# LongBench v2 / 66efc5e3821e116aacb23df1

task_id: 034cec16-39b3-549f-8d91-3f612e7283f8
task_key: train--66efc5e3821e116aacb23df1
task_revision_id: 1

{"choice_A":"The gross dividend amount of FY2006 is US$280 higher than that of FY2005.","choice_B":"The Group’s share of profit from associates after tax in FY2005 is US$5 million higher than that of FY2004.","choice_C":"As at the Latest Practicable Date of the prospectus,the prevailing corporate tax rate of Singapore is the lowest among the jurisdictions in which the firm’s Group operates.","choice_D":"The dividend per share for the years ended 2004 is 0.02 dollars higher than that for the years ended 2003.","context":"UNI-ASIA \nFINANCE CORPORATION\nRegistration No. CR-72229\nIncorporated in the Cayman Islands with \nlimited liability on 17 March 1997\nManager, Underwriter and Placement Agent\nINVITATION IN RESPECT OF \n65,400,000 NEW SHARES OF \nUS$0.16 EACH: -\na)  3,300,000 Offer Shares at S$0.55 \neach by way of public offer;\nb)  62,100,000 Placement Shares at  \nS$0.55 each by way of placement, \ncomprising:-\ni)  57,640,000 Placement Shares \nat S$0.55 for each Placement \nShare by way of Placement \nShares Application Forms (or \nsuch other forms of application \nas the Manager deems \nappropriate);\nii)  500,000 Internet Placement \nShares at S$0.55 for each \nInternet Placement Share \nreserved for applications made \nthrough the Internet website of \nDBS Vickers Securities Online \n(Singapore) Pte Ltd; and\niii) 3,960,000 Reserved Shares at  \nS$0.55 each reserved for our \nemployees, business associates \nand others who have contributed \nto the success of our Group,\npayable in full on application (subject \nto the Over-allotment Option). \nPROSPECTUS DATED 8 AUGUST 2007 (Registered by the Monetary Authority of Singapore on 8 August 2007)\nThis document is important. If you are in any doubt as to the action you should take, you should consult your \nlegal, fi\n nancial, tax, or other professional adviser.\nWe have made an application to the Singapore Exchange Securities Trading Limited (“SGX-ST”) for \npermission to deal in, and for quotation of, all the ordinary shares of US$0.16 each (the “Shares”) in the \ncapital of Uni-Asia Finance Corporation (the “Company”) already issued, the new shares which are the subject \nof this Invitation (the “New Shares”), the new Shares which may be issued upon the exercise of the options \nto be granted under the Uni-Asia Share Option Scheme (the “Option Shares”) and the new Shares which may \nbe issued upon the exercise of the Over-allotment Option (as defi\n ned below) (the “Additional Shares”). Such \npermission will be granted when we have been admitted to the Offi\n cial List of the SGX-ST. The dealing and \nquotation of the Shares will be in Singapore dollars.\nAcceptance of applications will be conditional upon, inter alia, permission being granted by the SGX-ST \nto deal in, and for quotation of, all the existing issued Shares, the New Shares, the Option Shares and the \nAdditional Shares. If the completion of the Invitation does not occur because the SGX-ST’s permission is not \ngranted or for any other reasons, moneys paid in respect of any application accepted will be returned to you \nat your own risk, without interest or any share of revenue or other benefi\n t arising therefrom and you will not \nhave any claims against us or the Manager.\nIn connection with the Invitation, we have granted the Manager an over-allotment option (the “Over-allotment \nOption”) exercisable by the Manager during the period commencing on the date of commencement of trading \nof the Shares on the SGX-ST (the “Commencement Date”) and expiring on the date falling 30 days after \nthe Commencement Date. The Manager may subscribe and/or procure subscribers for up to an aggregate \nof 9,810,000 Shares, representing 15 per cent. of the New Shares. The Manager may over-allot and effect \ntransactions which stabilise or maintain the market price of the Shares, subject to compliance with the \nlaws of Singapore. Such stabilisation, if commenced, may be discontinued by the Manager at any time at the \nManager’s discretion in accordance with the laws of Singapore.\nThe SGX-ST assumes no responsibility for the correctness of any of the statements or opinions made or \nreports contained in this Prospectus. Admission to the Offi\n cial List of the SGX-ST is not to be taken as an \nindication of the merits of the Invitation, our Company, our subsidiaries, our Shares, the New Shares, the \nOption Shares or the Additional Shares.\nA copy of this Prospectus has been lodged with and registered by the Monetary Authority of Singapore (the \n“Authority”) on 29 June 2007 and 8 August 2007 respectively. The Authority assumes no responsibility for the \ncontents of this Prospectus. Registration of this Prospectus by the Authority does not imply that the Securities \nand Futures Act (Cap. 289), or any other legal or regulatory requirements, have been complied with. The \nAuthority has not, in any way, considered the merits of the shares or units of shares, as the case may be, \nbeing offered or in respect of which an invitation is made, for investment.\nInvesting in our Shares involves risks which are described in the section entitled “RISK FACTORS” of this \nProspectus.\nNo Shares will be allotted and/or allocated on the basis of this Prospectus later than six months after the \ndate of registration of this Prospectus.\n\n\nUNI-ASIA FINANCE\nCORPORATION\nWe are an Asia-based structured fi\n nance \narrangement and Alternative Assets direct\ninvestment fi\n rm. We provide transport-related \nfi\n nance arrangement and investment management\nof alternative assets such as ships, distressed assets \nand real estate. Our offi\n ces in Tokyo, Hong Kong and \nSingapore serve clients that include established \ninternational shipping and aviation companies as \nwell as transport conglomerates like the Evergreen \nGroup and P.T. Berlian Laju Tanker TBK.\n\n\nOUR BUSINESS\n Distressed Assets Investment \n> We invest in or purchase Non-Performing Loans (“NPLs”) and \nother distressed assets in Asia\n> Between 1998 and 2004, we made 6 direct investments that \nincluded 24 NPL accounts, realising a return of over 8 times \nour investment within 6 years. In addition to our principal  \ninvestments in NPLs, we have launched two private distressed \ninvestment funds - AAA Series I and II Funds\nProperty Investment \nProperty Investment and Management -Japan\n> Our associated company, Capital Advisers, is engaged in the \ninvestment in and management of residential and hotel related \nreal estate assets in Japan \n> Capital Advisers manages and invests in private property \nfunds and the size of assets under management is close to \nUS$500 million\nPrincipal Investment in Properties - PRC\n> In January 2007, we established a wholly-owned property \ninvestment company, Uni-Asia Guangzhou, to explore property \ninvestment opportunities in the PRC\n> In June 2007, Uni-Asia Guangzhou completed the acquisition of \n14 offi\n ce units in Guangzhou which will be leased to third parties\nSTRUCTURED FINANCE \nOur structured fi\n nance department provides an integrated \nservice to clients by offering fi\n nancing solutions together \nwith charter arrangement services tailor-made to our clients’ \nneeds. Our services include acting as the arranger and agent \nfor the structured fi\n nancing provided by third party fi\n nancial \ninstitutions, and offering tax-enhanced structured services and \nproducts, including mortgage fi\n nancing, tax-oriented leases,as \nwell as export credit agency (“ECA”) backed credit, ship charter \narrangement, and balance sheet management.\nALTERNATIVE ASSETS INVESTMENT \nOur Alternative Assets Investments division leverages on \nour specialist skills in structured fi\n nance arrangement and \ncredit analysis to invest in, either as the principal investor or \nin partnership with other investors, three key Alternative \nAsset classes:  \nShip Investment \n> We invest in ships through equity investment in ship owning \ncompanies and investment funds\n> Our strategy is to invest in ships for commercial use that will \nproduce attractive investment returns due to the high expected \ndemand for, or anticipated shortfall in the supply of these ships\n> Since 2004, we have launched three private shipping \ninvestment funds – Searex Series I and II Funds, and the \nAkebono Fund\n> Besides being an investor in the various funds, we have \nplayed a variety of roles including administrator, fi\n scal agent, \nregistrar and project manager, which provides us with a \nmonthly fee income\n\n\nBUILDING ON OUR \nSTRENGTHS FOR GROWTH\nEXPERIENCED AND COMMITTED \nMANAGEMENT TEAM\n> Executive Directors, Executive Offi\n cers and \nemployees collectively own approximately \n19.7% of our post-Invitation issued share \ncapital and we believe that this has helped \nalign their interests with those of our \nCompany.\n> Clear understanding of industry \nrequirements, client-driven focus and \nestablished investment strategy\nSUCCESSFUL TRACK RECORD OF \nINTEGRATED CAPABILITIES IN OUR \nSPECIALIST FIELDS\n> Comprehensive range of value-added and \ninnovative structures\n> Scalable execution capabilities\n> Effective internal processes and practices\nABILITY TO LEVERAGE ON OUR LONG-\nTERM RELATIONSHIPS WITH OUR WELL-\nESTABLISHED NETWORK\n> We can leverage on our long-term \nbusiness relationships, built through \nour investments, partners, corporate \nshareholders and brokers, to identify new \nbusiness opportunities and to formulate \nnew and innovative structures to address \nthe requirements of business associates. \nOur corporate shareholders include \nEvergreen International S.A., HSH Nordbank \nAG, Exeno Yamamizu, and The Chuo Mitsui \nTrust & Banking Company, Limited\n> We have a track record of obtaining repeat \nbusinesses from our existing clients as well \nas new referrals from existing network\n> The strengths and geographical spread of \nthese relationships enable us to provide \ncross-border services\nOUR GROWTH STRATEGIES\nWe aim to be a leading Asia-based structured fi\n nance \narrangement and Alternative Assets direct investment fi\n rm. \nWe intend to build on our existing strengths in structured \nfi\n nance and Alternative Assets investments to provide \none-stop and innovative fi\n nancing solutions to our clients \nas well as to explore and develop Alternative Assets \ninvestment opportunities by leveraging on our expertise and \nrelationships.  We believe that globalisation and economic \ngrowth will offer us opportunities in terms of cross-border \nfi\n nancing and investments and allow us to build a wider \npresence and network within the region. \nIN SUMMARY, WE INTEND TO:\n> Continue to focus and leverage on our \nintegrated capabilities and well-established \nrelationships\n> Expand and diversify our structured fi\n nance \nclient and Alternative Assets investment \nportfolios and broaden our geographic \ncoverage within Asia\n> Launch new ship investment funds\nWe intend to use the net proceeds received \nby us from the issue of the New Shares \nin the Invitation for investments in the \nAkebono Fund; new container vessels; ship \ninvestments; distressed assets and/or real \nestate assets.\n\n\nOUR  FINANCIAL\nPERFORMANCE\nINCOME  BY BUSINESS \nSEGMENTS IN FY2006\nOPERATING PROFIT\nEBITDA (US$ million)\nFY2004\n8.1\nFY2005\n9.4\nFY2006\n10.0\nCAGR 11.3%\nTOTAL INCOME\nRevenue (US$ million)\nFY2005\n18.3\nFY2006\nFY2004\n14.8\n19.5\nCAGR 14.7%\nNET PROFIT\nNet Income (US$ million)\n9.4\n11.4\n7.9\nCAGR 20.0%\n6.0%  Distressed assets \n \nInvestment/ Management\n6.3%  Others1\n0.3%  Property Investment/\n \nManagement\n1 This line item is referenced in Note 3 to the \nconsolidated fi\n nancial statements of our \nCompany for FY2006 under the line item \n“Unallocated”\nFY2005 FY2006\nFY2004\n56.6%  Ship Investment/\n \nManagement\n30.8%  Structured Finance\n\n\n> \nBased on the mandates secured as at \nthe  Latest Practicable Date, we expect \nto recognise fee income of approximately \nUS$10.5 million in FY2007\n> \nWe also expect to receive fee income as \nwell as investment returns in respect of \nnew investment funds that are established,  \nincluding the Akebono Fund\n> \nThe gross dividend payout ratio in respect of \nFY2007 is up to 50 per cent. of the Company’s \nconsolidated profi\n ts available for distribution \nfor FY2007\nApplications for the Shares may be made through:\n> ATMs of DBS Bank (including POSB), OCBC and UOB Group,\n> Internet banking websites of DBS Bank and UOB Group, or\n> Printed application forms which form part of the Prospectus\nOUR INCOME STREAMS\nINDICATIVE TIMETABLE\nOVERVIEW OF INCOME STREAMS \nTO OUR GROUP\nSTRUCTURED FINANCE\nALTERNATIVE ASSETS \nINVESTMENT\nLEGEND\nDate and Time\nEvent\n8 August 2007, 8:00 p.m.\nOpening date and time for ATM applications\n15 August 2007, 12:00 noon\nClosing date and time for the Invitation\n17 August 2007, 9:00 a.m.\nCommence trading on a “ready” basis\nShipping Companies/\nShip Owners\n> \nFinance arrangement fees\n> \nCharter brokerage fees\n> \nAgency fees\nJoint Venture Ship Investments\n> \nInvestment returns\n> \nFinance arrangement fees\n> \nProject management fees\n> \nAdministration and \nagency fees\n         Akebono Fund\n> \nInvestment returns\n> \nFinance arrangement fees\n> \nAdministration and \nagency fees\n> \nProject management fees\n> \nIncentive fees\nProperty and Distressed \nAssets Investment\n> \nInvestment returns\n> \nIncentive fees\n> \nAdministration and \nagency fees\n\n\nPage\nCORPORATE INFORMATION..............................................................................................................\n4\nDEFINITIONS........................................................................................................................................\n6\nGLOSSARY OF TECHNICAL TERMS..................................................................................................\n14\nSPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS ..............................................\n16\nTAKE-OVERS........................................................................................................................................\n18\nPURCHASE BY OUR COMPANY OF OUR OWN SHARES ..............................................................\n19\nATTENDANCE AT GENERAL MEETINGS ..........................................................................................\n20\nSELLING RESTRICTIONS ..................................................................................................................\n21\nDETAILS OF THE INVITATION\nListing on the SGX-ST ................................................................................................................\n23\nIndicative Timetable for Listing....................................................................................................\n26\nPLAN OF DISTRIBUTION ....................................................................................................................\n27\nPROSPECTUS SUMMARY\nOverview......................................................................................................................................\n29\nCompetitive Strengths ................................................................................................................\n32\nProspects ....................................................................................................................................\n33\nBusiness Strategy and Future Plans ..........................................................................................\n35\nConsolidated Results of our Group ............................................................................................\n36\nOur Contact Details ....................................................................................................................\n36\nTHE INVITATION ..................................................................................................................................\n37\nEXCHANGE RATES ............................................................................................................................\n39\nRISK FACTORS\nRisks Relating to our Group........................................................................................................\n40\nRisks Relating to the Industries which We Operate In................................................................\n44\nRisks Relating to Ownership of our Shares ................................................................................\n46\nINVITATION STATISTICS ....................................................................................................................\n49\nUSE OF PROCEEDS............................................................................................................................\n50\nDIVIDEND POLICY ..............................................................................................................................\n51\nSHARE CAPITAL..................................................................................................................................\n52\nPRINCIPAL SHAREHOLDERS\nOwnership Structure....................................................................................................................\n55\nMoratorium ..................................................................................................................................\n57\nCAPITALISATION AND INDEBTEDNESS ..........................................................................................\n58\nCONTENTS\n1\n\n\nDILUTION..............................................................................................................................................\n59\nSELECTED FINANCIAL INFORMATION AND OTHER DATA\nConsolidated Results of our Group ............................................................................................\n60\nReconciliation of our Consolidated Results as set out \nin this Prospectus to our Audited Consolidated Financial Statements ....................................\n61\nConsolidated Financial Positions of our Group ..........................................................................\n62\nPro Forma Financial Statements for the Financial Year ended 31 December 2006 ..................\n64\nMANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL POSITION AND \nRESULTS OF OPERATIONS\nOverview......................................................................................................................................\n65\nReview of Results of Operations ................................................................................................\n69\nReview of Financial Position........................................................................................................\n73\nIndebtedness ..............................................................................................................................\n74\nLiquidity and Capital Resources..................................................................................................\n75\nCapital Expenditure, Investments, Divestments and Commitments............................................\n77\nForeign Exchange Exposure ......................................................................................................\n79\nCritical Accounting Policies ........................................................................................................\n80\nSignificant Changes in Accounting Policies ................................................................................\n84\nGROUP STRUCTURE ..........................................................................................................................\n85\nGENERAL INFORMATION ON OUR GROUP\nCorporate Development ..............................................................................................................\n87\nBusiness Overview......................................................................................................................\n90\nSales and Marketing ..................................................................................................................\n102\nMajor Clients ..............................................................................................................................\n102\nBusiness Partners ......................................................................................................................\n103\nIntellectual Property ....................................................................................................................\n104\nInsurance ....................................................................................................................................\n105\nRegulations Governing our Group’s Activities in Hong Kong, Japan, Singapore \nand the PRC..............................................................................................................................\n106\nSeasonality..................................................................................................................................\n109\nCompetition ................................................................................................................................\n110\nCompetitive Strengths ................................................................................................................\n110\nExchange Controls......................................................................................................................\n112\nProperties....................................................................................................................................\n114\nProspects ....................................................................................................................................\n115\nOrder Book..................................................................................................................................\n117\nBusiness Strategy and Future Plans ..........................................................................................\n117\nMANAGEMENT REPORTING STRUCTURE ......................................................................................\n119\nDIRECTORS, MANAGEMENT AND STAFF\nDirectors ......................................................................................................................................\n120\nExecutive Officers........................................................................................................................\n123\nManagement Committee ............................................................................................................\n124\nEmployees ..................................................................................................................................\n126\nCONTENTS\n2\n\n\nRemuneration..............................................................................................................................\n129\nService Agreements....................................................................................................................\n130\nCORPORATE GOVERNANCE ............................................................................................................\n132\nUNI-ASIA SHARE OPTION SCHEME..................................................................................................\n134\nINTERESTED PERSON TRANSACTIONS AND POTENTIAL CONFLICTS OF INTERESTS\nInterested Person Transactions ..................................................................................................\n141\nPotential Conflicts of Interests ....................................................................................................\n143\nDESCRIPTION OF OUR ORDINARY SHARES ..................................................................................\n146\nTAXATION ............................................................................................................................................\n148\nCLEARANCE AND SETTLEMENT ......................................................................................................\n157\nGENERAL AND STATUTORY INFORMATION\nInformation on Directors and Executive Officers ........................................................................\n158\nShare Capital ..............................................................................................................................\n168\nBank Borrowings and Working Capital........................................................................................\n168\nMaterial Contracts ......................................................................................................................\n168\nLitigation ......................................................................................................................................\n168\nManagement, Underwriting and Placement Arrangements ........................................................\n168\nMiscellaneous..............................................................................................................................\n170\nConsents ....................................................................................................................................\n172\nResponsibility Statement by our Directors ..................................................................................\n172\nDocuments Available for Inspection ............................................................................................\n173\nAPPENDIX A – Directors’ Report on the Consolidated Financial Statements for the Year \nended 31 December 2004 ......................................................................................\nA-2\nAuditors’ Report on the Consolidated Financial Statements for the Year\nended  31 December 2004 ......................................................................................\nA-5\nConsolidated Financial Statements for the Year ended 31 December 2004 ............\nA-6\nAPPENDIX B – Directors’ Report on the Consolidated Financial Statements for the Year \nended 31 December 2005 ......................................................................................\nB-2\nAuditors’ Report on the Consolidated Financial Statements for the Year\nended  31 December 2005 ......................................................................................\nB-5\nConsolidated Financial Statements for the Year ended 31 December 2005 ............\nB-6\nAPPENDIX C – Directors’ Report on the Consolidated Financial Statements for the Year \nended 31 December 2006 ......................................................................................\nC-2\nAuditors’ Report on the Consolidated Financial Statements for the Year\nended  31 December 2006 ......................................................................................\nC-5\nConsolidated Financial Statements for the Year ended 31 December 2006 ............\nC-6\nAPPENDIX D – Summary of the Constitution of our Company ..........................................................\nD-1\nAPPENDIX E – Summary of Cayman Islands Company Law ............................................................\nE-1\nAPPENDIX F – Rules of the Uni-Asia Share Option Scheme ............................................................\nF-1\nAPPENDIX G – Terms, Conditions and Procedures for Application and Acceptance ........................\nG-1\nCONTENTS\n3\n\n\nBOARD OF DIRECTORS\n:\nMotokuni Yamashiro (Executive Director)\nKazuhiko Yoshida (Executive Director)\nMichio Tanamoto (Executive Director)\nHamilton Jian Ren Chueh (Non-Executive Director)\nJörg Wilhelm Schelp (Non-Executive Director)\nRobert Van Jin Nien (Non-Executive Director)\nV-Nee Yeh (Independent Non-Executive Director)\nAng Miah Khiang (Independent Non-Executive Director)\nRonnie Teo Heng Hock (Independent Non-Executive Director)\nJOINT COMPANY SECRETARIES\n:\nJoanna Lim Lan Sim, ACIS\nLim Aik Kun, ACIS\nREGISTERED OFFICE\n:\nUgland House\nP\n.O. Box 309\nGrand Cayman\nCayman Islands\nBritish West Indies\nHEAD OFFICE AND PRINCIPAL\n:\nSuite A, 26th Floor\nPLACE OF BUSINESS\nAdmiralty Centre Tower I\n18 Harcourt Road\nHong Kong\nSHARE REGISTRAR AND\n:\nLim Associates (Pte) Ltd\nSINGAPORE SHARE\n3 Church Street #08-01\nTRANSFER AGENT\nSamsung Hub\nSingapore 049483\nMANAGER, UNDERWRITER AND\n:\nDBS Bank Ltd\nPLACEMENT AGENT\n6 Shenton Way\nDBS Building Tower One\nSingapore 068809\nAUDITORS\n:\nPricewaterhouseCoopers \nCertified Public Accountants\n22nd Floor Prince’s Building\nCentral\nHong Kong\nPartner-in-charge: Colin Shaftesley\nSOLICITORS TO THE INVITATION\n:\nAllen & Gledhill LLP\nAND LEGAL ADVISERS TO THE\nOne Marina Boulevard #28-00\nCOMPANY ON SINGAPORE LAW\nSingapore 018989\nLEGAL ADVISERS TO THE\n:\nHarney Westwood & Riegels\nCOMPANY AS TO BRITISH\nP\n.O. Box 71 Road Town\nVIRGIN ISLANDS LAW\nTortola, British Virgin Islands\nCORPORATE INFORMATION\n4\n\n\nLEGAL ADVISERS TO THE\n:\nMaples and Calder\nCOMPANY AS TO CAYMAN\n1504 One International Finance Centre\nISLANDS LAW\n1 Harbour View Street\nHong Kong\nLEGAL ADVISERS TO THE\n:\nRichards Butler\nCOMPANY AS TO HONG\n20th Floor, Alexandra House\nKONG LAW\n16-20 Chater Road\nCentral\nHong Kong\nLEGAL ADVISERS TO THE\n:\nTanaka Law Office\nCOMPANY AS TO JAPAN LAW\n10th Floor, Landic Akasaka Building\n3-4 Akasaka 2-Chome\nMinato-ku\nTokyo, 107-0052\nJapan\nLEGAL ADVISERS TO THE\n:\nLauseed & Tittan Law Firm\nCOMPANY AS TO PRC LAW\n11/F, Tower A\nChengjiandasha Plaza\n18 Beitaipingzhuang Road\nBeijing 100088\nPRC\nSOLICITORS TO THE MANAGER,\n:\nRajah & Tann\nUNDERWRITER AND\n4 Battery Road #26-01\nPLACEMENT AGENT\nBank of China Building\nSingapore 049908\nPRINCIPAL BANKERS\n:\nThe Hong Kong and Shanghai Banking Corporation Limited\nPacific Place Branch\nTwo Pacific Place\n88 Queensway\nHong Kong\nMizuho Corporate Bank Ltd\nHong Kong Branch\n17/F, Two Pacific Place\n88 Queensway \nHong Kong \nHang Seng Bank Limited\n83 Des Voeux Road, Central\nHong Kong\nRECEIVING BANK\n:\nDBS Bank Ltd\n6 Shenton Way\nDBS Building Tower One\nSingapore 068809\nCORPORATE INFORMATION\n5\n\n\nIn this Prospectus and the accompanying Application Forms, the following definitions apply where the\ncontext so admits:-\n“AAA”\n:\nAAA Strategic Investment Limited, a company incorporated in\nthe Cayman Islands and held by a charitable trust. AAA owns\nand operates the AAA Series I Fund and AAA Series II Fund \n“AAA Series I Fund”\n:\nThe investment fund owned and operated by AAA, comprising\nthe proceeds from the issue of the AAA Series I Notes and the\nassets into which any such proceeds have been converted \n“AAA Series I Notes”\n:\nThe US$5 million of Performance Notes issued by AAA to our\nCompany and one other investor which is an independent third\nparty \n“AAA Series II Fund”\n:\nThe investment fund owned and operated by AAA, comprising\nthe proceeds from the issue of the AAA Series II Notes and the\nassets into which any such proceeds have been converted \n“AAA Series II Notes”\n:\nThe US$15 million of Performance Notes issued by AAA to our\nCompany and the same investor who subscribed to the AAA\nSeries I Notes \n“Additional Shares”\n:\nUp to 9,810,000 new Shares (representing 15 per cent. of the\nNew Shares) which may be issued on the terms and subject to\nthe conditions of this Prospectus, upon the exercise of the Over-\nallotment Option by the Manager\n“Akebono Capital Limited”\n:\nAkebono Capital Limited, a company incorporated in the British\nVirgin Islands and held by a charitable trust. Akebono Capital\nLimited owns and operates the Akebono Fund\n“Akebono Fund”\n:\nThe investment fund owned and operated by Akebono Capital\nLimited, comprising the proceeds from the issue of the\nPerformance Notes and the assets into which any such\nproceeds have been converted\n“Application Forms”\n:\nThe printed application forms to be used for the purpose of the\nInvitation and which form part of this Prospectus\n“Application List”\n:\nThe list of applications for subscription of the New Shares\n“Articles” or “Articles of \n:\nThe articles of association of the Company as adopted on 26\nAssociation”\nJune 2007 and as amended from time to time\n“Associate”\n:\n(a)\nIn relation to any Director, chief executive officer,\nSubstantial Shareholder or Controlling Shareholder (being\nan individual) means:\n(i)\nhis immediate family;\n(ii)\nthe trustees, acting in their capacity as such\ntrustees, of any trust of which he or his immediate\nfamily is a beneficiary or, in the case of a\ndiscretionary trust, is a discretionary object; or\nDEFINITIONS\n6\n\n\n(iii)\nany company in which he and his immediate family\ntogether (directly or indirectly) have an interest of 30\nper cent. or more of the aggregate of the nominal\namount of all the voting shares; and\n(b)\nin relation to a Substantial Shareholder or a Controlling\nShareholder (being a company) means any other\ncompany which is its subsidiary or holding company or is\na fellow subsidiary of any such holding company or one in\nthe equity of which it and/or such other company or\ncompanies taken together (directly or indirectly) have an\ninterest of 30 per cent. or more\n“associated company”\n:\nA company in which at least 20% but not more than 50% of its\nshares are held by our Group\n“ATM”\n:\nAutomated teller machines of a Participating Bank\n“Audit Committee”\n:\nThe audit committee of our Company for the time being\n“Board” or “Board of Directors”\n:\nThe board of Directors of our Company as at the date of this\nProspectus, unless otherwise stated\n“Capital Advisers”\n:\nCapital Advisers Co., Ltd, a company incorporated on 24\nFebruary 2000 in Japan and an associated company of our\nCompany \n“Cayman Companies Law”\n:\nThe Companies Law, Cap. 22 (Law 3 of 1961, as consolidated\nand revised) of the Cayman Islands \n“CMTB”\n:\nThe Chuo Mitsui Trust and Banking Co. Ltd, a company\nincorporated in Japan \n“Companies Act”\n:\nThe Companies Act (Chapter 50) of Singapore\n“Companies Ordinance”\n:\nThe Companies Ordinance (Chapter 32 of the Laws of Hong\nKong) \n“Company” or “Uni-Asia”\n:\nUni-Asia \nFinance \nCorporation, \nan \nexempted \ncompany\nincorporated on 17 March 1997 in the Cayman Islands with\nlimited liability \n“Controlling Shareholder”\n:\nIn relation to a corporation,\n(a)\nperson who has an interest in the voting shares of a\ncorporation and who exercises control over the\ncorporation; or\n(b)\na person who has an interest of 15 per cent. or more of\nthe aggregate of the nominal amount of all the voting\nshares in a corporation, unless he does not exercise\ncontrol over the corporation\n“Directors”\n:\nThe directors of our Company as at the date of this Prospectus,\nunless otherwise stated\n“ECA”\n:\nExport credit agency \nDEFINITIONS\n7\n\n\n“Electronic Applications”\n:\nApplications for the Offer Shares made through an ATM or\nthrough IB websites in accordance with the terms and conditions\nof this Prospectus\n“EPS”\n:\nEarnings per Share\n“EuroAsia II”\n:\nEuroAsia II, Inc., a private company incorporated in Panama,\nwhose principal activity is ship owning\n“Evergreen” or “Evergreen \n:\nEvergreen International S.A., a private company incorporated in \nInternational S.A.”\nPanama and part of the Evergreen Group, a Substantial\nShareholder of our Company \n“Evergreen Group”\n:\nEvergreen and its subsidiaries including Evergreen International\nStorage and Terminal Corp, EVA Airways, Evergreen Marine\nCorp., Gaining Enterprise S.A., Greencompass Marine S.A.,\nEvergreen Marine (UK) Limited (formerly known as Hatsu\nMarine Limited), Italia Marittima and Evergreen International\nCorp.\n“Executive Directors”\n:\nThe executive Directors of our Company as at the date of this\nProspectus\n“Executive Officers”\n:\nThe executive officers of our Group as at the date of this\nProspectus \n“Exeno Yamamizu” or “Yamamizu”\n:\nExeno Yamamizu Corporation, a company incorporated in Japan\n“FY”\n:\nFinancial year ended or, as the case may be, ending 31\nDecember\n“GCAP Fund”\n:\nYK Japan Residential Holdings, a fund established in 2004\nwhich is jointly managed by Grosvenor Asia and Capital\nAdvisers through Grosvenor Capital Advisers Fund Management\nCo., Ltd.\n“Grosvenor”\n:\nGrosvenor Group Limited, an international property company\nincorporated in the United Kingdom \n“Grosvenor Asia”\n:\nThe group of companies within the Grosvenor Group which\noperates the businesses of Grosvenor in Asia \n“Grosvenor Group”\n:\nGrosvenor and its subsidiaries\n“Group”\n:\nOur Company together with our subsidiaries \n“Harmonic Shipping”\n:\nHarmonic Shipping S.A., a private company incorporated in\nPanama, engaged in the business of ship owning\n“Hatsu Marine”\n:\nEvergreen Marine (UK) Limited, formerly known as Hatsu Marine\nLimited, a company incorporated in the UK and part of the\nEvergreen Group \n“Hong Kong”\n:\nThe Hong Kong Special Administrative Region of the PRC \n“HSH Nordbank”\n:\nHSH Nordbank AG, a company incorporated in Germany \nDEFINITIONS\n8\n\n\n“IB”\n:\nInternet Banking\n“Independent Directors” or\n:\nThe independent non-executive Directors of our Company as at\n“Independent Non-Executive\nthe date of this Prospectus\nDirectors”\n“Infinite Asset”\n:\nInfinite Asset Management (Pte.) Limited, a wholly-owned\nsubsidiary of Akebono Capital Limited and the intermediate\nholding company for the shipping SPCs incorporated in\nSingapore\n“Internet Placement Shares”\n:\nThe 500,000 Placement Shares available for application through\nthe Internet website of DBS Vickers Securities Online\n(Singapore) Pte Ltd, subject to and on the terms and conditions\nof this Prospectus\n“Invitation”\n:\nThe invitation by us to the public in Singapore to subscribe for\nthe New Shares at the Invitation Price, subject to and on the\nterms and conditions of this Prospectus\n“Invitation Price”\n:\nS$0.55 for each New Share  \n“Italia Marittima”\n:\nItalia Marittima S.p.A., formerly known as Lloyd Triestino di\nNavigazione S.p.A., a company incorporated in Italy and part of\nthe Evergreen Group \n“Latest Practicable Date”\n:\n19 June 2007, being the latest practicable date for the purposes\nof lodgment of this Prospectus\n“Listing Date”\n:\nThe date trading in the Shares commences on the SGX-ST\n“Listing Manual”\n:\nThe Listing Manual of the SGX-ST\n“Management and Underwriting \n:\nThe conditional management and underwriting agreement dated \nAgreement”\n8 August 2007 entered into between our Company, the Manager\nand the Underwriter relating to the Invitation \n“Market Day”\n:\nA day on which the SGX-ST is open for trading in securities\n“Matin Shipping Limited”\n:\nMatin Shipping Limited, a company incorporated in Hong Kong,\nengaged in the business of ship owning\n“Memorandum” or “Memorandum  \n:\nThe memorandum of association of the Company as adopted on \nof Association”\n26 June 2007 and as amended from time to time \n“MOFTEC”\n:\nThe Ministry of Foreign Trade and Economic Cooperation of the\nPRC\n“NAV”\n:\nNet asset value\n“New Shares”\n:\nThe 65,400,000 Shares which are the subject of this Invitation\n“NTA”\n:\nNet tangible assets\n“Offer”\n:\nThe offer by our Company of the Offer Shares to the public in\nSingapore for subscription at the Invitation Price, subject to and\non the terms and conditions of this Prospectus\nDEFINITIONS\n9\n\n\n“Offer Shares”\n:\n3,300,000 New Shares which are the subject of the Offer\n“Option”\n:\nThe right to subscribe for Shares granted or to be granted to an\nemployee pursuant to the Scheme and for the time being\nsubsisting\n“Option Shares”\n:\nThe new Shares which may be allotted and issued upon the\nexercise of the Options pursuant to the Scheme \n“Over-allotment Option”\n:\nThe option granted by us to the Manager to require us to issue\nup to 9,810,000 Additional Shares at the Invitation Price solely\nfor the purpose of covering over-allotment of Shares (if any),\nupon the terms and subject to and on the terms and conditions\nof this Prospectus and referred to in the section entitled “Over-\nallotment and Stabilisation” of this Prospectus\n“Pacific Leasing Corporation”\n:\n, a company incorporated in the PRC and an\nindependent third party \n“Panmax”\n:\nPanmax Tanker S.A., a special purpose company established in\nPanama\n“PER”\n:\nPrice earnings ratio\n“Placement”\n:\nThe placement of the Placement Shares by the Placement\nAgent on behalf of our Company for subscription at the Invitation\nPrice, subject to and on the terms and conditions of this\nProspectus\n“Placement Shares”\n:\n62,100,000 of the New Shares (including the Internet Placement\nShares and the Reserved Shares), which are the subject of the\nPlacement\n“PRC” or “China”\n:\nThe People’s Republic of China which, for the purposes of this\nProspectus and for geographical reference, excludes Hong\nKong, the Macau Special Administrative Region and Taiwan\n“Prospectus”\n:\nThis Prospectus dated 8 August 2007 issued by our Company in\nrespect of the Invitation\n“Reserved Shares”\n:\nThe 3,960,000 Placement Shares reserved for our employees,\nbusiness associates and others who have contributed to the\nsuccess of our Group\n“Rich Containership S.A.”\n:\nA special purpose company incorporated in Panama, engaged in\nthe business of ship owning\n“Scheme”\n:\nThe Uni-Asia Share Option Scheme adopted by our Company\non 26 June 2007 and as described in the section entitled “Uni-\nAsia Share Option Scheme” of this Prospectus\n“Searex”\n:\nSearex Asset Management Limited, a company incorporated in\nthe British Virgin Islands and held by a charitable trust. Searex\nowns and operates the Searex Series I Fund and Searex Series\nII Fund \nDEFINITIONS\n10\n\n\n“Searex Series I Fund”\n:\nThe investment fund owned and operated by Searex comprising\nthe proceeds from the issue of the Searex Series I Notes, the\nassets into which any such proceeds have been converted and\nall loans advanced to Searex in relation to shipping interests\nacquired for the benefit of the holders of the Searex Series I\nNotes \n“Searex Series I Notes”\n:\nThe US$17 million Performance Notes issued by Searex to our\nCompany and five other investors \n“Searex Series II Fund”\n:\nThe investment fund owned and operated by Searex comprising\nthe proceeds from the issue of the Searex Series II Notes, the\nassets into which any such proceeds have been converted and\nall loans advanced to Searex in relation to shipping interests\nacquired for the benefit of the holders of the Searex Series II\nNotes \n“Searex Series II Notes”\n:\nThe US$23 million Performance Notes issued by Searex to the\nsame investors who subscribed for the Searex Series I Notes\nand to four additional new investors\n“Securities Account”\n:\nThe securities account maintained by a depositor with CDP\n“Service Agreements”\n:\nThe service agreements entered into between our Company and\neach of our Executive Directors Mr. Motokuni Yamashiro, Mr.\nKazuhiko Yoshida and Mr. Michio Tanamoto\n“SFA”\n:\nThe Securities and Futures Act (Chapter 289) of Singapore\n“SFC”\n:\nThe Securities and Futures Commission of Hong Kong  \n“SFO”\n:\nSecurities and Futures Ordinance, Chapter 571 of the Laws of\nHong Kong  \n“Share Lending Agreement”\n:\nAn agreement dated 8 August 2007 entered into between Mr.\nMotokuni Yamashiro and the Manager pursuant to which Mr.\nMotokuni Yamashiro may lend up to 9,810,000 Shares to the\nManager representing 15 per cent. of the New Shares, for the\npurpose of facilitating settlement of the over-allotment of Shares\n(if any) in connection with the Invitation\n“Shareholders”\n:\nRegistered holders of Shares\n“Shares”\n:\nOrdinary shares of US$0.16 each in the capital of our Company\n“SPC”\n:\nSpecial purpose company\n“Substantial Shareholders”\n:\nPersons who have an interest in the Shares, the nominal amount\nof which is not less than 5 per cent. of the aggregate of the\nnominal amount of all the voting Shares of our Company\n“Sunrise Shipping S.A.”\n:\nSunrise Shipping S.A., a private company incorporated in\nPanama, engaged in the business of ship owning \n“Uni-Asia Guangzhou”\n:\n, or Uni-Asia Guangzhou Property\nManagement Company Limited, a private company incorporated\nin Guangzhou, the PRC, engaged in the business of property\ninvestment and management  \nDEFINITIONS\n11\n\n\n“Uni-Ships and Management \n:\nUni-Ships and Management Limited, a company incorporated in \nLimited”\nHong Kong. Uni-Ships and Management Limited is a joint\nventure between Maritime 24 (Pte) Ltd, Uni-Asia, Uni-Fast\nLimited and Wealth Ocean which each respectively has a\nshareholding of 30%, 30%, 30% and 10%. It provides project\nmanagement, accounting and administration services to Uni-\nAsia’s investment fund vehicles \n“UK” or “United Kingdom”\n:\nEngland, Wales, Scotland and Northern Ireland \n“US”, “USA” or “United States”\n:\nThe United States of America \n“Wealth Ocean”\n:\nWealth Ocean Services Limited, a company incorporated in\nHong Kong and an independent third party. Wealth Ocean is\nengaged in marine-related activities  \nCurrencies, Units of Measurement and Others\n“€”\n:\nEuro, the lawful currency of certain nations within the European\nUnion\n“HK$”\n:\nHong Kong dollars, the lawful currency of Hong Kong\n“JPY” or “Yen”\n:\nJapanese Yen, the lawful currency of Japan \n“%” or “per cent.”\n:\nPer centum or Percentage\n“Renminbi” or “RMB”\n:\nPRC Renminbi, the lawful currency of the People’s Republic of\nChina\n“S$” and “cents”\n:\nSingapore dollars and cents respectively, the lawful currency of\nthe Republic of Singapore\n“sq ft”\n:\nSquare feet\n“sq m”\n:\nSquare metres\n“US dollars” or “US$”\n:\nUnited States dollars, the lawful currency of the United States of\nAmerica \nOther Corporations and Agencies\n“CDP”\n:\nThe Central Depository (Pte) Limited\n“CPF”\n:\nThe Central Provident Fund\n“DBS”, “DBS Bank”, “Manager”, \n:\nDBS Bank Ltd\n“Underwriter”, “Placement \nAgent” or “Receiving Bank”\n“MAS” or the “Authority”\n:\nThe Monetary Authority of Singapore\n“Participating Banks”\n:\nDBS Bank (including POSB), United Overseas Bank Limited\n(“UOB”) and its subsidiary, Far Eastern Bank Limited (the “UOB\nGroup”), and Oversea-Chinese Banking Corporation Limited\n(“OCBC”)\nDEFINITIONS\n12\n\n\n“SGX-ST”\n:\nSingapore Exchange Securities Trading Limited\n“Share Registrar”\n:\nLim Associates (Pte) Ltd\nIn this Prospectus, unless otherwise specified, conversions of US dollars into Singapore dollars are\nbased on the rate of US$1.00 to S$1.52 and conversions of Yen to US dollars are based on the rate of\nUS$1.00 to 118.9 Yen. This exchange rate is for reference only. No representation is made by us that any\namount in US$ has been, could have been or could be converted at the above rates or at any other rates\nor at all.\nAll figures are translated (where relevant) for the purposes of this Prospectus from square metre, to\nsquare feet at 1 square metre = 10.764 square feet.\nThe expressions “Depositor”, “Depository Agent” and “Depository Register” shall have the meanings\nascribed to them respectively in Section 130A of the Companies Act.\nWords importing the singular shall, where applicable, include the plural and vice versa and words\nimporting the masculine gender shall, where applicable, include the feminine and neuter genders and\nvice versa. References to persons shall include corporations.\nAny reference in this Prospectus, the Application Forms and Electronic Applications to any statute or\nenactment is a reference to that statute or enactment as for the time being amended or re-enacted. Any\nword defined under the Companies Act, the Cayman Companies Law, the SFA or any statutory\nmodification thereof and used in this Prospectus, the Application Forms and Electronic Applications shall,\nwhere applicable, have the meaning assigned to it under the Companies Act, the Cayman Companies\nLaw, the SFA or any statutory modification thereof, as the case may be.\nAny reference in this Prospectus, the Application Forms and the Electronic Applications to Shares being\nallotted and/or allocated to an applicant includes allotment and/or allocation to CDP for the account of\nthat Applicant.\nAny reference to a time of day in this Prospectus shall be a reference to Singapore time unless otherwise\nstated.\nReferences in this Prospectus to “our Group”, “we”, “our”, and “us” refer to our Group.\nCertain names with Chinese or Japanese characters have been translated into English names. Such\ntranslations are provided solely for the convenience of Singapore-based investors and for identification\npurposes only. They may not be registered with the relevant PRC or Japanese authorities (as the case\nmay be) and should not be construed as representations that the English names actually represent the\nChinese or Japanese characters. In the case of any inconsistency between the English names and their\nrespective official Chinese or Japanese names (as the case may be), the Chinese or Japanese names\nshall prevail.\nAny discrepancies in the tables included herein between the listed amounts and the totals thereof are due\nto rounding. Accordingly, figures shown as totals in certain tables may not be an arithmetic aggregation of\nthe figures that precede them.\nDEFINITIONS\n13\n\n\nTo facilitate a better understanding of our business, the following glossary provides a description of some\nof the technical terms and abbreviations as they relate to us and as they are used in this Prospectus, and\nmay not correspond to standard industry definitions or usage of the terms:\n“Alternative Assets”\n:\nA general term to describe non-mainstream investment assets. For Uni-\nAsia, at the Latest Practicable Date, the Alternative Assets we invest in\ninclude ships, distressed assets (including NPLs and other distressed\nassets in Asia (excluding Japan)), property (including hotel and\nresidential properties in Japan and commercial properties in the PRC) \n“Bareboat Charter”\n:\nCharter in which a bare ship is chartered without crew. The Charterer\ntakes over the vessel for a stipulated sum with minimum restrictions,\nusually for five or more years \n“Bulk Carriers”\n:\nA ship designed for homogeneous cargo stowed in bulk and not enclosed\nin any container\n“Bunkers”\n:\nFuel for vessels. Type will vary depending upon propulsion mode of\nvessel. Steamships use heavy fuel oil, diesels use range of fuels from\nheavy to light, and gas turbines generally use kerosene \n“Charterer”\n:\nPerson given use of vessel or all or part of the carrying capacity of a\nvessel to transport cargo/passengers for specified time \n“Charter Party”\n:\nDocument of contract/agreement by which shipowner agrees to lease and\nthe Charterer agrees to hire entire ship and all/ part of cargo space for\nagreed sum under certain conditions \n“Charter Rates”\n:\nThe tariff applied for chartering tonnage in a particular trade \n“DWT”\n:\nDead Weight Tons is the total weight of a vessel including all items on\nboard the vessel when the vessel is loaded to her maximum loading limit \n“Handy Max”\n:\nTankers of about 40,000 to 60,000 DWT \n“Handy Size”\n:\nTankers of about 10,000 to 40,000 DWT \n“IRR”\n:\nInternal rate of return, which is the interest rate received for an\ninvestment that consists of payments and income. The IRR is the interest\nrate corresponding to a zero net present value. Net IRR takes into\naccount direct transaction costs of a transaction\n“NPL(s)”\n:\nNon-performing loan whereby the borrower of the loan is in default or is\nhighly likely to default. Collateral or guarantees agreed for the loan,\ntherefore, may or may not be available when such loan is in default \n“Performance Notes”\n:\nAn evidence of entitlement issued by the issuer of the note pursuant to a\ndeed of covenant created by the issuer and subscribed by the note\nholders pursuant to a subscription agreement. They are redeemed semi-\nannually, in whole or in part, calculated based on net cash recovered\nfrom the underlying assets of the issuer. Note redemptions are\ndetermined based on the total original cost of recovered assets less the\ndeduction of fees and other expenses incurred in recovery of such\nassets. Recovery amounts from assets in excess of that required for\nperformance note repayments are paid out as interest on the\nperformance note\nGLOSSARY OF TECHNICAL TERMS\n14\n\n\n“TEU”\n:\nTwenty foot equivalent unit\n“Time Charter”\n:\nCharter for varying periods of time, typically between one and 10 years,\nunder which owner hires out vessel to Charterer, fully manned,\nprovisioned, stored and insured. The Charterer is usually responsible for\nbunkers, port charges, canal tolls and any crew overtime connected with\ncargo \n“Tokumei Kumiai” or “TK”\n:\nA form of silent partnership structure used in Japan. TK is used in very\nsophisticated cross-border tax structuring and is created by a contractual\nagreement between two or more parties: the “proprietor” or “operator” and\nthe “silent” or “limited” partners. The silent partner contributes cash or\nasset to the operator who manages asset for the business designated in\nthe partnership agreement. The economic benefits are shared between\nthe parties\nGLOSSARY OF TECHNICAL TERMS\n15\n\n\nAll statements contained in this Prospectus, statements made in press releases and oral statements that\nmay be made by us or our Directors, Executive Officers or employees acting on our behalf, that are not\nstatements of historical fact, constitute “forward-looking statements”. You can identify some of these\nforward-looking statements by terms such as “expects”, “believes”, “plans”, “intends”, “estimates”,\n“anticipates”, “may”, “will”, “would” and “could” or similar words. However, you should note that these\nwords are not the exclusive means of identifying forward-looking statements. All statements regarding our\nexpected financial position, business strategies, plans and prospects are forward-looking statements.\nThese forward-looking statements, including without limitation, statements as to:\n(a) \nour revenue and profitability;\n(b) \nexpected growth in demand;\n(c) \nexpected industry trends;\n(d) \nanticipated expansion plans; and\n(e) \nother matters discussed in this Prospectus regarding matters that are not historical fact,\nare only predictions. These forward-looking statements involve known and unknown risks, uncertainties\nand other factors that may cause our actual results, performance or achievements to be materially\ndifferent from any future results, performance or achievements expressed or implied by these forward-\nlooking statements. These risks, uncertainties and other factors include, among others:\n(a) \nchanges in political, social and economic conditions and the regulatory environment in Hong Kong,\nthe PRC, Japan and other countries in which we conduct business;\n(b) \nchanges in currency exchange rates;\n(c) \nour anticipated growth strategies and expected internal growth;\n(d) \nchanges in customer preferences;\n(e) \nchanges in competitive conditions and our ability to compete under such conditions;\n(f) \nchanges in our future capital needs and the availability of financing and capital to fund such needs;\nand\n(g) \nother factors beyond our control.\nSome of these risk factors are discussed in more detail under the section entitled “Risk Factors” of this\nProspectus.\nGiven the risks and uncertainties that may cause our actual future results, performance or achievements\nto be materially different than expected, expressed or implied by the forward-looking statements in this\nProspectus, undue reliance must not be placed on these statements which apply only as at the date of\nthis Prospectus. Neither our Company, the Manager, Underwriter and Placement Agent, nor any other\nperson represents or warrants that our actual future results, performance or achievements will be as\ndiscussed in those statements.\nSPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS\n16\n\n\nOur actual results may differ materially from those anticipated in these forward-looking statements as a\nresult of the risks faced by us. We and the Manager, Underwriter and Placement Agent, disclaim any\nresponsibility to update any of those forward-looking statements or publicly announce any revisions to\nthose forward-looking statements to reflect future developments, events or circumstances. We are,\nhowever, subject to the provisions of the SFA and the Listing Manual of the SGX-ST regarding corporate\ndisclosure. In particular, pursuant to Section 241 of the SFA, if after this Prospectus is registered but\nbefore the close of the Invitation, we become aware of (a) a false or misleading statement or matter in\nthis Prospectus; (b) an omission from this Prospectus of any information that should have been included\nin it under Section 243 of the SFA; or (c) a new circumstance that has arisen since this Prospectus was\nlodged with the Authority and would have been required by Section 243 of the SFA to be included in this\nProspectus, if it had arisen before this Prospectus was lodged and that is materially adverse from the\npoint of view of an investor, we may lodge a supplementary or replacement Prospectus with the Authority.\nSPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS\n17\n\n\nPursuant to Section 88 of the Cayman Companies Law, where a scheme or contract involving the transfer\nof Shares or any class of shares in the Company to another company, whether a company (the\n“transferee company”) has, within four months after the making of the offer in that behalf by the\ntransferee company, been approved by the holders of not less than 90 per cent. in value of the shares\naffected, the transferee company may, at any time within two months after the expiration of the said four\nmonths, give notice in the prescribed manner to any dissenting shareholder that it desires to acquire his\nshares, and where such notice is given the transferee company shall, unless on an application made by\nthe dissenting shareholder within one month from the date on which the notice was given, unless the\ncourt thinks fit to order otherwise, be entitled and bound to acquire those shares on the terms on which\nunder the scheme or contract the shares of the approving shareholders are to be transferred to the\ntransferee company.\nApart from Section 88 of the Cayman Companies Law, there are no other statutory requirements under\nany Cayman Islands laws or regulations on take-over offers for our Shares which would be applicable to\nus.\nWith effect from 15 October 2005 and following legislative amendments to the SFA, we are subject to\nSections 138, 139 and 140 of the SFA and the Singapore Code on Take-overs and Mergers\nnotwithstanding that we are a corporation incorporated in the Cayman Islands.\nTAKE-OVERS\n18\n\n\nUnder the laws of the Cayman Islands, a company may, if authorised by its articles of association,\npurchase its own shares. Our Company has such power to purchase our own Shares pursuant to Article\n14 of our Articles. Such power to purchase our own Shares shall, subject to the Cayman Companies Law\nand our Articles (and if applicable, the rules and regulations of the SGX-ST and other regulatory\nauthorities), be exercisable by our Directors upon such terms and subject to such conditions as they think\nfit, in accordance with Article 14.\nUnder the laws of the Cayman Islands, such purchases may be effected out of profits of our Company or\nout of proceeds of a fresh issue of Shares made for that purpose or, in the manner authorised by our\nArticles, by a payment out of capital. At no time may our Company purchase our Shares if, as a result of\nthe purchase, there would no longer be any member of our Company holding our Shares. Only fully paid\nShares may be purchased by our Company. A payment out of capital by our Company for the purchase of\nour Shares is not lawful unless immediately following the date on which the payment out of capital is\nproposed to be made, our Company shall be able to pay our debts as they fall due in the ordinary course\nof business. Shares purchased by our Company shall be treated as cancelled and our Company’s issued,\nbut not our authorised, capital will be diminished accordingly.\nFor further details on the constitution of our Company, please refer to Appendix D of this Prospectus.\nOur Company presently has no intention of purchasing our own Shares after the listing. However, if we\ndecide to do so later, we will seek our Shareholders’ approval in accordance with our Articles and the\nrules of the SGX-ST.\nOur Company will make prompt public announcement of any such share purchase and has also given an\nundertaking to the SGX-ST to comply with all requirements that the SGX-ST may impose in the event of\nany such share purchase.\nPURCHASE BY OUR COMPANY OF OUR OWN SHARES\n19\n\n\nUnder the Cayman Companies Law, only those persons who agree to become shareholders of a Cayman\nIslands company and whose names are entered on the register of members of such a company are\nconsidered members, with rights to attend and vote at general meetings. Accordingly, Depositors holding\nShares through CDP would not be recognised as members of our Company, and would not have a right\nto attend and to vote at general meetings of our Company. In the event that Depositors wish to attend\nand vote at general meetings of our Company, CDP will have to appoint them as proxies, pursuant to the\nArticles. In accordance with Article 63(b), unless CDP specifies otherwise in a written notice to our\nCompany, CDP shall be deemed to have appointed as CDP’s proxies each of the Depositors who are\nindividuals and whose names are shown in the records of CDP\n, as at a time not earlier than forty-eight\n(48) hours prior to the time of the relevant general meeting, supplied by CDP to our Company. Therefore,\nDepositors who are individuals can attend and vote at the general meetings of our Company without the\nlodgment of any proxy form. Depositors who cannot attend a meeting personally may enable their\nnominees to attend as CDP’s proxies. Depositors who are not individuals can only be represented at a\ngeneral meeting of our Company if their nominees are appointed by CDP as CDP’s proxies. Proxy forms\nappointing nominees of Depositors as proxies of CDP would need to be executed by CDP as members\nand must be deposited at the specified place and within the specified time frame to enable the nominees\nto attend and vote at the relevant general meeting of our Company.\nATTENDANCE AT GENERAL MEETINGS\n20\n\n\nSingapore\nThis Prospectus does not constitute an offer, solicitation or invitation to subscribe for the New Shares in\nany jurisdiction in which such offer, solicitation or invitation is unlawful or is not authorised or to any\nperson to whom it is unlawful to make such offer, solicitation or invitation. No action has been or will be\ntaken under the requirements of the legislation or regulations of, or of the legal regulatory requirements of\nany jurisdiction, except for the filing and/or registration of this Prospectus in Singapore in order to permit\nan offering of the New Shares and the distribution of this Prospectus in Singapore. The distribution of this\nProspectus and the offering of the New Shares in certain jurisdictions may be restricted by the relevant\nlaws in such jurisdictions. Persons who may come into possession of this Prospectus are required by us\nand the Manager, Underwriter and Placement Agent to inform themselves about, and to observe and\ncomply with, any such restrictions at their own expense and without liability to us and the Manager,\nUnderwriter and Placement Agent. Persons to whom a copy of this Prospectus has been issued shall not\ncirculate the same to any other person or reproduce or otherwise distribute this Prospectus or any\ninformation herein for any purpose whatsoever, nor permit or cause the same to occur.\nHong Kong\nThe Underwriter has represented and agreed that:\n(a)\nit has not offered or sold and will not offer or sell in Hong Kong, by means of any document, any\nNew Shares other than (i) to “professional investors” as defined in the Securities and Futures\nOrdinance (Cap. 571) of Hong Kong and any rules made under that Ordinance; or (ii) in other\ncircumstances which do not result in the document being a “prospectus” as defined in the\nCompanies Ordinance (Cap. 32) of Hong Kong or which do not constitute an offer to the public\nwithin the meaning of that Ordinance; and\n(b)\nit has not issued or had in its possession for the purposes of issue, and will not issue or have in its\npossession for the purposes of issue, whether in Hong Kong or elsewhere, any advertisement,\ninvitation or document relating to the New Shares, which is directed at, or the contents of which are\nlikely to be accessed or read by, the public of Hong Kong (except if permitted to do so under the\nsecurities laws of Hong Kong) other than with respect to New Shares which are or are intended to\nbe disposed of only to persons outside Hong Kong or only to “professional investors” as defined in\nthe Securities and Futures Ordinance (Cap. 571) and any rules made under that Ordinance.\nThe contents of this Prospectus have not been reviewed by any regulatory authority in Hong Kong. You\nare advised to exercise caution in relation to the Invitation. If you are in any doubt about any of the\ncontents of this Prospectus, you should obtain independent professional advice.\nJapan\nNo public offering or secondary offering of our Company’s Shares within the meaning of the Securities\nand Exchange Law will be made in Japan, and thus no registration statement in respect of the offering\nand placement of our Company’s Shares will be filed. Therefore, this Prospectus may not be issued,\ncirculated, distributed or otherwise used in Japan except as mentioned below.\nThis Prospectus may be issued only for the purpose of private placement within the meaning of the\nabove Law. In this connection, a notification of the private placement will be filed with the financial\nauthority pursuant to the provision of the Cabinet Office Ordinance on the Disclosure of Corporate Affairs\nand Other Matters.\nEuropean Economic Area\nIn relation to each Member State of the European Economic Area which has implemented the Prospectus\nDirective (each, a “Relevant Member State”) an offer to the public of any New Shares contemplated by\nthis Prospectus may not be made in that Relevant Member State except that an offer to the public in that\nRelevant Member State of any New Shares may be made at any time under the following exemptions\nunder the Prospectus Directive, if they have been implemented in that Relevant Member State:\n(a)\nto legal entities which are authorised or regulated to operate in the financial markets or, if not so\nauthorised or regulated, whose corporate purpose is solely to invest in securities;\nSELLING RESTRICTIONS\n21\n\n\n(b)\nto any legal entity which has two or more of (i) an average of at least 250 employees during the\nlast financial year; (ii) a total balance sheet of more than €43,000,000; and (iii) an annual net\nturnover of more than €50,000,000, as shown in its last annual or consolidated accounts;\n(c)\nby the Underwriter to fewer than 100 natural or legal persons (other than qualified investors as\ndefined in the Prospectus Directive) subject to obtaining the prior consent of the Underwriter for\nany such offer; or\n(d)\nin any other circumstances falling within Article 3(2) of the Prospectus Directive, \nprovided that no such offer of New Shares shall result in a requirement for the publication by us or the\nUnderwriter of a prospectus pursuant to Article 3 of the Prospectus Directive.\nFor the purposes of this provision, the expression an “offer to the public” in relation to any New Shares in\nany Relevant Member State means the communication in any form and by any means of sufficient\ninformation on the terms of the offer and any New Shares to be offered so as to enable an investor to\ndecide to purchase any New Shares, as the same may be varied in that Member State by any measure\nimplementing the Prospectus Directive in that Member State and the expression “Prospectus Directive”\nmeans Directive 2003/71/EC and includes any relevant implementing measure in each Relevant Member\nState.\nUnited Kingdom\nThe Underwriter has represented, warranted and agreed that:\n(a)\nit has only communicated or caused to be communicated and will only communicate or cause to be\ncommunicated any invitation or inducement to engage in investment activity (within the meaning of\nsection 21 of the Financial Services and Markets Act 2000, as amended (the “FSMA”)) received by\nit in connection with the issue or sale of any New Shares in circumstances in which section 21(1)\nof the FSMA does not apply to us; and\n(b)\nit has complied and will comply with all applicable provisions of the FSMA with respect to anything\ndone by it in relation to the New Shares in, from or otherwise involving the United Kingdom.\nUnited States of America\nThe New Shares have not been and will not be registered under the Securities Act and may not be\noffered or sold within the United States or to, or for the account or benefit of, U.S. persons except in\ncertain transactions exempt from the registration requirements of the Securities Act. Terms used in this\nparagraph have the meanings given to them by Regulation S.\nThe New Shares are subject to U.S. tax law requirements and may not be offered, sold or delivered within\nthe United States or its possessions or to a United States person, except in certain transactions permitted\nby U.S. tax regulations. Terms used in this paragraph have the meanings given to them by the United\nStates Internal Revenue Code and regulations thereunder.\nThe Underwriter has agreed that, except as permitted by the Placement Agreement, it will not offer, sell\nor deliver New Shares, (i) as part of their distribution at any time or (ii) otherwise until 40 days after the\nlater of the commencement of the offering of New Shares and the closing date, within the United States\nor to, or for the account or benefit of, U.S. persons, and such Underwriter will have sent to each dealer to\nwhich it sells New Shares during the distribution compliance period relating thereto a confirmation or\nother notice setting forth the restrictions on offers and sales of the New Shares within the United States\nor to, or for the account or benefit of, U.S. persons.\nIn addition, until 40 days after the later of the commencement of the offering of New Shares and the\nclosing date, any offer or sale of New Shares within the United States by any dealer (whether or not\nparticipating in the offering) may violate the registration requirements of the Securities Act.\nSELLING RESTRICTIONS\n22\n\n\nLISTING ON THE SGX-ST \nWe have applied to the SGX-ST for permission to deal in and for quotation of, all our existing issued\nShares, the New Shares, the Additional Shares and the Option Shares. Such permission will be granted\nwhen our Company has been admitted to the Official List of the SGX-ST. Acceptance of applications will\nbe conditional upon, inter alia, permission being granted by the SGX-ST to deal in, and for quotation of,\nall our existing issued Shares, the New Shares, the Additional Shares and the Option Shares. Monies\npaid in respect of any application accepted will be returned to you, without interest or any share of\nrevenue or other benefit arising therefrom and at your own risk, if the said permission is not granted or for\nany other reasons (including where the Authority issues a stop order) and you will not have any claims\nwhatsoever against us and the Manager, Underwriter and Placement Agent.\nIn connection with the Invitation, we have granted to the Manager an Over-allotment Option exercisable\nby the Manager during the period commencing on the date of commencement of trading of the Shares on\nthe SGX-ST (the “Commencement Date”) and expiring on the date falling 30 days after the\nCommencement Date. The Manager may subscribe for up to an aggregate of 9,810,000 Additional\nShares, representing approximately 15 per cent. of the New Shares, solely to cover over-allotments of\nShares (if any) in the Invitation. In connection with the Invitation, the Manager may over-allot or effect\ntransactions which stabilise or maintain the market price of the Shares, subject to compliance with the\nlaws of Singapore. Such stabilisation, if commenced, may be discontinued by the Manager at any time at\nthe Manager’s discretion in accordance with the laws of Singapore.\nThe SGX-ST assumes no responsibility for the correctness of any statements or opinions made or\nreports contained in this Prospectus. Admission to the Official List of the SGX-ST is not to be taken as an\nindication of the merits of the Invitation, our Company, our subsidiaries, our Shares, the New Shares, the\nOption Shares or the Additional Shares.\nA copy of this Prospectus has been lodged with and registered by the Authority. The Authority assumes\nno responsibility for the contents of this Prospectus. Registration of this Prospectus by the Authority does\nnot imply that the SFA, or any other legal or regulatory requirements, have been complied with. The\nAuthority has not, in any way, considered the merits of our Shares, the New Shares, the Option Shares or\nthe Additional Shares, as the case may be, being offered or in respect of which an invitation is made, for\ninvestment.\nWe are subject to the provisions of the SFA and the Listing Manual regarding corporate disclosure. In\nparticular, if after this Prospectus is registered but before the close of the Invitation, we become aware of:\n(a)\na false or misleading statement or matter in the Prospectus;\n(b)\nan omission from this Prospectus of any information that should be have been included in it under\nSection 243 of the SFA; or \n(c)\na new circumstance that has arisen since this Prospectus was lodged with the Authority which\nwould have been required by Section 243 of the SFA to be included in this Prospectus if it had\narisen before this Prospectus was lodged,\nthat is materially adverse from the point of view of an investor, we may lodge a supplementary or\nreplacement prospectus with the Authority pursuant to Section 241 of the SFA.\nWhere applications have been made for the New Shares prior to the lodgment of the supplementary or\nreplacement prospectus, we shall, within seven days from the date of lodgment of the supplementary or\nreplacement prospectus, either:\n(a)\nprovide the applicants with a copy of the supplementary or replacement prospectus and, as the\ncase may be, provide the applicants with an option to withdraw their applications; or \nDETAILS OF THE INVITATION\n23\n\n\n(b)\nsubject to compliance with the Cayman Companies Law, treat the applications as withdrawn and\ncancelled and return all monies paid, without interest or any share of revenue or other benefit\narising therefrom, in respect of any application accepted within seven days from the date of\nlodgment of the supplementary or replacement prospectus.\nAny applicant who wishes to exercise his option to withdraw his application shall, within 14 days from the\ndate of lodgment of the supplementary or replacement prospectus, notify us whereupon we shall, within\nseven days from the receipt of such notification, return the application monies without interest or any\nshare of revenue or other benefit arising therefrom and at the applicant’s own risk.\nUnder the SFA, the Authority may, in certain circumstances issue a stop order (the “Stop Order”) to our\nCompany, directing that no or no further Shares to which this Prospectus relates, be allotted, issued or\nsold. Such circumstances will include a situation where this Prospectus (i) contains a statement or matter,\nwhich in the opinion of the Authority is false or misleading; (ii) omits any information that should be\nincluded in accordance with the SFA; or (iii) does not, in the opinion of the Authority, comply with the\nrequirements of the SFA.\nWhere the Authority issues a Stop Order pursuant to Section 242 of the SFA:\n(a)\nin the case where the New Shares have not been issued and/or sold to the applicants, the\napplications of the New Shares pursuant to the Invitation shall be deemed to have been withdrawn\nand cancelled and our Company shall, within 14 days from the date of the Stop Order, pay to the\napplicants all monies the applicants have paid on account of their applications for the New Shares;\nor\n(b)\nin the case where the New Shares have been issued and/or sold to the applicants, the issue and/or\nsale of the New Shares pursuant to the Invitation is required by the SFA to be deemed void and\nour Company shall, subject to compliance with the Cayman Companies Law and our Articles,\nrepurchase the New Shares and our Company shall, within 14 days from the date of the Stop\nOrder, pay to the applicants all monies paid by them for the New Shares.\nSuch monies paid in respect of your application will be returned to you at your own risk, without interest\nor any share of revenue or other benefit arising therefrom, and you will not have any claim against us and\nthe Manager, Underwriter and Placement Agent.\nThis Prospectus has been seen and approved by our Directors and they individually and collectively\naccept full responsibility for the accuracy of the information given in this Prospectus and confirm, having\nmade all reasonable enquiries, that to the best of their knowledge and belief, the facts stated and all\nexpressions of opinion, intention and expectation in this Prospectus are fair and accurate in all material\nrespects as at the date of this Prospectus and that there are no material facts the omission of which\nwould make any statements in this Prospectus misleading, and that this Prospectus constitutes full and\ntrue disclosure of all material facts about the Invitation and our Group.\nNeither our Company and the Manager, Underwriter and Placement Agent, nor any other parties involved\nin the Invitation is making any representation to any person regarding the legality of an investment by\nsuch person under any investment or other laws or regulations. No information in this Prospectus should\nbe considered as being business, legal or tax advice regarding an investment in our Shares. Each\nprospective investor should consult his own professional or other advisers for business, legal or tax\nadvice regarding an investment in our Shares.\nNo Shares shall be allotted or allocated on the basis of this Prospectus later than six months after the\ndate of this Prospectus.\nDETAILS OF THE INVITATION\n24\n\n\nNo person has been or is authorised to give any information or to make any representation not contained\nin this Prospectus in connection with the Invitation and, if given or made, such information or\nrepresentation must not be relied upon as having been authorised by us and, the Manager, Underwriter\nand Placement Agent.\nNeither the delivery of this Prospectus and the Application Forms nor any\ndocuments relating to the Invitation, nor the Invitation shall, under any circumstances, constitute a\ncontinuing representation or create any suggestion or implication that there has been no change or\ndevelopment reasonably likely to invoke a change in our affairs or in the statements of fact or information\ncontained in this Prospectus since the date of this Prospectus. Where such changes occur, we may lodge\na supplementary or replacement Prospectus with the Authority and make an announcement of the same\nto the SGX-ST and/or the Authority and will comply with the requirements of the SFA and/or any other\nrequirements of the SGX-ST and/or the Authority. All applicants should take note of any such\nannouncements and, upon the release of such an announcement, shall be deemed to have notice of\nsuch changes. Save as expressly stated in this Prospectus, nothing herein is, or may be relied upon as,\na promise or representation as to our future performance or policies.\nThis Prospectus has been prepared solely for the purpose of the Invitation and may not be relied upon by\nany other persons other than the applicants in connection with their application for the New Shares or for\nany other purpose.\nThis Prospectus does not constitute an offer, solicitation or invitation of the New Shares in any\njurisdiction in which such offer, or solicitation or invitation is unlawful or unauthorised nor does it\nconstitute an offer, solicitation or invitation to any person to whom it is unlawful to make such\noffer, solicitation or invitation.\nCopies of this Prospectus and the Application Forms and envelopes may be obtained on request, subject\nto availability, during office hours, from:\nDBS BANK LTD\n6 SHENTON WAY #36-01\nDBS BUILDING TOWER ONE\nSINGAPORE 068809\nand where available, from branches of DBS Bank Ltd (including POSB), members of the Association of\nBanks in Singapore, members of the SGX-ST and merchant banks in Singapore.\nA copy of this Prospectus is also available on:\n(a)\nthe SGX-ST website: http://www.sgx.com; and\n(b)\nthe Authority’s website: http://masnet.mas.gov.sg/opera/sdrprosp.nsf.\nThe Application List will open at 10.00 a.m. on 15 August 2007 and will remain open until noon on\nthe same day or such further period or periods as our Directors may, in consultation with the\nManager, in their absolute discretion decide, subject to any limitation under all applicable laws\nand regulations. PROVIDED ALWAYS THAT where a supplementary prospectus or replacement\nprospectus is lodged with the Authority, the Application List will be kept open for at least 14 days\nafter the lodgment of the supplementary or replacement prospectus.\nDetails of the procedure for application and acceptance to subscribe for the New Shares are set out in\nAppendix G – “Terms, Conditions and Procedures for Application and Acceptance” of this Prospectus.\nDETAILS OF THE INVITATION\n25\n\n\nINDICATIVE TIMETABLE FOR LISTING\nAn indicative timetable on the trading of initial public offering shares on a “when issued” basis is set out\nbelow for reference of applicants:\nIndicative time/date\nEvent\n8 August 2007\nCommencement of Invitation\n12.00 noon on 15 August 2007\nClose of Application List\n16 August 2007\nBalloting of applications, if necessary (in the event of over-\nsubscription for the Offer Shares)\n9.00 a.m. on 17 August 2007\nCommence trading on a “ready” basis    \n22 August 2007\nSettlement date for all trades done on a “ready” basis \nThe above timetable is only indicative as it assumes that the date of closing of the Application List will be\n15 August 2007, the date of admission of our Company to the Official List of the SGX-ST will be 17\nAugust 2007, the shareholding spread requirement will be complied with and the New Shares will be\nissued and fully paid-up prior to 17 August 2007. The actual date on which our Shares will commence\ntrading on a “ready” basis will be announced when it is confirmed by the SGX-ST.\nThe above timetable and procedures may be subject to such modification as the SGX-ST may, in its\nabsolute discretion, decide, including the decision to permit trading on a “ready” basis and the\ncommencement date of such trading. The commencement of trading on a “ready” basis will be\nentirely at the discretion of the SGX-ST. All persons trading in our Shares before their Securities\nAccounts with CDP are credited with the relevant number of Shares do so at the risk of selling\nShares which neither they nor their nominees, as the case may be, have been allotted or are\notherwise beneficially entitled to.\nInvestors should consult the SGX-ST’s announcement on “ready” listing date on the internet (at the SGX-\nST website http://www.sgx.com) or the newspaper(s), or check with their brokers on the date on which\ntrading on a “ready” basis will commence.\nIn the event of any changes in the closure of the Application List or the time period during which the\nInvitation is open, we will publicly announce the same:\n(i)\nthrough an SGXNET announcement to be posted on the internet at the SGX-ST website\nhttp://www.sgx.com; and\n(ii)\nin a local English newspaper.\nDETAILS OF THE INVITATION\n26\n\n\nThe Invitation is for 65,400,000 New Shares (plus a maximum of 9,810,000 Additional Shares which may\nbe issued upon the exercise of the Over-allotment Option) offered in Singapore by way of public offer and\nplacement comprising 3,300,000 Offer Shares and 62,100,000 Placement Shares (including the Internet\nPlacement Shares and the Reserved Shares) managed and underwritten by DBS Bank Ltd.\nThe Invitation Price is determined by us in consultation with the Manager, based on market conditions\nand estimated market demand for our Shares determined through a book-building process. The Invitation\nPrice is the same for each New Share and is payable in full on application.\nInvestors may apply to subscribe for any number of New Shares in integral multiples of 1,000 Shares. In\norder to ensure a reasonable spread of Shareholders, we have the absolute discretion to prescribe a limit\nto the number of New Shares to be alloted to any single applicant and/or to allot New Shares above or\nunder such prescribed limit as we shall deem fit.\nOffer Shares\nPursuant to the terms and conditions contained in the Management and Underwriting Agreement entered\ninto between us and DBS Bank as set out in the section entitled “General and Statutory Information” of\nthis Prospectus, DBS Bank has agreed to underwrite the Offer Shares. DBS Bank is committed to take\nand to pay for all of the Offer Shares. The Offer is open to members of the public in Singapore.\nPlacement Shares\nPursuant to the terms and conditions contained in the Placement Agreement entered into between us\nand DBS Bank as set out in the section entitled “General and Statutory Information” of this Prospectus,\nDBS Bank agreed to subscribe and/or procure subscribers for the Placement Shares. Under the\nPlacement, the Placement Agent intends to offer the Placement Shares to investors (including\ninstitutional and other investors).\nSubscribers of the Placement Shares (excluding Reserved Shares) may be required to pay brokerage of\none per cent. of the aggregate Invitation Price for the number of Placement Shares subscribed as well as\napplicable stamp duties and goods and services tax to the Placement Agent.\nReserved Shares\n3,960,000 Placement Shares shall be reserved for our employees, business associates and others who\nhave contributed to the success of our Group. These Reserved Shares are not subject to any moratorium\nand may be disposed of after the admission of our Company to the Official List of the SGX-ST. However,\nnone of them will be offered more than five per cent. of the total Invitation size.\nThe terms, conditions and procedures for application are described in Appendix G of this Prospectus.\nClawback and Re-Allocation\nThe New Shares may be reallocated between the Placement and the Offer at the discretion of the\nManager.\nIn the event of an under-subscription for the Reserved Shares as at the close of the Application List, the\nnumber of Reserved Shares under-subscribed shall be made available to satisfy applications for\nPlacement Shares by way of Placement Application Forms or in any other form of application as may be\ndeemed appropriate by the Manager to the extent that there is an over-subscription for such Placement\nShares as at the close of the Application List, or to satisfy excess applications for Offer Shares to the\nextent that there is an over-subscription for Offer Shares as at the close of the Application List.\nPLAN OF DISTRIBUTION\n27\n\n\nIn the event of an under-subscription for the Internet Placement Shares to be applied for through the\nInternet website of DBS Vickers Securities Online (Singapore) Pte Ltd as at the close of the Application\nList, that number of Internet Placement Shares not subscribed for shall be made available to satisfy\napplications for the Placement Shares by way of Placement Shares Application Forms (or such other\nforms of application as the Manager may, in consultation with the Company, deem appropriate) to the\nextent that there is an over-subscription for such Placement Shares (not including the Internet Placement\nShares) as at the close of the Application List or to satisfy excess applications for the Offer Shares to the\nextent that there is an over-subscription for the Offer Shares as at the close of the Application List.\nOver-allotment and Stabilisation \nIn connection with the Invitation, and in consideration of the parties’ mutual obligations under the\nManagement and Underwriting Agreement, we have granted the Manager an Over-allotment Option to\nsubscribe for up to 9,810,000 Additional Shares, representing approximately 15 per cent. of the New\nShares, at the Invitation Price exercisable during the period commencing on the Commencement Date\nand expiring on the date falling 30 days after the Commencement Date. The Manager may subscribe for\nthe Additional Shares solely for the purpose of covering over-allotments (if any) made in connection with\nthe Invitation.\nIn addition, Mr. Motokuni Yamashiro has entered into the Share Lending Agreement with the Manager to\nloan up to 9,810,000 Shares to the Manager for the purpose of facilitating settlement of the over-allotment\nof Shares (if any) in connection with the Invitation.\nAs disclosed in the sub-section entitled “Moratorium” of the section entitled “Principal Shareholders” of\nthis Prospectus, Mr. Yamashiro’s entire post-Invitation shareholdings of 31,250,000 Shares will be subject\nto a moratorium, save for up to 9,810,000 Shares that may be lent to DBS Bank pursuant to the over-\nallotment and price stabilisation activities effected in connection with the Invitation. At the conclusion of\nthe price stabilisation activities, all Shares lent by DBS Bank are required to be returned to Mr. Motokuni\nYamashiro and will thereafter be subject to the moratorium undertaking.\nIn connection with the Invitation, the Manager may, at its discretion but subject always to applicable laws\nand regulations in Singapore, over-allot or effect transactions which stabilise or maintain the market price\nof the Shares at levels which might not otherwise prevail in the open market. Such transactions may be\neffected on the SGX-ST and in all jurisdictions where it is permissible to do so, in each case, in\ncompliance with all applicable laws and regulatory requirements. Such stabilisation activities, if\ncommenced, may be discontinued by the Manager at any time at the Manager’s discretion.\nEach of Founders Corporation, Exeno Yamamizu, Mitsui & Co., Ltd and Yamasa Co., Ltd has given an\nundertaking in favour of our Company to subscribe for an aggregate of 15,000,000 Placement Shares.\nFounders Corporation is beneficially owned as to 64% and 36% by Mr. Kazuhiko Yoshida and Mr. Michio\nTanamoto, our Executive Directors, respectively.\nSave as disclosed above, none of our Directors or Substantial Shareholders intend to subscribe for any\nNew Shares in the Invitation.\nSave as disclosed above, and to the best of our knowledge and belief, we are not aware of any person\nwho intends to subscribe for more than five per cent. of the New Shares. However, further to a book-\nbuilding process to access market demand for our Shares, there may be persons who may be allocated\nShares amounting to more than five per cent. of the New Shares.\nNo Shares shall be allotted or allocated on the basis of this Prospectus later than six months after the\ndate of this Prospectus.\nPLAN OF DISTRIBUTION\n28\n\n\nOVERVIEW\nIntroduction\nUni-Asia is an Asia-based structured finance arrangement and Alternative Assets direct investment firm.\nOur principal activities are in: (1) structured finance – the finance arrangement of transport related assets\n(such as ships and aircraft), and the provision of ship charter arrangement and agency services; and (2)\nAlternative Assets investment/management – direct investments in and/or the arrangement and\nadministration of Alternative Assets investments such as ships, distressed assets and real estate. As at\nthe Latest Practicable Date, our Group has 32 staff in three offices in Tokyo, Hong Kong and Singapore.\nUni-Asia was established in Hong Kong in 1997 by founders Motokuni Yamashiro, Kazuhiko Yoshida,\nMichio Tanamoto and Takanobu Himori who were Japanese bankers. Each of the founders has over 25\nyears experience in the banking industry working in corporate loan syndication and structured finance\narrangement. Mr. Himori left our Company in March 2004. The other founders continue to lead the\nbusiness and as at the Latest Practicable Date, they own, directly and indirectly, a significant aggregate\nequity interest in Uni-Asia of approximately 23.9%.\nActivities\nUni-Asia was founded to arrange structured finance transactions for companies mainly in the shipping\nand, to some extent, aviation industries. Our initial focus was on finance arrangement for companies in\nthe transport sector. Our business expanded to include investment in Alternative Assets such as NPLs\ndistressed debt, shipping assets and real estate assets in May 1998.\n(1)\nStructured Finance \nOur structured finance department provides an integrated service to our clients by offering financing\nsolutions together with charter arrangement services tailor-made to our clients’ needs. The solutions do\nnot normally involve the use of our balance sheet capital to make loans. We typically act only as the\narranger and agent for the structured financing provided by third party financial institutions. We arrange\nfinancing for asset acquisitions by our clients and also offer tax-enhanced structured services and\nproducts, including mortgage financing, tax-oriented leases such as UK tax leases and Japanese\noperating leases, as well as ECA backed credit, ship charter arrangement, and balance sheet\nmanagement. We receive an arrangement fee on each completed transaction.\nWe have been active in the arrangement of structured finance since our founding in 1997. In this time, we\nhave built up a portfolio of clients and have identified potential clients to whom we market to directly or on\nan opportunistic basis. We have also developed relationships with the key banks which provide\nsyndicated loan financing. Our clients include established international shipping and aviation companies\nfrom Taiwan, Greece, Indonesia, Japan, Hong Kong, Korea, the UK and Italy.\nSome key products and services which we offer our clients include mortgage financing, tax-oriented\nleases, ECA backed credit, ship charter arrangement and balance sheet management.\nWe acted as arranger for structured financing in the form of loans and leases in the aggregate amount of\napproximately US$561.6 million, US$987.5 million and US$637.7 million in FY2004, FY2005 and FY2006\nrespectively.\nSelected key transactions completed include:\n\u0002\nUK Tax Lease for Hatsu Marine\n\u0002\nArrangement of a Japanese Operating Lease\n\u0002\nShip Charter Arrangement for Niki Shipping Company Inc\n\u0002\nMortgage Financing for CIDO Holding Co., Ltd.\n\u0002\nJBIC Financing\nPROSPECTUS SUMMARY\n29\n\n\n(2)\nAlternative Assets Investment\nOur Alternative Assets Investments division leverages on our specialist skills in structured finance\narrangement and credit analysis to invest in, either as the principal investor or in partnership with other\ninvestors, three key Alternative Asset classes: (i) ship investment (such as bulk carriers, product tankers\nand container vessels); (ii) distressed assets investment (including NPLs and other distressed assets in\nAsia (excluding Japan)); and (iii) property investment (including hotel and property investment in Japan\nand commercial property investment in the PRC).\nWe invest in the following three key alternative asset classes:\n(i)\nShip Investment\nAs a progression from our structured finance business as an arranger of financing for transport related\nassets, we branched out into direct investments in ships through equity investment in the ship owning\ncompanies and also through subscription of Performance Notes issued by special investment fund\nvehicles established by us.\nOur asset finance department aims to invest in ships for commercial use that will produce attractive\ninvestment returns because of factors such as high expected demand for, or anticipated shortfall in, the\nsupply of such ships.\nSelected key transactions completed include:\n\u0002\nMortgage financing and equity syndication for Searex\n\u0002\nMultiple roles as investor, administrator and fiscal agent of Searex\n\u0002\nMultiple roles as administrator, registrar, fiscal agent and project manager to the Akebono Fund\n(ii)\nDistressed Assets Investment\nWe started to invest directly in distressed assets in 1998 to capitalise on opportunities for us to use our\nown capital to purchase NPLs and other distressed assets in Asia (excluding Japan) including the PRC,\nHong Kong, Thailand, Malaysia, Indonesia, the Philippines and Korea. We usually invest in NPLs through\nspecial investment fund vehicles established by us and which issue Performance Notes to Uni-Asia itself\nand selected institutional co-investors to raise funding for distressed assets investments.\nOur NPL investment strategy is to leverage on our network of industry contacts to find opportunities that\nsatisfy our criteria of high cashflow generation and a significant asset base on which we can get security.\nOpportunities are sourced through a network of industry contacts which include financial institutions, such\nas banks, and accounting firms active in NPL transactions. We aim to recover the NPLs and exit the\ninvestments to realise a return through various debt recovery policies. Debt collection and monitoring of\nindividual NPL transactions are applied either through an agent bank, receiver or liquidator, or led by us if\nthe asset is located in the PRC, Taiwan or Hong Kong. We focus on the recovery of the debt repayments\nunder the NPLs. We do not actively engage in the secondary trading of NPLs with the specific purpose of\non-selling to another purchaser of NPLs.\nA strong performance track record has been steadily built up since 1998 to 2004. We, as sole principal,\nmade six investments that included 24 NPL accounts with a value of approximately US$30.5 million and\nrealised a return of over eight times within the period of approximately six years.\nAAA Series II Fund has made 19 NPL investments representing 58 NPL accounts since July 2003 to the\nLatest Practicable Date. The two-year investment period ended in July 2005 and the recovery period will\nend in July 2008.\nPROSPECTUS SUMMARY\n30\n\n\nWe also act as the administrator of the distressed assets investment funds providing administration\nservices such as monitoring, book-keeping and reporting services. We earn an administration fee on the\ndrawdown of funds (for investment into NPLs) and an incentive fee for investment out-performance\nagainst a target hurdle rate. We also earn an agency fee for services to be provided in our capacity as\nthe registrar and the fiscal agent of the funds.\n(iii)\nProperty Investment\nProperty Investment and Management – Japan\nWe invest into real estate in Japan through Capital Advisers. Capital Advisers focuses on investment in\nand management of residential and hotel related real estate assets in Japan. It seeks investments across\na range of locations with a focus on balanced risk and return. Capital Advisers was established in 1998\nas our wholly-owned subsidiary. In May 2003, Capital Advisers raised Yen 985 million (or approximately\nUS$8.2 million) in shareholders’ equity capital from a number of independent third party investors as part\nof its strategic expansion. Our shareholding interest in Capital Advisers was diluted to 44.8% and as a\nresult, Capital Advisers became our associated company.\nCapital Advisers, by itself or in cooperation with its business partners, looks for the appropriate property\nprojects to invest in. At the initial stage of an investment, it arranges the investment structure, establishes\na SPC which owns the property in the form of a trust, arranges equity contribution to the SPC, arranges\nnon-recourse loan, from financial institutions on behalf of the SPC. Capital Advisers itself may invest in\nthe SPC as a minority investor. Capital Advisers also acts as the asset manager of the assets owned by\nthe SPC and manages the SPC’s assets including the invested property on behalf of the SPC, eventually\non behalf of the investors. At the end of the investment period or sometimes during the investment period,\nin order to maximise investors’ return, Capital Advisers also engages in a selling procedure as the asset\nmanager. Capital Advisers manages over Yen 58.5 billion (or approximately US$491.9 million) in assets\nwhich includes a contribution of approximately Yen 2.0 billion (or approximately US$16.8 million) of its\nown capital as at the end of 2006.\n\u0002\nProperty Investment – Japan\nIn 2000, we, through our then wholly-owned subsidiary Capital Advisers, established an investment\npartnership with Grosvenor Asia to invest in residential properties in Tokyo.\nThe investment partnership was followed by the establishment of the GCAP Fund in 2004. The\nGCAP Fund is jointly managed by Grosvenor Asia and Capital Advisers through Grosvenor Capital\nAdvisers Fund Management Co., Ltd. and is anticipated to grow to more than Yen 20 billion (or\napproximately US$194.4 million) when fully invested based on its historical borrowing capability\nand committed equity funds of Yen 6.3 billion (or approximately US$61.2 million).\nThe equity size of each investment fund ranged from US$1.4 million to US$38.5 million. The equity\ninvestors to the funds are financial institutions, real estate companies and corporations mainly\nbased in Japan and Southeast Asia. Capital Advisers itself invested Yen 2.0 billion (or\napproximately US$16.8 million) as a minority equity investor as at 31 December 2006.\n\u0002\nHotel Properties Investment – Japan\nIn 2001, Capital Advisers directed its attention to the asset investment/management business in\nthe hotel property sector. In the hotel property sector, Capital Advisers focuses mainly on\ninvestment in limited-service hotels. Capital Advisers typically enters into hotel properties\ninvestments as both the asset manager and a minority investor although there was one exception\nin which Capital Advisers had become the majority investor as a result of an additional equity\ninjection. The number of hotels in which Capital Advisers has been engaged in as asset manager\nand invested in as minority investor totalled 11 by the end of 2006. Capital Advisers, as the asset\nmanager in hotel property investments, employs a team which is experienced in the hotel sector\nand not only manages the hotel assets but also monitors the hotel operation itself. The total asset\nof the hotel investments was over Yen 16.9 billion (or approximately US$142.5 million) as at 31\nPROSPECTUS SUMMARY\n31\n\n\nDecember 2006. The total equity invested was about Yen 5.4 billion (or approximately US$45.5\nmillion), of which Capital Advisers had an interest of between 5.0% and 51.9%. In relation to the\nhotel property investment, in 2004, Capital Advisers invested in another asset management\ncompany which manages a Japanese real estate investment trust (J-REIT) specializing in hotel\nproperties. As at the Latest Practicable Date, Capital Advisers has a 5% shareholding interest in\nthis asset management company. The J-REIT was listed in Japan on 14 June 2006. In view of\nCapital Advisers’ growth and expansion strategy, they may from time to time consider various fund\nraising options, such as new equity injection. In the event of a new equity injection, our interest in\nCapital Advisers may be diluted.\n\u0002\nResidential Investment – Japan\nSince February 2004, Capital Advisers has also been engaged in the investment in and asset\nmanagement of residential properties, with a focus on small-sized studio apartment buildings. The\nnumber of these types of buildings managed and/or invested in by Capital Advisers reached 10 in\n2004, 31 in 2005 and 50 in 2006. Between 2004 and 2006, the equity interests held by Capital\nAdvisers in its residential property investments were between 5.8% to 10% in equity and such\nequity interests were redeemed through the sales of the relevant properties.\nCapital Advisers earns an arrangement, asset management and administration fee for its services\nas the asset manager of the property investment portfolio. It also participates in the return to\ninvestors in the portfolio through its position as a minority equity investor in the property investment\nfunds.\nPrincipal Investments in Properties – PRC\nIn January 2007, we established a wholly-owned property investment company, Uni-Asia Guangzhou, in\nGuangzhou, Guangdong Province, the PRC, with a paid-in capital of US$3.0 million. Our Group will\ncontinue to explore property investment opportunities in the PRC under new property guidelines\nintroduced by the PRC government in July 2006, and property investment opportunities in Southeast\nAsia. At the end of June 2007, Uni-Asia Guangzhou completed the acquisition of 14 office units with\ngross floor area of 1,304 sq m of the China Shine Plaza, a commercial development in the Tianhe\ncommercial district in Guangzhou. We intend to lease the office units to third parties.\nPlease refer to the section entitled “General Information on our Group” in this Prospectus for more details.\nCOMPETITIVE STRENGTHS \nWe believe that our key competitive strengths are as follows:\nExperienced Executive Directors and Management Team\nOur Executive Directors and management team comprise experienced professionals in the structured\nfinance industry and alternative asset investments. Our co-founders and Executive Directors, Messrs\nMotokuni Yamashiro, Kazuhiko Yoshida and Michio Tanamoto co-founded Uni-Asia in 1997. A summary\nof their work experience may be found in the section entitled “Directors, Management and Staff” in this\nProspectus.\nWe believe that we have a clear understanding of our industry requirement and possess a client-driven\nfocus and an established investment strategy. Our staff is committed to provide value-added and\ninnovative services to our clients. Our Executive Directors, Executive Officers and employees of our\nCompany collectively own approximately 19.7% of our post-Invitation issued share capital. We believe\nthat this has helped align their interests with those of our Company and foster a sense of commitment. In\naddition, we have in place an employee share option scheme to motivate and foster a stronger sense of\nownership amongst our staff. Please refer to the section entitled “Uni-Asia Share Option Scheme” in this\nProspectus for further details of our Scheme.\nPROSPECTUS SUMMARY\n32\n\n\nWe have a successful track record of integrated capabilities in our specialist fields\nWe have a strong background and experience in finance arrangement and investment in Alternative\nAssets. Based on our track record, we have been able to successfully identify opportunities, formulate\nstructures and execute them effectively. By leveraging on this strength, we focus on activities where our\nexperience and established relationships provide a competitive advantage. Further details of selected key\ntransactions may be found in the section entitled “General Information on our Group – Business\nOverview” in this Prospectus.\nAs transport-related finance arrangement and Alternative Asset investments are specialised fields, we\nbelieve that we are able to achieve the following competitive advantages:\n\u0002\nComprehensive range of value-added and innovative structures\n\u0002\nScalable execution capabilities\n\u0002\nEffective internal processes and practices\nWe are able to leverage on our relationships with our well-established network\nWe have a well-established and strong network of contacts. The engagement of clients and provision of\nservices are carried out with the objective of creating and maintaining long-term relationships. In addition\nto our client relationships, we have also been able to build other long-term business relationships through\nour investments, partners, corporate shareholders and brokers. We have been able, and will continue, to\nleverage on these relationships and network to support us in identifying new business opportunities and\nin assisting us to formulate new and innovative structures to address the requirements of our business\nassociates. This has resulted in us obtaining repeat businesses from our existing clients as well as new\nreferrals from our existing network. The strengths and geographical spread of these relationships enable\nus to provide cross-border services to our clients such as the recovery of PRC NPLs acquired from\nJapanese banks and ship finance in Asia financed by European financial institutions.\nPlease refer to the section entitled “General Information on our Group – Competitive Strengths” in this\nProspectus for more details.\nPROSPECTS \nShipping\nShipping is a global industry which is generally influenced by demand and supply dynamics such as the\ndemand for movement of cargoes, the resultant tonne-mile demand of vessels as well as the supply of\nvessels tonnage capacity. Fuel cost, which typically makes up a significant portion of the operating cost of\nships, is also a factor affecting the performance of the shipping industry.\nShipping comprises different shipping sectors servicing different industries, governed under different\nregulations and each having its own supply and demand dynamics. The major types of ships include dry\nbulk ships, container vessels, product tankers and crude tankers. Dry bulk ships carry dry commodities\nsuch as ore, coal, grains, fertiliser, bauxite, soy beans, cement, potash and salt. Container vessels carry\nmetal boxes containing cargoes such as cars and equipment. Product tankers carry mainly refined oil\nproducts such as gasoline and diesel, and other non-refrigerated cargoes such as edible oils and\nchemicals. Crude tankers carry crude oil and petroleum.\nThe dry bulk shipping trade is usually dependent on the demand for and price of commodities. Steel\nproduction is a key driver of the dry bulk shipping trade through seaborne demand for coking coal and\niron ore. The container shipping trade is usually dependent on the global economic growth, trade growth,\nindustrial production and consumer consumption. The product and oil tanker industry is usually\ndependent on global industrial production, refinery throughput, utilisation rate in refineries, global crude\noil inventory levels and the weather season.\nPROSPECTUS SUMMARY\n33\n\n\nWe believe that the demand for maritime vessels will be driven largely by the continued growth in the\nworld economy and seaborne trade. Such demand will provide us with opportunities to leverage on our\ntrack record and experience in structured finance and ship charter arrangements to establish new client\nrelationships and to offer our existing clients innovative and customised structured finance solutions as\nwell as ship charter arrangement services.\nStructured finance focusing on the shipping industry is dominated mainly by financial institutions. We\nbelieve that we are able to compete effectively with them by leveraging on our track record, our wide\nnetwork and our strong relationships with our business partners and customers, which include\nestablished shipping banks and shipowners.\nWhilst the shipping industry may be cyclical, we believe that our structured finance operations are not\nsignificantly subject to such cycles as we believe that there continues to be opportunities for us to provide\nstructured financing solutions as ship renewal is an ongoing process. In a shipping down-cycle, we\ngenerally observe the trend of older ships being scrapped and new ones being built given the lower cost\nof new builds. In the shipping up-cycle, we generally observe that there will be an increase in demand for\nships as ship owners seek to increase their fleet to capitalise on the favourable freight rates. We believe\nthat there continues to be opportunities for us to provide structured finance solutions and ancillary ship\nbrokerage services at different stages of the shipping cycle. We further believe that the shipyards’ order\nbooks in the coming years will continue to be sustained and thus present opportunities for us to provide\nmore structured finance solutions to shipowners and operators.\nAlternative Assets Investment\nThe Alternative Assets investment class includes investments in ships, distressed assets and real estate.\nDistressed assets typically include debt obligations such as junk bonds, corporate bonds, commercial and\nindustrial loans, credit card receivables and auto loans. Investors in distressed assets purchase debt\nobligations of companies that are financially troubled and are struggling or are unable to service their\ndebt obligations and they earn a return through recovery of distressed debt, through appreciation in the\nvalue of the distressed debt investment, or through leveraged buyouts.\nOur investments in ships are usually made through equity interests in ship owning companies or through\nPerformance Notes held in ship investment funds. Our direct and indirect investments in the different\ntypes of ships are made after careful consideration and due diligence and based on our Directors’ outlook\nof the various shipping sectors. We believe that we can leverage on our expertise knowledge in the\nshipping sector to tap on the opportunities to source for new ship investments and/or to buy or sell\nmaritime vessels.\nOur investments in distressed assets are mainly made through NPLs and we are also seeking\nopportunities in the distressed real estate market in Asia (excluding Japan). Such opportunities will be\ndependent on factors such as the respective countries’ macroeconomic environment and policies,\nperformance in key industry sectors, access to capital and liquidity, competition and prevailing market\nconditions. We believe that we will be able to leverage on our well-established network and familiarity with\nthe distressed asset markets in the region to identify and invest in suitable distressed assets.\nThe performance of Alternative Assets investments are dependent on the unique characteristics of each\ntype of alternative asset and the country of origin of these assets. These investments are therefore\nrelatively opportunistic in nature. We believe that such non-mainstream opportunities are available in Asia\nand we intend to seek new ship investments, real estate investments and distressed asset investments in\nAsia. We also believe that our experience in Alternative Assets investments, our capabilities in deal-\nmaking, due diligence, valuation, structuring and financing, together with our well-established network of\ncontacts in Asia will enable us to effectively identify and evaluate opportunities for cross-border\ninvestments in these assets.\nPlease refer to the section entitled “General Information on our Group – Prospects” in this Prospectus for\nmore details.\nPROSPECTUS SUMMARY\n34\n\n\nBUSINESS STRATEGY AND FUTURE PLANS\nWe aim to be a leading Asia-based structured finance arrangement and Alternative Assets direct\ninvestment firm. Our primary business strategy is to build on our existing strengths in structured finance\nand Alternative Assets investments, to provide one-stop and innovative financing solutions to our clients\nas well as to explore and develop Alternative Assets investment opportunities by leveraging on our\nexpertise and relationships.\nWe intend to continue to look for new market opportunities by leveraging on our core capabilities within\nour specialist fields. Globalisation and economic growth also offer us opportunities in terms of cross-\nborder financing and investments and allow us to build a wider presence and network within the region.\nThe principal elements of our strategy for growth and expansion of our business include:\n\u0002\nContinue to focus and leverage on our integrated capabilities and well-established relationships\n\u0002\nStructured finance: Expand and diversify our client portfolio and broaden our geographic coverage\nwithin Asia\n\u0002\nAlternative Assets investment: Expand and diversify our investment portfolio and broaden our\ngeographic coverage within Asia\n\u0002\nNew ship investment funds\nPlease refer to the section entitled “General Information on our Group – Business Strategy and Future\nPlans” in this Prospectus for more details.\nPROSPECTUS SUMMARY\n35\n\n\nCONSOLIDATED RESULTS OF OUR GROUP\nYou should read the following consolidated financial results of our Group in conjunction with the Reports\non the Consolidated Financial Statements for the years ended 31 December 2004, 2005 and 2006 set\nout in Appendices A, B and C of this Prospectus respectively and the related notes thereto.\nRestated(1)\nAudited\nAudited\nUS$’000\nFY2004\nFY2005\nFY2006\nFee income(2)\n5,599\n12,234\n9,922\nInvestment returns\n6,682\n5,011\n7,983\nIncome from defaulted loans\n1,862\n–\n–\nInterest income\n339\n936\n1,543\nOther income\n317\n86\n22\nTotal income\n14,799\n18,267\n19,470\nEmployee benefits expense\n(5,087)\n(5,481)\n(6,084)\nDepreciation expense\n(77)\n(106)\n(278)\nOther expenses\n(1,821)\n(3,316)\n(3,107)\nReversal of impairment loss on loans receivable\n250\n–\n–\nGain/(loss) on disposal of fixed assets\n–\n2\n(16)\n(6,735)\n(8,901)\n(9,485)\nOperating profit\n8,064\n9,366\n9,985\nFinance costs – interest expense\n(46)\n(42)\n(83)\nShare of profit of Associates after tax\n96\n594\n1,929\nProfit before income tax\n8,114\n9,918\n11,831\nIncome tax expense\n(179)\n(479)\n(398)\nProfit for the year\n7,935\n9,439\n11,433 (3)\nEPS(4) (pre-Invitation)\nUS$0.045\nUS$0.054\nUS$0.065 (3)\nEPS(5) (post-Invitation)\nUS$0.033\nUS$0.039\nUS$0.048 (3)\nNotes:\n(1)\nPlease refer to the discussion on “Reconciliation of our Consolidated Results of Operations as set out in this Prospectus to\nour Audited Consolidated Financial Statement” on page 61 of this Prospectus for the reconciliation of the restated figures to\nthe audited financial statements for the respective financial year.\n(2)\nOur fee income includes income generated from related party transactions as discussed in Note 29 to the consolidated\nfinancial statements of our Company for FY2006.\n(3)\nOur profit for the year and the EPS for FY2006 would not be materially affected had the Service Agreements as described in\nthe section entitled “Directors, Management and Staff – Service Agreements” been in place at the beginning of FY2006.\n(4)\nFor comparative purposes, the EPS (pre-Invitation) is computed by dividing the profit for the year by our pre-Invitation share\ncapital of 175,000,000 Shares.\n(5)\nFor comparative purposes, the EPS (post-Invitation) is computed by dividing the profit for the year by our post-Invitation share\ncapital of 240,400,000 Shares.\nOUR CONTACT DETAILS\nThe address of our principal place of business is Suite A, 26th Floor Tower I Admiralty Centre, 18 Harcourt\nRoad, Hong Kong. Our telephone number is +852 2528 5016. Our facsimile number is +852 2528 5020.\nPROSPECTUS SUMMARY\n36\n\n\nIssue Size\n:\n65,400,000 New Shares (excluding the Additional Shares that may\nbe issued under the Over-allotment Option) comprising 3,300,000\nOffer Shares and 62,100,000 Placement Shares.\nThe New Shares, upon issue and allotment, will rank pari passu in\nall respects with the existing issued Shares.\nInvitation Price \n:\nS$0.55 for each New Share.\nThe Offer \n:\nThe Offer comprises an offering of 3,300,000 Offer Shares at\nS$0.55 each to members of the public in Singapore, subject to and\non the terms and conditions of this Prospectus.\nThe Placement\n:\nThe Placement comprises a placement of 62,100,000 Placement\nShares including 500,000 Internet Placement Shares at S$0.55\neach and 3,960,000 Reserved Shares at S$0.55 each, subject to\nand on the terms and conditions of this Prospectus.\nReserved Shares \n:\n3,960,000 Placement Shares will be reserved for our employees,\nbusiness associates and others who have contributed to the\nsuccess of our Group.\nPurpose of our Invitation\n:\nOur Directors consider that the listing of our Company and the\nquotation of our Shares on the SGX-ST will enhance our public\nimage in Singapore and overseas and enable us to tap the capital\nmarkets for the expansion of our operations. The Invitation will also\nprovide members of the public, our employees and business\nassociates as well as those who have contributed to our success\nwith an opportunity to participate in the equity of our Company. In\naddition, the proceeds of the Invitation will provide us with additional\ncapital to finance our business expansion.\nUse of Proceeds\n:\nBased on the Invitation Price, we estimate that the aggregate net\nproceeds attributable to us from the issue of the New Shares in the\nInvitation (assuming the Over-allotment Option is not exercised) will\nbe approximately S$32.2 million, after deducting underwriting\ncommissions and other estimated expenses in relation to the\nInvitation of approximately S$3.8 million.\nWe intend to use the net proceeds received by us primarily for the\nfollowing purposes:\n(i)\napproximately US$12.2 million for investment in the Akebono\nFund;\n(ii)\napproximately US$2.6 million to further finance our\ninvestment in Rich Containership S.A., which will acquire a\nnew container vessel (4,300 TEU) with delivery expected in\nSeptember 2008; and\n(iii)\napproximately US$2.4 million for investment in another new\ncontainer vessel (4,300 TEU) with delivery targeted for 2008.\nThe remaining proceeds will be used for other ship investments,\ndistressed asset investments and/or investment in real estate\nassets.\nTHE INVITATION\n37\n\n\nOver-Allotment Option\n:\nIn connection with the Invitation, and in consideration of the parties’\nmutual obligations under the Management and Underwriting\nAgreement entered into between our Company and the Manager\nand Underwriter on 8 August 2007, we have granted the Manager\nan Over-allotment Option to subscribe for up to 9,810,000\nAdditional Shares, representing approximately 15 per cent. of the\nNew Shares, at the Invitation Price exercisable during the period\ncommencing on the Commencement Date and expiring on the date\nfalling 30 days after the Commencement Date. The Manager may\nsubscribe for the Additional Shares solely for the purpose of\ncovering over-allotment of Shares (if any) made in connection with\nthe Invitation.\nListing status\n:\nPrior to the Invitation, there had been no public market for our\nShares. Our Shares will be quoted in Singapore dollars on the Main\nBoard of the SGX-ST, subject to admission of our Company to the\nSGX-ST and permission for dealing in and for quotation of our\nShares being granted by the SGX-ST and the Authority not issuing\na stop order.\nTHE INVITATION\n38\n\n\nThe exchange rate between S$ and US$ as at the Latest Practicable Date is S$1.54 to US$1.00.\nThe following table sets forth the high and low exchange rates between S$ and US$ for each month in\nthe past six months. The table indicates how many S$ can be bought with US$1.00.\nS$ / US$ Rate\nHigh\nLow\nDecember 2006\n1.55\n1.53\nJanuary 2007\n1.55\n1.53\nFebruary 2007\n1.54\n1.53\nMarch 2007\n1.53\n1.52\nApril 2007\n1.52\n1.51\nMay 2007\n1.53\n1.51\nJune 2007 (to Latest Practicable Date)\n1.54\n1.53\nSource: Bloomberg L.P\n.\nThe following table sets forth, for each of the financial periods indicated, the average and closing\nexchange rates between the S$ and US$, calculated by using the average of the closing exchange rates\non the last day of each month during each financial period.\nS$ / US$ Rate\nAverage\nAt Period End\nFY2004\n1.69\n1.63\nFY2005\n1.66\n1.66\nFY2006\n1.59\n1.54\nSource: Bloomberg L.P\n.\nThe above exchange rates have been calculated with reference to exchange rates quoted from\nBloomberg L.P\n. and shall not be construed as representation that the S$ amounts actually represent such\nUS$ amounts or could be converted into US$ at the rate indicated or any other rate.\nBloomberg L.P\n. has not consented to the inclusion of the exchange rates quoted under this section and is\nthereby not liable for these statements under Sections 253 and 254 of the SFA. Our Company has\nincluded the above exchange rates in their proper form and context in this Prospectus and has not\nverified the accuracy of these statements.\nPlease refer to the section entitled “General Information on our Group – Exchange Controls” in this\nProspectus for a description of the exchange controls that exist in Japan, Hong Kong and the PRC.\nEXCHANGE RATES\n39\n\n\nInvestors should consider carefully the following risk factors (which are not intended to be exhaustive) and\nall other information contained in this Prospectus, before deciding to invest in our Shares. You should also\nnote that certain of the statements set forth below constitute “forward-looking statements” that involve\nrisks and uncertainties.\nIf any of the following risk factors and uncertainties develops into actual events, our business, financial\ncondition or results of operations or cash flows may be adversely affected. In such circumstances, the\ntrading price of our Shares could decline and investors may lose all or part of their investment. To the\nbest of our Directors’ belief and knowledge, all the risk factors that are material to investors in making an\ninformed judgement have been set out below.\nRISKS RELATING TO OUR GROUP \nWe are dependent on the services of key management personnel.\nOur Directors believe that the reason for our continued success is, to a certain extent, attributable to the\nexpertise and experience of our three Executive Directors, namely Mr. Motokuni Yamashiro, Mr. Kazuhiko\nYoshida and Mr. Michio Tanamoto. Our management personnel make key decisions to maximise our\nrevenue and earnings in a cyclical and highly volatile environment. Please refer to the section entitled\n“Directors, Management and Staff” in this Prospectus for more details. Our success will depend, in part,\non our ability to hire and retain key members of our management team. If any of our Executive Directors\nceases to be involved in our Group’s management in the future and we fail to find any suitable personnel\nto replace any one or all of them, our operations, profitability and prospects may be adversely affected.\nOur financial performance is unpredictable and dependent on prevailing market conditions.\nOur overall revenue and profits tend to be difficult to predict. Our financial performance is dependent on\nprevailing market conditions and we cannot predict with certainty our future revenue or profitability. The\nmajority of our income is earned mainly from our transaction-based business which depends on gaining\nand executing finance arrangement mandates, or identifying and executing direct investments into\nAlternative Assets. We also have some recurrent income from management fees, administration fees and\ninterest from Performance Notes from our direct investment business. Future revenue and profitability is\ndependent on our consistently gaining business from our customers for finance arrangement and making\nsuccessful direct investments that would exceed our target investment hurdle rate.\nOur Directors believe that our direct investment business performance depends on our ability to (i) source\nfor investment opportunities; (ii) negotiate investment terms that provide us with a positive investment\nreturn that satisfy our investment criteria and exit relatively illiquid investment assets to realise our target\ninvestment return rate; and (iii) continue to raise further funds from co-investors for new investments\nwhen necessary.\nAs Alternative Assets are generally not traded over the counter or on any recognised stock\nexchanges, it may be difficult to sell or realise the value of these investments and recover the\namounts we originally paid for them.\nWe invest in three key Alternative Asset classes, namely (i) ship investment consisting primarily of bulk\ncarriers, product tankers and container vessels mainly manufactured by Japanese shipyards; (ii)\ndistressed assets (including NPLs and other distressed assets in Asia (excluding Japan)); and (iii)\nproperty investment (including hotel and property investment in Japan and commercial property\ndevelopment in the PRC). As Alternative Assets are not traded over the counter or in any recognised\nstock exchanges, their liquidity is subject to market conditions. Should market conditions deteriorate, it\nmay be difficult to sell or realise the value of these investments and recover the amounts we originally\npaid for them. This could have a material adverse effect on our business, financial condition and results of\noperations.\nRISK FACTORS\n40\n\n\nWe face the risk of not being able to earn the income we would have earned from our investment\nin the NPL if the debtor is not able to service the loan and interest and we may be unable to\nrecover the original amount we had paid for the NPL.\nOur investments in NPLs are dependent on the underlying distressed debtor’s ability to service its debt\nand the anticipated cashflow return from recovering the NPL. There is a risk that the distressed debtor\nmight not be able to service its loan and the interest payable on the loan. In such circumstances, we face\nthe prospect of losing the income we could have earned from our investment in the NPL, had the debtor\nbeen able to service the loan and interest in excess of the original amount we paid for the NPL. This\ncould have a material adverse effect on our business, financial condition and results of operations. Our\nCompany does not currently participate directly in any NPLs. Our investments in NPLs are made through\ninvestments in distressed assets investment funds such as the AAA Series I and II Funds. In the event\nthat a distressed debtor is unable to service its loans and interest to the relevant funds, the risk faced by\nour Company is that we may receive lower or no distributions in respect of our investments in such funds.\nWe may be indirectly adversely affected by the risks involved in the business of our associated\ncompany, Capital Advisers, in Japan.\nOur associated company, Capital Advisers, is a company incorporated in Japan engaged in the\ninvestments in and management of real estate assets, including hotel and residential properties, in\nJapan. As at the Latest Practicable Date, Capital Advisers is engaged in investments in respect of 13\nhotels, three of which are under construction. Apart from the fluctuations of market values of properties\ndirectly or indirectly invested in by Capital Advisers, its business involves several substantial risks,\nincluding the risks of insufficient funding for its projects, inability to comply with changing laws or\nregulations governing its securitisation business, and having only minority control in projects where it is\nnot the majority investor. We can neither enumerate all such risks nor specify the probability of any loss\ndue to such events.\nA significant portion of our revenue is derived from the Asia-Pacific region and adverse economic\nconditions in these markets would adversely affect our financial condition and operating results.\nFor FY2006, a significant portion of our revenue was derived from the Asia-Pacific region. Economic\ndevelopment has a significant impact on the activities of industries in which most of our customers\noperate. Economic conditions in the Asia-Pacific region can be unstable, and other factors such as war,\nacts of terrorism, political instability or disease may harm or halt economic growth in the region. For\nexample, the Asian financial crisis of 2001 created a significant downturn in economic growth which\naffected the entire region. Similarly, the outbreak of severe acute respiratory syndrome that affected Hong\nKong, the PRC, Singapore, Taiwan and Vietnam, amongst others, severely impacted the economies of\nthe affected areas. If a similar wide-ranging health scare, such as a spread of avian influenza or “bird-flu”\nor another financial crisis or a large-scale act of terrorism, or any other adverse social or political incident\nshould occur, the economic conditions in the affected markets would likely be severely harmed. Any\ndeterioration in economic condition in these regions may result in a decline in demand for financing\narrangements or cause companies to halt their expansion plans. In such cases, our business, financial\ncondition and operating results would be materially and adversely affected.\nAn adverse judgment or settlement in respect of any claim against us could have a material\nadverse effect on our financial condition or results of operations.\nOur business involves arranging financing transactions for third parties. Although the contracts we enter\ninto may contain disclaimer provisions against certain potential liabilities, we may still be subject to claims\nby clients and could be held liable for our clients’ role in certain circumstances such as disagreement over\nthe performance of a contract. If this happens, we could be required to pay substantial damages to the\nsuccessful claimants. This could have a material adverse effect on our financial condition or results of\noperations.\nRISK FACTORS\n41\n\n\nOur business is heavily dependent on our reputation and any adverse publicity could have an\nadverse effect on our business and financial performance.\nOur business relies to a large extent on relationships and a reputation for delivering quality service to\ngain new clients and maintain existing ones. Should we provide a level of service that a client is not\nsatisfied with or becomes involved with any disputes in respect of a transaction involving us, then we may\nsuffer damage to our reputation and receive adverse publicity, either of which or together could have an\nadverse effect on our business and financial performance.\nWe may not be able to obtain the financing required to fund our transactions.\nIn order to finance transactions in which we are involved as either principal investor or finance arranger,\nour Group raises financing from various financial institutions with which we have enjoyed positive\nrelationships. Should such financing not be available in future, our business and financial performance\ncould be adversely affected.\nOur ship investment funds/companies may not be able to purchase or acquire new vessels\nmeeting our requirements at prices or delivery times acceptable to us.\nThe ship investment funds/companies that we establish and/or invest in may be required to make down\npayments and progress payments during the construction of new vessels, but do not derive any revenue\nfrom these vessels until after their delivery. There can be no assurance that such new vessels will be\ncompleted on schedule or at all. While the ship investment funds/companies may receive penalty\npayments from the shipbuilder, experience delays in the delivery of, or failure to deliver, one or more of\nthe new vessels could have an adverse effect on the business, financial condition and results of\noperations of the ship investment funds/companies and, in turn, the return on the ship investment\nfunds/companies that we invest in.\nWe may be subject to other third-party obligations and contingent liabilities which may affect our\nfinancial performance.\nWe commonly invest alongside third parties in our direct investment transactions. Our Directors believe\nthat the inability of co-investors to fulfil their obligations may result in us being required to contribute\nadditional capital that we did not initially intend to contribute or not completing transactions that we\notherwise might have. It is possible that if the co-investors fail to raise enough funds, we may have to\ncontribute more capital to achieve our target level of fund raising, and as a result, adversely affect our\ncash flow.\nWe depend on our ability to raise third party funds from time to time to finance direct investment\nopportunities. There can be no assurance that we will be able to obtain such funds on acceptable terms,\nor at all.\nIn addition, we have provided a guarantee in favour of Xing Long Maritime S.A. (“Xing Long”) to\nguarantee the performance by Panmax Tanker S.A. (“Panmax”) of its obligations under a contract\nbetween Xing Long and Panmax for the construction and sale of a 50,000 DWT product tanker (the\n“Tanker”) for approximately Yen 4.69 billion (or approximately US$39.5 million) (the “Shipsales\nContract”). Panmax is an SPC established for the purposes of acquiring the Tanker and has been\nacquired by the Akebono Fund on 19 June 2007. For further details, please refer to the section entitled\n“Business Overview – Alternative Assets Investment – Ship investment” in this Prospectus. As such, we\nmay be subject to claims by Xing Long in respect of their losses arising from any default by Panmax of its\nobligations under the Shipsales Contract. In the event of such claims being made, our financial\nperformance may be adversely affected. In the event of a default by Panmax of its payment obligations\nunder the Shipsales Contract, our Company may enforce a share charge provided by Infinite Asset and\nacquire Panmax in accordance with the terms thereof. Depending on market conditions, our Company\nmay either sell the shipbuilding contract or continue the shipbuilding contract and take delivery of the\nvessel. If we take delivery of the vessel, we would then have the option to charter it out to third party or\nsell it in the open market. If our Company is unable to sell the shipbuilding contract or the vessel (after it\nhas taken delivery of the vessel) at favourable prices, our financial performance may be significantly\naffected.\nRISK FACTORS\n42\n\n\nWe are exposed to foreign currency and interest rate fluctuations.\nWe are exposed to adverse fluctuations in foreign currency exchange rates and foreign exchange risks.\nThe invoicing currency of our income is mainly US$. Our operating expenses are mainly denominated in\nHK$, US$, Yen and S$, which are the local currencies of the countries in which we currently operate.\nOur foreign exchange risk arises mainly from a mismatch between our income and expenses. To the\nextent that our income and expenses are not naturally matched in the same currency and to the extent\nthat there are timing differences in the collections and payments, we may be susceptible to foreign\nexchange exposure. Any significant fluctuation in the foreign exchange rates of the principal invoicing\ncurrency of our income against the principal currencies for our operating costs could result in us incurring\nnet foreign exchange losses and will have an adverse impact on our financial results.\nWe may enter into hedging arrangements to manage our foreign exchange risks. For further details,\nplease refer to the section entitled “Management’s Discussion and Analysis of Financial Position and\nResults of Operations – Foreign Exchange Exposure”. However, there is no assurance that such efforts\nand our use of hedging arrangements will successfully hedge against all foreign currency fluctuations.\nOur consolidated financial statements are presented in US$. Foreign currency transactions are translated\nin US$. Such translation can result in foreign currency translation losses which may adversely affect our\nfinancial position.\nThe Hong Kong dollar has been pegged to the US dollar at the rate of HK$7.80 to US$1.00 since 17\nOctober 1983. In the event that this pegged exchange rate were to be changed or there were to be a\nrevaluation of the Hong Kong dollar, it could adversely affect our financial results.\nThe investment in ships is a leveraged investment, therefore, significant rises in the borrowing rate can\nadversely affect cash flow and profitability of each ship investment project as charter hire is normally fixed\nfor the period of charter.\nChanges in the accounting, legal and tax regimes could limit the functionality of the financing\nstructures that we have developed and lessen demand from our clients.\nWe operate in and across a variety of accounting, legal and tax regimes. Change in these regimes, whilst\nproviding opportunities, could also limit the functionality of the financing structures that we have\ndeveloped for our clients, a large number of which are based on optimising tax efficiency, which could\nadversely affect our finance arrangement business. Changes may reduce the efficiency of structures and\nhence lessen demand from our clients for these products.\nWe are subject to claims arising from disputes over the interpretation or enforceability of our\ndocumentation.\nWe enter into a number of highly structured transactions that require detailed documentation. As a result,\nthe risk of dispute over interpretation or enforceability of the documentation, or errors in the preparation of\nthe documentation may be higher than for other investments. As a result, we may be subject to claims\narising from such disputes by our clients or other counterparts. If these claims are successful, we may be\nrequired to compensate the claimant and our financial condition and results of operations may be\nadversely affected.\nWe may not be able to manage our expansion activities effectively.\nWith respect to our Company’s expansion into new geographic regions, our current approach is to\nconsider only new geographic and industry sectors that have synergistic potential with our existing\nbusiness. Expansion of our operations, including potential expansion into new geographic markets and\nproducts, although undertaken within a strategy of keeping risks low and seeking synergistic benefits,\nmay result in loss of initial investment costs such as initial capital outlay if not managed effectively. If we\nare unable to manage our expansion activities effectively, our financial condition and results of operations\nmay be adversely affected.\nRISK FACTORS\n43\n\n\nWe may be affected by terrorist attacks and other acts of violence or war.\nTerrorist attacks such as those that occurred in the USA on 11 September 2001, and armed conflict such\nas the war in Iraq, may negatively affect our business. Political and economic instability in some regions\nof the world may also result from such terrorist attacks and armed conflicts and could negatively impact\nour financial condition. We are unable to predict the consequences of any of these terrorist attacks or\narmed conflicts and we are unable to foresee events that could have a material adverse impact on our\nbusiness. In the event of such attacks or conflicts, our business, financial condition and results of\noperations may be adversely affected.\nRISKS RELATING TO THE INDUSTRIES WHICH WE OPERATE IN \nThe financial services industry is highly competitive and we may not be able to keep up with the\ncompetition.\nThe financial services industry is highly competitive and it is expected to remain so. We compete on the\nbasis of a number of factors including customer relationships, quality of service, innovation,\nresponsiveness to customer needs, flexibility, reputation and price. Many competitors have greater\nfinancial and marketing resources and larger customer bases than us. An increase in competition and our\nfailure to keep up with the intense competition may have a material and adverse effect on our financial\ncondition and results of operations.\nThe financial services industry is highly regulated and our business operations may be affected\nby future changes in applicable laws and regulations.\nAs the financial services industry is a highly regulated industry, many aspects of our business, such as\nthe financing structures adopted, are subject to approvals and exemptions by the relevant authorities.\nChanges in such laws and regulations or their interpretation or enforcement may result in us being\nrequired to obtain or not getting the requisite approvals or exemptions required for our business\noperations and a consequent increase in our costs of compliance. There can be no assurance that\nchanges in such laws and regulations or in their interpretation or enforcement, will not have a material\nadverse impact on our business, financial condition and results of operations. In addition, there can also\nbe no assurance that all regulatory bodies or authorities will take the same view as us with regard to the\ninterpretation or application of such laws and regulations.\nWe are subject to the cyclical upturns and downturns in the shipping industry.\nWe believe that the shipping industry (in particular, the dry bulk, product tanker and container segments)\nmay undergo a cyclical downturn in business cycle. Factors which may have an adverse effect on the\nshipping industry business cycle include a deterioration in the condition of the global economy, a\nreduction in the volume of international trade and excess supply of or insufficient demand for maritime\nvessels. While a cyclical downturn would directly affect our Company’s direct ship investment through\nlower charter income, cyclical upturns may also affect our Company by slowing down our ship acquiring\nactivities due to high vessel prices. Our financial performance is dependent on the cyclical upturns and\ndownturns in the shipping industry, and there may be material and adverse impact on our business,\nfinancial condition and results of operations.\nThe shipping industry is highly competitive, which may result in volatile charter rates and which\nmay have a material adverse effect on our operating results.\nThe shipping industry is highly fragmented with many owners of vessels and is characterised by intense\ncompetition. The industry is affected by developments in the major world economies that influence trade\npatterns and is fragmented among many global, regional and local carriers.\nMany of the factors\ninfluencing the supply of and demand for shipping capacity are outside our control and the nature, timing\nand degree of changes in industry conditions are unpredictable. Charter rates are based in part on supply\nand demand of vessels and are extremely competitive. Over the last decade, charter rates have been\nvolatile. Our operating results are dependent on, amongst other things, performance of our direct ship\ninvestments, which are, in turn, dependent on the prevailing charter rates in a given time period.\nFluctuations in charter rates may also have an impact on our Company’s investments in ship investment\nfunds, particularly where the underlying vessels are chartered on a short-term basis. In such cases, the\ndistributions of interest under the Performance Notes held by us in respect of our investments in such\nRISK FACTORS\n44\n\n\nship investment funds may be lower in the event of lower prevailing charter rates of the vessels under\nmanagement by the relevant ship investment funds. This is because such distributions of interest are\ngenerally derived from the charter income of the ship investment funds, less the operating and other\nexpenses (such as interest expenses) incurred in relation to the relevant vessels. There can be no\nassurance that charter rates will be stable or increase over time. In the event that the shipping industry\nexperiences a downturn, the performance of our direct ship investments as well as investments in ship\ninvestment funds and, in turn, our operating results and overall performance, may be materially and\nadversely affected.\nOur insurance policies may not provide us with adequate coverage against all risks.\nStandard Protection & Indemnity insurance has been arranged for vessels owned by the ship investment\nfunds/companies that we invest in. However there can be no assurance that all risks are adequately\ninsured against, that any particular claim will be paid or that adequate insurance coverage can be\nobtained at commercially reasonable rates in the future.\nThe shipping industry is highly regulated and we, or the ship investment funds that we invest in,\nmay incur additional costs in meeting new regulations or limit our ability to do business.\nThe shipping industry is highly regulated, and operations of shipowners, including the ship investment\nfunds which we invest in, are affected by extensive and changing environmental protection laws and other\nregulations in the form of numerous international conventions, national, state and local laws and national\nand international regulations in force in the jurisdictions in which our vessels operate, as well as in the\ncountry or countries in which such vessels are registered. Compliance with such laws and regulations\nmay entail significant expenses for shipowners, including the funds/companies which we invest in,\nincluding expenses for ship modifications and changes in operating procedures. In the event that such\nadditional costs are incurred, the performance of our investment in such funds/companies and, in turn,\nour overall performance, may be materially and adversely affected.\nWe may also incur substantial costs in order to comply with existing and future environmental and health\nand human safety requirements, including, among others, obligations relating to air emissions,\nmaintenance and inspection, development and implementation of emergency procedures and insurance\ncoverage. Shipowners, including the ship investment funds/companies which we invest in, could also face\nsubstantial liability for penalties, fines, damages and remediation costs associated with hazardous\nsubstance spills or other discharges into the environment involving operations of shipowners, including\nthe ship investment funds/companies which we invest in, under environmental laws and regulations. Such\ncosts could have a material adverse effect on the business, financial condition and results of operations\nof ship owners and in turn, the performance of the ship investment funds/companies we invest in. This\nmay materially and adversely affect our overall performance.\nThe operating certificates and licenses of vessels are renewed periodically during each vessel’s required\nannual survey. However, government regulation of vessels, particularly in the areas of safety and\nenvironmental impact may change in the future and require shipowners to incur significant capital\nexpenditure on their ships to keep them in compliance. In addition, shipowners are required by various\ngovernmental bodies to obtain permits and licenses required for the operation of their shipping business.\nThese permits may become costly or impossible to obtain or renew. In the event that such additional\ncosts are incurred, the performance of our investment in such funds/companies and, in turn, our overall\nperformance, may be materially and adversely affected.\nGovernments could requisition vessels during a period of war or emergency without adequate\ncompensation, resulting in loss of earnings.\nGovernments could requisition or seize vessels for title or for hire. Requisition for title occurs when a\ngovernment takes control of a vessel and becomes her owner. Also, a government could requisition\nvessels for hire which occurs when a government takes control of a vessel and effectively becomes her\ncharterer at dictated charter rates. Generally, requisitions occur during a period of war and emergency.\nGovernment requisition of one or more of the vessels owned by the ship investment funds/companies that\nwe invest in may adversely impact their business, financial condition and operating results. This could\nhave a material adverse effect on our business, financial condition and results of operations.\nRISK FACTORS\n45\n\n\nWe are subject to the cyclical upturns and downturns in the property industry in the countries\nwhere we have property investments and this may affect the rental yield and capital value of such\nproperties.\nThe property industry is affected by cyclical upturns and downturns in its business cycle. Factors which\nmay have an adverse effect on the property industry business cycle include a deterioration in the\ncondition of the domestic or global economy, an increase in interest rates, a reduction in business\nconfidence, an increase in the opportunity cost to investors of investing in real estate relative to other\nassets and negative changes to fundamental or speculative demand for real estate. A cyclical upturn may\naffect our Company as high property prices may have the effect of lowering our Company’s ability to grow\nour property portfolio. Our financial performance is dependent on the cyclical upturns and downturns in\nthe property industry, and there may be material and adverse impact on our business, financial condition\nand results of operations.\nOur historical financial performance may not be indicative of our future financial performance.\nAs our revenue and profits may be adversely affected by external factors beyond our control, investors\nshould be aware that there is no guarantee that we will increase or maintain our historical profit levels\nand therefore investors should not take our historical profit levels as an indication of our future financial\nperformance. Factors which may affect our performance include general economic conditions including\nbusiness confidence, inflation rates, interest rates and levels of international trade; government policy,\nlegislation and/or regulation; and levels of competition within the industries that we operate in.\nRISKS RELATING TO OWNERSHIP OF OUR SHARES\nInvestors in our Shares will face immediate and substantial dilution in the net asset value per\nShare and may experience future dilution.\nOur Invitation Price is substantially higher than our NAV per Share of 51.7 cents as at 31 December 2006\n(adjusted for net proceeds from the Invitation and based on our post-Invitation issued share capital).\nThus, there is an immediate and substantial dilution in the NAV per Share for investors who subscribe for\nour Shares pursuant to the Invitation. If we were liquidated for NAV immediately following the Invitation,\neach shareholder subscribing to the Invitation would receive less than the price they paid for their Shares.\nIn addition, if and when we issue new Shares, you may not be able to or may choose not to participate in\nan offering of these newly issued Shares, and as a result, you may experience significant dilution in\nfuture. Details of the immediate dilution of our Shares incurred by new investors are described under the\nsection entitled “Dilution” in this Prospectus.\nWe may require additional funding for our future growth.\nAlthough we have identified our future growth plans set out in the section entitled “General Information on\nour Group – Future Plans” in this Prospectus as the avenues to pursue growth in our business, the\nproceeds from the Invitation will not be sufficient to fully cover the estimated costs of implementing all\nthese plans. We may also find opportunities to grow through acquisitions which cannot be predicted at\nthis juncture. Under such circumstances, secondary issue(s) of securities after the Invitation may be\nnecessary to raise the required capital to develop these growth opportunities. If new Shares placed to\nnew and/or existing Shareholders are issued after the Invitation, they may be priced at a discount to the\nthen prevailing market price of our Shares trading on the SGX-ST, in which case, existing Shareholders’\nequity interest may be diluted. If we fail to utilise the new equity to generate a commensurate increase in\nearnings, our EPS will be diluted, and this could lead to a decline in our Share price. Any additional debt\nfinancing may, apart from increasing interest expense and gearing, contain restrictive covenants with\nrespect to dividends, future fund raising exercises and other financial and operational matters. If we are\nunable to procure the additional funding that may be required, our growth or financial performance will be\nadversely affected.\nRISK FACTORS\n46\n\n\nYou may not be able to attend general meetings of our Company.\nUnder the Cayman Companies Law, only those persons who agree to become shareholders of a Cayman\nIslands company and whose names are entered on the register of members of such a company are\nconsidered members, with rights to attend and vote at general meetings. Depositors holding Shares\nthrough CDP will not be recognised as members of our Company, and will not have a right to attend and\nto vote at general meetings of our Company. In the event that Depositors wish to attend and vote at\ngeneral meetings of our Company, CDP will have to appoint them as proxies, pursuant to the Articles. For\nfurther details, please refer to the section entitled “Attendance at General Meetings” in this Prospectus.\nWe are a Cayman Islands incorporated company and the rights and protection accorded to our\nShareholders may not be the same as those applicable to shareholders of a Singapore\nincorporated company.\nWe are incorporated in the Cayman Islands as an exempted company with limited liability under the\nCayman Companies Law. The Companies Act may provide shareholders of Singapore-incorporated\ncompanies with certain rights and protection of which there may be no corresponding or similar\nprovisions under the Cayman Companies Law. As such, if you invest in our Shares, you may or may not\nbe accorded the same level of shareholder rights and protection that a shareholder of a Singapore-\nincorporated company would be accorded under the Companies Act.\nWe have set out in Appendix D and Appendix E a summary of the Memorandum of Association and\nselected Articles of our Company and a summary of certain provisions under the Cayman Companies\nLaw. Explanatory statements on specific issues in relation to Cayman Companies Law have been set out\nin pages E-1 to E-5 of this Prospectus. Each of the summaries and explanatory statements is not\nintended to be and does not constitute legal advice and any person wishing to have advice on the\ndifferences between the Cayman Companies Law and the Companies Act and/or the laws of any\njurisdiction with which he is not familiar is recommended to seek independent legal advice. Copies of the\nMemorandum of Association and the Articles of our Company are available for inspection at such place\nand time as set out in the section entitled “General and Statutory Information – Documents Available For\nInspection” in this Prospectus.\nSingapore law contains provisions that could discourage a takeover of our Company.\nThe Singapore Code on Take-overs and Mergers contains certain provisions that may delay, deter or\nprevent a future takeover or change in control of our Company. Any person acquiring an interest, either\non his own or together with parties acting in concert with him, in 30.0 per cent. or more of our voting\nshares may be required to extend a takeover offer for our remaining voting shares. A takeover offer is also\nrequired to be made if a person holding between 30.0 per cent. and 50.0 per cent. (both inclusive) of the\nvoting rights in our Company (either on his own or together with parties acting in concert with him)\nacquires more than 1.0 per cent. of our voting shares in any six-month period.\nThese provisions may discourage or prevent certain types of transactions involving an actual or\nthreatened change of control of our Company. Some of our Shareholders, who may include you, may\ntherefore be disadvantaged as a transaction of that kind might have allowed the sale of Shares at a price\nabove the prevailing market price.\nThe Invitation may not result in an active or liquid market for our Shares.\nPrior to the Invitation, there has not been a public market for the Shares. We cannot predict the extent to\nwhich a trading market will develop or how liquid the market might become. The Invitation Price for the\nShares will be determined by a book-building process by agreement between our Company and the\nManager, Underwriter and Placement Agent, after taking into consideration, inter alia, prevailing market\nconditions and estimated market demand for the Shares and may not be indicative of the market price at\nwhich our Shares will trade after the Invitation. You may not be able to resell your Shares at a price that is\nattractive to you.\nRISK FACTORS\n47\n\n\nFuture sales of Shares could adversely affect the prevailing market price of Shares.\nThe trading prices of our Shares could be subject to fluctuations in response to variations in our results of\noperations, changes in general economic conditions, changes in accounting principles, or other\ndevelopments affecting us, our customers or our competitors, changes in financial estimates by securities\nanalysts, the operating and stock price performance of other companies and other events or factors,\nmany of which are beyond our control. Although it is currently intended that our Shares will remain listed\non the SGX-ST, there is no guarantee of the continued listing of our Shares.\nThe Singapore securities market is relatively small, which may cause the market price of our\nShares to be more volatile.\nThe SGX-ST is relatively small and may be more volatile than stock exchanges in the United States and\ncertain other countries. The relatively small market capitalisation of, and trading volume on, the SGX-ST,\ncompared to certain other global stock exchanges, may cause the market price of securities listed on the\nSGX-ST, including our Shares, to fluctuate more than those listed on larger global stock exchanges.\nIt may not be possible for Shareholders to effect service of process within Singapore or to enforce\nin Singapore any judgment obtained in Singapore or in the Singapore courts upon us or certain\nDirectors. Judgments of the Singapore courts may also not be enforceable in the Cayman Islands\ncourts.\nWe are a company incorporated with limited liability and of unlimited duration under the laws of the\nCayman Islands. Save for Mr. Michio Tanamoto, Mr. Ang Miah Khiang and Mr. Ronnie Teo Heng Hock, all\nof our Directors reside outside Singapore. Substantially all of our assets and the assets of such persons\nare located outside Singapore. As a result, it may not be possible for investors to effect service of process\nwithin Singapore upon us or such persons or to enforce in Singapore a judgment obtained in courts\nagainst us or such persons. Judgments of the Singapore courts may not be enforceable in the Cayman\nIslands courts.\nRISK FACTORS\n48\n\n\nS$0.55\n51.9 cents(1)\n51.7 cents(1)\n6.0 per cent.\n6.4 per cent.\n9.9 cents(1)\n5.5 times\n10.2 cents(1)\n5.4 times\nS$132.2 million\nInvitation Price\nNAV\nNAV per Share of our Group as at 31 December 2006:\n(a)\nbefore adjusting for the estimated net proceeds from the Invitation and\nbased on the pre-Invitation share capital of 175,000,000 Shares\n(b)\nafter adjusting for the estimated net proceeds from the Invitation and based\non the post-Invitation share capital of 240,400,000 Shares \nPremium of Invitation Price over the NAV per Share as at 31 December 2006:\n(a)\nbefore adjusting for the estimated net proceeds from the Invitation and\nbased on the pre-Invitation share capital of 175,000,000 Shares\n(b)\nafter adjusting for the estimated net proceeds from the Invitation and based\non the post-Invitation share capital of 240,400,000 Shares\nEPS\nHistorical EPS of our Group for FY2006 based on the pre-Invitation share capital\nof 175,000,000 Shares\nPrice Earnings Ratio\nHistorical PER based on the Invitation Price and the historical EPS of our Group\nfor FY2006\nNet Operating Cash Flow(2)\nHistorical net operating cash flow per Share of our Group for FY2006, based on\nthe pre-Invitation share capital of 175,000,000 Shares\nPrice to Net Operating Cash Flow Ratio\nRatio of Invitation Price to historical net operating cash flow per Share of our\nGroup for FY2006 based on the pre-Invitation share capital of 175,000,000\nShares\nMarket Capitalisation\nOur market capitalisation based on the Invitation Price and the post-Invitation\nshare capital of 240,400,000 Shares\nNotes:\n(1)\nBased on the exchange rate of US$1.00 : S$1.52 for illustrative purpose only.\n(2)\nNet operating cash flow is defined as the net profit attributable to Shareholders with depreciation added back.\n(3)\nThe above Invitation statistics have been computed on the assumption that the Over-allotment Option is not exercised.\nINVITATION STATISTICS\n49\n\n\nBased on the Invitation Price, we estimate that the aggregate net proceeds attributable to us from the\nissue of the New Shares in the Invitation (assuming the Over-allotment Option is not exercised) will be\napproximately S$32.2 million, after deducting underwriting commissions and other estimated expenses in\nrelation to the Invitation of approximately S$3.8 million, out of which S$1.3 million was incurred in 2006\nand S$2.5 million is estimated to be incurred in 2007.\nWe intend to use the net proceeds received by us primarily for the following purposes:\n(i)\napproximately US$12.2 million for investment in the Akebono Fund;\n(ii)\napproximately US$2.6 million to further finance our investment in Rich Containership S.A., which\nwill acquire a new container vessel (4,300 TEU) with delivery expected in September 2008; and\n(iii)\napproximately US$2.4 million for investment in another new container vessel (4,300 TEU) with\ndelivery targeted for 2008.\nThe remaining proceeds will be used for other ship investments, distressed assets investments and/or\ninvestments in real estate assets.\nTo the extent that the net proceeds from the Invitation are not immediately applied for the above\npurposes, it is the present intention of our Directors to place such net proceeds on short-term deposits\nwith licenced banks and/or financial institutions or used for investment in short-term money market or\ndebt instruments.\nFor further details on our plans above, please refer to the sections entitled “General Information on our\nGroup – Prospects” and “General Information on our Group – Business Strategy and Future Plans” in this\nProspectus.\nAs the Invitation is underwritten on a firm commitment basis, there is no minimum amount which must be\nraised from the Invitation.\nFor each Singapore dollar of the proceeds from the Invitation (assuming that the Over-allotment Option is\nnot exercised in full):\n(i)\napproximately 51.4 cents will be used to pay for investment in the Akebono Fund;\n(ii)\napproximately 11.1 cents will be used to further finance our investment in Rich Containership S.A.,\nwhich will acquire a new container vessel (4,300 TEU) with delivery expected in September 2008;\n(iii)\napproximately 10.0 cents will be used to pay for investment in another new container vessel (4,300\nTEU) with delivery targeted for 2008;\n(iv)\napproximately 7.0 cents will be used to pay for expenses incurred in connection with the Invitation;\nand\n(v)\napproximately 20.5 cents will be used for other ship investments, distressed assets investments\nand/or investments in real estate assets.\nIf the Over-allotment Option is exercised in full, the additional net proceeds (after the payment of the fees,\ncommissions and other expenses related to the subscription of the Additional Shares pursuant to the\nexercise of the Over-allotment Option) which we will receive is approximately US$3.4 million. Such net\nproceeds will be used for the purposes stipulated above, as our Directors may deem appropriate.\nUSE OF PROCEEDS\n50\n\n\nSubject to the Cayman Companies Law, our Directors may from time to time declare a dividend or other\ndistribution.\nOur dividend payments and the rates of such dividend payments for FY2004, FY2005 and FY2006 are\nset out below:\nGross dividend amounts\nDividend per Share\n(US$’000)\n(US$)\nFY2004\n1,400\n0.05\nFY2005\n1,400\n0.05\nFY2006\n1,680\n0.06\nIn determining our dividends in respect of FY2007, we will take into account factors including the\nprevailing state of financial and foreign exchange markets and interest rate levels. Subject to the factors\nstated herein, our Directors intend to recommend and distribute up to 50% of our consolidated profits\navailable for distribution for FY2007.\nThe amount of our past dividends is not indicative of the amount that we will pay in the future. Future\ndividends will be paid by us as and when approved by our Shareholders and Directors. Our Directors may\ndeclare an interim dividend without seeking our Shareholders’ approval. Any such dividend payments will\nbe subject to the level of our future earnings, cash flow, financial condition, working capital needs,\ninvestment plans and other factors deemed relevant by our Directors, including such legal or contractual\nrestrictions as may apply from time to time. There can be no assurance that dividends will be paid in the\nfuture or as to the timing of any dividends that are to be paid in the future.\nPayments of cash dividends and distributions, if any, will be made in US$ to the CDP on behalf of\nShareholders who maintain, either directly or through depository agents, Securities Accounts with the\nCDP\n. Except for Shareholders who have elected to receive cash dividends and distributions in US$, the\nCDP will convert such proceeds into S$ and cause such S$ to be delivered to the relevant Shareholders’\nrespective direct Securities Accounts with the CDP or to depository agents for distribution to\nShareholders who maintain securities sub-accounts with such depository agents, as the case may be.\nThe amount of S$ payable to Shareholders upon conversion of any such cash dividends or distributions\nwill be affected by fluctuations in the exchange rate between S$ and US$. Neither we nor the CDP shall\nbe liable to any Shareholder for any currency exchange loss in respect of any such conversion.\nYou should note that all the foregoing statements are merely statements of our present intention and shall\nnot constitute legally binding statements in respect of our future dividends which may be subject to\nmodification (including reduction or non-declaration thereof) in our Directors’ sole and absolute discretion.\nFor information relating to taxes payable on dividends, please refer to the section entitled “Taxation” of\nthis Prospectus.\nOur foreign subsidiaries may declare and pay cash dividends to our Company, if any, in the currencies of\ntheir respective countries of incorporation, which may be converted into US$.\nDIVIDEND POLICY\n51\n\n\nOur Company (Registration Number CR-72229) was incorporated in the Cayman Islands on 17 March\n1997 under the Cayman Companies Law as an exempted company with limited liability under the name\nof Uni-Asia Finance Corporation. As at the date of incorporation, our authorised share capital was\nUS$60,000,000 comprising 60,000,000 ordinary shares of US$1.00 each.\nSave as disclosed below, there have been no material changes in our share capital since inception.\nOn 17 March 1997, two initial subscribers of our Company were issued one subscriber share each for\ncash at par of US$1.00.\nOn 8 April 1997, together with the two subscriber shares transferred to it, Evergreen was allotted and\nissued 4,999,998 further shares of US$1.00 each by our Company, credited as fully paid, for cash at par\nof US$1.00.\nOn 8 April 1997, we allotted and issued 5,000,000 shares of US$1.00 each to Motokuni Yamashiro,\ncredited as fully paid, for cash at par of US$1.00.\nOn 1 September 1997, we allotted and issued 5,000,000 shares of US$1.00 each to Takugin International\n(Asia) Ltd, credited as fully paid, for cash at par of US$1.00, which were then transferred to The then-\nHokkaido Takushoku Bank, Ltd on 8 October 1997.\nOn 20 March 1998, our Company allotted and issued for cash at par of US$1.00 and credited as fully\npaid:\n(i) \n2,000,000 shares of US$1.00 each to Hamburgische Landesbank Girozentrale which were\nsubsequently transferred to HSH Nordbank on 28 July 2003;\n(ii) \n2,000,000 shares of US$1.00 each to Sojitz (Hong Kong) Limited (formerly known as Nissho Iwai\nHong Kong Corporation Limited);\n(iii) \n2,000,000 shares of US$1.00 each to The Sumitomo Trust and Banking Co., Ltd.;\n(iv) \n1,000,000 shares of US$1.00 each to JAFCO Investment (Asia Pacific) Ltd. (formerly known as\nNomura/JAFCO Investment (Asia) Limited); and\n(v)\n1,000,000 shares of US$1.00 each to ORIX Investment and Management Private Limited.\nOn 24 March 1998, we allotted and issued 2,000,000 shares of US$1.00 each to Fastwin Investment\nLimited, credited as fully paid, for cash at par of US$1.00.\nOn 25 March 1998, we allotted and issued 1,000,000 shares of US$1.00 each to Tokio Marine & Nichido\nFire Insurance Co., Ltd. (formerly known as The Tokio Marine and Fire Insurance Company Limited),\ncredited as fully paid, for cash at par of US$1.00.\nOn 9 November 1998, The then-Hokkaido Takushoku Bank, Ltd transferred 3,000,000 of its shares in our\nCompany to The Chuo Mitsui Trust & Banking Company, Limited. On 16 November 1998, The then-\nHokkaido Takushoku Bank, Ltd transferred its remaining 2,000,000 shares in our Company to The\nResolution and Collection Corporation (formerly known as The Resolution and Collection Bank, Ltd).\nOn 30 December 1998, we allotted and issued 1,500,000 shares of US$1.00 each to Founders\nCorporation, credited as fully paid, for cash at par of US$1.00.\nOn 8 February 1999, we allotted and issued 500,000 shares of US$1.00 each to CSK Venture Capital\nCo., Ltd as Investment Manager for the CSK-2 Investment Fund, credited as fully paid, for cash at par of\nUS$1.00.\nSHARE CAPITAL\n52\n\n\nAt a general meeting held on 26 June 2007, our Shareholders approved, inter alia, the following:\n(a)\nthe adoption of a new set of Memorandum and Articles of Association;\n(b)\nthe increase in our authorised share capital from US$60,000,000, divided into 60,000,000 ordinary\nshares of US$1.00 each to US$120,000,000 divided into 120,000,000 ordinary shares of US$1.00\neach;\n(c)\nthe consolidation of 16 ordinary shares of US$1.00 each into 1 ordinary share of US$16.00 each\n(the “Consolidation”);\n(d)\nthe division of each ordinary share of US$16.00, into 100 ordinary shares of US$0.16 each (the\n“Sub-division”);\n(e)\nthe issue and allotment of the New Shares, which are the subject of this Invitation. The New\nShares, when issued, allotted and fully paid up, will rank pari passu in all respects with the existing\nissued and fully paid up Shares;\n(f)\nthat authority be given to the Directors to grant the Over-allotment Option to the Manager and to\nallot and issue up to 9,810,000 Additional Shares pursuant to the exercise of the Over-allotment\nOption;\n(g)\nthe establishment of the Scheme and that authority be given to our Directors to issue and allot\nOption Shares pursuant to the exercise of Options under the Scheme;\n(h)\nthat Options may be granted under the Scheme with an exercise price set at a discount of up to 20\nper cent. of the market price for the Shares at the time of grant, provided that the exercise price per\nShare shall not be less than the par value of that Share; and\n(i)\nthat authority be given to our Directors, to (i) issue shares in our Company whether by way of\nrights, bonus or otherwise; (ii) make or grant offers, agreements or options (collectively,\n“Instruments”) that might or would require shares to be issued, including but not limited to the\ncreation and issue of (as well as adjustments to) warrants, debentures or other instruments\nconvertible into shares, at any time and upon such terms and conditions and for such purposes\nand to such persons as our Directors may in their absolute discretion deem fit, and (iii) issue\nshares in pursuance of any Instrument made or granted under such authority, provided that the\naggregate number of shares to be issued pursuant to such authority (including shares to be issued\nin pursuance of Instruments made or granted under such authority) shall not exceed 50 per cent. of\nthe post-Invitation issued share capital of our Company and that the aggregate number of shares\nto be issued other than on a pro rata basis to the then existing shareholders of our Company\n(including shares to be issued in pursuance of Instruments made or granted under such authority)\nshall not exceed 20 per cent. of the post-Invitation issued share capital of our Company. Unless\nrevoked or varied by our Company in general meeting, such authority shall continue in full force\nuntil the conclusion of the next annual general meeting is required by law or by our Articles to be\nheld, whichever is earlier, except that the Directors shall be authorised to issue and allot new\nshares pursuant to any Instrument made or granted under such authority notwithstanding the\nauthority conferred may have ceased to be in force.\nFor the purposes of the above resolution and pursuant to Rules 806(3) and 806(4) of the Listing\nManual, “post-Invitation issued share capital” means the enlarged issued and paid-up share capital\nof the Company after the Invitation, after adjusting for (i) new shares arising from the conversion or\nexercise of any convertible securities; and (ii) any subsequent consolidation or sub-division of\nshares.\nSHARE CAPITAL\n53\n\n\nOur Shares are issued in registered form. As at the Latest Practicable Date, there is only one class of\nshares in the capital of our Company, being the Shares. A summary of selected Articles of our Company\nrelating to, among other things, the voting rights of our Shareholders is set out in Appendix D of this\nProspectus. There are no founder, management, deferred or unissued Shares reserved for issuance for\nany purpose.\nAs at the Latest Practicable Date, our issued and paid-up capital comprised US$28,000,000 divided into\n28,000,000 ordinary shares of US$1.00 each, all of which were fully paid. Details of the changes in our\nissued and paid-up capital as at 31 December 2006, being the date of our last audited accounts, and our\nissued and paid-up share capital immediately after the Invitation are as follows:\nNumber of Shares\nPaid-up Capital\n(’000)\n(US$’000)\nIssued and fully paid-up ordinary shares as at 1 January 2006\n28,000\n28,000\nIssued and fully paid-up ordinary shares as at 31 December 2006\n28,000\n28,000\nConsolidation of 16 shares of US$1.00 each into 1 share of \nUS$16.00 each\n1,750\n28,000\nSub-division of each share of US$16.00 each immediately \nafter the consolidation into 100 shares of US$0.16 each\n175,000\n28,000\nPre-Invitation Share Capital\n175,000\n28,000\nNew Shares to be issued pursuant to the Invitation \n65,400\n10,464\nPost-Invitation Share Capital\n240,400\n38,464\nOur authorised share capital and shareholders’ funds as at 31 December 2006, before and after\nadjustments to reflect the increase in authorised share capital and the Invitation are set forth below.\nThese statements should be read in conjunction with the “Report on the Consolidated Financial\nStatements for the Year ended 31 December 2006”, as set out in Appendix C of this Prospectus.\nImmediately\nafter the\nConsolidation\nAs at\nand \nImmediately\n31 December 2006\nSub-division\nafter Invitation\n(US$)\n(US$)\n(US$)\nAuthorised Share Capital\nOrdinary shares of US$1.00 each\n60,000,000\n–\n–\nOrdinary shares of US$0.16 each\n–\n120,000,000\n120,000,000\nShareholders’ Equity\nIssued and paid-up share capital\n28,000,000\n28,000,000\n38,464,000\nOther Reserves\n(222,704)\n(222,704)\n11,325,100\nRetained earnings\n31,989,107\n31,989,107\n31,989,107\nTotal shareholders’ equity\n59,766,403\n59,766,403\n81,778,207\nThe New Shares to be issued will rank equally in all respects with all Shares currently in issue and will\nqualify for all dividends or other distributions declared, made or paid in respect of a record date which\nfalls after the date of their issue.\nSHARE CAPITAL\n54\n\n\nOWNERSHIP STRUCTURE\nOur Directors and Substantial Shareholders of our Company and their respective shareholdings\nimmediately before the Invitation (as at the Latest Practicable Date, assuming that the Consolidation and\nSub-division of the Shares in issue had taken place) and immediately after the Invitation (assuming that\nthe Over-allotment Option is not exercised at all) are set out below:\nBefore the Invitation\nAfter the Invitation\nDirect Interest\nDeemed Interest\nDirect Interest\nDeemed Interest\nNumber of\nNumber of\nNumber of\nNumber of\nShares\n%\nShares\n%\nShares\n%\nShares\n%\nDirectors\nMotokuni Yamashiro\n31,250,000\n17.9\n–\n–\n31,250,000\n13.0\n–\n–\nKazuhiko Yoshida\n–\n–\n10,437,500\n6.0 (1)\n–\n–\n11,937,500\n5.0\nMichio Tanamoto\n–\n–\n10,437,500\n6.0 (1)\n–\n–\n11,937,500\n5.0\nHamilton Jian Ren Chueh\n–\n–\n–\n–\n–\n–\n–\n–\nJörg Wilhelm Schelp(2)\n–\n–\n–\n–\n–\n–\n–\n–\nRobert Van Jin Nien(3)\n–\n–\n–\n–\n–\n–\n–\n–\nIndependent Directors\nV-Nee Yeh\n–\n–\n–\n–\n–\n–\n–\n–\nAng Miah Khiang\n–\n–\n–\n–\n–\n–\n–\n–\nRonnie Teo Heng Hock\n–\n–\n–\n–\n–\n–\n–\n–\nSubstantial Shareholders\nEvergreen International \nS.A.(4)\n31,250,000\n17.9\n–\n–\n31,250,000\n13.0\n–\n–\nThe Chuo Mitsui Trust \n& Banking Company, \nLimited(5)\n18,750,000\n10.7\n–\n–\n18,750,000\n7.8\n–\n–\nSojitz (Hong Kong) \nLimited(6)\n12,500,000\n7.1\n–\n–\n12,500,000\n5.2\n–\n–\nThe Sumitomo Trust and \nBanking Co., Ltd(7)\n12,500,000\n7.1\n–\n–\n12,500,000\n5.2\n–\n–\nFastwin Investment \nLimited(8)\n12,500,000\n7.1\n–\n–\n12,500,000\n5.2\n–\n–\nHSH Nordbank AG(9)\n12,500,000\n7.1\n–\n–\n12,500,000\n5.2\n–\n–\nFounders Corporation(10)(14)\n10,437,500\n6.0\n–\n–\n11,937,500\n5.0\n–\n–\nDr. Chang Yung Fa and \nhis associates\n–\n–\n31,250,000\n17.9\n–\n–\n31,250,000\n13.0\nHopewell Holdings \nLimited(8)\n–\n–\n12,500,000\n7.1\n–\n–\n12,500,000\n5.2\nExeno Yamamizu(11)(14)\n2,125,000\n1.2\n–\n–\n5,125,000\n2.1\n–\n–\nMitsui & Co., Ltd.(12)(14)\n3,718,750\n2.1\n–\n–\n8,968,750\n3.7\n–\n–\nYamasa Co., Ltd(13)(14)\n3,718,750\n2.1\n–\n–\n8,968,750\n3.7\n–\n–\nOthers\n23,750,000\n13.7\n–\n–\n23,750,000\n9.9\n–\n–\nPublic \n–\n–\n–\n–\n50,400,000\n21.0\n–\n–\nTotal\n175,000,000\n100.0\n240,400,000\n100.0\nPRINCIPAL SHAREHOLDERS\n55\n\n\nNotes:\n(1)\nMr. Kazuhiko Yoshida and Mr. Michio Tanamoto hold 64% and 36% of the shares respectively in Founders Corporation, which\nin turn holds 6.0% (pre-Invitation) or 5.0% (post-Invitation) of the Shares in our Company. Mr. Yoshida and Mr. Tanamoto are\nExecutive Directors of our Company.\n(2)\nMr. Jörg Wilhelm Schelp is a nominee director of our Substantial Shareholder, HSH Nordbank AG.\n(3)\nMr. Robert Van Jin Nien is a nominee director of our Substantial Shareholder, Fastwin Investment Limited.\n(4)\nEvergreen International S.A. is one of the major shipping companies of the Evergreen group. It owns and operates ships and\ncontainers. Evergreen International S.A. is wholly-owned by Dr. Chang Yung Fa and his associates (as defined in Section 4(6)\nof the SFA), Mr. Chang Kuo Hua, Mr. Chang Kuo Ming and Mr. Chang Kuo Cheng. Dr. Chang and his associates are, by\nvirtue of Section 4(5) of the SFA, deemed to be interested in the Shares held by Evergreen International S.A.\n(5)\nThe Chou Mitsui Trust and Banking Company, Limited is a financial institution in Japan specialising in trust banking products\nand services.\n(6)\nSojitz (Hong Kong) Limited is a subsidiary of Sojitz Corporation, which is a trading company.\n(7)\nThe Sumitomo Trust and Banking Co., Ltd is a financial institution in Japan providing asset management, custody services\nand commercial banking services.\n(8)\nFastwin Investment Limited is a wholly-owned subsidiary of Hopewell Holdings Limited, a public listed company in Hong Kong\nwith business interests in property investment and development, highway infrastructure, hotel and hospitality and construction\nbusinesses.\n(9)\nHSH Nordbank AG is one of the leading banks in Northern Europe and the world’s leading provider of ship finance and\ncovers the entire value chain in the transportation segment.\n(10)\nFounders Corporation is beneficially owned as to 64% by Mr. Kazuhiko Yoshida and 36% by Mr. Michio Tanamoto. Mr. Yoshida\nand Mr. Tanamoto are Executive Directors of our Company. Founders Corporation has given an undertaking to our Company\nto subscribe for 1,500,000 Placement Shares under the Invitation.\n(11)\nExeno Yamamizu was established in Tokyo in April 1947, and its major shareholders include NYK Line and Mitsui O.S.K.\nLines, Ltd. Exeno Yamamizu is one of the companies of the Yamamizu Shipping Group, which is a ship broker in Japan.\nExeno Yamamizu has given an undertaking to our Company to subscribe for 3,000,000 Placement Shares under the\nInvitation.\n(12)\nMitsui & Co., Ltd. is a public company listed on the Tokyo Stock Exchange. Mitsui & Co., Ltd. has given an undertaking to our\nCompany to subscribe for 5,250,000 Placement Shares under the Invitation.\n(13)\nYamasa Co., Ltd was established in Okayama in December 1967 and is a manufacturer of amusement related hardware as\nwell as software. Yamasa Co., Ltd has given an undertaking to our Company to subscribe for 5,250,000 Placement Shares\nunder the Invitation.\n(14)\nOn 25 October 2006, The Resolution and Collection Corporation disposed of its entire shareholding interest of 6.07% in our\nCompany (pre-Invitation) to Founders Corporation, Exeno Yamamizu, Mitsui & Co. Ltd., and Yamasa Co. Ltd.\nSave as disclosed above, there are no other relationships among our Directors, Executive Officers and\nSubstantial Shareholders. Save as disclosed above, to the best of the knowledge of our Directors, we are\nnot directly or indirectly owned or controlled by any other corporation, any government or other natural or\nlegal person whether severally or jointly.\nThe Shares held by our Directors and Substantial Shareholders do not carry different voting rights from\nthe New Shares which are the subject of the Invitation.\nThere is no known arrangement the operation of which may, at a subsequent date, result in a change in\nthe control of our Company.\nThere were no significant changes in the percentages of ownership of our Directors and Substantial\nShareholders in our Company from our incorporation until the Latest Practicable Date.\nImmediately following the Invitation and assuming the Over-allotment Option is not exercised, the\nauthorised share capital of our Company will be US$120,000,000 divided into 750,000,000 Shares, of\nwhich 240,400,000 Shares will be issued fully paid or credited as fully paid, and 509,600,000 Shares will\nremain unissued. Other than pursuant to the exercise of the Over-allotment Option, we do not have any\npresent intention to issue any of the authorised but unissued share capital.\nSave as disclosed herein, there has been no alteration in our share capital since our incorporation.\nPRINCIPAL SHAREHOLDERS\n56\n\n\nMORATORIUM\nTo demonstrate their commitment to our Group, Mr. Motokuni Yamashiro, Founders Corporation,\nEvergreen, The Chuo Mitsui Trust & Banking Company, Limited, Fastwin Investment Limited, HSH\nNordbank AG, Sojitz (Hong Kong) Limited, The Sumitomo Trust and Banking Co. Ltd, Exeno Yamamizu,\nYamasa Co., Ltd and Mitsui & Co., Ltd who will hold in aggregate 166,250,000 Shares representing\n69.2% of our Company’s post-Invitation share capital (including the 15,000,000 Placement Shares that\nFounders Corporation, Exeno Yamamizu, Yamasa Co., Ltd and Mitsui & Co., Ltd have together given an\nundertaking to subscribe for), have undertaken not to sell, transfer or otherwise dispose of or enter into\nany agreement that will directly or indirectly constitute or will be deemed as a disposal of any part of their\nrespective shareholding in our Company for a period of six months commencing from the date of\nadmission of our Company to the Official List of the SGX-ST.\nOur Executive Directors, Mr. Kazuhiko Yoshida and Mr. Michio Tanamoto, who hold 64% and 36% of the\nissued share capital of Founders Corporation have each given his respective undertaking that he will not\nsell, transfer or otherwise dispose of or enter into any agreement that will directly or indirectly constitute\nor will be deemed as a disposal of any part of his respective interest in Founders Corporation for a period\nof six months commencing from the date of admission of our Company to the Official List of the SGX-ST.\nIn addition, Mr. Kazuhiko Yoshida and Mr. Michio Tanamoto undertake that they shall not, for a period of\nsix months commencing on the date of admission of our Company to the Official List of the SGX-ST,\nwithout the prior written consent of the Manager (such consent not to be unreasonably withheld or\ndelayed), exercise their respective voting rights in relation to their shareholdings in Founders Corporation\nto approve any issue of shares of Founders Corporation if such issuance would cause their combined\nshareholdings in the share capital of Founders Corporation to fall below 51%.\nPRINCIPAL SHAREHOLDERS\n57\n\n\nThe following information should be read in conjunction with the “Report on the Consolidated Financial\nStatements for the Year Ended 31 December 2006” set out in Appendix C of this Prospectus.\nThe following table shows our cash and cash equivalents and capitalisation as at the Latest Practicable\nDate:\n(a)\non an actual basis based on our Group’s unaudited consolidated balance sheet; and\n(b)\nas adjusted to reflect the allotment and issue of 65,400,000 ordinary shares of US$0.16 each at\nthe Invitation Price of S$0.55 each pursuant to the Invitation and the net proceeds from the\nInvitation, after deducting estimated expenses related to the Invitation.\nAs at\nthe Latest Practicable Date\nActual\nAs adjusted\n(US$’000)\n(US$’000)\nCash and bank balances\n27,184\n49,199\nShort-term indebtedness – Secured(1)\n4,127\n4,127\nShort-term indebtedness – Unsecured\n–\n–\nTotal short-term indebtedness\n4,127\n4,127\nLong-term indebtedness\n–\n–\nTotal short and long-term indebtedness\n4,4,127\n4,127\nShareholders’ equity\n60,443\n82,455\nTotal capitalisation and indebtedness\n64,570\n86,582\nNote:\n(1)\nOur Company has an aggregate of US$5.2 million of deposits. Such deposits are secured by a pledge.\nSave as disclosed above, since the Latest Practicable Date, there were no material changes in our total\ncapitalisation and indebtedness, except for changes in our retained earnings arising from the day-to-day\noperations in the ordinary course of our business.\nContingent Liabilities\nPlease refer to the section entitled “Management’s Discussion and Analysis of Financial Position and\nResults of Operations – Indebtedness” for further details on our contingent liabilities.\nCAPITALISATION AND INDEBTEDNESS\n58\n\n\nDilution is the amount by which the Invitation Price paid by the subscribers of our Shares in this Invitation\nexceeds the NAV per Share after the Invitation. Our NAV per Share as at 31 December 2006 and based\non our pre-Invitation share capital of 175,000,000 Shares, was 51.9 cents per Share.\nBased on the issue of 65,400,000 New Shares at the Invitation Price for each New Share pursuant to the\nInvitation and after deducting the estimated issue expenses, the adjusted NAV of our Company as at 31\nDecember 2006 would have been 51.7 cents per Share based on the post-Invitation issued and paid-up\nshare capital of 240,400,000 Shares. This represents an immediate decrease in NAV of 0.2 cents per\nShare to our existing Shareholders and an immediate dilution of 3.3 cents per Share to our new investors\npursuant to the Invitation (“New Investors”).\nThe following table illustrates such dilution per Share:\nPer Share (Cents)\nInvitation Price\n55\nNAV per Share as at 31 December 2006 and based on the pre-Invitation \nshare capital of 175,000,000 Shares\n51.9 (1)\nDecrease in NAV per Share attributable to existing Shareholder\n0.2 (1)\nAdjusted NAV per Share after the Invitation(2) (3)\n51.7 (1)\nDilution in NAV per Share to New Investors\n3.3 (1)\nNotes:\n(1)\nBased on the exchange rate of US$1 : S$1.52 for illustrative purpose only.\n(2)\nAssuming the Over-allotment Option is not exercised. If the Over-allotment Option is exercised in full, the NAV per Share\nimmediately after the Invitation would be 51.8 cents per Share.\n(3)\nThe computed NAV per Share does not take into account the actual financial performance from 1 January 2007 up to the\nLatest Practicable Date. Depending on the actual financial results and the net gain or loss from translation of the financial\nstatements of our subsidiaries, the NAV per Share may be higher or lower than the computed NAV per Share.\nThe following table summarises the total number of Shares acquired by our Directors and Substantial\nShareholders and their Associates during the three years prior to the date of lodgment of this Prospectus,\nthe total consideration paid by them and the effective cash cost per share to them.\nTotal\nEffective cash\nNo. of shares\nconsideration\ncost per share\nacquired\n(US$)\n(US$)\nDirectors and their Associates\nFounders Corporation\n1,062,500\n265,200\n0.2496\nDILUTION\n59\n\n\nThe following tables present the selected consolidated financial information of our Group as at and for the\nfinancial years ended 31 December 2004, 2005 and 2006.\nThe selected consolidated financial information for the financial years ended 31 December 2004, 2005\nand 2006 have been extracted from the Reports on the Consolidated Financial Statements for the years\nended 31 December 2004, 2005 and 2006 set out in Appendices A, B and C of this Prospectus without\nmaterial adjustments. These selected consolidated financial information should be read in conjunction\nwith the Reports on the Consolidated Financial Statements for the years ended 31 December 2004, 2005\nand 2006 set out in Appendices A, B and C of this Prospectus and the related notes thereto.\nWith effect from the financial year ended 31 December 2005, we changed our presentation of the income\nstatement as set out in the audited financial statements by presenting an analysis of expenses using\nclassification based on their nature. For the financial year ended 31 December 2004, we presented an\nanalysis of expenses based on their function within our Group in the income statement as set out in the\naudited financial statements.\nFor comparison purposes, the selected consolidated financial information contained in this section of this\nProspectus has been presented using the classification and format in the audited consolidated financial\nstatements of our Group for the financial years ended 31 December 2005 and 2006. As a result, certain\nbalances in respect of the financial year ended 31 December 2004 were reclassified and restated. The\nreclassification and restatement had no impact on the consolidated net profit and consolidated net assets\nof our Group for the financial year ended 31 December 2004. Please refer to the section on reconciliation\nfor details of the reclassification of the comparative figures for the financial year ended 31 December\n2004.\nCONSOLIDATED RESULTS OF OUR GROUP\nRestated(1)\nAudited\nAudited\nUS$’000\nFY2004\nFY2005\nFY2006\nFee income(2)\n5,599\n12,234\n9,922\nInvestment returns\n6,682\n5,011\n7,983\nIncome from defaulted loans\n1,862\n–\n–\nInterest income\n339\n936\n1,543\nOther income\n317\n86\n22\nTotal income\n14,799\n18,267\n19,470\nEmployee benefits expense\n(5,087)\n(5,481)\n(6,084)\nDepreciation expense\n(77)\n(106)\n(278)\nOther expenses\n(1,821)\n(3,316)\n(3,107)\nReversal of impairment loss on loans receivable\n250\n–\n–\nGain/(loss) on disposal of fixed assets\n–\n2\n(16)\n(6,735)\n(8,901)\n(9,485)\nOperating profit\n8,064\n9,366\n9,985\nFinance costs – interest expense\n(46)\n(42)\n(83)\nShare of profit of associates after tax\n96\n594\n1,929\nProfit before income tax\n8,114\n9,918\n11,831\nIncome tax expense\n(179)\n(479)\n(398)\nProfit for the year\n7,935\n9,439 \n11,433 (3)\nEPS(4) (pre-Invitation)  \nUS$0.045\nUS$0.054\nUS$0.065 (3)\nEPS(5) (post-Invitation)\nUS$0.033\nUS$0.039\nUS$0.048 (3)\nSELECTED FINANCIAL INFORMATION AND OTHER DATA\n60\n\n\nNotes:\n(1)\nPlease refer to the section below for the reconciliation of the restated figures to the audited financial statements for the\nrespective financial year.\n(2)\nOur fee income includes income generated from related party transactions as discussed in Note 29 to the consolidated\nfinancial statements of our Company for FY2006.\n(3)\nOur profit for the year and the EPS for FY2006 would not be materially affected had the Service Agreements as described in\nthe section entitled “Directors, Management and Staff – Service Agreements” been in place at the beginning of FY2006.\n(4)\nFor comparative purposes, the EPS (pre-Invitation) is computed by dividing the profit for the year by our pre-Invitation share\ncapital of 175,000,000 Shares.\n(5)\nFor comparative purposes, the EPS (post-Invitation) is computed by dividing the profit for the year by our post-Invitation share\ncapital of 240,400,000 Shares.\nRECONCILIATION OF OUR CONSOLIDATED RESULTS AS SET OUT IN THIS PROSPECTUS TO\nOUR AUDITED CONSOLIDATED FINANCIAL STATEMENTS\nThe table below sets out the reconciliation of the restated figures to the audited consolidated financial\nstatements for the financial year ended 31 December 2004:\nAnnual Report\nOriginal\nReclassification\nRestated\nUS$’000\nFee income\n5,599\n–\n5,599\nInvestment returns\n6,682\n–\n6,682\nIncome from defaulted loans\n1,862\n–\n1,862\nInterest income\n339\n–\n339\nOther income\n317\n–\n317\nTotal income\n14,799\n–\n14,799\nBy function (1)\nAdministrative expenses\n(6,985)\n6,985\n–\nReversal of impairment loss on loans receivable\n250\n(250)\n–\n(6,735)\n6,735\n–\nBy nature (1)\nEmployee benefits expense\n–\n(5,087)\n(5,087)\nDepreciation expense\n–\n(77)\n(77)\nOther expenses\n–\n(1,821)\n(1,821)\nReversal of impairment loss on loans receivable\n–\n250\n250\n–\n(6,735)\n(6,735)\nOperating profit \n8,064\n–\n8,064\nFinance costs – interest expense\n(46)\n–\n(46)\nShare of profit of associates after tax\n96\n–\n96\nProfit before income tax \n8,114\n–\n8,114\nIncome tax expense\n(179)\n–\n(179)\nProfit for the year\n7,935\n–\n7,935\nNote:\n(1)\nExpenses in the income statement as set out in the audited consolidated financial statements of our Group for the financial\nyear ended 31 December 2004 were presented according to their functions. For comparison purposes, the expenses have\nbeen reclassified according to their nature using the classification and format in the audited consolidated financial statements\nfor the financial years ended 31 December 2005 and 2006.\nSELECTED FINANCIAL INFORMATION AND OTHER DATA\n61\n\n\nCONSOLIDATED FINANCIAL POSITIONS OF OUR GROUP\nRestated(1)\nAudited\nAudited\nAs at\nAs at\nAs at\n31 December 2004\n31 December 2005\n31 December 2006\nUS$’000\nASSETS\nNon-current assets\nProperty, plant and equipment\n122\n147\n652\nLoans receivable\n150\n50\n2,500\nInvestments\n8,289\n15,437\n19,249\nInvestments in associates\n6,928\n6,648\n8,472\nAmounts due from associates\n4,781\n756\n–\nDeposit for purchase of vessel\n–\n–\n3,944\n20,270\n23,038\n34,817\nCurrent assets\nLoans receivable\n1,200\n100\n3,050\nRental and utility deposits paid\n227\n433\n375\nDeposits pledged as collateral\n12,614\n10,082\n5,053\nAccounts receivable\n93\n465\n1,491\nDerivative financial instruments\n–\n–\n163\nPrepaid expenses\n247\n267\n235\nInterest receivable\n54\n20\n74\nAmount due from associate\n–\n–\n4\nCash and bank balances\n24,000\n27,544\n22,205\nTax receivable\n–\n–\n105\n38,435\n38,911\n32,755\nTotal assets\n58,705\n61,949\n67,572\nEQUITY\nCapital and reserves attributable \nto equity holders\nShare capital\n28,000\n28,000\n28,000\nOther Reserves\n–\n–\n(223)\nRetained earnings\n12,517\n21,956\n31,989\nTotal equity\n40,517\n49,956\n59,766\nLIABILITIES\nNon-current Liabilities\nDeferred tax liabilities\n178\n264\n636\n178\n264\n636\nCurrent Liabilities\nAmount due to associate\n–\n11\n1\nBorrowings\n12,526\n9,041\n4,222\nAccounts payable\n2,267\n227\n278\nDerivative financial instruments\n–\n–\n144\nAccrued expenses\n1,783\n2,023\n2,462\nTax payable\n34\n427\n63\nDividend payable\n1,400\n–\n–\nTotal current liabilities\n18,010\n11,729\n7,170\nTotal equity and liabilities\n58,705\n61,949\n67,572\nTotal liabilities\n18,188\n11,993\n7,806\nNet assets\n40,517\n49,956\n59,766\nSELECTED FINANCIAL INFORMATION AND OTHER DATA\n62\n\n\nNote:\n(1)\nDeposits pledged as collateral was previously classified under cash and bank balances in the audited consolidated financial\nstatements for the financial year ended 31 December 2004. For comparative purposes, this balance had been reclassified\nusing the classification and format in the audited consolidated financial statements for the financial years ended 31 December\n2005 and 2006.\nSELECTED FINANCIAL INFORMATION AND OTHER DATA\n63\n\n\nPRO FORMA FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2006\nOn 17 April 2007, we launched the Akebono Fund in order to take advantage of the Singapore Maritime\nPort Authority’s Maritime Finance Incentive (“MFI”) schemes. On 13 September 2006, our wholly-owned\nsubsidiary, Uni-Asia Capital (Singapore) Limited, was designated as an Approved Shipping Investment\nManager (“ASIM”) under the Income Tax Act, Chapter 134 of Singapore (the “SITA”) by the Singapore\nMaritime Port Authority (“MPA”). At the same time, the MPA had also granted a designation of Approved\nShipping Investment Enterprise (“ASIE”), for the Akebono Fund. Our Company has committed to invest in\nthe Akebono Fund, together with other investors, by way of subscription for a principal amount of\nUS$42.9 million Performance Notes issued or to be issued by the Akebono Fund pursuant to the terms of\na subscription agreement dated 17 April 2007.\nParagraph 23 of Part IX of the Fifth Schedule to the Securities and Futures (Offer of Investments)\n(Shares and Debentures) Regulations 2005 (“SFR”) requires the Prospectus to include pro forma\nfinancial statements for the most recent completed financial year where our Company has, inter alia,\nacquired any asset or any entity, or entered into any agreement, to acquire any asset or entity, during the\nperiod between the beginning of the most recent completed financial year and the date of registration of\nthe Prospectus with the Authority and the net book value of that asset would have accounted for 10% or\nmore of the net assets of our Group in respect of our most recent completed financial year.\nAs our total committed investment amount in the Akebono Fund exceeds 10% of the net assets of our\nGroup for FY2006, we are, accordingly, required under paragraph 23 of Part IX of the Fifth Schedule to\nthe SFR, to include pro forma financial information in this Prospectus.\nIn this regard, we have applied to the Authority and the Authority has granted us a waiver from\ncompliance with the requirement under paragraph 23 of Part IX of the Fifth Schedule to the SFR to\ninclude pro forma financial statements for the financial year ended 31 December 2006, on the bases set\nout below.\nWe do not have available all financial information on the Akebono Fund’s ship investments from which\nsuch pro forma financial statements can be prepared. Although our Company has identified certain\nvessels, consisting of existing vessels and/or newbuilds that were or may be proposed to be acquired by\nthe Akebono Fund, the actual decision to acquire such vessels may be subject to change. In the event\nthat the Akebono Fund decides to acquire existing vessels from the funds that our Company currently\ninvests in, our Company may have access to the financial information relating to the historical\nperformance of the vessels.\nEven if financial information on the potential vessels to be acquired by the Akebono Fund is available, we\nbelieve that it would not be advisable for our Company to rely on such financial information as a basis for\npreparing any pro forma financial statements for inclusion in this Prospectus, for the following reasons:\n(i)\nthe historical financial performance of the vessel would not be relevant as the future performance\nof the vessel would be dependent on various factors, including deployment and tenure of the\ncharters and charter rates. Charter rates are dictated by global trends and may differ from year to\nyear. Given that the factors contributing to the financial performance of the vessel in the current\nyear may differ from those of previous years, should our Company prepare the pro forma accounts\nbased on the historical financial information of the vessel, it may be misleading to investors who\nmay rely on the pro forma accounts in this Prospectus to make an investment decision, as such pro\nforma financial information may not be indicative of the future performance of the vessel and,\nconsequently, our Company; and \n(ii)\nour Company may not be in a position to verify the accuracy and validity of such underlying\nfinancial information.\nSELECTED FINANCIAL INFORMATION AND OTHER DATA\n64\n\n\nThe following discussion should be read in conjunction with our audited consolidated financial statements\ntogether with the related notes thereto, all of which are included elsewhere in this Prospectus. This\ndiscussion contains forward-looking statements that involve risks and uncertainties. Our actual results\nmay differ significantly from those projected in the forward-looking statements. Factors that might cause\nfuture results to differ significantly from those projected in the forward-looking statements include, but are\nnot limited to, those discussed below and elsewhere in this Prospectus, particularly in the section entitled\n“Risk Factors”.\nOVERVIEW\nUni-Asia is an Asia-based structured finance arrangement and Alternative Assets direct investment firm.\nOur principal activities are in: (1) structured finance – the finance arrangement of transport related assets\n(such as ships and aircraft), and the provision of ship charter arrangement and agency services; and (2)\nAlternative Assets investment/management – direct investments in and/or the arrangement and\nadministration of Alternative Assets investments such as ships, distressed assets and real estate.\nWe have an established base of clients that include Evergreen Group, CIDO Shipping Group and\nDainichi-Invest Corporation.\nIncome\nOur income comprises primarily of: (i) fee income; (ii) investment returns; (iii) income from defaulted\nloans; (iv) interest income; and (v) other income. Our investment returns comprise mainly realised gain on\ninvestments, return on Performance Notes and fair value adjustments on Performance Notes. Return on\nPerformance Notes comprises interest income from Performance Notes.\nWe derive income primarily from four main business segments, namely: (i) structured finance; (ii) ship\ninvestment/management;\n(iii) distressed assets investment/management;\nand (iv) property\ninvestment/management.\n(1)\nStructured finance \nThis business segment relates to the finance arrangement of transport related assets (such as ships and\naircrafts) and ship charter arrangement and agency services. We act as agent of and participate in the\narrangement of syndicated commercial loans, tax oriented leases, and charter brokerage and we\nspecialise mainly in shipping in Asia. Our income from structured finance accounted for 18.0%, 39.2%\nand 30.8% of our total income in FY2004, FY2005 and FY2006, respectively. In our structured finance\nbusiness, our Company will mainly act as finance arranger. As at 31 December 2003, our Company had\nbeen contracted to arrange financing for 10 containerships, for which we would collect a fee of US$0.69\nmillion in respect of each ship (totalling US$6.9 million for all 10 ships), including completion fees of\nUS$0.55 million per ship (totalling US$5.5 million for all 10 ships). As at 31 December 2006, a total of six\ncontainerships have been delivered and the fees received in respect of these containerships have been\nrecognised as income for FY2005 or, as the case may be, FY2006. The remaining fees will be recognised\nas income in the year of the delivery of the relevant vessels. As at the Latest Practicable Date, two\nadditional containerships had already been delivered in the first half of FY2007. The third containership is\nexpected to be delivered in the 3rd quarter of FY2007 and the last containership is expected to be\ndelivered in the 1st quarter of FY2008.\nAlthough our Company has, historically, participated in syndicated loans, we do not, moving forward,\nexpect that participation in syndicated loans to be a material component of our income. As such, our\nCompany does not regard itself to be exposed to any material credit and interest rate risks arising from\nparticipation in syndicated loans. The income received from participation in syndicated loans in FY2004,\nFY2005 and FY2006 were not significant, and are set out as follows:\n\u0002\nFY2004: US$12,000 (representing 0.08% of the total income for that year)\n\u0002\nFY2005: US$10,000 (representing 0.05% of the total income for that year)\n\u0002\nFY2006: US$8,000 (representing 0.04% of the total income for that year)\n65\nMANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL\nPOSITION AND RESULTS OF OPERATIONS\n\n\nIn this regard, the reference to the line item “Interest income – participation in syndicated loans” in Note 7\nto the audited consolidated financial statements of our Company for FY2006 (on page C-24 of this\nProspectus) should be construed as interest income derived from our Company’s participation in the two\nbridging loans provided by our Company to Harmonic Shipping S.A. (in respect of US$0.2 million) and\nSunrise Shipping S.A. (in respect of US$0.1 million) and a syndicated loan to Evergreen Marine (UK)\nLimited, formerly known as Hatsu Marine Limited (in respect of which our Company’s income from\nparticipation was US$8,000). As at the Latest Practicable Date, the syndicated loan to Evergreen Marine\n(UK) Limited has been repaid in full.\nOur income from structured finance includes (a) arrangement fee; (b) brokerage fee; and (c) agency fee.\n(2)\nAlternative Assets investment/management\n(i)\nShip investment/management\nOur ship investment activities comprise mainly direct and indirect ship investments. Our ship management\nactivities comprise mainly the arrangement and administration of ships/ship investments held by us\nand/or third-parties. Our income from ship investment/management accounted for 64.8%, 49.3% and\n56.6% of our total income in FY2004, FY2005 and FY2006, respectively.\nOur indirect ship investments include investments made in funds such as the Searex Series I Fund and\nthe Searex Series II Fund in FY2004. We also act as the administrator and agent of the Searex Series I\nFund and the Searex Series II Fund responsible for managing and arranging debt finance for the funds.\nOur income from ship investment/management activities include (a) arrangement fee for arranging\nfinancing for our ship investments made in partnership with other investors as well as, if any, ship\ninvestments by us in principal; (b) administration fee and incentive fee; (c) project management fee; (d)\nagency fee; (e) ship charter brokerage fee; and (f) investment returns from our direct investments and our\ninvestments made through investment funds, including fair value adjustments on the Performance Notes\nas well as the vessels in which we may have an investment.\n(ii)\nDistressed assets investment/management\nOur distressed assets investment/management activities comprise mainly the investment in and disposal\nof distressed assets in Asia (excluding Japan) and/or administration of distressed assets held by us\nand/or directly by third-parties. Our income from distressed assets investment/management accounted for\n15.8%, 5.6% and 6.0% of our total income in FY2004, FY2005 and FY2006, respectively.\nOur income from distressed assets investment/management activities include fees for the provision of\nagency, advisory and administration services, incentive fees and investment returns from the recovery of\ninvestments in NPLs including fair value adjustments on the Performance Notes.\n(iii)\nProperty investment/management \nOur property investment in Japan is held through Capital Advisers. Capital Advisers was our wholly-\nowned subsidiary before it became our associated company in May 2003 when Capital Advisers raised\nnew equity capital from a number of independent third-party investors. Prior to May 2003, property\nincome from Capital Advisers was consolidated in our consolidated financial statements. From May 2003,\nequity accounting was applied on property income from Capital Advisers after Capital Advisers became\nour associated company.\nIn 2004, we held a 5.3% interest in AP Real Estate Ltd. (“AP”) and a 10% interest in RS Property\nInvestment (“RS”). AP and RS are principally engaged in the investment and management of properties\nin Japan. As at 31 December 2006, we held Performance Notes of Yen 10,000 (or approximately US$84)\nin AP and we no longer have any interest in RS.\n66\nMANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL\nPOSITION AND RESULTS OF OPERATIONS\n\n\nFactors affecting our income\nThe key factors affecting our income include the following:\n(a)\nthe performance of the shipping industry;\n(b)\nthe opportunities in the real estate market in the PRC and other parts of Asia;\n(c)\nthe opportunities available in the distressed assets markets in Asia;\n(d)\nthe fair value of our investments;\n(e)\nthe macroeconomic policies of countries in Asia such as the PRC and Japan; and\n(f)\nthe economic environment in Asia.\nIncome recognition\nOur arrangement fees are recognised on delivery of the asset and upon completion of the transaction\nwhen all obligations associated with the transaction are completed and when the amount of income can\nbe measured reliably.\nOur agency fees and commissions are recognised when pre-agreed duties and functions of acting as an\nagent have been rendered.\nOur project management fees are recognised on an accrual basis.\nOur administration fee, agency fee and incentive fee from distressed loans are recognised as they\ncrystallise according to the pre-agreed terms of contract.\nOur interest income is recognised on a time-proportion basis using the effective yield basis.\nFair value adjustments on financial assets through profit or loss\nOur financial statements are prepared in conformity with the International Financial Reporting Standards\n(“IFRS”). Pursuant to the IFRS, certain financial assets are measured at their fair values. Performance\nNotes are investments with income and maturity values which fluctuate based on the distributions\nreceived from underlying assets, which are generally investments in property development companies,\ndefaulted loans or shipping companies. Fair values of Performance Notes are determined by our interest\nin the fair values of each scheme’s underlying assets. Gains and losses arising from changes in the fair\nvalue of all securities are recognised in the consolidated income statement as they arise. We recognised\na net gain on fair value adjustments on Performance Notes and other investments of US$1.4 million,\nUS$1.8 million and US$3.3 million in FY2004, FY2005 and FY2006, respectively.\nEmployee benefits expense\nOur employee benefits expense includes salaries (including Director’s remuneration), pension costs for\ndefined contribution plans, staff residencies cost and other welfare cost and allowances. Employee\nbenefits expense accounted for 75.5%, 61.6% and 64.1% of our total operating expenses in FY2004,\nFY2005 and FY2006, respectively.\nDepreciation expense\nOur depreciation expense include depreciation expense for leasehold improvements, depreciation\nexpense for office equipment, depreciation expense for furniture and fixtures and depreciation expense\nfor motor vehicles. Depreciation expense accounted for 1.1%, 1.2% and 2.9% of our total operating\nexpenses in FY2004, FY2005 and FY2006, respectively.\n67\nMANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL\nPOSITION AND RESULTS OF OPERATIONS\n\n\nOther expenses\nOur other expenses include rental expenses under operating leases for office premises, auditors’\nremuneration, travelling and entertainment expense, net foreign exchange loss, professional services fees\nand miscellaneous expenses. Other expenses accounted for 27.0%, 37.3% and 32.8% of our total\noperating expenses in FY2004, FY2005 and FY2006, respectively.\nOperating profit margin\nOur operating profit margins for FY2004, FY2005 and FY2006 are 54.5%, 51.3% and 51.3%,\nrespectively.\nFinance cost\nOur finance cost comprise of interest expense to financial institutions (non-related companies) being\nmainly interest on our bank loans and overdrafts.\nShare of profit from associates after tax\nOur Group’s share of profit from associates after tax represents our Group’s share of profit in Capital\nAdvisers and Uni-Ships and Management Limited, and it amounted to US$0.1 million, US$0.6 million and\nUS$1.9 million for FY2004, FY2005 and FY2006, respectively.\nOur Group’s share of profit from associates after tax increased to US$1.9 million in FY2006 from US$0.6\nmillion in FY2005 mainly due to an increase in profit of Capital Advisers in FY2006. Capital Advisers\nrealised a gain on disposal of its investment in three hotels in FY2006.\nCapital Advisers was our wholly-owned subsidiary prior to 2 May 2003 and became our associated\ncompany on 2 May 2003. We currently hold an equity interest of 44.8% in Capital Advisers. Uni-Ships and\nManagement Limited became our associated company on 25 January 2005 and we maintain an equity\ninterest of 30.0% of Uni-Ships and Management Limited.\nAs at 31 December 2006, Capital Advisers invested in and acted as the asset manager of eleven hotels\nin Japan. The size of assets under management by Capital Advisers as at the end of FY2006 was Yen\n58.5 billion (or approximately US$491.9 million).\nTaxation\nOur tax on profits has been calculated at rates of taxation prevailing in the jurisdictions in which our\nGroup operates. As at the Latest Practicable Date, the prevailing corporate tax rates for the various\njurisdictions in which our Group operates are as follows: 17.5% for Hong Kong, 18% for Singapore, 33%\nfor the PRC and 40.65% for Japan.\nOur Company was incorporated in the Cayman Islands as an exempted company with limited liability\nunder the Cayman Companies Law and, accordingly, is exempted from payment of Cayman Islands\nincome tax. Apart from Uni-Asia Services and Agency Limited which was incorporated in Hong Kong, our\nCompany’s other subsidiaries were incorporated in Singapore, Hong Kong, the PRC, British Virgin Islands\nand Japan. Offshore Property Investment Corporation, a wholly-owned subsidiary of the Company, was\nincorporated in the British Virgin Islands under the International Business Companies Act of the British\nVirgin Islands and was subsequently reregistered under the BVI Business Companies Act, and is\naccordingly exempted from payment of the British Virgin Islands income tax.\nOur Company conducts our business mainly in Asia and we have accumulated tax losses of\napproximately US$6.7 million from Hong Kong as at the end of FY2006. These tax losses will be carried\nforward against our future profits which are taxable in Hong Kong.\nNo deferred income tax asset has been recognised by us in respect of these un-utilised tax losses during\nFY2004, FY2005 and FY2006. Deferred income tax assets are recognised for tax losses carried forward\nonly to the extent that the realisation of the related tax benefit through the future taxable profits is\nprobable in future, in accordance with our accounting policy.\n68\nMANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL\nPOSITION AND RESULTS OF OPERATIONS\n\n\nREVIEW OF RESULTS OF OPERATIONS\nThe following tables show income by the business segment and geographical segment for each of the\nperiods under review:\nIncome by Business Segment\nFY2004\nFY2005\nFY2006\nUS$’000\n%\nUS$’000\n%\nUS$’000\n%\n(i)\nStructured finance income \n2,669\n18.0\n7,165\n39.2\n5,994\n30.8\n(ii)\nShip investment/management income\n9,594\n64.8\n8,997\n49.3\n11,013\n56.6\n(iii)\nDistressed assets investment/management \nincome \n2,336\n15.8\n1,019\n5.6\n1,177\n6.0\n(iv)\nProperty investment/management income\n(99)\n(0.6)\n186\n1.0\n53\n0.3\nUnallocated\n299\n2.0\n900\n4.9\n1,233\n6.3\nTotal income\n14,799\n100.0\n18,267\n100.0\n19,470\n100.0\nUnallocated income represents interest income from cash and cash equivalents.\nIncome by Geographical Segment\nFY2004\nFY2005\nFY2006\nUS$’000\n%\nUS$’000\n%\nUS$’000\n%\nIncome\nGlobal (indeterminate location)(1)\n8,353\n56.5\n8,918\n48.8\n8,896\n45.7\nAsia (excluding Japan)(2)\n6,156\n41.6\n3,052\n16.7\n6,823\n35.1\nJapan(3)\n(9)\n(0.1)\n5,397\n29.6\n2,518\n12.9\nUnallocated(4)\n299\n2.0\n900\n4.9\n1,233\n6.3\nTotal\n14,799\n100.0\n18,267\n100.0\n19,470\n100.0\nNotes:\n(1)\nThe global segment represents (a) income derived from our investment in ship investment funds, which do not have a fixed\ngeographical location; (b) income from activities including ship finance arrangement and management for special purpose\ncompanies holding vessels, which have no fixed geographical location; and (c) structured finance income from our European\nclient in the case of FY2004.\n(2)\nThe Asia (excluding Japan) segment represents activities with assets or customers located in Taiwan, Indonesia, the PRC\nand Korea, which includes structured finance, shipping finance/investment/management and distressed assets investments.\n(3)\nThe Japan segment represents income from activities (including structured finance arrangement) with assets or customers\nlocated in Japan.\n(4)\nIncome from the unallocated segment represents interest income from our cash and cash equivalents held by our head office\nin Hong Kong and our subsidiary in Singapore.\n69\nMANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL\nPOSITION AND RESULTS OF OPERATIONS\n\n\nFY2005 vs FY2004\nIncome\nOur income in FY2005 increased by 23.4% from US$14.8 million in FY2004 to US$18.3 million in\nFY2005 mainly due to an increase in income from structured finance by US$4.5 million and an increase\nin interest income from cash and cash equivalents of US$0.6 million, offset by a decrease in distressed\nassets income of US$1.3 million.\nStructured finance \nOur income from structured finance increased by 168.5% from US$2.7 million in FY2004 to US$7.2\nmillion in FY2005 mainly due to an increase in the value of syndicated loans arranged in FY2005.\nWe arranged 12 syndicated loans and ship charter arrangement transactions totalling approximately\nUS$930.2 million and generating US$7.1 million in arrangement, brokerage and agency fees in FY2005,\nas compared to five syndicated loans and tax leases totalling approximately US$417.3 million and\ngenerating US$2.6 million in arrangement and agency fees in FY2004.\nShip investment/management \nOur income from ship investment/management in FY2005 was US$9.0 million compared to US$9.6\nmillion in FY2004.\nOur income from ship investment/management in FY2005 include fee income comprising arrangement\nfees and agency fees of US$1.0 million, administration fees and incentive fees of US$2.5 million primarily\ndue to the higher level of administration fees received as a result of the launch of the Searex Series I and\nSeries II Funds, project management fees of US$0.8 million, as well as investment returns comprising\ninterest on Performance Notes of US$2.5 million and fair value adjustment on Performance Notes of\nUS$2.4 million.\nOur income from ship investment/management in FY2004 include fee income comprising arrangement\nfees and agency fees of US$1.3 million, administration fees and incentive fees of US$1.4 million,\ninvestment returns comprising interest on ship investments and Performance Notes of US$2.5 million and\nUS$2.6 million respectively, fair value adjustment on Performance Notes of US$1.6 million and others of\nUS$0.2 million.\nA second shipping fund Searex Series II Fund with an asset size of approximately US$100 million was\nsuccessfully launched in December 2004. This fund contributed a total US$0.4 million fee income and\ninvestment return to us in FY2005. During the year, the Searex Series I Fund sold a small handy size\nbulk carrier, Ocean Time, in FY2005.\nAs at 31 December 2005, our total ship investments through equity shares and Performance Notes\namounted to US$3.7 million and US$9.7 million respectively.\nDistressed assets investment/management\nOur income from distressed assets investment/management decreased by 56.4% from US$2.3 million in\nFY2004 to US$1.0 million in FY2005.\nThe decrease in income was mainly due to the full recovery in FY2004 of one distressed asset which we\ndirectly invested in which contributed US$1.9 million of income in FY2004. We recorded fee income\ncomprising agency, advisory, administration and incentive fees of US$0.3 million and investment return\ncomprising return on Performance Notes of US$0.1 million in FY2004 from AAA Series I Fund and AAA\nSeries II Fund.\n70\nMANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL\nPOSITION AND RESULTS OF OPERATIONS\n\n\nWe recorded fee income comprising agency, advisory, administration and incentive fees of US$0.7 million\nand investment return comprising return on Performance Notes of US$0.3 million in FY2005 from AAA\nSeries I Fund and AAA Series II Funds. As at 31 December 2005, the nominal value of the Performance\nNotes outstanding on the balance sheets of AAA Series I Fund and AAA Series II Fund was US$5.3\nmillion (2004: US$5.6 million) of which our share of interest was US$1.7 million (2004: US$1.8 million).\nProperty investment/management\nWe recorded interest return on Performance Notes issued by AP and RS of US$0.1 million and fair\nvaluation gain from our investments in AP and RS of US$0.1 million.\nAs at 31 December 2005, we held Performance Notes on AP and RS of Yen 10,000 (or approximately\nUS$84) and Yen 23.2 million (or approximately US$0.2 million) respectively.\nOperating expenses\nOur operating expenses increased by 32.2% from US$6.7 million in FY2004 to US$8.9 million in FY2005\nmainly due to an increase in rental of US$0.2 million following the relocation of our office in Hong Kong,\nan increase in employee benefits expense of US$0.4 million due to an increase in our headcount and\nsalary adjustments, an increase in professional fees of US$0.5 million and an increase in net foreign\nexchange loss of US$0.4 million arising from translation losses mainly from our investments in Japan.\nOperating profit and operating profit margin\nOur operating profit increased by 16.1% from US$8.1 million in FY2004 to US$9.4 million in FY2005. Our\noperating profit margin decreased slightly from 54.5% in FY2004 to 51.3% in FY2005. The decrease in\nour operating profit margin is mainly due to the increase in our operating expenses relating to an increase\nin professional fees by US$0.5 million and office rental expenses by US$0.2 million.\nTaxation\nOur tax expense increased from US$0.2 million in FY2004 to US$0.5 million in FY2005 mainly due to\nhigher taxable income recorded in FY2005.\nProfit for the year\nBased on the foregoing, our profit for the year increased by 18.9% from US$7.9 million in FY2004 to\nUS$9.4 million in FY2005 mainly due to an increase in structured finance income in FY2005.\nFY2006 vs FY2005\nIncome\nOur income increased by 6.6% from US$18.3 million in FY2005 to US$19.5 million in FY2006 due\nprimarily to a US$2.0 million increase in income from ship investment/management, a US$0.2 million\nincrease in income from our distressed assets investment/management activities and a US$0.3 million\nincrease in interest income, offset by a US$1.2 million decrease in income from structured finance and a\nUS$0.1 million decrease in income from property investment/management.\nStructured finance \nOur income from structured finance decreased by 16.3% from US$7.2 million in FY2005 to US$6.0\nmillion in FY2006 mainly due to a decrease in the number and total volume of syndicated transactions\narranged in FY2006.\nWe arranged six syndicated loans and ship charter arrangement transactions totalling approximately\nUS$459.9 million and generating US$6.0 million in arrangement, brokerage and agency fees in FY2006\nas compared to 12 syndicated loans and ship charter arrangement transactions totalling approximately\nUS$930.2 million and generating US$7.1 million in arrangement, brokerage and agency fees in FY2005.\n71\nMANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL\nPOSITION AND RESULTS OF OPERATIONS\n\n\nShip investment/management \nOur income from ship investment/management in FY2006 totalled US$11.0 million as compared to\nUS$9.0 million in FY2005. This increase of US$2.0 million was mainly due to (a) increase of US$1.8\nmillion in investment return in respect of our Performance Notes in Searex I; and (b) an increase of\nUS$1.3 million in the fair valuation gain due to the improvement of the shipping market, offset by a\nreduction of approximately US$1.0 million in fee income derived from ship investment/management.\nOur income from ship investment/management in FY2006 include fee income comprising arrangement\nand agency fees of US$1.4 million, administration fees and incentive fees of US$1.9 million, as well as\ninvestment returns comprising interest in Performance Notes of US$4.3 million, fair value adjustment on\nPerformance Notes of US$1.2 million and fair value adjustments on ship investments of US$1.9 million.\nAs at 31 December 2006, our total ship investments through equity shares and Performance Notes\namounted to US$8.3 million and US$9.7 million respectively.\nDistressed assets investment/management \nOur income from distressed assets investment/management increased by 15.5% from US$1.0 million in\nFY2005 to US$1.2 million in FY2006.\nIn FY2006, we recorded fee income comprising agency, advisory, administration and incentive fees of\nUS$0.7 million and investment return comprising return on Performance Notes of US$0.4 million and fair\nvalue adjustment on performance notes from AAA Series I and Series II Funds of US$0.1 million. AAA\nSeries I Fund expired in FY2006. As at 31 December 2006, the aggregate nominal value of the\nPerformance Notes outstanding on the balance sheet of AAA Series II Fund totalled US$2.7 million (the\naggregate nominal value of the Performance Notes outstanding on the balance sheets of AAA Series I\nand II Funds totalled US$5.3 million as at 31 December 2005) of which our share of interest was US$0.9\nmillion (our share of interest of AAA Series I and Series II Funds totalled US$1.7 million as at 31\nDecember 2005). Drawdown of AAA Series II Performance Notes took place on 21 December 2006 and\nAAA Series I Performance Notes were fully redeemed on 22 December 2006.\nProperty investment/management \nWe recorded fair value adjustment on our investment in Performance Notes in RS of approximately\nUS$50,000 in FY2006. These Performance Notes on RS were fully redeemed in March 2006. As at 31\nDecember 2006, we held Performance Notes on AP of Yen 10,000 (or approximately US$84).\nOperating expenses \nOur operating expenses increased by 6.6% from US$8.9 million in FY2005 to US$9.5 million in FY2006\ndue primarily to an increase in our rental expenses of US$0.2 million following the relocation of our office\nin Hong Kong, Singapore and Japan and an increase of US$0.6 million in employee benefits expense\ndue to an increase in our headcount and salary adjustments. There was a reduction of foreign exchange\nloss of US$0.3 million in FY2006 as compared to FY2005.\nOperating profit and operating profit margin\nOur operating profit increased by 6.6% from US$9.4 million in FY2005 to US$10.0 million in FY2006. Our\noperating profit margin remained consistent at 51.3% for FY2005 and FY2006.\nTaxation\nOur tax expense was US$0.4 million in FY2006 as compared to US$0.5 million in FY2005. Our tax\nexpense in FY2006 was mainly attributable to taxable income earned in Singapore and an increase in\ndeferred tax liability provision made in relation to the withholding tax of 20% that had been withheld in\naccordance with Japanese tax laws, in respect of the profits arising from our Company’s investment in\nCapital Advisers.\n72\nMANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL\nPOSITION AND RESULTS OF OPERATIONS\n\n\nProfit for the Year\nOur profit for the year increased by 21.1% from US$9.4 million in FY2005 to US$11.4 million in FY2006\nbased on the foregoing and due partly to a US$1.3 million increase in our share of profit from Capital\nAdvisers, our associated company.\nREVIEW OF FINANCIAL POSITION\nNon-current assets\nAs at 31 December 2006, our non-current assets amounted to US$34.8 million, comprising US$0.7\nmillion in property, plant and equipment, US$2.5 million in loans receivable, US$3.9 million in deposit for\nthe acquisition of a vessel, US$19.2 million in investments and US$8.5 million in investments in\nassociates.\nOur investments of US$19.2 million comprised mainly US$9.7 million in Performance Notes of unlisted\nshipping companies, US$8.3 million in shares of shipping companies engaged in ship investment and\nmanagement and US$1.0 million in unlisted Performance Notes of distressed debt.\nOur investments in associates of US$8.5 million comprise mainly of our investment in Capital Advisers.\nOur loans receivables of US$2.5 million refers to the bridging loan granted to Sunrise Shipping S.A. The\ninterest rate payable on this bridging loan is 6% per annum. As at the Latest Practicable Date, the\nbridging loan remains payable and will mature on 11 September 2011.\nCurrent assets \nAs at 31 December 2006, our current assets amounted to US$32.8 million, comprising US$3.1 million of\nloans receivables, US$0.4 million of rental and utility deposits paid, US$5.1 million of deposits pledged as\ncollateral, US$1.5 million of accounts receivable, US$0.2 million of prepaid expenses, US$0.1 million tax\nreceivable, approximately US$74,000 of interest receivable, US$22.2 million of cash and bank balances,\napproximately US$4,000 of amount due from associates and US$0.16 million of derivative financial\ninstruments.\nOur loans receivables of US$3.0 million refers primarily to the bridging loan granted to Harmonic\nShipping S.A. The interest payable on this bridging loan was set as the rate of LIBOR + 2% per annum.\nThe bridging loan was fully repaid on 30 April 2007.\nAs shown in the Group’s balance sheet as at 31 December 2006, there is an amount of US$5.1 million of\ndeposits. This amount is pledged as collateral for a Japanese Yen denominated revolving bank loan\nfacilities used for hedging.\nNon-Current Liabilities\nThis refers to our deferred tax liabilities of US$0.6 million as at 31 December 2006.\nCurrent Liabilities\nAs at 31 December 2006, our current liabilities amounted to US$7.2 million, comprising US$4.2 million of\nborrowings, US$0.3 million of accounts payable, US$2.5 million of accrued expenses, tax payable of\napproximately US$63,000, amount due to associate of approximately US$1,000 and US$0.1 million of\nderivative financial instruments.\nThe borrowings of US$4.2 million is revolving on an annual basis and bears an interest rate of floating\nYen LIBOR and were secured against our cash deposits as at 31 December 2006. Our cash deposits as\nat 31 December 2006 is US$5.1 million.\nEquity\nAs at 31 December 2006, our equity comprised an issued share capital of US$28.0 million, retained\nearnings of US$32.0 million and other reserves of US$(0.2) million.\n73\nMANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL\nPOSITION AND RESULTS OF OPERATIONS\n\n\nINDEBTEDNESS\nBorrowings and collaterals\nAs at 31 December 2006, we had total outstanding borrowings amounting to US$4.2 million, which relate\nto a loan of Yen 502.0 million (or approximately US$4.2 million). This loan is secured by a cash deposit of\nUS$5.1 million.\nAs at 31 December 2006, our material credit facilities include the following:\nBorrowings\noutstanding\nas at\nBank and type of\nFacility\n31 December\nDuration of\nPurpose of \nfacility\namount\n2006\nthe facility\nthe facility\nInterest rate\nMizuho Corporate\nUS$5.0 million\nNil\nRevolving loan\nWorking capital\n0.5% per \nBank, Ltd., Revolving\nfacility\nannum over \nLoan Facility\nCost of Funds(1)\nMizuho Corporate\nUS$10.0 million\nNil\nUp to 1 year\nHedging\n– \nBank, Ltd., Foreign\nfrom 1 April\ninstruments \nExchange Facility\n2005, subject \nto automatic \nrenewal\nHong Kong and\nYen 1,648\nYen 502.0\n30 April 2007\nHedging\n0.30% over 1,2, \nShanghai Banking\nmillion\nmillion\nto 1 April 2008\ninstruments\n3 or 6 months \nCorporation,\n(or approximately (or approximately\nJPY LIBOR \nRevolving JPY Loan\nUS$13.8 million)\nUS$4.2 million)\nNote:\n(1)\nActual cost to the bank of funding an advance or other credit utilisation or any sum due under the facilities in the currency of\nthe sum.\nThe following table summarises our repayment obligations in connection with our bank borrowings as at\n31 December 2006:\nAudited\nAs at 31 December 2006\nUS$’000\nPayable:\n- within one year\n4,222\n- after one year but within five years\n–\nTotal borrowings\n4,222\nContingent liabilities \nOn 27 November 2006, our Group extended a performance guarantee to Xing Long Maritime S.A for the\namount of Yen 4.69 billion (or approximately US$39.5 million) for the due performance by Panmax under\nthe Shipsales Contract.\n74\nMANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL\nPOSITION AND RESULTS OF OPERATIONS\n\n\nLIQUIDITY AND CAPITAL RESOURCES\nOur operations have been funded through a combination of cash generated from our operating activities\nand external cash reserves. The principal uses of these funds are to meet working capital requirements\nand operating costs, and for capital expenditure, repayment of borrowings and investments. We anticipate\nthat cash generated from our operating and investing activities, together with our cash and cash\nequivalents, will be sufficient to fund the operations of our business and meet our current working capital\nrequirements for the next 12 months.\nThe following table summarises our cash flow data in FY2004, FY2005 and FY2006:\nUS$’000\nFY2004\nFY2005\nFY2006\nNet cash generated from operating activities\n2,928\n2,659\n1,146\nNet cash flow generated from investing activities\n15,618\n5,245\n114\nNet cash used in financing activities \n(4,590)\n(4,930)\n(6,524)\nCash and cash equivalents at the end of the year\n24,000\n27,544\n22,205\nOperating activities\nIn FY2004, we recorded a profit before tax of US$8.1 million. After adjusting for non-cash and non-\noperational items (comprising primarily depreciation, interest income and expenses, results of associates,\nnet foreign exchange loss, income from defaulted loans and investment returns) of US$9.2 million and\nworking capital changes of US$3.7 million, the cash generated from operations was US$2.6 million. We\nreceived interest on bank balances of US$0.3 million. These resulted in net cash generated from\noperating activities of US$2.9 million in FY2004.\nIn FY2005, we recorded a profit before tax of US$9.9 million. After adjusting for non-cash and non-\noperational items (comprising primarily depreciation, interest income and expenses, results of associates,\nnet foreign exchange loss, gain on disposal of fixed assets and investment returns) of US$6.0 million and\nworking capital changes of US$2.2 million, the cash generated from operations was US$1.7 million. We\nreceived interest on bank balances of US$0.9 million. These resulted in net cash generated from\noperating activities of US$2.7 million in FY2005.\nIn FY2006, we recorded a profit before tax of US$11.8 million. After adjusting for non-cash and non-\noperational items (comprising primarily depreciation, interest income and expenses, results of associates,\nnet foreign exchange loss, loss on disposal of fixed assets and investment returns) of US$10.9 million\nand working capital changes of US$0.4 million, the cash generated from operations was US$0.4 million.\nWe received interest on bank balances of US$1.2 million and paid income tax of US$0.5 million. These\nresulted in net cash generated from operating activities of US$1.1 million in FY2006.\nIn FY2004, the working capital inflows were mainly the result of a decrease in accounts receivable of\nUS$0.6 million, an increase in accounts payable of US$1.9 million and an increase in accrued expenses\nof US$1.3 million.\nIn FY2005, the working capital outflows were mainly the result of an increase in rental and utility deposits\npaid of US$0.2 million, an increase in accounts receivable of US$0.2 million and a decrease in accounts\npayable of US$2.0 million.\nIn FY2006, the working capital outflows were mainly the result of an increase in accounts receivable of\nUS$1.1 million and offset by an increase in accrued expenses of US$0.4 million.\n75\nMANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL\nPOSITION AND RESULTS OF OPERATIONS\n\n\nInvesting activities\nNet cash generated from investing activities was US$15.6 million in FY2004 mainly due to proceeds from\nsale of investments in EuroAsia III, Inc, and AP Real Estate Ltd. of US$2.6 million, dividend received from\ninvestments in EuroAsia III, Inc, and Searex Series I Fund of US$2.9 million, repayment of principal and\ninterest from loans to Capital Advisers of US$4.9 million, loans repayment from Hatsu Marine and Searex\nSeries I Fund of US$2.0 million, sale of default loans of US$1.6 million, reduction of US$4.6 million in\ndeposits pledged as collateral in respect of a Japanese Yen borrowing in respect of our investment in\nCapital Advisers, following the partial repayment of such Japanese Yen borrowing, interests received on\nPerformance Notes of US$2.7 million from AAA Series I and Series II Funds and Searex I Fund and\nproceeds from settlement of foreign exchange contracts of US$10.3 million for AAA Series I and Series II\nFunds. This was partially offset by cash used for the purchase of investments in AAA Series I and Series\nII Funds and Searex Series I Fund of US$4.6 million, and loans advanced to Ever Union Ltd. (which, at\nthe relevant time, was an investee company under the Searex Series II Fund) of US$1.1 million and\npurchase of foreign exchange contracts of US$10.3 million.\nNet cash used in investing activities was US$5.3 million in FY2005 mainly due to the purchase of\ninvestments in AAA Series I and II Funds, Searex Series I and II Funds, Falcon Containership S.A.,\nFortitude Containership S.A., Union Containership S.A. and Harmonic Shipping S.A., of US$9.8 million\nand purchase of foreign exchange contracts of US$25.4 million. This was partially offset by proceeds from\nsale of investments in AAA Series I and Series II Funds, Searex Series I and Series II Funds, Euroasia II,\nGlad Mate Ltd, RS Property Investment and AP Real Estate Ltd of US$2.9 million, repayment of principal\nand interest from loans to associate of US$4.1 million, loan repayment of US$1.2 million extended to\nHatsu Marine and Ever Union Ltd., decrease in deposits pledged as collateral of US$2.5 million, interests\nreceived on Performance Notes of US$4.4 million from Searex I Fund, AAA Series I and II Funds and\nCapital Advisers and settlement of foreign exchange contracts of US$25.5 million.\nNet cash generated from investing activities was US$0.1 million in FY2006 mainly due to proceeds from\nredemption of Performance Notes of AAA Series I and Series II Funds and Searex Series I and Series II\nFunds of US$3.8 million, repayment of principal and interest from loans to associate of US$0.8 million,\nrepayment of a loan extended to Harmonic Shipping S.A., Sunrise Shipping S.A. and Hatsu Marine of\nUS$11.5 million, interest received on Performance Notes of US$4.7 million from AAA Series I and Series\nII Funds and Searex Series I and Series II Funds and a reduction of US$5.0 million in deposits pledged\nas collateral in respect of a Japanese Yen borrowing in respect of our investment in Capital Advisers,\nfollowing the partial repayment of such Japanese Yen borrowing. This was partially offset by cash used for\npurchase of Performance Notes of AAA Series I Fund and Searex Series II Fund of US$1.5 million,\npayment of shareholders loan of US$2.8 million to Harmonic Shipping S.A. and Sunrise Shipping S.A.,\nloans advanced to Harmonic Shipping S.A. and Sunrise Shipping S.A of US$16.9 million, deposit paid for\npurchase of a vessel of approximately US$3.9 million from Xing Long, and purchase of fixed assets of\nUS$0.8 million.\nFinancing activities\nNet cash used in financing activities was US$4.6 million in FY2004. This was mainly due to interest paid\non bank borrowings of US$0.1 million, repayment of bank borrowings of US$4.8 million and dividend paid\nto shareholders of US$0.8 million. This was partially offset by new bank borrowings of US$1.1 million.\nNet cash used in financing activities was US$4.9 million in FY2005 mainly due to interest paid on\nborrowings of US$0.1 million, repayment of borrowings of US$3.5 million and dividend payment of\nUS$1.4 million.\nNet cash used in financing activities was US$6.5 million in FY2006 mainly due to interest paid on\nborrowings of US$0.1 million, repayment of bank borrowings of US$7.0 million and dividend payment of\nUS$1.4 million. The cash outflows, including a cash outflow of US$0.2 million from interim expenses\nincurred in respect of the Invitation, were partially offset by cash inflow from new bank borrowings of\nUS$2.2 million.\n76\nMANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL\nPOSITION AND RESULTS OF OPERATIONS\n\n\nCAPITAL EXPENDITURE, INVESTMENTS, DIVESTMENTS AND COMMITMENTS\nCapital Expenditure\nOur capital expenditure for the past three financial years from FY2004 to FY2006, and for the period from\n1 January 2007 up to the Latest Practicable Date, are as follows:\nFrom\n1 January 2007\nup to the Latest \nUS$’000\nFY2004\nFY2005\nFY2006\nPracticable Date\nLeasehold improvements\n49\n2\n666\n–\nOffice equipment\n58\n38\n55\n89\nFurniture and fixtures\n–\n–\n117\n1\nMotor vehicles\n–\n93\n0\n0\nTotal\n107\n133\n838\n90\nOur material investments and divestments for the past three financial years from FY2004 to FY2006, and\nfor the period from 1 January 2007 up to the Latest Practicable Date, are as follows:\nInvestments and Divestments \nFrom\n1 January 2007\nup to the Latest \nUS$’000\nFY2004\nFY2005\nFY2006\nPracticable Date\nInvestment \nAAA Strategic Investment\n-\nSeries II\n1,467\n285\n140\n–\nEuroAsia II\n50\n–\n–\n–\nEuroAsia III\n109\n–\n–\nSearex Assets Management Limited\n-\nSeries I\n5,000\n706\n–\n–\n-\nSeries II\n–\n4,500\n1,435\n–\nGlad Mate\n1,000\n–\n–\n–\nContainer Vessel Fund\n–\n1,926\n–\n214\nHarmonic Shipping S.A.\n–\n2,100\n65\n3,230\nSunrise Shipping S.A.\n–\n–\n2,700\n–\nUni-Ships and Management Limited\n–\n39\n–\n–\nRich Containership S.A.\n–\n–\n–\n1,000\nMatin Shipping Limited \n–\n–\n–\n1,203\nAkebono Capital Limited \n–\n–\n–\n2,800\nTotal\n7,626\n9,556\n4,340\n8,447\n77\nMANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL\nPOSITION AND RESULTS OF OPERATIONS\n\n\nFrom\n1 January 2007\nup to the Latest \nUS$’000\nFY2004\nFY2005\nFY2006\nPracticable Date\nDivestments\nAAA Strategic Investment\n-\nSeries I\n320\n151\n28\n–\n-\nSeries II\n311\n150\n967\n–\nEuroAsia II\n113\n113\n75\n259\nEuroAsia III\n500\n–\n–\n–\nSearex Assets Management Limited\n-\nSeries I\n2,353\n530\n1,382\n–\n-\nSeries II\n–\n–\n1,272\n4,663\nOcean Target Limited\n1,130\n–\n–\n–\nOcean Time Limited\n928\n–\n–\n–\nSouth China International Leasing Co Ltd\n366\n–\n–\n–\nGlad Mate Ltd\n–\n1,249\n–\n–\nRS Property Investment\n–\n185\n105\n–\nAP Real Estate Ltd.\n284\n262\n–\n–\nHarmonic Shipping S.A.\n–\n–\n–\n5,391\nOther Investments\n61\n–\n–\n–\nTotal\n6,366\n2,640\n3,829\n10,313\nCapital Commitments\nWe do not have any material capital commitments as at the Latest Practicable Date.\nThe following table summarises our proposed investments as at the Latest Practicable Date:\nUS$’000\nInvestments\nShipping funds and investments\n12,200\nInvestment in vessels\n- Investment in container vessels\n5,000\n17,200\nOur planned capital expenditure for FY2007 will be financed from internal sources. Please refer to the\nsection entitled “General Information on our Group – Business Strategy and Future Plans” for further\ndetails.\nLease Commitments\nOur lease commitments comprise rent payable by our Group for the leased properties disclosed in the\nsection entitled “General Information on our Group – Properties”. As at the Latest Practicable Date, we\nhave the following lease commitments in respect of our properties:\nUS$’000\nWithin one year\n1,176\nLater than one year and not later than five years\n647\nTotal\n1,823\n78\nMANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL\nPOSITION AND RESULTS OF OPERATIONS\n\n\nFOREIGN EXCHANGE EXPOSURE\nOur foreign exchange exposures give rise to market risk associated with exchange rate movements\nagainst the US$, our functional and reporting currency.\nAs a result of our global operations, we conduct our business in various foreign currencies, principally\nUS$, HK$, S$ and Yen. Our income is denominated mainly in US$ while our operating expenses are\nmainly denominated in HK$, US$, S$ and Yen. Our investments are mainly denominated in US$ and Yen\nand our cash and cash equivalents are mainly denominated in US$.\nOur foreign exchange risk arises mainly from a currency mismatch between our income and expenses. To\nthe extent that our income and expenses are not naturally matched in the same currency and to the\nextent that there are timing differences in the collections and payments, we may be susceptible to foreign\nexchange exposure.\nOur net foreign exchange losses are as follows:\nFY2004\nFY2005\nFY2006\nNet foreign exchange loss (US$’000)\n20\n453\n180\nAs a % of our Group’s profit before tax (%)\n0.2\n4.6\n1.5\nOur income is mainly denominated in US$ in FY2004, FY2005 and FY2006. Our operating expenses\ndenominated in the various currencies for the last three financial years from FY2004 to FY2006 are as\nfollows:\nAs a percentage of operating expenses (%)\nFY2004\nFY2005\nFY2006\nHK$\n44.1\n47.3\n48.6\nUS$\n32.3\n26.8\n33.8\nYen\n10.0\n15.1\n6.0\nS$\n13.1\n9.9\n11.0\nOthers\n0.5\n0.9\n0.6\nTotal\n100.0\n100.0\n100.0\nDuring the past three financial years, we have had no significant exposure to foreign currency risk from\nour investments. Our exposure to foreign exchange was mainly due to fluctuations between Yen and US$\ninvestments in Japan, including our investment in Capital Advisers, as well as our operations in Japan\nand Singapore where our operating expenses are mainly denominated in Yen and S$.\nWe seek to minimise our exposure to foreign currency movements on certain significant Yen denominated\nassets by borrowing a comparable amount of Yen. Our borrowings as at 31 December 2004, 2005 and\n2006 amounted to Yen 1.2 billion, Yen 1.1 billion and Yen 0.5 billion respectively (or approximately\nUS$11.6 million, US$9.3 million and US$4.2 million respectively), hedging against Yen denominated\nequity investments in, and shareholder’s loans extended to, Capital Advisers of Yen 1.2 billion, Yen 0.84\nbillion and Yen 1.0 billion as at 31 December 2004, 2005 and 2006 respectively (or approximately\nUS$11.6 million, US$7.1 million and US$8.4 million respectively).\n79\nMANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL\nPOSITION AND RESULTS OF OPERATIONS\n\n\nMoving forward, our Company intends to hedge all ship investments that are not denominated in US$. All\nfuture hedging transactions would be subject to an approval process, including the review of our\nCompany’s terms by our Management Committee as stated in our Company’s standard operating\nprocedure (“SOP”) for investments, which sets out certain requirements in respect of such derivatives\ntransactions:\n(a)\nA back-to-back guarantee for the forward contract should be arranged with the bank and the\nrelevant SPC;\n(b)\nFor each forward contract provided to an SPC, the forward contract should be completed within a\nmaximum period of 6 months;\n(c)\nFor each forward contract entered into by our Company on behalf of the SPC, the contract amount\nshould not exceed a maximum amount of US$10 million, and the total value of forward contracts\nentered into by our Company on behalf of our SPCs should not, at any time, exceed the maximum\namount of US$20 million in aggregate;\n(d)\nA certain margin on the contract amount should be charged by our Company to that SPC for\nproviding the financial arrangement;\n(e)\nThe purpose of entering into foreign exchange contracts is limited for hedging purposes only.\nForeign exchange contracts shall not be entered into for the purposes of speculation; and\n(f)\nThe forward contract arrangement should be approved by one of our Executive Directors and our\nCompany’s head of our finance department, provided that no outstanding contract is expected at\nyear end.\nIf one or more of the above criteria is not met, our Company may seek the approval of our Executive\nDirectors by consulting the Review Committee (in accordance with the procedure as discussed under the\nsection entitled “Internal Investment Approval Process” on page 125 of this Prospectus). We intend to\nminimise our exposure to foreign currency movements on Yen denominated transactions by entering into\nforward foreign exchange contracts. As at the end of FY2004 and FY2005, we had no outstanding foreign\nexchange contracts. As at the end of 2006, there was a Yen 1 billion (or approximately US$8.6 million)\nUS$ forward contract outstanding which was guaranteed by a back-to-back arrangement with a shipping\nSPC for the equivalent amount in Yen upon maturity of that contract. Moving forward, we may enter into\nsimilar arrangements to hedge future transactions on behalf of our shipping SPCs. As at the Latest\nPracticable Date, we had no outstanding foreign exchange contracts.\nThe foreign exchange gain/(losses) on Yen borrowings in FY2004, FY2005 and FY2006 that were offset\nagainst exchange movements on the net investment in Capital Advisers were US$262,000, US$(879,000)\nand US$(61,000), respectively.\nIn FY2006, we continued to undertake the net investment hedge against our investment in Capital\nAdvisers. We continue to monitor the level of hedging amounts on an ongoing basis.\nCRITICAL ACCOUNTING POLICIES\nOur consolidated financial information has been prepared in accordance with IFRS, which requires us to\nmake judgments, estimates and assumptions that affect (1) the reported amounts of our assets and\nliabilities; (2) the disclosure of our contingent assets and liabilities at the end of each fiscal period; and (3)\nthe reported amounts of revenues and expenses during each fiscal period. We continually evaluate these\nestimates based on our own historical experience, knowledge and assessment of current business and\nother conditions, our expectations regarding the future based on available information and reasonable\nassumptions, which together form our basis for making judgments about matters that are not readily\napparent from other sources.\nSince the use of estimates is an integral component of the financial\nreporting process, our actual results could differ from those estimates. Some of our accounting policies\nrequire a higher degree of judgment than others in their application.\n80\nMANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL\nPOSITION AND RESULTS OF OPERATIONS\n\n\nWhen reviewing our financial statements, investors should consider (1) our selection of critical accounting\npolicies; (2) the judgment and other uncertainties affecting the application of those policies; and (3) the\nsensitivity of reported results to changes in conditions and assumptions.\nWe believe the following\naccounting policies involve the most significant judgment and estimates used in the preparation of our\nfinancial statements.\nFinancial Assets\nWe classify our financial assets in the following categories: (a) at fair value through profit or loss; and (b)\nloans and receivables. The classification depends on the purpose for which the financial assets were\nacquired. Management determines the classification of our assets at initial recognition and re-evaluates\nthis designation at every reporting date.\n(a)\nFinancial assets at fair value through profit or loss\nThis category has two sub-categories: ‘financial assets held for trading’ and those designated at fair\nvalue through profit and loss at inception. A financial asset is classified in this category if acquired\nprincipally for the purpose of selling in the short term or if so designated by management.\nDerivatives are also categorised as ‘held for trading’ unless they are designated as hedges. Assets\nin this category are classified as current assets if they are either held for trading or are expected to\nbe realised within 12 months of the balance sheet date.\n(b)\nLoans and receivables\nLoans and receivables are non-derivative financial assets with fixed or determinable payments that\nare not quoted in an active market. These are included in current assets, except for maturities\ngreater than 12 months after the balance sheet date. These are classified as non-current assets.\nLoans are classified as “Loans Receivable” in the balance sheet.\nPurchases and sales of investments are recognised at trade date – the date on which we commit to buy\nor sell the asset. Investments are initially recognised at fair value plus transaction costs for all financial\nassets not carried at fair value through profit or loss. In the income statement, investments are initially\nrecognised at fair value and transaction costs are expensed. Investments are derecognised when the\nrights to receive cash flows from the investments have expired or have been transferred and we have\ntransferred substantially all the risks and rewards of ownership. Financial assets at fair value through\nprofit and loss are subsequently carried at fair value.\nFair values for unquoted securities are estimated by our relevant project team and approved by our\nExecutive Directors. In determining fair valuation, our project team makes use of market-based\ninformation and fair valuation models such as discounted cash flow models. In many instances, our\nproject team also relies on financial data of investees and on estimates provided by the management of\nthe investee companies as to the effect of future developments.\nPerformance Notes are investments with income and maturity values which fluctuate based on the\ndistributions received from underlying assets, which are generally investments in property development\ncompanies, defaulted loans or shipping companies. Fair values of Performance Notes or other collective\ninvestment schemes are determined by our Group’s interest in the fair values of each scheme’s\nunderlying assets. Gains and losses arising from changes in the fair value of all securities are recognised\nin the consolidated income statement as they arise.\n81\nMANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL\nPOSITION AND RESULTS OF OPERATIONS\n\n\nFair valuation methodology\nFollowing the admission of our Company to the Official List of the SGX-ST, we will adopt the following fair\nvaluation methodology for the three categories of investments by our Company:\n(i)\nFair valuation on vessels:\nOur investments into ships are conducted through our SPCs. There are two components to the fair\nvaluation exercise involved. There can be a valuation of the underlying vessel or there can be a valuation\non the SPC holding the vessel. The valuation of the underlying vessel would be conducted by an\nindependent valuer while the fair valuation of the SPC would be to recognise a fair valuation of the net\nassets held by the SPC. We have adopted the following process for the internal approval of the fair\nvaluation of our vessels:\n(1)\nthe valuation of the underlying vessel is first conducted by an independent professional appraiser\nsuch as Marine-Net Co., Ltd.;\n(2)\nthe valuation of the SPCs would be conducted by our relevant asset finance team responsible for\nour investment in the relevant SPC. The asset finance team would propose a fair value that would\nbe submitted to our overall finance department (the “Finance Department”) for their review and\napproval;\n(3)\nour Finance Department would review the fair value proposed by the relevant asset finance team. If\nour Finance Department does not agree with the proposed fair value, they will discuss their\nconcerns with the relevant asset finance team and, if necessary, obtain a second valuation of the\nunderlying vessel or vessels from another independent professional appraiser. When the proposed\nfair value is agreed between our Finance Department and the relevant asset finance team, the\nproposed fair value would be submitted to the Audit Committee for their review and approval; and\n(4)\nthe Audit Committee would review the fair value proposed by the Finance Department. If the Audit\nCommittee does not agree with the proposed fair value, they will discuss their concerns with our\nFinance Department and, if necessary, obtain a further valuation of the underlying vessel or\nvessels from another independent professional appraiser. The proposed fair valuation is adopted\nonly after the approval of the Audit Committee has been obtained.\nOur fair valuation methodology is as follows: fair valuation exercise at the SPC level would include the\ncharter income or excess cash which have not been declared or paid to investors. According to IAS 39,\nthe financial asset that recorded in the balance sheet of an entity shall be measured at fair market value\n(“FMV”) through profit or loss at each financial reporting date. Therefore, our Company’s investments in\ninvestee companies that engaged in the business of vessel investments and vessel chartering shall be\nmeasured at FMV at each financial reporting date in accordance with the methodology as described\nbelow:\n\u0002\nUsing the method of equity pick up, the FMV measurement of investment in each investee\ncompany is the aggregate of:\n1)\nFMV (See Note 1 below) of vessel owned by the investee company held by our Company;\nand\n2)\nNet Asset Value (“NAV”) (See Note 2 below) of the investee company held by our Company.\n\u0002\nAny gain or loss on FMV of investments in investee companies between the current and prior\nfinancial reporting date shall be charged to the profit and loss account for the current financial\nreporting period as fair market value gain or loss, provided however that the management\nconsiders no pick-up of FMV gains on the vessel which is under construction. In any event, the\nmanagement will not pickup FMV gains on vessels under construction and FMV loss will be\ncharged to the profit and loss accounts where the vessel has been acquired but not delivered.\n82\nMANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL\nPOSITION AND RESULTS OF OPERATIONS\n\n\n\u0002\nNote 1:\nThe valuation report is prepared by the independent professional appraiser, currently\nMarine-Net Co., Ltd. based on discounted cash flow models. Such valuation would be carried out\nparticularly in the case where the investee company accounts for its vessels at book cost or market\nvalue.\n\u0002\nNote 2:\nNAV is determined based on the management account of the investee company as at\neach financial reporting date.\n(ii)\nFair valuation on distressed assets investments:\nAs our Company has no direct investments into NPLs, any fair valuations on NPLs would be done at\nfunds level. In the case of AAA Series I and II funds, AAA Strategic Investment Limited (“AAA”) would\nconduct a fair valuation of its NPL investment portfolio at half yearly interval. With regards to its\nmethodology, AAA would combine the discounted future streams of projected cash recovery of its NPL,\nand each NPL\n’s future steam of projected cash recovery is in fact assessed independently. Since the\ncircumstance of each NPL varies, there is no standard benchmark for the discount rate to apply.\nDetermination of the appropriate discount rate to apply to each NPL\n’s future cash flow is subjective and\nwill depend on the prevailing condition of that particular NPL. However subjective it may be, AAA has\nbeen conservative in its application and mostly takes into consideration future cash recovery streams with\ndegree of certainty. AAA also applies discount rates as much as 40% to 50% to minimise any possible\nover-estimation of the recoverable amount.\n(iii)\nFair valuation on property investments:\nOur investment in properties would be classified into investments with either long term or short to\nmedium term investment purposes. For long term investment projects (which are principally investment\nassets with the intention to hold the property on a long-term investment purposes for at least three\nyears), our Company will adopt the net assets valuation methodology by discounting the expected\ncashflow from the investment project. For short to medium term property projects (which are principally\ninvestment assets for trading purposes and which are held for one to two years), a fair valuation may be\nconducted by an external valuer.\nGeneral internal approval procedure\nThe internal approval process for making fair value adjustments involves the submission of each\ndepartment’s separate fair valuation for each reporting period to our Company’s Finance Department. In\nevaluating the fair value adjustments proposed by each department, the Finance Department would\nconsider, among other things, whether it agrees with the assumptions as reported by each department.\nThe fair value adjustments approved by the Finance Department will be subject to the final approval of\nour Company’s Audit Committee’s approval. If our Audit Committee disagrees with any of the proposed\nfair valuation adjustments, our Audit Committee may require the Finance Department and/or the relevant\ndepartments proposing the fair value adjustments, to re-evaluate the fair value adjustments.\nAlthough our Directors use their best judgement in estimating the fair value of investments, there are\ninherent limitations in any estimation techniques. Future confirming events will also affect the estimates of\nfair value and the effect of such events on the estimates of fair value, including the ultimate liquidation of\ninvestments, could be material to these consolidated financial statements.\n83\nMANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL\nPOSITION AND RESULTS OF OPERATIONS\n\n\nSIGNIFICANT CHANGES IN ACCOUNTING POLICIES\nIn FY2004, FY2005 and FY2006, we prepared our financial statements in accordance with IFRS. The\nnew/revised IFRS became effective for financial periods beginning on or after 1 January 2005 and we had\nearlier adopted the following standards in FY2004:\n\u0002\nIAS 28 (revised 2003) ‘Investments in Associates’\n\u0002\nIAS 31 (revised 2003) ‘Interests in Joint Ventures’\n\u0002\nIAS 32 (revised 2003) ‘Financial Instruments: Disclosure and Presentation’\n\u0002\nIAS 39 (revised 2003) ‘Financial Instruments: Recognition and Measurement’\nIn particular, the early adoption of these standards resulted in a change as to how we accounted for\ncertain investments. Previously we had equity accounted for certain investments which were classified as\nour associates. Under the revised scope of IAS 28, these associates are required to be remeasured at\nfair value through profit or loss.\nWhere applicable, the FY2003 comparative figures were amended to\ntake into account of the remeasurement of associates in accordance with the transitional provisions of the\nrevised standard.\nIn FY2005, we adopted all applicable new/revised standards under the IFRS. The adoption of these\nnew/revised standards resulted in some changes to the accounting policies of our Group. Please refer to\nAppendix B – “Report on the Consolidated Financial Statements for the Year Ended 31 December 2005”\nof this Prospectus for details of our Group’s accounting policies.\nIAS 39 (Amendment) The Fair Value Option came into effect from 1 January 2006. This amendment\nchanges the definition of financial instruments classified at fair value through profit or loss and restricts\nthe ability to designate financial instruments as part for this category. We believe that this amendment\nshould not have a significant impact on the classification of financial instruments, as we should be able to\ncomply with the amended criteria for the designation of financial instruments at fair value through profit\nand loss. We have applied this amendment from annual periods beginning 1 January 2006.\nIFRS 7, Financial Instruments: Disclosures, and a complementary Amendment to IAS 1, Presentation of\nFinancial Statements – Capital Disclosures (effective from 1 January 2007). IFRS 7 introduces new\ndisclosures to improve the information about financial instruments. It requires the disclosure of qualitative\nand quantitative information about exposure to risks arising from financial instruments, including specified\nminimum disclosures about credit risk, liquidity risk and market risk, including sensitivity analysis to\nmarket risk. It replaces IAS 30, Disclosures in the Financial Statements of Banks and Similar Financial\nInstitutions, and disclosure requirements in IAS 32, Financial Instruments: Disclosure and Presentation. It\nis applicable to all entities that report under IFRS. The amendment to IAS 1 introduces disclosures about\nthe level of an entity’s capital and how it manages capital. We assessed the impact of IFRS 7 and the\namendment to IAS 1 and concluded that the main additional disclosures will be the sensitivity analysis to\nmarket risk and the capital disclosures required by the amendment of IAS 1. We will apply IFRS 7 and\nthe amendment to IAS 1 from annual periods beginning 1 January 2007.\n84\nMANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL\nPOSITION AND RESULTS OF OPERATIONS\n\n\nThe structure of our Group (including our associated companies) and the principal business activities of\nthe members of our Group are set out below. Our Group structure set out below does not include direct\nequity investments in ships held by us. Please refer to the table set out in “Ship investment” in the section\nentitled “Business Overview – Alternative Assets Investment” for more details.\nOffshore Property \nInvestment \nCorporation \n(incorporated in the \nBritish Virgin Islands) \nInvestment holding \nUni-Asia Capital \n(Singapore) Limited \n(incorporated in \nSingapore)\nShip charter arrangement\nand project management \nUni-Ships and \nManagement \nLimited \n(incorporated in \nHong Kong) \nShip management \n44.8%\n100%\n30%\n \n%\n0\n0\n1\n \n%\n0\n0\n1\nUni-Asia Services \nand Agency Limited \n(incorporated in  \nHong Kong) \nDormant \nCapital Advisers Co., Ltd \n(incorporated in Japan) \nProperty investment \nUni-Asia Finance \nCorporation (Japan) \n(incorporated in Japan) \nFinance arrangement \nUni-Asia Capital \nCo. Ltd \n\u000b㙃Ѳ㟈ᆠ᳝䰤݀ৌ\f\n(incorporated in \nHong Kong) \nInvestment \nholding\nUni-Asia Fund \nManagement Co. Ltd  \n(incorporated in  \nHong Kong) \nDormant \n100%\n100%\n100%\nThe Company \n(incorporated in the Cayman Islands) \nDirect investment  \nand structured finance arrangement \n(Uni-Asia Guangzhou \nProperty Management \nCompany Limited) \n(incorporated in PRC) \nProperty investment and \nmanagement \n100%\nᑓᎲᏖѮ㢥⠽Ϯㅵ⧚᳝䰤݀ৌ\nGROUP STRUCTURE\n85\n\n\nThe details of each subsidiary and associated company of our Company as at the date of this Prospectus\nare set out in the table below. Entities that are used as investment vehicles by our Company, as set out\non page 93 of this Prospectus are not presented as subsidiaries in this table.\nDate and Country\nof incorporation/\nPrincipal place\nPercentage\nName\nestablishment\nPrincipal business\nof business\nowned\nSubsidiaries\nOffshore Property \n23 April 1998, \nInvestment holding\nARK Mori Building,\n100%\nInvestment Corporation\nBritish Virgin \nWest 24F\n, 1-12-32, \nIslands \nAkasaka, Minato-ku,\nTokyo, \nJapan 107-6024\nUni-Asia Capital \n27 June 1997, \nInvestment holding\nSuite A, 26th Floor\n100%\nCompany Limited\nHong Kong\nAdmiralty Centre Tower I\n18 Harcourt Road\nHong Kong\nUni-Asia Capital \n7 August 1997, \nShip charter\n8 Shenton Way, \n100%\n(Singapore) Limited\nSingapore \narrangement and\n#37-04, \nproject management\nSingapore 068811\nUni-Asia Finance \n9 November 1998,\nFinance arrangement \nARK Mori Building, \n100%\nCorporation (Japan)\nJapan\nWest 24F\n, 1-12-32, \nAkasaka, Minato-ku, \nTokyo, \nJapan 107-6024\nUni-Asia Fund \n27 June 1997, \nDormant\nSuite A, 26th Floor\n100%\nManagement Company \nHong Kong\nAdmiralty Centre Tower I \nLimited\n18 Harcourt Road\nHong Kong\n9 January 2007,\nProperty investment \nRoom 2401, \n100%\nthe PRC\nand management \nGuangdong Foreign \n(Uni-Asia Guangzhou\nEconomic & Trade Building\nProperty Management\n351, Tianhe Road, \nCompany Limited)\nGuangzhou\nPRC\nUni-Asia Services and \n27 June 1997,\nDormant \nSuite A, 26th Floor\n100%\nAgency Limited\nHong Kong \nAdmiralty Centre Tower I\n18 Harcourt Road\nHong Kong\nAssociated companies(2)\nCapital Advisers Co., Ltd\n24 February 2000, \nProperty investment\nARK Mori Building, \n44.8%(1)\nJapan\nWest 24F\n, 1-12-32, \nAkasaka, Minato-ku, \nTokyo, Japan 107-6024\nUni-Ships and \n25 January 2005, \nShip management \nSuite A, 26th Floor\n30%(1)\nManagement Limited\nHong Kong\nAdmiralty Centre Tower I\n18 Harcourt Road\nHong Kong\nNotes:\n(1)\nThe remaining shareholding interest is held by independent third-parties.\n(2)\nIn addition to the associated companies, our Company also has direct equity investments in vessels through various SPCs as\ndetailed under the sub-section entitled “Alternative Assets Investment” on page 93.\nGROUP STRUCTURE\n86\n\n\nCORPORATE DEVELOPMENT \nWe were established as an exempted company with limited liability in the Cayman Islands under the\nCayman Companies Law on 17 March 1997 by founders Motokuni Yamashiro, Kazuhiko Yoshida, Michio\nTanamoto and Takanobu Himori who were Japanese bankers. Each of the founders has over 25 years\nexperience in the banking industry working in corporate loan syndication and structured finance\narrangement. Mr. Himori left our Company in March 2004. The other founders continue to lead the\nbusiness and as at the Latest Practicable Date, they own, directly and indirectly, a significant aggregate\nequity interest in Uni-Asia of approximately 23.9%.\nOur Company was founded to arrange structured finance transactions for companies mainly in the\nshipping and, to some extent, aviation industries. Our initial focus was on finance arrangement for\ncompanies in the transport sector. Our business expanded to include investment in alternative assets\nsuch as NPLs, distressed assets, shipping assets and real estate assets in May 1998.\nWe provide a range of customised structured finance solutions and services such as the arrangement of\nship and aircraft leases, mortgage financing, charter arrangements for vessels, tax-enhanced leases and\nloans and balance sheet management for clients. Since our establishment up to the end of 2006, we have\narranged financing for transactions in the form of loans and/or leases transactions worth approximately\nUS$5.6 billion. In FY2004, FY2005 and FY2006, we arranged structured finance transactions totalling\nUS$561.6 million, US$987.5 million and US$637.7 million respectively.\nIn May 1998, we entered the distressed assets market in the aftermath of the Asia economic crisis when\nlocal governments and banks in Asia were seeking to dispose of their non-performing loan assets or\nNPLs. Initially, we focused on acquiring NPL accounts represented by PRC-based borrowers from\nJapanese banks with whom our management had established relationships, either as Uni-Asia’s client or\nindustry contact. We expanded our NPL investments over time by carefully identifying, selecting and\nnegotiating the purchase of distressed assets with attractive financial returns. Most of these NPLs were\nsourced through our client network or through brokers.\nWe also invested in NPLs through AAA, a private investment company, held by a charitable trust but\nadministered by us, which invested in NPLs in Asia. We, along with a Japanese financial institution,\nsubscribed to Performance Notes issued by AAA in August 2001, up to a maximum face value of US$5\nmillion.\nIn August 2001, we invested US$1.0 million in, and acted as the administrator and agent of, our first\nAsian distressed assets investment fund known as AAA Series I Fund with a size of US$5.0 million. As at\n31 December 2006, this fund’s net IRR was approximately 156.6%. In July 2003, we launched a second\nUS$15 million Asian distressed assets investment fund, called AAA Series II Fund which is also held\nthrough AAA. As at the Latest Practicable Date, this fund’s net IRR was approximately 20.44% assuming\nthat the value of AAA Series II Fund is realised as at the Latest Practicable Date. We are also the\nadministrator and agent of AAA Series II Fund, bringing the total funds under management within this\ndivision to US$20 million. We together with the same Japanese financial institution in AAA Series I Fund\ninvested US$5 million and US$10 million respectively in AAA Series II Fund. Both investment facilities\nfocus on distressed asset investment opportunities in Asia, excluding Japan. (Please refer to the section\nentitled “General Information on our Group – Business Overview – Distressed assets investment” below\nfor further details of the AAA Series I Fund and AAA Series II Fund.) As at the Latest Practicable Date,\nthe AAA Series I Fund has expired and the Performance Notes have been fully redeemed.\nIn 2002, we set up an asset finance department to focus on asset-backed financing in the maritime\ntransport sector. This division gradually diversified into making direct investments in shipping assets.\nBuilding on our experience in investing in maritime vessels, our first shipping investment fund Searex\nSeries I Fund with an asset size of up to US$117.5 million was launched in January 2004 through private\ninvestment company Searex which is held by a charitable trust. We subscribed for Performance Notes of\nUS$5 million in the fund along with five other investors based in Asia. By 2004, this fund had invested in\nsix vessels. We arranged a non-recourse loan of US$100.5 million for the ship portfolio.\nGENERAL INFORMATION ON OUR GROUP\n87\n\n\nA second shipping investment fund Searex Series II Fund which is also held through Searex and with an\nasset size of up to US$100 million was successfully closed in December 2004. By 2005, this fund\nacquired five vessels. Like Searex Series I Fund, we subscribed for US$5 million of Performance Notes in\nSearex Series II Fund along with other institutional investors in Asia. We arranged financing of around\nUS$77 million for the ship portfolio.\nWe are the administrator and agent of both Searex Series I Fund and Searex Series II Fund, responsible\nfor managing and arranging debt finance for the funds.\nAs part of our continued growth, Uni-Ships and Management Limited was incorporated in January 2005\nin Hong Kong to provide accounting and administration services for the fund vehicles and act as the\nproject manager for the Searex Series II Fund. Uni-Ships and Management Limited is a joint venture\nbetween Maritime 24 (Pte) Ltd, Uni-Asia, Uni-Fast Limited and Wealth Ocean with each having a\nshareholding of 30%, 30%, 30% and 10% respectively.\nIn April 2005, the number of investors in the Searex Series II Fund increased to 10 through the\nintroduction of another institutional investor which acquired US$0.5 million in Performance Notes at par\nfrom us. In August 2006, we redeemed US$1.3 million Performance Notes and we acquired an additional\nUS$1.4 million Performance Notes from Uni-Fast Limited in September 2006. Following such redemption\nand acquisition, we held a total of US$4.7 million Performance Notes in the Searex Series II Fund. As at\nthe Latest Practicable Date, the Performance Notes of Searex Series II Fund have been fully redeemed.\nIn July 2005, the aggregate principal of the Searex Series I Fund was increased from US$17 million to up\nto US$19.4 million. We subscribed for an additional US$705,882 in Performance Notes issued by the\nSearex Series I Fund.\nA third private shipping joint venture, the container vessel fund, was launched in 2005, specialising in\ninvestment in container vessels. We, together with three partners, invested in three panamax 3,500 TEU\ncontainer vessels for US$56.3 million each, or an aggregate of US$168.9 million. The vessels will be built\nby Hyundai Mipo Dockyard Co Ltd, Korea with delivery in 2007. Our Company, with 38% equity interest in\nthe shipping joint venture, arranged financing for the three vessels. The container vessels have been\nchartered out to Italia Marittima of the Evergreen Group under an eight-year bareboat charter agreement,\ncommencing on delivery of the vessels in 2007.\nOn 13 September 2006, our wholly-owned subsidiary, Uni-Asia Capital (Singapore) Limited, was\ndesignated as an ASIM under the SITA by the MPA. At the same time, the MPA had also granted the\nAkebono Fund a designation of ASIE.\nOur ASIM designation is for an initial period of 10 years commencing on the subscription date of the\nSingapore fund by investors, subject to a review by MPA at the end of the fifth year. Pursuant to our ASIM\ndesignation, we are eligible for a concessionary tax rate of 10% for income derived from managing an\nASIE such as the Akebono Fund. In the event that we no longer qualify for the ASIM designation, the\nprevailing corporate tax rate of 18% will apply.\nThe ASIE designation for the Akebono Fund is for an initial period of up to 10 years commencing from\nthe date of its establishment, subject to a review by MPA at the end of the fifth year. Pursuant to its ASIE\ndesignation, the Akebono Fund is eligible for a tax exemption on income derived from the chartering or\nfinance leasing of (a) any sea-going ship to (i) a person who is neither resident in nor a permanent\nestablishment in Singapore; or (ii) an approved international shipping enterprise; or (b) any sea-going\nSingapore ship to persons described in (a) (i) and (ii) above or a shipping enterprise within the meaning\nof Section 13A of the SITA. The tax exemption will be valid for the life of vessels acquired by ASIE during\nthe incentive period of up to 10 years. For instance, if an ASIE acquires a vessel during the 10-year\nincentive period, charters it for 20 years and disposes of it thereafter, lease income on the charter will\nenjoy tax exemption for the entire 20 years. The qualifying income of the Akebono Fund under the tax\nexemption shall also include hedging gains derived in connection with the management of its portfolio of\nvessels, and share of profits or dividends remittances from shipholding special purpose vehicles owned\nby the Akebono Fund that are declared out of qualifying activities.\nGENERAL INFORMATION ON OUR GROUP\n88\n\n\nOn 17 April 2007, we launched our first Singapore fund, the Akebono Fund, in order to take advantage of\nthe MPA’s MFI schemes. Our Company has invested in the Akebono Fund, together with other investors,\nby way of subscription for a principal amount of US$42.9 million Performance Notes issued by the\nAkebono Fund.\nGoing forward, our ship investment division is expected to continue to look for joint venture investments in\nshipping assets.\nIn addition to our investments in shipping assets, we have also invested in real estate assets.\nIn June 1998, we commenced investments in real estate in Japan. In February 2000, Capital Advisers\nwas established as our wholly-owned subsidiary engaged in investment in and management of real\nestate assets in the hotel and residential sector. The equity size of each investment ranged from US$1.4\nmillion to US$38.5 million.\nIn 2000, our Company and Grosvenor Asia jointly established an investment partnership with another\ninvestor to invest in residential properties in Tokyo. Grosvenor is an international property development\nand investment group. It has regional operating companies covering Australia, Asia Pacific, US, UK and\nEurope and an international fund management business which operates across all these markets. The\ninvestment started in 2000 and was followed in 2004 with the establishment of the GCAP Fund. The\nGCAP Fund is jointly managed by Grosvenor Asia and Capital Advisers through Grosvenor Capital\nAdvisers Fund Management Co., Ltd.\nIn the residential sector, Capital Advisers has also been engaged in asset management with a focus on\nsmall-size studio apartment buildings since February 2004. The number of the buildings of this investment\nreached 10 in 2004, 31 in 2005 and 50 in 2006. The investor to this investment is one of the largest\nfinancial institutions in Japan. Capital Advisers sometimes joins in this investment as a developer of the\nbuildings in order to enjoy additional return.\nIn 2001, Capital Advisers directed its attention to the asset management business in the hotel property\ninvestment. In the hotel sector, Capital Advisers mainly focuses on the investment in limited-service\nhotels. Since 2001, the number of hotels which Capital Advisers has engaged in as the asset manager\nand invested in as a minority investor has increased to 11 in 2006. The characteristics of Capital Advisers\nas the asset manager in hotel property investments is its capability to not only manage the assets but\nalso monitor the hotel operation itself by keeping the staff who have sufficient work experience in hotel\nbusiness within Capital Advisers. Capital Advisers invested in another asset management company which\nmanages a Japanese real estate investment trust (J-REIT) specializing in hotel properties. The J-REIT\nwas listed in Japan on 14 June 2006. As at 31 December 2006, the total asset of the hotel investments\nwas over Yen 16.9 billion (or approximately US$142.5 million). The total equity invested was about Yen 5.4\nbillion (or approximately US$45.5 million), out of which Capital Advisers had an interest of between 5.0%\nand 51.9%.\nOn 2 May 2003, the equity base of Capital Advisers increased to Yen 892.5 million (or approximately\nUS$7.4 million) as a result of an issue of 9,850 new shares to a number of institutional investors, venture\ncapital firms, corporations etc. The total funds raised amounted to Yen 985 million (or approximately\nUS$8.2 million). The subscription price of Yen 100,000 (or approximately US$832) per share was\ndetermined with reference to a valuation conducted by Partners C.P\n.A. Office, an independent certified\npublic accountant. As a result, our equity interest in Capital Advisers was diluted to 44.8% with Capital\nAdvisers becoming our associated company.\nIn January 2007, we made a direct investment into office units in Guangzhou, the PRC, through our\nwholly-owned property investment company, Uni-Asia Guangzhou. Going forward, we will continue to look\nfor investment opportunities in distressed properties and/or other properties in the PRC and other parts of\nAsia.\nGENERAL INFORMATION ON OUR GROUP\n89\n\n\nBUSINESS OVERVIEW\nWe are an Asia-based structured finance arrangement and Alternative Assets direct investment firm. Our\nprincipal activities are in: (1) structured finance – the finance arrangement of transport related assets\n(largely ships and, to some extent, aircraft), and the provision of ship charter arrangement and agency\nservices; and (2) Alternative Assets investment/management – direct investments in and/or the\narrangement and administration of Alternative Assets investments such as ships, distressed assets and\nreal estate. As at the Latest Practicable Date, we have 32 staff in three offices in Tokyo, Hong Kong and\nSingapore.\nStructured Finance \nOur structured finance department provides an integrated service to our clients by offering financing\nsolutions together with charter arrangement services tailor-made to our clients’ needs. The solutions do\nnot normally involve the use of our balance sheet capital to make loans. We typically act only as the\narranger and agent for the structured financing provided by third-party financial institutions. We arrange\nfinancing for asset acquisitions by our clients and also offers tax-enhanced structured services and\nproducts, including mortgage financing, tax-oriented leases such as UK tax leases and Japanese\noperating leases, as well as ECA backed credit, ship charter arrangement and balance sheet\nmanagement. We receive an arrangement fee on each completed transaction.\nWe have been active in the arrangement of structured finance since our founding in 1997. In this time we\nhave built up a portfolio of clients and have identified potential clients to whom we market to directly or on\nan opportunistic basis. We have also developed relationships with the key banks which provide\nsyndicated loan financing. Our clients include established international shipping and aviation companies\nfrom Taiwan, Greece, Indonesia, Japan, Hong Kong, Korea, the UK and Italy.\nSome key products and services which we offer our clients include mortgage financing, tax-oriented\nleases, ECA backed credit, ship charter arrangement and balance sheet management.\nThe following table provides a brief description of our key products:\nProduct\nDescription\nMortgage financing\nA type of finance arrangement where the borrower will mortgage the asset as a\ncollateral for the loan\nTax-oriented lease\nA financing structure which takes advantage of tax incentives and benefits within\na jurisdiction in order to minimise cost of capital for investors or to maximise tax\nsavings for investors. The economic benefits are eventually shared between the\ninvestors and the lessee. The cost savings stem from fixed asset depreciation\nand tax allowances. Types of tax-oriented leases include UK tax leases and\nJapanese operating leases \nECA backed credit\nCo-financing with export credit agencies including the Japan Bank for\nInternational Cooperation (“JBIC”)\nShip charter arrangement\nThe arrangement of charters for ship owners that want to charter out their\nvessels to third-parties or the arrangement of vessels for potential charterers\nwho are looking for ships to charter. Types of charter arrangement include\nbareboat charter, being the charter of bare ship; or time charter, being the\ncharter under which owner charters out vessel to charterer together with ship\nmanagement including crew, insurance and technical management, for a fixed\nperiod of time\nBalance sheet management\nThe service of reviewing and analyzing the balance sheet of a client and\nstructuring and tailoring financing alternatives that would best suit the financial\nposition of our client\nGENERAL INFORMATION ON OUR GROUP\n90\n\n\nWe acted as arranger for structured financing in the form of loans and leases in the aggregate amount of\napproximately US$561.6 million, US$987.5 million and US$637.7 million in FY2004, FY2005 and FY2006\nrespectively.\nThe type of structured finance arrangement we are engaged in is tailor-made to the specific requirements\nof our clients and the asset to be acquired. Typically, potential projects usually commence with a detailed\ndue diligence review of the risks and return in relation to the clients. During the due diligence, we\ninvestigate the asset to be acquired, examining among other things its specifications, condition and legal\ntitle of the asset to be acquired. Our client’s financial condition and ability to repay the debt are also\nassessed. Factors such as the intended use of the asset and the market demand for driving the asset’s\nintended utilisation all factor into the assessment of the viability of the project. The findings and\nconclusions of the due diligence and analysis are then submitted to our Management Committee which is\nresponsible for approving the proposal to engage our clients. Upon approval and engagement, we will\nassist our clients in the preparation of an information memorandum. This information memorandum\ncontains a detailed summary of the asset, the acquirer, the industry or sector, the proposed terms of the\nfinancing, and financial analysis of the project. The information memorandum is then presented to\ntargeted institutions. Those institutions which express interest in providing finance are then given the\nopportunity to perform their own independent due diligence and eventually one or more institutions are\nselected which best matches the terms requested by our clients. Throughout the entire process, we act\nas a co-ordinator between our clients and the lender to manage the process and help the counterparties\nagree on the terms of finance.\nFollowing the execution of a loan agreement and related documents between our clients and the\nsyndication group, we would usually also act as the facility agent responsible for the administration of the\nsyndicated loan during the life of the loan, for which we receive agency fees.\nSelected key transactions completed include:\nUK Tax Lease for Hatsu Marine: Uni-Asia arranged two UK tax leases for Hatsu Marine, a part of the\nEvergreen Group, in 2002 to acquire two 6,332 TEU E-type container vessels manufactured by Mitsubishi\nHeavy Industries, Ltd. Under these transactions, two European banks financed the acquisition of two\nUS$71.5 million container vessels which were delivered in 2002 and 2003, respectively. Upon delivery,\nthe vessels were leased to Hatsu Marine under a finance lease agreement on terms satisfactory to all\nparties.\nArrangement of a Japanese Operating Lease: Uni-Asia arranged a Japanese Operating Lease for a\nJapanese leasing company in March 2002 to acquire a 1,618 TEU container vessel for US$29 million and\ndelivery by the end of March 2002. Under this structure, the lessor, the Japanese investors introduced by\nUni-Asia and a Japanese leasing company, entered into a Tokumei Kumiai agreement to own and charter\nships, whereby the Japanese investors invested 30% of the purchase price of the vessel in the TK and\nthe remaining 70% financing was in the form of debt. Upon delivery, the vessel was chartered to a third-\nparty shipping company for a period of 11.5 years by way of a Bareboat Charter.\nShip Charter Arrangement for Niki Shipping Company Inc: Niki Shipping Company Inc, a private company\nincorporated in Greece and which is an independent third-party, entered into shipbuilding contracts in\nSeptember 2004 for four 5,060 TEU container vessels to be built by Hanjin Heavy Industries in Korea.\nUni-Asia arranged a 15-year Bareboat Charter between Niki Shipping Company Inc and Italia Marittima,\npart of the Evergreen Group, for the four container carriers.\nMortgage Financing for CIDO Holding Co., Ltd.: Uni-Asia and HSH Nordbank, an independent third-party\nfinancial institution which is also a shareholder in Uni-Asia, jointly arranged a US$127.8 million\nsyndicated loan in March 2005 for CIDO Holding Co., Ltd which is an independent third-party\nincorporated in the Cayman Islands, to acquire four 4,075 unit type pure car carriers, with delivery from\nMarch 2006 to September 2007. The loan was successfully syndicated out to third-party lending\ninstitutions.\nGENERAL INFORMATION ON OUR GROUP\n91\n\n\nJBIC Financing: Uni-Asia arranged a US$113.8 million financing for Evergreen in the acquisition of two\n6,724 TEU container vessels using a buyer’s credit provided by JBIC and Nippon Export and Investment\nInsurance in the first half of 2006. The two container vessels, manufactured by Mitsubishi Heavy\nIndustries Ltd., will be delivered in October and December 2007, respectively. In this financing structure,\nJBIC will fund 40% of the facility amount and the remaining 60% will be funded by a consortium of\nlenders. The facility agreement was signed in July 2006.\nAlternative Assets Investment \nOur Alternative Assets Investments division leverages on our specialist skills in structured finance\narrangement and credit analysis to invest in, either as the principal investor or in partnership with other\ninvestors, three key Alternative Asset classes: (i) ship investment (such as bulk carriers, product tankers\nand container vessels); (ii) distressed assets investment (including NPLs and other distressed assets in\nAsia (excluding Japan)); and (iii) property investment (including hotel and property investment in Japan\nand commercial property investment in the PRC).\nShip investment \nAs a progression from our structured finance business as an arranger of financing for transport related\nassets, we branched out into direct investments in ships through equity investment in the ship owning\ncompanies and also through subscription of Performance Notes issued by special investment fund\nvehicles established by us.\nOur asset finance department aims to invest in ships for commercial use that will produce attractive\ninvestment returns because of factors such as high expected demand for, or anticipated shortfall in, the\nsupply of such ships.\nIn order to further facilitate our Group’s investments in ships and leverage on this area of our expertise,\nour Group established two closed-end investment funds in 2004, Searex Series I Fund and Searex Series\nII Fund, with an investment term of five years each. The equity of the investment funds is held through\nSearex which, in turn, is held by a charitable trust to ensure the funds function as a whole as an\nindependent entity in accordance with recognised corporate principles. Investors participate in the ship\ninvestments by subscribing for Performance Notes issued by the ship investment fund. Performance\nNotes obligate the holder to provide the committed investment amount to the fund over a two-year\ndrawdown period as the fund calls for funds to invest. Profits from the sale of the ships are distributed on\na pro-forma basis to Performance Note holders semi-annually at the discretion of the fund. By\nestablishing these ship investment funds, we benefit not only from the larger capital pool available for\ninvestment, providing risk diversification; we also earn administration fees and incentive fees based on\nthe performance of such funds.\nIn 2002, we participated in two bulk carriers’ new building projects, namely, EuroAsia II, Inc. and EuroAsia\nIII, Inc., in Japan. The total investment cost or acquisition price of each vessel was US$16.8 million. Our\nGroup made an investment of US$0.6 million in EuroAsia II, Inc. and US$0.5 million in EuroAsia III, Inc.,\nrepresenting a 15% equity interest in EuroAsia II, Inc. and EuroAsia III, Inc. The outstanding balance was\nfinanced by debt from independent financial institutions. Our Group’s investment into EuroAsia II, Inc. and\nEuroasia III, Inc. was made in the form of share capital and shareholder’s loan. In addition to share capital\nof US$1,500 each into the two projects, we made shareholders’ loan of US$0.6 million to EuroAsia II, Inc.\nand US$0.5 million to EuroAsia III, Inc. Our Company’s investment in EuroAsia III, Inc. was completed\nand disposed of in October 2004 resulting in a capital gain of approximately US$1.5 million. Our\nCompany’s investment in EuroAsia II, Inc. was disposed of in April 2007, resulting in a capital gain of\napproximately US$2.8 million. Our net investment return after factoring in fair value adjustment was\nUS$1.3 million.\nGENERAL INFORMATION ON OUR GROUP\n92\n\n\nIn 2006, we invested in the equity of two SPCs each holding a bulk carrier, namely, Harmonic Shipping\nS.A. (“Harmonic”) and Sunrise Shipping S.A. (“Sunrise”). The total investment made by our Group into\nHarmonic totaled US$2.1 million comprising share capital of US$4,040 and shareholders’ loan of US$2.1\nmillion. In addition, we also provided a bridging loan of US$3.0 million to Harmonic as at 31 December\n2006. The investment made by our Group into Sunrise totaled US$2.7 million comprising share capital of\nUS$4,600 and shareholders’ loan of US$2.7 million. In addition, we provided a bridging loan of US$2.22\nmillion to Sunrise which was repaid and renewed to US$2.5 million as at 31 December 2006. Our\nCompany’s investment in Harmonic was disposed of in April 2007, resulting in a capital gain of\napproximately US$2.8 million. Our net investment return after factoring in fair value adjustment was\nUS$2.4 million. The bulk carrier held by Sunrise is chartered to a third party for a period of five years\ncommencing in September 2006.\nListed below are our direct equity investments as at the Latest Practicable Date.\nYear of \nInvestment \nDuration of charter \nInvestment vehicle\nType of vessel\nacquisition \ninterest held\ncontracts \nSunrise Shipping \nBulk Carrier\n2006\n46%\nSeptember 2006 to\nS.A. (1)(2) \nSeptember 2011\nFalcon Containership \nContainer vessel\n2005 (delivered \n38%\nApril 2007 to \nS.A. (1)(3)\nin April 2007)\nApril 2015\nFortitude Containership \nContainer vessel\n2005 (delivered \n38%\nJune 2007 to\nS.A. (1)(3)\nin June 2007)\nJune 2015\nUnion Containership \nContainer vessel\n2005 (to be delivered \n38%\nSeptember 2007 to \nS.A. (1)(3)\nin September 2007)\nSeptember 2015\nRich Containership \nContainer vessel\n2006(6) (to be \n50%\nSeptember 2008 to \nS.A. (1)(4)\ndelivered in 2008)\nSeptember 2018\nMatin Shipping Limited (5)\nBulk Carrier\nto be acquired in 2007  \n40%\n2011 to 2016\nand delivered in 2011\nNotes:\n(1)\nIncorporated in Panama \n(2)\nThe amount invested by our Company in Sunrise Shipping S.A. for the purchase of the bulk carrier is US$4,600 in equity and\napproximately US$2.7 million in shareholders’ loans as well as a bridge loan of approximately US$2.5 million.\n(3)\nThe SPCs owning these vessels are proposed to be acquired by the Akebono Fund in the second half of 2007.\n(4)\nThe amount invested by our Company in Rich Containership S.A. for the purchase of the container vessel is US$5,000 in\nequity and approximately US$1.0 million in shareholders’ loans.\n(5)\nIncorporated in Hong Kong. The amount invested by our Company in Matin Shipping Limited for the purchase of the bulk\ncarrier is US$400 in equity and approximately US$1.2 million in shareholders’ loans.\n(6)\nRich Containership S.A. has entered into an option agreement for the acquisition of the vessel in 2006.\nListed below is the ship investment of Searex Series I Fund as at the Latest Practicable Date.\nYear of \nInvestment \nDuration of charter \nInvestment vehicle\nType of vessel\nacquisition \ninterest held\ncontracts \nSearex (1)\nProduct Tanker\n2004\n100%\nJanuary 2004 to January\n2009 \nNote:\n(1)\nThe SPC owning this vessel is proposed to be acquired by the Akebono Fund in the second half of 2007 or early 2008.\nGENERAL INFORMATION ON OUR GROUP\n93\n\n\nWe also act as the administrator, registrar and fiscal agent of the Searex Series I Fund and the Searex\nSeries II Fund (collectively, the “Searex Funds”), for which we charge a monthly fee for each ship held by\nthe Searex Funds. We are also engaged under a number of management agreements with individual\nspecial purpose vehicles, each of which directly hold the shipping assets, to arrange financing for the\nacquisition of a ship by the special purpose vehicle, for which we charge a financing arrangement fee and\nmay also receive an incentive fee, subject to the financial return of the ship upon disposal. Each acquired\nship is held by a special purpose vehicle established by each of the Searex Funds. The individual special\npurpose vehicles also appoint a project manager, which is responsible for sourcing and negotiating\nemployment of vessels held by the special purpose vehicle and remarketing of ships for disposal. The\nproject manager of the Searex Series I Fund is Exeno Yamamizu and the project manager of the Searex\nSeries II Fund is Uni-Ships and Management Limited. Exeno Yamamizu is one of the largest shipping\nbrokers in Asia and their client network covers major shipping companies. Uni-Ships and Management\nLimited is a joint venture between Maritime 24 (Pte) Ltd, Uni-Asia, Uni-Fast Limited and Wealth Ocean\nwhere each has a shareholding of 30%, 30%, 30% and 10%, respectively.\n\u0002 \nSearex Series I Fund\nIn January 2004, the ship investment fund Searex Series I Fund was established with funding\nraised by an issue of Performance Notes totalling US$17.0 million by Searex. We subscribed for\nUS$5.0 million of the Performance Notes and five co-investors subscribed for the remaining\nUS$12.0 million of the Performance Notes. We arranged a non-recourse loan for the fund in the\namount of US$100.5 million. There are a total of six investors in Searex Series I Fund, including\nUni-Asia, which are companies engaged in shipping related businesses.\nAs at the Latest Practicable Date, the Searex Series I Fund held one ship and had disposed of five\nships. The return on investment on the five disposed ships was approximately 3.7 times our\ninvestment and distributions paid out in 2004, 2005 and 2006 have amounted in aggregate to\napproximately US$14.5 million in principal and US$30.5 million in profit in relation to these five\nships. The one ship currently held by Searex Series I Fund is chartered out. This ship is proposed\nto be acquired by the Akebono Fund in the second half of 2007 or early 2008, following which the\nSearex Series I Fund will be terminated.\n\u0002\nSearex Series II Fund\nIn December 2004, we established a second ship investment fund following the success of Searex\nSeries I Fund. The principal investment amount of the Searex Series II Fund was US$23.0 million\nof Performance Notes. The investors of the Searex Series II Fund comprised all the investors of the\nSearex Series I Fund, which includes our Company, and three new investors. The other investors in\nthe Searex Series II Fund are independent parties. We subscribed for US$5.0 million of the\nPerformance Notes and eight co-investors subscribed for the remaining US$18 million of the\nPerformance Notes. The number of investors in the Searex Series II Fund was increased to 10 in\nApril 2005 when another investor acquired US$0.5 million of Performance Notes from us at par\nvalue. Our total commitment to the fund was reduced to US$4.5 million. In August 2006, we\nredeemed US$1.3 million of Performance Notes and we acquired an additional US$1.4 million of\nPerformance Notes from Uni-Fast Limited in September 2006. Following such acquisition, we held\na total of US$4.7 million Performance Notes in the Searex Series II Fund. On 9 May 2007, our\nPerformance Notes in the Searex Series II Fund were redeemed in full, following which we no\nlonger hold any outstanding Performance Notes in the Searex Series II Fund. We arranged\nfinancing of around US$77 million, giving the Searex Series II Fund a total investment capability of\nup to US$100.0 million.\nSearex Series II Fund has disposed of five ships. The return on investment on the five disposed\nships was approximately 1.4 times our investment. No distributions were paid out under the fund for\n2004 and 2005 and distributions paid out in 2006 amounted in aggregate to approximately US$0.6\nmillion. Following such disposals, the Searex Series II Fund is intended to be terminated.\nGENERAL INFORMATION ON OUR GROUP\n94\n\n\n\u0002\nAkebono Fund\nListed below is the ship investment of Akebono Fund as at the Latest Practicable Date.\nYear of \nInvestment \nDuration of charter \nInvestment vehicle\nType of vessel\nacquisition \ninterest held\ncontracts \nSentic Limited\nBulk Carrier\n2007\n100%\nJune 2007 to\nJuly 2008 \nPanmax Tanker S.A.\nProduct Tanker\n2007\n100%\nNil\nOn 17 April 2007, we launched the Akebono Fund in order to take advantage of the MPA’s MFI\nschemes. The principal investment amount of the Akebono Fund by the Company, together with\nother investors, was US$42.9 million of Performance Notes. We are committed to subscribe for\nUS$15.0 million of the Performance Notes and the other five co-investors are committed to\nsubscribe for the remaining US$27.9 million of the Performance Notes. As at the Latest Practicable\nDate, our Company has subscribed for US$2.8 million of Performance Notes. The remaining\nundrawn commitment by our Company to subscribe for US$12.2 million of Performance Notes is\nintended to be funded from the proceeds of the Invitation.\nAs at the Latest Practicable Date, the Akebono Fund held one bulk carrier from a third-party,\nacquired another product tanker by acquiring Panmax Tanker S.A. from our Group and intends to\nacquire three container vessels from our Group and one product tanker from Searex Series I Fund.\nWe will also act as the administrator, registrar, fiscal agent and project manager of the Akebono\nFund for which we charge a monthly fee for each ship held by the Akebono Fund.\n\u0002\nRecent ship investments\nOn 2 May 2007, we made an investment in a Panama-incorporated company, Rich Containership\nS.A. (“Rich Containership”), through a joint venture with Wisdom Marine Lines S.A. (“Wisdom”).\nWisdom is not related to our Company, the Directors or the Substantial Shareholders of our\nCompany. Pursuant to the joint venture, we have subscribed for a 50% equity interest in Rich\nContainership for a total consideration of US$5,000. The remaining 50% equity interest in Rich\nContainership is held by Wisdom. On 6 September 2006, Rich Containership entered into a\ncontract with, inter alia, Hyundai Mipo Dockyard Co., Ltd. in respect of the purchase option of a\n4,300 TEU container vessel, which is due for delivery in September 2008. On 3 May 2007, we\nmade a shareholder’s loan of approximately US$1.0 million to Rich Containership.\nOn 28 May 2007, we made another investment in a Hong Kong-incorporated company, Matin\nShipping Limited (“Matin”), through a joint venture with Uni-Fast Limited (“Uni-Fast”). Uni-Fast is\nnot related to our Company, the Directors or the Substantial Shareholders of our Company.\nPursuant to the joint venture, we have subscribed for a 40% equity interest in Matin for a total\nconsideration of US$400. The remaining 60% equity interest in Matin is held by Uni-Fast. As at the\nLatest Practicable Date, Matin is in the process of entering into a contract with, inter alia, Imabari\nShipbuilding Co., Ltd. to acquire a 37,300 DWT bulk carrier, which is expected to be delivered in\n2011. On 31 May 2007, we made a shareholder’s loan of approximately US$1.2 million to Matin.\nAs the vessels to be acquired by Matin and Rich Containership are in the process of being built\nand will only be delivered in 2011 and 2008 respectively, the Auditors of our Company have\nconfirmed that the investments by our Company in Matin and Rich Containership will have no\nimpact on the profit and loss statement for FY2006 as set out in Appendix C of this Prospectus,\nhad they been made at the beginning of FY2006. In addition, the Auditors have also confirmed that\nhad these investments been made at the end of FY2006, they would also have no significant\nimpact on the balance sheet as set out in Appendix C of this Prospectus, other than the\nreclassification of the cash amount of US$2,203,162 (being the aggregate amount for the\nsubscription for shares and provision of shareholder loans in Matin and Rich Containership), to\n“Investments” under the said balance sheet.\nGENERAL INFORMATION ON OUR GROUP\n95\n\n\n\u0002\nShip Investment Portfolio\nAs at the end of FY2004, the total value* of our ship investment portfolio (comprising vessels\nowned by ship-owning companies in which we have an interest and vessels owned by investment\nfunds in which we have an interest) was approximately US$149.4 million. Through various\nacquisitions and disposals of vessels since the end of FY2004, the total value* of our ship\ninvestment portfolio has increased to approximately US$403.0 million as at the Latest Practicable\nDate. Please refer to the section entitled “Alternative Assets Investments – Ship investment” at\npage 92 of this Prospectus for more information.\nThe following table sets out the value* of vessels in our ship investment portfolio, with a breakdown\nof the value* of vessels owned by ship-owning companies in which we have an interest and\nvessels owned by investment funds in which we have an interest, as at the end of each of FY2004,\nFY2005, FY2006 and as at the Latest Practicable Date.\nNotes:\n(1)\nThe decrease in portfolio size was due to disposal of vessels in FY2006. The value* of vessels disposed during the\nperiod totalled US$37.8 million in 2004, US$71.0 million in 2005, US$89.6 million in 2006 and US$78.8 million from 1\nJanuary 2007 up to the Latest Practicable Date.\n(2)\nThe increase in the value of the vessels owned by investment funds in which our Company has an interest, from\nUS$66 million as at 31 December 2006 to US$105 million as at the Latest Practicable Date, is due primarily to the\nlaunch of the Akebono Fund in April 2007. As at the Latest Practicable Date, the Akebono Fund held two ship\ninvestments - Sentic Limited (where the acquisition price of the underlying vessel is US$26.4 million) and Panmax\nTanker S.A. (where the acquisition price of the underlying vessel is US$46.7 million). The increase in the value of the\nvessels in which our Company has an interest, from US$236 million as at 31 December 2006 to US$298 million as at\nthe Latest Practicable Date, is due primarily to our Company’s investments in Rich Containership S.A. (where the\nacquisition price of the underlying vessel is US$71 million) and Matin Shipping (where the acquisition price of the\nunderlying vessel is US$31 million).\n*\nValue of vessels is an aggregation of the total acquisition price paid or to be paid for each relevant vessel at the time\nof acquisition and does not represent our proportionate interest in the ship investment portfolio.\nValue of Vessels in our Ship Investment Portfolio (US$’million)\nas at 31 December\n2004\nas at 31 December\n2005\nas at 31 December\n2006(1)\nas at Latest\nPracticable Date(2)\nValue* of vessels owned by ship-owning companies in which we have an interest\nValue* of vessels owned by investment funds in which we have an interest\n117\n155\n66\n105\n33\n214\n236\n298\n0\n50\n100\n150\n200\n250\n300\n350\n400\n450\nGENERAL INFORMATION ON OUR GROUP\n96\n\n\n\u0002\nSelected key transactions completed:\nMortgage Financing and Equity Syndication for Searex: Uni-Asia acted as the finance arranger for\nSearex for a US$100.5 million non-recourse loan in January 2004. The proceeds were used by\nSearex to acquire six vessels in 2004. Searex issued US$17.0 million of Performance Notes to\ninvestors out of which we subscribed for US$5.0 million, representing 29.4% of the total issued\nPerformance Notes. The remaining 70.6% of the Performance Notes were issued to third-party\ninvestors. This deal demonstrates our track record as finance arranger and alternative investment\nadministrator.\nMultiple roles as investor, administrator and fiscal agent of Searex: In addition to being an equity\ninvestor, we also acted as administrator and fiscal agent for Searex. For Searex Series I Fund, six\nvessels comprising bulk carriers and tankers were acquired in 2004 and 2005. As at the Latest\nPracticable Date, the fund disposed of five vessels and the remaining vessel is currently chartered\nout to third-party operators. As the investor of the fund, we were able to share in the investment\nreturns of the fund. As the fund administrator and fiscal agent, we received performance bonus\nalong with annual administration fees.\nContainer vessel joint venture: A third private shipping joint venture between us and three other\npartners was launched in 2005 specializing in investment in container vessels. This joint venture\ninvested US$56.3 million each in three panamax 3,500 TEU container vessels, or US$168.8 million\nin total. The vessels are being built by Hyundai Mipo Dockyard Co Ltd, Korea with delivery in 2007.\nUni-Asia, with a 38% equity interest in the shipping joint venture, arranged financing for the three\nvessels. The 38% equity interest of our Company in the shipping joint venture comprises (i)\nUS$380 paid in capital; and (ii) up to US$0.9 million in a shareholder’s loan. The container vessels\nhave been chartered out to Italia Marittima of the Evergreen Group under an eight-year bareboat\ncharter agreement, which has commenced following delivery of two vessels in April 2007 and June\n2007.\nWe have established a special purpose company in Panama, Panmax Tanker S.A. (“Panmax”),\nwhich entered into a contract with Xing Long Maritime S.A. (“Xing Long”) on 28 November 2006\nfor the construction and sale of a 50,000 DWT product tanker for approximately Yen 4.69 billion (or\napproximately US$39.5 million) (the “Shipsales Contract”). We provided a guarantee to Xing Long\nto guarantee the performance by Panmax of its obligations under the Shipsales Contract, including\nthe obligation to pay for the price of the vessel. The guarantee will remain effective until the\nfulfillment of all obligations of Panmax under the Shipsales Contract. The following table sets out\nthe payment obligations of Panmax under the Shipsales Contract and the intended manner of\nfinancing such payments:\nActual / Indicative\nInstalment amount\nDetails of Intended Manner of Financing\nInstalment Timeline\npayable to \n(Dependent on stage\nXing Long\nof construction)\n30 November 2006\nYen 469 million\nThis instalment was initially financed through a \n(approximately\nbridging loan of US$4.1 million provided by our\nUS$4.0 million) \nCompany on 30 November 2006. Such bridging loan\nwas repaid and replaced by another bridging loan of\nUS$4.0 million on 28 May 2007. The interest payable\nunder this bridging loan was set at the rate of London\nInter-Bank Offer Rate (“LIBOR”) + 3% per annum\nwith maturity date being 28 May 2008. This bridging\nloan may be refinanced in 2008 by way of an\nunsecured bank loan with a third-party financial\ninstitution at a lower interest rate than that under the\nbridging loan.\nGENERAL INFORMATION ON OUR GROUP\n97\n\n\nActual / Indicative\nInstalment amount\nDetails of Intended Manner of Financing\nInstalment Timeline\npayable to \n(Dependent on stage\nXing Long\nof construction)\n31 May 2007\nYen 469 million\nThis instalment was primarily financed through a \n(approximately \nbridging loan of US$4.0 million provided by one of\nUS$4.0 million) \nthe three sponsors of the Akebono Fund. This\nbridging loan may be refinanced in 2008 by way of an\nunsecured bank loan with a third-party financial\ninstitution at a lower interest rate than that under the\nbridging loan.\nAround March \nYen 469 million\nThis instalment is intended to be financed from\n2010\n(approximately \nthe proceeds of an issue of Performance Notes by\nUS$4.0 million) \nthe Akebono Fund.\nAround July 2010\nYen 469 million\nThis instalment is intended to be financed from\n(approximately \nthe proceeds of an issue of Performance Notes by\nUS$4.0 million) \nthe Akebono Fund, which issue may occur before\nApril 2010.\nAround November \nYen 2,814 million\nThis instalment is intended to be financed \n2010\n(approximately\nthrough debt financing from a third-party financial\nUS$23.7 million) \ninstitution and drawn down upon delivery of vessel.\nOur Company envisages that we may furnish similar guarantees in future in the ordinary course of\nour business. In this connection, Panmax received a guarantee from Orix Corporation which is our\nshareholder for the due performance of the contractual obligations of Xing Long. We also provided\na bridging loan of 10% of the contract price to Panmax for payment of the first 10% of the contract\nprice. Such bridging loan is targeted to be repaid around May 2008, or earlier if Panmax refinances\nthe bridging loan with a third-party financial institution. Upon such refinancing, the bridging loan\nprovided by our Company would be discharged and we would be paid in full. On 19 June 2007, the\nentire issued share capital of Panmax, comprising 100 nil-paid shares of par value US$100 each,\nwas transferred to Infinite Asset from the nominee company then holding such shares. With the\ncompletion of the transfer, Panmax became a wholly-owned subsidiary of Infinite Asset.\nSubsequently, Infinite Asset paid an aggregate amount of US$10,000 in respect of the then-unpaid\namounts on the shares, upon which the shares became fully-paid shares in the capital of Panmax.\nUpon transfer of Panmax to the Akebono Fund, Infinite Asset has undertaken to indemnify us from\nall claims which may arise from any default by Panmax of its obligations under the Shipsales\nContract. Such indemnity is supported by a share charge given by Infinite Asset in favour of our\nCompany over the entire share capital of Panmax. In the event of any default by Infinite Asset on\nits obligations under its indemnity to us, the share charge allows us to take over the ownership of\nthe shares of Panmax on the tenth day after any such default by Infinite Asset. Our Directors\nbelieve that the exposure of our Company in giving the guarantee to Xing Long would be mitigated\nsince we would, in the event of any default by Infinite Asset under its indemnity, be entitled to take\npossession of Panmax, which we may subsequently sell to other third-parties. It is the commercial\nintention of our Company that such sale would only take place if a replacement guarantee is\nobtained from the buyer of the vessel, to replace the guarantee given by our Company to Xing\nLong (subject to the credit standing of the replacement guarantor being acceptable to Xing Long).\nIn addition, our Directors believe that the likelihood of a default by Panmax is mitigated by the fact\nthat a material portion of the additional funds required by Panmax to fulfil its payment obligations\nunder the Shipsales Contract would be provided by further issuances of Performance Notes by the\nAkebono Fund to investors who have already committed to subscribe for a total of US$42.9 million\nprincipal amount of Performance Notes, from time to time up to April 2010, of which US$11.5\nmillion is intended to be utilised towards funding the payment obligations of Panmax. Nonetheless,\nin the event of a default by Panmax of its payment obligations under the Shipsales Contract, the\nGENERAL INFORMATION ON OUR GROUP\n98\n\n\ncommercial intention of our Company is to enforce the share charge and acquire Panmax in\naccordance with the terms thereof. Depending on market conditions, our Company may either sell\nthe shipbuilding contract or continue the shipbuilding contract and take delivery of the vessel. If we\nacquire Panmax and take delivery of the vessel, we would then have the option to charter it out to\nthird-party or sell it in the open market. These would, again, depend on the prevailing market\nconditions at the time. As at the Latest Practicable Date, the net asset value of Infinite Asset was\nUS$7.7 million. Infinite Asset is a shipholding SPC and its only material assets are currently\nPanmax Tanker S.A. (which will own a product tanker) and Sentic Limited (which owns a bulk\ncarrier).\nDistressed Assets Investment \nWe started to invest directly in distressed assets in 1998 to capitalise on opportunities for us to use\nour own capital to purchase NPLs and other distressed assets in Asia (excluding Japan) including\nthe PRC, Hong Kong, Thailand, Malaysia, Indonesia, the Philippines and Korea. We usually invest\nin NPLs through special investment fund vehicles established by us and which issue Performance\nNotes to Uni-Asia itself and selected institutional co-investors to raise funding for distressed assets\ninvestments.\nOur NPL investment strategy is to leverage on our network of industry contacts to find opportunities\nthat satisfy our criteria of high cashflow generation and a significant asset base on which we can\nget security. Opportunities are sourced through a network of industry contacts which include\nfinancial institutions, such as banks, and accounting firms active in NPL transactions. We aim to\nrecover the NPLs and exit the investments to realise a return through various debt recovery\npolicies. Debt collection and monitoring of individual NPL transactions are applied either through an\nagent bank, receiver or liquidator, or led by us if the asset is located in the PRC, Taiwan or Hong\nKong. We focus on the recovery of the debt repayments under the NPLs. We do not actively\nengage in the secondary trading of NPLs in which we buy distressed assets with the specific\npurpose of on-selling to another purchaser of NPLs.\nBetween 1998 and 2004, we made six direct investments that included 24 NPL accounts with a\nvalue of approximately US$30.5 million and realised a return of over eight times our investment\nwithin the period of approximately six years.\nWe also invest in distressed assets through AAA, a Cayman Islands incorporated investment\nvehicle that is held by a charitable trust. AAA functions independently from Uni-Asia in accordance\nwith recognised corporate principles. AAA was incorporated in the Cayman Islands on 26 July\n2001, and registered in Hong Kong on 14 August 2001. It has two distressed assets investment\nfunds, AAA Series I Fund and AAA Series II Fund, funded by the issuance of Performance Notes\nto us and a third-party independent Japanese financial institution. AAA Series I Fund and AAA\nSeries II Fund were established in August 2001 and July 2003 respectively.\nThe Performance Notes under the AAA Series I Fund and the AAA Series II Fund obligate the\nholder to provide the committed investment amount to the fund over a two-year drawdown period\nas the fund calls for funds to invest. Proceeds from the recovery of NPLs are distributed to\nperformance noteholders semi-annually at the discretion of the fund.\n\u0002\nAAA Series I Fund \nAAA Series I Fund is a distressed assets investment fund with the financial capability to invest up\nto US$5.0 million with a five-year term and two-year drawdown period. This fund has closed and\nthe Performance Notes have been fully redeemed. We committed US$1.0 million as principal when\nthe AAA Series I Fund was started in August 2001. AAA Series I Fund had an internal rate of\nreturn of approximately 156.6% from its inception in 2001 to 31 December 2006 based on 22 NPL\ninvestments, each representing an NPL account. The AAA Series I Fund has expired as at the\nLatest Practicable Date.\nGENERAL INFORMATION ON OUR GROUP\n99\n\n\n\u0002\nAAA Series II Fund\nAAA Series II Fund is a distressed assets investment fund with the financial capability to invest up\nto US$15.0 million with a five-year term and two-year drawdown period due to expire in September\n2008. We committed US$5.0 million as principal when the AAA Series II Fund was formed in July\n2003.\nAAA Series II Fund has made 19 NPL investments representing 58 NPL accounts since July 2003\nto the Latest Practicable Date. The two-year drawdown period ended in July 2005 and the recovery\nperiod will end in July 2008.\nThe AAA Series I and AAA Series II Funds target distressed or non-performing loan opportunities in Asia\n(excluding Japan) in the manufacturing, leasing, finance and hotel property sectors. The aim is to realise\nan investment return of over 20% within a 1-5 year time horizon. As at 31 December 2006, the PRC and\nHong Kong accounted for approximately 80.2% of the total nominal value of AAA’s NPL investments of\nUS$70.3 million and the rest are located in Thailand, Indonesia, Korea, Malaysia and the Philippines.\nWe also act as the administrator of the distressed assets investment funds providing administration\nservices such as monitoring, book-keeping and reporting services. We earn an administration fee on the\ndrawdown of funds (for investment into NPLs) and an incentive fee for investment out-performance\nagainst a target hurdle rate. We also earn an agency fee for services to be provided in our capacity as\nthe registrar and the fiscal agent of the funds.\nWe have made arrangements with an administrative services provider in the PRC to carry out\nadministrative and clerical services (such as appointment booking and minute taking), including any\nadministrative work or liaison work with our PRC contacts. Other than the registration with the\nAdministration for Industry and Commerce of Guangzhou (as stated in the section entitled “General\nInformation on our Group – Regulations governing our Group’s activities in Hong Kong, Japan, Singapore\nand the PRC – Scope of our activities in the PRC” in this Prospectus), we do not require any registration\nor licensing under PRC law for our activities in the PRC that arise only from the management and\nadministration of the debtors of our NPLs who are located in the PRC.\nSelected key transactions completed include:\nRestructuring and recovery of a leasing company in the PRC: We acquired a 40% equity interest in a joint\nventure leasing company in the PRC in 1998 and took over the management of the restructuring and\nrecovery exercise of the joint venture’s non-performing assets. The joint venture leasing company was\nsold to a third-party in 2004.\nLiquidation of Pacific Leasing: We acquired the NPLs of Pacific Leasing, a sino-foreign joint venture\nleasing company in Shanghai, in 1999. Pacific Leasing was an independent third-party company\nincorporated in the PRC. In 2000, Pacific Leasing’s license expired and it entered into a period of\nvoluntary liquidation. We became the largest creditor with a 31.1% exposure to Pacific Leasing’s total\ndebt. The recovery measures and efforts taken by us were successful and highlighted our strong workout\ntechniques and strategies. Pacific Leasing set a precedent in Shanghai as:\n\u0002\nthe first bankruptcy case applied by overseas creditors\n\u0002\nthe first bankruptcy case against a sino-foreign joint venture leasing company in the PRC\n\u0002\nthe first bankruptcy case against non-bank financial institutions licensed by MOFTEC\nThe case was accepted by the court, and Uni-Asia and related parties finalised the lawsuit successfully in\nDecember 2002. Our Company has recovered 22.59% out of the total registered debt owed to us by\nPacific Leasing. Following the liquidation of Pacific Leasing, there were no further outstanding amounts\nthat remained recoverable.\nGENERAL INFORMATION ON OUR GROUP\n100\n\n\nProperty Investment\nProperty Investment and Management - Japan\nWe invest in real estate in Japan through Capital Advisers. Capital Advisers focuses on investment in and\nmanagement of residential and hotel related real estate assets in Japan. It seeks investments across a\nrange of locations with a focus on balanced risk and return. Capital Advisers was established in 1998 as\nour wholly-owned subsidiary. In May 2003, Capital Advisers raised Yen 985 million (or approximately\nUS$8.2 million) in shareholders’ equity capital from a number of independent third-party investors as part\nof its strategic expansion. Our shareholding interest in Capital Advisers was diluted to 44.8% and as a\nresult, Capital Advisers became our associated company.\nCapital Advisers, by itself or in cooperation with its business partners, looks for the appropriate property\nto invest in. At the initial stage of the investment, it arranges the investment structure, establishes a SPC\nwhich owns the property in the form of a trust, arranges equity contribution to the SPC, arranges non-\nrecourse loan from financial institutions on behalf of the SPC. Capital Advisers itself may invest in the\nSPC as a minority investor. Capital Advisers also acts as the asset manager of the assets owned by the\nSPC and manages the SPC’s assets including the invested property on behalf of the SPC, eventually on\nbehalf of the investors. At the end of the investment period or sometimes during the investment period, in\norder to maximise investors’ return, Capital Advisers also engages in a selling procedure as the asset\nmanager. Capital Advisers manages over Yen 58.5 billion (or approximately US$491.9 million) in assets\nwhich includes a contribution of approximately Yen 2.0 billion (or approximately US$16.8 million) of its\nown capital as at the end of 2006.\n\u0002\nProperty Investment - Japan\nIn 2000, we, through our then wholly-owned subsidiary Capital Advisers, established an investment\npartnership with Grosvenor Asia to invest in residential properties in Tokyo.\nThe Grosvenor Group is an international property development and investment group. It has\nregional operating companies covering Australia, Asia Pacific, the Americas, Britain and Ireland\nand Continental Europe and an international fund management business which operates across all\nthese markets.\nThe investment partnership was followed by the establishment of the GCAP Fund in 2004. The\nGCAP Fund is jointly managed by Grosvenor Asia and Capital Advisers through Grosvenor Capital\nAdvisers Fund Management Co., Ltd. and is anticipated to grow to more than Yen 20 billion (or\napproximately US$194.4 million) when fully invested based on its historical borrowing capability\nand committed equity funds of Yen 6.3 billion (or approximately US$61.2 million).\nThe equity size of each investment fund ranged from US$1.4 million to US$38.5 million. The equity\ninvestors to the funds are financial institutions, real estate companies and corporations mainly\nbased in Japan and Southeast Asia. Capital Advisers itself invested Yen 2.0 billion (or\napproximately US$16.8 million) as a minority equity investor as at 31 December 2006.\n\u0002\nHotel Properties Investment - Japan\nIn 2001, Capital Advisers directed its attention to the asset investment/management business in\nthe hotel property sector. In the hotel property sector, Capital Advisers focuses mainly on\ninvestment in limited-service hotels. The number of hotels in which Capital Advisers has been\nengaged in as asset manager and invested in as minority investor totalled 11 by the end of 2006.\nCapital Advisers, as the asset manager in hotel property investments, employs a team which is\nexperienced in the hotel sector and not only manages the hotel assets but also monitors the hotel\noperation itself. The total asset of the hotel investments was over Yen 16.9 billion (or approximately\nUS$142.5 million) as at 31 December 2006. The total equity invested was about Yen 5.4 billion (or\napproximately US$45.5 million), of which Capital Advisers’ interest ranged from 5.0% to 51.9%. In\nGENERAL INFORMATION ON OUR GROUP \n101\n\n\nrelation to the hotel property investment, in 2004, Capital Advisers invested in another asset\nmanagement company engaged in Japanese real estate investment trust which specialises in hotel\nproperties and which was listed in Japan on 14 June 2006. In view of Capital Advisers’ growth and\nexpansion strategy, they may from time to time consider various fund raising options, such as new\nequity injection. In the event of a new equity injection, our interest in Capital Advisers may be\ndiluted.\n\u0002\nResidential Investment - Japan\nSince February 2004, Capital Advisers has also been engaged in the investment in and asset\nmanagement of residential properties, with a focus on small-size studio apartment buildings. The\nnumber of these type of buildings managed and/or invested in by Capital Advisers reached 10 in\n2004, 31 in 2005 and 50 in 2006.\nCapital Advisers earns an arrangement, asset management and administration fee for its services\nas the asset manager of the property investment portfolio. It also participates in the return to\ninvestors in the portfolio as a minority equity investor in the property investment funds.\nPrincipal Investments in Properties - PRC\nIn January 2007, we established a wholly-owned property investment company, Uni-Asia Guangzhou, in\nGuangzhou, Guangdong Province, the PRC, with a paid-in capital of US$3.0 million. Our Group will\ncontinue to explore property investment opportunities in the PRC under new property guidelines\nintroduced by the PRC government in July 2006, and property investment opportunities in Southeast\nAsia. At the end of June 2007, Uni-Asia Guangzhou completed the acquisition of 14 office units with\ngross floor area of 1,304 sq m of the China Shine Plaza, a commercial development in the Tianhe\ncommercial district in Guangzhou. We intend to lease the office units to third-parties.\nSALES AND MARKETING\nWe conduct sales and marketing activities out of our three offices in Hong Kong, Japan and Singapore.\nWe use our network of industry contacts and existing client base, built up from over nine years of\nestablishing the business to source for investment opportunities. Most marketing activities in structured\nfinance advisory are done directly where senior professionals meet existing and potential clients to\nprovide proposals for transactions or advice on existing deals. We also receive referrals from our existing\nclients and business partners with whom we have developed relationships.\nCo-investors of the direct investment funds we invested in are sourced primarily through our broad\nnetwork base and client relationships. Our Directors believe that we have repeatedly demonstrated an\nability to secure ties with strategic partners and co-investors in each of our Alternative Assets investment\nfunds due to our extensive contact base. Likewise, deals are also sourced through our internal contact\nbase along with sourcing agents and industry referrals.\nMAJOR CLIENTS \nFor FY2004, FY2005 and FY2006, we generated total fee income from our five largest clients of\napproximately US$5.0 million, US$9.9 million and US$8.8 million, respectively, representing 90.2%,\n80.8% and 89.2% of our total fee income during the corresponding period. The aggregate fee income\nreceived from our clients as a proportion of our total income was approximately 34.1%, 54.1% and 45.4%\nfor FY2004, FY2005 and FY2006 respectively.\nGENERAL INFORMATION ON OUR GROUP\n102\n\n\nThe following table sets forth our clients who account for 5% or more of our total fee income received for\nFY2004, FY2005 and FY2006 below:\nAs a percentage of total fee income (%)\nName of Clients \nFY2004\nFY2005\nFY2006\nCIDO Holding Co., group of companies(1)\n–\n16.1\n–\nDainichi-Invest Corporation(2)\n–\n17.5\n–\nEvergreen Group(3)\n29.4\n11.6\n34.8\nMitsubishi Heavy Industries(4)\n–\n9.0\n22.1\nNiki Shipping Company INC(5)\n6.6\n–\n–\nP\n.T. Berlian Laju Tanker TBK(6)\n9.2\n–\n–\nWisdom Marine Lines S.A.(7)\n–\n–\n5.6\nFunds and joint ventures set up by us \nAAA Strategic Investment Limited\n5.4\n5.7\n6.7\nContainer Vessel Fund(8)\n–\n16.1\n–\nSearex Asset Management Ltd\n39.5\n19.5\n19.9\nNotes:\n(1)\nKorea-based shipping group\n(2)\nJapanese shipping company\n(3)\nTaiwan-based transport conglomerate in aviation and shipping\n(4)\nJapanese ship/transport equipment conglomerate\n(5)\nGreek shipping company\n(6)\nIndonesian shipping conglomerate, listed on the SGX-ST, Jakarta Stock Exchange and Surabaya Stock Exchange\n(7)\nTaiwanese shipping company\n(8) \nComprising Falcon Containership S.A , Fortitude Containership S.A. and Union Containership S.A.\nSave as disclosed in the section entitled “Interested Person Transactions” in this Prospectus, none of our\nDirectors or Substantial Shareholders is related to or has had any interest in clients who accounted for\n5% or more of our total revenue for FY2004, FY2005 and FY2006.\nBUSINESS PARTNERS \nRelationship with HSH Nordbank\nWe have a close working relationship with HSH Nordbank, one of our shareholders and the largest\nshipping bank in the world focusing on container vessels, tankers, bulk carriers and roll-on-roll-off ships.\nHSH Nordbank has a strong presence in Germany, Scandinavia, Greece, and the United States, although\nclients from across Europe and Asia represent a significant portion of their credit portfolio. We act as a\nmarketing intermediary for HSH Nordbank in Asia in sourcing maritime transactions and also partner\nHSH Nordbank in arranging debt syndication.\nA recent example where we and HSH Nordbank worked in partnership was in arranging the US$127.8\nmillion term loan facilities for CIDO Holding Co., Ltd. to finance the purchase of ships. We and HSH\nNordbank as joint coordinating arrangers, project-managed the transaction and marketed the transaction\nto debt syndicate lenders. HSH Nordbank was also the senior lender being the underwriter to the loan.\nIn addition, HSH Nordbank was a co-lender in the Searex Series I Fund.\nGENERAL INFORMATION ON OUR GROUP\n103\n\n\nRelationship with Exeno Yamamizu\nWe and Exeno Yamamizu have jointly managed the Searex Series I Fund since the end of 2003 where\nwe have acted as administrator, registrar, fiscal agent and sometimes finance arranger for transactions\nand Exeno Yamamizu has been overall project manager. Exeno Yamamizu is one of the largest shipping\nbrokers in Asia and their client network covers major shipping companies. This cooperation has brought\nus a broader market coverage in terms of chartering and sale and purchase of vessels. A new joint\nventure company, Uni-Ships and Management Limited, was established in 2005 to carry out the\nresponsibilities of project manager for Searex Series II Fund.\nRelationship with Grosvenor Asia \nGrosvenor is an international property development and investment group. It has regional operating\ncompanies covering Australia, Asia Pacific, the United States, Britain and Ireland and Continental Europe\nand an international fund management business which operates across all these markets. Grosvenor\ninvests in and manages offices, shopping centres, retail, residential and industrial property. Anchored by\nits ownership and management of the Mayfair and Belgravia estates in Central London, Grosvenor is one\nof the largest, private real estate companies in the UK and has been operating in Asia for over 10 years.\nIn 2000, we and Grosvenor Asia jointly established an investment partnership with another investor to\ninvest in residential properties in Tokyo. This was followed in 2004 with the establishment of the GCAP\nFund. The fund is jointly managed by Grosvenor Asia and Capital Advisers through Grosvenor Capital\nAdvisers Fund Management Co., Ltd.\nRelationship with CMTB\nCMTB is one of the largest trust banks in Japan and our 10.7% Shareholder. We collaborated with CMTB\nthrough Capital Advisers, our then wholly-owned subsidiary, to invest in property projects in Japan and in\naddition, CMTB has been cooperating with Capital Advisers on various other transactions such as\ntransfer agency and lending arrangements since 2002.\nINTELLECTUAL PROPERTY\nWe market our services under our “Uni-Asia” logo and name as shown below:\nUni-Asia Finance Corporation\nGENERAL INFORMATION ON OUR GROUP\n104\n\n\nWe are the registered proprietors of our “Uni-Asia” logo. As at the Latest Practicable Date, the details\nrelating to the registration of our trademark are as follows:\nPlace of\nRegistration\nRegistration\nTrademark\nApplication\nClass\nnumber\nDate\nStatus\nUni-Asia device \nHong Kong\n35(1) and 36(2)\n300421091\n17 May 2005\nRegistered\n“UNI-ASIA FINANCE\nHong Kong\n35(1) and 36(2)\n300421073\n17 May 2005\nRegistered  \nCORPORATION”\nHong Kong\n35(1) and 36(2)\n300421082\n17 May 2005\nRegistered  \n“UNI-ASIA FINANCE\nJapan\n35(1) and 36(2)\n4911813\n2 December 2005\nRegistered \nCORPORATION”\nUni-Asia device\nJapan\n35(1) and 36(2)\n4914362\n9 December 2005\nRegistered  \nUni-Asia device\nTaiwan\n35(1) and 36(2)\n01199347\n1 March 2006\nRegistered  \n“UNI-ASIA ”\nTaiwan\n35(1)\n01212538\n1 June 2006\nRegistered   \nTaiwan\n36(1)\n01212539\n1 June 2006\nRegistered  \nUni-Asia device,\nPRC\n35(1) and 36(2)\n–\n–\nApplication \n“UNI-ASIA FINANCE\nsubmitted on \nCORPORATION” and\n17 June 2005, \nPending(3)\nUni-Asia device\nSingapore\n35(1)\nT05/08232H \n19 May 2005\nRegistered \nUni-Asia device\nSingapore\n36(2)\nT05/08233F\n19 May 2005\nRegistered \n“UNI-ASIA FINANCE\nSingapore\n35(1)\nT05/08206I\n19 May 2005\nRegistered \nCORPORATION”\n“UNI-ASIA FINANCE\nSingapore\n36(2)\nT05/08207G\n19 May 2005\nRegistered \nCORPORATION”\nNotes:\n(1)\nClass 35 relates to business management and organisation consultancy and business management assistance.\n(2)\nClass 36 relates to, inter alia, financial consultancy, financial planning services, investment advisory services, investment\nmanagement services, management of funds, assets and trusts for others, debt financing, provision and financing of loans,\nreal estate management, and banking services.\n(3)\nCurrently, we have no reason to believe that the trademark application in the PRC will be declined by the relevant authorities\nin the PRC, and we are not of the view that the delay in the trademark registration in the PRC would pose a material risk to\nour Company’s financial performance.\nINSURANCE\nAs at the Latest Practicable Date, we have in place insurance policies in respect of the following (subject\nto exceptions and exclusions and the conditions of the respective policy):\n(i)\npersonal accident, medical and travel insurance policies for our employees as well as employees’\ncompensation insurance;\n(ii)\noffice insurance against, inter alia, loss of or damage to property and interruption of the operations\nof business;\nGENERAL INFORMATION ON OUR GROUP\n105\n\n\n(iii)\nburglary insurance against loss by theft or burglary or any damage to our property or to our\npremises that arose due to any such theft and burglary or to any attempted threat in respect of our\ncurrent manufacturing facility and the office equipment, furniture, fixtures and fittings located\ntherein; and\n(iv)\nProtection and Indemnity insurance as well as hull and machinery insurance for the vessels owned\nby ship investment funds/companies that we invested in.\nOur Directors believe that the above insurance policies are adequate for our business.\nREGULATIONS GOVERNING OUR GROUP’S ACTIVITIES IN HONG KONG, JAPAN, SINGAPORE\nAND THE PRC\nOverview\nScope of our activities in Hong Kong \nOur operations are principally conducted from Hong Kong, although the activities which we carry on in\nHong Kong do not comprise activities that require our Company or any of our subsidiaries to be licenced\nin Hong Kong.\nStructured Finance \nIn relation to our structured finance business, we act as an arranger of financing, but do not ourselves\nlend money to third-parties. We are accordingly not required to be regulated under the Banking\nOrdinance (Cap. 155 of the Laws of Hong Kong) nor do we require a licence for the purposes of the\nMoney Lenders Ordinance (Cap. 163 of the Laws of Hong Kong).\nIn relation to the advice which we impart to third-parties in relation to our structured financing activities,\nsuch advice does not constitute advising in relation to securities for the purposes of the SFO as the\nrelevant products arranged for third-parties comprise bank loans, finance leases or other banking-specific\nproducts. Moreover, such advice does not amount to corporate finance advice for the purposes of the\nSFO, again because the relevant products do not constitute securities as defined in that Ordinance.\nAlternative Assets Investment \nIn relation to the fund structures which we have devised and established for the purposes of effecting\ninvestment by us, as principal, and by co-investors, in both ships and NPLs (and other distressed assets),\nthe various roles performed by us do not fall to be regulated under the SFO.\nWe act as administrator, registrar and fiscal agent of the two funds, the Searex Series I Fund and the\nSearex Series II Fund, dedicated to investment in ships, and the two funds, the AAA Series I Fund and\nthe AAA Series II Fund, dedicated to investment in distressed debt assets, being typically NPLs.\nEach of the fund vehicles, namely Searex and AAA, is a limited liability company, in each case, managed\nby the board of directors of the relevant company. It is the responsibility of each such board to originate\nand implement all transactions relevant to the fund, including acquisitions and disposals of the underlying\ninvestments. In this regard, prior to implementing any such transaction, the relevant fund vehicle reports\nto a monitoring committee that represents the parties who have invested in the underlying notes (namely,\nthe Searex Series I Notes and the Searex Series II Notes, or the AAA Series I Notes and the AAA Series\nII Notes, as the case may be).\nThe composition of the monitoring committee of the Searex Series I Fund comprises five individuals, two\nof whom are our representatives (the other three being the representatives of other investors in the\nSearex Series I Notes). The composition of the monitoring committee of the Searex Series II Fund\ncomprises seven individuals, one of whom is our representative (the other six being the representatives of\nother investors in the Searex Series II Notes). In cases where the relevant fund (Searex Series I Fund\nand Searex Series II Fund) proposes to implement any investment related matter, such as acquiring or\ndisposing the shares of a single purpose vehicle, itself owning a ship, Searex prepares a report for the\nmonitoring committee which, having raised any queries, has the right to issue, or not issue, a “notice of\nGENERAL INFORMATION ON OUR GROUP\n106\n\n\nawareness”. Should such a notice be issued, Searex may, but is not obliged to, proceed with the\ntransaction. If such a notice is not issued, Searex would internally consider suitable modifications be\nmade to the proposal such that it might become acceptable to the investors. The monitoring committee for\nthe Searex Series I Fund and the Searex Series II Fund acts on the basis of a simple majority of its\nmonitoring committee members, and is therefore not under our control.\nIn the case of the AAA Series I Fund and the AAA Series II Fund, each is operated along lines similar to\nthose described above. Accordingly, management of both such funds resides in the board of directors of\nAAA itself. The monitoring committee applicable to both the AAA Series I Fund and the AAA Series II\nFund comprises three individuals, two of whom are our representatives. All decisions of the monitoring\ncommittee concerning the issue, or not, of a “notice of awareness” require the unanimous consent of the\ncommittee’s members, meaning that the monitoring committee is not under our control.\nOur Directors have given due consideration to the question of whether or not any of the activities of our\nCompany fall under the regulation of SFO and are aware, in particular, that the following constitute\n“regulated activities”:\n\u0002\ndealing in securities (requiring a type 1 licence);\n\u0002\nadvising on securities (requiring a type 4 licence);\n\u0002\nasset management (requiring a type 9 licence).\nOur Directors are satisfied that we do not perform any activity that is regulated under the SFO, in which\nregard, our Directors confirm that Uni-Asia does not deal in or manage assets for and on behalf of the\nrelevant funds, either in our capacity as administrator or as one of the parties represented on the various\nmonitoring committees. Moreover, our Company does not provide any form of investment advice to the\nfunds in relation to their respective investment decisions.\nFinally, our Directors have noted that, in any event, the underlying assets of both the Searex Series I\nFund and the Searex Series II Fund and both the AAA Series I Fund and the AAA Series II Fund would\nnot, generally, be considered as “securities” for the purposes of the SFO. In the case of the Searex Series\nI Fund and the Searex Series II Fund, the underlying investments are made through special purpose\nvehicles, each a private company (within the meaning of section 29 of the Companies Ordinance) which,\nin turn, owns the underlying ship. Securities in such private companies are expressly exempted from the\ndefinition of securities in the SFO. Moreover, the underlying assets of the AAA Series I Fund and the AAA\nSeries II Fund generally comprise NPLs, being assets that would not ordinarily be considered as\nsecurities for the purposes of the SFO.\nIn relation to our Company’s role as subscriber to the Funds, a money lender’s licence is not considered\nby our Directors to be necessary as our Company’s ordinary business does not primarily or mainly\ninvolve the lending of money, in the ordinary course of that business.\nScope of our activities in Japan \nWe have one subsidiary in Japan, Uni-Asia Finance Corporation (Japan), involved in finance arrangement\nin Japan and the provision of related advisory services.\nUni-Asia Finance Corporation (Japan) has obtained a registration from the Governor of Tokyo Prefecture\nto carry on the business of money lending (the registration being transliterated as a “Kashikingyo\nTouroku”). The registration which expired on 26 December 2006 was renewed and extended to 26\nDecember 2009 and remains in full force and effect. So far as our Directors are aware, no other licences\nor registrations are necessary for Uni-Asia Finance Corporation (Japan) to carry on its business in\naccordance with its current scope and practice.\nHowever, Uni-Asia Finance Corporation (Japan) will have to apply for newly created registration under the\nnew Financial Instruments and Exchange Law (the “Law”) (presently the Securities and Exchange Law) if\nit will be engaged in the solicitation to potential clients to acquire interest in general or limited partnership\nor Tokumei Kumiai. The new Law extends the coverage of the regulation to such interest which has not\nbeen regulated. The major part of the Law, including the registration regulation will enter into force on\nsuch date on or before 13 December 2007 as will be designated by the Cabinet Order.\nGENERAL INFORMATION ON OUR GROUP\n107\n\n\nIn addition, we have a 44.8% interest in Capital Advisers Co., Ltd., a company which invests in and\nmanages certain real estate assets, including hotel and residential properties.\nCapital Advisers has obtained:\n(i)\na registration from the Governor of Tokyo Prefecture to carry on the business of money lending (the\nregistration being transliterated as a “Kashikingyo Touroku”). The current registration expires on 17\nSeptember 2007 and remains in full force and effect;\n(ii)\na Housing and Property Dealer Licence (transliterated as a “Takuchi Tatemono Torihikigyo\nMenkyo”) which expires on 30 August 2007 and remains in full force and effect; and\n(iii)\na registration from the Prime Minister to carry on the business of selling interest in the various trust\nfunds (such registration being transliterated as “Shintaku-Juekiken Hanbaigyo Touroku”) which\nexpires on 17 May 2008.\nHowever, Capital Advisers will in the future have to apply for newly created registration under the new\nFinancial Instruments and Exchange Law mentioned above, unless it changes the modes of transactions\nit structures. The new Law extends the coverage of regulation to such products as have not been under\nany regulation. Also, the above “Shintaku-Juekiken Hanbaigyo Touroku” will be abolished and uniformly\nregulated with other business of financial products under the new Law. We understand that Capital\nAdvisers intends to seek registration under the new Law. When such registration is granted under the new\nLaw, its existing registration from the Prime Minister to carry on the business of selling interest in the\nvarious trust funds (“Shintaku-Juekiken Hanbaigyo Touroku”) will be superseded and will automatically\nexpire. As such, Capital Advisers will not maintain their current registration alongside the new registration\nunder the new Law (when granted).\nWe also understand that Capital Advisers intends to renew the registration from the Governor of Tokyo\nPrefecture to carry on the business of money lending, as well as the Housing and Property Dealer\nLicence upon their expiry.\nSo far as our Directors are aware, no other consents, licences, registrations or the like are necessary or\nrequired for Capital Advisers to carry on its business in accordance with its current scope and practice. In\nany event, Capital Advisers is no longer our wholly-owned subsidiary and is only our associated\ncompany.\nScope of our activities in Singapore \nWe have one subsidiary in Singapore, Uni-Asia Capital (Singapore) Limited, whose principal businesses\nare:\n(i)\nto provide loans to shipping clients, typically secured by vessel mortgages;\n(ii)\nto arrange ship chartering; and\n(iii)\nto provide project management.\nUni-Asia Capital (Singapore) Limited acts as administrator, registrar, fiscal agent and project manager to\nAkebono Capital Limited, which is the issuer of the Performance Notes in relation to the Akebono Fund.\nAkebono Capital Limited is a limited liability company, managed by its board of directors. It is the\nresponsibility of the board to originate and implement all transactions relevant to the fund, including\nacquisitions and disposals of the underlying investments. Prior to implementing any such transaction, the\nboard will consult the monitoring committee that represents the parties who have invested in the\nunderlying notes. The board of Akebono Capital Limited prepares a report for the monitoring committee\nwhich, having raised any queries, has the right to issue, or not issue, a “notice of awareness”. Should\nsuch a notice be issued, Akebono Capital Limited may, but is not obliged to, proceed with the transaction.\nIf such a notice is not issued, Akebono Capital Limited would internally consider suitable modifications be\nmade to the proposal such that it might become acceptable to the investors.\nGENERAL INFORMATION ON OUR GROUP\n108\n\n\nThe composition of the monitoring committee comprises four individuals, one of whom is our\nrepresentative (the other three being the representatives of other investors in the Akebono Fund),\nmeaning that the monitoring committee is not under our control. The monitoring committee for the\nAkebono Fund acts on the basis of a simple majority of its monitoring committee members, except where\nunanimous approval of all the representatives of the monitoring committee is required in relation to\ncertain cases such as the proposal by the issuer of the Performance Notes for any modification of any\nprovision of the administration and project management agreement or any arrangement in respect of the\nobligations of the issuer thereunder.\nIn the case of a transaction with an affiliate of any sponsor of the Akebono Fund, namely Mitsui & Co.,\nLtd, Exeno Yamamizu and our Company, a valuation of the relevant asset from a professional valuer\n(other than the sponsor) or from other persons (if approved by the representatives of the monitoring\ncommittee (other than those nominated by the sponsor whose affiliate will be involved in the transaction))\nshall be obtained, unless such requirement is waived by representatives of the monitoring committee\n(other than those nominated by the Sponsor whose affiliate will be involved in the transaction).\nWith regard to the business of providing loans to shipping clients, Uni-Asia Capital (Singapore) Limited\nhas obtained a renewal of its Certificate of Exemption under Section 36 No. 1752 dated 4 November\n2004, issued by the Government of Singapore pursuant to the Moneylenders Act, Chapter 188 of\nSingapore (the “Moneylenders Act”).\nUni-Asia Capital (Singapore) Limited first obtained a Certificate of Exemption dated 14 January 2002 and\nwhich was effective from 4 January 2002 and expiring on 3 January 2008. The Certificate of Exemption\nprovides an exemption to Uni-Asia Capital (Singapore) Limited from compliance with the provisions of the\nMoneylenders Act in respect of loans granted to finance or re-finance the purchase of a vessel(s),\nvessel’s engines, vessel’s parts and related equipment and components, for commercial or industrial\npurposes and/or for working capital in connection with which the vessel is inter-alia granted as security\nfor the loan and/or generally in connection with ship finance. Uni-Asia Capital (Singapore) Limited did not\nprovide any loans in Singapore prior to obtaining the Certificate of Exemption.\nSo far as our Directors are aware, apart from the exemption referred to above, no other consents,\nlicences, registrations or the like are necessary or required for Uni-Asia Capital (Singapore) Limited to\ncarry on its business in accordance with its current scope and practice.\nScope of our activities in the PRC\nWe have one subsidiary in the PRC, Uni-Asia Guangzhou, involved in property investment and\nmanagement.\nUni-Asia Guangzhou has earlier obtained approval for the establishment of the company from the Bureau\nof Foreign Trade and Economic Cooperation of Tianhe District, Guangzhou Municipality and was duly\nregistered with the Administration for Industry and Commence of Guangzhou. Uni-Asia Guangzhou can\ncarry on the business of leasing, operating and management of its owned properties according to the\nrequirements under the business licence issued by the Administration for Industry and Commence of\nGuangzhou (which will expire on 9 January 2037) and within the approved scope of business.\nSo far as our Directors are aware, no other consents, licences, registrations or the like are necessary or\nrequired for Uni-Asia Guangzhou to carry on its business in accordance with its current scope and\npractice.\nSEASONALITY\nThere is no apparent seasonality observed within the industries in which we operate. However, we\nexperience some seasonality in the recognition of profits. We concentrate on marketing and sales\nactivities in the first half of each financial year and typically only complete our transactions and profits\nfrom such transactions are only realised and recorded in the second half of the financial year.\nGENERAL INFORMATION ON OUR GROUP\n109\n\n\nCOMPETITION\nOur Directors believe that competition in our industry is intense and we have to compete with companies\nthat may have wider name recognition, more resources, a broader range of services including the ability\nto provide debt directly, as well as arranging it, and a longer operating history than us.\nOur Directors believe we face competition from the finance arrangement departments of commercial\nbanks and investment banks, funds that make direct investments into Alternative Assets and property\ncompanies that make secondary acquisitions of property.\nThe market in Asia for finance arrangement and direct investments is very competitive and many financial\ninstitutions operate in our key geographical markets of Hong Kong, the PRC, Japan and Singapore. Our\nDirectors do not believe any of our competitors have the exact same mix and focus of business as us,\nhowever each of our competitors tends to compete with us on a particular type of activity, such as only in\nfinance arrangement or only in direct investment into ships, NPLs or property.\nOur Directors believe that we are able to effectively compete with our competitors based on our focus on\nour strengths (as stated in the section entitled “General Information on our Group – Competitive\nStrengths” of this Prospectus) and by providing our customers with a level of service that meets or\nexceeds their expectations, hence leading to repeat business from satisfied customers, as well as\nreferrals from them for new business opportunities.\nOur Directors have identified the following competitors in each area of our business:\nArea of business\nCompetitors\nStructured finance\nBanks, financial advisory and consulting firms, hedge funds, leasing\ncompanies and ship brokers\nDistressed assets\nHedge funds\nProperty investment/management\nProperty funds, property developers and real estate investment trusts\nShip investment\nShipping companies and shipping trusts\nCOMPETITIVE STRENGTHS \nWe believe that our key competitive strengths are as follows:\nExperienced Executive Directors and Management Team\nOur Executive Directors and management team are experienced professionals in the structured finance\nindustry and alternative asset investments. Our co-founders and Executive Directors, Messrs Motokuni\nYamashiro, Kazuhiko Yoshida and Michio Tanamoto co-founded Uni-Asia in 1997. A summary of their\nwork experience is set out below and further details may be found in the section entitled “Directors,\nManagement and Staff” in this Prospectus:\n\u0002\nMr. Motokuni Yamashiro is our Chairman and Executive Director. Mr. Yamashiro has over 40 years\nof experience in the banking sector. Prior to founding our Company, he was with The Hokkaido\nTakushoku Bank since 1967 and was the Chairman of Takugin International (Asia) Limited, the\noffshore merchant banking arm of The Hokkaido Takushoku Bank between 1992 to 1997.\n\u0002\nMr. Kazuhiko Yoshida is our Chief Executive Officer and Executive Director. He has over 27 years of\nexperience in banking and credit analysis, specialising in structured finance of maritime vessels\nand aircraft. Prior to founding our Company, he was a senior manager in Sumitomo Trust and\nBanking Co., Ltd. following which, he was a director/deputy general manager of Takugin\nInternational (Asia) Limited, the offshore merchant banking arm of The Hokkaido Takushoku Bank,\nfrom 1992 to 1997. Mr. Yoshida is also currently a director of Capital Advisers.\nGENERAL INFORMATION ON OUR GROUP\n110\n\n\n\u0002\nMr. Michio Tanamoto is our Chief Operating Officer and Executive Director. Mr. Tanamoto has over\n26 years of experience in banking based in Japan, Hong Kong and Singapore. Prior to founding\nUni-Asia in 1997, he joined The Hokkaido Takushoku Bank in 1980 and was the senior manager of\nTakugin International (Asia) Limited, the offshore merchant banking arm of The Hokkaido\nTakushoku Bank between 1988 and 1993. Following which, he was the deputy general manager of\nthe Singapore Branch of The Hokkaido Takushoku Bank from 1995 to 1997.\nWe believe that we have a clear understanding of our industry requirement and possess a client-driven\nfocus and an established investment strategy. Our staff is committed to provide value-added and\ninnovative services to our clients. Our Executive Directors, Executive Officers and employees collectively\nown approximately 19.7% of our post-Invitation issued share capital. We believe that this has helped align\ntheir interests with those of our Company and foster a sense of commitment. In addition, we have in place\nan employee share option scheme to motivate and foster a stronger sense of ownership amongst our\nstaff. Please refer to the section entitled “Uni-Asia Share Option Scheme” in this Prospectus for further\ndetails of our Scheme.\nWe have a successful track record of integrated capabilities in our specialist fields\nWe have a strong background and experience in finance arrangement and investment in Alternative\nAssets. Based on our track record, we have been able to successfully identify opportunities, formulate\nstructures and execute them effectively. By leveraging on this strength, we focus on activities where our\nexperience and established relationships provide a competitive advantage. Further details of selected key\ntransactions may be found in the section entitled “General Information on our Group – Business\nOverview” in this Prospectus.\nAs transport-related finance arrangement and alternative asset investments are specialised fields, we\nbelieve that we are able to achieve the following competitive advantages:\n\u0002\nComprehensive range of value-added and innovative structures\nWe offer a comprehensive range of services that helps our clients achieve their business and/or\nfinancing objectives. We provide a range of customised structured finance products and services\nsuch as the arrangement of ship and aircraft leases, mortgage financing, charter arrangements for\nvessels, tax-enhanced leases and loans and balance sheet management. The availability of such a\nbroad and comprehensive product range enables us to offer our clients integrated and innovative\nsolutions. It also allows us to cater to any periodic change in requirements in any of our target\nindustries.\n\u0002\nScalable execution capabilities\nOur business allows us to explore multiple opportunities based on common product requirements\nacross geographic markets. We are able to leverage on our existing competencies, resources and\nnetwork to execute our expansion initiatives into new sectors and across geographical locations.\nWe believe that we are one of the few industry participants who have in-house capabilities for both\nstructured finance and Alternative Assets investment. This combination has also allowed us to\ndevelop long-term relationships with and meet the needs of our existing and new clients through\nour comprehensive range of services.\n\u0002\nEffective internal processes and practices\nWe have developed internal business processes and practices to enable us to function efficiently\nand effectively in our dealings with clients and our approach to other relationships. We believe that\nour intimate knowledge of global transport and Alternative Assets markets and trends provides us\nwith an advantage over our competitors in structuring and investments. We believe that this focus\nhas allowed us to structure customised solutions to our clients’ requirements. In addition, with our\n“boutique” size and lean organisational structure, we are able to function with greater flexibility and\nspeed in comparison to some of our larger competitors.\nGENERAL INFORMATION ON OUR GROUP\n111\n\n\nWe are able to leverage on our relationships with our well-established network\nWe have a well-established and strong network of contacts. The engagement of clients and provision of\nservices are carried out with the objective of creating and maintaining long-term relationships. In addition\nto our client relationships, we have also been able to build other long-term business relationships through\nour investments, partners, corporate shareholders and brokers. We have been able, and will continue, to\nleverage on these relationships and network to support us in identifying new business opportunities and\nin assisting us to formulate new and innovative structures to address the requirements of our business\nassociates. This has resulted in us obtaining repeat businesses from our existing clients as well as new\nreferrals from our existing network. The strengths and geographical spread of these relationships enable\nus to provide cross-border services to our clients such as the recovery of PRC NPLs acquired from\nJapanese banks and ship finance in Asia financed by European financial institutions.\nEXCHANGE CONTROLS\nOur operations are largely located in Hong Kong, Japan, Singapore and the PRC.\nHong Kong\nPursuant to Article 112 of the Basic Law of the Hong Kong Special Administrative Region of the People’s\nRepublic of China (Cap 2101), there are no foreign exchange control policies in Hong Kong. The Hong\nKong dollar is freely convertible. Profits, royalties, interest and capital can also be freely converted and\nrepatriated.\nJapan\nForeign exchange matters are regulated by the Law on the Foreign Exchange and Foreign Trade (“FEFT\nLaw”), and cabinet orders and ministerial ordinances thereunder. Under the FEFT Law, capital\ntransactions as defined by the FEFT Law including investment from and to Japan as well as trans-border\npayments may be freely conducted except for certain extraordinary cases such as transaction with certain\ncountries or for certain business where permit or notification for review prior to the transaction is required.\nNeither our Company nor our Shares fall under such exception. Nevertheless, a report after the\ntransaction is normally required for a capital transaction exceeding Yen 100 million (or Yen 1 billion for\nsome transactions) and for a trans-border payment exceeding Yen 30 million except in case of settlement\nof international trade. Also, notification prior to the transaction is required for physical import and export of\ncash or negotiable instruments exceeding Yen 1 million or of gold exceeding 1 kilogramme.\nSingapore\nThere are currently no exchange controls in Singapore.\nPRC\nIn 1994, the PRC reformed the foreign exchange system, combined the RMB exchange rates, adopted\nthe bank exchange settlement system and set up a unified inter-bank foreign exchange market.\nSince 1 December 1996, the PRC has introduced a new system of foreign exchange control under which\nRMB is convertible on current accounts, but strict administrative measures are still in place for capital\naccount. Foreign exchange is not allowed to circulate or to be used in lieu in the settlement of accounts\nexcept in free trade zones. Any organisation or individual with international balance of payment (including\noverseas-invested businesses, foreign financial institutions and the resident PRC offices of foreign legal\npersons except for those of international organisations and foreign embassies or consulates) should\ndeclare for statistical purposes their international balances and go through the foreign exchange\nsettlement and sales procedure when collecting foreign exchange in export and paying foreign exchange\nin import. The control over the confirmation of foreign exchange payment to banks in Mainland China and\nthe control over export tax refund are closely linked.\nGENERAL INFORMATION ON OUR GROUP\n112\n\n\nMaterial Measures\nThe State Administration of Foreign Exchange (“SAFE”) in the PRC achieves its targets mainly through a\nforeign exchange registration system, account categorization system and annual survey system.\n\u0002\nForeign Exchange Registration \nA foreign investment enterprise should, within 30 days after obtaining the business license, apply\nfor going through the procedure of foreign exchange registration with its domiciled branch of SAFE.\nAfter examining the documents submitted by the enterprises, SAFE shall issue a Foreign\nExchange Registration Certificate for Foreign Investment Enterprises (the “Registration\nCertificate”) to the qualified applicant.\nAfter the Registration Certificate is issued, in cases of changes made to name, address and\nbusiness scope, share transfers, capital increase, mergers and acquisitions etc., relevant\ndocuments shall be submitted to SAFE for record. The enterprise should also apply for an\namendment of the Registration Certificate.\n\u0002\nForeign Exchange Accounts \nAfter acquiring the Registration Certificate, the foreign investment enterprise shall open foreign\nexchange accounts with designated foreign exchange banks.\n\u0002\nForeign Exchange Annual Inspection \nSAFE shall make annual inspections on the Registration Certificate. Upon completion of the annual\ninspection, the Registration Certificate will be valid for a term of one year.\nGuidelines to foreign investment enterprises \n\u0002\nControl over foreign exchange receipts and expenditure under current account transactions\n“Current account transactions” or \nrefer to those components in the current account of\nthe balance of payments, such as goods, services and unilateral transfer.\nAll foreign exchange receipts of domestic entities for current account transactions shall be\nrepatriated and shall not be deposited abroad in violation of the relevant government regulations\nwithout authorisation.\nAll foreign exchange receipts for current account transactions shall be sold to the designated\nforeign exchange banks in accordance with the regulations issued by the State Council on the sale\nand purchase of foreign exchange and making payments in foreign exchange, and such receipts\nmay also be upon approval, deposited in the foreign exchange account at the designated banks for\nforeign exchange operations.\nPurchase of foreign exchange for current account transactions shall be conducted with the\ndesignated foreign exchange banks, in accordance with the regulations issued by the State Council\non the sale and purchase of foreign exchange and making payments in foreign exchange, upon the\npresentation of valid documents and commercial bills.\nThe collection of export proceeds and the payments for imports in foreign exchange by domestic\nentities shall be processed in accordance with the relevant government regulations governing the\nverification procedures for export proceeds and import payments.\n\u0002\nControl over foreign exchange receipts and expenditure under capital account transactions\n“Capital account transactions” or \nrefer to the increase and decrease of assets and\nliabilities in the balance of payments as a result of the inflow and outflow of capital, including direct\ninvestment, loans and portfolio investment etc.\nGENERAL INFORMATION ON OUR GROUP\n113\n\n\nGENERAL INFORMATION ON OUR GROUP\n114\nUnless otherwise specified by the State Council, all foreign exchange receipts for capital account\ntransactions shall be repatriated.\nAll foreign exchange receipts for capital account transactions shall be placed in the foreign\nexchange account at the designated foreign exchange banks in accordance with the relevant\ngovernment regulations; such receipts can also be sold to the designated foreign exchange banks\nupon the approval by the exchange administration agencies.\nThe source of foreign exchange for overseas investment by domestic entities shall be reviewed by\nthe exchange administration agencies before the application for such investments is filed for\napproval by the relevant government agencies. If approval is granted, remittance of funds shall then\ntake place in accordance with the regulations on overseas investment issued by the State Council.\nExternal borrowing in loans by foreign investment enterprises shall be filed with the exchange\nadministration agencies for records.\nPROPERTIES\nProperty interests owned by our Group\nUni-Asia Guangzhou acquired 14 office units with gross floor area of 1,304 sq m of the China Shine\nPlaza, a commercial development in the Tianhe commercial district in Guangzhou. Going forward, we will\ncontinue to look for investment opportunities in distressed properties and/or other properties in the PRC\nand other parts of Asia. Please refer to the section entitled “General Information On Our Group –\nBusiness Overview – Alternative Assets Investment” in this Prospectus for details on our investments.\nLocation\nHeld by\nGross Area\nUse of Property\n7/F, 9 Lin He Xi Road, Tianhe\nUni-Asia Guangzhou\n1,304 sq m\nOffice \nDistrict, Guangzhou\nProperty interests leased by our Group\nWe currently lease the following real properties:\nUse of\nLocation\nTenure\nGross Area\nProperty\nAnnual Rental \nLessor\nSuite A, 26.F.,\n3 years expiring\n10,159\nOffice of\nHK$3,413,424\nGiven  \nAdmiralty Centre,\n31 October 2008\nsq ft\nUni-Asia\nInvestments  \nTower I, 18 Harcourt \nFinance\nLimited\nRoad, Admiralty, \nCorporation\nHong Kong\nARK Mori Building,\n3 years expiring\n46.8\nOffice of\nYen 7,200,888(1)\nMori Building \nWest 24F, 1-12-32,\n31 July 2009\nsq m\nUni-Asia\nCo., Ltd.\nAkasaka, Minato-ku,\nFinance \nTokyo, Japan\nCorporation \n107-6024\n(Japan)\nApartment B, 5/F.,\n2 years expiring\n2,700\nDirector’s\nHK$780,000\nGrandchamp  \nTwin Brook, No. 43\n21 April 2009\nsq ft\napartment\nEnterprise  \nRepulse Bay Road,\nLimited \nHong Kong\nApartment 5B,\n2 years expiring\n2,375\nDirector’s\nHK$672,000\nThe Repulse \nTaggart Tower II,\n30 April 2008\nsq ft\napartment\nBay\nThe Repulse Bay, \nCompany, \n109 Repulse Bay\nLimited \nRoad, Hong Kong\n\n\nUse of\nLocation\nTenure\nGross Area\nProperty\nAnnual Rental \nLessor\n261 River Valley Road,\n1 year expiring\n3,142\nDirector’s\nS$126,000\nChung Swee \n#16-17 Aspen Heights,\n31 October 2007\nsq ft\napartment\nKiat  \nSingapore 238307\nFlat F1, 5/F., Block F,\n2 years expiring\n1,988\nExpatriate\nHK$552,000\nProfit Power  \nBeverly Hill, No. 6\n24 January 2009\nsq ft\napartment\nInternational  \nBroadwood Road, \nLimited\nHong Kong\nFlat A, 10/F, Tower 9,\n2 years expiring\n1,438\nExpatriate\nHK$642,000\nChang Tze-  \nThe Leighton Hill, \n11 October 2008\nsq ft\napartment \nKwan\n2B Broadwood Road, \nHong Kong \nFlat 04, 14/F,\n2 years expiring\n1,898\nExpatriate\nHK$504,000\nSilver Nicety \nSunning Court, \n9 February 2009\nsq ft\napartment\nCo Ltd \n8 Hoi Ping Road, \nCauseway Bay, \nHong Kong\n8 Shenton Way,\n3 years expiring\n236\nOffice of\nS$165,303.84\nMGP Raffle\n#37-04, \n30 November 2009\nsq m\nUni-Asia\nPte. Limited\nSingapore\nCapital\n068811\n(Singapore) \nLtd \n180A Bencoolen\n2 years expiring\n86\nExpatriate\nS$25,200\nCheong Kee \nStreet, #07-02,\n31 August 2008\nsq m\napartment \nFong and\nSingapore 189647\nLee Mun       \nTeng\nRoom 2401,\n1 year expiring\n55\nOffice of\nRMB33,000\nGuangdong \nGuangdong Foreign\n30 November 2007\nsq m\nUni-Asia\nTea Import &\nEconomic & Trade\nGuangzhou\nExport Co., \nBuilding\nLimited\n351 Tianhe Road\nProperty\nGuangzhou\nManagement\nPRC\nSub-Company\nNote:\n(1)\nFor 2006 only, the landlord has granted a rebate of the rental for the first two months of the year, equivalent to a total of Yen\n997,670.\nPROSPECTS \nShipping\nShipping is a global industry which is generally influenced by demand and supply dynamics such as the\ndemand for movements of cargos, the resultant tonne-mile demand of vessels as well as the supply of\nvessels tonnage capacity. Fuel cost, which typically makes up a significant portion of the operating cost of\nships, is also a factor affecting the performance of the shipping industry.\nShipping comprises different shipping sectors servicing different industries, governed under different\nregulations and each having its own supply and demand dynamics. The major types of ships include dry\nbulk ships, container vessels, product tankers and crude tankers. Dry bulk ships carry dry commodities\nsuch as ore, coal, grains, fertiliser, bauxite, soy beans, cement, potash and salt. Container vessels carry\nmetal boxes containing cargoes such as cars and equipment. Product tankers carry mainly refined oil\nproducts such as gasoline, diesel and other non-refrigerated cargos such as edible oils and chemicals.\nCrude tankers carry crude oil and petroleum.\nGENERAL INFORMATION ON OUR GROUP\n115\n\n\nThe dry bulk shipping trade is usually dependent on the demand for and price of commodities. Steel\nproduction is a key driver of the dry bulk shipping trade through seabourne demand for coking coal and\niron ore. The container shipping trade is usually dependent on the global economic growth, trade growth,\nindustrial production and consumer consumption. The product and oil tanker industry is usually\ndependent on global industrial production, refinery throughput, utilisation rate in refineries, global crude\noil inventory levels and the weather season.\nWe believe that the demand for maritime vessels will be driven largely by the continued growth in the\nworld economy and seaborne trade. Such demand will provide us with opportunities to leverage on our\ntrack record and experience in structured finance and ship charter arrangements to establish new client\nrelationships and to offer our existing clients innovative and customised structured finance solutions as\nwell as ship charter arrangement services.\nStructured finance focusing on the shipping industry is dominated mainly by financial institutions. We\nbelieve that we are able to compete effectively with them by leveraging on our track record, our wide\nnetwork and our strong relationships with our business partners and customers, which include\nestablished shipping banks and shipowners.\nWhilst the shipping industry may be cyclical, we believe that our structured finance operations are not\nsignificantly subject to such cycles as we believe that there continues to be opportunities for us to provide\nstructured financing solutions as ship renewal is an ongoing process. In a shipping down-cycle, we\ngenerally observe the trend of older ships being scrapped and new ones being built given the lower cost\nof new builds. In the shipping up-cycle, we generally observe that there will be an increase in demand for\nships as ship owners seek to increase their fleet to capitalise on the favourable freight rates. We believe\nthat there continues to be opportunities for us to provide structured finance solutions and ancillary ship\nbrokerage services at different stages of the shipping cycle. We further believe that the shipyards’ order\nbooks in the coming years will continue to be sustained and thus present opportunities for us to provide\nmore structured finance solutions to shipowners and operators.\nAlternative Assets Investment\nThe Alternative Assets investments class includes investments in ships, distressed assets and real\nestate. Distressed assets typically include debt obligations such as junk bonds, corporate bonds,\ncommercial and industrial loans, credit card receivables and auto loans. Investors in distressed assets\npurchase debt obligations of companies that are financially troubled and are struggling or are unable to\nservice their debt obligations and they earn a return through recovery of distressed debt, through\nappreciation in the value of the distressed debt investment, or through leveraged buyouts.\nOur investments in ships are usually made through equity interests in ship owning companies or through\nPerformance Notes held in ship investment funds. Our direct and indirect investments in the different\ntypes of ships are made after careful consideration and due diligence and based on our Directors’ outlook\nof the various shipping sectors. We believe that we can leverage on our expertise knowledge in the\nshipping sector to tap on the opportunities to source for new ship investments and/or to buy or sell\nmaritime vessels.\nOur investments in distressed assets are mainly made through NPLs and we are also seeking\nopportunities in the distressed real estate market in Asia (excluding Japan). Such opportunities will be\ndependent on factors such as the respective countries’ macroeconomic environment and policies,\nperformance in key industry sectors, access to capital and liquidity, competition and prevailing market\nconditions. We believe that we will be able to leverage on our well-established network and familiarity with\nthe distressed asset markets in the region to identify and invest in suitable distressed assets.\nGENERAL INFORMATION ON OUR GROUP\n116\n\n\nThe performance of Alternative Assets investments are dependent on the unique characteristics of each\ntype of alternative asset and the country of origin of these assets. These investments are therefore\nrelatively opportunistic in nature. We believe that such non-mainstream opportunities are available in Asia\nand we intend to seek new ship investments, real estate investments and distressed asset investments in\nAsia. We also believe that our experience in Alternative Assets investments, our capabilities in deal-\nmaking, due diligence, valuation, structuring and financing, together with our well-established network of\ncontacts in Asia will enable us to effectively identify and evaluate opportunities for cross-border\ninvestments in these assets.\nORDER BOOK\nDue to the nature of our business, we do not maintain an order book. Our revenue stream includes\nrevenue from fee income, investment returns, and other income. Based on our mandates secured as at\nthe Latest Practicable Date, we expect to recognise fee income including arrangement, agency and\ncharter brokerage fees and administration fees, of approximately US$10.5 million in FY2007. We will\ncontinue to receive administration fees from the fleet of vessels held under the funds administered by us.\nWe also expect to receive fee income as well as investment returns in respect of new investment funds\nincluding the Akebono Fund referred to in the section entitled “General Information on our Group –\nBusiness Strategy and Future Plans” below.\nBUSINESS STRATEGY AND FUTURE PLANS\nWe aim to be a leading Asia-based structured finance arrangement and Alternative Assets direct\ninvestment firm. Our primary business strategy is to build on our existing strengths in structured finance\nand Alternative Assets investments to provide one-stop and innovative financing solutions to our clients\nas well as to explore and develop Alternative Assets investment opportunities by leveraging on our\nexpertise and relationships.\nWe intend to continue to look for new market opportunities by leveraging on our core capabilities within\nour specialist fields. Globalisation and economic growth also offer us opportunities in terms of cross-\nborder financing and investments and allow us to build a wider presence and network within the region.\nThe principal elements of our strategy for growth and expansion of our business are described below.\nContinue to focus and leverage on our integrated capabilities and well-established relationships\nWe intend to continue to focus on our specialist fields in structured finance arrangements and Alternative\nAssets investments and to build on our well-established relationships with clients.\nWe aim to build on our well-established relationships with our structured finance clients by offering\ncustomised products to meet their specific requirements. We are sensitive to our clients’ needs and we\nbelieve that such client-driven product customisation strategy applied through our comprehensive range\nof innovative financial products and services will strengthen our future growth.\nWe also intend to focus on investments in Alternative Assets through our various credit and risk\nassessments, sound management, industry and geographical diversification as well as strong internal\nprocesses and practices. While our associated company, Capital Advisers, will continue to play an integral\nrole in our property investment in Japan, we also plan to look for opportunities in property investment in\nother parts of Asia.\nStructured Finance: Expand and diversify our client portfolio and broaden our geographic\ncoverage within Asia\nWe have been growing our revenues since our establishment in 1997. We believe that a key factor to this\ngrowth has been the introduction of new and innovative financial products to our clients. We are focused\non the acquisition of new clients as well as developing existing client relationships. We believe that there\nare opportunities in the area of structured finance arrangement, particularly in the shipping sector. We\nintend to concentrate on building new relationships with regional shipping companies by offering tax-\nGENERAL INFORMATION ON OUR GROUP\n117\n\n\ndriven leasing and bareboat and time charter opportunities tailor-made specifically to clients’\nrequirements and investment appetite. In such transactions, our Company will act as finance arranger\nand will not participate as a lender. Through our role as finance arranger, we intend to secure up-front\nfees via structured finance arrangements and to receive brokerage commission through the arrangements\nof charter including bareboat and time charters.\nAlternative Assets Investment: Expand and diversify our investment portfolio and broaden our\ngeographic coverage within Asia\nWe intend to continue to search for suitable Alternative Assets investments that will meet our stringent\ncriteria to expand and diversify our Alternative Assets investment portfolio. At the same time, we are\ncontinuously working on recovering our NPL portfolio to maximise our returns on our investments. We\nintend to leverage on our expertise and network in distressed asset investments in the Asian region to\nfurther explore and develop investment opportunities in other parts of Asia such as the PRC and\nThailand. We will continue to identify investment opportunities and intend to utilise our capital to directly\ninvest in distressed assets and/or real estate assets in the PRC and other parts of Asia.\nFor example, we intend to invest directly into new sectors such as distressed real estate in Asia\n(excluding Japan), hotels and residential and other commercial properties to make use of our synergy\nand the capabilities of Capital Advisers and our Alternative Assets investment.\nNew ship investment funds\nAs part of our principal business to invest in shipping assets either directly or through specialised fund\nvehicles, we directly invested in three container vessels in 2005.\nWe intend to continue to seek opportunities to invest in and/or launch new joint ventures in ship\ninvestments. As such, we have on 17 April 2007 launched a new fund in Singapore, the Akebono Fund,\nto take advantage of the Maritime Port Authority’s Maritime Finance Incentive Scheme. The Akebono\nFund, which will have an initial size of approximately US$300 million, has acquired a product tanker and a\nbulk carrier and will invest in container vessels and another product tanker. Our committed investment\nportion in this fund is US$15.0 million, which payment obligation will crystallise upon the acquisition of the\nvessels by the fund. On 13 September 2006, our wholly-owned subsidiary, Uni-Asia Capital (Singapore)\nLimited, was designated as an ASIM under the Singapore Income Tax Act by the MPA. At the same time,\nthe MPA also granted a designation of ASIE for the Akebono Fund.\nOur ASIM designation is for an initial period of 10 years commencing on the subscription date of the\nAkebono Fund by investors, subject to a review by MPA at the end of the fifth year. Pursuant to our ASIM\ndesignation, we are eligible for a concessionary tax rate of 10% for income derived from managing an\nASIE, such as the Akebono Fund.\nThe ASIE designation for the Akebono Fund is for an initial period of up to 10 years commencing from\nthe date of its establishment, subject to a review by MPA at the end of the fifth year. Pursuant to its ASIE\ndesignation, the Akebono Fund is eligible for tax exemption on income derived from the chartering or\nfinance leasing of (a) any sea-going ship to (i) a person who is neither resident in nor a permanent\nestablishment in Singapore; (ii) an approved international shipping enterprise; or (b) any sea-going\nSingapore ship to persons described in (a)(i) and (a)(ii) above or a shipping enterprise within the meaning\nof Section 13A of the SITA. The tax exemption will be valid for the life of vessels acquired by ASIE during\nthe incentive period of up to 10 years. For instance, if an ASIE acquires a vessel during the 10-year\nincentive period, charters it for 20 years and disposes of it thereafter, lease income on the charter will\nenjoy tax exemption for the entire 20 years. The qualifying income of the Akebono Fund shall also\ninclude hedging gains derived in connection with the management of its portfolio of vessels, and share of\nprofits or dividends remittances from shipholding special purpose vehicles owned by the Akebono Fund\nthat are declared out of qualifying activities.\nIn addition to the launch of the Akebono Fund and our investment in Rich Containership, we also intend\nto directly invest in one additional container vessel, due for delivery in 2008.\nPlease refer to the section entitled “Use of Proceeds” in this Prospectus for further details.\nGENERAL INFORMATION ON OUR GROUP\n118\n\n\nORGANISATION STRUCTURE\nThe following chart shows our management reporting structure as at the Latest Practicable Date.\n \nStructured Finance \nDivision \nExecutive Director & \nHead of Structured \nFinance Division\n \nMichio Tanamoto\n \nAsset Finance \nDepartment (AFD)\n \nHead of AFD (EVP)\n \nMasaki Fukumori\n \nStruc\n tured Finance \nDepartment (SFD)\n \nHead of SFD (SVP)\n \nKenji Fukuyado\n \nDistressed Assets/ \nProperties Investment\n \n Department (DAID)  \nHead of DAID (EVP)\n \nMasahiro Iwabuchi\n \nFinance Department\n \nHead of Finance \n(SVP)\n \nClementine Man\nTing Ng\n \nCEO\n \nKazuhiko Yoshida\n \nBoard of Directors\n \nManagement Committee \n \n \nMotokuni Yamashiro\n \nKazuhiko Yoshida\n \nMichio Tanamoto\n \nAgency & Documentation \nDepartment (ADD)\n \nHead of ADD (EVP)\n \nThomas Cheung Fook-Loi\n \nMANAGEMENT REPORTING STRUCTURE\n119\n\n\nDIRECTORS \nOur Company has nine directors, including our three Independent Directors. The Management Committee\nconsists of three Directors, namely Mr. Yamashiro, Mr. Yoshida and Mr. Tanamoto.\nThe following table provides information regarding our Directors as at the date of this Prospectus.\nCountry of\nPrincipal\nName\nAge\nAddress\nPrincipal Occupation\nResidence\nExecutive Directors\nMotokuni Yamashiro\n65\nFlat B, 5/F., Twin Brook,\nChairman of the\nHong Kong \nNo. 43 Repulse Bay Road,\nCompany  \nHong Kong\nKazuhiko Yoshida\n55\nApartment 5B,\nChief Executive Officer\nHong Kong \nTaggart Tower II,\nof the Company  \nThe Repulse Bay, \n109 Repulse Bay Road, \nHong Kong\nMichio Tanamoto\n50\n261 River Valley Road,\nChief Operating Officer\nSingapore \n#16-17 Aspen Heights,\nof the Company \nSingapore 238307\nNon-Executive Directors\nHamilton Jian Ren Chueh\n58\n9Fl., 59 Sec. 1 Ho-ping\nPresident, Evergreen\nTaiwan \nEast Rd, Taipei, Taiwan\nInternational Corp.\nJörg Wilhelm Schelp\n52\nFrahmredder 102A, 22393,\nSenior Vice President,\nGermany \nHamburg Germany\nHSH Nordbank AG\nRobert Van Jin Nien\n59\n13D, Dragon Garden,\nExecutive Director,\nHong Kong \nNo. 1 Chun Fai Terrace,\nHopewell Holdings Limited \nTai Hang Road, Hong Kong\nIndependent Directors\nV-Nee Yeh\n48\n24/F., Hong Villa, No. 12,\nChairman, Argyle Street\nHong Kong \nBowen Road, Hong Kong\nManagement Limited\nAng Miah Khiang\n53\n17A Brighton Avenue,\nExecutive Director,\nSingapore \nSingapore 559252\nDP Information Network \nPte Ltd\nRonnie Teo Heng Hock\n58\n19 Lentor Plain,\nManaging Director,\nSingapore \nSingapore 786521\nFinancial Re-engineering \nPte. Ltd.\nOur Directors’ working and business experience are set out below:\nExecutive Directors \nMr. Motokuni Yamashiro is the Chairman, Director and one of the founders who established our\nCompany in 1997. Mr. Yamashiro is responsible for business development and the overall planning of our\nGroup. He was with The Hokkaido Takushoku Bank since 1967 and was the chairman of Takugin\nInternational (Asia) Limited, the offshore merchant banking arm of The Hokkaido Takushoku Bank\nbetween 1992 and 1997. Takugin International (Asia) Limited provided structured finance solutions for the\naviation and shipping industries, provided project financing for construction of properties, including hotels\nand buildings and also provided corporate financing to Chinese financial institutions and other\ncorporations. He has over 40 years of experience in banking. Since 1993, Mr. Yamashiro has been a\nDIRECTORS, MANAGEMENT AND STAFF\n120\n\n\nmember of the China Committee of the Japanese Ministry of Finance, and in 1995, he was awarded the\nShenzhen Honorary Citizenship by the Shenzhen Municipal Government. Between 2002 and 2006, Mr.\nYamashiro was an executive director in Capital Advisers. Mr. Yamashiro graduated with a bachelor’s\ndegree in law from Keio University of Japan in 1967. In addition to Japanese, he speaks fluent Mandarin\nand Cantonese.\nMr. Kazuhiko Yoshida is the Chief Executive Officer, Director and one of the founders who established\nour Company in 1997. Mr. Yoshida is responsible for business development and the overall management\nof our Group. He has over 27 years of experience in banking and credit analysis, specialising in\nstructured finance of maritime vessels and aircraft. Between 1986 and 1992, he was a senior manager in\nSumitomo Trust and Banking Co., Ltd. following which, he was a director/deputy general manager of\nTakugin International (Asia) Limited, the offshore merchant banking arm of The Hokkaido Takushoku\nBank, from 1992 to 1997. Takugin International (Asia) Limited provided structured finance solutions for the\naviation and shipping industries, provided project financing for construction of properties, including hotels\nand buildings and also provided corporate financing to Chinese financial institutions and other\ncorporations. Mr. Yoshida is also currently a director of Capital Advisers. Mr. Yoshida obtained a bachelor’s\ndegree in engineering from Hokkaido University in Japan in 1976.\nMr. Michio Tanamoto is the Chief Operating Officer, Director, and one of the founders who established\nour Company in 1997. Mr. Tanamoto is responsible for the marketing of our Group’s structured finance\nand ship investment businesses. He has over 26 years of experience in banking based in Japan, Hong\nKong and Singapore. In 1980, Mr. Tanamoto joined The Hokkaido Takushoku Bank and was the senior\nmanager of Takugin International (Asia) Limited, the offshore merchant banking arm of The Hokkaido\nTakushoku Bank between 1988 and 1993. Takugin International (Asia) Limited provided structured\nfinance solutions for the aviation and shipping industries, provided project financing for construction of\nproperties, including hotels and buildings and also provided corporate financing to Chinese financial\ninstitutions and other corporations. Following which, Mr. Tanamoto was the deputy general manager of the\nSingapore Branch of The Hokkaido Takushoku Bank from 1995 to 1997. Mr. Tanamoto is also currently a\ndirector of Capital Advisers. He obtained a bachelor’s degree in law from Hitotsubashi University of Japan\nin 1980.\nNon-Executive Directors\nMr. Hamilton Jian Ren Chueh was appointed as a Non-Executive Director of the Company in March\n2005. Mr. Chueh has over 33 years of experience in shipping and air transportation. In 1974, he began\nhis career with the Evergreen Group, where he was a manager in Evergreen Marine Corp. (Taiwan) Ltd,\nwhich was listed on the main board of the Taiwan Stock Exchange in 1987. He joined Evergreen\nInternational Corp as an executive officer in 1982, where he was their president between 2004 and 2006,\nand the Vice Chairman since January 2007. Mr. Chueh is also currently an executive director at\nEvergreen Reinsurance Company and Greencompass Marine S.A. Mr. Chueh holds an executive\nmaster’s degree in business administration in shipping and transportation management from the National\nTaiwan Ocean University.\nMr. Jörg Wilhelm Schelp was appointed as a Non-Executive Director of the Company in January 2005.\nMr. Schelp has extensive experience in ship finance. In 1986, he joined HSH Nordbank AG and is\ncurrently a senior vice-president in the shipping department. Mr. Schelp was responsible for managing the\nbank’s shipping client relationships in Asia until recently, when he took over such client relationships in\nthe Middle East and Europe. Mr. Schelp received a law degree at the University of Bielefeld and was\nadmitted to the German Bar Association in 1983.\nMr. Robert Van Jin Nien was appointed as a Non-Executive Director of the Company in June 2006. Mr.\nNien has extensive experience in property and infrastructure projects in Hong Kong and the PRC Pearl\nRiver Delta area. Between 1972 and 1976, he was a manager at Citibank, N.A., following which he joined\nand, since 1980, has been an executive director of Hopewell Holdings Limited, which is listed on the main\nboard of the Stock Exchange of Hong Kong Limited. Mr. Nien holds a bachelor’s degree in economics\nfrom the University of Pennsylvania and a master’s degree in business administration from the Wharton\nGraduate School of Business.\nDIRECTORS, MANAGEMENT AND STAFF\n121\n\n\nIndependent Directors \nMr. V-Nee Yeh was appointed as an Independent Director in April 2005. Mr. Yeh is a co-founder of Value\nPartners Limited and the chairman of Argyle Street Management Limited. He was a council member of\nthe Hong Kong Stock Exchange until its merger into the Hong Kong Exchanges and Clearing Limited and\nwas a member of the Hong Kong Stock Exchange’s Listing Committee until May 2006. He was also a\nmember of the Listing Committee of the China Securities Regulatory Commission from 1993 to 2003. Mr.\nYeh sits on the Takeovers & Mergers Panel and the Takeovers Appeals Committee of SFC. He is also a\ndirector of Arnhold Holdings Limited, Kingway Brewery Holdings Limited and Next Media Limited, which\nare listed companies in Hong Kong. Mr. Yeh worked with the Lazard Houses (New York, Hong Kong and\nLondon) in corporate finance, capital markets and risk arbitrage from 1984 onwards, until his resignation\nfrom Lazard Brothers Capital Markets as a partner in 1990. He graduated at the School of Law at\nColumbia University and was admitted a member of the California Bar Association in 1984.\nNotwithstanding such directorships, our Board of Directors believe that Mr. Yeh is able to devote sufficient\ntime to the affairs of our Company. In this regard, our Board has discussed with Mr. Yeh on the frequency\nof the meetings of the Board of Directors, as well as the meetings of the Board Committees of which he\nis a member. Mr. Yeh is fully aware of the commitment required of him in his role as our Independent\nDirector, including his duties as the Chairman of our Remuneration Committee. Since Mr. Yeh’s\nappointment as our Independent Director in April 2005, our Board has noted his efficiency in responding\nto our requests and enquiries. Our Board has also noted the high level of commitment demonstrated by\nhim attending most of our Board meetings and/or participating in conference calls and contributing to\ndiscussions with helpful and practical perspectives. In addition, our Board values the contribution of\nfinancial expertise and corporate experience from Mr. Yeh, which would complement the background of\nthe other members of the Board. For the reasons set out above, our Board is of the view that Mr. Yeh will\nbe able to commit sufficient time and attention to the matters of our Company. Our Board also believes\nthat Mr. Yeh will be able to fulfil his responsibilities to our Company and discharge his duties to our\nCompany as an Independent Director of our Company.\nMr. Ang Miah Khiang was appointed as our Independent Director on 26 June 2007. Mr. Ang is currently\nthe executive director of DP Information Network Pte Ltd (“DP”), a credit and business information\nbureau, and is responsible for corporate and strategic development. Prior to joining DP\n, Mr. Ang was the\nmanaging director of GE Commercial Financing (Singapore) Ltd. He is also independent director of\nseveral listed companies in Singapore. Mr. Ang holds a bachelor of accountancy degree from the then-\nUniversity of Singapore and is a Certified Public Accountant.\nMr. Ronnie Teo Heng Hock was appointed as our Independent Director on 26 June 2007. Mr. Teo is\ncurrently the managing director of Financial Reengineering Pte. Ltd., a management consulting firm\nspecialising in providing investment and treasury advisory services and project financing. Mr. Teo was\npreviously the managing director of DBS Asset Management Ltd and the general manager of DBS\nFinance Limited. Mr. Teo holds a bachelor of social sciences (Honours) degree in economics from the\nthen-University of Singapore.\nSave that Mr. Hamilton Jian Ren Chueh, Mr. Jörg Wilhelm Schelp and Mr. Robert Van Jin Nien are\nexecutive officers or directors of Evergreen International S.A., HSH Nordbank and Hopewell Holdings\nLimited respectively, which are our Substantial Shareholders, none of our Directors and Executive\nOfficers are related to each other or our Substantial Shareholders.\nDIRECTORS, MANAGEMENT AND STAFF\n122\n\n\nEXECUTIVE OFFICERS \nOur Company has five Executive Officers. The following table provides information regarding our\nExecutive Officers as at the date of this Prospectus.\nCountry of\nPrincipal\nName\nAge\nAddress\nPrincipal Occupation\nResidence\nMasaki Fukumori\n45\nFlat A, 10/F., Tower 9, \nExecutive Vice President,\nHong Kong\nThe Leighton Hill,\nHead of Asset Finance \n2B Broadwood Road,\nDepartment \nHong Kong\nMasahiro Iwabuchi\n44\nRm. 1, 5/F., Block F,\nExecutive Vice President,\nHong Kong \nBeverly Hill, No. 6\nHead of Distressed Asset/ \nBroadwood Road,\nProperties Investment \nHong Kong\nDepartment  \nKenji Fukuyado\n43\nFlat 1404 Sunning Court,\nSenior Vice President,\nHong Kong \n8 Hoi Ping Road,\nHead of Structured \nCauseway Bay, Hong Kong\nFinance Department\nClementine Man Ting Ng\n36\nUnit 1633, Tower 4,\nSenior Vice President,\nHong Kong \nHong Kong Parkview,\nHead of Finance \n88 Tai Tam Reservoir Road,\nHong Kong\nThomas Cheung Fook-Loi\n51\n12A Monmouth Place,\nExecutive Vice President,\nHong Kong\n9L Kennedy Road,\nHead of Agency and \nWanchai, Hong Kong\nDocumentation Department\nOur Executive Officers’ working and business experience are set out below:\nMr. Masaki Fukumori joined our Group in August 1997 and acted as Head of our Structured Finance\nDivision until he initiated the Asset Finance Department in 2002. He is the executive vice president\nresponsible for our Asset Finance Department and information technology. He has extensive experience\nin marketing and syndication in the banking industry specialising in the shipping and aviation sectors\nspanning over 20 years. Between 1985 and 1993, he was a marketing manager at Hokkaido Takushoku\nBank. After which, he was a senior marketing manager at Takugin International (Asia) Ltd. from 1993 to\n1997. He is also currently a director of Akebono Capital Limited, Searex, Kabushikikaisha Tenshodo,\nHarmonic Shipping S.A., Fortitude Containership S.A., Union Containership S.A., Falcon Containership\nS.A. and Sunrise Shipping S.A. Mr. Fukumori holds a bachelor’s degree in business administration from\nYokohama National University obtained in 1985.\nMr. Masahiro Iwabuchi was appointed as the executive vice-president responsible for the distressed\nasset/properties investment department in April 1998. He has extensive experience in the banking\nindustry throughout Asia including Japan, Indonesia, Singapore, Hong Kong and the PRC, having spent\nsome 13 years with The Hokkaido Takushoku Bank. He is also currently a director of AAA. Mr. Iwabuchi\ngraduated with a bachelor’s degree in economics from Hirosaki University of Japan in 1985. In addition to\nJapanese, Mr. Iwabuchi speaks fluent Mandarin.\nMr. Kenji Fukuyado was appointed as the senior vice-president responsible for the structured finance\ndepartment in January 2006. Prior to joining us, Mr. Fukuyado worked in the banking and finance industry\nin Hong Kong and Japan and was a manager at The Hokkaido Takushoku Bank between 1987 and 1998.\nHe joined our Group in 2001 and was the Vice President of Uni-Asia Finance Corp (Japan) from April\n2001 to May 2003 and the managing director from May 2003 to December 2005. Mr. Fukuyado graduated\nwith a bachelor’s degree in law from Waseda University in 1987.\nDIRECTORS, MANAGEMENT AND STAFF\n123\n\n\nDIRECTORS, MANAGEMENT AND STAFF\n124\nMs. Clementine Man Ting Ng joined our Company in February 2004 and is the senior vice-president\nresponsible for the finance department. She has over 14 years’ experience in the financial industry,\nincluding fund management, private equity and equity research. Ms. Ng started her career in Hong Kong\nas a manager with the hedge fund group Gaiacorp in 1992 and took on various responsibilities in the\nfinance industry prior to joining us in February 2004, including an investment analyst at Amsteel Finance\nCorporation, an investment associate with the direct investment arm of AIG Investment Corporation, and\na director at Kaizen Property Management Limited. Ms. Ng graduated with a bachelor’s degree in\ncommerce from the University of British Columbia, Canada and holds a master’s of business\nadministration degree from the Judge Business School, University of Cambridge, UK.\nMr. Thomas Cheung Fook-Loi joined our Company in May 1997 and is the executive vice-president\nresponsible for our Group’s agency and documentation department. Mr. Cheung has over 20 years of\nexperience in credit and documentation work at European and Japanese banks. He started his banking\ncareer at Barclays Bank in 1977 and joined the then Banque Paribas as an assistant manager in 1986.\nPrior to joining us, Mr. Cheung was an assistant general manager at Takugin International (Asia) Ltd\nbetween 1987 and 1997.\nSave as disclosed in the section entitled “Directors”, there is no arrangement, or understanding with a\nSubstantial Shareholder, customer or supplier of our Company or any other person, pursuant to which\nany of our Directors or Executive Officers was selected as a Director or Executive Officer of our\nCompany.\nMANAGEMENT COMMITTEE \nThe Management Committee has the responsibility to maintain oversight of our Group’s business as a\nwhole. Its authority includes each division’s business targets, budgets, new clients/transactions and\nhuman resources related policies.\nThe Management Committee oversees and monitors the activities of the Structured Finance, Distressed\nAssets Investment and Ship Investment departments and meets regularly once each month or when\nneeded. Members of the Management Committee include Mr. Yamashiro, Mr. Yoshida and Mr. Tanamoto.\nMr. Yoshida is the Chairman of the Management Committee and is responsible for the Distressed\nAssets/Properties Investment Department and Mr. Tanamoto is responsible for the Structured Finance\nand Asset Finance (Ship Investment) Departments. Each Executive Director is responsible for the\nexecution of the relevant department’s budget, strategy and internal organisation, such as headcount\nremuneration, staff reporting lines, business targets and departmental procedures.\nThe Management Committee has the authority to approve transactions with a net value of up to 10% of\nour Group’s net worth at the last audited balance sheet date, except for loans to or investment in Capital\nAdvisers, where the authority to approve relates to transactions of up to a total value of US$12 million.\nAny transaction exceeding the Management Committee’s authority of approval would be subject to Board\napproval.\nProposed finance arrangement transactions are screened by the Management Committee, based on\nfactors such as potential return, risks, market conditions and testing the assumptions which underlie the\nproposed transaction. Approval is granted to deals that have a reasonable likelihood of success and meet\nour Group’s risk/return criteria.\n\n\nInternal Investment Approval Process\nEach department is expected to seek internal approval before making an investment. Proposed\ninvestments need to go through a three-stage approval process depicted in the chart above.\nIn the first stage a report would need to be prepared for approval and review by the Review Committee\ncomprising the Management Committee and various department heads. The Chairman of the Review\nCommittee and Management Committee will give approval or authorisation for the project team to\nproceed with the next stage of application. In the second stage, a detailed report and analysis would be\nprepared to be reviewed and approved by the Review Committee. Should the project meet our Group’s\ninvestment criteria, the Chairman will recommend the investment for final approval. In the final stage, a\ndetailed final report is submitted to Management Committee for their final approval. The Management\nCommittee will give the final approval for any investment project.\nTransactions are monitored on a continuous basis. A key person from the project team will be designated\nto monitor each investment. The Management Committee maintains oversight through direct contact with\nexecutives, a monthly status report from each department of its activities and latest results and a monthly\nand six-monthly budget from each department.\nRisk management policy\nOur Group’s principal risks are market risk, credit risk and foreign exchange risk. The following sets out a\ndescription of our Group’s risk management policy:\n(i) \nMarket risk and credit risk\nOur Group seeks to minimise these risks by performing detailed reviews of loan counterparties or asset\nissuers prior to purchase approval, and by either selling on participated loans to other parties or entering\ninto offsetting loans payable when Directors wish to preserve our Group’s liquidity. Our Group seeks to\nminimise adverse movements in market price of financial instruments by extensive due diligence\nprocedures to ensure acquisition at prices below their perceived fair value.\nHead of project \nteam sounds out \ninvestment idea to \nUni-Asia\nConcept Paper\nAppraisal Paper\nFinal \nInvestment \nReport\nStage 1 \nStage 2\nStage 3\nReview \nCommittee\nConcept Paper (CP) to be issued as quickly as possible\nAddressees of review committee have up to 5 days to comment on CP\nThe Chairman of review committee will give authorization to project  \nteam within 7 days from receipt of CP\nThe project team will provide bi-weekly status report on investment idea \nto review committee\nProject team will begin to prepare Appraisal Report (AP) following \nauthorization from Chairman of review committee\nReview \nCommittee\nAP to be issued after thorough due diligence by project team and\nsent to addressees\nReview committee to review AP and submit written comments \nwithin 7 days or as promptly as possible\nThe Chairman will give authorization to the project team to submit \nproject to Management Committee within 10 days. If approved, go \nto stage 3\nProject team will begin to prepare Final Investment Report  following \nauthorization from Chairman of review committee\nFinal Investment Report to be issued and sent to Management \nCommittee\nManagement\n \nCommittee\nMembers of Management Committee have not less than 7 days \nbefore a decision is due\nMeetings must be held in person. In the event member is absent, \nhe/she will forfeit his/her right to vote and attending members will \nmake decision based on unanimous vote\nAn official action sheet will be filled out \nMonitoring\nIf CP approved, go \nto stage 2\nIf AP approved, go \nto stage 3\nDIRECTORS, MANAGEMENT AND STAFF\n125\n\n\nDIRECTORS, MANAGEMENT AND STAFF\n126\n(ii) \nForeign exchange and interest rate risk\nOur Directors review the currency exposures and enter into foreign currency forward contracts when\nconsidered necessary to hedge against adverse currency movements. Our Group uses the following\nderivative instruments for both hedging purposes: Forward rate agreements are individually negotiated\ninterest rate futures that call for a cash settlement at a future date for the difference between a contracted\nrate of interest and the current market rate, based on a notional principal amount.\nCurrency and interest rate swaps are commitments to exchange one set of cashflows for another. Swaps\nresult in an economic exchange of currencies or interest rates (for example, fixed rate for floating rate) or\na combination of all these (i.e. cross-currency interest rate swaps). No exchange of principal takes place,\nexcept for certain currency swaps. Our Group’s credit risk represents the potential cost to replace the\nswap contracts if counterparties fail to perform their obligation. This risk is monitored on an ongoing basis\nwith reference to the current fair value, a proportion of the notional amount of the contracts and the\nliquidity of the market. To control the level of credit risk taken, our Group assesses counterparties using\nthe same techniques as for its lending activities.\n(iii)\nLiquidity risk\nOur Group will maintain sufficient cash and marketable securities, the availability of funding through an\nadequate amount of committed credit facilities and the ability to close out market positions.\nOur risk management policy with respect to market and credit risks in loans, ship investments and other\nmatters related to the shipping industry, is administered by our relevant/respective departments, who\nreport to the Management Committee on a monthly basis. In this regard, our asset finance department\nwill be responsible for market and credit risks in loans and ship investments, and our structured finance\ndepartment will be responsible to monitor the credit worthiness of our shipping clients for finance\narrangement. Our risk management policy with respect to foreign exchange, interest rate and liquidity\nrisks, is administered by our overall finance department, who reports to the Management Committee on a\nmonthly basis. Our risk management policy with respect to our direct investments in distressed assets\nand property is administered by our distressed assets/investment department, who is responsible to\nmonitor, among other things, the risks and issues relating to our distressed assets investments and the\neconomic and market conditions of the property market in the areas in which we have invested in or are\nconsidering to invest in. The distressed assets/investment department reports to the Management\nCommittee on a monthly basis.\nEMPLOYEES\nAs at the Latest Practicable Date, we employed a total of 32 full-time employees and we do not have any\npart-time employees.\nWe set out below the total number of our employees and the various departments in which they serve\nand their geographical distribution as at the end of each of FY2004, FY2005 and FY2006.\nDepartment\nFY2004\nFY2005\nFY2006\nStructured finance, asset finance, and ship investment\n7\n9\n11  \nand management\nDistressed assets investment and management\n4\n4\n4\nAgency and documentation\n3\n3\n3\nFinance and Accounting\n3\n3\n4\nExecutive Directors\n3\n3\n3\nGeneral affairs/others\n5\n5\n6\nTotal\n25\n27\n31\n\n\nDIRECTORS, MANAGEMENT AND STAFF\n127\nCountry\nFY2004\nFY2005\nFY2006\nHong Kong\n20\n21\n24\nSingapore\n2\n3\n4\nJapan\n3\n3\n3\nTotal\n25\n27\n31\nOur relationship with staff\nWe believe that our staff is one of our most valuable assets which has contributed to the success of our\nGroup. Since we came into existence, we have not experienced any significant turnover of staff nor any\ndisruption to our business operations due to labour disputes.\nBenefits\nHong Kong\nWe provide mandatory provident fund schemes for our staff in Hong Kong (“MPF schemes”), medical\ninsurance schemes, housing allowance scheme and certain allowances for our staff.\nUnder the MPF schemes, we are required to contribute 5% of the staff’s monthly relevant income subject\nto a maximum contribution of HK$1,000. Such contribution is not required for staff with a monthly relevant\nincome of less than HK$4,000. In addition to the mandatory contributions, we make a voluntary\ncontribution to top up the total contributions to a maximum of 10% of our staff’s monthly relevant income\nto the MPF scheme, depending on seniority of our staff.\nOur staff in Hong Kong are required to contribute 5% of their monthly relevant income or HK$1,000 to the\nscheme, whichever is lower and they may make additional voluntary contributions to the MPF scheme in\nany amount.\nFor staff joining before 1 July 1997, contributions from us and the staff are 100% vested in the staff as\nsoon as they are paid to the MPF schemes but all benefits derived from the mandatory contributions\nmust be preserved until the staff reach the retirement age of 65 (subject to exceptions such as early\nretirement between the ages of 60 to 64, death, total incapacity and permanent departure from Hong\nKong). For staff joining after 1 July 1997, the employer’s contribution under the MPF scheme will be\nvested in the staff according to a vesting schedule. Our contributions to the MPF schemes can be used to\noffset any long service payments or severance payments payable and it is deductible against profits tax.\nSingapore \nUnder the CPF scheme, we and our staff in Singapore have to contribute a total amount equal to 33% of\nthe total ordinary wages of local staff (below the age of 50) to the CPF scheme, subject to a maximum\nlevel of monthly relevant income of S$4,500 for the current year. Ordinary wage refers to monthly salary,\novertime, monthly allowances etc.\nCPF deduction is also applicable on the bonus portion of staff’s income, known as the Additional wage.\nThe Additional wage subject to CPF deduction is the difference between S$76,500 and the total ordinary\nwages subject to CPF contributions for the current year. This total amount (i.e. S$76,500) is currently\npegged at a level equivalent to 17 times the maximum level of monthly income which is subject to CPF\ndeduction.\nBoth the employer and its foreign employees are not required to contribute to the CPF scheme in respect\nof a foreign staff hired on an employment pass, work permit or professional visit pass.\nThe employer and its foreign employees are required to contribute to the CPF scheme in respect of\nforeign employees who are Singapore permanent residents. The mandatory CPF contribution in respect\nof Singapore permanent residents are at reduced rates of 9% in the first year following the time\npermanent resident status is granted to the foreign staff (4% from the employer and 5% from the\n\n\nemployee), 24% in the second year (9% from the employer and 15% from the employee), and thereafter\nat the full rate. The employer and employee may however, jointly apply to the CPF for either the employer\nor both the employer and employee to contribute to the CPF scheme at the full rate prescribed for\nSingapore citizens. Such application, once approved, is irrevocable, unless the contract of employment is\nterminated. The levels of contribution to the CPF by us and the aforementioned employees and our Group\nall assume that the employee’s salary is above S$750. Reduced contributions are applicable for salaries\nbelow this amount.\nThe maximum level of monthly income subject to CPF deductions for 2006 is S$4,500.\nFor staff below the age of 50, the total CPF contribution rate of 33% for year 2006 is made up of 20%\nfrom the staff and 13% from our Group.\nFor staff between the age of 50 to 55, the current total CPF contribution rate is 27% (18% from staff and\n9% from our Group) in 2006.\nContributions from us and the staff are 100% vested in the staff as soon as they are paid into the CPF\nschemes but all benefits derived from the mandatory contributions will be retained in each respective\nstaff’s account (subject to deduction for any amount that has been utilised under the approved withdrawal\nscheme for purchase of housing accommodation, etc.) until the staff reaches the retirement age of 62 or\nearlier.\nContributions paid by the staff and us (i.e. 20% and 13%) are expenses deductible against staff income\nfor personal income tax and profits for company corporate tax.\nJapan \nWe provide our employees with the health, pension insurance, workmen’s accident compensation and\nunemployment insurance schemes.\nEmployees who are permanent staff are covered by a health insurance scheme. We and our employees\nshare equally in the cost of the premium. The cost of the premium is paid monthly and the general\npremium rate was 8.2% of the respective salaries for each employee of the age of 40 or less and 9.45%\nfor employees of over 40 years in age. Under the scheme, 70% of medical costs is covered including\nhigh-cost medical benefits, transportation expenses, disability benefits, lump-sum allowance for childcare\nand nursing, maternity allowance and funeral expenses.\nOrdinary employees participate in the employees’ pension plan. Both the employer and the employee\nbear the insurance premium payment equally. We deduct the insurance premium from the employee’s\nmonthly salary. The premium rate was 13.934%.\nThe workmen’s Accident Compensation Insurance covers the expenses to compensate an employee for\ninjuries or diseases sustained or incurred during work or commuting to work. The insurance premium is\npaid by us. The premium was 0.5%. Benefits from this insurance cover includes the expenses of medical\ntreatment, absence from work for four days or more, compensation for any irrecoverable physical\nfunctional impediment or disability, compensation for the bereaved family in the case of an employee\npassing away and funeral costs of an employee who has passed away.\nUnemployment Insurance provides benefits to employees if they are made redundant. The premium is\nshared between us and our employee 1.05% and 0.7% respectively. The insurance premium is deducted\nfrom the employee’s monthly salary. This insurance provides benefits to job-seeking people who left\nusand have the will and the ability to work. To receive such benefits, the job-seeking person must have\nworked for the same employer as an insured employee for six months or longer and that person must\nhave worked for at least 14 days or longer during the past one year period prior to the date of\nunemployment.\nDIRECTORS, MANAGEMENT AND STAFF\n128\n\n\nPRC\nUnder PRC laws and regulations, a PRC-incorporated company must contribute to social welfare plans\n(including retirement insurance, unemployment insurance, medical insurance, and workmen’s accident\ncompensation insurance) for each of its employees.\nAs at the Latest Practicable Date, we do not have any direct employees in the PRC and therefore do not\ncontribute to the social welfare plans under PRC laws and regulations. In the event that we have any\nemployees in the PRC in the future, we will comply with such PRC laws and regulations as may be\nnecessary.\nREMUNERATION\nThe compensation paid to our Directors and Executive Officers for services rendered to us and our\nsubsidiaries on an aggregate basis and in remuneration bands during the last two most recent completed\nfinancial years and the current financial year (estimate) is as follows:-\nActual\nEstimated\nFY2005\nFY2006\nFY2007\nDirectors\nExecutive Directors\nMotokuni Yamashiro\nF\nF\nF\nKazuhiko Yoshida\nE\nF\nF\nMichio Tanamoto\nE\nE\nE\nNon-Executive Directors\nHamilton Jian Ren Chueh\nX\nX\nX\nJörg Wilhem Schelp\nX\nX\nX\nRobert Van Jin Nien\n–\nX\nX\nActual\nEstimated\nFY2005\nFY2006\nFY2007\nDirectors\nIndependent Non-Executive Directors\nV-Nee Yeh\nA\nA\nA\nAng Miah Khiang\n–\n–\nA\nRonnie Teo Heng Hock\n–\n–\nA\nExecutive Officers\nMasaki Fukumori\nE\nE\nE\nMasahiro Iwabuchi\nB\nB\nB\nKenji Fukuyado\nC\nB\nB\nClementine Man Ting Ng\nA\nB\nB\nThomas Cheung Fook-Loi\nB\nB\nB\nNotes:\nBand A: Compensation from S$1 to S$250,000 per annum.\nBand B: Compensation from S$250,001 to S$500,000 per annum.\nBand C: Compensation from S$500,001 to S$750,000 per annum.\nBand D: Compensation from S$750,001 to S$1,000,000 per annum.\nBand E: Compensation from S$1,000,001 to S$1,250,000 per annum.\nBand F: Compensation from S$1,250,001 to S$1,500,000 per annum.\nBand X: No compensation was paid for the relevant period.\nNo amounts have been set aside or accrued by our Group to provide for pension, retirement or similar\nbenefits for our Directors and Executive Officers.\nDIRECTORS, MANAGEMENT AND STAFF\n129\n\n\nSERVICE AGREEMENTS\nParticulars of Directors’ service contracts \nExecutive Directors\nMr. Motokuni Yamashiro has entered into a service agreement with our Company pursuant to which he\nhas agreed to act as an Executive Director for an initial term of one year with effect from 7 August 2007.\nEach of  Mr. Kazuhiko Yoshida and Mr. Michio Tanamoto has entered into a service agreement with our\nCompany pursuant to which each has agreed to act as an Executive Director for an initial term of three\nyears with effect from 7 August 2007. The term of service shall be renewed and extended automatically\non the expiry of such initial term for an indefinite term, unless and until either party has given at least six\nmonths’ written notice of termination or unless the employment is summarily terminated upon any breach\nby the employee.\nSeparately from the above, Mr. Motokuni Yamashiro, Mr. Kazuhiko Yoshida and Mr. Michio Tanamoto have\neach given an undertaking to our Company as follows:\n\u0002\nMr. Yamashiro has undertaken that he will not resign as an Executive Director of our Company and\nhe will not exercise any right to terminate any service agreement that he may enter into with our\nCompany within the period of one year commencing from the date of listing of our Company on the\nSGX-ST, and after such one-year period, within a period of one year commencing from the date of\nresignation of any other Executive Director, save that the foregoing undertaking shall terminate in\nthe event that a take-over offer has been made in accordance with the Singapore Code on Take-\novers and Mergers or any other applicable law or regulation (including Cayman Islands law) by a\nperson (whether individually or together with parties acting in concert with him) and subsequent to\nsuch take-over offer, more than 50% of the issued share capital of our Company is acquired or\notherwise controlled by that person (whether individually or together with parties acting in concert\nwith him); and\n\u0002\neach of Mr. Yoshida and Mr. Tanamoto has undertaken that he will not resign as an Executive\nDirector of our Company and he will not exercise any right to terminate any service agreement that\nhe may enter into with our Company within the period of three years commencing from the date of\nlisting of our Company on the SGX-ST, and after such three-year period, within a period of one\nyear commencing from the date of resignation of any other Executive Director, save that the\nforegoing undertaking shall terminate in the event that a take-over offer has been made in\naccordance with the Singapore Code on Take-overs and Mergers or any other applicable law or\nregulation (including Cayman Islands law) by a person (whether individually or together with parties\nacting in concert with him) and subsequent to such take-over offer, more than 50% of the issued\nshare capital of our Company is acquired or otherwise controlled by that person (whether\nindividually or together with parties acting in concert with him).\nEach of these Executive Directors is entitled to the respective basic salary and housing allowance set out\nbelow (after the first year of appointment, annual reviews of the housing allowance shall be made and\ndecided at the discretion of our Directors payable monthly in arrears). In addition, each of the Executive\nDirectors is also entitled to a discretionary performance bonus to be determined in the following manner:\nConsolidated Profit Before Tax (“CPBT”)\nPerformance Bonus, as a percentage of CPBT\nLess than US$8.0 million\n–\nUS$8.0 million or more but not more than \n7.50%\nUS$12.0 million\nMore than US$12.0 million\nThe aggregate of (i) 7.50% of the first US$12.0 million \nand (ii) 10.0% of the remaining amount of CPBT\nConsolidated Profit Before Tax means, in respect of a financial year of our Company, the audited\nconsolidated profit before tax of our Company, our subsidiaries and our associated companies and before\npayment of the respective performance bonus to the Executive Directors for that financial year, but\nexcluding any extraordinary profit. The performance bonus will be payable in respect of the financial year\nended 31 December 2007 and in respect of each financial year thereafter.\nDIRECTORS, MANAGEMENT AND STAFF\n130\n\n\nAn Executive Director may not vote on any resolution of the Directors regarding the amount of\nremuneration (including housing allowance and bonuses payable to him). The current basic annual\nsalaries and housing allowance of our Executive Directors are as follows:\nName\nAnnual Salary\nHousing Allowance\n(US$)\n(US$)\nMr. Motokuni Yamashiro\n180,000\n111,075\nMr. Kazuhiko Yoshida\n180,000\n104,412 \nMr. Michio Tanamoto\n180,000\n79,245\nOur Executive Directors’ salaries are paid net of any tax payable by the relevant Director in respect of any\nremuneration payable to the Director under the Service Agreements with our Company.\nUnder the Service Agreement, each of the Executive Directors has agreed that during the course of his\nemployment with our Company, he will not engage in the conduct of any other business and will not use,\ndivulge or communicate to any person any trade secrets or other confidential information of our Company.\nIn addition, each Executive Director has agreed that he will not, for 12 months after the termination of his\nemployment under his respective Service Agreement: (i) carry on for his own account any business\ncarried on by our Company, subsidiaries and associates within Hong Kong and Singapore; (ii) assist, with\ntechnical advice, any party engaged in the business of our Company, subsidiaries and associates within\nHong Kong and Singapore; (iii) solicit any party who at any time during the last 12 months of his\nemployment with our Company was a customer of our Company or any of our subsidiaries; and (iv) offer\nemployment by himself or solicit or arrange for employment by any other person of any of the employees\nof our Company or any of our subsidiaries.\nWe may terminate the Service Agreement by giving not less than six months’ notice to any Executive\nDirector. Following such termination, we shall pay to such Executive Director an amount of up to 70% of\nhis basic salary per month for 12 months following the date on which the Service Agreement has been\nterminated by us, provided that the Service Agreement is not terminated due to any breach committed by\nsuch Executive Director, and we have not waived the non-competition provisions described above.\nOur Company believes that such termination fees are fair and reasonable in view of the specialised\nnature of our Company’s business, together with the fact that the Executive Directors are subject to non-\ncompetition obligations (as described above) for a period of 12 months following the termination of their\nemployment under their respective Service Agreements. Given that the Executive Directors are precluded\nfrom seeking alternative employment during such 12-month restriction period, our Company believes that\nit is only fair and reasonable that the Executive Directors are compensated for agreeing to such\nrestrictions. In the event that the amount of termination fees payable is lower than 5% of the NTA of our\nCompany (based on the most recent audited financial statements of our Company at the time of the\npayment of the termination fees), the payment of such termination fees shall be subject to the approval of\nour Audit Committee. In the event that the amount of termination fees payable is equal to or exceeds 5%\nof the NTA of our Company (based on the most recent audited financial statements of our Company at\nthe time of the payment of the termination fees), the payment of such termination fees shall be subject to\nthe requirements of Chapter 9 of the SGX-ST Listing Manual in relation to interested person transactions,\nas the same may be amended or modified from time to time.\nSave as disclosed in the section entitled “Service Agreements – Particulars of Directors’ Service\nContracts”, none of our Directors has or is proposed to have a service contract with us other than\ncontracts expiring or determinable by the employer within one year without the payment of compensation\n(other than statutory compensation).\nSave for the above, there are no other existing or proposed service agreements entered into or to be\nentered into by our Directors or Executive Officers.\nHad the Service Agreements been in existence for FY2006, the aggregate remuneration paid to the\nExecutive Directors in FY2006 would have been approximately US$2.42 million instead of US$2.43\nmillion and the Profit Before Tax of our Group for FY2006 would have been US$11.84 million instead of\nUS$11.83 million.\nDIRECTORS, MANAGEMENT AND STAFF\n131\n\n\n132\nOur Directors recognise the importance of corporate governance and the offering of high standards of\naccountability to our Shareholders of our Company.\nOur Board of Directors has formed three committees: (i) the Nominating Committee; (ii) the Remuneration\nCommittee; and (iii) the Audit Committee.\nNominating Committee\nOur Nominating Committee comprises Mr. Ang Miah Khiang, Mr. Ronnie Teo Heng Hock, Mr. V-Nee Yeh\nand Mr. Kazuhiko Yoshida. The Chairman of the Nominating Committee is Mr. Ronnie Teo Heng Hock. Our\nNominating Committee will be responsible for:\n(a) \nre-nomination of our Directors having regard to the Director’s contribution and performance;\n(b) \ndetermining annually whether or not a Director is independent; and\n(c) \ndeciding whether or not a Director is able to and has been adequately carrying out his duties as a\nDirector.\nThe Nominating Committee will decide how the Board’s performance is to be evaluated and propose\nobjective performance criteria, subject to the approval of the Board, which address how the Board has\nenhanced long-term Shareholders’ value. The Board will also implement a process to be carried out by\nthe Nominating Committee for assessing the effectiveness of the board as a whole and for assessing the\ncontribution of each individual Director to the effectiveness of the Board. Each member of the Nominating\nCommittee shall abstain from voting on any resolution in respect of the assessment of his performance or\nre-nomination as Director.\nRemuneration Committee\nOur Remuneration Committee comprises Mr. Ang Miah Khiang, Mr. Ronnie Teo Heng Hock and Mr. V-Nee\nYeh. The Chairman of the Remuneration Committee is Mr. V-Nee Yeh. Our Remuneration Committee will\nrecommend to our Board of Directors a framework of remuneration for our Directors and key executives,\nand determine specific remuneration packages for each Executive Director.\nThe recommendations of our Remuneration Committee should be submitted for endorsement by the\nentire Board. All aspects of remuneration, including but not limited to directors’ fees, salaries, allowances,\nbonuses, options issued under the Scheme and benefits in kind shall be covered by our Remuneration\nCommittee. Each member of the Remuneration Committee shall abstain from voting on any resolution in\nrespect of his remuneration package.\nAudit Committee\nOur Company established an Audit Committee on 26 June 2007 with written terms of reference in\ncompliance with the Code of Corporate Governance 2005, as issued by the Ministry of Finance,\nSingapore. The primary duties of the Audit Committee are to review and supervise the financial reporting\nprocess and internal control procedures of our Group.\nThe Audit Committee has four members comprising our Directors, Mr. Ang Miah Khiang, Mr. Hamilton\nJian Ren Chueh, Mr. Ronnie Teo Heng Hock and Mr. V-Nee Yeh. Mr. Ang Miah Khiang is the Chairman of\nthe Audit Committee.\nThe Audit Committee shall meet periodically to perform the following functions:\n(a)\nreview with the external auditors the audit plan, their evaluation of the system of internal controls\n(including the fair valuation process), their audit report, their management letter and our\nmanagement’s response;\nCORPORATE GOVERNANCE\n\n\nCORPORATE GOVERNANCE\n133\n(b) \nreview the financial statements before submission to our Board of Directors for approval, focusing\nin particular, on changes in accounting policies and practices, major risk areas, significant\nadjustments resulting from the audit, any adjustments resulting from fair valuation of our\nCompany’s investments the going concern statement, compliance with accounting standards as\nwell as compliance with any stock exchange and statutory/regulatory requirements;\n(c) \nreview, with the assistance of the internal auditor, the internal control and procedures and ensure\nco-ordination between the external auditors and our management, reviewing the assistance given\nby our management to the auditors, and discuss problems and concerns, if any, arising from the\ninterim and final audits, and any matters which the auditors may wish to discuss (in the absence of\nour management where necessary);\n(d) \nreview and discuss with the external auditors any suspected fraud or irregularity, or suspected\ninfringement of any relevant laws, rules or regulations, which has or is likely to have a material\nimpact on our Group’s operating results or financial position, and our management’s response;\n(e) \nconsider the appointment or re-appointment of the external auditors and matters relating to\nresignation or dismissal of the auditors;\n(f) \nreview transactions falling within the scope of Chapter 9 and Chapter 10 of the Listing Manual;\n(g) \nundertake such other reviews and projects as may be requested by our Board of Directors and\nreport to our Board of Directors its findings from time to time on matters arising and requiring the\nattention of our Audit Committee; and\n(h) \ngenerally to undertake such other functions and duties as may be required by statute or the Listing\nManual, and by such amendments made thereto from time to time.\nApart from the duties listed above, the Audit Committee shall commission and review the findings of\ninternal investigations into matters where there is any suspected fraud or irregularity, or failure of internal\ncontrols or infringement of any Singapore law, rule or regulation which has or is likely to have a material\nimpact on our Company’s operating results and/or financial position.\nBOARD PRACTICE\nOur Articles provide that our Board of Directors shall consist of between one and nine Directors. Save as\ndisclosed in the section entitled “Service Agreements – Particulars of Directors’ Service Contracts”, our\nDirectors do not have fixed terms of office. At each annual general meeting, one-third of the Directors for\nthe time being shall retire from office by rotation, provided that no Director holding office as Executive\nDirector whose term of office under a service contract with the Company is a fixed term that is unexpired\nand continuing as at the time of the relevant annual general meeting, shall be subject to retirement by\nrotation or be taken into account in determining the number of Directors to retire. The Directors to retire in\nevery year shall be those who have been longest in office since their last re-election or appointment. A\nretiring Director shall be eligible for re-election.\n\n\nUNI-ASIA SHARE OPTION SCHEME\n134\nOn 26 June 2007, our Shareholders approved a share option scheme known as the Uni-Asia Share\nOption Scheme, the rules of which are set out in Appendix F of this Prospectus. The Scheme complies\nwith the relevant rules of Chapter 8 of the Listing Manual. The Scheme will provide eligible participants\nwith an opportunity to participate in the equity of our Company as well as to motivate them to perform\nbetter through increased loyalty and dedication to our Company. The Scheme, which forms an integral\nand important component of a remuneration and compensation plan, is designed to primarily reward and\nretain Executive Directors and employees whose services are crucial to our Group’s well being,\ndevelopment and success.\nAs at the Latest Practicable Date, no Options (as defined in Rule 2 of the Scheme) have been granted\nunder the Scheme.\nA summary of the Rules of the Scheme is set out as follows:\n1.\nObjectives\nThe objectives of the Scheme are as follows:\n(a)\nto motivate each participant to optimise his performance standards and efficiency and to\nmaintain a high level of contribution to our Group;\n(b)\nto retain key employees and Directors whose contributions are essential to the long-term\ngrowth and profitability of our Group;\n(c)\nto instil loyalty to, and a stronger identification by the participants with the long-term\nprosperity of, our Group;\n(d)\nto attract potential employees with relevant skills to contribute to our Group and to create\nvalue for our Shareholders; and\n(e)\nto align the interests of the participants with the interests of our Shareholders.\n2.\nParticipants\nUnder the rules of the Scheme, Executive, Non-Executive and Independent Directors and full-time\nemployees of our Group are eligible to participate in the Scheme. Directors who are Controlling\nShareholders of our Company and their Associates are not eligible to participate in the Scheme.\nTo be eligible to participate in the Scheme, a participant (“Participant”) must:\n(i)\nbe confirmed in his/her employment with our Company or our Subsidiaries and not be on\nprobation and have been in the full-time service of our Company or any of our Subsidiaries\nfor at least 12 months on or prior to the date of the grant of the Option (the “Date of Grant”);\n(ii)\nhave attained the age of 21 years on or before the Date of Grant; and\n(iii)\nnot be an undischarged bankrupt and must not have entered into a composition with his\ncreditors.\n3.\nScheme administration\nThe Scheme shall be administered by a committee comprising Directors (including Directors who\nmay be participants of the Scheme) (“Committee”), with powers to determine, inter alia, the\nfollowing:\n(a)\npersons to be granted Options;\n(b)\nnumber of Options to be offered; and\n(c)\nrecommendations for modifications to the Scheme.\n\n\nUNI-ASIA SHARE OPTION SCHEME\n135\nThe Committee comprises members of the Remuneration Committee. A member of the Committee\nwho is also a Participant of the Scheme must not be involved in its deliberation in respect of\nOptions granted or to be granted to him.\n4.\nSize of the Scheme\nThe nominal amount of the aggregate number of Shares over which the Committee may grant\nOptions on any date, when aggregated with the nominal amount of the number of Shares issued\nand issuable in respect all Options granted under the Scheme and any other share option schemes\nof our Company, shall not exceed 15 per cent. of the issued share capital of our Company on the\nday preceding the date of the relevant grant.\nOur Company believes that this 15 per cent. limit set by the SGX-ST gives our Company sufficient\nflexibility to decide upon the number of Option Shares to offer to our existing and new employees.\n15 per cent. of our post-Invitation issued share capital constitutes approximately 36,060,000\nShares. As it is intended that the Scheme shall last for 10 years, assuming that there is no change\nin the total issued share capital of our Company, the number of Option Shares in respect of which\nOptions may be granted in a year will average approximately 3,606,000. The number of eligible\nparticipants is expected to grow over the years. Our Company, in line with its goals of ensuring\nsustainable growth, is constantly reviewing our position and considering the expansion of our talent\npool which may involve employing new employees. The employee base, and therefore the number\nof eligible participants will increase as a consequence. If the number of Options available under the\nScheme is limited, we may only be able to grant a small number of Options to each eligible\nparticipant which may not be a sufficiently attractive incentive. Our Company is of the opinion that it\nshould have sufficient number of Options to offer to new employees as well as to existing\nemployees. The number of Options offered must also be significant enough to constitute a\nmeaningful reward for contribution to our Group. However, this does not mean that the Committee\nwill issue Option Shares up to the prescribed limit. The Committee shall exercise its discretion in\ndeciding the number of Option Shares to be granted to each employee, which will depend on, inter\nalia, the employee’s performance and value to our Group.\n5.\nEntitlement\nSubject to such adjustments as may be made under the Rules, the number of Options to be\noffered to a Participant of the Scheme shall be determined at the absolute discretion of the\nCommittee, who shall take into account criteria such as the rank, performance, years of service\nand potential for future development of that Participant.\n6.\nParticipants in other schemes\nParticipants who participate in the Scheme are eligible to participate in other schemes\nimplemented by other companies, if approved by the Committee.\n7.\nGrant of Options\nSubject to the Rules, the Committee may make offers of grant of Options (“Offers”) to such eligible\nParticipants as it may in its sole and absolute discretion select at any time during the period when\nthe Scheme is in force, except that no Offers shall be made during the period of 30 days\nimmediately preceding the date our Company announces its interim and/or final results (whichever\nthe case may be). In the event of our Company announcing any matter of an exceptional nature\ninvolving unpublished price sensitive information (“Exceptional Announcements”), Offers may\nonly be made on or after the third Market Day on which such Exceptional Announcement is\nreleased.\n\n\n8.\nAcceptance of Offer\nThe Offer to a Participant, if not accepted by the Participant before 5.00 p.m. on the 30th day from\nthe date of such Offer, will lapse. Upon acceptance of the Offer, the Participant to whom the Option\nis granted will pay to our Company a consideration of US$1.00 or such other amount and deliver\nsuch other documentation as the Committee may require.\n9.\nExercise price and exercise period\nSubject to any adjustment to be made pursuant to the Rules, the exercise price for each Share in\nrespect of which an Option is exercisable shall be determined by the Committee at its absolute\ndiscretion and fixed by the Committee at:\n(a)\na price equal to the average of the last dealt prices for a Share on the SGX-ST for the period\nof three consecutive Market Days immediately prior to the relevant Date of Grant (“Market\nPrice”) but in no event shall the exercise price per Share be less than its par value (“Market\nPrice Options”); or\n(b)\na price which is set at a discount to the Market Price, provided that the maximum discount\nshall not exceed 20 per cent. of the Market Price but in no event shall the exercise price per\nShare be less than its par value (“Incentive Options”).\nEach eligible Participant who has been granted Market Price Options shall be entitled to exercise\nat any time after the first anniversary of the Date of Grant of that Option, Provided always that the\nOptions granted to employees shall be exercised before the tenth anniversary of the relevant Date\nof Grant and Options granted to Non-Executive Directors and Independent Directors shall be\nexercised before the fifth anniversary of the relevant Date of Grant, or such earlier date as may be\ndetermined by the Committee, failing which all unexercised Options shall immediately lapse and\nbecome null and void and a Participant shall have no claims against our Company.\nEach eligible Participant who has been granted Incentive Options shall be entitled to exercise at\nany time after the second anniversary of the Date of Grant of that Option, Provided always that the\nOptions granted to employees shall be exercised before the tenth anniversary of the relevant Date\nof Grant and Options granted to Non-Executive Directors and Independent Directors shall be\nexercised before the fifth anniversary of the relevant Date of Grant, or such earlier date as may be\ndetermined by the Committee, failing which all unexercised Options shall immediately lapse and\nbecome null and void and a Participant shall have no claims against our Company.\n10.\nVariation of share capital\nIf a variation in our issued share capital occurs (whether by way of capitalisation or rights issue,\nreduction of capital, sub-division or consolidation of Shares or distribution), the exercise price, the\nnominal value, class and/or number of Shares comprised in an Option or over which Options may\nbe granted will be adjusted in such manner as the Committee may determine to be appropriate\nand upon the written confirmation of our auditors (acting only as experts and not as arbitrators) that\nin their opinion, such adjustment is fair and reasonable. The issue of Shares as consideration for\nan acquisition by us or a private placement of Shares will not be regarded as a circumstance\nrequiring adjustment. An increase in the number of issued Shares as a consequence of the\nexercise of Options or other convertibles issued by us will also not be a circumstance requiring\nadjustment.\n11.\nExercise of Options\nOptions which are accepted by the Participants may be exercised during the periods and at the\nrelevant exercise prices. All Options must be exercised before the expiry of 10 years from the Date\nof Grant in the case of employees and before the expiry of five years in the case of Non-Executive\nDirectors and Independent Directors, or such earlier date as may be determined by the Committee,\nfailing which the Options shall be deemed to have expired and shall cease to be valid.\nUNI-ASIA SHARE OPTION SCHEME\n136\n\n\nSpecial provisions dealing with the lapsing or permitting the earlier exercise of Options under\ncertain circumstances include:\n(a)\nthe termination of the Participant’s employment or appointment in our Group, as the case\nmay be;\n(b)\nthe bankruptcy of the Participant;\n(c)\nthe death of the Participant;\n(d)\na take-over of our Company; and\n(e)\nthe winding-up of our Company (voluntary or otherwise).\n12.\nShares issued under the Scheme\nShares arising from the exercise of the Options shall be subject to the provisions of the\nMemorandum of Association and Articles of our Company. The Shares so allotted will upon issue\nrank pari passu in all respects with the then existing issued Shares for any dividends, rights,\nallotments or distributions the record date (“Record Date”) of which falls after the relevant date of\nexercise of the Option. “Record Date” means the date fixed by our Company for the purposes of\ndetermining entitlements of Shareholders to dividends, rights, allotments or other distributions.\n13.\nChanges in the Scheme\nSubject to the prior approval of the SGX-ST or any other stock exchange on which the Shares are\nlisted or quoted and other regulatory authorities as may be necessary, the Scheme may be altered\nfrom time to time by a resolution of the Committee. However, no alteration shall be made which\nwould adversely affect the rights attached to Options granted prior to such alteration except with\nthe prior consent in writing of such number of Participants who, if they exercised their Options in\nfull, would thereby become entitled to not less than ¾ in nominal amount of all Shares which would\nbe allotted and issued upon exercise in full of all outstanding Options. Also, no alteration shall be\nmade to certain rules of the Scheme to the advantage of Participants except with the prior approval\nof our Shareholders in general meeting.\n14.\nDuration of the scheme\nThe Scheme shall continue in operation for a maximum period of ten years commencing on the\nAdoption Date. “Adoption Date” means the date upon which the Scheme is adopted by our\nShareholders which is 26 June 2007. The Scheme may be continued for any further period\nthereafter with the approval of our Shareholders in general meeting and of any relevant authorities\nwhich may then be required.\nGrant of Options at Discounted Exercise Price\nThe Scheme which forms an integral component of our remuneration and compensation plan, is designed\nto reward and retain eligible Participants whose services are crucial to our well-being and success. The\nability to grant Options with exercise prices set at a discount to the prevailing Market Prices of our\nShares, is intended, inter alia, to operate as a means to recognise Participants for their outstanding\nperformance as well as to motivate them to continue to excel while encouraging them to focus more on\nimproving our profitability and return above a certain level which will benefit all Shareholders when these\nare eventually reflected through share price appreciation. The flexibility in determining the quantum of\ndiscount would enable the Committee to tailor the incentives in the grant of Options to commensurate\nwith the performance and contribution of each individual Participant.\nThe flexibility of granting Options with discounted prices is also intended to cater for situations where the\nmarket conditions are bullish and the market price of our Shares are traded at high premiums. In such\nevents, we may grant Options to our employees at a discount to the Market Price.\nUNI-ASIA SHARE OPTION SCHEME\n137\n\n\nUNI-ASIA SHARE OPTION SCHEME\n138\nIn deciding whether to give a discount and the quantum of such discount, the Committee shall be at\nliberty to take into consideration factors including performance of our Company, the years of service and\nindividual performance of the Participant concerned, the contribution of the Participant to our success and\ndevelopment, and the prevailing market conditions. All Participants, regardless of their rank, shall be\neligible to a discount of up to 20 per cent.\nIt is envisaged that we may consider granting the Options with Exercise Prices set at a discount to the\nMarket Price of our Shares prevailing at the time of grant under circumstances including (but not limited\nto) to the following:\n(a)\nwhere, due to speculative forces in the stock market resulting in an overrun of the market, the\nmarket price of our Shares at the time of the grant of Options is not a true reflection of our financial\nperformance;\n(b)\nto enable us to offer competitive remuneration packages in the event that the practice of granting\nOptions with exercise prices that have a discount element becomes a general market norm. As\nshare options become more significant components of executive remuneration packages, a\ndiscretion to grant Options with discounted prices will provide us with a means to maintain the\ncompetitiveness of our remuneration and compensation strategy; and/or\n(c)\nwhere we need to provide more compelling motivation for specific business units to improve their\nperformance, grants of share options with discounted exercise prices will help to align the interests\nof employees to those of our Shareholders by encouraging them to focus more on improving our\nprofitability and returns above a certain level which will benefit all Shareholders when these are\neventually reflected through share price appreciation. Options granted at a discount are perceived\nmore positively by the employees who receive such Options.\nThe Committee will determine on a case-by-case basis whether a discount will be given, and if so, the\nquantum of the discount, taking into account the objective that is desired to be achieved by us and the\nprevailing market conditions. As the actual discount given will depend on the relevant circumstances, the\nextent of the discount may vary from one case to another, subject to a maximum discount of 20 per cent.\nof the Market Price of the Share, as described above.\nThe discretion to grant Options to subscribe for Shares at an exercise price set at a discount to the\nMarket Price will, however, be used judiciously. The amount of the discount may vary from one offer to\nanother, and from time to time, subject to a limit of 20 per cent. on the quantum of discount in respect of\nOptions granted under the Scheme.\nIn respect of our Independent Directors, we have presently not made any decision on the terms of the\ngrant of Options and on whether Options will be granted at a discount to the Market Price. However,\nshould we decide in the future to grant Options to them at a discount, such decision will be based on\nfactors such as the individual performance of the Participant and the contribution of the Participant to our\nsuccess and development.\nWe may also grant Options without any discount to the Market Price. Additionally, we may, if we deem fit,\nimpose conditions on the exercise of the Options (whether such Options are granted at the Market Price\nor at a discount to the Market Price), such as restricting the number of Shares for which the Option may\nbe exercised during the initial years following its vesting.\n\n\nUNI-ASIA SHARE OPTION SCHEME\n139\nParticipants in the Scheme\nParticipation of our Group Employees\nThe extension of the Scheme to Group employees allows us to have a fair and equitable system to\nreward Directors and employees who have made and who continue to make significant contributions to\nour Group’s long-term growth.\nWe believe the Scheme will enable us to attract, retain and provide incentives to its Participants to\nproduce higher standards of performance as well as encourage greater dedication and loyalty by enabling\nus to give recognition to past contributions and services as well as motivating Participants generally to\ncontribute towards our long-term growth.\nParticipation of our Non-Executive Director and Independent Directors\nThe Scheme contemplates the participation by any person who is or may become our Non-Executive\nDirectors. Our Non-Executive Directors and Independent Directors, although not involved in the day-to-\nday running of our operations, play an invaluable role in furthering the business interests of our Group by\ncontributing their experience and expertise. We believe that by allowing our Non-Executive Directors and\nIndependent Directors to participate in the Scheme, we will be able to provide them with an opportunity to\nparticipate in our equity. Our Non-Executive Directors and Independent Directors are closely associated\nwith our business operations even though they do not hold office in an executive capacity. To allow them\nto participate in the Scheme will instil in them a greater sense of involvement and belonging in our Group,\nthereby enhancing our working relationship with them.\nIn addition, our Independent Directors are also members of our Audit Committee. They therefore\nundertake a major role in our corporate governance. It is therefore in our long-term interest that we\nacknowledge the services of these Directors who are members of our Audit Committee by allowing them\nto participate in the Scheme. Their participation in the Scheme will also attract future suitable and more\nqualified persons to sit on our Audit Committee. This will help to ensure the continuity of good corporate\ngovernance in our Company in the long term.\nTo reflect our recognition of the valuable contributions and efforts of our Non-Executive Directors and\nIndependent Directors, the Scheme will allow us flexibility in providing reward to these Directors in a\ncombination of Director’s fees and Options as it may not always be possible to compensate them fully or\nappropriately by increasing the Directors’ fees or other forms of cash payment. We also hope that by\nbeing able to offer share options, it will be able to attract more well-qualified persons to act as Non-\nExecutive Directors and Independent Directors of our Company.\nWe believe that the grant of Options to our Independent Directors will not give rise to any conflict of\ninterests. In any event, to minimise any potential conflict of interests and not to compromise the\nindependence of our Independent Directors, we intend to grant only a nominal number of Options under\nthe Scheme to such Independent Directors. In addition, in the event that any conflict of interests arises in\nany matter to be decided by our Board, we shall procure that the relevant Independent Director abstain\nfrom voting on such matter at our Board meeting.\nDisclosures in Annual Reports\nDetails of the number of Options granted, the number of Options exercised and the subscription price (as\nwell as the discounts involved, if any) will be disclosed in our annual report.\nFinancial Effects of The Scheme\nInternational Financial Reporting Standard 2 on Share-based Payment (“IFRS 2”) is effective for financial\nstatements covering periods beginning on or after 1 January 2005, and was in force at the date the\nScheme was approved. IFRS 2 requires the fair value of employee services received in exchange for the\ngrant of options to be recognised as an expense. For equity-settled share-based payment transactions,\nthe total amount to be expensed in the income statement over the vesting period is determined by\nreference to the fair value of each option granted, excluding the impact of any non-market vesting\nconditions.\n\n\nAt each balance sheet date, the Company revises its estimates of the number of options that are\nexpected to become exercisable. It recognises the impact of the revision of original estimates, if any, in\nthe income statement with a corresponding adjustment to equity.\nShare options are treated as potential ordinary shares in calculating dilutive earnings per share.\nEmployee share options with fixed or determinable terms and non-vested ordinary share are treated as\noptions in the calculation of diluted earnings per share, even though they are contingent on vesting. They\nare treated as outstanding on the grant date.\nDuring the vesting period, the consolidated earnings per Share would be reduced by both the expense\nrecognised and the potential ordinary shares to be issued under the Scheme. When the options are\nexercised, the consolidated net tangible assets will be increased by the amount of cash received in\nsubscription for the Option Shares. On a per Share basis, the effect is accretive if the subscription price is\nabove the net tangible assets per Share but dilutive otherwise.\nWe have made an application to the SGX-ST for permission to deal in, and for quotation of, our Shares\nwhich may be issued upon the exercise of the Options to be granted under the Scheme. The approval of\nthe SGX-ST is not to be taken as an indication of the merits of our Company, our subsidiaries, our\nShares, the New Shares, the Option Shares or the Additional Shares.\nUNI-ASIA SHARE OPTION SCHEME\n140\n\n\n141\nINTERESTED PERSON TRANSACTIONS AND POTENTIAL CONFLICTS \nOF INTEREST\nINTERESTED PERSON TRANSACTIONS\nIn general, transactions between our Group and any of our interested persons (namely, our Directors,\nChief Executive Officer or Controlling Shareholders or the Associates of such Directors, Chief Executive\nOfficer or Controlling Shareholders) would constitute “Interested Person Transactions” for the purposes of\nChapter 9 of the Listing Manual.\nOur interested persons include Mr. Motokuni Yamashiro, Mr. Kazuhiko Yoshida, Mr. Michio Tanamoto, Mr.\nRobert Van Jin Nien, Mr. Jörg Wilhem Schelp, Mr. Hamilton Jian-Ren Chueh, Mr. V-Nee Yeh, Mr. Ang Miah\nKhiang and Mr. Ronnie Teo Heng Hock who are our Directors and the Evergreen Group. Save as\ndisclosed below, none of our Controlling Shareholders, Directors, Executive Officers, or their respective\nAssociates, has any interest, direct or indirect, in any transaction undertaken by our Group within the past\nthree years ended 31 December 2006 and from 1 January 2007 up to the Latest Practicable Date.\nPast, Present and Ongoing Transactions\nTransactions with the Evergreen Group \nHistorically, part of our loan syndication business has involved Uni-Asia arranging loan facilities, operating\nleases and, or finance leases for the Evergreen Group.\nEvergreen International S.A. is a private, Panamanian company controlled as to 100% by Dr. Chang and\nhis associates, Mr. Chang Kuo Hua, Mr. Chang Kuo Ming and Mr. Chang Kuo Cheng. It is a holding\ncompany with direct and indirect interests in a number of companies engaged in the ownership and\noperation of shipping and aircraft fleets, including various major members of the Evergreen Group.\nAlthough no member of our Group is in the business of lending money to Evergreen or any other\ncompany of the Evergreen Group, Uni-Asia has earned and continues to earn fees from these companies\nas a result of arranging loans or other financing transactions, such as operating leases and finance\nleases, for these companies, the lenders or financiers of which are syndicates of banks or other lending\ninstitutions whose participants are independent of and not interested persons of our Company.\nThe fees which Uni-Asia earns from these transactions comprise arrangement fees, paid at the outset,\ntypically on or around drawdown of a loan facility or on the initial leasing of the asset, i.e. the ship or\naircraft, in relation to an operating lease or finance lease. In addition, Uni-Asia earns ongoing annual\nagency fees, over the tenor of the facilities, in relation to its role as agent of the syndicate members. The\nannual agency fees earned are minimal in comparison to the arrangement fees in respect of any loan or\nfinancing transaction.\nIn the normal course of business, we arrange loans or other financial transactions for the Evergreen\nGroup. Such transactions are of an ad-hoc nature and have been carried out on an arm’s length basis.\nWe also act as facility agent for these loans and financial transactions.\nThe aggregate fees, including arrangement fees, agency fees and interest income, received from the\nEvergreen Group in each of the past three years ended 31 December 2006 and from 1 January 2007 up\nto the Latest Practicable Date are as follows:\nFrom \n1 January 2007\nto Latest  \nFY2004\nFY2005\nFY2006\nPracticable Date\nAggregate fees received (US$ ’000)\n1,682\n1,452\n3,483\n51\nThe fees received from Evergreen are based on our normal rates charged to our other customers at the\nrelevant time. Such transactions, if continued after our listing on the SGX-ST, will be subject to the review\nprocedures described in “Guidelines For Future Interested Person Transactions” below, to ensure that\nthey are continued on an arm’s length basis.\n\n\nGuidelines For Future Interested Person Transactions\nIn the event that we enter into certain transactions with interested persons in the future, such future\ntransactions with interested persons must comply with the requirements of the Listing Manual. As\nrequired by the Listing Manual, our Articles of Association require a Director to abstain from voting in any\ncontract or arrangement in which he has a personal material interest. Our internal control procedures will\nbe designed to ensure that all Interested Person Transactions are conducted at arm’s length and on\nnormal commercial terms.\nAny interested person transaction will be properly documented and submitted semi-annually to our Audit\nCommittee for its review to ensure that all Interested Person Transactions are conducted at arm’s length\nand on normal commercial terms. In the event that a member of our Audit Committee is interested in any\nInterested Person Transaction, he will abstain from reviewing that particular transaction. Our Audit\nCommittee will include the review of all such Interested Person Transaction as part of the standard\nprocedures while examining the adequacy of our internal controls.\nOur Audit Committee will ensure that all provisions and disclosure requirements on all such Interested\nPerson Transactions, including those required by prevailing legislation, the Listing Manual and accounting\nstandards, as the case may be, are complied with.\nOur Directors will ensure that all disclosure requirements on Interested Person Transactions, including\nthose required by prevailing legislation, will be subject to shareholders’ approval if deemed necessary by\nthe Listing Manual. We will disclose in our annual report the aggregate value of Interested Person\nTransactions conducted during the financial year.\nReview Procedures for Future Interested Person Transactions\nOur Audit Committee will review and approve Interested Person Transactions, to ensure that they are on\nan arm’s length basis, that is, that the transactions are transacted on terms and prices not more\nfavourable to the interested person than if they were transacted with a third-party and we and our\nshareholders have not been disadvantaged in accordance with the following review procedures:\n(i)\nall Interested Person Transactions (either individually or as part of a series or if aggregated with\nother transactions involving the same Interested Person during the same financial year) below\nS$100,000 will not require the approval of the Audit Committee;\n(ii)\nall Interested Person Transactions (either individually or as part of a series or if aggregated with\nother transactions involving the same Interested Person during the same financial year) below or\nequal to 3% of the last audited NTA of our Group will not require approval of the Audit Committee\nprior to such transactions being entered into, but will require approval by a Director who shall not\nbe an Interested Person in respect of the particular transaction. Any contracts to be made with an\nInterested Person shall not be approved unless the pricing is determined in accordance with our\nusual business practices and policies, consistent with the usual profit margin built-in or discount\ngiven or price received by us for the same or substantially similar type of transactions between us\nand unrelated parties and the terms are no more favourable to the interested person than those\nextended to or received from unrelated parties; and\n(iii)\nall Interested Person Transactions (either individually or as part of a series or if aggregated with\nother transactions involving the same Interested Person during the same financial year) in excess\nof 3% of the last audited NTA of our Group will be reviewed by and will require approval by the\nAudit Committee prior to such transactions being entered into.\nWe intend to prepare relevant information (such as pricing guidelines, pricing for similar existing\ncustomers and quotations obtained from third-parties) to assist our Audit Committee in its review of all\nInterested Person Transactions.\n142\nINTERESTED PERSON TRANSACTIONS AND POTENTIAL CONFLICTS \nOF INTEREST\n\n\nBefore any agreement or arrangement that is not in our ordinary course of business is transacted, prior\napproval must be obtained from our Audit Committee. In the event that a member of the Audit Committee\nis interested in any of the Interested Person Transaction, he will abstain from reviewing that particular\ntransaction. Any decision to proceed with such an agreement or arrangement would be recorded for\nreview by the Audit Committee.\nWe also intend to comply with the provisions in Chapter 9 of the Listing Manual in respect of all future\nInterested Person Transactions, and if required under the Listing Manual, we will seek our Shareholders’\napproval for such transactions.\nOther Review Procedures\nIn view that part of our loan syndication business has historically involved the arrangement of loan\nfacilities, operating leases and/or finance leases for the Evergreen Group, we will, in the interests of good\ncorporate governance, apply the same review and approval procedures as those applicable to future\nInterested Person Transactions, to all our future transactions with the Evergreen Group, for so long as\nEvergreen holds a direct and/or indirect shareholding interest of five per cent. or more in our Company.\nHowever, as Evergreen is not an interested person for the purposes of Chapter 9 of the Listing Manual,\nour transactions with Evergreen Group will not be subject to the disclosure requirements under Chapter 9\nof the Listing Manual. The requirements under Chapter 9 of the Listing Manual will only apply to\ntransactions with the Evergreen Group in the event of Evergreen becoming an interested person in the\nfuture.\nPOTENTIAL CONFLICTS OF INTERESTS\nOur non-Executive Director, Mr. Robert Van Jin Nien, has a 0.08% shareholding interest in and is also a\ndirector of Hopewell Holdings Limited (“Hopewell”), a company in the principal business of property\ndevelopment. Hopewell is our substantial shareholder, and is currently publicly listed in Hong Kong. Our\nBoard believes that Mr. Nien’s interests in Hopewell does not give rise to a material conflict of interests,\ngiven that he does not have a material shareholding interest in Hopewell. In the event that Mr. Nien or the\nBoard is of the view that any material conflict of interests should arise, Mr. Nien will abstain from\ndeliberating and participating in the decision-making process of our Board, in relation to any such matter\nin question.\nOur Independent Director, Mr. V-Nee Yeh, is a director and non-executive chairman of Argyle Street\nManagement Limited (“ASM”), a fund management company that manages other funds investing in\ndistressed assets, including the ASM Asia Recovery Fund. Mr. Yeh holds units in the ASM Asia Recovery\nFund and also has a 33.33% shareholding interest in Argyle Street Management (Holdings) Limited\n(“ASMH”), which in turn owns 100% of ASM. As Mr. Yeh does not have majority control over ASM, he\ndoes not control the decision-making of the board or investment committee of ASM. Our Board believes\nthat potential conflicts of interests would be minimised by the fact that Mr. Yeh is an independent non-\nexecutive director of our Company and is not involved in the day-to-day business of our Group. In\naddition, as a Director of our Company, Mr. Yeh will also have a duty to disclose any conflicts of interest,\nas soon as he becomes aware of the same. He will also abstain from voting in respect of any matter\nwhere a conflict of interests arises and is required to act in the interests of our Company and our\nshareholders as a whole when performing his duties as an Independent Director of our Company. Our\nBoard believes that his professional background in distressed assets fund management is beneficial to us\nas he would have a better understanding of our business. In connection with Mr. Yeh’s appointment as our\nIndependent Director, we will, prior to the registration of this Prospectus with the MAS, enter into a\nconfidentiality agreement with Mr. Yeh, pursuant to which Mr. Yeh will be required to keep confidential and\nnot use, divulge, disclose or deliver to any person (except as authorised or required by his duties or by\nlaw) any information acquired by him in the course of his role as director of the Company and which (i) is\na trade secret or know-how of our  Company or is otherwise the confidential property of our Company or\nany of its related corporations; or (ii) was acquired by the director under a duty of confidentiality. Mr. Yeh\nwill also be required to use his best endeavours to prevent the publication or disclosure of any trade\n143\nINTERESTED PERSON TRANSACTIONS AND POTENTIAL CONFLICTS \nOF INTEREST\n\n\nsecret or know-how of our Company, or confidential information concerning the business or the finance of\nour Company or any of our related companies or of any person or company with whom our Company\ndeals. The above confidentiality requirements shall continue to apply after the termination of Mr. Yeh’s\nappointment without limit in time, but shall cease to apply to information or knowledge which may come\ninto the public domain other than by breach of these provisions.\nEach of our Executive Directors, Mr. Motokuni Yamashiro, Mr. Kazuhiko Yoshida and Mr. Michio Tanamoto,\nhas an option to subscribe for new shares in our associated company, Capital Advisers. Mr. Yoshida and\nMr. Tanamoto are also directors of Capital Advisers. None of their options, if fully exercised, would each\namount to more than 1.63% of the enlarged share capital of Capital Advisers. They do not currently hold\nany shares directly in Capital Advisers. In order to minimise any potential conflicts of interests, each of\nMr. Motokuni Yamashiro, Mr. Kazuhiko Yoshida and Mr. Michio Tanamoto will abstain from deliberating and\nparticipating in the decision-making process of our Board, in relation to any issues concerning our\ntransactions with Capital Advisers. In addition, as our Directors each of Mr. Motokuni Yamashiro, Mr.\nKazuhiko Yoshida and Mr. Michio Tanamoto will also have a duty to disclose any conflicts of interest, as\nsoon as he becomes aware of the same. They will also be required to act in the interests of our\nCompany and our Shareholders as a whole when performing their duties as our Directors.\nSave as disclosed above and in the section entitled “Interested Person Transactions” in this Prospectus:-\n(a)\nnone of our Directors, Executive Officers, Controlling Shareholders or any of their Associates has\nhad any interest, direct or indirect, in any transactions to which our Company was or is to be a\nparty;\n(b)\nnone of our Directors, Executive Officers, Controlling Shareholders or any of their Associates has\nany interest, direct or indirect, in any company carrying on the same business or a similar trade\nwhich competes materially and directly with the existing business of our Group; and\n(c)\nnone of our Directors, Executive Officers, Controlling Shareholders or any of their Associates has\nany interest, direct or indirect, in any company that is our customer or supplier of goods and\nservices.\nMitigation\nUpon completion of the Invitation, there is no single Controlling Shareholder of our Group.\nWe believe that any potential conflicts of interest are addressed as follows:\n\u0002\nWe have established policies and procedures, including internal audit controls, to ensure that our\ntransactions with our Controlling Shareholders and their affiliates are entered into on arm’s length\nand normal commercial terms. In this regard, our Company has appointed an internal auditor (the\n“Internal Auditor”) to undertake the role of the internal audit function. The Internal Auditor will be\nresponsible for assessing the internal auditing and reporting controls and procedures within our\nGroup and to make recommendations, as appropriate, to the Audit Committee.\n\u0002\nUpon our listing on the SGX-ST, we will be subject to the SGX-ST rules on Interested Person\nTransactions. The objective of these rules is to ensure that our Interested Person Transactions do\nnot prejudice the interests of our Shareholders as a whole. These rules require us to make prompt\nannouncements, disclosures in our annual reports and/or seek Shareholders’ approval for certain\nmaterial Interested Person Transactions. Further, our Audit Committee may have to, and we may\nhave to appoint independent financial advisers to, review such Interested Person Transactions and\nstate whether or not it is, or they are, of the view that such transactions are on normal commercial\nterms and are not prejudicial to our interests and our minority Shareholders.\n144\nINTERESTED PERSON TRANSACTIONS AND POTENTIAL CONFLICTS \nOF INTEREST\n\n\n\u0002\nOur Audit Committee will review Interested Person Transactions on a periodic basis to ensure\ncompliance with our policies and procedures, including internal audit controls, and with the relevant\nprovisions of the SGX-ST rules. The review will include an examination of the nature of the\ntransactions and such relevant supporting data as the Audit Committee may deem necessary. If a\nmember of our Audit Committee has an interest in a transaction, he will abstain from participating\nin the review and approval process of the Audit Committee in relation to that transaction. Our Audit\nCommittee will also review the policies and procedures to ensure that they are adequate to achieve\nthe objectives of ensuring that our Interested Person Transactions are entered into on arm’s length\nand normal commercial terms.\n\u0002\nOur Directors owe fiduciary duties to us, including the duty to act in good faith and in our best\ninterests. Our Directors have a duty to disclose any conflict of interest, as soon as they become\naware of any conflict, including a conflict that arises from a directorship in a competing company or\nfrom a personal investment in a competing company and, in such event, such Director may only\nvote in respect of any such decision if his fiduciary duties so allow and only in accordance with\nsuch duties. Our Directors are also subject to a duty of confidentiality, which precludes a Director\nfrom disclosing to any third-party information that is confidential to us.\n\u0002\nOur Audit Committee will review any conflicts of interest disclosed to our Board and the exercise of\nDirectors’ fiduciary duties in this respect. Upon disclosure of an actual or potential conflict of\ninterest by a Director, our Audit Committee will consider whether a conflict of interest does in fact\nexist and whether it is appropriate that such Director abstain from voting in respect of a matter\nwhere the conflict of interest arises. The review will include an examination of the nature of the\nconflict and such relevant supporting data as our Audit Committee may deem reasonably\nnecessary. If any member of our Audit Committee has a conflict of interest which is brought before\nour Audit Committee, such member shall not participate in any proceedings of our Audit Committee\nin relation to such conflict of interest.\n145\nINTERESTED PERSON TRANSACTIONS AND POTENTIAL CONFLICTS \nOF INTEREST\n\n\nDESCRIPTION OF OUR ORDINARY SHARES\n146\nThe following description of our share capital summarises certain provisions of our Articles. Such\nsummaries do not purport to be complete and are subject to, and are qualified in their entirety by\nreference to and all of the provisions of our Articles (copies of which are available for inspection at the\nplace referred to on page 173 of this Prospectus), Cayman Companies Law and the Companies Act.\nShare capital\nThe authorised share capital of our Company is US$120,000,000 divided into 750,000,000 Shares of\nUS$0.16 par value each.\nDividend rights\nDividends and interim dividends on our Shares may be declared from time to time by our Directors on a\npari passu basis.\nVariation of rights\nIf at any time the share capital of our Company is divided into different classes of shares, preference\ncapital other than redeemable preference capital may be repaid and the rights attached to any class may\nbe varied with the sanction of a special resolution passed at a general meeting of the holders of the\nshares of that class or, if such special resolution is not passed within two months of such meeting, with\nthe consent in writing of the holders of three-fourths of the issued shares of that class.\nTransfer of shares\nNo Member may transfer shares in our Company unless the prior consent of our Directors has been\nobtained and the provisions set out in the Articles concerning pre-emption having been complied with.\nWhere a Member transfers or proposes to transfer shares in connection with a property settlement\nagreement or by court decree in connection with any marriage dissolution or similar proceeding, or a\nbankruptcy or insolvency proceeding or the death or liquidation of such Member, our Company will have\nthe first right to repurchase all the shares owned by such Member in accordance with the terms of the\nArticles.\nMeetings of shareholders\nAs our Company is an exempted company, it may but shall not be required to hold annual general\nmeetings.\nExtraordinary general meetings can be called on the requisition of Members holding not less than one-\ntenth of the paid-up voting capital of our Company or by our Directors.\nLimitations on non-Cayman Islands shareholders\nThere are no limitations on non-Cayman Islands shareholders.\nAccess to books and records and dissemination of information\nOur Directors shall determine whether and to what extent the accounts and books of our Company shall\nbe open to the inspection of Members. Our Directors may cause to be prepared and laid before our\nCompany in general meeting profit and loss accounts, balance sheets and group accounts, if any.\nElection and removal of directors\nOur Company may by ordinary resolution appoint and remove any Director. Our Directors may also\nappoint a Director to hold office until the next annual general meeting of our Company and such Director\nwould then be eligible for re-election thereat.\n\n\nIndemnification of Directors and officers\nThe Directors and officers of our Company and any trustee acting in relation to our Company’s affairs and\ntheir heirs, executors, administrators and personal representatives shall be indemnified out of the assets\nof our Company for and against all actions, proceedings and damages which shall be incurred by reason\nof any act done or omitted in the execution of their duty except due to wilful neglect or default.\nAmendment of Memorandum of Association and Articles\nOur Company may amend the Memorandum and Articles of Association of our Company by special\nresolution.\nCertain provisions of Cayman Islands Company Law\nPlease refer to Appendix E of this Prospectus for a summary of Cayman Islands Company Law.\nShare Registrar and Singapore Share Transfer Agent\nA register of holders of our Shares will be maintained by Lim Associates (Pte) Ltd in Singapore, and Lim\nAssociates (Pte) Ltd will also serve as Singapore share transfer agent for our Shares.\nDESCRIPTION OF OUR ORDINARY SHARES\n147\n\n\nTAXATION\n148\nThe following is a discussion of certain tax matters arising under the current tax laws of the Cayman\nIslands, Singapore, Hong Kong, Japan and the PRC and is not intended to be and does not constitute\nlegal or tax advice. While this discussion is considered to be a correct interpretation of existing laws in\nforce, no assurance can be given that courts or fiscal authorities responsible for the administration of\nsuch laws will agree with this interpretation or that changes in such laws will not occur. The discussion is\nlimited to a general description of certain tax consequences in the respective countries with respect to\nownership of our Shares by investors in those respective countries, and does not purport to be a\ncomprehensive nor exhaustive description of all of the tax considerations that may be relevant to a\ndecision to purchase our Shares. Prospective investors should consult their tax advisors regarding tax\nand other tax consequences of owning and disposing our Shares. It is emphasised that neither our\nCompany, our Directors nor any other persons involved in the Invitation accepts responsibility for any tax\neffects or liabilities resulting from the subscription for, purchase, holding or disposal of our Shares.\nCAYMAN ISLANDS TAXATION\nPursuant to section 6 of the Tax Concessions Law (1999 Revision) of the Cayman Islands, our Company\nhas obtained an undertaking from the Governor in Cabinet:\n(a)\nthat no law which is enacted in the Cayman Islands imposing any taxes to be levied on profits or\nincome or gains or appreciation shall apply to the Company or its operations; and\n(b)\nin addition, that no tax to be levied on profits, income gains or appreciations or which is in the\nnature of estate duty or inheritance tax shall be payable by the Company:\n(i)\non or in respect of the shares, debentures or other obligations of the Company; or\n(ii)\nby way of withholding in whole or in part of any relevant payment as defined in Section 6(3)\nof the Tax Concession Law (1999 Revision).\nThe undertaking is for a period of twenty years, commencing 8 April 1997.\nThe Cayman Islands currently levy no taxes on individuals or corporations based upon profits, income,\ngains or appreciations and there is not taxation in the nature of inheritance tax or estate duty. There are\nno other taxes likely to be material to our Company levied by the Government of the Cayman Islands\nsave certain stamp duties which may be applicable, from time to time, on certain instruments executed in\nor brought within the jurisdiction of the Cayman Islands. The Cayman Islands are not party to any double\ntax treaties.\nSINGAPORE TAXATION \nIndividual Income Tax\nAn individual is a tax resident in Singapore in a year of assessment if, in the preceding year, he was\nphysically present in Singapore or exercised an employment in Singapore (other than as a director of a\ncompany) for 183 days or more, or if he resides in Singapore.\nThe following income received in Singapore by non-resident individuals is exempt from Singapore income\ntax:\n(a)\nall foreign sourced income; and\n(b)\nSingapore-sourced investment income from financial instruments.\nFor individual tax residents of Singapore, the income specified in (a) and (b) above is exempt from tax\nexcept where such income is derived through a partnership in Singapore or is derived through carrying\non of a trade, business or profession.\n\n\nThus, an individual taxpayer is only subject to Singapore income tax on income (other than certain\ninvestment income and one-tier dividends which are exempt from tax) accrued in or derived from\nSingapore, irrespective of whether that person is a resident or non-resident of Singapore.\nThe tax rate for a resident individual varies according to the individual’s circumstances, but is subject to\nthe current maximum rate of 20% for the year of assessment 2007 (i.e. calendar year 2006). A non-\nresident individual is normally taxed at the corporate tax rate, except that Singapore employment income\nis taxed at a flat rate of 15% or at resident rates, whichever yields a higher tax.\nCorporate Income Tax\nA corporate taxpayer is regarded as resident for Singapore tax purposes if its business is controlled and\nmanaged in Singapore.\nA Singapore resident corporate taxpayer is subject to Singapore income tax on income accrued in or\nderived from Singapore, and on foreign sourced income received in Singapore.\nHowever, foreign\ndividends, branch profits and foreign sourced service income received in Singapore by a Singapore\nresident company are exempt from Singapore tax if certain conditions are met. In addition, one-tier\ndividends received by a resident company are also exempt from Singapore income tax.\nA non-resident corporate taxpayer, with certain exceptions, is subject to income tax only on income that is\naccrued in or derived from Singapore, and on foreign sourced income received in Singapore, subject to\ncertain exceptions. One-tier dividends received by a non-resident Singapore company are also exempt\nfrom Singapore income tax. There is no withholding tax on dividends paid by a Singapore resident\ncompany to non-resident shareholders.\nThe corporate tax rate is presently 18%. In calculating a company’s chargeable income, 75% of up to the\nfirst S$10,000 of chargeable income and 50% of up to the next S$290,000 are exempt from corporate tax\nwith effect from year of assessment 2008. The remaining chargeable income will be fully taxable at the\ncorporate tax rate of 18%. The tax exemptions referred to above do not apply to Singapore dividend\nincome.\nDividend Distributions\nSingapore moved to the one-tier corporate tax system with effect from 1 January 2003. Under this\nsystem, the tax collected from corporate profits is final and all Singapore dividends paid by Singapore tax\nresident companies to their shareholders are exempt from tax (“one-tier tax exempt dividends”).\nIf the company is a Singapore tax resident company under the one-tier corporate tax system, it can\ndistribute one-tier tax exempt dividends to its shareholders. Such dividends are exempt from Singapore\nincome tax in the hands of its shareholders.\nGains on Disposal of our Shares\nSingapore does not impose tax on capital gains. However, there are no specific laws or regulations which\ndeal with the characterisation of gains. In general, gains may be construed to be of an income nature and\nsubject to Singapore income tax if they arise from activities which the Inland Revenue Authority of\nSingapore regards as the carrying on of a trade or business in Singapore.\nAny profits from the disposal of our Shares are not taxable in Singapore unless the seller is regarded as\nhaving derived gains of an income nature, in which case, the disposal profit would be taxable.\nStamp Duty\nThere is no stamp duty payable on the subscription of our Shares.\nStamp duty is payable in Singapore on an instrument of transfer of our Shares at the rate of S$0.20 for\nevery S$100.00 or any part thereof, computed based on the consideration for or market value of our\nShares, whichever is higher.\nTAXATION\n149\n\n\nThe purchaser is liable for stamp duty, unless there is an agreement to the contrary. No stamp duty is\npayable if no instrument of transfer is executed or the instrument of transfer is executed outside\nSingapore. However, stamp duty may be payable if the instrument of transfer which is executed outside\nSingapore is received in Singapore.\nThe above stamp duty is not applicable to electronic transfers of shares effected through the Central\nDepository system.\nEstate Duty\nSingapore estate duty is imposed on the value of immovable property situated in Singapore owned by\nindividuals who are not domiciled in Singapore, subject to specific exemption limits. Movable assets of\nnon-domiciles will be exempt from estate duty with respect to deaths occurring on or after 1 January\n2002. Singapore estate duty is imposed on the value of most immovable property situated in Singapore\nand on most movable property, wherever it may be, owned by individuals who are domiciled in Singapore,\nsubject to specific exemption limits.\nAccordingly, our Shares held by an individual domiciled in Singapore are subject to Singapore estate duty\nupon such individual’s death. Singapore estate duty is payable to the extent that the value of our Shares\naggregated with any other assets subject to Singapore estate duty exceeds S$600,000. Unless other\nexemptions apply to the other assets, for example, the separate exemption limit for residential properties,\nany excess beyond S$600,000 will be taxed at 5 per cent. of the first S$12,000,000 of the individual’s\nSingapore chargeable assets and thereafter at 10 per cent. Individuals, whether or not domiciled in\nSingapore should consult their own tax advisors regarding the Singapore estate duty consequences of\ntheir ownership of our Shares.\nGoods and Services Tax (“GST”)\nThe sale of shares is considered a supply of services for GST purposes. Generally, a supply of services\nmade by a GST-registered person is subject to GST at the current rate of 7% unless the supply of\nservices can qualify for zero-rating (i.e. charge GST at 0%) under Section 21(3) of the Goods and\nServices Tax Act (Cap. 117A) (“GST Act”) or can qualify for exemption under the Fourth Schedule to the\nGST Act.\nThe sale of shares by a GST-registered investor in the course of or furtherance of a business carried on\nby him through the Singapore Exchange or to another person belonging in Singapore qualifies for\nexemption under the Fourth Schedule to the GST Act. However, any input GST which is incurred by the\ninvestor in making exempt supplies is not recoverable from the Comptroller of GST.\nIf the sale of shares by a GST-registered investor is made to another person belonging outside\nSingapore, and that person is outside Singapore when the sale is executed, the sale would qualify for\nzero-rating under Section 21(3)(j) of the GST Act. Input GST which is incurred by the investor in making\nzero-rated supplies is fully recoverable from the Comptroller of GST.\nBrokerage, handling and clearing fees in connection with the sale or acquisition of shares charged by a\nGST-registered person (e.g. broker) to an investor belonging to Singapore is subject to GST at the current\nrate of 7%. Similar services rendered to an investor belonging outside Singapore should qualify for zero-\nrating provided that the investor is outside Singapore when the services are performed and the services\nprovided do not benefit any Singapore persons.\nTAXATION\n150\n\n\nHONG KONG TAXATION\nProfits Tax\nHong Kong profits tax is chargeable on every person, including corporations, partnerships, trustees and\nbodies of persons carrying on any trade, profession or business in Hong Kong in respect of his/its\nassessable profits (excluding profits arising from the sale of capital assets) arising in or derived from\nHong Kong from the conduct of such trade, profession or business. Non-residents in receipt of such\nprofits are also subject to profit tax. The current profits tax rate is 17.5% for corporations while sole\nproprietorships, partnerships and other unincorporated businesses are taxed at a rate of 16%.\nStamp Duty\nStamp duty is payable on contract note for sale or purchase of any Hong Kong stock (i.e. stock the\ntransfer of which is required to be registered in Hong Kong) at the rate of 0.2% of the consideration or, if\nhigher, the value of the Hong Kong stock being sold or transferred. This is payable half by the vendor and\nhalf by the purchaser.\nOther Taxes\nCurrently, there is no capital gains tax or turnover or sales taxes in Hong Kong.\nProfessional Tax Advice Recommended\nIf you are unsure about the taxation implications of subscribing for, purchasing, holding, disposing of,\ndealing in, or the exercise of any rights in relation to the New Shares, you should consult an expert. Our\nCompany, our Directors or any person involved in the Invitation do not accept responsibility for any tax\neffects on or liabilities resulting from the subscription for, purchase, holding, disposing of, dealing in, or\nthe exercise of any rights in relation to the New Shares.\nJAPAN TAXATION \nGeneral\nIndividual income taxes in Japan consist of national income tax and local inhabitant tax. An individual with\na domicile or residence in Japan for a period of one year or longer (“resident”) is subject to national and\nlocal income taxes on worldwide income, while an individual other than a resident (“non-resident”)\nhaving no permanent facility in Japan is subject to only national income tax solely upon income from\nsources within Japan. A resident who does not possess Japanese nationality and has maintained a\nresidence or domicile in Japan over a period of no more than five years in the last ten years, is treated as\n“a non-permanent resident”. A non-permanent resident taxpayer is subject to national and local income\ntaxes solely on income derived from sources within Japan and income derived from foreign sources paid\nin Japan or remitted to Japan.\nNational income tax rates are progressive, ranging from 5% to 40% in 2007. Local inhabitant tax rate is\n10% in 2007. However, interest income, capital gains from transfer of stocks etc. are taxed separately\nfrom other income at special rates specified in the Special Taxation Measures Law.\nJapanese corporate taxes consist of corporate income tax (national tax), income tax and enterprise tax\n(local tax) and other local taxes.\nDomestic corporations, including subsidiaries and joint ventures established under the Japanese law by\nforeign enterprises are subject to corporate income tax on their worldwide income and other corporate\ntaxes.\nForeign corporations operating in Japan through branches are liable for the corporate income tax on the\nentire income from sources within Japan and other corporate taxes.\nTAXATION\n151\n\n\nDividends\nWith respect to individual taxpayers, dividend income may be taxed as aggregate income or separately\nfrom other income at their choice. Withholding income tax will be imposed on dividends if dividends be\npaid through a paying agent in Japan. The withholding tax rate for dividends from shares listed in Japan\nand overseas is 10%, comprising national tax of 7% and local tax of 3% until 31 March 2009, and 20%\nthereafter, comprising national tax of 15% and local tax of 5%.\nCorporate taxpayers enjoy a benefit of deduction from gross income a certain portion of dividend.\nCapital Gain\nWith respect to individual taxpayers, capital gains derived from the transfer of stocks are taxed separately\nfrom other income by filing a return. The current tax rate applied to these capital gains is 20%, comprising\nnational tax of 15% and local tax of 5% (10% for listed stocks, comprising national tax of 7% and local tax\nof 3% until 31 December 2008).\nAs for corporate taxpayers, capital gains from the sale of securities are subject to ordinary corporate\nincome taxes in the same manner as ordinary income.\nInheritance Tax\nInheritance tax is imposed on the total value of all properties acquired through inheritance or bequest,\nless liabilities and funeral expenses. Properties are appraised based on current prices or values at the\ntime of acquisition. Our Shares held by an individual domiciled in Japan are generally subject to\nJapanese Inheritance Tax upon such individual’s death.\nPRC TAXATION\nTax Legislation\nAt present, the State Organisations that have authority to formulate tax laws or tax policy mainly include\nthe National People’ s Congress (the “NPC”) and its Standing Committee, State Council, Ministry of\nFinance, State Administration of Taxation, Tariff and Classification Committee of the State Council, and\nGeneral Administration of Customs.\n(a)\nTax laws are enacted by the NPC, e.g. the Individual Income Tax Law of the People’s Republic of\nChina; or enacted by the Standing Committee of the NPC, e.g. the Tax Collection and\nAdministration Law of the People’s Republic of China.\n(b)\nThe administrative regulations and rules concerning taxation are formulated by the State Council,\ne.g., the Detailed Rules for the Implementation of the Tax Collection and Administration Law of the\nPeople’s Republic of China, the Detailed Regulations for the Implementation of the Individual\nIncome Tax Law of the People’s Republic of China and the Provisional Regulations of the People’s\nRepublic of China on VAT.\n(c)\nThe departmental rules concerning taxation are formulated by the Ministry of Finance, the State\nAdministration of Taxation, the Tariff and Classification Committee of the State Council, and the\nGeneral Administration of Customs, e.g., the Detailed Rules for the Implementation of the\nProvisional Regulations of the People’s Republic of China on VAT and the Provisional Measures for\nVoluntary Reporting of the Individual Income Tax.\nTAXATION\n152\n\n\nForeign Investment Taxation\nAccording to the “Circular on Questions related to Provisional Regulations concerning Taxations including\nValue-Added Tax, Consumption Tax and Business Tax Applicable to Foreign Investment Enterprises and\nForeign Enterprises”\n, the following tax categories are applicable to foreign investment enterprises:\n(1) \nValue-Added Tax \n(2)\nConsumption Tax \n(3) \nBusiness Tax  \n(4)\nIncome Tax\n(5)\nLand Value-Added Tax\n(6) \nResources Tax\n(7)\nStamp Tax\n(8) \nAnimal Slaughter Tax\n(9) \nUrban Real Estate Tax\n(10) Vehicle and Shipping License Tax\n(11) Contract Tax \nCustoms Tax is also applicable for foreign investment enterprises with imports and exports.\nThe most important tax categories are as follows:\n(a)\nIncome Tax on foreign investment enterprises \nThe applicable income tax laws, regulations, notices and decisions (collectively referred to as\n“Applicable Foreign Enterprises Tax Law”) related to foreign investment enterprises and their\ninvestors include, without limitation to, the following:\n(i) \nIncome Tax Law of the PRC on Foreign Investment Enterprises and Foreign Enterprises\nadopted by the NPC on 9 April 1991\nwhich came into effect on 1 July 1991 and would be revoked on 1 January 2008;\n(ii) \nImplementing Rules of the Income Tax Law of the PRC on Foreign Investment Enterprises\nand \nForeign \nEnterprises \npromulgated by the State Council on 30 June 1991 and came into effect on 1 July 1991;\n(iii)\nNotice Relating to Income Tax for Foreign Investment Enterprises and Foreign Enterprises In\na Number of Law Enforcement Issues \npromulgated by State Tax Bureau on 21 August 2000 and effective on 1 July\n2000; and\n(iv)\nThe Enterprise Income Tax Law of the PRC \nadopted by the\nNPC on 16 March 2007 and effective on 1 January 2008.\nTAXATION\n153\n\n\nAccording to the Applicable Foreign Enterprises Tax Law, before the Enterprise Income Tax Law of\nthe PRC \ncomes into effect, a foreign investment enterprise is\nrequired to pay a national income tax at a rate of 30% of their taxable income and a local income\ntax at a rate of 3% of their taxable income. The main tax preference is as follow:\n(i)\nA foreign investment enterprise engaged in production having a period of operation of not\nless than 10 years shall be exempted from income tax for the first two profit making years\nand a 50% reduction in the income tax payable for the next three years. The income tax\nconcession for foreign investment enterprises engaged in the exploitation of resources such\nas petroleum, natural gas, rare metals and precious metals are regulated separately by the\nState Council.\n(ii)\nForeign investment enterprises established in special economic zones, foreign enterprises\nhaving an establishment in special economic zones engaged in production or business\noperations and foreign investment enterprises engaged in production in economic and\ntechnological zones may pay income tax at a reduced rate of 15%. Foreign investment\nenterprises engaged in production established in coastal economic open zones or in the old\nurban districts of cities where the special economic zones or the economic and technological\ndevelopment zones are located may pay income tax at a reduced rate of 24%.\nThe Enterprise Income Tax Law of the PRC \nsets a new income tax\nrate of 25% for all resident enterprises. The main tax rates are as follows:\n(i)\nA preferential rate of 20% to eligible small low-profit enterprises and a preferential rate of\n15% to hi-tech enterprises receiving priority support from the State (Article 28)\n(ii)\nMore tax preferential treatment to venture investment enterprises (Article 31) and to\nenterprises investing in environmental protection, energy and water conservation, work\nsafety, etc. (Article 34).\n(iii)\nPreferential tax policy on investment in agriculture, forestry, animal husbandry, fisheries and\ninfrastructure construction, income from environmental protection projects and eligible\ntechnology transfer (Article 27).\n(iv)\nDirect tax reduction or exemption with a substitute preferential policy for labor service\nenterprises, welfare enterprises and enterprises making comprehensive use of resources\n(Articles 30 and 33).\n(v)\nTransitional measures for enterprises enjoying the existing statutory tax preferential\ntreatment: old enterprises established before the Enterprise Income Tax Law of the PRC\nbecomes effective, who were entitled to enjoy an income tax rate of 15% or 24% under the\ncurrent tax laws may, pursuant to the regulations of the State Council, continue to enjoy a\ngradually increasing transitional income tax rate within five years after the new Enterprise\nIncome Tax Law becomes effective. Old enterprises entitled to enjoy regular tax reduction\nand exemption treatment under the current income tax laws may continue to enjoy remaining\nincentives in accordance with the requirements and period specified by the current income\ntax laws. However, for enterprises that have not made any profits and thus not enjoyed such\npreferential treatment, the period for enjoying preferential treatment shall be calculated from\nthe year in which the new Enterprise Income Tax Law becomes effective. The State Council\nshall develop measures for implementing such transitional incentives (Article 57).\n(b)\nValue-Added Tax\nAll units and individuals which and who, in the territory of the PRC, sell goods, render services\nsuch as processing, repair and spare parts replacement, or import goods, shall be the taxpayers of\nvalue-added tax.\nTAXATION\n154\n\n\nThe value-added tax rate in the PRC shall be:\n(i)\n17% for sales or import of goods and providing service of processing and repair services;\n(ii)\n13% for sales or import of grain, edible oil coal gas, natural gas, coal products for civil use,\nbooks, newspapers, magazines, etc.; and\n(iii)\n0% for export goods, except for those that the State Council has made special provisions.\n(c)\nBusiness Tax\nThere are nine business tax rates, ranging from 5% (communications and transportation industry)\nto 20% (recreation industry).\n(d)\nConsumption Tax\nConsumption tax has, in all, 11 tax items and 25 tax rates (tax volumes), from the lowest 3% to the\nhighest 45%. The tax rate is generally decided by prices in the production process, however, the\ntax rate for yellow rice wine, beer, petrol and diesel oil is determined by the quantity in production.\nThe taxable export consumer goods, except those subject to special State provisions, should be\nexempt from consumption tax.\n(e)\nLand Value-Added Tax\nThere are four categories of tax rates applicable under Land Value-Added Tax:\n(i)\nFor the part of increased value that does not surpass 50% of the deduction of fixed items,\nthe tax rate is 30%.\n(ii)\nFor the part of increased value that surpasses 50% but no more than 100% of the deduction\nof fixed items, the tax rate is 40%.\n(iii)\nFor the part of increased value that surpasses 100% but no more than 200% of the\ndeduction of fixed items, the tax rate is 50%.\n(iv)\nFor the part of increased value that surpasses 200% of the deduction of fixed items, the tax\nrate is 60%.\n(f)\nUrban Real Estate Tax\nThe owner or lessee (agent and user in cases where the owner and lesseet is unidentifiable) is the\ntax payer. The Urban Real Estate Tax of foreign investment enterprises should be levied quarterly\nat an annual tax rate of 1.2%, and they may enjoy a 30% reduction of assessed tax.\n(g)\nCustoms Tax\n(i)\nImport: Tariffs and import-related value-added tax shall be exempted with respect to\nimported equipment for foreign investment enterprises’ own use within the total amount of\ninvestment in foreign business investment projects that transfer technology and are\nconsistent with the category of encouragement and the restricted B category under the\n“Catalogue of Industries Guidance for Foreign Business Investment”\n,\nwith the exception of commodities listed in the “Catalogue of Import Commodities for Foreign\nBusiness Investment Projects with no Tax Exemption”\n.\n(ii)\nExport: Foreign investment enterprises that export self-manufactured products, with the\nexception of restricted exports, shall be exempt from export-related tax, subject to foreign\nrules and regulations.\nTAXATION\n155\n\n\n(iii)\nBonded commodities: The necessary imports for foreign investment enterprises to produce\nexports, such as raw materials, fuel, parts and components, accessories or packaging\nmaterials are regarded by Customs as bonded commodities.\nTAXATION\n156\n\n\nUpon listing and quotation on the SGX-ST, our Shares will be traded under the book-entry settlement\nsystem of the CDP\n, and all dealings in and transactions of the Shares through the SGX-ST will be\neffected in accordance with the terms and conditions for the operation of Securities Accounts with the\nCDP\n, as amended from time to time.\nOur Shares will be registered in the name of CDP or its nominee and held by CDP for and on behalf of\npersons who maintain, either directly or through depository agents, Securities Accounts with CDP\n.\nPersons named as direct Securities Account holders and depository agents in the depository register\nmaintained by the CDP will not be treated, under our Articles and the Cayman Companies Law as\nmembers of our Company in respect of the number of Shares credited to their respective Securities\nAccounts.\nPersons holding the Shares in Securities Account with CDP may withdraw the number of Shares they\nown from the book-entry settlement system in the form of physical share certificates.\nSuch share\ncertificates will, however, not be valid for delivery pursuant to trades transacted on the SGX-ST, although\nthey will be prima facie evidence of title and may be transferred in accordance with our Articles. A fee of\nS$10 for each withdrawal of 1,000 Shares or less and a fee of S$25 for each withdrawal of more than\n1,000 Shares is payable upon withdrawing the Shares from the book-entry settlement system and\nobtaining physical share certificates. In addition, a fee of S$2 or such other amount as our Directors may\ndecide, is payable to the Share Registrar for each share certificate issued and a stamp duty of S$10 is\nalso payable where our Shares are withdrawn in the name of the person withdrawing our Shares or\nS$0.20 per S$100 or part thereof of the last-transacted price where it is withdrawn in the name of a third-\nparty. Persons holding physical share certificates who wish to trade on the SGX-ST must deposit with\nCDP their share certificates together with the duly executed and stamped instruments of transfer in favour\nof CDP\n, and have their respective securities accounts credited with the number of Shares deposited\nbefore they can effect the desired trades. A fee of S$20 is payable upon the deposit of each instrument\nof transfer with CDP\n.\nTransactions in our Shares under the book-entry settlement system will be reflected by the seller’s\nSecurities Account being debited with the number of Shares sold and the buyer’s Securities Account\nbeing credited with the number of Shares acquired. No transfer of stamp duty is currently payable for the\nShares that are settled on a book-entry basis.\nA Singapore clearing fee for trades in our Shares on the SGX-ST is payable at the rate of 0.05 per cent.\nof the transaction value subject to a maximum of S$200 per transaction. The clearing fee, instrument of\ntransfer deposit fee and share withdrawal fee may be subject to Singapore Goods and Services Tax.\nDealings of our Shares will be carried out in Singapore dollars and will be effected for settlement on CDP\non a scripless basis. Settlement of trades on a normal “ready” basis on the SGX-ST generally takes\nplace on the third Market Day following the transaction date, and payment for the securities is generally\nsettled on the following business day. CDP holds securities on behalf of investors in Securities Accounts.\nAn investor may open a direct account with CDP or a sub-account with a CDP agent. The CDP agent\nmay be a member company of the SGX-ST, bank, merchant bank or trust company.\nCLEARANCE AND SETTLEMENT\n157\n\n\nINFORMATION ON DIRECTORS AND EXECUTIVE OFFICERS \n1.\nThe name, age, address, principal occupation and business and working experience of each of our\nDirectors and Executive Officers are set out in the section entitled “Directors, Management and\nStaff” in this Prospectus.\n2.\nThe present and past directorships other than directorships held in our Company (held in the five\nyears preceding the Latest Practicable Date) of each of our Directors, in other companies are as\nfollows:\nName\nPresent Directorships\nPast Directorships\nExecutive Directors\nMotokuni Yamashiro\nGroup Companies\nGroup Companies\nUni-Asia Fund Management Co., Ltd\nOffshore Property Investment\nUni-Asia Services and Agency Co., \nCorporation \nLtd\nUni-Asia Capital Co., Ltd\nUni-Asia Capital (Singapore) Limited\nAssociated Companies\nAssociated Companies\nNone\nCapital Advisers\nOther Companies\nOther Companies\nNone\nNone\nKazuhiko Yoshida\nGroup Companies\nGroup Companies\nOffshore Property Investment\nNone\nCorporation\nUni-Asia Capital Co., Ltd\nUni-Asia Capital (Singapore) Limited\nUni-Asia Finance Corporation (Japan)\nUni-Asia Fund Management Co., Ltd\nUni-Asia Guangzhou Property\nManagement Co. Ltd.\nUni-Asia Services and Agency Co., Ltd\nAssociated Companies\nAssociated Companies\nCapital Advisers \nNone\nOther Companies\nOther Companies\nFounders Corporation\nNone\nProsperity Containership S.A.\nMichio Tanamoto\nGroup Companies\nGroup Companies\nUni-Asia Capital Co., Ltd\nNone\nUni-Asia Capital (Singapore) Limited\nUni-Asia Finance Corporation (Japan)\nUni-Asia Guangzhou Property\nManagement Co. Ltd.\nAssociated Companies\nAssociated Companies\nCapital Advisers\nNone\nUni-Ships and Management Limited\nGENERAL AND STATUTORY INFORMATION\n158\n\n\nName\nPresent Directorships\nPast Directorships\nMichio Tanamoto\nOther Companies\nOther Companies\nEuro Asia II Inc., Panama\nNone\nEuro Asia III Inc., Panama \nFounders Corporation\nOcean Target Limited (in liquidation)\nOcean Time Limited (in liquidation)\nProsperity Containership S.A.\nNon-Executive Directors\nHamilton Jian Ren Chueh\nGroup Companies\nGroup Companies\nNone\nNone\nAssociated Companies\nAssociated Companies\nNone\nNone\nOther Companies\nOther Companies\nAsia Leasing Limited (in liquidation)\nEvergreen Energy Technology\nEvergreen International Corporation\nCorporation (Singapore) Pte. Ltd\nEvergreen Laurel Hotel (Paris) S.A.\n(liquidated)\nEvergreen Reinsurance Co\nGreencompass Marine S.A.\nUniglory HK Ltd.\nJörg Wilhelm Schelp\nGroup Companies\nGroup Companies\nNone\nNone\nAssociated Companies\nAssociated Companies\nNone\nNone\nOther Companies\nOther Companies\nNone\nNone\nRobert Van Jin Nien\nGroup Companies\nGroup Companies\nNone\nNone\nAssociated Companies\nAssociated Companies\nNone\nNone\nOther Companies\nOther Companies\nAcewise Holdings Limited\nAllway Gardens Management &\nAmco Finance Holdings S.A.\nServices Limited (liquidated)\nAnber Investments Limited\nArt Way Limited (liquidated)\nBanbury Investments Limited\nDaring March Company Limited\nBayern Gourmet Food Company\n(liquidated)\nLimited\nEAC Holdings (BVI) Limited\nBeecroft International Limited \n(liquidated)\nBoro Investment Limited \nEast Asia Capital (L) Limited\nChee Shing Company Limited\n(liquidated)\nConsolidated Construction \nEmpresa de Construcoes e\nResources Limited\nFabquip Hong Kong Limited\nConverse Limited\n(liquidated)\nDelta Roads Limited \nFair Bong Limited (liquidated)\nDover Hills Investments Limited\nFomento Predial Hopewell (Macau)\nExgratia Company Limited \nLimitada\nFastwin Investment Limited\nFungus Company Limited (liquidated)\nGENERAL AND STATUTORY INFORMATION\n159\n\n\nName\nPresent Directorships\nPast Directorships\nRobert Van Jin Nien\nOther Companies\nOther Companies\nForbes Resources Limited\nHarapbaik Construction (Malaysia) \nGalette Company Limited\nSdn. Bhd. (liquidated)\nGoldhill Investments (B.V.I.) Limited\nHofine Limited (liquidated) \nGoldhill Investments Limited \nHopewell 102 Limited (liquidated)\nGoldmax Resources Limited \nHopewell 104 Limited (liquidated)\nGoldvista Properties Limited \nHopewell Credit Limited (liquidated)\nGomark Holdings Ltd.\nHopewell Engineering & Construction\nGuangzhou-Shenzhen Superhighway \nLimited (liquidated)\n(Holdings) Ltd.\nHopewell Finance Limited (liquidated)\nHappy Gain Resources Limited\nHopewell Guangzhou Ring Road\nHCNH Insurance Brokers Limited\n(Hong Kong) Limited (liquidated)\nHH Finance Limited \nHopewell Humen Development\nHH Nominees Limited\nLimited (liquidated)\nHITEC Management Limited \nHopewell International Limited\nHong Kong Bowling City Limited\n(liquidated)\nHong Kong Insurance Agency Limited\nHopewell Shunde Highway 105\nHOPEC Engineering Design Limited\nLimited (liquidated)\nHopewell 106 Limited\nHopewell Xintang Development \nHopewell 108 Limited \n(H.K.) Limited (liquidated)\nHopewell 110 Limited  \nHopewell Xintang Development\nHopewell (Broadview Villa) Car Parks\nLimited (liquidated)\nManagement Limited\nIndonesia Slipform Holding (L) Ltd\nHopewell Centre Management Limited \n(liquidated)\nHopewell China Development Limited\nIndonesia Slipform (L) Ltd \nHopewell Construction Company,\n(liquidated) \nLimited \nIndonesia Tileman (BVI) Limited\nHopewell Development Company \n(liquidated)\nLimited \nIndonesian Tileman Holding (L) Ltd\nHopewell Engineering & Construction\n(liquidated)\n(B.V.I.) Limited \nIndonesia Tileman (L) Ltd\nHopewell Engineering & Construction\n(liquidated)\n(Macau) Limited \nIndonesia Tileman Nominee (BVI) \nHopewell Engineering Design Limited\nLimited (liquidated)\nHopewell Hitec (B.V.I.) Limited\nJoyful Year Limited (liquidated)\nHopewell Holdings Limited \nKanematsu Power (South China)\nHopewell Hospitality Company Limited \nCo. Ltd. (liquidated)\nHopewell Housing Limited\nKanetalho Properties Limited\nHopewell Huang Gang Development\n(liquidated)\n(B.V.I.) Limited\nMega Hotels International Limited\nHopewell Huang Gang Development\n(liquidated)\nLimited  \nNewpac (Hong Kong) Limited\nHopewell-Kanematsu (China)\n(liquidated)\nDevelopment Holdings Limited \nNewpac Limited (liquidated)\nHopewell Ma Chung Development\nOnway Company, Limited \n(H.K.) Limited\n(liquidated)\nHopewell Ma Chung Development  \nPower Project Services (L) Ltd\nLimited\n(liquidated)\nHopewell Properties (B.V.I.) Limited\nSingway Company, Limited \nHopewell Property Management\n(liquidated)\nCompany Limited \nSuffield Company Limited \nHopewell Rail Limited\n(liquidated)\nHopewell Slipform Engineering\nTanjung Jati Slipform (BVI) Limited \nLimited  \n(liquidated)\nHopewell Tileman Limited\nTanjung Jati Slipform Construction \nHopewell Tileman Power System\nLimited (liquidated)\nCorp. (in liquidation)\nTileman Asia (Hong Kong) Limited\nH-Power Investor Limited \n(liquidated)\nGENERAL AND STATUTORY INFORMATION\n160\n\n\nName\nPresent Directorships\nPast Directorships\nRobert Van Jin Nien\nOther Companies\nOther Companies\nIndonesia Project Management (L) Ltd.\nTruedale Company Limited \nIntek Resources Limited\n(liquidated)\nInternational Trademart Company   \nTuxhouse Holdings Limited \nLimited\n(liquidated)\nIT Catering and Services Limited \nValeside Investment Limited\nKammer Investment Limited \n(liquidated)\nKinghill Investment Limited\nVenlint Holdings Limited \nKowloon Panda Hotel (B.V.I.) Limited \n(liquidated)\nKowloon Panda Hotel Limited \nWenshan Holdings Limited \nLadway Limited\n(liquidated)\nLok Foo Company Limited \nYing Tat Estates Limited \nLucky Sino Limited\n(liquidated)\nManley High Investments Limited \nManrose Limited \nMega Hotels Management Limited \nMelo Hope Limited (formerly known as\nHopewell Shunde Roads Limited) \nMingway Company Limited\nNomusa Limited \nNova City Property Management \nLimited \nNova Taipa Gardens Property \nManagement Limited \nNova Taipa-Urbanizacoes, Limitada \nOrchard Resources Limited\nPaking Limited\nPanda Place Management Limited \nParkgate Enterprises Limited \nPerfect Joy Limited\nPhindorie Company Limited\nPowell Resources Ltd.\nPrimax Investment Limited \nProcelain Properties Ltd.\nPT. Hi Power Tubanan 1 \nSingway (B.V.I.) Company Limited \nSky Hover Investment Limited \nSlipform Engineering Limited\nSlipform Engineering (Macau) Limited \nSlipform Engineering (U.S.A.) Inc.\nSlipform Projects (Philippines), Inc.\n(in liquidation) \nSupreme Choice Investments Limited \nTanjung Jati Construction (BVI) Limited \nTanjung Jati Holding (BVI) Limited \nTileman Engineering Services Limited \nTileman Transportation Systems Limited \nTubanan Power Limited \nVibo Limited \nWetherall Investments (B.V.I.) Limited \nWetherall Investments Limited \nWholeson Investment Ltd.\nYeeko Investment Limited \nYuba Company Limited\nGENERAL AND STATUTORY INFORMATION\n161\n\n\nName\nPresent Directorships\nPast Directorships\nIndependent Directors\nV-Nee Yeh\nGroup Companies\nGroup Companies\nNone\nNone\nAssociated Companies\nAssociated Companies\nNone\nNone\nOther Companies\nOther Companies\nAFI Master Fund, Ltd.\nAllman Holdings Limited\nAnber Limited (in liquidation)\nASM Asia Recovery Fund\nArgyle Street Management (Holdings)\nASM Asia Recovery (Holdings)\nLimited\n(dissolved)\nArgyle Street Management Limited\nASM Asia Recovery (Master) Fund\nArnhold Holdings Limited\nASM Hudson River Fund\nAzure Fixed Income Fund, Ltd.\nBioneering Limited (Struck off)\nAzure India Real Estate Fund, Ltd\nBudi Ikhtiar Sdn. Bhd. (liquidated)\nAzure Non-U.S. Real Estate Fund, Ltd\nChina Travel International Investment\nCheetah Group Holdings Limited\nHong Kong Limited\nCheetah Investment Management\nCIM Adviosrs Limited\nLimited\nCompass Technology Holdings\nCheetah Korea Value Fund\nLimited\nChina Law International Limited\nEaseway Engineering Limited\nCogent Spring Limited\nGlenwell Orient Limited\nCompass Capital Preservation Fund,\nGlobpac Development Limited\nLtd.\n(liquidated)\nCompass Global Equity Fund, Ltd.\nHC Capital (BVI) Limited\nCompass Global Fixed Income Fund,\nHC Capital Limited\nLtd.\nHCG Insurance Services Limited\nCotteen Investments Limited\nHebei An Neng Hsin Chong\nCyberstreet Developments Limited\nConstruction Company Limited\nDeventer Limited\nHost Leader International Limited\nFirmwin Peak Limited\n(deregistered)\nFocal Point Investments Limited\nHsin Chong Development (China)\nG&H Acquisitions I, Inc.\nLimited\nG&H Acquisitions II, Inc.\nHsin Chong Johnson Controls IFM\nG&H Acquisitions III, Inc.\nLimited\nG&H Real Estate LLC\nInsight One Investments Limited\nG and H Enterprises (Liberia) Ltd.\nOcean Grand Chemicals Holdings\nGHY Company Limited\nLimited (in liquidation) \nGo-CDMA Limited\nPacific Squaw Creek, Inc.\nGoldian Limited \nSucasa Sdn. Bhd.\nHarrots Limited\nTranspac Industrial Holdings\nHC Liberia Ltd.\nLimited\nHCV Pacific Partners LLC\nValue Partners Private Equity\nHsin Chong Construction (BVI) Ltd.\nLimited (formerly known as VP\nHsin Chong Construction Group Ltd.\nPrivate Equity Limited)\nHsin Chong Development (Vietnam)\nYu Ming Investments Limited\nLimited\nHsin Chong Holdings (BVI) Limited\nHsin Chong Holdings (H.K.) Limited\nHsin Chong International Holdings\nLimited\nGENERAL AND STATUTORY INFORMATION\n162\n\n\nName\nPresent Directorships\nPast Directorships\nV-Nee Yeh\nOther Companies\nOther Companies\nHysan Development Company Limited\nJapan High Yield Property Fund \nLimited\nJapan Regional Assets Manager \nLimited\nKey Finance Limited\nKingway Brewery Holdings Limited\nKSDC Limited\nMandarin IT Fund I\nMandarin IT Fund II\nMandarin Venture Partners Ltd.\nMandarin VP (BVI) Limited \nMandarin VP (HK) Limited\nMariscal Limited\nMensa Management Limited\nNext Media Limited\nOrient Partners Inc.\nOrient Realty Inc.\nPacventure Developments, Inc.\nPedder Street Asia Absolute Return \nFund Limited\nPedder Street Asia Absolute Return \nMaster Fund Limited\nRife Yard Limited\nRocheland Company Limited\nShun Kin Enterprises Limited\nShun Tak Holdings Limited\nSteel China Access Capital Partners\nLimited\nSummit Insurance (Asia) Limited\nTarget Asia Fund Limited\nTopway Investments Limited\nValue Partners Hong Kong Limited\nValue Partners Limited\nVP Special Situations I Limited\nWebswin Limited\nWellhurst Company Limited\nWrights Point Limited\nYeh-Lloyds Partners Ltd.\nAng Miah Khiang\nGroup Companies\nGroup Companies\nNone\nNone\nAssociated Companies\nAssociated Companies\nNone\nNone\nOther Companies\nOther Companies\nAnwell Technologies Limited\nEast Asia GE Commercial Finance \nAsia Enterprises Holding Limited\nLtd\nBRIS Information Services Sdn Bhd\nEucon Holding Limited\n(as alternate director)\nGE Capital Trade Services Ltd\nDP Credit Bureau Pte Ltd\nGE Commercial Financing\nDP Information Network Pte Ltd\n(Singapore) Ltd\nHeller Factoring (Malaysia) Sdn Bhd\nHIG Asia Pacific Management Pte \n(in liquidation)\nLtd (in liquidation)\nPan Asian Water Solutions Limited\nKasikorn Factoring Co, Ltd\nRAM-DP Information Services Sdn Bhd\nRotol Singapore Ltd \nSei Woo Technologies Limited\nTUV SUD PSB Corporation Pte. Ltd\nGENERAL AND STATUTORY INFORMATION\n163\n\n\nName\nPresent Directorships\nPast Directorships\nRonnie Teo Heng Hock\nGroup Companies\nGroup Companies\nNone\nNone\nAssociated Companies\nAssociated Companies\nNone\nNone\nOther Companies\nOther Companies\nBehringer Corporation Ltd\nCheung Woh Technologies Ltd\nBerger International Limited\nDM Analytics Pte Ltd (liquidated)\nBerger Paints Singapore Pte Ltd\nSpeedy-Tech Electronics Ltd \nFinancial Reengineering Pte Ltd\nStewardship Capital Pte Ltd\nShanghai Asia Holdings Ltd\nStewardship Equity Pte Ltd\nStewardship Learning Pte Ltd\n(liquidated) \n(in liquidation)\nStewardship Partners Pte Ltd \nSunVic Chemical Holdings Limited\n(liquidated)\n3.\nThe present and past directorships (held in the five years preceding the Latest Practicable Date) of\neach of our Executive Officers are as follows:\nName\nPresent Directorships\nPast Directorships\nExecutive Officers\nMasaki Fukumori\nGroup Companies\nGroup Companies\nNone\nNone\nAssociated Companies\nAssociated Companies\nNone\nNone\nOther Companies\nOther Companies\nAkebono Capital Limited\nFortitude Maritime Inc.\nEver Union Ltd\nShine Line Ltd.\nFalcon Containership S.A.\nFortitude Containership S.A.\nGlad Mate Ltd \nHarmonic Shipping S.A.\nHonest Rays Ltd\nInfinite Asset Management (Pte) \nLimited\nJoin Mate Ltd\nKabushikikaisha Tenshodo\nKok Shipping Inc \nMatin Shipping Limited\nNova Shipping S.A.\nPanmax Tanker S.A.\nProsperity Containership S.A.\nRich Containership S.A.\nSearex Asset Management Ltd\nSentic Limited\nSunny Law Co., Ltd\nSunrise Shipping S.A.\nUnion Ace Ltd\nUnion Containership S.A.\nWave Dancer Ltd\nGENERAL AND STATUTORY INFORMATION\n164\n\n\nName\nPresent Directorships\nPast Directorships\nMasahiro Iwabuchi\nGroup Companies\nGroup Companies\nUni-Asia Guangzhou Property \nNone\nManagement Co. Ltd.\nAssociated Companies\nAssociated Companies\nNone\nNone\nOther Companies\nOther Companies\nAAA Strategic Investment Ltd\nNone\nKenji Fukuyado\nGroup Companies\nGroup Companies\nNone\nUni-Asia Capital (Singapore) Limited\nUni-Asia Finance Corporation (Japan)\nAssociated Companies\nAssociated Companies\nNone\nNone\nOther Companies\nOther Companies\nNone\nNone\nClementine Man Ting Ng\nGroup Companies\nGroup Companies\nNone\nNone\nAssociated Companies\nAssociated Companies\nNone\nNone\nOther Companies\nOther Companies\nNone\nKaizen Property Management Limited\nThomas Cheung Fook-Loi\nGroup Companies\nGroup Companies\nNone\nNone\nAssociated Companies\nAssociated Companies\nNone\nNone\nOther Companies\nOther Companies\nNone\nNone\n4.\nSave as disclosed in this section of the Prospectus, none of our Directors or Executive Officers is\nor was involved in any of the following events:-\n(a)\nduring the last ten years, an application or a petition under any bankruptcy laws of any\njurisdiction filed against him or against a partnership of which he was a partner at the time\nhe was a partner or at any time within two years from the date he ceased to be a partner;\n(b)\nduring the last ten years, an application or a petition under any law of any jurisdiction filed\nagainst an entity (not being a partnership) of which he was a director or an equivalent\nperson or a key executive, at the time when he was a director or an equivalent person or a\nkey executive of that entity or at any time within two years from the date he ceased to be a\ndirector or an equivalent person or a key executive of that entity, for the winding-up or\ndissolution of that entity or, where the entity is the trustee of a business trust, that business\ntrust, on the ground of insolvency;\nGENERAL AND STATUTORY INFORMATION\n165\n\n\n(c)\nany unsatisfied judgments against him;\n(d)\na conviction of any offence, in Singapore or elsewhere, involving fraud or dishonesty which is\npunishable with imprisonment, or has been the subject of any criminal proceedings\n(including any pending criminal proceedings which he is aware of) for such purpose;\n(e)\na conviction of any offence, in Singapore or elsewhere, involving a breach of any law or\nregulatory requirement that relates to the securities or futures industry in Singapore or\nelsewhere, or has been the subject of any criminal proceedings (including pending criminal\nproceedings which he is aware of) for such breach;\n(f)\nduring the last ten years, judgment entered against him in any civil proceeding in Singapore\nor elsewhere involving a breach of any law or regulatory requirement that relates to the\nsecurities or futures industry in Singapore or elsewhere, or a finding of fraud,\nmisrepresentation or dishonesty on his part, been the subject of or any civil proceedings\n(including any pending civil proceedings which he is aware of) involving an allegation of\nfraud, misrepresentation or dishonesty on his part;\n(g)\na conviction in Singapore or elsewhere of any offence in connection with the formation or\nmanagement of any entity or business trust;\n(h)\ndisqualification from acting as a director or an equivalent person of any entity (including the\ntrustee of a business trust), or from taking part directly or indirectly in the management of\nany entity or business trust;\n(i)\nthe subject of any order, judgment or ruling of any court, tribunal or governmental body\npermanently or temporarily enjoining him from engaging in any type of business practice or\nactivity;\n(j)\nto his knowledge, been concerned with the management or conduct, in Singapore or\nelsewhere, of affairs of:\n(i)\nany corporation which has been investigated for a breach of any law or regulatory\nrequirement governing corporations in Singapore or elsewhere;\n(ii)\nany entity (not being a corporation) which has been investigated for a breach of any\nlaw or regulatory requirement governing such entities in Singapore or elsewhere;\n(iii)\nany business trust which has been investigated for a breach of any law or regulatory\nrequirement governing business trusts in Singapore or elsewhere; or\n(iv)\nany entity or business trust which has been investigated for a breach of any law or\nregulatory requirement that relates to the securities or futures industry in Singapore or\nelsewhere,\nin connection with any matter occurring or arising during the period when he was so\nconcerned with the entity or business trust; and\n(k)\nthe subject of any current or past investigation or disciplinary proceedings, or has been\nreprimanded or issued any warning, by the Authority or any other regulatory authority,\nexchange, professional body or government agency, whether in Singapore or elsewhere.\nOne of our Independent Directors, Mr. V-Nee Yeh, was a non-executive director and member of the\naudit committee of Ocean Grand Chemicals Holdings Limited (“OGC”). OGC is a company\nincorporated in Bermuda with limited liability and is currently listed on the Stock Exchange of Hong\nKong Limited (“HKSE”).\nGENERAL AND STATUTORY INFORMATION\n166\n\n\nIn early July 2006, OGC’s auditors, PricewaterhouseCoopers, alerted the OGC audit committee of\npotential accounting irregularities. OGC audit committee then instructed Deloitte & Touche Forensic\nServices Limited (“DTFS”) to enquire into certain accounting issues relating to certain of its\nsubsidiaries. In the course of its investigations, DTFS found material discrepancies in the actual\ncash and bank balances of one of OGC’s subsidiaries as compared to the management accounts\nof that subsidiary previously provided by that subsidiary to OGC. DTFS also noted that a\nsubstantial amount of money was transferred out from the bank accounts of one of OGC’s\nsubsidiaries on 17 July 2006 to payees that were not companies within the OGC group of\ncompanies. Trading of OGC shares on the HKSE was suspended on 17 July 2006 and remains\nsuspended as at the Latest Practicable Date.\nThe OGC board of directors resolved to apply to the Hong Kong and Bermuda courts for the\nappointment of provisional liquidators in order to protect the assets of OGC and safeguard the\ninterests of the creditors and shareholders of OGC. Pursuant to the Order of the High Court dated\n24 July 2006, Messrs Lai Kar Yan and Joseph Kin Ching Lo, both of Messrs Deloitte Touche\nTohmatsu, have been appointed jointly and severally as the provisional liquidators of OGC. Taking\ninto account the appointment of provisional liquidators to protect the interests of OGC, Mr. Yeh,\ntogether with both independent non-executive directors, resigned from the OGC board of directors\non 26 July 2006. An enquiry was commenced by the Securities and Futures Commission of Hong\nKong into the affairs of OGC and Ocean Grand Holdings Limited (the parent company of OGC also\nlisted on the HKSE). As far as Mr. Yeh is aware, as at the Latest Practicable Date, the investigations\nby DTFS and SFC on the aforesaid matters are still ongoing.\nAccording to the latest announcement of OGC dated 27 December 2006, the hearing of the\npetitions to wind up OGC was adjourned to 16 April 2007 and the provisional liquidators\ninvestigations into OGC are continuing.\n5.\nThe aggregate remuneration paid to our Directors for services rendered in all capacities to our\nCompany and our subsidiaries for the last financial year ended 31 December 2006 was\napproximately US$2.5 million. For the current financial year ending 31 December 2007, the\naggregate remuneration payable to Directors by our Group (including fees paid under any service\nagreements with the Directors) is estimated to be approximately US$2.7 million.\n6.\nSave as disclosed in the section entitled “Service Agreements” of this Prospectus, there are no\nexisting or proposed service contracts between our Executive Directors or Executive Officers and\nour Company or any of our subsidiaries.\n7.\nThere is no shareholding qualification for Directors under our Articles.\n8.\nNo option to subscribe for shares in, or debentures of, our Company or any of our subsidiaries has\nbeen granted to, or was exercised by, any of our Directors or Executive Officers within the last\nfinancial year.\n9.\nSave for any options to be granted under the Uni-Asia Share Option Scheme, our Company has no\nintention of granting any options to subscribe for any shares in or debentures of our Company or\nany of our subsidiaries. As at the date of this Prospectus, no options have been granted or agreed\nto be granted under the Uni-Asia Share Option Scheme.\n10.\nNone of our Directors is interested, directly or indirectly, in the promotion of, or in any property or\nassets which have, within the two years preceding the date of this Prospectus, been acquired or\ndisposed of by or leased to, our Company or any of our subsidiaries, or are proposed to be\nacquired or disposed of by or leased to our Company or any of our subsidiaries.\n11.\nNone of our Directors or Executive Officers or Substantial Shareholders of our Company have any\nsubstantial interest, direct or indirect, in any company carrying on a similar trade as our Company\nor our subsidiaries.\nGENERAL AND STATUTORY INFORMATION\n167\n\n\n12.\nNo sum or benefit has been paid or is agreed to be paid to any Director, Executive Officer or\nexpert, or to any firm in which such Director, Executive Officer or expert is a partner or any\ncorporation in which such Director, Executive Officer or expert holds shares or debentures, in cash\nor shares or otherwise, by any person to induce him to become, or to qualify him as, a Director or\nExecutive Officer, or otherwise for services rendered by him or by such firm or corporation in\nconnection with the promotion or formation of our Company.\n13.\nNone of our Directors has any interest in any existing contract or arrangement which is significant\nin relation to the business of our Company and our subsidiaries, taken as a whole.\nSHARE CAPITAL\n14.\nAs at the Latest Practicable Date, there is only one class of shares in the capital of our Company.\nThere are no founder, management or deferred shares. The rights and privileges attached to our\nShares are stated in our Articles.\n15.\nSave as disclosed in the sections entitled “Share Capital” and “General Information on our Group”\nof this Prospectus, there were no changes in the issued and paid-up share capital of our Company\nand our subsidiaries within the three years preceding the Latest Practicable Date.\n16.\nNo shares in, or debentures of, our Company or any of our subsidiaries have been issued, or are\nproposed to be issued, as fully or partly paid for cash or for a consideration other than cash, during\nthe last two years. A summary of the provisions of our Articles relating to, inter alia, the\nremuneration, voting rights on proposals, arrangements or contracts in which Directors are\ninterested, borrowing powers of our Directors, the voting rights and dividend rights of members of\nour Company are set out in Appendix D “Summary of the Constitution of our Company” and\nAppendix E “Summary of Cayman Islands Company Law” of this Prospectus.\nBANK BORROWINGS AND WORKING CAPITAL\n17.\nSave as disclosed under the section entitled “Capitalisation and Indebtedness” in this Prospectus,\nour Group had no other borrowings or indebtedness in the nature of borrowings including bank\noverdrafts and liabilities under acceptances (other than normal trading bills) or acceptance credits,\nmortgages, charges, hire purchase commitments, guarantees or other contingent liabilities as at\nthe Latest Practicable Date.\nMATERIAL CONTRACTS\n18.\nOur Company and our subsidiaries have not entered into any material contracts, not being\ncontracts entered into in the ordinary course of business, within the two years preceding the date\nof lodgment of this Prospectus.\nLITIGATION\n19.\nAs at the Latest Practicable Date, neither our Company nor any of our subsidiaries are engaged in\nany legal or arbitration proceedings as plaintiff or defendant including those which are pending or\nknown to be contemplated which may have or have had in the last 12 months before the date of\nlodgment of this Prospectus, a material effect on the financial position or the profitability of our\nCompany or any of our subsidiaries.\nMANAGEMENT, UNDERWRITING AND PLACEMENT ARRANGEMENTS\n20.\nPursuant to the Management and Underwriting Agreement dated 8 August 2007 entered into\nbetween our Company and DBS Bank as the Manager and the Underwriter, our Company\nappointed DBS Bank to manage the Invitation. DBS Bank will receive a management fee from our\nCompany for its services rendered in connection with the Invitation.\nGENERAL AND STATUTORY INFORMATION\n168\n\n\nPursuant to the Management and Underwriting Agreement, the Underwriter has agreed to\nunderwrite the Offer Shares for a commission of 2.75 per cent. of the Invitation Price for each Offer\nShare payable by our Company pursuant to the Invitation. DBS Bank may, at its absolute\ndiscretion, appoint one or more sub-underwriters to sub-underwrite the Offer Shares.\n21.\nPursuant to the Placement Agreement dated 8 August 2007 (the “Placement Agreement”) entered\ninto between our Company and DBS Bank as Placement Agent, DBS Bank has agreed to\nsubscribe for and/or procure subscribers for the Placement Shares for a placement commission of\n2.75 per cent. of the Invitation Price for each Placement Share (save that the placement\ncommission payable in respect of the aggregate of 15,000,000 Placement Shares, to be\nsubscribed by Founders Corporation, Exeno Yamamizu, Mitsui & Co., Ltd., and Yamasa Co., Ltd,\nshall be 1.75 per cent. of the Invitation Price for each Placement Share), to be paid by our\nCompany. DBS Bank may, at its absolute discretion, appoint one or more sub-placement agents for\nthe Placement Shares.\nIn respect of the Offer Shares, brokerage will be paid to members of the SGX-ST, merchant banks\nand members of the Association of Banks in Singapore in respect of successful applications made\non Application Forms bearing their respective stamps, or to Participating Banks in respect of\nsuccessful applications made through Electronic Applications at their respective ATMs or their IB\nwebsites. Subscribers of the Placement Shares (excluding Reserved Shares) may be required to\npay brokerage of 1.0 per cent. of the Invitation Price.\n22.\nThe Management and Underwriting Agreement may be terminated by DBS Bank at any time on or\nbefore the close of the Application List on the occurrence of certain events including, inter alia:\n(a)\nthere shall come to the knowledge of the Manager or the Underwriter any breach of certain\nrepresentations and warranties in the Management and Underwriting Agreement or that any\nof certain representations and warranties by our Company as provided in the Management\nand Underwriting Agreement is untrue, inaccurate or misleading; or\n(b)\nany event or circumstance occurring after the date of the Management and Underwriting\nAgreement, which if it had occurred before the date of the Management and Underwriting\nAgreement, would have rendered any of the warranties in the Management and Underwriting\nAgreement untrue, inaccurate or misleading in any respect; or \n(c)\nthere shall have been, since the date of the Management and Underwriting Agreement:\n(i)\nany material adverse change (whether or not foreseeable at the date of the\nManagement and Underwriting Agreement) in, or any development (which has\noccurred or is likely to occur) involving a prospective material adverse change, in the\nbusiness or in the condition (financial or otherwise) or prospects of our Company or of\nour Group as a whole; or\n(ii)\nany new or prospective introduction of or any change or prospective change in any\nlegislation, regulation, order, policy, rule, guideline or directive (including without\nprejudice to the generality of the foregoing, in respect of any laws or regulations\nrelating to taxation or exchange controls) in Singapore or elsewhere (whether or not\nhaving the force of law and including, without limitation, any directive or request issued\nby the Authority, the Securities Industry Council of Singapore or the SGX-ST or other\nauthorities in the Cayman Islands, Hong Kong, Japan or the PRC) or in the\ninterpretation or application thereof any court, government body, regulatory authority\nor other competent authority; or\nGENERAL AND STATUTORY INFORMATION\n169\n\n\n(iii)\nany event or series of events resulting in or representing a change, or any\ndevelopment involving a prospective change, in local, national, regional or\ninternational financial (including stock market, foreign exchange market, inter-bank\nmarkets or interest rates or money markets), political, industrial, economic, legal or\nmonetary conditions, taxation or exchange controls (including but without limitation,\nthe imposition of any moratorium, suspension or material restriction on trading in\nsecurities generally on the SGX-ST due to exceptional financial circumstances or\notherwise); or\n(iv)\nany imminent threat or occurrence of any local, national or international outbreak or\nescalation of hostilities, insurrection or armed conflict (whether or not involving\nfinancial markets); or\n(v)\nany other occurrence of any nature whatsoever;\nwhich event or events shall in the sole opinion of DBS Bank (1) result in or be likely to result\nin a material adverse fluctuation or adverse conditions in the stock market in Singapore or\noverseas; or (2) be likely to prejudice the success of the subscription or offer of the New\nShares (whether in the primary market or in respect of dealings in the secondary market); or\n(3) make it impracticable, inadvisable, inexpedient or uncommercial to proceed with any of\nthe transactions contemplated in the Management and Underwriting Agreement; or (4) be\nlikely to have a material adverse effect on the business, trading position, operations or\nprospects of our Company or of our Group as a whole; or (5) be such that no reasonable\nunderwriter would have entered into the Management and Underwriting Agreement; or (6)\nresult or be likely to result in the issue of a stop order by the Authority in accordance with\nSection 242 of the SFA (notwithstanding that a supplementary or replacement Prospectus is\nsubsequently registered with the Authority pursuant to Section 241 of the SFA); or (7) make\nit uncommercial or otherwise contrary to or outside the usual commercial practices of\nunderwriters in Singapore for DBS Bank to observe or perform or be obliged to observe or\nperform the terms of the Management and Underwriting Agreement; or\n(d)\nif any of the matters referred above to in this paragraph 22 comes to the notice of DBS Bank\nand our Company fails to lodge a supplementary or replacement Prospectus or document\nwithin a reasonable time after being notified of such a material misrepresentation or\nomission or fails to promptly take such steps as DBS Bank may reasonably require to inform\ninvestors of the lodgment of such a supplementary prospectus or document.\n23.\nThe Placement Agreement is conditional upon the Management and Underwriting Agreement not\nhaving been terminated or rescinded pursuant to the provisions of the Management and\nUnderwriting Agreement. In the event that the Management and Underwriting Agreement is\nterminated or rescinded, our Company reserves the right, at the absolute discretion of our\nDirectors, to cancel the Invitation.\n24.\nSave as disclosed in paragraphs 20 to 23 above, we do not have any material relationship with the\nManager, Underwriter or Placement Agent.\nMISCELLANEOUS\n25.\nThe nature of the business of our Company has been stated earlier in this Prospectus. The\ncorporations which by virtue of Section 6 of the Companies Act are deemed to be related to our\nCompany are set out in the section entitled “Group Structure” in this Prospectus.\n26.\nThere has been no previous issue of Shares by our Company or offer for sale of our Shares to the\npublic within the two years preceding the date of this Prospectus.\nGENERAL AND STATUTORY INFORMATION\n170\n\n\n27.\nThe estimated aggregate expenses in connection with the Invitation and the application for listing,\nincluding underwriting commission, placement commission, brokerage, management fees, auditors’\nfee, solicitors’ fee, and all other incidental expenses in relation to the Invitation can be broken down\nas follows:\nPercentage of\ngross proceeds\nAmount\nof the Invitation\n(S$’000)\n(%)\nListing fees\n75\n0.2\nProfessional fees and charges\n1,828\n5.1\nUnderwriting and placement commission and brokerage\n907\n2.5\nMiscellaneous expenses\n962\n2.7\nTotal estimated expenses\n3,772\n10.5\nThe above expenses will be borne by our Company.\n28.\nThere have been no public takeover offers by third-parties in respect of our Shares or by us in\nrespect of other companies’ shares or units of a business trust which have occurred during the last\nand current financial year and up to the Latest Practicable Date.\n29.\nNo amount of cash or securities or benefit has been paid or given to any promoter within the two\nyears preceding the Latest Practicable Date or is proposed or intended to be paid or given to any\npromoter at any time.\n30.\nSave as disclosed in the section entitled “General and Statutory Information – Management,\nUnderwriting and Placement Arrangements” in this Prospectus, no commission, discount or\nbrokerage has been paid or other special terms granted within the two years preceding the Latest\nPracticable Date or is payable to any Director, promoter, expert, proposed director or any other\nperson for subscribing or agreeing to subscribe or procuring or agreeing to procure subscriptions\nfor any shares in, or debentures of, our Company or any of our subsidiaries.\n31.\nNo expert is interested, directly or indirectly, in the promotion of, or in any property or assets which\nhave, within the two years preceding the Latest Practicable Date, been acquired or disposed of by\nor leased to our Company or any of our subsidiaries or are proposed to be acquired or disposed of\nby or leased to our Company or any of our subsidiaries.\n32.\nWe did not employ, on a contingent basis, any expert who has a material interest, whether direct or\nindirect, in our Shares, or has a material economic interest, whether direct or indirect, in our\nCompany including an interest in the success of the Invitation.\n33.\nSave as disclosed in the sections entitled “Risk Factors” and “Prospects”, our Directors are not\naware of any relevant material information including trading factors or risks which are unlikely to be\nknown or anticipated by the general public and which could materially affect the profits of our\nCompany and our subsidiaries.\n34.\nSave as disclosed in the sections entitled “Risk Factors” and “Prospects”, the financial condition\nand operations of our Group are not likely to be affected by any of the following:\n(a)\nknown trends or demands, commitments, events or uncertainties that will result in or are\nreasonably likely to result in our Group’s net sales, profitability, liquidity or capital resources\nincreasing or decreasing in any material way;\n(b)\nmaterial commitments for capital expenditure;\nGENERAL AND STATUTORY INFORMATION\n171\n\n\n(c)\nunusual or infrequent events or transactions or any significant economic changes that\nmaterially affected the amount of reported income from our operations; and\n(d)\nknown trends or uncertainties that have had or that we reasonably expect will have a\nmaterial favourable or unfavourable impact on our revenues or operating income.\n35.\nWe currently have no intention of changing our auditors after the listing of our Company on the\nSGX-ST.\n36.\nSave as disclosed under the section entitled “Use of Proceeds” in this Prospectus, no property has\nbeen purchased or acquired or proposed to be purchased or acquired by our Company or our\nsubsidiaries which is to be paid for wholly or partly out of the proceeds of the Invitation or the\npurchase or acquisition of which has not been completed at the date of the issue of this\nProspectus other than property in respect of which the contract for the purchase or acquisition\nwhereof was entered into in our ordinary course of business or in the ordinary course of business\nof our subsidiaries, such contract not being made in contemplation of the Invitation nor the\nInvitation in consequence of the contract.\n37.\nSave as disclosed in the section entitled “General Information on our Group – Business Overview”\nin this Prospectus, our Directors are not aware of any event which has        occurred since 31\nDecember 2006 and up to the Latest Practicable Date which may have a material effect on the\nfinancial position and results of our Group.\nCONSENTS\n38.\nThe Auditors have given and have not withdrawn their written consent to the issue of this\nProspectus with the inclusion herein of the Reports on the Consolidated Financial Statements of\nour Group for FY2004, FY2005 and FY2006 (each of which has not been prepared for the\npurposes of incorporation in this Prospectus) as set out in Appendices A, B and C, in the form and\ncontext in which they are included in this Prospectus and references to their name in the form and\ncontext in which they are included in this Prospectus.\n39.\nThe Manager, Underwriter and Placement Agent has given and has not withdrawn its written\nconsent to the issue of this Prospectus with the inclusion herein of, and all references to, its name\nand references thereto in the form and context in which it appears in this Prospectus, and to act in\nsuch capacity in relation to this Prospectus.\n40.\nEach of the Manager, Underwriter and Placement Agent, the Solicitors to the Invitation, the\nSolicitors to the Manager, Underwriter and Placement Agent, the legal advisers to our Company as\nto Hong Kong law, Cayman Islands law, British Virgin Islands law, Japan law and PRC law, the\nShare Registrar and Singapore Share Transfer Agent, does not make, or purport to make, any\nstatement in this Prospectus or any statement upon which a statement in this Prospectus is based\nand, to the maximum extent permitted by law, expressly disclaim and take no responsibility for any\nliability to any person which is based on, or arises out of, the statements, information or opinions in\nthis Prospectus.\nRESPONSIBILITY STATEMENT BY OUR DIRECTORS\n41.\nThis Prospectus has been seen and approved by our Directors and they individually and\ncollectively accept full responsibility for the accuracy of the information given herein and confirm,\nhaving made all reasonable enquiries, that to the best of their knowledge and belief, the facts\nstated and the opinions expressed herein are fair and accurate in all material respects as of the\ndate hereof and there are no material facts the omission of which would make any statements in\nthis Prospectus misleading and that this Prospectus constitutes full and true disclosure of all\nmaterial facts about the Invitation and our Group.\nGENERAL AND STATUTORY INFORMATION\n172\n\n\nDOCUMENTS AVAILABLE FOR INSPECTION\n42.\nThe following documents or copies thereof may be inspected at 8 Shenton Way, #37-04, Singapore\n068811 during normal business hours for a period of six months from the date of registration by the\nAuthority of this Prospectus:\n(a)\nthe Memorandum and Articles of our Company;\n(b)\nthe Reports on the Consolidated Financial Statements for the years ended 31 December\n2004, 2005 and 2006 set out in Appendices A, B, and C of this Prospectus respectively;\n(c)\nthe audited financial statements, where available, of each of our subsidiaries for the years\nended 31 December 2004, 2005 and 2006;\n(d)\nthe service agreements referred to in the section entitled “Directors, Management and Staff –\nService Agreements” in this Prospectus; and\n(e)\nthe letters of consent referred to in paragraphs 38 and 39 in the section entitled “General\nand Statutory Information – Consents” in this Prospectus.\nGENERAL AND STATUTORY INFORMATION\n173\n\n\nUNI-ASIA FINANCE CORPORATION\n(Incorporated in the Cayman Islands with limited liability)\nREPORTS AND CONSOLIDATED FINANCIAL STATEMENTS\nFOR THE YEAR ENDED\n31 DECEMBER 2004\nA-1\nAPPENDIX A\nThe consolidated financial statements for the year ended 31 December 2004 and the auditors’ report on\nthe consolidated financial statements for the year ended 31 December 2004 were not prepared for\npurposes of inclusion in the Prospectus and, save for references to page numbers which have been\naltered to conform to the pagination of the Prospectus, have been reproduced and are set out on pages\nA-6 to A-48 and page A-5, respectively.\n\n\nDIRECTORS’ REPORT TO THE SHAREHOLDERS \nOF UNI-ASIA FINANCE CORPORATION\nThe directors submit their report together with the audited consolidated financial statements of Uni-Asia\nFinance Corporation (the “Group”) for the year ended 31 December 2004.\nGeneral information\nThe principal activities of the Group continue to be in finance arrangement and investment management.\nThe Group acted in the capacity of principal investor, finance arranger and fund administrator for the\nvarious classes of investments mentioned below. At the end of December 2003, a new investment line in\nshipping was launched within the asset finance division and subsequently became a major business\nsegment within the Group.\nThe four major operation areas are described hereunder.\n–\nStructured Finance – Finance arrangement, acting as agent of and participating in syndicated\ncommercial loans and tax oriented leases; mainly in shipping in Asia.\n–\nShip Investment/Management – Acquisition and disposal of ships and the investment management\nof assets held by the Group and on behalf of third parties.\n–\nDistressed Assets Investment/Management – Acquisition and disposal of distressed Asian assets\nand the investment management of assets held by the Group and on behalf of third parties.\n–\nProperty Investment/Management – Arrangement of investments and co-investments in the\ndevelopment and trading of Japanese hotels, commercial and residential properties and the\ninvestment management of the properties held by the Group and on behalf of third parties.\nThe Group also retains working capital for the purpose of investment in additional projects or businesses\nwhere the directors deem there to be short-term or long-term opportunities in niche areas where the\nGroup is able to extend its relevant expertise.\nOperating and Financial Review\n1.\nStructured Finance\nThe Group undertakes structured finance activities under its Hong Kong and Tokyo operations.\nThe Group arranged 6 syndicated loans and tax leases totalling US$402 million during 2004 (2003:\n8 loans/leases totalling US$404.9 million), generating US$2,383,000 (2003: US$3,060,000) in\nmanagement fees and US$251,000 (2003: US$283,000) in agency fees.\nAs at 31 December 2004, the outstanding loans the Group had participating in totalled\nUS$250,000 generating US$12,000 in interest income during the year (2003: total outstanding was\nUS$767,000 generating US$30,000 in interest income).\nThe directors view that the general business circumstances in this area in 2005 would continue to\nremain robust due to the strong demand of shipping transportation brought about by the economic\ngrowth in China and the rebound of Asian economies.\nA-2\nAPPENDIX A – DIRECTORS’ REPORT ON THE CONSOLIDATED FINANCIAL\nSTATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2004\n\n\nDIRECTORS’ REPORT TO THE SHAREHOLDERS \nOF UNI-ASIA FINANCE CORPORATION (Continued)\n2.\nShip Investment/Management\nThe Ship Investment/Management division undertakes to carry out shipping investment\nmanagement for the Group and for third parties. In December 2003, the Group ventured into\nshipping investment and acted as the investor and administrator of a US$17 million fund, Searex\nAsset Management Limited. The Group participated in the fund by the way of subscribing to a\n29.4% interest in the outstanding performance notes.\nFrom these shipping investment\nmanagement activities including the role as debt arranger and administrator of the fund, the Group\nearned a total of US$9,594,000 (2003: US$1,136,000) including US$1,157,000 as upfront fee from\narrangement of 7 syndicated/bilateral loans totalling US$109 million, US$63,000 as agency fee,\nUS$184,000 as brokerage commission, US$1,415,000 as fund management fee and\nUS$6,682,000 as investment return.\nAs at 31 December 2004, the total outstanding amount\ninvested in the ships/shipping fund was US$4,247,000.\nThe directors view the business circumstances in this area would remain positive in the near term\nbut would exercise caution in its longer term strategies as this buoyant shipping cycle has persisted\nfor more than 18 months. The business outlook envisaged in asset finance is expected to remain\nstrong for reasons already mentioned.\n3.\nDistressed Assets Investment/Management\nThe Distressed Assets Investment/Management division carries out Non-Performing Loans (NPLs)\nacquisitions and disposal for the Group and for the managed funds.\nA total of US$1,862,000 was recovered in 2004 from distressed assets directly invested by the\nGroup (2003: US$1,245,000).\nAAA Strategic Investment Limited (AAA) is a co-investment fund administrated by the Group in\nparticipation with a Japanese financial institution. Direct and indirect total contribution from AAA to\nthe Group amounted to US$436,000 in 2004 (2003: US$1,014,000). As at 31 December 2004, the\nnominal value of the notes issued by AAA was US$5,644,000 (2003: US$3,776,000) of which the\nGroup’s participation reached US$1,793,000 (2003: US$926,000).\nThe directors anticipate changes and a higher degree of competition in the distressed assets\nmarket in 2005. The Group will not only focus on new NPL investment opportunities for AAA but\nalso, future expansion and investments in the PRC distressed assets market in partnership with\ninternational players and local professional institutions.\nA-3\nAPPENDIX A – DIRECTORS’ REPORT ON THE CONSOLIDATED FINANCIAL\nSTATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2004\n\n\nDIRECTORS’ REPORT TO THE SHAREHOLDERS \nOF UNI-ASIA FINANCE CORPORATION (Continued)\n4.\nProperty Investment Management\nThe Group’s property investment in Japan has been conducted mainly through Capital Advisers\nCo., Limited (CA). Since 1 May 2003, CA has become an associated company in which the Group\nmaintains an equity interest of 44.8%.\nAs at 31 December 2004, the Group’s outstanding\ninvestment in CA totalled US$7,836,000 including US$3,082,000 as ordinary capital and\nUS$4,754,000 as shareholders’ loan. Contribution from CA to the Group in 2004 was US$242,000\n(2003: US$601,000).\nCA focuses on investment in residential projects and limited service hotels through the\narrangement of new property funds or existing property funds advised, administrated and managed\nby the company. The company would take minority equity participations in the projects. During the\nyear, CA launched a new fund structure with the participation of a Japanese financial institution\nspecialising in the investment of medium/small sized residential properties. As at 31 December\n2004, CA had invested JPY1,209 million (2003: JPY1,400 million) direct or indirectly in Japanese\nproperties generating JPY478 million (2003: JPY652 million) as the total income during the year.\nProfit before taxation was JPY58 million (2003: JPY140 million).\nThe main reason for the\nsignificant reduction in profit was due to its corporate re-structuring and management reshuffling\nexercise.\nThe directors view CA’s performance in 2005 would rebound in view of the new arrangement\nteam’s broadened investment perspective and wider deal sourcing capabilities in spite of the still\ncompetitive and challenging market conditions.\n5.\nNon-core business\nNon-core business conducted during the year comprises direct investment in non-core assets of\nUS$451,000 (2003: US$905,000).\nThe Group earned a pre-tax profit of US$8,114,000 (2003: US$3,442,000). The administrative\nexpenses totalled US$6,985,000 (2003: US$6,352,000).\nOn behalf of the board\nKazuhiko Yoshida\nManagement Director, Chief Executive Officer\n11 January 2006\nA-4\nAPPENDIX A – DIRECTORS’ REPORT ON THE CONSOLIDATED FINANCIAL\nSTATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2004\n\n\nAUDITORS’ REPORT TO THE SHAREHOLDERS OF\nUNI-ASIA FINANCE CORPORATION\n(Incorporated in the Cayman Islands with limited liability)\nWe have audited the accompanying consolidated balance sheet of Uni-Asia Finance Corporation (the\n“Company”) and its subsidiaries (together, the “Group”) as of 31 December 2004 and the related\nconsolidated statements of income, cash flows and changes in shareholders’ equity for the year then\nended. These financial statements set out on pages 5 to 47 are the responsibility of the Company’s\nmanagement. Our responsibility is to express an opinion on these financial statements based on our\naudit and to report our opinion solely to you, as a body, in accordance with our agreed terms of\nengagement, and for no other purpose. We do not assume responsibility towards or accept liability to any\nother person for the contents of this report.\nWe conducted our audit in accordance with International Standards on Auditing. Those Standards\nrequire that we plan and perform the audit to obtain reasonable assurance about whether the financial\nstatements are free of material misstatement. An audit includes examining, on a test basis, evidence\nsupporting the amounts and disclosures in the financial statements. An audit also includes assessing the\naccounting principles used and significant estimates made by management, as well as evaluating the\noverall financial statement presentation. We believe that our audit provides a reasonable basis for our\nopinion.\nIn our opinion, the accompanying consolidated financial statements give a true and fair view of the\nfinancial position of the Group as of 31 December 2004, and of the results of its operations and cash\nflows for the year then ended in accordance with International Financial Reporting Standards.\nPricewaterhouseCoopers\nCertified Public Accountants\nHong Kong, 11 January 2006\nA-5\nAPPENDIX A – AUDITORS’ REPORT ON THE CONSOLIDATED FINANCIAL\nSTATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2004\n\n\nUNI-ASIA FINANCE CORPORATION\n(Incorporated in the Cayman Islands with limited liability)\nCONSOLIDATED INCOME STATEMENT\nFOR THE YEAR ENDED 31 DECEMBER 2004\nNote\n2004\n2003\nUS$’000\nUS$’000\nFee income\n4\n5,599\n5,194\nInvestment returns\n5\n6,682\n1,121\nIncome from defaulted loans\n1,862\n1,245\nInterest income\n6\n339\n351\nOther income\n317\n501\nTotal income\n14,799\n8,412\nAdministrative expenses\n7\n(6,985)\n(6,352)\nReversal of impairment loss on loans receivable\n250\n–\nLoss on disposal of fixed assets\n–\n(34)\n(6,735)\n(6,386)\nProfit from operations\n8,064\n2,026\nFinance costs - interest expense\n6\n(46)\n(216)\nDeemed gain on dilution of investment in an associate\n18(c)\n–\n1,332\nShare of results of associates after tax\n8\n96\n300\nProfit before taxation\n8,114\n3,442\nTaxation\n10\n(179)\n(6)\nProfit for the year\n7,935\n3,436\nEarnings per share\n-  basis and diluted\n13\nUS$0.283\nUS$0.123\nA-6\nAPPENDIX A – CONSOLIDATED FINANCIAL STATEMENTS \nFOR THE YEAR ENDED 31 DECEMBER 2004\n\n\nUNI-ASIA FINANCE CORPORATION\n(Incorporated in the Cayman Islands with limited liability)\nCONSOLIDATED BALANCE SHEET\nAS AT 31 DECEMBER 2004\nNote\n2004\n2003\nUS$’000\nUS$’000\nAssets\nNon-current assets\nFixed assets\n15\n122\n92\nLoans receivable\n16\n150\n250\nInvestments\n17\n8,289\n4,806\nInvestments in associates\n18\n6,928\n6,576\nAmounts due from associates\n18,29 (h)\n4,781\n9,631\n20,270\n21,355\nCurrent assets\nLoans receivable\n16\n1,200\n1,808\nRental and utility deposits paid\n227\n193\nAccounts receivable\n19\n93\n726\nPrepaid expenses\n247\n209\nInterest receivable\n54\n52\nCash and bank balances\n20\n36,614\n27,250\n38,435\n30,238\nTotal assets\n58,705\n51,593\nCurrent liabilities \nAccounts payable\n23\n2,267\n340\nAccrued expenses\n1,783\n502\nTax payable\n34\n34\nBorrowings\n24\n12,526\n15,895\nDividend payable\n12,22\n1,400\n840\nTotal current liabilities\n18,010\n17,611\nTotal assets less current liabilities\n40,695\n33,982\nA-7\nAPPENDIX A – CONSOLIDATED FINANCIAL STATEMENTS \nFOR THE YEAR ENDED 31 DECEMBER 2004\n\n\nUNI-ASIA FINANCE CORPORATION\n(Incorporated in the Cayman Islands with limited liability)\nCONSOLIDATED BALANCE SHEET (Continued)\nAS AT 31 DECEMBER 2004\nNote\n2004\n2003\nUS$’000\nUS$’000\nShareholders’ equity\nCapital and reserves\nShare capital\n21\n28,000\n28,000\nRetained earnings\n12,517\n5,982\nTotal shareholders’ equity\n40,517\n33,982\nNon-current liabilities\nDeferred tax liabilities\n10\n178\n–\nTotal non-current liabilities\n178\n–\nTotal shareholders’ equity and non-current \nliabilities\n40,695\n33,982\n…………………........\n…………………........\nDirector\nDirector\nA-8\nAPPENDIX A – CONSOLIDATED FINANCIAL STATEMENTS \nFOR THE YEAR ENDED 31 DECEMBER 2004\n\n\nUNI-ASIA FINANCE CORPORATION\n(Incorporated in the Cayman Islands with limited liability)\nCONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY\nFOR THE YEAR ENDED 31 DECEMBER 2004\nNote\n2004\n2003\nUS$’000\nUS$’000\nAt the beginning of the year\n33,982\n31,386\nProfit for the year\n7,935\n3,436\nDividend\n12\n(1,400)\n(840)\nAt the end of the year\n22\n40,517\n33,982\nA-9\nAPPENDIX A – CONSOLIDATED FINANCIAL STATEMENTS \nFOR THE YEAR ENDED 31 DECEMBER 2004\n\n\nUNI-ASIA FINANCE CORPORATION\n(Incorporated in the Cayman Islands with limited liability)\nCONSOLIDATED CASH FLOW STATEMENT\nFOR THE YEAR ENDED 31 DECEMBER 2004\nNote\n2004\n2003\nUS$’000\nUS$’000\nCash flows from operating activities\nCash generated from /(used in) operations\n26(a)\n2,628\n(2,274)\nInterest received on bank balances\n300\n293\nTax paid\n–\n(709)\nNet cash generated from /(used in) operating \nactivities\n2,928\n(2,690)\nCash flows from investing activities\nCash flows from investments:\nPurchase of investments\n(4,642)\n(3,570)\nProceeds from sales of investments\n2,619\n2,464\nDividend received from investments\n2,929\n–\nNet cash outflow on deemed disposal of \nsubsidiary company\n26(b)\n–\n(10,800)\nRental income from investments\n–\n35\nCash flows from associates:\nRepayment of principal and interest from loans to \nassociate\n4,937\n221\nCash flows from other investing activities:\nPurchase of fixed assets\n(107)\n(91)\nLoan interest received\n–\n22\nLoans advanced\n(1,100)\n–\nLoans repaid\n1,969\n2,012\nInterest received from syndicated loans\n37\n–\nProceeds from sale of defaulted loans\n1,584\n–\nProceeds from sales of property development \nprojects held for sale\n–\n1,384\nProceeds received form interest on performance \nnotes\n2,702\n292\nPurchase of foreign exchange contracts\n(10,265)\n–\nProceeds from settlement of foreign exchange \ncontracts\n10,325\n–\nNet cash generated from/(used in) investing \nactivities\n10,988\n(8,031)\nA-10\nAPPENDIX A – CONSOLIDATED FINANCIAL STATEMENTS \nFOR THE YEAR ENDED 31 DECEMBER 2004\n\n\nUNI-ASIA FINANCE CORPORATION\n(Incorporated in the Cayman Islands with limited liability)\nCONSOLIDATED CASH FLOW STATEMENT (Continued)\nFOR THE YEAR ENDED 31 DECEMBER 2004\nNote\n2004\n2003\nUS$’000\nUS$’000\nCash flows from financing activities\nInterest paid on borrowings\n(45)\n(218)\nDecrease/(Increase) in deposits pledged as\ncollateral\n4,630\n(923)\nNew borrowing made\n1,053\n9,179\nRepayment of borrowings\n(4,758)\n–\nRepayment of preferred capital\n–\n(2,647)\nDividend paid\n(840)\n(840)\nNet cash generated from financing activities\n40\n4,551\nIncrease/(decrease) in cash and cash equivalents\n13,956\n(6,170)\nMovements in cash and cash equivalents:\nCash and cash equivalents at beginning of year\n10,006\n16,242\nNet increase/(decrease) in cash and cash\nequivalents\n13,956\n(6,170)\nEffects of exchange rate changes\n38\n(66)\nCash and cash equivalents at end of the year\n20\n24,000\n10,006\nA-11\nAPPENDIX A – CONSOLIDATED FINANCIAL STATEMENTS \nFOR THE YEAR ENDED 31 DECEMBER 2004\n\n\n1\nGeneral\nThe Company is an exempted company incorporated in the Cayman Islands on 17 March 1997\nwith limited liability. The principal activities of the Group are the arrangement of, acting as agent of\nand participation in syndicated commercial loans, arrangement, management and co-investment in\ndevelopment and trading of Japanese property assets and the acquisition, management and\ndisposal of distressed Asian assets and shipping business.\n2\nAccounting policies \n(a)\nBasis of preparation\nThe consolidated financial statements (the “Financial Statements”) are prepared under the\nhistorical cost convention as modified by the revaluation of investments, defaulted loans and other\nfinancial assets and liabilities (including derivative instruments) at fair value through profit or loss.\nThe principal accounting policies adopted by the Group in arriving at these Financial Statements\nare set out below. The Financial Statements are prepared in accordance with and comply with\nInternational Financial Reporting Standards (IFRS).\nIn 2004, the Group has early adopted the following revised IFRS issued up to and including 31\nMarch 2004. The 2003 comparative figures have been amended as required, in accordance with\nthe requirements of the following relevant standards:\nIAS 28 (revised 2003)\nInvestments in Associates\nIAS 31 (revised 2003)\nInterests in Joint Ventures\nIAS 32 (revised 2003)\nFinancial Instruments: Disclosure and Presentation\nIAS 39 (revised 2003)\nFinancial Instruments: Recognition and Measurement\nThe early adoption of these standards has resulted in the reclassification of certain associates and\na joint venture to investments. Due to the reclassified assets having the same equity pick-up value\nand fair value, there was no change to net profit or shareholders’ equity arising from the\nreclassification.\nIn 2005, the Group will adopt the IFRS below, which are relevant to its operations:\nIAS 1 (revised 2003)\nPresentation of Financial Statements\nIAS 8 (revised 2003)\nAccounting Policies, Changes in Accounting Estimates and\nErrors\nIAS 10 (revised 2003)\nEvents after the Balance Sheet Date\nIAS 16 (revised 2003)\nProperty, Plant and Equipment\nIAS 17 (revised 2003)\nLeases  \nIAS 21 (revised 2003)\nThe Effects of Changes in Foreign Exchange Rates\nIAS 24 (revised 2003)\nRelated Party Disclosures\nIAS 27 (revised 2003)\nConsolidated and Separate Financial Statements \nIAS 33 (revised 2003)\nEarnings per Share\nIAS 36 (revised 2004)\nImpairment of Assets \nA-12\nAPPENDIX A – CONSOLIDATED FINANCIAL STATEMENTS \nFOR THE YEAR ENDED 31 DECEMBER 2004\nUNI-ASIA FINANCE CORPORATION\n(Incorporated in the Cayman Islands with limited liability)\nNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS\n\n\n2\nAccounting policies (Continued)\n(b)\nSubsidiaries \nSubsidiary undertakings, which are those companies in which the Group, directly or indirectly, has\nan interest of more than one half of the voting rights or otherwise has power to exercise control\nover the operations, have been consolidated. Subsidiaries are consolidated from the date on which\neffective control is transferred to the Group and are no longer consolidated from the date of\ndisposal.\nAll inter-company transactions, balances and unrealised surpluses and deficits on\ntransactions between Group companies have been eliminated. Where necessary, accounting\npolicies for subsidiaries have been changed to ensure consistency with the policies adopted by the\nGroup.\n(c)\nAssociates \nAssociates are all entities, other than those investments where IAS 28 does not apply, over which\nthe Group has significant influence but not control, generally accompanying a shareholding of\nbetween 20% and 50% of the voting rights. Investments in associates are accounted for using the\nequity method of accounting and are initially recognised at cost. The Group’s investments in\nassociates are detailed in Note 18.\nThe Group’s share of its associates post-acquisition profits or losses is recognised in the income\nstatement and its share of post-acquisition movements in reserves is recognised in reserves. The\ncumulative post-acquisition movements are adjusted against the carrying amount of the\ninvestment.\nWhen the Group’s share of losses in an associate equals or exceeds its interest in the associate\nthe Group does not recognise any further losses, unless it has incurred obligations or made\npayments on behalf of the associate.\n(d)\nIncome recognition \nIncome constitutes fee income, investment returns, fair value adjustments and interest income.\nFee income is recorded when the amount of revenue can be measured reliably and it is probable\nthat the economic benefits associated with the transaction will flow to the Group. Interest income is\nrecognised on a time-proportion basis using the effective yield basis.\nAll other revenue is\nrecognized on an accruals basis.\n(e)\nFixed assets\nFixed assets are stated at cost less accumulated depreciation.\nLeasehold improvements are depreciated over the remaining period of the lease while all other\nfixed assets are depreciated at the following rates on a straight-line basis, which is deemed\nsufficient to write off their costs to their residual values over their estimated useful lives: Office\nequipment 33 1/3 percent per annum and other fixed assets 25 percent per annum.\nGain and losses on disposals are determined by comparing proceeds with carrying amounts and\nare included in the consolidated income statement.\nA-13\nAPPENDIX A – CONSOLIDATED FINANCIAL STATEMENTS \nFOR THE YEAR ENDED 31 DECEMBER 2004\nUNI-ASIA FINANCE CORPORATION\n(Incorporated in the Cayman Islands with limited liability)\nNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS\n\n\n2\nAccounting policies (Continued) \n(f)\nLoans receivable\nLoans originated by the Group comprise of participations in syndicated loans and are stated at\namortised cost less any impairment losses. Impairment losses are dealt with in the consolidated\nincome statement.\nDefaulted loans are classified and measured at their fair value. Fair value is determined using a\ndiscounted cash flow valuation technique that takes into consideration the probability weighted\nexpected cash recoveries on a loan-by-loan basis and the estimated costs anticipated in the\ncollection of loan repayments, including staff costs, legal fees, loan recovery commission or taxes\npayable. Changes in fair values are dealt with in the consolidated income statement.\n(g)\nInvestments\nThe Group classifies its financial assets in the following categories: at fair value through profit or\nloss and loans receivable. The classification depends on the purpose for which the financial assets\nwere acquired. Management determines the classification of its assets at initial recognition and re-\nevaluates this designation at every reporting date.\na)\nFinancial assets at fair value through profit or loss\nThis category has two sub-categories: ‘financial assets held for trading’ and those designated\nat fair value through profit and loss at inception. A financial asset is classified in this category\nif acquired principally for the purpose of selling in the short term or if so designated by\nmanagement. Derivatives are also categorised as ‘held for trading’ unless they are\ndesignated as hedges. Assets in this category are classified as current assets if they are\neither held for trading or are expected to be realised within 12 months of the balance sheet\ndate.\nb)\nLoans receivable\nLoans receivable are non-derivative financial assets which are not quoted in an active\nmarket. These are included in current assets, except for maturities greater than 12 months\nafter the balance sheet date.\nPurchases and sales of investments are recognised at trade date - the date on which the group\ncommits to sell the asset. Investments are initially recognised at fair value plus transaction costs for\nall financial assets not carried at fair value through profit or loss. Financial assets carried at fair\nvalue through profit or loss, are initially recognised at fair value and transaction costs are expensed\nin the income statement. Investments are derecognised when the rights to receive cashflows from\nthe investments have expired or have been transferred and the Group has transferred substantially\nall the risks and rewards of ownership. Available for sale financial assets and financial assets at fair\nvalue through profit and loss are subsequently carried at fair value.\nA-14\nAPPENDIX A – CONSOLIDATED FINANCIAL STATEMENTS \nFOR THE YEAR ENDED 31 DECEMBER 2004\nUNI-ASIA FINANCE CORPORATION\n(Incorporated in the Cayman Islands with limited liability)\nNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS\n\n\n2\nAccounting policies (Continued) \n(g)\nInvestments (Continued)\nFair values for unquoted securities are estimated by the directors. In determining fair valuation, the\ndirectors make use of market-based information and fair valuation models such as discounted cash\nflow models. In many instances the directors also rely on financial data of investees and on\nestimates provided by the management of the investee companies as to the effect of future\ndevelopments.\nPurchases and sales of investments are recognised on the trade date, which is the date that the\nGroup commits to purchase or sell the asset. Realised and unrealised gains and losses arising\nfrom changes in the fair value of investments are included in the consolidated income statement in\nthe period in which they arise.\nPerformance notes are investments, which do not classify as jointly controlled entities, with income\nand maturity values which fluctuate based on the distributions received from underlying assets,\nwhich are generally shares in property development companies, defaulted loans or shipping\ncompanies.\nFair values of performance notes or other collective investment schemes are\ndetermined by the Group’s interest in the fair values of each scheme’s underlying assets. Gains\nand losses arising from changes in the fair value of all securities are recognized in the consolidated\nincome statement as they arise.\nAlthough the directors use their best judgement in estimating the fair value of investments, there\nare inherent limitations in any estimation techniques. Future confirming events will also affect the\nestimates of fair value and the effect of such events on the estimates of fair value, including the\nultimate liquidation of investments, could be material to these consolidated financial statements.\n(h)\nCash and cash equivalents \nCash and cash equivalents are carried in the consolidated balance sheet at cost and comprise of\ncash and bank balances with an original maturity of less than three months.\n(i)\nBorrowings\nBorrowings are recognized initially at the proceeds received, net of transaction costs incurred. In\nsubsequent periods, fixed term borrowings are stated at amortised cost using the effective yield\nmethod; any difference between proceeds (net of transaction costs) and the redemption value is\nrecognized in the consolidated income statement over the period of the borrowings.\nA-15\nAPPENDIX A – CONSOLIDATED FINANCIAL STATEMENTS \nFOR THE YEAR ENDED 31 DECEMBER 2004\nUNI-ASIA FINANCE CORPORATION\n(Incorporated in the Cayman Islands with limited liability)\nNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS\n\n\n2\nAccounting policies (Continued) \n(j)\nDeferred taxation \nDeferred income tax is provided, using the liability method, for all temporary differences arising\nbetween the tax bases of assets and liabilities and their carrying values for financial reporting\npurposes. Deferred tax is measured using the tax rate currently enacted, or substantially enacted,\nat the balance sheet date.\nThe principal temporary differences arise from depreciation on fixed assets. Deferred tax assets\nrelating to the carry forward of unused tax losses are recognized to the extent that it is probable\nthat future taxable profit will be available against which the unused tax losses can be utilized.\n(k)\nEmployee benefits \nPension obligations\nGroup companies have various defined contribution pension schemes in accordance with the local\nconditions and practices in the countries in which they operate. A defined contribution plan is a\npension plan under which the Group pays fixed contributions into a separate entity (a fund) and will\nhave no legal or constructive obligations to pay further contributions if the fund does not hold\nsufficient assets to pay all employees benefits relating to employee services in the current and prior\nperiods.\nFor defined contribution plans, the company pays contributions to publicly or privately administered\npension insurance plans on a mandatory, contractual or voluntary basis.\nOnce the contributions have been paid, the company has no further payment obligations. The\nregular contributions constitute net periodic costs for the year in which they are due and as such\nare included in staff costs.\n(l)\nFinancial instruments\nFinancial instruments carried on the consolidated balance sheet include cash and bank balances,\nloans, investments, receivables, payables and borrowings. The particular recognition methods\nadopted are disclosed in the individual policy statements associate with each item.\nThe Group’s principal foreign exchange hedging is conducted by funding a major portion of\nJapanese operations using Yen borrowings secured by US$ deposits, which are stated gross on\nthe consolidated balance sheet.\nDisclosures in respect of financial risks to which the Group is exposed are shown in Note 27.\nA-16\nAPPENDIX A – CONSOLIDATED FINANCIAL STATEMENTS \nFOR THE YEAR ENDED 31 DECEMBER 2004\nUNI-ASIA FINANCE CORPORATION\n(Incorporated in the Cayman Islands with limited liability)\nNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS\n\n\n2\nAccounting policies (Continued) \n(l)\nFinancial instruments (Continued)\nDerivatives are initially recognised at fair value on the date a derivative contract is entered into and\nare subsequently re-measured at their fair value. The method of recognising the resulting gain or\nloss depends on whether the derivative is designated a hedging instrument, and if so, the nature of\nthe item being hedged. The Group designates certain derivatives as either: (1) hedges of the fair\nvalue of recognised assets or liabilities or a firm commitment (fair value hedge); (2) hedges of\nhighly probable forecast transactions (cash flow hedges); or (3) hedges of net investments in\nforeign operations.\nThe Group documents at the inception of the transaction the relationship between hedging\ninstruments and hedged items, as well as its risk management objective and strategy for\nundertaking various hedge transactions. The Group also documents its assessment, both at hedge\ninception and on an ongoing basis, of whether the derivatives that are used in hedging transactions\nare highly effective in offsetting changes in fair values or cash flows of hedged items.\n(a)\nFair value hedge \nChanges in the fair value of derivatives that are designated and qualify as fair value hedges\nare recorded in the consolidated income statement, together with any changes in the fair\nvalue of the hedged asset or liability that are attributable to the hedged risk.\n(b)\nCash flow hedge\nThe effective portion of changes in the fair value of derivatives that are designated and\nqualify as cash flow hedges are recognised in equity.\nThe gain or loss relating to the\nineffective portion is recognised immediately in the consolidated income statement.\nAmounts accumulated in equity are recycled in the income statement in the periods when\nthe hedged item will affect profit or loss (for instance when the forecast sale that is hedged\ntakes place).\nHowever, when the forecast transaction that is hedged results in the\nrecognition of a non-financial asset or a liability, the gains and losses previously deferred in\nequity are transferred from equity and included in the initial measurement of the cost of the\nasset or liability.\nWhen a hedging instrument expires or it sold, or when a hedge no longer meets the criteria\nfor hedge accounting, any cumulative gain or loss existing in equity at that time remains in\nequity and is recognised when the forecast transaction is ultimately recognised in the income\nstatement. When a forecast transaction is no longer expected to occur, the cumulative gain\nor loss that was reported in equity is immediately transferred to the consolidated income\nstatements.\nA-17\nAPPENDIX A – CONSOLIDATED FINANCIAL STATEMENTS \nFOR THE YEAR ENDED 31 DECEMBER 2004\nUNI-ASIA FINANCE CORPORATION\n(Incorporated in the Cayman Islands with limited liability)\nNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS\n\n\n2\nAccounting policies (Continued) \n(l)\nFinancial instruments (Continued)\n(c)\nNet investment hedge \nHedges of net investments in foreign operations are accounted for similarly to cash flow\nhedges. Any gain or loss on the hedging instrument relating to the effective portion of the\nhedge is recognised in equity; the gain or loss relating to the ineffective portion is recognised\nimmediately in the income statement.\nGains and losses accumulated in equity are included in the income statement when the\nforeign operation is disposed of.\n(d)\nDerivatives that do not qualify for hedge accounting \nCertain derivative instruments do not qualify for hedge accounting. Changes in the fair value\nof any derivative instruments that do not qualify for hedge accounting are recognised\nimmediately in the consolidated income statement.\n(m)\nForeign currency translation \n(a)\nMeasurement currency \nItems included in the financial statements of each entity within the Group are measured\nusing the currency that best reflects the economic substance of the underlying events and\ncircumstances relevant to that entity (“the measurement currency”).\nThe consolidated\nfinancial statements are presented in United States dollars, which is the measurement\ncurrency of the parent.\n(b)\nTransactions and balances \nTransactions in foreign currencies are translated at exchange rates ruling at the transaction\ndates. Monetary assets and liabilities expressed in foreign currencies at the consolidated\nbalance sheet date are translated at rates of exchange ruling at the consolidated balance\nsheet date. All exchange differences are dealt with in the consolidated income statement,\nexcept for exchange differences arising from the Group’s net investment in foreign entities,\nand from monetary liabilities that are effective hedges of the Group’s net investment in\nforeign entities.\n(c)\nGroup companies \nIncome statements and cash flows of foreign entities are translated into the Group’s\nreporting currency at average exchange rates for the year and their balance sheets are\ntranslated at the exchange rates ruling on 31 December.\nExchange differences arising from the translation of the net investment in foreign entities and\nborrowings and other currency instruments designated as hedges of such investments are\ntaken directly to equity.\nWhen a foreign entity is sold, such exchange differences are\nrecognised in the consolidated income statement as part of the gain or loss on sale.\nA-18\nAPPENDIX A – CONSOLIDATED FINANCIAL STATEMENTS \nFOR THE YEAR ENDED 31 DECEMBER 2004\nUNI-ASIA FINANCE CORPORATION\n(Incorporated in the Cayman Islands with limited liability)\nNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS\n\n\n2\nAccounting policies (Continued) \n(n)\nLeases\nLeases where a significant portion of the risks and rewards of ownership are retained by the lessor\nare classified as operating leases. Payments made under operating leases (net of any incentives\nreceived form the lessor) are charged to the consolidated income statement on a straight-line basis\nover the period of the lease.\n(o)\nDividends \nDividends are recorded in the Group’s financial statements in the period in which they are\napproved by the Group’s shareholders or directors.\n(p) \nSegment reporting \nA business segment is a group of assets and operations engaged in providing products or services\nthat are subject to risks and returns that are different from those of other business segments. A\ngeographical segment is engaged in providing products or services within a particular economic\nenvironment that are subject to risks and returns that are different from those of segments\noperating in other economic environments.\nA-19\nAPPENDIX A – CONSOLIDATED FINANCIAL STATEMENTS \nFOR THE YEAR ENDED 31 DECEMBER 2004\nUNI-ASIA FINANCE CORPORATION\n(Incorporated in the Cayman Islands with limited liability)\nNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS\n\n\n3\nSegment information \nPrimary reporting format - business segments \nThe Group is organised on a worldwide basis into four main business segments (departments):\n(1) \nstructured \nfinance;\n(2) \nship \ninvestment/management;\n(3) \ndistressed \nassets\ninvestment/management; and (4) property investment/management.\nThe segment results for the year ended 31 December 2004 are as follows:\nDistressed\nShip\nassets\nProperty\nStructured\ninvestment/\ninvestment/\ninvestment/\nfinance\nmanagement\nmanagement\nmanagement\nUnallocated\nGroup\nUS$’000\nUS$’000\nUS$’000\nUS$’000\nUS$’000\nUS$’000\nRevenue \n2,669\n9,594\n2,336\n(99)\n299\n14,799\nProfits from operations \n729\n7,797\n1,576\n(421)\n(1,617)\n8,064\nShare of results of associates\n–\n–\n–\n96\n–\n96\nFinance costs - interest\nexpenses\n–\n(2)\n–\n(44)\n–\n(46)\nProfit before taxation \n729\n7,795\n1,576\n(369)\n(1,617)\n8,114\nLess: Taxation \n–\n–\n–\n(179)\n–\n(179)\nProfit for the year \n729\n7,795\n1,576\n(548)\n(1,617)\n7,935\nOther segment items are\nas follows:\nCapital expenditure\n21\n29\n20\n2\n35\n107\nDepreciation \n41\n1\n8\n12\n15\n77\nThe segment results for the year ended 31 December 2003 are as follows:\nDistressed\nShip\nassets\nProperty\nStructured\ninvestment/\ninvestment/\ninvestment/\nfinance\nmanagement\nmanagement\nmanagement\nUnallocated\nGroup\nUS$’000\nUS$’000\nUS$’000\nUS$’000\nUS$’000\nUS$’000\nRevenue \n3,432\n1,136\n2,360\n1,192\n292\n8,412\nProfits from operations \n1,308\n289\n1,431\n28\n(1,030)\n2,026\nShare of results of associates \n–\n–\n–\n300\n–\n300\nDeemed gain dilution of\ninvestment in an associate\n–\n–\n–\n1,332\n–\n1,332\nFinance costs – interest\nexpenses\n–\n–\n–\n(116)\n(100)\n(216)\nProfit before taxation\n1,308\n289\n1,431\n1,544\n(1,130)\n3,442\nLess: Taxation \n(5)\n–\n–\n(1)\n–\n(6)\nProfit for the year \n1,303\n289\n1,431\n1,543\n(1,130)\n3,436\nOther segment items are\nas follows:\nCapital expenditure\n42\n7\n14\n1\n27\n91\nDepreciation \n24\n3\n5\n9\n8\n49\nA-20\nAPPENDIX A – CONSOLIDATED FINANCIAL STATEMENTS \nFOR THE YEAR ENDED 31 DECEMBER 2004\nUNI-ASIA FINANCE CORPORATION\n(Incorporated in the Cayman Islands with limited liability)\nNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS\n\n\n3\nSegment information (Continued) \nThe segment assets and liabilities as at 31 December 2004 for the year then ended are as follows:\nDistressed\nShip\nassets\nProperty\nStructured\ninvestment/\ninvestment/\ninvestment/\nfinance\nmanagement\nmanagement\nmanagement\nUnallocated\nGroup\nUS$’000\nUS$’000\nUS$’000\nUS$’000\nUS$’000\nUS$’000\nSegment assets \n1,472\n7,433\n1,916\n6,544\n–\n17,365\nAssociates\n–\n–\n–\n6,928\n–\n6,928\nUnallocated assets \n–\n–\n–\n–\n34,412\n34,412\nTotal assets \n1,472\n7,433\n1,916\n13,472\n34,412\n58,705\nSegment liabilities \n2,391\n788\n307\n89\n–\n3,575\nUnallocated liabilities \n–\n–\n–\n–\n14,613\n14,613\nTotal liabilities \n2,391\n788\n307\n89\n14,613\n18,188\nThe segment assets and liabilities as at 31 December 2003 for the year then ended are as follows:\nDistressed\nShip\nassets\nProperty\nStructured\ninvestment/\ninvestment/\ninvestment/\nfinance\nmanagement\nmanagement\nmanagement\nUnallocated\nGroup\nUS$’000\nUS$’000\nUS$’000\nUS$’000\nUS$’000\nUS$’000\nSegment assets \n1,910\n4,582\n1,732\n11,530\n–\n19,754\nAssociates \n–\n–\n–\n6,576\n–\n6,576\nUnallocated assets \n–\n–\n–\n–\n25,263\n25,263\nTotal assets \n1,910\n4,582\n1,732\n18,106\n25,263\n51,593\nSegment liabilities \n284\n160\n262\n22\n–\n728\nUnallocated liabilities \n–\n–\n–\n–\n16,883\n16,883\nTotal liabilities \n284\n160\n262\n22\n16,883\n17,611\nSegment assets consist primarily of fixed assets, receivables and operating cash. They exclude\ntaxation, certain investments and cash and cash equivalents.\nSegment liabilities comprise operating liabilities and exclude items such as taxation and certain\ncorporate borrowings.\nCapital expenditure comprises planned additions to fixed assets, all in Asia-ex Japan (Note 15).\nA-21\nAPPENDIX A – CONSOLIDATED FINANCIAL STATEMENTS \nFOR THE YEAR ENDED 31 DECEMBER 2004\nUNI-ASIA FINANCE CORPORATION\n(Incorporated in the Cayman Islands with limited liability)\nNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS\n\n\n3\nSegment information (Continued) \nSecondary reporting format - geographical segments \nThe Group’s four business segments operate in three main geographical areas, even through they\nare managed on a worldwide basis.\nGlobal - the global segment represents activities with assets or customers with no fixed location,\nwhich include shipping finance/investment/management.\nAsia (ex-Japan) - the Asia (ex-Japan) segment represents activities with assets or customers\nlocated in Asia (ex-Japan), which include structured finance, asset and shipping\nfinance/investment/management and distressed Asian investments.\nJapan - the Japan segment represents activities with assets or customers located in Japan, and\ninclude real estate investment/management.\n2004\n2003\nUS$’000\nUS$’000\nIncome\nGlobal \n8,353\n413\nAsia (ex-Japan) \n6,156\n4,631\nJapan \n(9)\n3,076\nUnallocated \n299\n292\n14,799\n8,412\nTotal assets\nGlobal \n7,433\n4,582\nAsia (ex-Japan) \n3,388\n3,642\nJapan \n6,544\n11,530\nUnallocated \n34,412\n25,263\n51,777\n45,017\nInvestments in associates \n6,928\n6,576\n58,705\n51,593\nCapital expenditure\nAsia (ex-Japan)\n107\n91\nWith the exception of Hong Kong, Singapore and Japan no other individual country contributed\nmore than 10% of consolidated sales or assets.\nIncome and total assets attributable to business segments are based on the country in which the\ncustomer is located. Income and assets not attributable to business segments are disclosed as\nunallocated. There are no sales between the segments. Total assets and capital expenditure are\nwhere the assets are located.\nA-22\nAPPENDIX A – CONSOLIDATED FINANCIAL STATEMENTS \nFOR THE YEAR ENDED 31 DECEMBER 2004\nUNI-ASIA FINANCE CORPORATION\n(Incorporated in the Cayman Islands with limited liability)\nNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS\n\n\n4\nFee income\n2004\n2003\nUS$’000\nUS$’000\nCorporate finance arrangement and agency fees \n3,086\n2,873\nFront-end fees for finance arrangement of container\nship (note below)\n–\n1,137\nProperty fund management and administrative fees \n–\n502\nAgency, advisory, administration and incentives fees\nfrom distressed loans (Note 29)\n303\n682\nAgency, arrangement, administration and incentive\nfees from shipping finance and management (Note 29)\n2,210\n–\n5,599\n5,194\nNote:\nContingent assets \nAt 31 December 2003, the Company had been contracted to arrange finance for 10 container\nships, for which the Company will collect a US$685,000 fee in respect of each ship. Front-end fees\nof US$137,000 per ship totalling US$1,137,000, to which the Company had received or were\nentitled at the balance sheet date, have been booked as income for the year ended 31 December\n2003. Completion fees of US$548,000 per ship totalling US$5,548,000 were to be received on\ndelivery and financing of each ship.\nUnder the commission agreement, further services are\nrequired to be delivered by the Company and significant contingencies exist such that the directors\nare not certain that the completion fees will be received for the year ended 31 December 2003 and\nconsequently only front-end fees have been booked as income for the year ended 2003. The\ncontingent asset of US$5,548,000 at 31 December 2003 was recognised as income during 2004\nwhen circumstances were no longer contingent.\nAt 31 December 2004, the Company had no such outstanding contracts.\nA-23\nAPPENDIX A – CONSOLIDATED FINANCIAL STATEMENTS \nFOR THE YEAR ENDED 31 DECEMBER 2004\nUNI-ASIA FINANCE CORPORATION\n(Incorporated in the Cayman Islands with limited liability)\nNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS\n\n\n5\nInvestment returns\n2004\n2003\nUS$’000\nUS$’000\nShare of results of jointly controlled entities \n–\n349\nRental income from property development projects held for sale \n–\n35\nRealised gains on investments \n2,482\n84\nReturn on performance notes - distressed debt (Note 29)\n103\n292\nReturn on performance notes - properties\n35\n81\nReturn on performance notes - shipping business (Note 29)\n2,589\n–\nGain on foreign exchange contracts and swap contracts\nentered into on behalf of an associate (Note 29)\n63\n–\nFair value adjustments on performance notes – distressed debt\n31\n–\nFair value adjustments on performance notes – shipping business\n1,600\n–\nFair value adjustments on performance notes – properties\n(221)\n–\nFair value adjustment on other investments\n–\n280\n6,682\n1,121\n6\nInterest income and expense\n2004\n2003\nUS$’000\nUS$’000\nInterest income from:\n– cash and cash equivalents \n299\n293\n– participation in syndicated loans \n40\n58\n339\n351\nInterest expense on:\n– borrowings \n46\n186\n– preferred capital\n–\n30\n46\n216\nA-24\nAPPENDIX A – CONSOLIDATED FINANCIAL STATEMENTS \nFOR THE YEAR ENDED 31 DECEMBER 2004\nUNI-ASIA FINANCE CORPORATION\n(Incorporated in the Cayman Islands with limited liability)\nNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS\n\n\n7\nAdministrative expenses \n2004\n2003\nUS$’000\nUS$’000\nDepreciation (Note 15)\n77\n49\nRental expenses under operating leases:\n– office premises \n376\n485\n– staff residencies \n384\n404\nStaff costs (Note 9)\n4,703\n4,305\nAuditors’ remuneration \n85\n60\nTraveling and entertainment \n825\n845\nNet foreign exchange loss/(gain)\n20\n(489)\nMiscellaneous expenses \n313\n347\nProfessional service fees \n– proposed initial public offering \n103\n–\n– others \n99\n346\n6,985\n6,352\n8\nResults of associates \nThe Group’s share of results of associates after taxation are as follows:\n2004\n2003\nUS$’000\nUS$’000\nCapital Advisers Co. Ltd.\n242\n600\nLess: share of tax of Capital Advisers Co. Ltd (Note 18)\n(146)\n(300)\n96\n300\n9\nStaff costs \n2004\n2003\nUS$’000\nUS$’000\nSalaries (including director’s remuneration)  \n4,490\n3,991\nPension costs - defined contribution plans \n114\n131\nOther welfare and allowances \n99\n183\n4,703\n4,305\nA-25\nAPPENDIX A – CONSOLIDATED FINANCIAL STATEMENTS \nFOR THE YEAR ENDED 31 DECEMBER 2004\nUNI-ASIA FINANCE CORPORATION\n(Incorporated in the Cayman Islands with limited liability)\nNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS\n\n\n9\nStaff costs (Continued)\nThe weighed average number of employees is as follows:\n2004\n2003\nUS$’000\nUS$’000\nFull time \n25\n29\nHong Kong \n20\n19\nJapan \n3\n8\nSingapore \n2\n2\n25\n29\nFrom 2 May 2003, when it ceased to be a subsidiary, staff employed by Capital Advisers Co. Ltd.\nceased to be included in the Group’s staff numbers. The annual weighted average of full time staff\nat Capital Advisers Co. Ltd. during the period from 2 May 2003 to 31 December 2003 was 11.\n10\nTaxation \n(a)\nTaxation \n2004\n2003\nUS$’000\nUS$’000\nCurrent tax\n1\n6\nDeferred tax \n178\n–\n179\n6\nTax on profits has been calculated at rates of taxation prevailing in the jurisdictions in which the Group\noperates.\nThe tax on the Group’s profit before tax differs from the theoretical amount that would arise using the tax\nrate of the home country of the Company as follows:\n2004\n2003\nUS$’000\nUS$’000\nProfit before tax \n8,114\n3,442\nTax calculated at a tax rate of 17.5% (2003: 17.5%)\n1,420\n602\nEffect of different tax rates in other countries \n103\n446\nIncome not subject to tax \n(1,344)\n(1,042)\nTax charge \n179\n6\nA-26\nAPPENDIX A – CONSOLIDATED FINANCIAL STATEMENTS \nFOR THE YEAR ENDED 31 DECEMBER 2004\nUNI-ASIA FINANCE CORPORATION\n(Incorporated in the Cayman Islands with limited liability)\nNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS\n\n\n10\nTaxation (Continued)\n(a)\nTaxation (Continued)\nNote:\nIncome not subject to taxation is only included to the extent that it negates profits at group tax rate.\nFurther adjustments are not made as the contingent tax asset is not accrued.\n(b)\nDeferred taxation\n2004\n2003\nUS$’000\nUS$’000\nIncome statement charge\n178\n–\nAt end of the year\n178\n–\nDeferred income tax assets are recognized for tax losses carried forward only to the extent that the\nrealization of the related tax benefit is probable. The Group has tax losses of US$8,897,000 (2003:\nUS$7,637,000) and US$1,000 (2003: US$269,000) for the Company in Hong Kong and Uni-Asia\nFinance Corporation (Japan) respectively to carry forward against future taxable income of those\ncompanies, which have not been recognized in these consolidated financial statements due to\nuncertainty of their recoverability. These tax losses have no expiry dates.\n11\nProfit attributable to shareholders \nThe profit attributable to shareholders is dealt with in the consolidated accounts to the extent of a\nprofit of US$3,436,000 and US$7,935,000 for the year ended 2003 and 2004 respectively.\n12\nDividend \nThe Company declared a dividend of US$0.03 and US$0.05 per share for the years ended 2003\nand 2004 respectively.\nA-27\nAPPENDIX A – CONSOLIDATED FINANCIAL STATEMENTS \nFOR THE YEAR ENDED 31 DECEMBER 2004\nUNI-ASIA FINANCE CORPORATION\n(Incorporated in the Cayman Islands with limited liability)\nNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS\n\n\n13\nEarnings per share \n(a)\nBasic\nBasic earnings per share is calculated by dividing the profit attributable to equity holders of the\nCompany by the weighted average number of ordinary shares in issue during the Relevant Periods.\n(b)\nDiluted \nDiluted earnings per share is calculated adjusting the weighted average number of ordinary shares\noutstanding to assume conversation of all dilutive interests during the Relevant Periods. The Group\nhas one category of potential ordinary shares: share options issued in 2004 by an associate\ncompany. There is no impact on earnings per share as the share options issued by the associate\nare anti-dilutive.\n2004\n2003\nUS$’000\nUS$’000\nProfit attributable to equity holders of the Company\n7,935\n3,436\nWeighted average number of ordinary shares in issue\n28,000\n28,000\nEarnings per share (US$ per share) - basic and diluted \n0.283\n0.123\n14\nEmoluments for directors and highest paid individuals\n(a)\nDirectors’ emoluments  \n2004\n2003\nUS$’000\nUS$’000\nFees\n1,116\n1,465\nOther emoluments:\nBasic salaries, housing allowances, share options,\nother allowances and benefits in kind\n249\n256\nDiscretionary bonuses\n750\n86\nContributions to pensions schemes for directors (and\npast directors) - as directors\n3\n3\n2,118\n1,810\nThere were no independent non-executive directors appointed to the Group during the year.\nA-28\nAPPENDIX A – CONSOLIDATED FINANCIAL STATEMENTS \nFOR THE YEAR ENDED 31 DECEMBER 2004\nUNI-ASIA FINANCE CORPORATION\n(Incorporated in the Cayman Islands with limited liability)\nNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS\n\n\n14\nEmoluments for directors and highest paid individuals (Continued)\nThe emoluments of the directors fell within the following bands.\nNumber of\nNumber of\ndirectors\ndirectors\n2004\n2003\nEmoluments bands \nHK$Nil - HK$1,000,000\n5\n5\nHK$1,000,001 - HK$1,500,000\n–\n–\nHK$2,000,001 - HK$2,500,000\n–\n2\nHK$2,500,001 - HK$3,000,000\n–\n1\nHK$3,000,001 - HK$3,500,000\n–\n1\nHK$3,500,001 - HK$4,000,000\n–\n1\nHK$4,500,001 - HK$5,000,000\n1\n–\nHK$5,500,001 - HK$6,000,000\n2\n–\n8\n10\n(b)\nFive highest paid individuals \nThe five individuals whose emoluments were the highest in the Group for the Relevant include 3\n(2003: 3) directors whose emoluments are reflected in the analysis presented above.\nThe\nemoluments payable to the remaining 2 (2003: 2) individuals are as follows:\n2004\n2003\nUS$’000\nUS$’000\nBasic salaries, housing allowances, share options,\nother allowances and benefits in kind\n574\n546\nBonuses\n550\n220\nPensions\n40\n39\n1,164\n805\nThe emoluments fee within the following bands:\nNumber of individuals\n2004\n2003\nEmoluments bands \nHK$2,000,001 - HK$2,500,000\n–\n–\nHK$2,500,001 - HK$3,000,000\n–\n1\nHK$3,000,001 - HK$3,500,000\n1\n1\nHK$5,000,001 - HK$5,500,000\n1\n–\n2\n2\n(c)\nDuring the year (2003 : nil), no emoluments were paid by the companies comprising the Group to\nany of the directors or the five highest paid individuals as an inducement to join or upon joining the\nGroup or as compensation for loss of office.\nA-29\nAPPENDIX A – CONSOLIDATED FINANCIAL STATEMENTS \nFOR THE YEAR ENDED 31 DECEMBER 2004\nUNI-ASIA FINANCE CORPORATION\n(Incorporated in the Cayman Islands with limited liability)\nNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS\n\n\n15\nFixed assets \nLeasehold\nFurniture\nimprove-\nOffice\nand\nMotor\nments\nequipment\nfixtures\nvehicles\nTotal\nUS$’000\nUS$’000\nUS$’000\nUS$’000\nUS$’000\nCost\nAt 1 January 2003\n361\n258\n74\n64\n757\nAdditions\n16\n72\n3\n–\n91\nDisposals \n–\n(12)\n(28)\n–\n(40)\nSubsidiary sold \n(42)\n(58)\n(8)\n–\n(108)\nExchange translation \n1\n1\n20\n–\n22\nAt 31 December 2003\n336\n261\n61\n64\n722\nAccumulated depreciation\nAt 1 January 2003\n324\n178\n57\n64\n623\nCharge \n4\n36\n9\n–\n49\nDisposals \n–\n(2)\n(3)\n–\n(5)\nSubsidiary sold \n(5)\n(32)\n(5)\n–\n(42)\nExchange translation \n–\n5\n–\n–\n5\nAt 31 December 2003\n323\n185\n58\n64\n630\nNet book value \nAt 31 December 2003 \n13\n76\n3\n–\n92\nCost\nAt 1 January 2004\n336\n261\n61\n64\n722\nAdditions\n49\n58\n–\n–\n107\nExchange translation\n–\n2\n–\n–\n2\nAt 31 December 2004\n385\n321\n61\n64\n831\nAccumulated\ndepreciation\nAt 1 January 2004\n323\n185\n58\n64\n630\nCharge\n31\n45\n1\n–\n77\nExchange translation\n2\n–\n–\n–\n2\nAt 31 December 2004\n356\n230\n59\n64\n709\nNet book value\nAt 31 December 2004\n29\n91\n2\n–\n122\nA-30\nAPPENDIX A – CONSOLIDATED FINANCIAL STATEMENTS \nFOR THE YEAR ENDED 31 DECEMBER 2004\nUNI-ASIA FINANCE CORPORATION\n(Incorporated in the Cayman Islands with limited liability)\nNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS\n\n\n16\nLoans receivable\n2004\n2003\nUS$’000\nUS$’000\nDefaulted loans purchased at fair value\nRepayable on demand, and in default:\nDefaulted loans purchased at fair value, at fair value\nNominal value of US$3,310,000\n–\n291\nParticipation in loans\nRepayable within one year\nInterest rate at:\nLIBOR plus 1.6% p.a. (2003: LIBOR plus 1.6% p.a.)\n–\n417\nLIBOR plus 1.25% p.a. (2003: LIBOR plus 1.25% p.a.)\n100\n100\n5% unsecured (2003: Interest free)\n1,100\n1,000\n1,200\n1,808\nParticipation in loans\nRepayable between one and two years\nInterest rate at:\nLIBOR plus 1.25% p.a. (2003: LIBOR plus 1.25% p.a.)\n150\n200\nRepayable between two and five years\nInterest rate at:\nLIBOR plus 1.25% p.a. (2003: LIBOR plus 1.25% p.a.)\n–\n50\n150\n250\nLoans receivable\n1,350\n2,058\nA-31\nAPPENDIX A – CONSOLIDATED FINANCIAL STATEMENTS \nFOR THE YEAR ENDED 31 DECEMBER 2004\nUNI-ASIA FINANCE CORPORATION\n(Incorporated in the Cayman Islands with limited liability)\nNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS\n\n\n16\nLoans receivable (Continued)\nNotes:\n(a)\nIncome from defaulted loans is detailed in the consolidated income statements - Fair value\ngains on defaulted loans.\nDuring the year, most of the fair value gains consisted of cash receipts from the underlying\nloans.\n2004\n2003\nUS$’000\nUS$’000\nCash recovered\n1,862\n1,245\n(b)\nLoans receivable approximate to their fair values due to being floating rate loans.\n17\nInvestments\n2004\n2003\nUS$’000\nUS$’000\nNon-Hong Kong\nUnlisted shares\n191\n264\nUnlisted shares - shipping business (Note (a) below)\n1,451\n2,533\nUnlisted performance notes - properties investment (Note 29(c))\n607\n1,083\nUnlisted partnership\n–\n–\nUnlisted performance notes - distressed debt (Note 29(c))\n1,793\n926\nUnlisted performance notes – shipping (Note 29(c))\n4,247\n–\nInvestments\n8,289\n4,806\nA-32\nAPPENDIX A – CONSOLIDATED FINANCIAL STATEMENTS \nFOR THE YEAR ENDED 31 DECEMBER 2004\nUNI-ASIA FINANCE CORPORATION\n(Incorporated in the Cayman Islands with limited liability)\nNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS\n\n\n17\nInvestments (Continued)\nNote:\n(a)\nWithin unlisted shares - shipping business are investments totalling US$451,000 (2003:\nUS$905,000) in two shipping companies which own and run cargo ships respectively.\nPrincipal\nactivities and\nCountry/place and\nIssued and fully paid\n% of\nplace of\nName\ndate of incorporation\nup share capital\nholdings\noperation\nNiigata Seimitsu\nJapan\nJPY3,874,300,000\n0.2%\nManufacturing\nCo. Ltd.\n17 January 1981\nElectronic \nDevices\nEuroAsia II Inc.,\nPanama\nUS$10,000\n15%\nShipping\nPanama\n12 April 2002\ninvestment\nand\nmanagement\n- Hong Kong\nEuroAsia III Inc.,\nPanama\nUS$10,000\n15%\nShipping\nPanama\n12 April 2002\ninvestment\nand\nmanagement\n- Hong Kong\nAP Real Estate\nCayman Islands\nUS$1,000\n5.9%\nJapanese\nLtd.\n12 April 2000\nproperty\ninvestment\nand\nmanagement\n- Japan\nRS Property\nCayman Islands\nUS$1,000\n10%\nJapanese\nInvestment\n28 August 2000\nproperty\ninvestment\nand\nmanagement\n- Japan\nSearex Asset\nBritish Virgin Islands\nUS$1,000\nNote\nShipping\nManagement\n30 December 2003\n28(c)\ninvestment\nLimited\nand\nmanagement\n- Hong Kong\nAAA Strategic\nCayman Islands\nUS$1,000\nNote\nDistressed\nInvestment\n26 July 2001\n28(c)\ndebts\nLimited\ninvestment\nand\nmanagement\n- Hong Kong\nA-33\nAPPENDIX A – CONSOLIDATED FINANCIAL STATEMENTS \nFOR THE YEAR ENDED 31 DECEMBER 2004\nUNI-ASIA FINANCE CORPORATION\n(Incorporated in the Cayman Islands with limited liability)\nNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS\n\n\n18\nInvestments in associates\n(a)\nMovement of investments in associates\n2004\n2003\nUS$’000\nUS$’000\nCapital Advisers Co. Ltd.\nAt the beginning of year\n6,576\n–\nInvestment in associate\n–\n5,553\nShare of results after tax\n96\n300\nExchange differences\n256\n723\nInvestments in associates at end of the year\n6,928\n6,576\n(b)\nSummary of significant associates’ assets, liabilities and result\nA summary of Capital Advisers Co. Ltd.’s assets, liabilities and results are as follows:\n2004\n2003\nUS$’000\nUS$’000\nInvestments in property related projects\n11,755\n14,405\nCash and cash equivalents\n7,494\n10,662\nOther assets\n6,588\n1,847\nTotal assets\n25,837\n26,914\nAmount due to Uni-Asia Finance Corporation\n(4,781)\n(9,631)\nOther liabilities\n(5,562)\n(2,605)\nMinority interest\n(29)\n–\nShareholders’ equity (of which Company has 44.8%\ninterest, 2003: 44.8%)\n15,465\n14,678\nShareholders’ equity\n- Company’s 44.8% interest\n6,928\n6,576\nA-34\nAPPENDIX A – CONSOLIDATED FINANCIAL STATEMENTS \nFOR THE YEAR ENDED 31 DECEMBER 2004\nUNI-ASIA FINANCE CORPORATION\n(Incorporated in the Cayman Islands with limited liability)\nNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS\n\n\n18\nInvestments in associates (Continued)\nFor the\nperiod from\nFor the\n2 May 2003\nyear ended\nto\n31 December\n31 December\n2004\n2003\nUS$’000\nUS$’000\nResults to 31 December 2004, translated at an\naverage rate of Yen 107.94583 (2003: Yen\n114.0026 to US$1):\nRevenue\n4,539\n4,865\nStaff costs\n(1,974)\n(1,298)\nInterest expense\n(210)\n(227)\nOther expenses\n(1,815)\n(1,999)\nProfit before tax\n540\n1,341\nTaxation\n(325)\n(672)\nProfit after tax\n215\n669\nProfit before tax - Company’s interest\n242\n601\nTaxation - Company’s interest\n(146)\n(301)\nProfit after tax - Company’s interest\n96\n300\nNote:\nThe Group loss arising from Capital Advisers Co. Ltd. during the period from 1 January\n2003 to 2 May 2003 was US$100,000. Prior to 2 May 2003, Capital Advisers Co. Ltd. was\nconsolidated as a subsidiary.\nA-35\nAPPENDIX A – CONSOLIDATED FINANCIAL STATEMENTS \nFOR THE YEAR ENDED 31 DECEMBER 2004\nUNI-ASIA FINANCE CORPORATION\n(Incorporated in the Cayman Islands with limited liability)\nNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS\n\n\n18\nInvestments in associates (Continued)\n(c)\nDetails of associates\nAs at 31 December 2004, details of the associates, all of which are unlisted, were as follows:\nPrincipal\nCountry/place\nIssued and\nAttributable\nactivities and\nand date of\nfully paid up\nequity\nplace of\nName\nincorporation\nshare capital\ninterest\noperation\n2004 - Indirectly held:\nCapital Advisers Co.\nJapan\nYen892,500,000\n44.8%\nJapanese\nLtd. (Note below)\n24 February 2000\ncommon shares\nproperty\ninvestment and\nmanagement\nJapan\n(Note) On 2 May 2003, 9,850 new shares in Capital Advisers Co. Ltd. (“Capital Advisers”) were\nissued to non-related parties for cash which diluted the Group’s interest in Capital Advisers\nfrom 100% to 44.8%. The Group sold none of its existing shares in Capital Advisers, but\ndue to the issuance of new shares at a premium above its net assets, it recognised a\n“deemed gain on dilution of investment in an associate” of US$1,332,000.\nCalculation of deemed gain on dilution of investment in an associate\nFor year ended\n31 December 2003\nShare\nYen’000\nUS$’000\nCompany’s share of CA net asset value\nbefore dilution\n100%\n508,621\n4,221\nCash received from share issurance\n985,000\n8,174\nCA net asset value after dilution\n1,493,621\n12,395\nCompany’s share of CA net asset value\nafter dilution\n44.8%\n669,142\n5,553\nLess Company’s share of CA net asset\nvalue before dilution\n(508,621)\n(4,221)\nDeemed gain on dilution\n160,521\n1,332\nThere was no dilution of investment in associates during the year ended 31 December\n2004.\nA-36\nAPPENDIX A – CONSOLIDATED FINANCIAL STATEMENTS \nFOR THE YEAR ENDED 31 DECEMBER 2004\nUNI-ASIA FINANCE CORPORATION\n(Incorporated in the Cayman Islands with limited liability)\nNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS\n\n\n18\nInvestments in associates (Continued)\n(d)\nAmounts due from associates\nThe amounts due from associates constituted the principal balance and interest accrued on an\nunsecured revolving short term loan facility of US$4,754,000 equivalent to Yen 489,000,000 (2003:\nUS$9,631,000 equivalent to Yen 1,030,000,000. The loan was subject to interest at 3% per annum\nfrom 2 May 2003, when Capital Advisers ceased to be a subsidiary and thereon 1 April 2004, the\ninterest rate was revised to 1.375% per annum. Interest charged on amounts due from associates\nduring the year was US$101,000 (2003: US$221,000).\n(e)\nAmounts due to associates\nThe amounts due to associate are unsecured, interest free and with no fixed repayment terms.\n19\nAccounts receivable\nIn general, the Group grants a credit period of 7 to 60 days to its customers. The aging analysis of\nthe accounts receivable is as follows:\n2004\n2003\nUS$’000\nUS$’000\n0-30 days\n77\n692\n31-60 days\n–\n–\n61-90 days\n–\n–\nOver 90 days\n16\n34\n93\n726\n20\nCash and bank balances\n2004\n2003\nUS$’000\nUS$’000\nCash at bank and in hand\n1,942\n1,909\nShort term bank deposits\n34,672\n25,341\nCash and bank balances\n36,614\n27,250\nLess: Deposits pledged as collateral\n12,614\n17,244\nCash and cash equivalents\n24,000\n10,006\nThe effective interest rate on short term bank deposits was 1.15% (2003: 0.08%) and these\ndeposits have an average maturity of 35 days.\nWithin cash and bank balances as at 31 December 2004 are US$12,614,000 (2003:\nUS$17,244,000) of deposits pledged as collateral against Japanese Yen denominated revolving\nbank loan facilities.\nA-37\nAPPENDIX A – CONSOLIDATED FINANCIAL STATEMENTS \nFOR THE YEAR ENDED 31 DECEMBER 2004\nUNI-ASIA FINANCE CORPORATION\n(Incorporated in the Cayman Islands with limited liability)\nNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS\n\n\n21\nShare capital\n2004\n2003\nUS$’000\nUS$’000\nAuthorized:\n60,000,000 shares of US$1 each\n60,000\n60,000\nIssued and fully paid:\n28,000,000 shares of US$1 each\n28,000\n28,000\n22\nReserves\nShare\nRetained\nExchange\nNote\ncapital\nearnings\ndifference\nTotal\nUS$’000\nUS$’000\nUS$’000\nUS$’000\nBalance at 1 January 2004\n28,000\n5,982\n–\n33,982\nNet investment hedge\n–\n–\n(262)\n(262)\nCurrency translation \ndifference\n–\n–\n262\n262\nProfit for the year and total  \nrecognised income for 2004\n–\n7,935\n–\n7,935\nDividend\n12\n–\n(1,400)\n–\n(1,400)\nBalance at 31 December 2004\n28,000\n12,517\n–\n40,517\nBalance at 1 January 2003\n28,000\n3,386\n–\n31,386\nNet investment hedge\n–\n–\n(633)\n(633)\nCurrent translation difference\n–\n–\n633\n633\nProfit for the year and total \nrecognised income for 2003\n–\n3,436\n–\n3,436\nDividend\n12\n–\n(840)\n–\n(840)\nBalance at 31 December 2003\n28,000\n5,982\n–\n33,982\nA-38\nAPPENDIX A – CONSOLIDATED FINANCIAL STATEMENTS \nFOR THE YEAR ENDED 31 DECEMBER 2004\nUNI-ASIA FINANCE CORPORATION\n(Incorporated in the Cayman Islands with limited liability)\nNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS\n\n\n23\nAccounts payable\nThe aging analysis of the accounts payable is as follows:\n2004\n2003\nUS$’000\nUS$’000\n0-30 days\n2,246\n191\n31-60 days\n3\n92\n61-90 days\n–\n4\nOver 90 days\n18\n53\n2,267\n340\n24\nBorrowings\n2004\n2003\nUS$’000\nUS$’000\nRepayable per terms of revolving loan facility bank \nborrowings\n12,526\n15,895\nIncluded in borrowings is a secured loan of Yen1.18 billion (approximately US$11,473,000)\ncollateralised by a cash deposit of approximately US$12,614,000 with the same financial institution\n(2003: a loan totalling Yen1.7 billion, (approximately US$15,895,000) collateralised by\napproximately US$17,244,000).\nFair value of borrowings approximate the carrying amounts due to their being floating rate\ninstruments and no changes to the Group’s credit risk.\n2004\n2003\nUS$’000\nUS$’000\nWeighted average effective interest rates:\nBank borrowing - JPY\n0.34%\n0.46%\nBank borrowing - US$\n2.84%\n–\nCash deposit\n1.15%\n0.80%\nA-39\nAPPENDIX A – CONSOLIDATED FINANCIAL STATEMENTS \nFOR THE YEAR ENDED 31 DECEMBER 2004\nUNI-ASIA FINANCE CORPORATION\n(Incorporated in the Cayman Islands with limited liability)\nNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS\n\n\n24\nBorrowings (Continued)\nThe borrowings of the Group are at floating Yen LIBOR rates:\n2004\n2003\nUS$’000\nUS$’000\nTerm borrowings matured within one year\n1,053\n–\nRevolving secured loan due within one year\n11,473\n15,895\n12,526\n15,895\nTotal borrowings\n12,526\n15,895\n25\nSubsidiary companies\n(a)\nDetails of principal investments in subsidiaries\nDetails of the principal subsidiaries within the Group at the date of this report are as follows:\nName\nCountry/place\nIssued and\nAttributable\nPrincipal activities\nand date of\nfully paid up\nequity\nand place\nincorporation\nshare capital\ninterest\nof operation\nDirectly held:\nUni-Asia Capital\nSingapore\nUS$1,000,000\n100%\nCorporate finance and\n(Singapore)\n7 August 1997\ninvestment advisory \nLimited  \nservices Singapore\nOff-Shore\nBritish Virgin Islands\nUS$1\n100%\nHolding and \nProperty\n23 April 1998\ninvestment company\nInvestment\nBVI \nCorporation\nUni-Asia Services\nHong Kong\nHKD20\n100%\nInactive\nand Agency\n27 June 1997\nHong Kong\nLimited\nIndirectly held:\nUni-Asia Finance \nJapan\nYen 10,000,000\n100%\nCorporate\nCorporation \n9 November 1998\nfinance services Japan\n(Japan)\n(b)\nAmounts due from subsidiaries\nThe amounts due from subsidiaries are unsecured, at an interest rate of 2% per annum and with\nno fixed repayment terms.\nA-40\nAPPENDIX A – CONSOLIDATED FINANCIAL STATEMENTS \nFOR THE YEAR ENDED 31 DECEMBER 2004\nUNI-ASIA FINANCE CORPORATION\n(Incorporated in the Cayman Islands with limited liability)\nNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS\n\n\n25\nSubsidiary companies (Continued)\n(c)\nAmounts due to subsidiaries\nThe amounts due to subsidiaries are unsecured, interest free and with no fixed repayment terms.\n26\nCash generated from/(used in) operations\n(a)\nReconciliation of profit before taxation to cash generated from/(used in) operations \n2004\n2003\nUS$’000\nUS$’000\nProfit before taxation\n8,114\n3,442\nAdjustments for:\nDepreciation\n77\n49\nInterest income\n(339)\n(350)\nInterest expenses\n46\n216\nResults of associates\n(96)\n(1,632)\nInterest from loans to associate\n(86)\n(221)\nNet foreign exchange (gain)/loss\n20\n(489)\n(Increase)/decrease in rental and utility deposits paid\n(33)\n407\n(Increase)/decrease in accounts receivable\n552\n(9,527)\n(Increase)/decrease in prepaid expenses\n(38)\n3\nIncrease in accounts payable\n1,924\n8,143\nIncrease/(decrease) in accrued expenses\n1,281\n(68)\nIncrease in rental and utility deposits received\n–\n85\nLoss on disposal of fixed assets\n–\n34\nDecrease in deferred income\n–\n–\nRecovery on loans and interest receivable\n(250)\n–\nInvestment returns\n(6,682)\n(1,121)\nIncome from defaulted loans\n(1,862)\n(1,245)\nCash generated from/(used in) operations\n2,628\n(2,274)\nA-41\nAPPENDIX A – CONSOLIDATED FINANCIAL STATEMENTS \nFOR THE YEAR ENDED 31 DECEMBER 2004\nUNI-ASIA FINANCE CORPORATION\n(Incorporated in the Cayman Islands with limited liability)\nNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS\n\n\n26\nCash generated from/(used in) operations (Continued)\n(b)\nNet cash outflow on deemed disposal of subsidiary company\nOn 2 May 2003, 9,850 new shares Advisers Co. Ltd. (“Capital Advisers”) were issued to non-\nrelated parties which diluted the Group’s interest in Capital Advisers from 100% to 44.80% (Note\n18). Net cash outflow from the deemed disposal of subsidiary company is as follows:\n2004\n2003\nUS$’000\nUS$’000\nFixed assets\n–\n66\nJointly controlled entities\n–\n6,817\nProperty development projects held for sales\n–\n5,049\nRental and utility deposits paid\n–\n124\nAccounts receivable\n–\n1,635\nPrepaid expenses\n–\n42\nCash and cash equivalents\n–\n10,800\nUtility and rental deposits received\n–\n(220)\nAccounts payable\n–\n(8,532)\nTax payable\n–\n(8)\nBorrowings\n–\n(11,552)\nNet assets disposed of\n–\n4,221\nDeemed gain on dilution of investments in an associate\n–\n1,332\nAdjustment to investment in an associate\n–\n(5,553)\nSales proceeds\n–\n–\nCash of subsidiary disposed of\n–\n10,800\n(c)\nMajor non-cash transactions\nDuring the year ended 31 December 2004, the share of taxation of associate amounted to\nUS$146,000 (2003: US$301,000).\nA-42\nAPPENDIX A – CONSOLIDATED FINANCIAL STATEMENTS \nFOR THE YEAR ENDED 31 DECEMBER 2004\nUNI-ASIA FINANCE CORPORATION\n(Incorporated in the Cayman Islands with limited liability)\nNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS\n\n\n27\nFinancial instruments\n(a)\nRisks\nThe Group holds monetary assets and liabilities, transacts in foreign exchange transactions with\nthird parties and has mismatched Yen denominated assets and liabilities. All these operations give\nrise to risk exposures.\nFinancial instruments traded or held include cash and cash equivalents, investments, loans\nreceivable and borrowings.\nOff-balance sheet derivative financial instruments are contracts whose value is derived from one or\nmore underlying financial instruments or indices defined in the contract, which include forward rate\nagreements.\nForward rate agreements are used to manage the Group’s own exposures to foreign exchange risk\nas part of its asset and liability management process. The principal derivative instruments used by\nthe Group are foreign exchange rate related contracts. Most of the Group’s derivative positions\nhave been entered into to hedge investments in subsidiaries.\n(i)\nMarket risk \nMarket risk is the risk that the value of a financial instrument will fluctuate as a result of\nchanges in market prices, whether those changes are caused by factors specific to the\nindividual financial instrument or by factors affecting all financial instruments traded in or\nindexed to a market. The Group is exposed to market risk on financial instruments that are\nvalued at market prices and primarily consist of investments, loans, property development\nprojects and marketable securities.\n(ii)\nForeign exchange risk\nForeign exchange risk is the risk that the value of financial instruments and other assets and\nliabilities will fluctuate as a result of changes in foreign exchanges rates. The Group is\nexposed to foreign exchange risk primarily from the net position of Yen denominated cash\nand cash equivalents, investments and borrowings.\n(iii)\nInterest rate risk\nInterest rate risk is the risk that the value of a financial instrument will fluctuate as a result of\nchanges in market interest rates and the cash flow risks associated with the variability of\ncash flows from floating rate financial instruments. The Group is exposed to interest rate risk\nprimarily from interest rate re-pricing differences between customers’ loans, borrowings, cash\nand cash equivalents and shareholders’ capital.\n(iv)\nCredit risk\nCredit risk is the risk of loss resulting from the failure of counterparties to meet the terms of\ntheir obligations. The Group is exposed to credit risk through loans and investments, and\nthrough counterparty default risk on transactions, including foreign exchange transactions in\nthe process of settlement.\nA-43\nAPPENDIX A – CONSOLIDATED FINANCIAL STATEMENTS \nFOR THE YEAR ENDED 31 DECEMBER 2004\nUNI-ASIA FINANCE CORPORATION\n(Incorporated in the Cayman Islands with limited liability)\nNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS\n\n\n27\nFinancial instruments (Continued)\n(a)\nRisks (Continued)\n(v)\nLiquidity risk\nLiquidity risk is the risk of loss resulting from the failure of the Group to meet its funding\nrequirements or to execute a transaction at a reasonable price. The Group is exposed to\nliquidity risk relating to the gaps between the maturity of assets held against the maturity of\nthe funding of the Group’s activities.\n(b)\nRisk management\nThe Group’s principal risks are market risk, credit risk and foreign exchange risk. The directors\nconsider the interest rate risk and liquidity risk of the Group to be immaterial.\nMarket risk and credit risk\nThe Group seeks to minimise these risks by performing detailed reviews of loan counterparties or\nasset issuers prior to purchase approval, and by either selling on participated loans to other parties\nor entering into offsetting loans payable when the directors wish to preserve the Group’s liquidity.\nThe Group seeks to minimize adverse movements in market price of financial instruments by\nextensive due diligence procedures to ensure acquisition at prices below their perceived fair value.\nForeign exchange risk\nThe directors review their currency exposures and enter into foreign currency forward contracts\nwhen considered necessary to hedge against adverse currency movements.\nThe Group uses the following derivative instruments for both hedging purposes:\nForward rate agreements are individually negotiated interest rate futures that call for a cash\nsettlement at a future date for the difference between a contracted rate of interest and the current\nmarket rate, based on a notional principal amount.\nCurrency and interest rate swaps are commitments to exchange one set of cash flows for another.\nSwaps result in an economic exchange of currencies or interest rates (for example, fixed rate for\nfloating rate) or a combination of all these (ie, cross-currency interest rate swaps). No exchange of\nprincipal takes place, except for certain currency swaps. The Group’s credit risk represents the\npotential cost to replace the swap contracts if counterparties fail to perform their obligation. This\nrisk is monitored on an ongoing basis with reference to the current fair value, a proportion of the\nnotional amount of the contracts and the liquidity of the market. To control the level of credit risk\ntaken, the Group assesses counterparties using the same techniques as for its lending activities.\n(c)\nFair value\nThe directors consider the carrying amount of all financial assets and liabilities included in the\nconsolidated balance sheet are a reasonable estimate of their fair values.\nA-44\nAPPENDIX A – CONSOLIDATED FINANCIAL STATEMENTS \nFOR THE YEAR ENDED 31 DECEMBER 2004\nUNI-ASIA FINANCE CORPORATION\n(Incorporated in the Cayman Islands with limited liability)\nNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS\n\n\n28\nCommitments\n(a)\nCapital commitments\nCapital expenditure contracted for at the balance sheet date but not yet incurred is as follows:\n2004\n2003\nUS$’000\nUS$’000\nMotor vehicle\n81\n–\n(b)\nLease commitments\nCommitments, under non-cancellable operating leases with a term of more than one year, fall due:\n2004\n2003\nUS$’000\nUS$’000\nWithin one year\n643\n542\nLater than one year and not later than five years\n399\n480\nLater than five years\n–\n–\n1,042\n1,022\nThe Group contracted to a new non-cancellable operating lease covering the period from 1 April\n2003 to 30 September 2006, at a monthly rent of US$14,000.\n(c)\nInvestment commitments\n2004\n2003\nUS$’000\nUS$’000\nUn-drawn investment commitments at 31st December\n12,484\n4,834\nThe Group holds 20% of the performance notes – series 1 issued by AAA Strategic Investment\nLimited and 33.33% of the performance notes – series 2, a distressed debt fund managed by the\nGroup. No commitments remain outstanding for series 1 at 31 December 2004 (2003: US$Nil).\nTotal commitments for series 2 amount to US$5,000,000 (2003: US$5,000,000) of which a\ncumulative amount of US$1,894,000 has been called and paid to 31 December 2004 (2003:\nUS$427,000).\nThe Group also holds 29.4% of the performance notes – series 1 issued by Searex Asset\nManagement Limited and 21.7% of the performance notes – series 2, a shipping management\ncompany managed by the Group.\nNo commitments remain outstanding for series 1 at 31\nDecember 2004 (2003: US$Nil). Total commitments for series 2 amount to US$5,000,000 of which\nno amount called and paid to 31 December 2004 (2003: US$Nil).\nA-45\nAPPENDIX A – CONSOLIDATED FINANCIAL STATEMENTS \nFOR THE YEAR ENDED 31 DECEMBER 2004\nUNI-ASIA FINANCE CORPORATION\n(Incorporated in the Cayman Islands with limited liability)\nNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS\n\n\n28\nCommitments (Continued)\n(c)\nInvestment commitments (Continued)\nThe Group holds a 15% interest in both Euroasia II Inc. Panama and Euroasia III Inc. Panama,\neach of which has been established for the sole purpose of contracting, take delivery of and\noperating a cargo vessel. No commitments remain outstanding as at 31 December 2004 (2003:\nUS$1,166,000) of which no amount (2003: US$905,000) has been called and paid to 31 December\n2004.\nThe Group holds a 33.3% interest in Glad Mate Limited, which has been established for the sole\npurpose of contracting, the building of, take delivery of, and operating a cargo vessel. The Group\nhad an outstanding commitment of US$4,378,000 at 31 December 2004 in relation to this\nenterprise (2003: US$Nil).\n29\nRelated party transactions\nRelated parties include investments, associates, jointly controlled entities, and property\ndevelopment projects held for sale where the Group holds a beneficial interest in, and is also\ncontracted as a service provider to manage or administer such investment, company, entity or\nproperty.\nRelated party transactions are carried out under normal commercial terms and conditions and\ngenerate fee income as disclosed in Note 4, investment returns as disclosed in Note 5, directors’\nremunerations and other allowances as disclosed in Note 14, investments in associates and\namounts due from associates as disclosed in Note 18.\nRelated party balances comprise the unlisted performance notes as disclosed in Note 17.\nThe following transactions were carried out with related parties:\n2004\n2003\nUS$’000\nUS$’000\nAgency, arrangement, administration and incentive \nfees from shipping finance, investment and \nmanagement (Note (a))\n2,210\n–\nAgency, advisory, administration and incentive fees \nfrom distressed loans (Note (b))\n303\n682\nReturn on performance notes – shipping business \n(Note (c)) \n2,589\n–\nReturn on performance notes – distressed debt \n(Note (c)) \n103\n292\nProceeds on sales of the associates to another \nassociates (Note (d))\n709\n–\nIncentive fees receivable from associates\n6\n–\nInterest return on performance note – distressed debt\n25\n–\nAmount due from associates (Note (b))\n4,781\n9,631\nA-46\nAPPENDIX A – CONSOLIDATED FINANCIAL STATEMENTS \nFOR THE YEAR ENDED 31 DECEMBER 2004\nUNI-ASIA FINANCE CORPORATION\n(Incorporated in the Cayman Islands with limited liability)\nNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS\n\n\n29\nRelated party transactions (Continued)\nNotes:\n(a)\nThe Group is entitled to receive from Searex Asset Management Limited, as investment of the\nGroup, the following fees:\n(i)\na minimum administration fee of US$5,000 per month for each shipping asset owned by\nSearex Asset Management Limited, including the vessels being acquired which are subject\nof a memorandum of agreement, payable quarterly in advance.\n(ii)\na brokerage fee of approximately 0.75% to 1.25% on the sum of the daily charter hire of a\nvessel.\n(iii)\nan incentive fee of approximately 10% of the sum of the net proceeds, accumulated cash\nbalance and liabilities outstanding from the disposal of certain vessels.\n(iv)\na loan arrangement fee of approximately 1% of the purchase price of a vessel.\n(b)\nThe Group is entitled to receive from AAA Strategic Investment Limited, as investment of the\nGroup, the following fees:\n(i)\nan administration fee of US$75,000 per annum for performance notes series 1 payable semi-\nannually in advance and an administration fee for performance notes series 2 payable semi-\nannually in advance in the amount of US$50,000 for the full or partial issuance of\nperformance notes each of the first three US$5 million amounts up to a maximum of\nUS$150,000.\n(ii)\nan agency fee of US$25,000 per annum for performance notes series 1 payable semi-\nannually in advance, and an agency fee for performance notes series 2, payable semi-\nannually in advance, in the amount of US$50,000 per annum for the full or partial issuance\nof each of the first three US$5 million tranches of performance notes.\n(iii)\nan incentive fee, calculated on an asset by asset basis, in addition to the administration fee.\nThe initial incentive fee is calculated as twenty percent of the cumulative cash recovered\nfrom each asset in excess of one hundred and ten percent of that asset’s initial cost. The\nsubsequent incentive fee is calculated as twenty percent of additional cash recovered from\neach asset in excess of that asset’s additional cost. The incentive fee is calculated and paid\nsemi-annually.\n(c)\nPerformance notes are redeemed semi-annually, in whole or in part, calculated based on net cash\nrecovered from the underlying assets. Performance note redemptions are determined based on\nthe total original cost of recovered assets less the deduction of fees and other expenses incurred in\nrecovery of such assets. Recovery amounts from assets in excess of that required for performance\nnote repayments are paid out as interest on those performance notes.\n(d)\nIn March 2004, the Company disposed of its equity interest in two investments, Ocean Time\nLimited and Ocean Target Limited, to a related party, Searex Asset Management Limited.\nA-47\nAPPENDIX A – CONSOLIDATED FINANCIAL STATEMENTS \nFOR THE YEAR ENDED 31 DECEMBER 2004\nUNI-ASIA FINANCE CORPORATION\n(Incorporated in the Cayman Islands with limited liability)\nNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS\n\n\n29\nRelated party transactions (Continued)\n(e)\nThe Company entered into a two year Cap transaction of notational amount of US$27,000,000\n(2003: US$Nil) with a bank at an interest rate cap of 2.25% on 31 March 2004. The Company\nassigned and transferred all the rights and obligations to a subsidiary company of Searex Asset\nManagement Limited, a related party of the Group, effective from 13 April 2004. The Company has\nno residual interest or obligations in relation to the transaction after the assignment. The Company\nalso entered into US$/Yen foreign currency forward contracts with the same subsidiary company of\nSearex Asset Management Limited during 2004, of principal amounts of US$10m and US$1.3m,\nboth contracts expired during the years.\n(f)\nThe Group also purchased loans originally advanced to a related party, South China International\nLeasing Co. Ltd. (“SCIL”). On 9th September 2004, the Company sold its equity and loan interest\nin SCIL to an unrelated party at a total consideration of US$1,666,000.\n(g)\nThe amounts due are unsecured, interest free and have no fixed repayment terms.\n(h)\nThe amounts due from associates constituted loans to Capital Advisers.\nThe principal balance and interest accrued on an unsecured revolving short term loan facility of\nUS$4,754,000 \nequivalent \nto Yen \n489,000,000 \n(2003:\nUS$9,631,000 \nequivalent \nto\nYen1,030,000,000). The loan was subject to interest at 3% per annum from 2 May 2003, when\nCapital Advisers Co. Ltd ceased to be a subsidiary and thereon 1 April 2004, the interest rate was\nrevised to 1.375% per annum. Interest charged on amounts due from Capital Advisers Co. Ltd\nduring the year was US$101,000 (2003: US$221,000).\n30\nPost balance sheet events\nOn 25 January 2005, a new joint venture, Uni Ships and Management Ltd., was incorporated in\nHong Kong, of which the Company holds 30% of its common shares. The principal activities of the\njoint venture are the provision of project management services for Searex Asset Management\nLimited, and accounting and other supporting services to the underlying shipping companies.\nOn 21 March 2005, the Company entered into three contracts to guarantee payment on the\npurchase of three container vessels, of US$56,280,000 per vessel.\n31 \nApproval of the consolidated financial statements\nThe consolidated financial statements were approved by the board of directors on 11 January\n2006.\nA-48\nAPPENDIX A – CONSOLIDATED FINANCIAL STATEMENTS \nFOR THE YEAR ENDED 31 DECEMBER 2004\nUNI-ASIA FINANCE CORPORATION\n(Incorporated in the Cayman Islands with limited liability)\nNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS\n\n\nB-1\nUNI-ASIA FINANCE CORPORATION\n(Incorporated in the Cayman Islands with limited liability)\nREPORTS AND CONSOLIDATED FINANCIAL STATEMENTS\nFOR THE YEAR ENDED\n31 DECEMBER 2005\nAPPENDIX B\nThe consolidated financial statements for the year ended 31 December 2005 and the auditors’ report on\nthe consolidated financial statements for the year ended 31 December 2005 were not prepared for\npurposes of inclusion in the Prospectus and, save for references to page numbers which have been\naltered to conform to the pagination of the Prospectus, have been reproduced and are set out on pages\nB-6 to B-47 and page B-5, respectively.\n\n\nDIRECTORS’ REPORT TO THE SHAREHOLDERS \nOF UNI-ASIA FINANCE CORPORATION\nThe directors submit their report together with the audited consolidated financial statements of Uni-Asia\nFinance Corporation (the “Company”) and its subsidiaries (together the “Group”) for the year ended 31st\nDecember 2005.\nGeneral Information \nThe principal activities of the Group remained substantially the same as the previous year- finance\narrangement and investment management. The Group acted in the capacities of principal investor,\nfinance arranger and fund administrator for various classes of alternative investments in ships, distressed\nassets and real estate. The main sources of income for the Group include fee income, investment returns,\ninterest income and other income generated from the four departments listed below.\n-\nStructured Finance department focuses on finance arrangement in the shipping sector in Asia.\nThe Group acts as the arranger, packager and agent and participates in syndicated commercial\nloans and tax oriented leases.\n-\nAsset Finance department focuses on investment and management of ships including the\nacquisition and disposal of ships and the investment management of assets held by the Group\nand on behalf of third parties.\n-\nDistressed Assets Investment department focuses on investment and management activities in\nAsia including the acquisition and disposal of distressed Asian assets and the investment\nmanagement of assets held by the Group and on behalf of third parties.\n-\nJapan real estate department focuses on the investment and management of real estate\nprojects in Japan including the arrangement of investment and co-investment in the\ndevelopment and trading of Japanese hotels, commercial and residential properties and the\ninvestment management of the properties held by the Group and on behalf of third parties.\nThe Group is also seeking investment opportunities in new areas, projects or business where it will be\nable to capitalize on its finance packaging expertise.\nThe directors would like to report that the Group’s listing application in April 2005 to the Hong Kong Stock\nExchange was rejected. The directors would like to continue to explore the possibility of bringing the\nCompany public.\nOperating and Financial Review\n1.\nStructured Finance\nStructured finance activities are conducted mainly out of the Hong Kong and Tokyo offices. During\nthe year, the Group arranged syndicated transactions totalling US$930m (2004: US$546m).\nThe structured finance department generated arrangement and brokerage fee income of\nUS$3,494k (2004: US$2,383k) and agency fees of US$289k (2004: US$251k).\nThe directors are of the view that the business of finance arrangement will remain competitive.\nB-2\nAPPENDIX B – DIRECTORS’ REPORT ON THE CONSOLIDATED FINANCIAL\nSTATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2005\n\n\nDIRECTOR’S REPORT TO THE SHAREHOLDERS\nOF UNI-ASIA FINANCE CORPORATION (Continued)\nOperating and Financial Review (continued)\n2.\nAsset Finance\nThe asset finance department carries out the business of shipping investment management for the\nGroup and for third parties. In December 2003, the Group ventured into shipping investment and\nacted as the investor and administrator of two investment facilities held under Searex Asset\nManagement Limited. The Group participated in the fund by way of subscribing to a 29.4% and\n19.57% interest in the outstanding performance notes. In 2005, the Group invested into 3 container\nvessel projects namely Falcon, Fortitude and Union.\nThrough shipping investment management, debt arrangement and fund administration, the\ndepartment recorded total income of US$8,997k (2004: US$9,594k). A detailed breakdown of the\nmajor income is as follows: US$1,785k as arrangement and project management fees (2004:\nUS$1,344k), US$65k as agency fee (2004: US$63k), US$2,552k as fund management fee (2004:\nUS$1,415k) and US$4,500k as investment return (2004: US$6,682k). As at 31st December 2005,\nthe total outstanding investment in the ships/shipping fund was US$9.7m (2004: US$4,247k).\nThe directors are of the view that the shipping market would remain opportunistic in the short term\ndriven by China’s continued economic prosperity. The anticipated increase in vessel supply is\nexpected to put pressure on capital values and freight rates. In the medium term, the Group will\nexercise greater degree of caution in future investments and dispositions.\n3.\nDistressed Assets Investment \nThe distressed assets investment department carries out the acquisition and disposition of non-\nperforming loans (NPLs) for the Group and for the managed funds.\nThere was no recovery in 2005 from NPLs invested directly by the Group (2004: US$1,862k). Only\nmoderate NPL investments were made in 2005 due primarily to a change in market dynamics and\nincreased investment risk.\nAAA Strategic Investment Limited (AAA) is a co-investment fund administrated by the Group in\nparticipation with a Japanese financial institution. Contribution from AAA to the Group amounted to\nUS$1,019k in 2005 (2004: US$405k). As at 31st December 2005, the nominal value of the notes\nissued by AAA was US$5,293k (2004: US$5,644k) of which the Group’s participation reached\nUS$1,746k (2004: US$1,793k).\nThe directors are of the view that investing into NPLs has become less attractive. As a result, the\nGroup has extended from investment in NPLs to distressed real estate projects. The Group is\ncurrently conducting investment and due diligence on real estate projects in Asia.\n4.\nReal Estate Investment Management in Japan\nThe Group’s property investment in Japan is conducted through Capital Advisers Co., Limited (CA),\nan associated company in which the Group maintains an equity interest of 44.8%. As at 31st\nDecember 2005, the Group’s outstanding investment in CA totaled US$6,585k (2004: US$6,928k)\nincluding US$756k as shareholders’ loan (2004: US$4,781k). Net Contribution from CA to the\nGroup in 2005 was US$570k (2004: US$96k).\nB-3\nAPPENDIX B – DIRECTORS’ REPORT ON THE CONSOLIDATED FINANCIAL\nSTATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2005\n\n\nDIRECTOR’S REPORT TO THE SHAREHOLDERS\nOF UNI-ASIA FINANCE CORPORATION (Continued)\nOperating and Financial Review (continued)\n4.\nReal Estate Investment Management in Japan (continued)\nCA focuses on investment in residential projects and limited service hotels through the\narrangement of new property funds or existing property funds advised, administrated and managed\nby the company. The company would take minority equity participations in the projects. As at 31st\nDecember 2005, CA had invested JPY1,533m (2004: JPY1,209m) direct or indirectly in Japanese\nproperties generating JPY949m (2004: JPY478m) in total income during the year. Profit before\ntaxation was JPY276m (2004: JPY58m).\nIn 2005, the property funds under CA’s management reached JPY43.7 billion with an increase of\nJPY23.6 billion from the previous year. Also, CA has entered into the hotel operation business in\nAugust, 2005 by purchasing all the shares of the hotel operating company, Sun–Vista.\nThe directors are of view that the Japan real estate market will continue to improve. CA will\ncontinue to expand its real estate fund business and the hotel operation business in 2006 targeting\nsales of JPY2,293m and ordinary income of JPY554m.\nThe Group reported a net profit before tax of US$9,918k (2004: US$8,114k) after factoring in total\nexpenses of US$8,903k (2004: US$6,985k) of which US$575k (2004: US$103k) was attributable to\nthe listing exercise in Hong Kong in 2005.\nOn behalf of the board\nKazuhiko Yoshida\nManaging Director, Chief Executive Officer\nHong Kong, 16th June 2006\nB-4\nAPPENDIX B – DIRECTORS’ REPORT ON THE CONSOLIDATED FINANCIAL\nSTATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2005\n\n\nAUDITORS’ REPORT TO THE SHAREHOLDERS OF\nUNI-ASIA FINANCE CORPORATION\n(Incorporated in the Cayman Islands with limited liability)\nWe have audited the accompanying consolidated balance sheet of Uni-Asia Finance Corporation (the\n“Company”) and its subsidiaries (together, the “Group”) as of 31 December 2005 and the related\nconsolidated statement of income, cash flows and changes in shareholders’ equity for the year then\nended. These financial statements set out on pages 5 to 47 are the responsibility of the Company’s\nmanagement. Our responsibility is to express an opinion on these financial statements based on our\naudit and to report our opinion solely to you, as a body, in accordance with our agreed terms of\nengagement, and for no other purpose. We do not assume responsibility towards or accept liability to any\nother person for the contents of this report.\nWe conducted our audit in accordance with International Standards on Auditing. Those Standards\nrequire that we plan and perform the audit to obtain reasonable assurance about whether the financial\nstatements are free of material misstatement. An audit includes examining, on a test basis, evidence\nsupporting the amounts and disclosures in the financial statements. An audit also includes assessing the\naccounting principles used and significant estimates made by management, as well as evaluating the\noverall financial statement presentation. We believe that our audit provides a reasonable basis for our\nopinion.\nIn our opinion, the accompanying consolidated financial statements give a true and fair view of the\nfinancial position of the Group as of 31 December 2005, and of the results of its operations and cash\nflows for the year then ended in accordance with International Financial Reporting Standards.\nPricewaterhouseCoopers\nCertified Public Accountants\nHong Kong, 16th June 2006\nB-5\nAPPENDIX B – AUDITORS’ REPORT ON THE CONSOLIDATED FINANCIAL\nSTATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2005\n\n\nUNI-ASIA FINANCE CORPORATION\n(Incorporated in the Cayman Islands with limited liability)\nCONSOLIDATED BALANCE SHEET\nAS AT 31 DECEMBER 2005\nNote\n2005\n2004\nUS$’000\nUS$’000\nASSETS\nNon-current assets\nProperty, plant and equipment \n16\n147\n122\nLoans receivable\n17\n50\n150\nInvestments\n18\n15,437\n8,289\nInvestments in associates\n20(a)\n6,648\n6,928\nAmounts due from associates\n31(h)\n756\n4,781\n23,038\n20,270\nCurrent assets\nLoans receivable\n17\n100\n1,200\nRental and utility deposits paid\n433\n227\nDeposits pledged as collateral \n32\n10,082\n12,614\nAccounts receivable\n21\n465\n93\nPrepaid expenses\n267\n247\nInterest receivable\n20\n54\nCash and bank balances\n22\n27,544\n24,000\n38,911\n38,435\nTotal assets\n61,949\n58,705\nEQUITY\nCapital and reserves attributable to equity \nholders of the company\nShare capital\n23\n28,000\n28,000\nRetained earnings\n21,956\n12,517\nTotal equity\n49,956\n40,517\nThe notes on pages 11 to 47  are an integral part of these consolidated financial statements.\nB-6\nAPPENDIX B – CONSOLIDATED FINANCIAL STATEMENTS \nFOR THE YEAR ENDED 31 DECEMBER 2005\n\n\nUNI-ASIA FINANCE CORPORATION\n(Incorporated in the Cayman Islands with limited liability)\nCONSOLIDATED BALANCE SHEET (Continued)\nAS AT 31 DECEMBER 2005\nNote\n2005\n2004\nUS$’000\nUS$’000\nLIABILITIES\nNon-current Liabilities\nDeferred tax liabilities\n11(b)\n264\n178\n264\n178\nCurrent Liabilities\nAmount due to associate\n31(g)\n11\n–\nBorrowings\n26\n9,041\n12,526\nAccounts payable\n25\n227\n2,267\nAccrued expenses\n2,023\n1,783\nTax payable\n427\n34\nDividend payable\n13,24\n–\n1,400\nTotal current liabilities\n11,729\n18,010\nTotal equity and liabilities\n61,949\n58,705\nApproved by board of directors on 16 June 2006\nand signed on its behalf by:\n…………………….….\n……………………….\nDirector\nDirector \nThe notes on pages 11 to 47 are an integral part of these consolidated financial statements.\nB-7\nAPPENDIX B – CONSOLIDATED FINANCIAL STATEMENTS \nFOR THE YEAR ENDED 31 DECEMBER 2005\n\n\nUNI-ASIA FINANCE CORPORATION\n(Incorporated in the Cayman Islands with limited liability)\nCONSOLIDATED INCOME STATEMENT\nFOR THE YEAR ENDED 31 DECEMBER 2005\nNote\n2005\n2004\nUS$’000\nUS$’000\nFee income\n5\n12,234\n5,599\nInvestment returns\n6\n5,011\n6,682\nIncome from defaulted loans\n–\n1,862\nInterest income\n7\n936\n339\nOther income\n86\n317\nTotal income\n18,267\n14,799\nEmployee benefits expense\n10\n(5,481)\n(5,087)\nDepreciation expense\n16\n(106)\n(77)\nOther expenses\n8\n(3,316)\n(1,821)\nReversal of impairment loss on loans \nreceivable\n–\n250\nGain on disposal of fixed assets\n2\n–\n(8,901)\n(6,735)\nOperating profit \n9,366\n8,064\nFinance costs - interest expense\n7\n(42)\n(46)\nShare of profit of associates after tax\n9\n594\n96\nProfit before income tax \n9,918\n8,114\nIncome tax expense\n11\n(479)\n(179)\nProfit for the year\n9,439\n7,935\nEarnings per share for profit attributable \nto the equity holders of the company\nduring the year \n-  basic and diluted\n14\nUS$0.337\nUS$0.283\nThe notes on pages 11 to 47 are an integral part of these consolidated financial statements.\nB-8\nAPPENDIX B – CONSOLIDATED FINANCIAL STATEMENTS \nFOR THE YEAR ENDED 31 DECEMBER 2005\n\n\nUNI-ASIA FINANCE CORPORATION\n(Incorporated in the Cayman Islands with limited liability)\nCONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY\nFOR THE YEAR ENDED 31 DECEMBER 2005\nNote\n2005\n2004\nUS$’000\nUS$’000\nAt the beginning of the year\n40,517\n33,982\nNet investment hedge\n(879)\n262\nCurrency translation difference\n879\n(262)\nProfit for the year\n9,439\n7,935\nDividend\n13\n–\n(1,400)\nAt the end of the year\n24\n49,956\n40,517\nThe notes on pages 11 to 47 are an integral part of these consolidated financial statements.\nB-9\nAPPENDIX B – CONSOLIDATED FINANCIAL STATEMENTS \nFOR THE YEAR ENDED 31 DECEMBER 2005\n\n\nUNI-ASIA FINANCE CORPORATION\n(Incorporated in the Cayman Islands with limited liability)\nCONSOLIDATED CASH FLOW STATEMENT\nFOR THE YEAR ENDED 31 DECEMBER 2005\nNote\n2005\n2004\nUS$’000\nUS$’000\nCash flows from operating activities\nCash generated from operations\n28(a)\n1,733\n2,628\nInterest received on bank balances\n927\n300\nIncome tax paid\n(1)\n–\nNet cash generated from operating activities\n2,659\n2,928\nCash flows from investing activities\nCash flows from investments:\nPurchase of investment\n(9,825)\n(4,642)\nProceeds from sales of investments\n2,911\n2,619\nDividend received from investments\n2\n2,929\nCash flows from associates:\nRepayment of principal and interest from loans to \nassociate\n4,085\n4,937\nCash flows from other investing activities:\nPurchase of fixed assets\n(134)\n(107)\nLoans advanced\n–\n(1,100)\nLoan repayments received\n1,200\n1,969\nInterest received from syndicated loans\n48\n37\nProceeds from sale of defaulted loans\n–\n1,584\nDecrease  in deposits pledged as collateral\n2,533\n4,630\nProceeds received from interest on performance \nnotes\n4,359\n2,702\nPurchase of foreign exchange contracts\n(25,433)\n(10,265)\nProceeds from settlement of foreign exchange \ncontracts\n25,499\n10,325\nNet cash generated from investing activities\n5,245\n15,618\nThe notes on pages 11 to 47 are an integral part of these consolidated financial statements.\nB-10\nAPPENDIX B – CONSOLIDATED FINANCIAL STATEMENTS \nFOR THE YEAR ENDED 31 DECEMBER 2005\n\n\nUNI-ASIA FINANCE CORPORATION\n(Incorporated in the Cayman Islands with limited liability)\nCONSOLIDATED CASH FLOW STATEMENT (Continued)\nFOR THE YEAR ENDED 31 DECEMBER 2005\nNote\n2005\n2004\nUS$’000\nUS$’000\nCash flows from financing activities\nInterest paid on borrowings\n(45)\n(45)\nProceed from borrowings\n–\n1,053\nRepayment of borrowings\n(3,485)\n(4,758)\nDividend paid to company shareholders\n(1,400)\n(840)\nNet cash used in from financing activities\n(4,930)\n(4,590) \nIncrease in cash equivalents\n2,974\n13,956\nMovements in cash and cash equivalents:\nCash and cash equivalents at beginning of year\n24,000\n10,006\nNet increase in cash and cash equivalents\n2,974\n13,956\nEffects of exchange rate changes\n570\n38\nCash and cash equivalents at end of the year\n22\n27,544\n24,000\nThe notes on pages 11 to 47 are an integral part of these consolidated financial statements.\nB-11\nAPPENDIX B – CONSOLIDATED FINANCIAL STATEMENTS \nFOR THE YEAR ENDED 31 DECEMBER 2005\n\n\n1\nGeneral information\nUni-Asia Finance Corporation (the “Company”) and its subsidiaries (together, the “Group”) principal\nactivities are the arrangement of, acting as agent of and participation in syndicated commercial\nloans, arrangement, management and co-investment in development and trading of Japanese\nproperty assets and the acquisition, management and disposal of distressed Asian assets and\nshipping business.\nThe Company is an exempted company incorporated in the Cayman Islands on 17th March 1997\nwith limited liability.\n2\nSummary of significant accounting policies \nThe principal accounting policies applied in the preparation of these consolidated financial\nstatements are set out below. These policies have been consistently applied to all the years\npresented, unless otherwise stated.\n(a)\nBasis of preparation\nThe consolidated financial statements of Uni-Asia Finance Corporation have been prepared in\naccordance with International Financial Reporting Standards (IFRS). The consolidated financial\nstatements have been prepared under the historical cost convention as modified by the revaluation\nof financial assets and financial liabilities (including derivative instruments) at fair value through\nprofit or loss.\nThe preparation of financial statements in conformity with IFRS requires the use of certain critical\naccounting estimates. The areas where assumptions and estimates are significant to the\nconsolidated financial statements are disclosed in note 4.\nInterpretations and amendments to published standards effective in 2005\nThe following amendments and interpretations to standards are mandatory for the Group’s\naccounting periods beginning on or after 1st January 2005:\n- IFRIC 2, Members’ Shares in Co-operative Entities and Similar Instruments (effective from 1st\nJanuary 2005);\n- SIC 12 (Amendment), Consolidation – Special Purpose Entities (effective 1st January 2005); and\n- IAS 39 (Amendment), Transition and Initial Recognition of Financial Assets and Financial\nLiabilities (effective from 1 January 2005).\nManagement assessed the relevance of these amendments and interpretations with respect to the\nGroup’s operations and concluded that they are not relevant to the Group.\nStandards, interpretations and amendments to published standards that are not yet effective\nCertain new standards, amendments and interpretations to existing standards have been published\nthat are mandatory for the Group’s accounting periods beginning on or after 1st January 2006 or\nlater periods but which the Group has not early adopted, as follows:\nB-12\nAPPENDIX B – CONSOLIDATED FINANCIAL STATEMENTS \nFOR THE YEAR ENDED 31 DECEMBER 2005\nUNI-ASIA FINANCE CORPORATION\n(Incorporated in the Cayman Islands with limited liability)\nNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS\n\n\n2\nSummary of significant accounting policies (Continued)\n(a)\nBasis of preparation (Continued)\nIAS 39 (Amendment) The Fair Value Option (effective from 1 January 2006). This amendment\nchanges the definition of financial instruments classified at fair value through profit or loss and\nrestricts the ability to designate financial instruments as part of this category. The Group believes\nthat this amendment should not have a significant impact on the classification of financial\ninstruments, as the Group should be able to comply with the amended criteria for the designation\nof financial instruments at fair value through profit and loss. The Group will apply this amendment\nfrom annual periods beginning 1 January 2006\nIFRS 7, Financial Instruments: Disclosures, and a complementary Amendment to IAS 1,\nPresentation of Financial Statements - Capital Disclosures (effective from 1 January 2007). IFRS 7\nintroduces new disclosures to improve the information about financial instruments. It requires the\ndisclosure of qualitative and quantitative information about exposure to risks arising from financial\ninstruments, including specified minimum disclosures about credit risk, liquidity risk and market\nrisk, including sensitivity analysis to market risk. It replaces IAS 30, Disclosures in the Financial\nStatements of Banks and Similar Financial Institutions, and disclosure requirements in IAS 32,\nFinancial Instruments: Disclosure and Presentation. It is applicable to all entities that report under\nIFRS. The amendment to IAS 1 introduces disclosures about the level of an entity’s capital and how\nit manages capital. The Group assessed the impact of IFRS 7 and the amendment to IAS 1 and\nconcluded that the main additional disclosures will be the sensitivity analysis to market risk and the\ncapital disclosures required by the amendment of IAS 1. The Group will apply IFRS 7 and the\namendment to IAS 1 from annual periods beginning 1 January 2007.\n(b)\nConsolidation \n(i) \nSubsidiaries \nSubsidiaries are all entities (including special purpose entities) over which the Group has the power\nto govern the financial and operating policies generally accompanying a shareholding of more than\none half of the voting rights. The existence and effect of potential voting rights that are currently\nexercisable or convertible are considered when assessing whether the Group controls another\nentity. Subsidiaries are fully consolidated from the date on which control is transferred to the\nGroup. They are de-consolidated from the date that control ceases.\nThe purchase method of accounting is used to account for the acquisition of subsidiaries by the\nGroup. The cost of an acquisition is measured as the fair value of the assets given, equity\ninstruments issued and liabilities incurred or assumed at the date of exchange, plus costs directly\nattributable to the acquisition. Identifiable assets acquired and liabilities and contingent liabilities\nassumed in a business combination are measured initially at their fair values at the acquisition\ndate, irrespective of the extent of any minority interest. The excess of the cost of acquisition over\nthe fair value of the Group’s share of the identifiable net assets acquired is recorded as goodwill. If\nthe cost of acquisition is less than the fair value of the net assets of the subsidiary acquired, the\ndifference is recognized directly in the consolidated income statement.\nInter-company transactions, balances and unrealized gains on transactions between group\ncompanies are eliminated. Unrealized losses are also eliminated but considered an impairment\nindicator of the asset transferred. Accounting policies of subsidiaries have been changed where\nnecessary to ensure consistency with the policies adopted by the Group.\nB-13\nAPPENDIX B – CONSOLIDATED FINANCIAL STATEMENTS \nFOR THE YEAR ENDED 31 DECEMBER 2005\nUNI-ASIA FINANCE CORPORATION\n(Incorporated in the Cayman Islands with limited liability)\nNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS\n\n\n2\nSummary of significant accounting policies (Continued)\n(b) \nConsolidation (Continued)\n(ii) \nAssociates \nAssociates are all entities, other than those investment where IAS 28 does not apply, over which\nthe Group has significant influence but not control, generally accompanying a shareholding of\nbetween 20% to 50% of the voting rights. Investments in associates are accounted for using the\nequity method of accounting and are initially recognized at cost. The Group’s investments in\nassociates are detailed in Note 20.\nThe Group’s share of its associates’ post-acquisition profits or losses is recognized in the income\nstatement, and its share of post-acquisition movements in reserves is recognized in reserves. The\ncumulative post-acquisition movements are adjusted against the carrying amount of the\ninvestment. When the Group’s share of losses in an associate equals or exceeds its interest in the\nassociates, including any other unsecured receivables, the Group does not recognize further\nlosses, unless it has incurred obligations or made payments on behalf of the associate.\nUnrealized gains on transactions between the Group and its associates are eliminated to the extent\nof the Group’s interest in the associates. Unrealized losses are also eliminated unless the\ntransaction provides evidence of an impairment of the asset transferred. Accounting policies of\nassociates have been changed where necessary to ensure consistency with the policies adopted\nby the Group.\nInvestments held by venture capital or similar entities are excluded from the scope of IAS 28 where\nthose investments are designated, upon initial recognition, as at fair value through profit or loss and\nare accounted for in accordance with IAS 39. Certain investments of the Group have applied this\nscope exemption with changes in fair value recognised in profit or loss in the period of change. The\ndirectors have determined that the Group does not carry on its business through these associates.\n(c)\nRevenue and other income recognition \nArrangement fees are recognized on delivery and upon completion of the transaction when all\nobligations associated with the transaction are completed and when the amount of revenue can be\nmeasured reliably.\nAgency fees and commissions are recognized when pre-agreed duties and functions of acting as\nan agent has been rendered.\nProject management fees are recognized on an accruals basis.\nAdministration / Agency Fee / Incentive fee from distressed Loans are recognized as they\ncrystallize according to the pre-agreed terms of contract.\nInterest Income is recognized on a time-proportion basis using the effective yield basis.\nB-14\nAPPENDIX B – CONSOLIDATED FINANCIAL STATEMENTS \nFOR THE YEAR ENDED 31 DECEMBER 2005\nUNI-ASIA FINANCE CORPORATION\n(Incorporated in the Cayman Islands with limited liability)\nNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS\n\n\n2\nSummary of significant accounting policies (Continued) \n(d)\nProperty, plant and equipment \nProperty, plant and equipment is stated at cost less accumulated depreciation.\nLeasehold improvements are depreciated over the remaining period of the lease while all other\nfixed assets are depreciated at the following rates on a straight-line basis, which is deemed\nsufficient to write off their costs to their residual values over their estimated useful lives: office\nequipment at 33 1/3% per annum and other fixed assets at 25% per annum.\nGain and losses on disposals are determined by comparing proceeds with carrying amounts and\nare included in the consolidated income statement.\n(e)\nFinancial Assets \nThe Group classifies its financial assets in the following categories: at fair value through profit or\nloss and loans and receivables. The classification depends on the purpose for which the financial\nassets were acquired. Management determines the classification of its assets at initial recognition\nand re-evaluates this designation at every reporting date.\na)\nFinancial assets at fair value through profit or loss\nThis category has two sub-categories: ‘financial assets held for trading’ and those designated\nat fair value through profit and loss at inception. A financial asset is classified in this category\nif acquired principally for the purpose of selling in the short term or if so designated by\nmanagement. Derivatives are also categorised as ‘held for trading’ unless they are\ndesignated as hedges. Assets in this category are classified as current assets if they are\neither held for trading or are expected to be realized within 12 months of the balance sheet\ndate.\nb)\nLoans and receivables\nLoans and receivables are non-derivative financial assets with fixed or determinable\npayments that are not quoted in an active market. These are included in current assets,\nexcept for maturities greater than 12 months after the balance sheet date. These are\nclassified as non-current assets. Loans are classified as “Loans Receivable” in the balance\nsheet.\nPurchases and sales of investments are recognised at trade date - the date on which the Group\ncommits to sell the asset. Investments are initially recognised at fair value plus transaction costs for\nall financial assets not carried at fair value through profit or loss. Financial assets carried at fair\nvalue through profit or loss, are initially recognised at fair value and transaction costs are expensed\nin the income statement. Investments are derecognised when the rights to receive cash flows from\nthe investments have expired or have been transferred and the Group has transferred substantially\nall the risks and rewards of ownership. Financial assets at fair value through profit and loss are\nsubsequently carried at fair value.\nB-15\nAPPENDIX B – CONSOLIDATED FINANCIAL STATEMENTS \nFOR THE YEAR ENDED 31 DECEMBER 2005\nUNI-ASIA FINANCE CORPORATION\n(Incorporated in the Cayman Islands with limited liability)\nNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS\n\n\n2\nSummary of significant accounting policies (Continued) \n(e)\nFinancial assets (Continued) \nFair values for unquoted securities are estimated by the directors. In determining fair valuation, the\ndirectors make use of market-based information and fair valuation models such as discounted cash\nflow models. In many instances the directors also rely on financial data of investees and on\nestimates provided by the management of the investee companies as to the effect of future\ndevelopments.\nPerformance notes are investments with income and maturity values which fluctuate based on the\ndistributions received from underlying assets, which are generally investments in property\ndevelopment companies, defaulted loans or shipping companies. Fair values of performance notes\nor other collective investment schemes are determined by the Group’s interest in the fair values of\neach scheme’s underlying assets. Gains and losses arising from changes in the fair value of all\nsecurities are recognized in the consolidated income statement as they arise.\nAlthough the directors use their best judgement in estimating the fair value of investments, there\nare inherent limitations in any estimation techniques. Future confirming events will also affect the\nestimates of fair value and the effect of such events on the estimates of fair value, including the\nultimate liquidation of investments, could be material to these consolidated financial statements.\n(f)\nCash and cash equivalents \nCash and cash equivalents include cash in hand, bank balances and short term bank deposits with\nan original maturity of less than three months.\n(g)\nBorrowings\nBorrowings are recognized initially at fair value, net of transaction costs incurred. Borrowings are\nsubsequently stated at amortized cost; any difference between the proceeds (net of transaction\ncosts) and the redemption value is recognized in the income statement over the period of the\nborrowings using the effective interest method.\nBorrowings are classified as current liabilities unless the Group has an unconditional right to defer\nsettlement of the liability for at least 12 months after the balance sheet date.\n(h)\nDeferred taxation \nDeferred income tax is provided in full, using the liability method, on temporary differences arising\nbetween the tax bases of assets and liabilities and their carrying amounts in the consolidated\nfinancial statements. However, the deferred income tax, if it is not accounted for, arises from initial\nrecognition of an asset or liability in a transaction other than a business combination that at the\ntime of the transaction affects neither accounting nor taxable profit or loss. Deferred income tax is\ndetermined using tax rates (and laws) that have been enacted or substantially enacted by the\nbalance sheet date and are expected to apply when the related deferred income tax asset is\nrealized or the deferred income tax liability is settled.\nB-16\nAPPENDIX B – CONSOLIDATED FINANCIAL STATEMENTS \nFOR THE YEAR ENDED 31 DECEMBER 2005\nUNI-ASIA FINANCE CORPORATION\n(Incorporated in the Cayman Islands with limited liability)\nNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS\n\n\n2 \nSummary of significant accounting policies (Continued)\n(h)\nDeferred taxation (Continued) \nDeferred income tax assets are recognized to the extent that it is probable that future taxable profit\nwill be available against which the temporary differences can be utilized.\nDeferred income tax is provided on temporary differences arising on investments in subsidiaries\nand associates, except where the timing of the reversal of the temporary difference is controlled by\nthe Group and it is probable that the temporary difference will not reverse in the foreseeable future.\n(i)\nEmployee benefits \nPension obligations\nGroup companies have various defined contribution pension schemes in accordance with the local\nconditions and practices in the countries in which they operate. A defined contribution plan is a\npension plan under which the Group pays fixed contributions into a separate entity (a fund) and will\nhave no legal or constructive obligations to pay further contributions if the fund does not hold\nsufficient assets to pay all employees benefits relating to employee services in the current and prior\nperiods.\nFor defined contribution plans, the Company pays contributions to publicly or privately administered\npension insurance plans on a mandatory, contractual or voluntary basis.\nOnce the contributions have been paid, the Company has no further payment obligations. The\nregular contributions constitute net periodic costs for the year in which they are due and as such\nare included in staff costs.\n(j)\nDerivative financial instruments and hedging activities\nDerivatives are initially recognised at fair value on the date a derivative contract is entered into and\nare subsequently re-measured at their fair value. The method of recognising the resulting gain or\nloss depends on whether the derivative is designated a hedging instrument, and if so, the nature of\nthe item being hedged. The Group designates certain derivatives as hedges of net investments in\nforeign operations.\nThe Group documents at the inception of the transaction the relationship between hedging\ninstruments and hedged items, as well as its risk management objective and strategy for\nundertaking various hedge transactions. The Group also documents its assessment, both at hedge\ninception and on an ongoing basis, of whether the derivatives that are used in hedging transactions\nare highly effective in offsetting changes in fair values or cash flows of hedged items.\nB-17\nAPPENDIX B – CONSOLIDATED FINANCIAL STATEMENTS \nFOR THE YEAR ENDED 31 DECEMBER 2005\nUNI-ASIA FINANCE CORPORATION\n(Incorporated in the Cayman Islands with limited liability)\nNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS\n\n\n2\nSummary of significant accounting policies (Continued)\n(j)\nDerivative financial instruments  and hedging activities (Continued)\n(a)\nNet investment hedge  \nThe effective portion of changes in the fair value of derivatives that are designated and\nqualify as Net Investment hedge are recognised in equity. The gain or loss relating to the\nineffective portion is recognised immediately in the consolidated income statement.\nGains and losses accumulated in equity are included in the consolidated income statement\nwhen the foreign operation is disposed of.\n(b)\nDerivatives that do not qualify for hedge accounting \nCertain derivative instruments do not qualify for hedge accounting. Changes in the fair value\nof any derivative instruments that do not qualify for hedge accounting are recognised\nimmediately in the consolidated income statement.\n(k)\nForeign currency translation \n(a)\nFunctional and presentation currency\nItems included in the financial statements of each of the Group’s entities are measured using\nthe currency of the primary economic environment in which   the entity operates (‘the\nfunctional currency’). The consolidated financial statements are presented in United States\nDollars, which is the Company’s functional and presentation currency.\n(b) \nTransactions and balances\nForeign currency transactions are translated into the functional currency using the exchange\nrates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting\nfrom the settlement of such transactions and from the translation at year-end exchange rates\nof monetary assets and liabilities denominated in foreign currencies are recognized in the\nincome statement, except when deferred in equity as qualifying cash flow hedges and\nqualifying net investment hedges.\n(c)\nGroup companies\nThe results and financial position of all the group entities (none of which has the currency of\na hyperinflationary economy) that have a functional currency different from the presentation\ncurrency are translated into the presentation currency as follows:\nB-18\nAPPENDIX B – CONSOLIDATED FINANCIAL STATEMENTS \nFOR THE YEAR ENDED 31 DECEMBER 2005\nUNI-ASIA FINANCE CORPORATION\n(Incorporated in the Cayman Islands with limited liability)\nNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS\n\n\n2\nSummary of significant accounting policies (Continued)\n(k)\nForeign currency translation (Continued)\n(c)\nGroup companies\n(i)\nassets and liabilities for each balance sheet presented are translated at the closing rate at\nthe date of that balance sheet;\nincome and expenses for each income statement are translated at average exchange rates\n(unless this average is not a reasonable approximation of the cumulative effect of the rates\nprevailing on the transaction dates, in which case income and expenses are translated at the\ndates of the transactions); and\n(ii)\nall resulting exchange differences are recognised as a separate component of equity. On\nconsolidation, exchange differences arising from the translation of the net investment in\nforeign operations, and of borrowings and other currency instruments designated as hedges\nof such investments, are taken to shareholders’ equity. When a foreign operation is sold,\nexchange differences that were recorded in equity are recognised in the income statement\nas part of the gain or loss on sale.\n(iii)\nGoodwill and fair value adjustments arising on the acquisition of a foreign entity are treated\nas assets and liabilities of the foreign entity and translated at the closing rate.\n(l)\nLeases\nLeases in which a significant portion of the risks and rewards of ownership are retained by the\nlessor are classified as operating leases. Payments made under operating leases (net of any\nincentives received form the lessor) are charged to the consolidated income statement on a\nstraight-line basis over the period of the lease.\n(m)\nDividend distributions \nDividend distributions to the Company’s shareholders are recognised as a liability in the Group’s\nfinancial statements in the period in which dividends are approved.\n(n)\nSegment reporting \nA business segment is a group of assets and operations engaged in providing products or services\nthat are subject to risks and returns that are different from those of other business segments. A\ngeographical segment is engaged in providing products or services within a particular economic\nenvironment that are subject to risks and returns that are different from those of segments\noperating in other economic environments.\nB-19\nAPPENDIX B – CONSOLIDATED FINANCIAL STATEMENTS \nFOR THE YEAR ENDED 31 DECEMBER 2005\nUNI-ASIA FINANCE CORPORATION\n(Incorporated in the Cayman Islands with limited liability)\nNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS\n\n\n3\nSegment information \nPrimary reporting format - business segments \nAt 31 December 2005, the Group is organised on a worldwide basis into four main business\nsegments (departments): (1) structured finance; (2) ship investment/management; (3) distressed\nassets investment/management; and (4) property investment/management.\nThe segment results for the year ended 31 December 2005 are as follows:\nDistressed\nShip\nassets\nProperty\nStructured\ninvestment/\ninvestment/\ninvestment/\nfinance\nmanagement\nmanagement\nmanagement\nUnallocated\nGroup\nUS$’000\nUS$’000\nUS$’000\nUS$’000\nUS$’000\nUS$’000\nIncome\n7,165\n8,997\n1,019\n186\n900\n18,267\nOperating profits  \n4,710\n6,920\n22\n(588)\n(1,698)\n9,366\nShare of  profit  of associates\n–\n24\n–\n570\n–\n594\nFinance costs - interest \nexpenses\n–\n–\n–\n(42)\n–\n(42)\nProfit before income tax\n4,710\n6,944\n22\n(60)\n(1,698)\n9,918\nLess: income tax expenses  \n(92)\n(92)\n–\n(295)\n–\n(479)\nProfit for the year\n4,618\n6,852\n22\n(355)\n(1,698)\n9,439\nOther segment items are as \nfollows:\nCapital expenditure\n26\n37\n24\n2\n44\n133\nDepreciation \n43\n22\n14\n1\n26\n106\nThe segment results for the year ended 31 December 2004 are as follows:\nDistressed\nShip\nassets\nProperty\nStructured\ninvestment/\ninvestment/\ninvestment/\nfinance\nmanagement\nmanagement\nmanagement\nUnallocated\nGroup\nUS$’000\nUS$’000\nUS$’000\nUS$’000\nUS$’000\nUS$’000\nIncome\n2,669\n9,594\n2,336\n(99)\n299\n14,799\nOperating profits  \n729\n7,797\n1,576\n(421)\n(1,617)\n8,064\nShare of profit  of associates \n–\n–\n–\n96\n–\n96\nFinance costs – interest \nexpenses\n–\n(2)\n–\n(44)\n–\n(46)\nProfit before income tax \n729\n7,795\n1,576\n(369)\n(1,617)\n8,114\nLess: income tax expense \n–\n–\n–\n(179)\n–\n(179)\nProfit for the year\n729\n7,795\n1,576\n(548)\n(1,617)\n7,935\nOther segment items are as \nfollows:\nCapital expenditure\n21\n29\n20\n2\n35\n107\nDepreciation \n41\n1\n8\n12\n15\n77\nB-20\nAPPENDIX B – CONSOLIDATED FINANCIAL STATEMENTS \nFOR THE YEAR ENDED 31 DECEMBER 2005\nUNI-ASIA FINANCE CORPORATION\n(Incorporated in the Cayman Islands with limited liability)\nNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS\n\n\n3\nSegment information (Continued) \nThe segment assets and liabilities as at 31 December 2005 for the year then ended are as follows:\nDistressed\nShip\nassets\nProperty\nStructured\ninvestment/\ninvestment/\ninvestment/\nfinance\nmanagement\nmanagement\nmanagement\nUnallocated\nGroup\nUS$’000\nUS$’000\nUS$’000\nUS$’000\nUS$’000\nUS$’000\nSegment assets \n1,708\n14,679\n2,332\n5,871\n–\n24,590\nAssociates\n–\n63\n–\n6,585\n–\n6,648\nUnallocated assets \n–\n–\n–\n–\n30,711\n30,711\nTotal assets \n1,708\n14,742\n2,332\n12,456\n30,711\n61,949\nSegment liabilities \n556\n891\n63\n362\n0\n1,872\nUnallocated liabilities \n–\n–\n–\n–\n11,521\n11,521\nTotal liabilities \n556\n891\n63\n362\n11,521\n13,393\nThe segment assets and liabilities as at 31 December 2004 for the year then ended are as follows:\nDistressed\nShip\nassets\nProperty\nStructured\ninvestment/\ninvestment/\ninvestment/\nfinance\nmanagement\nmanagement\nmanagement\nUnallocated\nGroup\nUS$’000\nUS$’000\nUS$’000\nUS$’000\nUS$’000\nUS$’000\nSegment assets \n1,472\n7,433\n1,916\n6,544\n–\n17,365\nAssociates \n–\n–\n–\n6,928\n–\n6,928\nUnallocated assets \n–\n–\n–\n–\n34,412\n34,412\nTotal assets \n1,472\n7,433\n1,916\n13,472\n34,412\n58,705\nSegment liabilities \n2,391\n788\n307\n89\n–\n3,575\nUnallocated liabilities \n–\n–\n–\n–\n14,613\n14,613\nTotal liabilities \n2,391\n788\n307\n89\n14,613\n18,188\nSegment assets consist primarily of property, plant and equipment, receivables and operating cash.\nThey exclude taxation, certain investments and cash and cash equivalents. The unallocated portion\nrepresents mainly cash balances held by the Group which is not distinguishable into any particular\nsegment.\nSegment liabilities comprise operating liabilities and exclude items such as taxation and certain\ncorporate borrowings.\nCapital expenditure comprises planned additions to property, plant and equipment (Note 16).\nB-21\nAPPENDIX B – CONSOLIDATED FINANCIAL STATEMENTS \nFOR THE YEAR ENDED 31 DECEMBER 2005\nUNI-ASIA FINANCE CORPORATION\n(Incorporated in the Cayman Islands with limited liability)\nNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS\n\n\n3\nSegment information (Continued) \nSecondary reporting format - geographical segments \nThe Group’s four business segments operate in three main geographical areas, even through they\nare managed on a worldwide basis.\nGlobal - the global segment represents activities with assets or customers with no fixed location,\nwhich include shipping finance/investment/management.\nAsia (ex-Japan) - the Asia (ex-Japan) segment represents activities with assets or customers\nlocated in Asia (ex-Japan), which include structured finance, asset and shipping\nfinance/investment/management and distressed Asian investments.\nJapan - the Japan segment represents activities with assets or customers located in Japan, and\ninclude real estate investment/management.\n2005\n2004\nUS$’000\nUS$’000\nIncome\nGlobal \n8,918\n8,353\nAsia (ex-Japan) \n3,052\n6,156\nJapan \n5,397\n(9)\nUnallocated \n90\n299\n18,267\n14,799\nTotal assets \nGlobal \n14,742\n7,433\nAsia (ex-Japan) \n4,040\n3,388\nJapan \n5,872\n6,544\nUnallocated \n30,710\n34,412\n55,364\n51,777\nInvestments in associates \n6,585\n6,928\n61,949\n58,705\nCapital expenditure\n133\n107\nIncome and total assets attributable to business segments are based on the country in which the\ncustomer is located. Income and assets not attributable to business segments are disclosed as\nunallocated. There are no sales between the segments. Total assets and capital expenditure are\nwhere the assets are located.\nB-22\nAPPENDIX B – CONSOLIDATED FINANCIAL STATEMENTS \nFOR THE YEAR ENDED 31 DECEMBER 2005\nUNI-ASIA FINANCE CORPORATION\n(Incorporated in the Cayman Islands with limited liability)\nNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS\n\n\n4\nCritical accounting estimates\nEstimates are continually evaluated and are based on historical experience and other factors,\nincluding expectations of future events that are believed to be reasonable under the circumstances.\nCritical accounting estimates and assumptions\nThe Group makes estimates and assumptions concerning the future. The resulting accounting\nestimates will, by definition, seldom equal the related actual results. The estimates and\nassumptions that have a significant risk of causing a material adjustment to the carrying amounts\nof assets and liabilities are discussed below.\nFair value of derivatives and other financial instruments\nThe fair value of financial instruments that are not traded in an active market are determined by\nusing valuation techniques. The Group uses its judgment in selecting  methods and makes\nassumptions that are based on market conditions existing at each balance sheet date. The Group\nhas used discounted cash flow analysis to value investments which were not traded in an active\nmarket. Management has used discount rates which it believes would be able to reasonably\ncapture the expected recovery from the underlying projects.\n5\nFee income\n2005\n2004\nUS$’000\nUS$’000\nCorporate finance arrangement, brokerage and agency \nfees \n8,138\n3,881\nProject Management fee\n844\n–\nAgency, advisory, administration and incentives fees \nfrom distressed loans (Note 31)\n700\n303\nAdministration and incentive fees from shipping \ninvestment  management \n2,552\n1,415\n12,234\n5,599\nNote:\nContingent assets \nAt 31st December 2003, the Company had been contracted to arrange finance for 10 container\nships, for which the Company will collect a US$685k fee in respect of each ship. Completion fees\nof US$548k per ship totalling US$5,548k were to be received on delivery and financing of each\nship.\nThere were only 2 ships delivered in 2005 which have been included as income for the year ended\n31st December 2005 and the remaining contingent asset of US$4,452k at 31st December 2005 will\nbe recognised as income in future years when circumstances are no longer contingent.\nB-23\nAPPENDIX B – CONSOLIDATED FINANCIAL STATEMENTS \nFOR THE YEAR ENDED 31 DECEMBER 2005\nUNI-ASIA FINANCE CORPORATION\n(Incorporated in the Cayman Islands with limited liability)\nNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS\n\n\n6\nInvestment returns\n2005\n2004\nUS$’000\nUS$’000\nRealized gains on investments \n250\n2,482\nReturn on performance notes - distressed debt \n(Note 31)\n318\n103\nReturn on performance notes - properties\n47\n35\nReturn on performance notes - shipping business \n(Note 31)\n2,491\n2,589\nGain on foreign exchange contracts and swap \n67\n63\nFair value adjustments on performance notes - \ndistressed debt\n–\n31\nFair value adjustments on performance notes - \nshipping business\n2,423\n1,600\nFair value adjustments on performance notes - \nproperties\n79\n(221)\nFair value adjustment on other investments\n(664)\n–\n5,011\n6,682\nInvestments measured at fair value through profit or loss include fair value adjustments and returns\non performance notes. Return on performance notes comprises of interest income paid to note\nholders during the year.\n7\nInterest income and expense\n2005\n2004\nUS$’000\nUS$’000\nInterest income from:\n– cash and cash equivalents \n900\n299\n– participation in syndicated loans \n36\n40\n936\n339\nInterest expense on:\n– borrowings \n42\n46\n42\n46\nB-24\nAPPENDIX B – CONSOLIDATED FINANCIAL STATEMENTS \nFOR THE YEAR ENDED 31 DECEMBER 2005\nUNI-ASIA FINANCE CORPORATION\n(Incorporated in the Cayman Islands with limited liability)\nNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS\n\n\n8\nOther expenses \n2005\n2004\nUS$’000\nUS$’000\nRental expenses under operating leases:\n– office premises \n601\n376\nAuditors’ remuneration \n105\n85\nTraveling and entertainment \n863\n825\nNet foreign exchange loss\n453\n20\nProfessional service fees \n– proposed initial public offering \n575\n103\nMiscellaneous expenses \n719\n412\n3,316\n1,821\n9\nResults of associates \nThe Group’s share of results of associates after taxation are as follows:\n2005\n2004\nUS$’000\nUS$’000\nCapital Advisers Co. Ltd.\n1,126\n242\nLess: share of tax of Capital Advisers Co. Ltd \n(Note 20)\n(556)\n(146)\nUni Ship and Management Ltd.\n29\n–\nLess: Share of tax of Uni-Ship and Management Ltd.\n(Note 20)\n(5)\n–\n594\n96\n10\nEmployee benefit expense \n2005\n2004\nUS$’000\nUS$’000\nSalaries (including director’s remuneration)  \n4,817\n4,490\nPension costs - defined contribution plans \n145\n114\nStaff residencies, other welfare and allowances \n519\n483\n5,481\n5,087\nB-25\nAPPENDIX B – CONSOLIDATED FINANCIAL STATEMENTS \nFOR THE YEAR ENDED 31 DECEMBER 2005\nUNI-ASIA FINANCE CORPORATION\n(Incorporated in the Cayman Islands with limited liability)\nNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS\n\n\n10\nEmployee benefits expense (Continued)\nThe weighed average number of employees is as follows:\n2005\n2004\nUS$’000\nUS$’000\nFull time \n27\n25\nHong Kong \n21\n20\nJapan \n3\n3\nSingapore \n3\n2\n27\n25\n11\nIncome tax expense and deferred taxation \n(a)\nIncome tax expense\n2005\n2004\nUS$’000\nUS$’000\nCurrent tax \n393\n1\nDeferred tax \n86\n178\n479\n179\nThe tax on the Group’s profit before tax differs from the theoretical amount that would arise using\nthe weighted average tax rate applicable to the profits of the consolidated companies as follows:\n2005\n2004\nUS$’000\nUS$’000\nProfit before tax \n9,918\n8,114\nDomestic tax rates applicable to profits in the respective countries \n1,736\n1,420\nEffect of different tax rates in other countries \n359\n103\nIncome not subject to tax \n(1,616)\n(1,344)\nTax charge \n479\n179\nNote:\nIncome not subject to taxation is only included to the extent that it negates profits at group tax rate.\nFurther adjustments are not made as the contingent tax asset is not accrued.\nB-26\nAPPENDIX B – CONSOLIDATED FINANCIAL STATEMENTS \nFOR THE YEAR ENDED 31 DECEMBER 2005\nUNI-ASIA FINANCE CORPORATION\n(Incorporated in the Cayman Islands with limited liability)\nNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS\n\n\n11\nIncome tax expense and deferred taxation (Continued)\n(b)\nDeferred taxation\nTotal \nUS$’000\nAt 1 January 2004\n–\nCharged to income statement\n178\nAt 31 December 2004\n178\nCharged to income statement\n86\nAt 31 December 2005\n264\nDeferred income tax assets are recognized for tax losses carried forward only to the extent that the\nrealization of the related tax benefit is probable. The Group has tax losses of US$8,103k (2004:\nUS$8,897k) and US$ Nil  (2004: US$1k) for the Company in Hong Kong and Uni-Asia Finance\nCorporation (Japan) respectively to carry forward against future taxable income of those\ncompanies, which have not been recognized in these consolidated financial statements due to\nuncertainty of their recoverability.\n12\nProfit attributable to shareholders \nThe profit attributable to shareholders is dealt with in the consolidated financial statements to the\nextent of a profit of US$9,439k and US$7,935k for the year ended 2005 and 2004 respectively.\n13\nDividends \nThe dividends paid in 2005 and 2004 were US$1,400k and US$840k respectively (US$ 0.05/\nUS$0.03 per share). A dividend in respect of the year ended 31st December 2005 of US$0.05 per\nshare amounting to a total dividend of US$1,400k was approved at the Board of Directors meeting\non 13 January 2006. These financial statements do not reflect this dividend payable.\n14\nEarnings per share \n(a)\nBasic\nBasic earnings per share is calculated by dividing the profit attributable to equity holders of the\nCompany by the weighted average number of ordinary shares in issue during the year.\nB-27\nAPPENDIX B – CONSOLIDATED FINANCIAL STATEMENTS \nFOR THE YEAR ENDED 31 DECEMBER 2005\nUNI-ASIA FINANCE CORPORATION\n(Incorporated in the Cayman Islands with limited liability)\nNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS\n\n\n14\nEarnings per share (Continued)\n(b)\nDiluted \nDiluted earnings per share is calculated adjusting the weighted average number of ordinary shares\noutstanding to assume conversion of all dilutive ordinary shares during the year. The Group has\none category of potential ordinary shares: share options issued in 2004 by an associate company.\nThese share options are not considered to have a dilutive effect on earnings per share.\n2005\n2004\nUS$’000\nUS$’000\nProfit attributable to equity holders of the Company \n9,439\n7,935\nWeighted average number of ordinary shares in issue \n28,000\n28,000\nEarnings per share (US$ per share) - basic and diluted \n0.337\n0.283\n15\nEmoluments for directors and highest paid individuals\n(a)\nDirectors’ emoluments  \n2005\n2004\nUS$’000\nUS$’000\nFees\n1,223\n1,116\nOther emoluments:\nBasic salaries, housing allowances and other \nallowances and benefits in kind \n275\n249\nDiscretionary bonuses \n750\n750\nContributions to pensions schemes for directors \n(and past directors) - as directors\n3\n3\n2,251\n2,118\nThere were 3 independent non-executive directors were appointed to the Group during the year.\nB-28\nAPPENDIX B – CONSOLIDATED FINANCIAL STATEMENTS \nFOR THE YEAR ENDED 31 DECEMBER 2005\nUNI-ASIA FINANCE CORPORATION\n(Incorporated in the Cayman Islands with limited liability)\nNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS\n\n\n15\nEmoluments for directors and highest paid individuals (Continued)\nThe emoluments of the directors fell within the following bands.\nNumber of\nNumber of\ndirectors\ndirectors\n2005\n2004\nEmoluments bands\nUS$ Nil – US$15,000\n8\n5\nUS$15,001 – US$ 600,000 \n–\n–\nUS$600,001 – US$700,000\n–\n1\nUS$700,001 – US$800,000\n3\n2\n11\n8\n(b)\nFive highest paid individuals \nThe five individuals whose emoluments were the highest in the Group for the year include 3 (2004:\n3) directors whose emoluments are reflected in the analysis presented above. The emoluments\npayable to the remaining 2 (2004: 2) individuals are as follows:\n2005\n2004\nUS$’000\nUS$’000\nBasic salaries, housing allowances and other \nallowances and benefits in kind \n446\n574\nBonuses \n627\n550\nPensions \n20\n40\n1,093\n1,164\nThe emoluments fall within the following bands:\nNumber of individuals\n2005\n2004\nEmoluments bands\nUS$300,000 – US$450,000\n1\n1\nUS$450,001 – US$700,000\n–\n1\nUS$700,001 – US$750,000\n1\n–\n2\n2\n(c)\nNo emoluments were paid in both 2004 and 2005 by the companies comprising the Group to any\nof the directors or the five highest paid individuals as an inducement to join or upon joining the\nGroup or as compensation for loss of office.\nB-29\nAPPENDIX B – CONSOLIDATED FINANCIAL STATEMENTS \nFOR THE YEAR ENDED 31 DECEMBER 2005\nUNI-ASIA FINANCE CORPORATION\n(Incorporated in the Cayman Islands with limited liability)\nNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS\n\n\n16\nProperty, plant and equipment \nLeasehold\nFurniture\nimprove-\nOffice\nand\nMotor\nments\nequipment\nfixtures\nvehicles\nTotal\nUS$’000\nUS$’000\nUS$’000\nUS$’000\nUS$’000\nCost\nAt 1 January 2005\n385\n321\n61\n64\n831\nAdditions\n2\n38\n–\n93\n133\nDisposals\n–\n(2)\n–\n(64)\n(66)\nExchange translation\n(8)\n(2)\n–\n–\n(10)\nWritten off\n(9)\n(96)\n(8)\n–\n(113)\nAt 31 December 2005\n370\n259\n53\n93\n775\nAccumulated depreciation\nAt 1 January 2005\n356\n229\n60\n63\n708\nCharge\n27\n57\n1\n21\n106\nDisposals\n–\n(1)\n–\n(64)\n(65)\nExchange translation\n(6)\n(2)\n–\n–\n(8)\nWritten off\n(9)\n(96)\n(8)\n–\n(113)\nAt 31 December 2005\n368\n187\n53\n20\n628\nNet book value\nAt 31 December 2005\n2\n72\n0\n73\n147\nCost\nAt 1 January 2004\n336\n261\n61\n64\n722\nAdditions\n49\n58\n–\n–\n107\nExchange translation\n–\n2\n–\n–\n2\nAt 31 December 2004\n385\n321\n61\n64\n831\nAccumulated depreciation\nAt 1 January 2004\n323\n185\n58\n64\n630\nCharge\n31\n45\n1\n–\n77\nExchange translation\n2\n–\n–\n–\n2\nAt 31 December 2004\n356\n230\n59\n64\n709\nNet book value\nAt 31 December 2004\n29\n91\n2\n–\n122\nB-30\nAPPENDIX B – CONSOLIDATED FINANCIAL STATEMENTS \nFOR THE YEAR ENDED 31 DECEMBER 2005\nUNI-ASIA FINANCE CORPORATION\n(Incorporated in the Cayman Islands with limited liability)\nNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS\n\n\n17\nLoans receivable\n2005\n2004\nUS$’000\nUS$’000\nParticipation in loans\nRepayable within one year\nInterest rate at:\nLIBOR plus 1.25% p.a. (2004: LIBOR plus 1.25% p.a.)\n100\n100\nNil (2004: 5% unsecured)\n–\n1,100\n100\n1,200\nParticipation in loans\nRepayable between one and two years\nInterest rate at:\nLIBOR plus 1.25% p.a. (2004: LIBOR plus 1.25% p.a.)\n50\n150\n50\n150\nLoans receivable\n150\n1,350\nThe carrying amount of the loans approximates their fair value. Income from defaulted loans is\ndetailed in the consolidated income statement.\n2005\n2004\nUS$’000\nUS$’000\nCash recovered\n–\n1,862\nB-31\nAPPENDIX B – CONSOLIDATED FINANCIAL STATEMENTS \nFOR THE YEAR ENDED 31 DECEMBER 2005\nUNI-ASIA FINANCE CORPORATION\n(Incorporated in the Cayman Islands with limited liability)\nNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS\n\n\n18\nInvestments\n2005\n2004\nUS$’000\nUS$’000\nNon-Hong Kong\nUnlisted shares\n191\n191\nUnlisted shares - shipping business (Note (a) below)\n3,699\n1,451\nUnlisted performance notes - properties investment (Note 31(e))\n55\n607\nUnlisted performance notes - distressed debt (Note 31(e))\n1,746\n1,793\nUnlisted performance notes – shipping (Note 31(e))\n9,746\n4,247\n15,437\n8,289\nNote:\n(a)\nWithin unlisted shares - shipping business are investments totalling US$3,664k (2004: US$451k) in\ntwo shipping companies which own and run cargo ships respectively.\nCountry/place\nIssued and fully\nand date of\npaid up share\n% of\nName\nincorporation\ncapital\nholdings\nPrincipal activities\nNiigata Seimitsu\nJapan\nJPY3,874,300,000\n0.2%\nManufacturing\nCo. Ltd.\n17 January 1981\nelectronic devices\nEuroAsia II Inc., \nPanama\nUS$10,000\n15%\nShipping investment and\nPanama\n12 April 2002\nmanagement\nEuroAsia III Inc., \nPanama\nUS$10,000\n15%\nShipping investment and \nPanama\n12 April 2002\nmanagement\nAP Real Estate \nCayman Islands\nUS$1,000\n5.9%\nJapanese property\nLtd.\n12 April 2000\ninvestment and \nmanagement\nRS Property \nCayman Islands\nUS$1,000\n10%\nJapanese property\nInvestment\n28 August 2000\ninvestment and \nmanagement\nB-32\nAPPENDIX B – CONSOLIDATED FINANCIAL STATEMENTS \nFOR THE YEAR ENDED 31 DECEMBER 2005\nUNI-ASIA FINANCE CORPORATION\n(Incorporated in the Cayman Islands with limited liability)\nNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS\n\n\n18\nInvestments (Continued)\nCountry/place\nIssued and fully\nand date of\npaid up share\n% of\nName\nincorporation\ncapital\nholdings\nPrincipal activities\nSearex Asset \nBritish Virgin Islands\nUS$1,000\nSeries 1:\nShipping investment and \nManagement \n30 December 2003\n29.4%\nmanagement\nLimited\nSeries 2:\n19.57%\nAAA Strategic \nCayman Islands\nUS$1,000\nSeries 1:\nDistressed debts\nInvestment \n26 July 2001\n20%\ninvestment and \nLimited\nSeries 2:\nmanagement\n33% \nFortitude \nPanama\nUS$1,000\n38%\nShipping owning\nContainership \n26 November 2004\nand chartering\nS.A.\nUnion \nPanama\nUS$1,000\n38%\nShipping owning\nContainership \n26 November 2004\nand chartering\nS.A.\nFalcon\nPanama\nUS$1,000\n38%\nShipping owning\nContainership \n26 November 2004\nand chartering\nS.A.\n19\nDerivative financial Instruments \na)\nForward foreign exchange contracts\nThere were no outstanding contracts at 31 December 2005 (2004: Nil). Gains and losses on\nforward foreign exchange contracts are recognised directly in the consolidated income statement.\nb)\nInterest Rate Swaps \nThere were no outstanding contracts at 31 December 2005 (2004: Nil). Gains and losses on\ninterest rate swaps are recognised directly in the consolidated income statement.\nc)\nHedge of net Investment in foreign entity\nThe Group’s Yen-denominated borrowing is designated as a hedge of the net investment in an\nassociate of the Group, Capital Advisers Co, Ltd. The fair value of the borrowing was JPY1,065m\nThe foreign exchange loss US$879k (2004: US$262k gain) on translation of the borrowings to US\ndollar at balance sheet date was recognised in reserves in shareholders equity (Note 24).\nB-33\nAPPENDIX B – CONSOLIDATED FINANCIAL STATEMENTS \nFOR THE YEAR ENDED 31 DECEMBER 2005\nUNI-ASIA FINANCE CORPORATION\n(Incorporated in the Cayman Islands with limited liability)\nNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS\n\n\n20\nInvestments in associates\n(a)\nMovement of investments in associates\n2005\n2004\nUS$’000\nUS$’000\nCapital Advisers Co. Ltd.\nAt the beginning of year\n6,928\n6,576\nShare of results after tax\n570\n96\nExchange differences\n(913)\n256\nInvestments in associates at end of the year\n6,585\n6,928\n2005\n2004\nUS$’000\nUS$’000\nUni-Ships and Management Ltd.\nAt the beginning of year\n–\n–\nInvestment in associate\n39\n–\nShare of results after tax\n24\n–\nInvestments in associates at end of the year\n63\n–\n6,648\n6,928\n(b)\nSummary of significant associates’ assets, liabilities and results\nA summary of Capital Advisers Co. Ltd.’s assets, liabilities and results are as follows:\n2005\n2004\nUS$’000\nUS$’000\nInvestments in property related projects\n13,018\n11,755\nCash and cash equivalents\n6,240\n7,494\nOther assets\n12,181\n6,588\nTotal assets\n31,439\n25,837\nAmount due to Uni-Asia Finance Corporation\n(756)\n(4,781)\nOther liabilities\n(15,956)\n(5,562)\nMinority interest\n(29)\n(29)\nShareholders’ equity (of which Company has 44.8% \ninterest, 2004: 44.8%)\n14,698\n15,465\nShareholders’ equity\n- Company’s 44.8% interest\n6,585\n6,928\nB-34\nAPPENDIX B – CONSOLIDATED FINANCIAL STATEMENTS \nFOR THE YEAR ENDED 31 DECEMBER 2005\nUNI-ASIA FINANCE CORPORATION\n(Incorporated in the Cayman Islands with limited liability)\nNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS\n\n\n20\nInvestments in associates (Continued)\nFor the\nFor the\nyear ended\nyear ended\n31 December\n31 December\n2005\n2004\nUS$’000\nUS$’000\nResults to 31 December 2005, translated at an average rate \nof JPY110.85 (2004: JPY114.00) to US$1:\nRevenue\n11,382\n4,539\nStaff costs\n(2,354)\n(1,974)\nInterest expense\n(201)\n(210)\nOther expenses\n(6,314)\n(1,815)\nProfit before tax\n2,513\n540\nTaxation\n(1,241)\n(325)\nProfit after tax\n1,272\n215\nProfit before tax - Company’s interest\n1,126\n242\nTaxation - Company’s interest\n(556)\n(146)\nProfit after tax - Company’s interest (of which Company \nhas 44.8% interest, 2004: 44.8%)\n570\n96\nA summary of Uni Ships and Management Limited’s assets, liabilities and results are as follows:\n2005\n2004\nUS$’000\nUS$’000\nCash and cash equivalents\n231\n–\nOther assets\n10\n–\nTotal assets\n241\n–\nOther liabilities\n(32)\n–\nShareholders’ equity (of which Company has 30% interest) \n209\n–\nShareholders’ equity\n- Company’s 30% interest\n63\n–\nB-35\nAPPENDIX B – CONSOLIDATED FINANCIAL STATEMENTS \nFOR THE YEAR ENDED 31 DECEMBER 2005\nUNI-ASIA FINANCE CORPORATION\n(Incorporated in the Cayman Islands with limited liability)\nNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS\n\n\n20\nInvestments in associates (Continued)\nFor the\nFor the\nyear ended\nyear ended\n31 December\n31 December\n2005\n2004\nUS$’000\nUS$’000\nRevenue\n229\n–\nOther expenses\n(131)\n–\nProfit before tax\n98\n–\nTaxation\n(17)\n–\nProfit after tax\n81\n–\nProfit before tax - Company’s interest\n29\n–\nTaxation - Company’s interest\n(5)\n–\n- Profit after tax - Company’s interest (of which Company has  30%)\n24\n–\n(c)\nDetails of associates\nAs at 31 December 2005, details of the associates, all of which are unlisted, were as follows:\nCountry/place\nIssued and\nAttributable\nPrincipal activities\nand date of\nfully paid up\nequity\nand place of\nName\nincorporation\nshare capital\ninterest\noperation\nIndirectly held:\nCapital Advisers \nJapan\nJPY892,500,000\n44.8%\nJapanese property \nCo. Ltd.\n24 February 2000\ncommon shares\ninvestment and \nmanagement \nJapan\nDirectly held:\nUni-Ships and\nHong Kong\nHK$1,000,000\n30%\nHong Kong Project \nManagement \n25 January 2005\ncommon shares\nmanagement for\nLtd.\nvessels\nB-36\nAPPENDIX B – CONSOLIDATED FINANCIAL STATEMENTS \nFOR THE YEAR ENDED 31 DECEMBER 2005\nUNI-ASIA FINANCE CORPORATION\n(Incorporated in the Cayman Islands with limited liability)\nNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS\n\n\n20\nInvestments in associates (Continued)\n(d)\nAmounts due from associates\nThe amounts due from associates constituted the principal balance and interest accrued on an\nunsecured revolving short term loan facility of US$756k  equivalent to JPY89m  (2004: US$4,754k\nequivalent to JPY489m). The interest rate was revised to 1.375% per annum. Interest charged on\namounts due from associates for the year was US$60k (2004: US$101k).\n(e)\nAmounts due to associates\nThe amounts due to associate are unsecured, interest free and with no fixed repayment terms.\n21\nAccounts receivable\nIn general, the Group grants a credit period of 7 to 60 days to its customers. The aging analysis of\nthe accounts receivable is as follows:\n2005\n2004\nUS$’000\nUS$’000\n30  days or less\n464\n77\nOver 90 days\n1\n16\n465\n93\n22\nCash and bank balances\n2005\n2004\nUS$’000\nUS$’000\nCash at bank and in hand\n5,565\n1,942\nShort term bank deposits\n21,979\n22,058\nCash and cash equivalents\n27,544\n24,000\nThe effective interest rate on short term bank deposits was 0.2% (2004: 1.15%) and these deposits\nhave an average maturity of 35 days.\nB-37\nAPPENDIX B – CONSOLIDATED FINANCIAL STATEMENTS \nFOR THE YEAR ENDED 31 DECEMBER 2005\nUNI-ASIA FINANCE CORPORATION\n(Incorporated in the Cayman Islands with limited liability)\nNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS\n\n\n23\nShare capital\n2005\n2004\nUS$’000\nUS$’000\nAuthorized:\n60,000,000 shares of US$1 each\n60,000\n60,000\nIssued and fully paid:\n28,000,000 shares of US$1 each\n28,000\n28,000\n24\nReserves\nShare\nRetained\nExchange\nNote\ncapital\nearnings\ndifference\nTotal\nUS$’000\nUS$’000\nUS$’000\nUS$’000\nBalance at 1st January 2005\n28,000\n12,517\n–\n40,517\nNet investment hedge\n–\n–\n(879)\n(879)\nCurrency translation \ndifference\n–\n–\n879\n879\nProfit for the year and total \nrecognized income for 2005\n–\n9,439\n–\n9,439\nBalance at 31st December \n2005\n28,000\n21,956\n–\n49,956\nBalance at 1st January 2004\n28,000\n5,982\n–\n33,982\nNet investment hedge\n–\n–\n262\n262\nCurrency translation difference\n–\n–\n(262)\n(262)\nProfit for the year and total \nrecognized income for 2004\n–\n7,935\n–\n7,935\nDividend\n13\n–\n(1,400)\n–\n(1,400)\nBalance at 31st December\n2004\n28,000\n12,517\n–\n40,517\nB-38\nAPPENDIX B – CONSOLIDATED FINANCIAL STATEMENTS \nFOR THE YEAR ENDED 31 DECEMBER 2005\nUNI-ASIA FINANCE CORPORATION\n(Incorporated in the Cayman Islands with limited liability)\nNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS\n\n\n25\nAccounts payable\nThe aging analysis of the accounts payable is as follows:\n2005\n2004\nUS$’000\nUS$’000\n30 days or less\n226\n2,246\nBetween 31-60 days\n–\n3\nBetween 61-90 days\n1\n–\nOver 90 days\n–\n18\n227\n2,267\n26\nBorrowings\n2005\n2004\nUS$’000\nUS$’000\nTerm borrowings matured within one year\n–\n1,053\nRevolving secured loan due within one year\n9,041\n11,473\n9,041\n12,526\nIncluded in borrowings is a secured loan of JPY1.065 billion (approximately US$9,041k)\ncollateralized by a cash deposit of US$10,082k with the same financial institution (2004: a loan of\nJPY1.18 billion, (approximately US$11,473k) collateralized by US$12,614k).\nFair value of borrowings approximate the carrying amounts due to their being floating rate\ninstruments and no changes to the Group’s credit risk.\n2005\n2004\nWeighted average effective interest rates:\nBank borrowing - JPY\n0.34%\n0.34%\nBank borrowing - US$\n2.97%\n2.84%\nCash deposit\n0.20%\n1.15%\nB-39\nAPPENDIX B – CONSOLIDATED FINANCIAL STATEMENTS \nFOR THE YEAR ENDED 31 DECEMBER 2005\nUNI-ASIA FINANCE CORPORATION\n(Incorporated in the Cayman Islands with limited liability)\nNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS\n\n\n26\nBorrowings (Continued)\nThe borrowings of the Group are at floating JPY LIBOR rates:\n2005\n2004\nUS$’000\nUS$’000\nTerm borrowings matured within one year\n–\n1,053\nRevolving secured loan due within one year\n9,041\n11,473\nTotal borrowings\n9,041\n12,526\n27\nSubsidiary companies\n(a)\nDetails of principal investments in subsidiaries\nDetails of the principal subsidiaries within the Group at the date of this report are as follows:\nCountry/place\nIssued and\nAttributable\nPrincipal activities\nand date of\nfully paid up\nequity\nand place\nName\nincorporation\nshare capital\ninterest\nof operation\nDirectly held:\nUni-Asia Capital \nSingapore\nUS$1,000,000\n100%\nShip chartering\n(Singapore) \n7 August 1997\narrangement\nLimited\nOff-Shore \nBritish Virgin Islands\nUS$1\n100%\nHolding and \nProperty \n23 April 1998\ninvestment company\nInvestment \nBVI\nCorporation\nUni-Asia \nHong Kong\nHKD20\n100%\nInactive\nServices and \n27 June 1997\nHong Kong\nAgency Limited\nIndirectly held:\nUni-Asia Finance \nJapan\nJPY 10,000,000\n100%\nCorporate finance \nCorporation \n9 November 1998\nservices Japan\n(Japan)\n(b)\nAmounts due from subsidiaries\nThe amounts due from subsidiaries are unsecured, at an interest rate of 2% per annum.\nB-40\nAPPENDIX B – CONSOLIDATED FINANCIAL STATEMENTS \nFOR THE YEAR ENDED 31 DECEMBER 2005\nUNI-ASIA FINANCE CORPORATION\n(Incorporated in the Cayman Islands with limited liability)\nNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS\n\n\n27\nSubsidiary companies (Continued)\n(c)\nAmounts due to subsidiaries\nThe amounts due to subsidiaries are unsecured, interest free and with no fixed repayment terms.\n28\nCash generated from operations\n(a)\nReconciliation of profit before taxation to cash generated from operations \n2005\n2004\nUS$’000\nUS$’000\nProfit before taxation\n9,918\n8,114\nAdjustments for:\nDepreciation\n106\n77\nInterest income\n(940)\n(339)\nInterest expenses\n42\n46\nResults of associates\n(594)\n(96)\nInterest from loans to associate\n(60)\n(86)\nNet foreign exchange loss\n452\n20\nIncrease in rental and utility deposits paid\n(207)\n(33)\n(Increase)/decrease in accounts receivable\n(165)\n552\nIncrease in prepaid expenses\n(19)\n(38)\n(Decrease)/increase  in accounts payable\n(2,038)\n1,924\nIncrease in accrued expenses\n240\n1,281\nIncrease in amount due to associates\n11\n–\nDecrease in deferred income\n(2)\n–\nRecovery on loans and interest receivable\n–\n(250)\nInvestment returns\n(5,011)\n(6,682)\nIncome from defaulted loans\n–\n(1,862)\nCash generated from operations\n1,733\n2,628\n(b)\nMajor non-cash transactions\nDuring the year ended 31 December 2005, the share of taxation of associate amounted to\nUS$561k (2004: US$146k).\nB-41\nAPPENDIX B – CONSOLIDATED FINANCIAL STATEMENTS \nFOR THE YEAR ENDED 31 DECEMBER 2005\nUNI-ASIA FINANCE CORPORATION\n(Incorporated in the Cayman Islands with limited liability)\nNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS\n\n\n29\nFinancial risk management \n(a)\nFinancial risk factors \nThe Group holds monetary assets and liabilities, transacts in foreign exchange transactions with\nthird parties and has mismatched Yen denominated assets and liabilities. All these operations give\nrise to risk exposures.\nFinancial instruments traded or held include cash and cash equivalents, investments, loans and\nreceivables and borrowings.\nForward rate agreements are used to manage the Group’s own exposures to foreign exchange risk\nas part of its asset and liability management process. The principal derivative instruments used by\nthe Group are foreign exchange rate related contracts. Most of the Group’s derivative positions\nhave been entered into to hedge investments in subsidiaries.\n(i)\nMarket risk\nMarket risk is the risk that the value of a financial instrument will fluctuate as a result of changes in\nmarket prices, whether those changes are caused by factors specific to the individual financial\ninstrument or by factors affecting all financial instruments traded in or indexed to a market. The\nGroup is exposed to market risk on financial instruments that are valued at market prices and\nprimarily consist of investments, loans, property development projects and marketable securities.\n(ii)\nForeign exchange risk\nThe Group has certain investments in Japan, whose net assets are exposed to foreign currency\ntranslation risk. Currency exposure arising from the net assets of the Group’s foreign operations is\nmanaged primarily through borrowings denominated in the relevant foreign currencies.\n(iii)\nInterest rate risk\nInterest rate risk is the risk that the value of a financial instrument will fluctuate as a result of\nchanges in market interest rates and the cash flow risks associated with the variability of cash\nflows from floating rate financial instruments. The Group is exposed to interest rate risk primarily\nfrom interest rate re-pricing differences between customers’ loans, borrowings, cash and cash\nequivalents and shareholders’ capital.\n(iv) \nCredit risk\nCredit risk is the risk of loss resulting from the failure of counterparties to meet the terms of their\nobligations. The Group is exposed to credit risk through loans and investments, and through\ncounterparty default risk on transactions, including foreign exchange transactions in the process of\nsettlement.\nB-42\nAPPENDIX B – CONSOLIDATED FINANCIAL STATEMENTS \nFOR THE YEAR ENDED 31 DECEMBER 2005\nUNI-ASIA FINANCE CORPORATION\n(Incorporated in the Cayman Islands with limited liability)\nNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS\n\n\n29\nFinancial Risk Management (Continued)\n(v) \nLiquidity risk\nPrudent liquidity risk management implies maintaining sufficient cash and marketable securities,\nthe availability of funding through an adequate amount of committed credit facilities and the ability\nto close out market positions.\n(b)\nRisk management\nThe Group’s principal risks are market risk, credit risk and foreign exchange risk. The directors\nconsider the interest rate risk and liquidity risk of the Group to be immaterial.\nMarket risk and credit risk\nThe Group seeks to minimise these risks by performing detailed reviews of loan counterparties or\nasset issuers prior to purchase approval, and by either selling on participated loans to other parties\nor entering into offsetting loans payable when the directors wish to preserve the Group’s liquidity.\nThe Group seeks to minimize adverse movements in market price of financial instruments by\nextensive due diligence procedures to ensure acquisition at prices below their perceived fair value.\nForeign exchange and interest rate risk\nThe directors review their currency exposures and enter into foreign currency forward contracts\nwhen considered necessary to hedge against adverse currency movements.\nThe Group uses the following derivative instruments for both hedging purposes:\nForward rate agreements are individually negotiated interest rate futures that call for a cash\nsettlement at a future date for the difference between a contracted rate of interest and the current\nmarket rate, based on a notional principal amount.\nCurrency and interest rate swaps are commitments to exchange one set of cash flows for another.\nSwaps result in an economic exchange of currencies or interest rates (for example, fixed rate for\nfloating rate) or a combination of all these (i.e. cross-currency interest rate swaps). No exchange of\nprincipal takes place, except for certain currency swaps. The Group’s credit risk represents the\npotential cost to replace the swap contracts if counterparties fail to perform their obligation. This\nrisk is monitored on an ongoing basis with reference to the current fair value, a proportion of the\nnotional amount of the contracts and the liquidity of the market. To control the level of credit risk\ntaken, the Group assesses counterparties using the same techniques as for its lending activities.\nLiquidity risk \nThe Group will maintain sufficient cash and marketable securities, the availability of funding\nthrough an adequate amount of committed credit facilities and the ability to close out market\npositions.\nB-43\nAPPENDIX B – CONSOLIDATED FINANCIAL STATEMENTS \nFOR THE YEAR ENDED 31 DECEMBER 2005\nUNI-ASIA FINANCE CORPORATION\n(Incorporated in the Cayman Islands with limited liability)\nNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS\n\n\n29\nFinancial Risk Management (Continued)\n(c)\nFair value estimation \nThe fair value of financial instruments traded in active is based on quoted market prices at the\nbalance sheet date. The quoted market price used for financial assets held by the Group is the\ncurrent bid price.\nThe fair value of financial instruments that are not traded in an active market (for example, over-\nthe-counter derivatives) is determined by using valuation techniques. The Group uses a variety of\nmethods and makes assumptions that are based on market conditions existing at each balance\nsheet date. Quoted market prices or dealer quotes for similar instruments are used for long-term\ndebt. Other techniques, such as estimated discounted cash flows, are used to determine fair value\nfor the remaining financial instruments. The fair value of interest rate swaps is calculated as the\npresent value of the estimated future cash flows. The fair value of forward foreign exchange\ncontracts is determined using quoted forward exchange rates at the balance sheet date.\nThe nominal value less impairment provision of trade receivables and payables are assumed to\napproximate their fair values.\n30\nCommitments\n(a)\nCapital commitments\nCapital expenditure contracted for at the balance sheet date but not yet incurred are as follows:\n2005\n2004\nUS$’000\nUS$’000\nMotor vehicle\n–\n81\nLeasehold Improvement\n515\n–\n(b)\nLease commitments\nCommitments, under non-cancellable operating leases with a term of more than one year, fall due:\n2005\n2004\nUS$’000\nUS$’000\nWithin one year\n1,096\n643\nLater than one year and not later than five years\n1,156\n399\n2,252\n1,042\nB-44\nAPPENDIX B – CONSOLIDATED FINANCIAL STATEMENTS \nFOR THE YEAR ENDED 31 DECEMBER 2005\nUNI-ASIA FINANCE CORPORATION\n(Incorporated in the Cayman Islands with limited liability)\nNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS\n\n\n30\nCommitments (Continued)\n(c)\nInvestment commitments\n2005\n2004\nUS$’000\nUS$’000\nUn-drawn investment commitments at 31st December\n–\n12,484\nInvestment for Harmonic Shipping\n4\n–\nShareholder Loans\n1,283\n–\nThe Company committed to purchase 38% of the share capital of Harmonic Shipping whose\nprincipal activity is the owning of ships.\nShareholder loans represent the outstanding balance of maximum commitment to Fortitude\nContainership S.A., Union Containership S.A. and Falcon Containership S.A. as contained in the\nshareholders loan agreement dated 15 August 2005.\n31\nRelated party transactions\nRelated parties include investments, associates and property development projects held for sale\nwhere the Group holds a beneficial interest in, and is also contracted as a service provider to\nmanage or administer such investment, company, entity or property.\nRelated party transactions are carried out under normal commercial terms and conditions and\ngenerate fee income as disclosed in Note 5, investment returns as disclosed in Note 6, directors’\nremunerations and other allowances as disclosed in Note 15, investments in associates and\namounts due from associates as disclosed in Note 20.\nRelated party balances comprise the unlisted performance notes as disclosed in Note 18.\nThe following transactions were carried out with related parties:\n2005\n2004\nUS$’000\nUS$’000\nAgency, arrangement, administration and incentive fees from \nshipping finance, investment and management (Note (a))\n2,387\n2,210\nAgency, advisory, administration and incentive fees from \ndistressed loans (Note (b))\n700\n303\nAdministration service fee (Note (c))\n51\n–\nArrangment fee from shipping investment management  (Note (d))\n1,982\n–\nReturn on performance notes – shipping business (Note (e)) \n2,491\n2,589\nReturn on performance notes – distressed debt (Note (e)) \n318\n103\nGain on sales of investment (Note (f))\n248\n709\nB-45\nAPPENDIX B – CONSOLIDATED FINANCIAL STATEMENTS \nFOR THE YEAR ENDED 31 DECEMBER 2005\nUNI-ASIA FINANCE CORPORATION\n(Incorporated in the Cayman Islands with limited liability)\nNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS\n\n\n31\nRelated party transactions (Continued)\n2005\n2004\nUS$’000\nUS$’000\nAmount due to associates (Note (g))\n11\n–\nAmount due from associates (Note (h))\n756\n4,781\nNotes:\n(a)\nThe Group is entitled to receive from Searex Asset Management Limited, an investment of the\nGroup, the following fees:\n(i)\na minimum administration fee of US$5,000 per month for each shipping asset owned by\nSearex Asset Management Limited, including the vessels being acquired which are subject\nof a memorandum of agreement, payable quarterly in advance.\n(ii)\na brokerage fee of approximately 0.75% to 1.25% on the sum of the daily charter hire of a\nvessel.\n(iii)\nan incentive fee of approximately 10% of the sum of the net proceeds, accumulated cash\nbalance and liabilities outstanding from the disposal of certain vessels.\n(iv)\na loan arrangement fee of approximately 1% of the purchase price of a vessel.\n(b)\nThe Group is entitled to receive from AAA Strategic Investment Limited, an investment of the\nGroup, the following fees:\n(i)\nan administration fee of US$75k per annum for performance notes series 1 payable semi-\nannually in advance and an administration fee for performance notes series 2 payable semi-\nannually in advance in the amount of US$50k for the full or partial issuance of performance\nnotes each of the first three US$5 million amounts up to a maximum of US$150k.\n(ii)\nan agency fee of US$25k per annum for performance notes series 1 payable semi-annually\nin advance, and an agency fee for performance notes series 2, payable semi-annually in\nadvance, in the amount of US$50k per annum for the full or partial issuance of each of the\nfirst three US$5 million tranches of performance notes.\n(iii)\nan incentive fee, calculated on an asset by asset basis, in addition to the administration fee.\nThe initial incentive fee is calculated as 20% of the cumulative cash recovered from each\nasset in excess of 110% of that asset’s initial cost.\nThe subsequent incentive fee is\ncalculated as twenty percent of additional cash recovered from each asset in excess of that\nasset’s additional cost. The incentive fee is calculated and paid semi-annually.\nB-46\nAPPENDIX B – CONSOLIDATED FINANCIAL STATEMENTS \nFOR THE YEAR ENDED 31 DECEMBER 2005\nUNI-ASIA FINANCE CORPORATION\n(Incorporated in the Cayman Islands with limited liability)\nNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS\n\n\n31\nRelated party transactions (Continued)\n(c)\nThe Group is entitled to receive from Uni Ships and Management Limited (USML), an associated\ncompany of the Group, a monthly administration service fee of US$6,335 in respect to the\nadministration, accounting and financial matters of USML.\n(d)\nThe Group is entitled to receive from Fortitude Containership SA, Falcon Containership SA and\nUnion Containership SA, investments of the Group, the following fees:\n(i)\nproject arrangement fee being 1% of the contract price of the vessel.\n(ii)\nfinance arrangement fee being 1% of the contract price of the vessel.\n(iii)\nadministration fee of US$7,000/month.\n(e)\nPerformance notes are redeemed semi-annually, in whole or in part, calculated based on net cash\nrecovered from the underlying assets. Performance note redemptions are determined based on\nthe total original cost of recovered assets less the deduction of fees and other expenses incurred in\nrecovery of such assets. Recovery amounts from assets in excess of that required for performance\nnote repayments are paid out as interest on those performance notes.\n(f)\nIn June 2005, the Company disposed of its equity interest in Glade Mate Investments, to a related\nparty, Searex Asset Management Limited.\n(g)\nThe amounts due to associate are unsecured, interest free and have no fixed repayment terms.\n(h)\nThe amounts due from associates constituted loans to Capital Advisers Co. Ltd.\nThe principal balance and interest accrued on an unsecured revolving short term loan facility of\nUS$756k equivalent to JPY89 million (2004: US$4,791k equivalent to JPY489 million). The interest\nrate was revised to 1.375% per annum since May 2004  Interest charged on amounts due from\nCapital Advisers Co. Ltd during the year was US$60k (2004: US$101k).\n32\nDeposits pledged as collateral\nAs at 31st December 2005, the Group had US$10,082k (2004: US$12,614k) of deposits pledged\nas collateral against Japanese Yen denominated revolving bank loan facilities.\n33\nPost balance sheet events\nOn 8 March 2006, Uni-Asia purchased 38% of share capital of Harmonic Shipping whose principal\nactivity is the owning of ships.\n34 \nApproval of the consolidated financial statements\nThe consolidated financial statements were approved by the board of directors on 16th June 2006.\nB-47\nAPPENDIX B – CONSOLIDATED FINANCIAL STATEMENTS \nFOR THE YEAR ENDED 31 DECEMBER 2005\nUNI-ASIA FINANCE CORPORATION\n(Incorporated in the Cayman Islands with limited liability)\nNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS\n\n\nUNI-ASIA FINANCE CORPORATION\n(Incorporated in the Cayman Islands with limited liability)\nREPORTS AND CONSOLIDATED FINANCIAL STATEMENTS\nFOR THE YEAR ENDED\n31 DECEMBER 2006\nThe consolidated financial statements for the year ended 31 December 2006 and the auditors’ report on\nthe consolidated financial statements for the year ended 31 December 2006 were not prepared for\npurposes of inclusion in the Prospectus and, save for references to page numbers which have been\naltered to conform to the pagination of the Prospectus, have been reproduced and are set out on pages\nC-6 to C-51 and page C-5, respectively.\nC-1\nAPPENDIX C\n\n\nDIRECTORS’ REPORT TO THE SHAREHOLDERS \nOF UNI-ASIA FINANCE CORPORATION\nThe directors submit their report together with the audited consolidated financial statements of Uni-Asia\nFinance Corporation (the “Company”) and its subsidiaries (together the “Group”) for the year ended 31st\nDecember 2006.\nGeneral Information \nThe principal activities of the Group are finance arrangement and investment management. The Group\nacted in the capacities of principal investor, finance arranger and fund administrator for various classes of\nalternative investments in ships, distressed assets and real estate. The main sources of income for the\nGroup include fee income, investment returns, interest income and other income generated from the four\ndepartments/units listed below.\n–\nStructured Finance department focuses on finance arrangement in the shipping sector in Asia. The\nGroup acts as the arranger, packager, charter broker and agent and participates in syndicated\ncommercial loans and tax oriented leases.\n–\nAsset Finance department focuses on investment and management of ships including the\nacquisition and disposal of ships and the investment management of assets held by the Group and\non behalf of third parties.\n–\nDistressed Assets Investment department focuses on investment and management activities in\nAsia including the acquisition and disposal of distressed Asian assets and the investment\nmanagement of assets held by the Group and on behalf of third parties.\n–\nReal estate activities are conducted through our 44.8% owned associated company engaged in the\ninvestment and management of real estate projects in Japan including the arrangement of\ninvestment and co-investment in the development and trading of Japanese hotels, commercial and\nresidential properties and the investment management of the properties held by the Group and on\nbehalf of third parties.\nThe Group is also seeking investment opportunities in new areas, projects or business where it will be\nable to capitalize on its finance packaging and investment expertise in ships and real estate.\nOperating and Financial Review\n1.\nStructured Finance\nStructured finance activities are conducted mainly out of the Hong Kong and Tokyo offices. During\nthe year, the Group arranged syndicated transactions totalling US$460m (2005: US$930m).\nThe structured finance department generated arrangement and brokerage fee income of\nUS$5,707k (2005: US$6,842k) and agency fees of US$258k (2005: US$289k).\nThe directors are of the view that the business of finance arrangement will remain competitive and\nthe Group will continue to focus on providing enhanced value added services to our clients.\nC-2\nAPPENDIX C – DIRECTORS’ REPORT ON THE CONSOLIDATED FINANCIAL\nSTATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2006\n\n\nOperating and Financial Review (Continued)\n2.\nAsset Finance\nThe asset finance department is engaged in shipping investment management for the Group and\nfor third parties. In December 2003, the Group ventured into shipping investment and acted as the\ninvestor and administrator of two investment facilities held under Searex Asset Management\nLimited. As at December 2006, the Group participated in the fund by way of subscribing to a\n29.39% and 28.26% interest in the outstanding performance notes. In 2006, the Group also\ninvested 46% in Sunrise Shipping S.A and 40.4% in Harmonic Shipping S.A.\nThrough shipping investment management, debt arrangement and fund administration, the\ndepartment recorded total income of US$11,013k (2005: US$8,997k). A detailed breakdown of the\nmajor income is as follows: US$1,289k as arrangement and project management fees (2005:\nUS$1,785k), US$63k as agency fee (2005: US$65k), US$1,939k as fund management fee (2005:\nUS$2,552k) and US$7,403k as investment return (2005: US$4,500k). As at 31st December 2006,\nthe total outstanding investment in the ships/shipping fund was US$18m (2005: US$13.4m).\nThe directors are of the view that the shipping market would remain opportunistic. The Group is\nexpected to launch a new shipping fund in Singapore in the near term and to launch new shipping\njoint ventures to grow the size of the funds under management.\n3.\nDistressed Assets Investment \nThe distressed assets investment department carries out the acquisition and disposition of non-\nperforming loans (NPLs) for the Group and for the managed funds.\nAAA Strategic Investment Limited (AAA) is a co-investment fund administrated by the Group in\nparticipation with a Japanese financial institution. Contribution from AAA to the Group amounted to\nUS$1,177k in 2006 (2005: US$1,019k). As at 31st December 2006, the nominal value of the notes\nissued by AAA was US$2,674k (2005: US$5,294k) of which the Group’s participation reached\nUS$891k (2005: US$1,746k).\nThe directors are of the view that investing into NPLs has become less attractive. As a result, the\nGroup has extended from investment in NPLs to distressed and/or real estate projects. The Group\nis currently conducting investment and due diligence on real estate investments in Asia; in\nparticular, China.\nC-3\nAPPENDIX C – DIRECTORS’ REPORT ON THE CONSOLIDATED FINANCIAL\nSTATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2006\n\n\nOperating and Financial Review (Continued)\n4.\nReal Estate Investment Management in Japan\nThe Group’s property investment in Japan is conducted through Capital Advisers Co., Limited (CA),\nan associated company in which the Group maintains an equity interest of 44.8%. As at 31st\nDecember 2006, the Group’s outstanding investment in CA totaled US$8,397k (2005: US$6,585k).\nNet Contribution from CA to the Group in 2006 was US$1,918k (2005: US$570k).\nCA focuses on investment in residential projects and limited service hotels through the\narrangement of new property funds or existing property funds advised, administrated and managed\nby the company. The company would take minority equity participations in the projects. As at 31st\nDecember 2006, CA had invested JPY1,324m (2005: JPY1,534m) directly or indirectly in Japanese\nproperties along with property of sales of generating JPY3,419m (2005: JPY1,262m) in total\nincome during the year. Profit before taxation was JPY970m (2005: JPY279m).\nIn 2006, the property funds under CA’s management reached JPY58.4 billion with an increase of\nJPY14.7 billion from the previous year.\nThe directors are of view that the Japan real estate market will continue to improve. CA will\ncontinue to expand its real estate fund business and the hotel operation business in 2007.\nThe Group reported a net profit before tax of US$11,831k (2005: US$9,918k) after factoring in total\nexpenses of US$9,485k (2005: US$8,901k).\nOn behalf of the board\nKazuhiko Yoshida\nManaging Director, Chief Executive Officer\nHong Kong, 27 June 2007\nC-4\nAPPENDIX C – DIRECTORS’ REPORT ON THE CONSOLIDATED FINANCIAL\nSTATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2006\n\n\nAUDITORS’ REPORT TO THE SHAREHOLDERS OF\nUNI-ASIA FINANCE CORPORATION\n(Incorporated in the Cayman Islands with limited liability)\nWe have audited the accompanying consolidated financial statements of Uni-Asia Finance Corporation\n(the “Company”) and its subsidiaries (together, the “Group”) which comprise the consolidated balance\nsheet as of 31 December 2006 and the consolidated income statement, consolidated statement of\nchanges in shareholders’ equity and consolidated cash flow statement for the year then ended and a\nsummary of significant accounting policies and other explanatory notes.\nDirectors’ responsibility for the financial statements \nDirectors are responsible for the preparation and fair presentation of these consolidated financial\nstatements in accordance with International Financial Reporting Standards. This responsibility includes:\ndesigning, implementing and maintaining internal control relevant to the preparation and fair presentation\nof financial statements that are free from material misstatement, whether due to fraud or error; selecting\nand applying appropriate accounting policies; and making accounting estimates that are reasonable in the\ncircumstances.\nAuditor’s responsibility\nOur responsibility is to express an opinion on these consolidated financial statements based on our audit.\nWe conducted our audit in accordance with International Standards on Auditing. Those standards require\nthat we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance\nwhether the financial statements are free from material misstatement.\nAn audit involves performing procedures to obtain audit evidence about the amounts and disclosures in\nthe financial statements. The procedures selected depend on the auditor’s judgment, including the\nassessment of the risks of material misstatement of the financial statements, whether due to fraud or\nerror. In making those risk assessments, the auditor considers internal control relevant to the entity’s\npreparation and fair presentation of the financial statements in order to design audit procedures that are\nappropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of\nthe entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies\nused and the reasonableness of accounting estimates made by management, as well as evaluating the\noverall presentation of the financial statements.\nWe believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for\nour audit.\nOpinion\nIn our opinion, the accompanying consolidated financial statements give a true and fair view of the\nfinancial position of the Group as of 31 December 2006, and of its financial performance and its cash\nflows for the year then ended in accordance with International Financial Reporting Standards.\nPricewaterhouseCoopers\nCertified Public Accountants\nHong Kong, 27 June 2007\n(Partner-in-charge: Colin Shaftesley)\nC-5\nAPPENDIX C – AUDITORS’ REPORT ON THE CONSOLIDATED FINANCIAL\nSTATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2006\n\n\nUNI-ASIA FINANCE CORPORATION\n(Incorporated in the Cayman Islands with limited liability)\nCONSOLIDATED BALANCE SHEET\nAS AT 31 DECEMBER 2006\nNote\n2006\n2005\nUS$’000\nUS$’000\nASSETS\nNon-current assets\nProperty, plant and equipment \n15\n652\n147\nLoans receivable\n16\n2,500\n50\nInvestments\n17\n19,249\n15,437\nInvestments in associates\n19(a)\n8,472\n6,648\nLoan amounts due from associates\n29(i)\n–\n756\nDeposit  for purchase of vessel\n3,944\n–\n34,817\n23,038\nCurrent assets\nLoans receivable\n16\n3,050\n100\nRental and utility deposits paid\n375\n433\nDeposits pledged as collateral \n30\n5,053\n10,082\nAccounts receivable\n20\n1,491\n465\nDerivative financial instruments\n18\n163\n–\nPrepaid expenses\n235\n267\nInterest receivable\n74\n20\nAmount due from associates\n29(j)\n4\n–\nCash and bank balances\n21\n22,205\n27,544\nTax receivable\n105\n–\n32,755\n38,911\nTotal assets\n67,572\n61,949\nThe notes on pages C12 to C51 are an integral part of these consolidated financial statements.\nC-6\nAPPENDIX C – CONSOLIDATED FINANCIAL STATEMENTS\nFOR THE YEAR ENDED 31 DECEMBER 2006\n\n\nUNI-ASIA FINANCE CORPORATION\n(Incorporated in the Cayman Islands with limited liability)\nCONSOLIDATED BALANCE SHEET (Continued)\nAS AT 31 DECEMBER 2006\nNote\n2006\n2005\nUS$’000\nUS$’000\nEQUITY\nCapital and reserves attributable to equity holders \nof the company\nShare capital\n22\n28,000\n28,000\nOther reserves\n(223)\n–\nRetained earnings\n31,989\n21,956\nTotal equity\n59,766\n49,956\nLIABILITIES\nNon-current Liabilities\nDeferred tax liabilities\n11(b)\n636\n264\n636\n264\nCurrent Liabilities\nAmount due to associate\n29(j)\n1\n11\nBorrowings\n24\n4,222\n9,041\nAccounts payable\n23\n278\n227\nDerivative financial instruments\n18\n144\n–\nAccrued expenses\n2,462\n2,023\nTax payable\n63\n427\nTotal current liabilities \n7,170\n11,729\nTotal equity and liabilities \n67,572\n61,949\nApproved by board of directors on 27 June 2007\nand signed on its behalf by:\nDirector\nDirector \nThe notes on pages C12 to C51 are an integral part of these consolidated financial statements.\nC-7\nAPPENDIX C – CONSOLIDATED FINANCIAL STATEMENTS\nFOR THE YEAR ENDED 31 DECEMBER 2006\n\n\nUNI-ASIA FINANCE CORPORATION\n(Incorporated in the Cayman Islands with limited liability)\nCONSOLIDATED INCOME STATEMENT\nFOR THE YEAR ENDED 31 DECEMBER 2006\nNote\n2006\n2005\nUS$’000\nUS$’000\nFee income\n5\n9,922\n12,234\nInvestment returns\n6\n7,983\n5,011\nInterest income\n7\n1,543\n936\nOther income\n22\n86\nTotal income\n19,470\n18,267\nEmployee benefits expense\n10\n(6,084)\n(5,481)\nDepreciation expense\n15\n(278)\n(106)\nOther expenses\n8\n(3,107)\n(3,316)\n(Loss)/ gain on disposal of fixed assets\n(16)\n2\n(9,485)\n(8,901) \nOperating profit \n9,985\n9,366\nFinance costs - interest expense\n7\n(83)\n(42)\nShare of profit of associates after tax\n9\n1,929\n594\nProfit before income tax \n11,831\n9,918\nIncome tax expense\n11\n(398)\n(479)\nProfit for the year\n11,433\n9,439\nEarnings per share ($US per share) for profit attributable to \nthe equity holders of the company during the year\n- basic and diluted\n13\nUS$0.408\nUS$0.337\nThe notes on pages C12 to C51 are an integral part of these consolidated financial statements.\nC-8\nAPPENDIX C – CONSOLIDATED FINANCIAL STATEMENTS\nFOR THE YEAR ENDED 31 DECEMBER 2006\n\n\nUNI-ASIA FINANCE CORPORATION\n(Incorporated in the Cayman Islands with limited liability)\nCONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY\nFOR THE YEAR ENDED 31 DECEMBER 2006\nShare\nRetained\nOther\nNote\ncapital\nearnings\nreserve\nReserve\nTotal\nUS$’000\nUS$’000\nUS$’000\nUS$’000\nUS$’000\nBalance at 1 January 2006\n28,000\n21,956\n–\n–\n49,956\nNet investment hedge\n–\n–\n–\n(61)\n(61)\nCurrency translation difference\n–\n–\n–\n61\n61\nProfit for the year \n–\n11,433\n–\n–\n11,433\nIPO expense \n–\n–\n(223)\n–\n(223)\nDividend paid\n12\n–\n(1,400)\n–\n–\n(1,400)\nBalance at 31 December 2006\n28,000\n31,989\n(223)\n–\n59,766\nBalance at 1 January 2005\n28,000\n12,517\n–\n–\n40,517\nNet investment hedge\n–\n–\n–\n(879)\n(879)\nCurrency translation difference\n–\n–\n–\n879\n879\nProfit for the year \n–\n9,439\n–\n–\n9,439 \nBalance at 31 December 2005\n28,000\n21,956\n–\n–\n49,956\nIncremental costs directly attributable to the issue of new shares are shown in equity as a deduction from\nthe proceeds of the IPO. Since the IPO process is still underway at 31 December 2006, the related\nincremental costs are shown as a direct balance under other reserve.\nThe notes on pages C12 to C51 are an integral part of these consolidated financial statements.\nC-9\nAPPENDIX C – CONSOLIDATED FINANCIAL STATEMENTS\nFOR THE YEAR ENDED 31 DECEMBER 2006\n\n\nUNI-ASIA FINANCE CORPORATION\n(Incorporated in the Cayman Islands with limited liability)\nCONSOLIDATED CASH FLOW STATEMENT\nFOR THE YEAR ENDED 31 DECEMBER 2006\nNote\n2006\n2005\nUS$’000\nUS$’000\nCash flows from operating activities\nCash generated from Group’s operations\n26(a)\n444\n1,733\nInterest received on bank balances\n1,197\n927\nIncome tax paid\n(495)\n(1)\nNet cash generated from operating activities\n1,146\n2,659\nCash flows from investing activities\nCash flows from investments:\nPurchase of investments\n(4,340)\n(9,825)\nProceeds from sales of investments\n3,830\n2,911\nDividend received from investments\n–\n2\nCash flows from associates:\nRepayment of principal and interest from loans \nto associate\n758\n4,085\nCash flows from other investing activities:\nPurchase of fixed assets\n(838)\n(134)\nProceeds from disposal of fixed assets\n38\n–\nDeposit for purchase of vessel\n(3,944)\n–\nLoans advanced\n(16,930)\n–\nLoan repaid \n11,530\n1,200\nInterest received from syndicated loans\n291\n48\nDecrease in deposits pledged as collateral\n5,029\n2,533\nProceeds received from interest on performance notes\n4,690\n4,359\nPurchase of foreign exchange contracts \n–\n(25,433)\nProceeds from settlement of foreign exchange \ncontracts and swaps\n–\n25,499\nNet cash generated from investing activities\n114\n5,245\nThe notes on pages C12 to C51 are an integral part of these consolidated financial statements.\nC-10\nAPPENDIX C – CONSOLIDATED FINANCIAL STATEMENTS\nFOR THE YEAR ENDED 31 DECEMBER 2006\n\n\nUNI-ASIA FINANCE CORPORATION\n(Incorporated in the Cayman Islands with limited liability)\nCONSOLIDATED CASH FLOW STATEMENT (Continued)\nFOR THE YEAR ENDED 31 DECEMBER 2006\nNote\n2006\n2005\nUS$’000\nUS$’000\nCash flows from financing activities\nInterest paid on borrowings\n(82)\n(45)\nNew borrowings\n2,220\n–\nRepayment of borrowings\n(7,039)\n(3,485)\nDividend paid\n(1,400)\n(1,400)\nIPO expenses \n(223)\n–\nNet cash used in financing activities\n(6,524)\n(4,930) \nNet (decrease)/increase in cash and cash equivalents\n(5,264)\n2,974\nMovements in cash and cash equivalents:\nCash and cash equivalents at beginning of year\n27,544\n24,000\nNet (decrease) / increase in cash and cash equivalents\n(5,264)\n2,974\nEffects of exchange rate changes\n(75)\n570\nCash and cash equivalents at end of the year\n21\n22,205\n27,544\nThe notes on pages C12 to C51 are an integral part of these consolidated financial statements.\nC-11\nAPPENDIX C – CONSOLIDATED FINANCIAL STATEMENTS\nFOR THE YEAR ENDED 31 DECEMBER 2006\n\n\nUNI-ASIA FINANCE CORPORATION\n(Incorporated in the Cayman Islands with limited liability)\nNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS \nFOR THE YEAR ENDED 31 DECEMBER 2006\n1\nGeneral information\nThe principal activities of Uni-Asia Finance Corporation (the “Company”) and its subsidiaries\n(together, the “Group”) are the arrangement of, acting as agent of and participation in syndicated\ncommercial loans, arrangement, management and co-investment in development and trading of\nJapanese property assets and the acquisition, management and disposal of distressed Asian\nassets and shipping business.\nThe Company is an exempted company incorporated in the Cayman Islands on 17 March 1997\nwith limited liability.\n2.\nSummary of significant accounting policies \nThe principal accounting policies applied in the preparation of these consolidated financial\nstatements are set out below. These policies have been consistently applied to all the years\npresented, unless otherwise stated.\n(a)\nBasis of preparation\nThe consolidated financial statements of Uni-Asia Finance Corporation have been prepared\nin accordance with International Financial Reporting Standards (IFRS). The consolidated\nfinancial statements have been prepared under the historical cost convention as modified by\nthe revaluation of financial assets and financial liabilities (including derivative instruments) at\nfair value through profit or loss.\nThe preparation of financial statements in conformity with IFRS requires the use of certain\ncritical accounting estimates. The areas where assumptions and estimates are significant to\nthe consolidated financial statements, are disclosed in note 4.\nThe following new standards, amendments to standards and interpretations are mandatory\nfor financial year ending 31 December 2006.\nAmendment to IAS 39, Amendment to ‘The fair value option’, effective for annual periods\nbeginning on or after 1 January 2006. This amendment does not have any impact on the\nclassification and valuation of the Group’s financial instruments which were classified at fair\nvalue through profit or loss prior to 1 January 2006 as the Group was able to comply with the\namended criteria for the designation of financial instruments at fair value through profit or\nloss;\nAmendment to IAS 21, Amendment ‘Net investment in a foreign operation’, effective for\nannual periods beginning on or after 1 January 2006. This amendment is not relevant for the\nGroup;\nThe following new standards, amendments to standards and interpretations have been\nissued but are not effective for 2006 and have not been early adopted:\nIFRIC 8, ‘Scope of IFRS 2’, effective for annual periods beginning on or after 1 May 2006.\nManagement is currently assessing the impact of IFRIC 8 on the Group’s operations;\nC-12\nAPPENDIX C – CONSOLIDATED FINANCIAL STATEMENTS\nFOR THE YEAR ENDED 31 DECEMBER 2006\n\n\nUNI-ASIA FINANCE CORPORATION\n(Incorporated in the Cayman Islands with limited liability)\nNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS \nFOR THE YEAR ENDED 31 DECEMBER 2006\n2\nSummary of significant accounting policies (Continued)\n(a)\nBasis of preparation (Continued)\nIFRIC 9, ‘Reassessment of Embedded Derivatives’, effective for annual periods beginning on\nor after 1 June 2006.\nManagement believes that this interpretation should not have a\nsignificant impact on the reassessment of embedded derivatives as the Group already\nassess if embedded derivative should be separated using principles consistent with IFRIC 9;\nand\nIFRS 7, ‘Financial instruments: Disclosures’, effective for annual periods beginning on or\nafter 1 January 2007.\nIAS 1, ‘Amendments to capital disclosures’, effective for annual\nperiods beginning on or after 1 January 2007. The Group assessed the impact of IFRS 7\nand the amendment to IAS 1 and concluded that the main additional disclosures will be the\nsensitivity analysis to market risk and capital disclosures required by the amendment of IAS\n1. The Group will apply IFRS 7 and the amendment to IAS 1 from annual periods beginning\n1 January 2007.\nIFRS 8, ‘Operating Segments’ effective from annual periods beginning on or after 1 January\n2009.\nOther standards, amendments, and interpretations mandatory for accounting periods\nbeginning on or after 1 January 2006 are not relevant to the Group’s operation.\n(b)\nConsolidation \n(i)\nSubsidiaries \nSubsidiaries are all entities (including special purpose entities) over which the Group\nhas the power to govern the financial and operating policies generally accompanying a\nshareholding of more than one half of the voting rights. The existence and effect of\npotential voting rights that are currently exercisable or convertible are considered\nwhen assessing whether the Group controls another entity. Subsidiaries are fully\nconsolidated from the date on which control is transferred to the Group. They are de-\nconsolidated from the date that control ceases.\nThe purchase method of accounting is used to account for the acquisition of\nsubsidiaries by the Group. The cost of an acquisition is measured as the fair value of\nthe assets given, equity instruments issued and liabilities incurred or assumed at the\ndate of exchange, plus costs directly attributable to the acquisition. Identifiable assets\nacquired and liabilities and contingent liabilities assumed in a business combination\nare measured initially at their fair values at the acquisition date, irrespective of the\nextent of any minority interest. The excess of the cost of acquisition over the fair value\nof the Group’s share of the identifiable net assets acquired is recorded as goodwill. If\nthe cost of acquisition is less than the fair value of the net assets of the subsidiary\nacquired, the difference is recognized directly in the consolidated income statement.\nInter-company transactions, balances and unrealized gains on transactions between\ngroup companies are eliminated. Unrealized losses are also eliminated but considered\nan impairment indicator of the asset transferred. Accounting policies of subsidiaries\nhave been changed where necessary to ensure consistency with the policies adopted\nby the Group.\nC-13\nAPPENDIX C – CONSOLIDATED FINANCIAL STATEMENTS\nFOR THE YEAR ENDED 31 DECEMBER 2006\n\n\nUNI-ASIA FINANCE CORPORATION\n(Incorporated in the Cayman Islands with limited liability)\nNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS \nFOR THE YEAR ENDED 31 DECEMBER 2006\n2\nSummary of significant accounting policies (Continued)\n(b)\nConsolidation (Continued)\n(ii)\nAssociates \nAssociates are all entities, over which the Group has significant influence but not\ncontrol, generally accompanying a shareholding of between 20% to 50% of the voting\nrights. Investments in associates are accounted for using the equity method of\naccounting and are initially recognized at cost. The Group’s investments in associates\nare detailed in Note 19.\nThe Group’s share of its associates’ post-acquisition profits or losses is recognized in\nthe income statement, and its share of post-acquisition movements in reserves is\nrecognized in reserves. The cumulative post-acquisition movements are adjusted\nagainst the carrying amount of the investment. When the Group’s share of losses in\nan associate equals or exceeds its interest in the associates, including any other\nunsecured receivables, the Group does not recognize further losses, unless it has\nincurred obligations or made payments on behalf of the associate.\nUnrealized gains on transactions between the Group and its associates are eliminated\nto the extent of the Group’s interest in the associates. Unrealized losses are also\neliminated unless the transaction provides evidence of an impairment of the asset\ntransferred. Accounting policies of associates have been changed where necessary to\nensure consistency with the policies adopted by the Group.\nInvestments held by venture capital or similar entities are excluded from the scope of\nIAS 28 where those investments are designated, upon initial recognition, as at fair\nvalue through profit or loss and are accounted for in accordance with IAS 39. Certain\ninvestments of the Group have applied this scope exemption with changes in fair value\nrecognised in profit or loss in the period of change. The directors have determined that\nthe Group does not carry on its business through these associates.\n(c)\nRevenue and other income recognition \nArrangement fees are recognized on delivery and upon completion of the transaction/\nservice when all obligations associated with the transaction are completed and when the\namount of revenue can be measured reliably.\nAgency fees and commissions are recognized when pre-agreed duties and functions of\nacting as an agent has been rendered.\nProject management fees are recognized on an accrual basis.\nAdministration / Agency Fee / Incentive fee from distressed Loans are recognized as they\ncrystallize according to the pre-agreed terms of contract.\nInterest Income is recognized on a time-proportion basis using the effective yield basis.\nC-14\nAPPENDIX C – CONSOLIDATED FINANCIAL STATEMENTS\nFOR THE YEAR ENDED 31 DECEMBER 2006\n\n\nUNI-ASIA FINANCE CORPORATION\n(Incorporated in the Cayman Islands with limited liability)\nNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS \nFOR THE YEAR ENDED 31 DECEMBER 2006\n2\nSummary of significant accounting policies (Continued) \n(d)\nProperty, plant and equipment \nProperty, plant and equipment is stated at cost less accumulated depreciation.\nLeasehold improvements are depreciated over the remaining period of the lease while all\nother fixed assets are depreciated at the following rates on a straight-line basis, which is\ndeemed sufficient to write off their costs to their residual values over their estimated useful\nlives: office equipment at 33 1/3% per annum and other fixed assets at 25% per annum.\nGain and losses on disposals are determined by comparing proceeds with carrying amounts\nand are included in the consolidated income statement.\n(e)\nFinancial assets \nThe Group classifies its financial assets in the following categories: at fair value through\nprofit or loss and loans and receivables. The classification depends on the purpose for which\nthe financial assets were acquired.\na)\nFinancial assets at fair value through profit or loss\nThis category has two sub-categories: ‘financial assets held for trading’ and those\ndesignated at fair value through profit and loss at inception. A financial asset is\nclassified in this category if acquired principally for the purpose of selling in the short\nterm or if so designated by management. Derivatives are also categorised as ‘held for\ntrading’ unless they are designated as hedges. Assets in this category are classified\nas current assets if they are either held for trading or are expected to be realized\nwithin 12 months of the balance sheet date.\nb)\nLoans and receivables\nLoans and receivables are non-derivative financial assets with fixed or determinable\npayments that are not quoted in an active market. These are included in current\nassets, except for maturities greater than 12 months after the balance sheet date.\nThese are classified as non-current assets. Loans are classified as “Loans\nReceivable” in the balance sheet.\nPurchases and sales of investments are recognised at trade date - the date on which the\nGroup commits to sell the asset. Investments are initially recognised at fair value plus\ntransaction costs for all financial assets not carried at fair value through profit or loss.\nFinancial assets carried at fair value through profit or loss, are initially recognised at fair\nvalue and transaction costs are expensed in the income statement. On initial recognition the\nGroup designates financial assets and liabilities at fair value through profit or loss where a\ngroup of financial assets, financial liabilities or both is managed and its performance is\nevaluated on a fair value basis in accordance with the Group investment strategy.\nC-15\nAPPENDIX C – CONSOLIDATED FINANCIAL STATEMENTS\nFOR THE YEAR ENDED 31 DECEMBER 2006\n\n\nUNI-ASIA FINANCE CORPORATION\n(Incorporated in the Cayman Islands with limited liability)\nNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS\nFOR THE YEAR ENDED 31 DECEMBER 2006\n2\nSummary of significant accounting policies (Continued) \n(e)\nFinancial assets (Continued) \nInvestments are derecognised when the rights to receive cash flows from the investments\nhave expired or have been transferred and the Group has transferred substantially all the\nrisks and rewards of ownership. Financial assets at fair value through profit and loss are\nsubsequently carried at fair value.\nFair values for unquoted securities are estimated by the directors. In determining fair\nvaluation, the directors make use of market-based information and fair valuation models\nsuch as discounted cash flow models. In many instances the directors also rely on financial\ndata of investees and on estimates provided by the management of the investee companies\nas to the effect of future developments.\nPerformance notes are investments with income and maturity values which fluctuate based\non the distributions received from underlying assets, which are generally investments in\nproperty development companies, defaulted loans or shipping companies. Fair values of\nperformance notes or other collective investment schemes are determined by the Group’s\ninterest in the fair values of each scheme’s underlying assets.\nGains and losses arising from changes in the fair value of all securities are recognized in the\nconsolidated income statement as they arise.\nAlthough the directors use their best judgement in estimating the fair value of investments,\nthere are inherent limitations in any estimation techniques. Future confirming events will also\naffect the estimates of fair value and the effect of such events on the estimates of fair value,\nincluding the ultimate liquidation of investments, could be material to these consolidated\nfinancial statements.\n(f)\nCash and cash equivalents \nCash and cash equivalents include cash in hand, bank balances and short term bank\ndeposits with an original maturity of less than three months.\n(g)\nBorrowings\nBorrowings are recognized initially at fair value, net of transaction costs incurred. Borrowings\nare subsequently stated at amortized cost; any difference between the proceeds (net of\ntransaction costs) and the redemption value is recognized in the income statement over the\nperiod of the borrowings using the effective interest method.\nBorrowings are classified as current liabilities unless the Group has an unconditional right to\ndefer settlement of the liability for at least 12 months after the balance sheet date.\nC-16\nAPPENDIX C – CONSOLIDATED FINANCIAL STATEMENTS\nFOR THE YEAR ENDED 31 DECEMBER 2006\n\n\nUNI-ASIA FINANCE CORPORATION\n(Incorporated in the Cayman Islands with limited liability)\nNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS\nFOR THE YEAR ENDED 31 DECEMBER 2006\n2\nSummary of significant accounting policies (Continued) \n(h)\nDeferred taxation \nDeferred income tax is provided in full, using the liability method, on temporary differences\narising between the tax bases of assets and liabilities and their carrying amounts in the\nconsolidated financial statements. However, the deferred income tax, if it is not accounted\nfor, arises from initial recognition of an asset or liability in a transaction other than a business\ncombination that at the time of the transaction affects neither accounting nor taxable profit or\nloss. Deferred income tax is determined using tax rates (and laws) that have been enacted\nor substantially enacted by the balance sheet date and are expected to apply when the\nrelated deferred income tax asset is realized or the deferred income tax liability is settled.\nDeferred income tax assets are recognized to the extent that it is probable that future taxable\nprofit will be available against which the temporary differences can be utilized.\nDeferred income tax is provided on temporary differences arising on investments in\nsubsidiaries and associates, except where the timing of the reversal of the temporary\ndifference is controlled by the Group and it is probable that the temporary difference will not\nreverse in the foreseeable future.\n(i)\nEmployee benefits \nPension obligations\nGroup companies have various defined contribution pension schemes in accordance with the\nlocal conditions and practices in the countries in which they operate. A defined contribution\nplan is a pension plan under which the Group pays fixed contributions into a separate entity\n(a fund) and will have no legal or constructive obligations to pay further contributions if the\nfund does not hold sufficient assets to pay all employees benefits relating to employee\nservices in the current and prior periods.\nFor defined contribution plans, the Company pays contributions to publicly or privately\nadministered pension insurance plans on a mandatory, contractual or voluntary basis.\nOnce the contributions have been paid, the Company has no further payment obligations.\nThe regular contributions constitute net periodic costs for the year in which they are due and\nas such are included in staff costs.\nBonus scheme\nThe Company pays out bonus to employees based on the overall corporate performance, the\ndepartment being able to achieve the annual budget and the employee’s performance and\ncontribution to the Company.\nC-17\nAPPENDIX C – CONSOLIDATED FINANCIAL STATEMENTS\nFOR THE YEAR ENDED 31 DECEMBER 2006\n\n\nUNI-ASIA FINANCE CORPORATION\n(Incorporated in the Cayman Islands with limited liability)\nNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS\nFOR THE YEAR ENDED 31 DECEMBER 2006\n2\nSummary of significant accounting policies (Continued) \n(j)\nDerivative financial instruments and hedging activities\nDerivatives are initially recognised at fair value on the date a derivative contract is entered\ninto and are subsequently re-measured at their fair value. The method of recognising the\nresulting gain or loss depends on whether the derivative is designated a hedging instrument,\nand if so, the nature of the item being hedged. The Group designates certain derivatives as\nhedges of net investments in foreign operations.\nThe Group documents at the inception of the transaction the relationship between hedging\ninstruments and hedged items, as well as its risk management objective and strategy for\nundertaking various hedge transactions. The Group also documents its assessment, both at\nhedge inception and on an ongoing basis, of whether the derivatives that are used in\nhedging transactions are highly effective in offsetting changes in fair values or cash flows of\nhedged items.\n(a)\nNet investment hedge  \nThe effective portion of changes in the fair value of derivatives that are designated and\nqualify as net investment hedge are recognised in equity. The gain or loss relating to\nthe ineffective portion is recognised immediately in the consolidated income\nstatement.\nGains and losses accumulated in equity are included in the consolidated income\nstatement when the foreign operation is disposed of.\n(b)\nDerivatives that do not qualify for hedge accounting \nCertain derivative instruments do not qualify for hedge accounting. Changes in the fair\nvalue of any derivative instruments that do not qualify for hedge accounting are\nrecognised immediately in the consolidated income statement.\n(k)\nForeign currency translation \n(a)\nFunctional and presentation currency\nItems included in the financial statements of each of the Group’s entities are\nmeasured using the currency of the primary economic environment in which the entity\noperates (‘the functional currency’). The consolidated financial statements are\npresented in United States Dollars, which is the Company’s functional and\npresentation currency.\n(b) \nTransactions and balances\nForeign currency transactions are translated into the functional currency using the\nexchange rates prevailing at the dates of the transactions. Foreign exchange gains\nand losses resulting from the settlement of such transactions and from the translation\nat year-end exchange rates of monetary assets and liabilities denominated in foreign\ncurrencies are recognized in the income statement, except when deferred in equity as\nqualifying cash flow hedges and qualifying net investment hedges.\nC-18\nAPPENDIX C – CONSOLIDATED FINANCIAL STATEMENTS\nFOR THE YEAR ENDED 31 DECEMBER 2006\n\n\nUNI-ASIA FINANCE CORPORATION\n(Incorporated in the Cayman Islands with limited liability)\nNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS\nFOR THE YEAR ENDED 31 DECEMBER 2006\n2\nSummary of significant accounting policies (Continued) \n(k)\nForeign currency translation (Continued)\n(c) \nGroup companies\nThe results and financial position of all the group entities (none of which has the\ncurrency of a hyperinflationary economy) that have a functional currency different from\nthe presentation currency are translated into the presentation currency as follows:\nAssets and liabilities for each balance sheet presented are translated at the closing\nrate at the date of that balance sheet.\nIncome and expenses for each income statement are translated at average exchange\nrates (unless this average is not a reasonable approximation of the cumulative effect\nof the rates prevailing on the transaction dates, in which case income and expenses\nare translated at the dates of the transactions).\nAll resulting exchange differences are recognised as a separate component of equity.\nOn consolidation, exchange differences arising from the translation of the net\ninvestment in foreign operations, and of borrowings and other currency instruments\ndesignated as hedges of such investments, are taken to shareholders’ equity. When a\nforeign operation is sold, exchange differences that were recorded in equity are\nrecognised in the income statement as part of the gain or loss on sale.\nGoodwill and fair value adjustments arising on the acquisition of a foreign entity are\ntreated as assets and liabilities of the foreign entity and translated at the closing rate.\n(l)\nLeases\nLeases in which a significant portion of the risks and rewards of ownership are retained by\nthe lessor are classified as operating leases. Payments made under operating leases (net of\nany incentives received form the lessor) are charged to the consolidated income statement\non a straight-line basis over the period of the lease.\n(m)\nDividend distributions \nDividend distributions to the Company’s shareholders are recognised as a liability in the\nGroup’s financial statements in the period in which dividends are approved.\n(n)\nSegment reporting \nA business segment is a group of assets and operations engaged in providing products or\nservices that are subject to risks and returns that are different from those of other business\nsegments. A geographical segment is engaged in providing products or services within a\nparticular economic environment that are subject to risks and returns that are different from\nthose of segments operating in other economic environments.\nC-19\nAPPENDIX C – CONSOLIDATED FINANCIAL STATEMENTS\nFOR THE YEAR ENDED 31 DECEMBER 2006\n\n\nUNI-ASIA FINANCE CORPORATION\n(Incorporated in the Cayman Islands with limited liability)\nNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS \nFOR THE YEAR ENDED 31 DECEMBER 2006\n3\nSegment information \nPrimary reporting format - business segments \nAt 31 December 2006, the Group is organised on a worldwide basis into four main business\nsegments (departments): (1) structured finance; (2) ship investment/management; (3) distressed\nassets investment/management; and (4) property investment/management.\nThe segment results for the year ended 31 December 2006 are as follows:\nDistressed\nShip\nassets\nProperty\nStructured\ninvestment/\ninvestment/\ninvestment/\nfinance\nmanagement\nmanagement\nmanagement\nUnallocated\nGroup\nUS$’000\nUS$’000\nUS$’000\nUS$’000\nUS$’000\nUS$’000\nIncome\n5,994\n11,013\n1,177\n53\n1,233\n19,470\nOperating profits/ (losses)\n3,271\n8,463\n246\n(295)\n(1,700)\n9,985\nShare of profit of associates\n–\n11\n–\n1,918\n–\n1,929\nFinance costs – interest expenses\n–\n(32)\n–\n(51)\n–\n(83)\nProfit before income tax\n3,271\n8,442\n246\n1,572\n(1,700)\n11,831\nLess: income tax expenses  \n(29)\n(30)\n–\n(372)\n33\n(398)\nProfit for the year\n3,242\n8,412\n246\n1,200\n(1,667)\n11,433\nOther segment items are as follows: \nCapital expenditure\n163\n307\n126\n9\n233\n838\nDepreciation \n67\n99\n38\n3\n71\n278\nThe segment results for the year ended 31 December 2005 are as follows:\nDistressed\nShip\nassets\nProperty\nStructured\ninvestment/\ninvestment/\ninvestment/\nfinance\nmanagement\nmanagement\nmanagement\nUnallocated\nGroup\nUS$’000\nUS$’000\nUS$’000\nUS$’000\nUS$’000\nUS$’000\nIncome\n7,165\n8,997\n1,019\n186\n900\n18,267\nOperating profits/ (losses)\n4,710\n6,920\n22\n(588)\n(1,698)\n9,366\nShare of profit  of associates \n–\n24\n–\n570\n–\n594\nFinance costs – interest expenses\n–\n–\n–\n(42)\n–\n(42)\nProfit before income tax\n4,710\n6,944\n22\n(60)\n(1,698)\n9,918\nLess: income tax expense\n(92)\n(92)\n–\n(295)\n–\n(479)\nProfit for the year\n4,618\n6,852\n22\n(355)\n(1,698)\n9,439\nOther segment items are as follows: \nCapital expenditure\n26\n37\n24\n2\n44\n133\nDepreciation \n43\n22\n14\n1\n26\n106\nC-20\nAPPENDIX C – CONSOLIDATED FINANCIAL STATEMENTS\nFOR THE YEAR ENDED 31 DECEMBER 2006\n\n\nUNI-ASIA FINANCE CORPORATION\n(Incorporated in the Cayman Islands with limited liability)\nNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS \nFOR THE YEAR ENDED 31 DECEMBER 2006\n3\nSegment information (Continued) \nThe segment assets and liabilities as at 31 December 2006 for the year then ended are as follows:\nDistressed\nShip\nassets\nProperty\nStructured\ninvestment/\ninvestment/\ninvestment/\nfinance\nmanagement\nmanagement\nmanagement\nUnallocated\nGroup\nUS$’000\nUS$’000\nUS$’000\nUS$’000\nUS$’000\nUS$’000\nSegment assets \n2,086\n28,972\n2,194\n1,227\n–\n34,479\nInvestment in Associates\n–\n75\n–\n8,397\n–\n8,472\nUnallocated assets \n–\n–\n–\n–\n24,621\n24,621\nTotal assets \n2,086\n29,047\n2,194\n9,624\n24,621\n67,572\nSegment liabilities \n852\n1,198\n95\n744\n–\n2,889\nUnallocated liabilities \n–\n–\n–\n–\n4,917\n4,917\nTotal liabilities \n852\n1,198\n95\n744\n4,917\n7,806\nThe segment assets and liabilities as at 31 December 2005 for the year then ended are as follows:\nDistressed\nShip\nassets\nProperty\nStructured\ninvestment/\ninvestment/\ninvestment/\nfinance\nmanagement\nmanagement\nmanagement\nUnallocated\nGroup\nUS$’000\nUS$’000\nUS$’000\nUS$’000\nUS$’000\nUS$’000\nSegment assets \n1,708\n14,679\n2,332\n5,871\n–\n24,590\nInvestment in Associates \n–\n63\n–\n6,585\n–\n6,648\nUnallocated assets \n–\n–\n–\n–\n30,711\n30,711\nTotal assets \n1,708\n14,742\n2,332\n12,456\n30,711\n61,949\nSegment liabilities \n556\n891\n63\n362\n–\n1,872\nUnallocated liabilities \n–\n–\n–\n–\n10,121\n10,121\nTotal liabilities \n556\n891\n63\n362\n10,121\n11,993\nSegment assets consist primarily of property, plant and equipment, receivables and operating cash.\nThey exclude certain investments and cash and cash equivalents. The unallocated portion\nrepresents mainly cash balances held by the Group which is not distinguishable into any particular\nsegment.\nSegment liabilities comprise operating liabilities and exclude items such as certain corporate\nborrowings.\nCapital expenditure comprises incurred additions to property, plant and equipment (Note 15).\nC-21\nAPPENDIX C – CONSOLIDATED FINANCIAL STATEMENTS\nFOR THE YEAR ENDED 31 DECEMBER 2006\n\n\nUNI-ASIA FINANCE CORPORATION\n(Incorporated in the Cayman Islands with limited liability)\nNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS \nFOR THE YEAR ENDED 31 DECEMBER 2006\n3\nSegment information (Continued) \nSecondary reporting format - geographical segments \nThe Group’s four business segments operate in three main geographical areas, even though they\nare managed on a worldwide basis.\nGlobal - the global segment represents activities with assets or customers with no fixed location,\nwhich include structured finance and ship investment/ management.\nAsia (ex-Japan) - the Asia (ex-Japan) segment represents activities with assets or customers\nlocated in Asia (ex-Japan), which include structured finance, ship investment/management and\ndistressed assets investment/management.\nJapan - the Japan segment represents activities with assets or customers located in Japan, which\ninclude structured finance, ship investment/management and property investment/management.\n2006\n2005\nUS$’000\nUS$’000\nIncome\nGlobal \n8,896\n8,918\nAsia (ex-Japan) \n6,823\n3,052\nJapan \n2,518\n5,397\nUnallocated \n1,233\n900\n19,470\n18,267\nTotal assets \nGlobal \n28,972\n14,679\nAsia (ex-Japan) \n4,280\n4,040\nJapan \n1,227\n5,871\nUnallocated \n24,621\n30,711\n59,100\n55,301\nInvestments in associates \n8,472\n6,648\n67,572\n61,949\nCapital expenditure \n838\n133\nIncome and total assets attributable to business segments are based on the country in which the\ncustomer is located. Income and assets not attributable to business segments are disclosed as\nunallocated. There are no sales between the segments. Total assets and capital expenditure are\nwhere the assets are located.\nC-22\nAPPENDIX C – CONSOLIDATED FINANCIAL STATEMENTS\nFOR THE YEAR ENDED 31 DECEMBER 2006\n\n\nUNI-ASIA FINANCE CORPORATION\n(Incorporated in the Cayman Islands with limited liability)\nNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS \nFOR THE YEAR ENDED 31 DECEMBER 2006\n4\nCritical accounting estimates\nEstimates are continually evaluated and are based on historical experience and other factors,\nincluding expectations of future events that are believed to be reasonable under the circumstances.\nCritical accounting estimates and assumptions\nThe Group makes estimates and assumptions concerning the future. The resulting accounting\nestimates will, by definition, seldom equal the related actual results. The estimates and\nassumptions that have a significant risk of causing a material adjustment to the carrying amounts\nof assets and liabilities are discussed below.\nFair value of derivatives and other financial instruments\nThe fair value of financial instruments that are not traded in an active market are determined by\nusing valuation techniques. The Group uses its judgment in selecting methods and makes\nassumptions that are based on market conditions existing at each balance sheet date. The Group\nhas used discounted cash flow analysis or other similar methodologies to value investments which\nwere not traded in an active market.\n5\nFee income\n2006\n2005\nUS$’000\nUS$’000\nCorporate finance arrangement, brokerage and agency fees \n7,317\n8,138\nProject Management fee\n–\n844\nAgency, advisory, administration and incentives fees from \ndistressed loans (Note 29)\n667\n700\nAdministration and incentive fees from shipping investment management \n1,938\n2,552\n9,922\n12,234\nNote:\nContingent assets \nAt 31 December 2003, the Company had been contracted to arrange finance for 10 container\nships, for which the Company will collect a US$685k fee in respect of each ship. Completion fees\nof US$548k per ship totalling US$5,480k were to be received on delivery and financing of each\nship.\nThere were totally 6 ships delivered up to end of 2006 which have been included as income for the\nyear ended 2005 or 2006 and the remaining contingent asset of US$2,192k at 31 December 2006\nwill be recognised as income in future years when circumstances are no longer contingent.\nC-23\nAPPENDIX C – CONSOLIDATED FINANCIAL STATEMENTS\nFOR THE YEAR ENDED 31 DECEMBER 2006\n\n\nUNI-ASIA FINANCE CORPORATION\n(Incorporated in the Cayman Islands with limited liability)\nNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS \nFOR THE YEAR ENDED 31 DECEMBER 2006\n6\nInvestment returns\n2006\n2005\nUS$’000\nUS$’000\nRealized (losses)/ gains on investments \n(2)\n250\nReturn on performance notes - distressed debt (Note 29)\n371\n318\nReturn on performance notes - properties \n1\n47\nReturn on performance notes - shipping business (Note 29)\n4,291\n2,491\nUnrealised / realized gain on foreign exchange contracts \n19\n67\nFair value adjustments on performance notes - distressed debt\n139\n–\nFair value adjustments on performance notes - shipping business\n1,214\n2,423\nFair value adjustments on performance notes - properties\n50\n79\nFair value adjustment on unlisted shares - shipping business\n1,900\n(664)\n7,983\n5,011\nDuring the year, total fair value adjustments relating to performance notes amounted to US$3,303k\n(December 2005: US$1,838k). Return on performance notes comprises interest income paid to\nnote holders during the year. Refer further to note 2(e) in respect of the accounting policy for fair\nvaluation on performance notes.\n7\nInterest income and expense\n2006\n2005\nUS$’000\nUS$’000\nInterest income from:\n- cash and cash equivalents \n1,233\n900\n- participation in syndicated loans \n310\n36\n1,543\n936\nInterest expense on:\n- borrowings \n83\n42\n83\n42\nC-24\nAPPENDIX C – CONSOLIDATED FINANCIAL STATEMENTS\nFOR THE YEAR ENDED 31 DECEMBER 2006\n\n\nUNI-ASIA FINANCE CORPORATION\n(Incorporated in the Cayman Islands with limited liability)\nNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS \nFOR THE YEAR ENDED 31 DECEMBER 2006\n8\nOther expenses \n2006\n2005\nUS$’000\nUS$’000\nRental expenses under operating leases:\n- office premises \n752\n601\nAuditors’ remuneration \n77\n105\nTraveling and entertainment \n801\n863\nNet foreign exchange loss\n180\n453\nProfessional service fees \n252\n351\nMiscellaneous expenses \n436\n368  \nExpense for IPO\n609\n575\n3,107\n3,316\n9\nResults of associates \nThe Group’s share of results of associates after taxation is as follows:\n2006\n2005\nUS$’000\nUS$’000\nCapital Advisers Co. Ltd.\n3,743\n1,126\nLess: share of tax of Capital Advisers Co. Ltd (Note 19)\n(1,825)\n(556)\nUni Ship and Management Ltd.\n14\n29\nLess: Share of tax of Uni-Ship and Management Ltd. (Note 19)\n(3)\n(5)\n1,929\n594\n10\nEmployee benefit expense \n2006\n2005\nUS$’000\nUS$’000\nSalaries (including director’s remuneration)\n5,187\n4,817\nPension costs - defined contribution plans \n147\n145\nStaff residencies, other welfare and allowances \n750\n519\n6,084\n5,481\nC-25\nAPPENDIX C – CONSOLIDATED FINANCIAL STATEMENTS\nFOR THE YEAR ENDED 31 DECEMBER 2006\n\n\nUNI-ASIA FINANCE CORPORATION\n(Incorporated in the Cayman Islands with limited liability)\nNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS \nFOR THE YEAR ENDED 31 DECEMBER 2006\n10\nEmployee benefits expense (Continued)\nThe weighed average number of employees is as follows:\n2006\n2005\nUS$’000\nUS$’000\nFull time \n30\n27\nHong Kong \n24\n21\nJapan \n3\n3\nSingapore \n3\n3\n30\n27\n11\nIncome tax expense and deferred taxation \n(a)\nIncome tax expense \n2006\n2005\nUS$’000\nUS$’000\nCurrent tax \n26\n393\nDeferred tax \n372\n86\n398\n479\nThe tax on the Group’s profit before tax differs from the theoretical amount that would arise\nusing the weighted average tax rate applicable to the profits of the consolidated companies\nas follows:\n2006\n2005\nUS$’000\nUS$’000\nProfit before tax \n11,831\n9,918\nDomestic tax rates applicable to profits in the respective countries \n2,071\n1,736\nEffect of different tax rates in other countries \n1,173\n359\nIncome not subject to tax \n(2,846)\n(1,616)\nTax charge \n398\n479\nNote:\nIncome not subject to taxation is only included to the extent that it negates profits at group\ntax rate. Further adjustments are not made as the contingent tax asset is not recognised.\nC-26\nAPPENDIX C – CONSOLIDATED FINANCIAL STATEMENTS\nFOR THE YEAR ENDED 31 DECEMBER 2006\n\n\nUNI-ASIA FINANCE CORPORATION\n(Incorporated in the Cayman Islands with limited liability)\nNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS \nFOR THE YEAR ENDED 31 DECEMBER 2006\n11\nIncome tax expense and deferred taxation (Continued)\n(b)\nDeferred taxation\nTotal\nUS$’000\nAt 1 January 2005\n178\nCharged to income statement\n86\nAt 31 December 2005\n264\nCharged to income statement\n372\nAt 31 December 2006\n636\nDeferred income tax assets are recognized for tax losses carried forward only to the extent\nthat the realization of the related tax benefit is probable. The Group has estimated tax\nlosses of US$6,746k (2005: US$7,104k) in Hong Kong to carry forward against future\ntaxable income of those companies, which have not been recognized in these consolidated\nfinancial statements due to uncertainty of their recoverability.\n12\nDividends \nThe dividends paid in 2006 and 2005 were US$1,400k and US$1,400k respectively (US$0.05 per\nshare). A dividend in respect of the year ended 31st December 2006 of US$0.06 per share\namounting to a total dividend of US$1,680k was approved at the Board of Directors meeting on 24\nJanuary 2007. These financial statements do not reflect this dividend payable.\n13\nEarnings per share \n(a)\nBasic\nBasic earnings per share is calculated by dividing the profit attributable to equity holders of\nthe Company by the weighted average number of ordinary shares in issue during the year.\nC-27\nAPPENDIX C – CONSOLIDATED FINANCIAL STATEMENTS\nFOR THE YEAR ENDED 31 DECEMBER 2006\n\n\nUNI-ASIA FINANCE CORPORATION\n(Incorporated in the Cayman Islands with limited liability)\nNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS \nFOR THE YEAR ENDED 31 DECEMBER 2006\n13\nEarnings per share (Continued)\n(b)\nDiluted \nDiluted earnings per share is calculated adjusting the weighted average number of ordinary\nshares outstanding to assume conversion of all dilutive ordinary shares during the year. The\nGroup has one category of potential ordinary shares: share options issued in 2004 by an\nassociate company. These share options are not considered to have a dilutive effect on\nearnings per share.\n2006\n2005\nUS$’000\nUS$’000\nProfit attributable to equity holders of the Company \n11,433\n9,439\nWeighted average number of ordinary shares in issue \n28,000\n28,000\nEarnings per share (US$ per share) - basic and diluted \n0.408\n0.337\n14\nEmoluments for directors and highest paid individuals\n(a)\nDirectors’ emoluments  \n2006\n2005\nUS$’000\nUS$’000\nFees & basic salaries \n1,364\n1,223\nOther emoluments:\nHousing allowances and other allowances and benefits in kind \n334\n275\nDiscretionary bonuses \n750\n750\nContributions to pensions schemes for directors \n3\n3\n2,451\n2,251\nThere were three independent non-executive directors who were appointed to the Group in\nApril 2005 and two of them resigned in April 2006.\nC-28\nAPPENDIX C – CONSOLIDATED FINANCIAL STATEMENTS\nFOR THE YEAR ENDED 31 DECEMBER 2006\n\n\nUNI-ASIA FINANCE CORPORATION\n(Incorporated in the Cayman Islands with limited liability)\nNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS \nFOR THE YEAR ENDED 31 DECEMBER 2006\n14\nEmoluments for directors and highest paid individuals (Continued)\nThe emoluments of the directors fell within the following bands.\nNumber of\nNumber of\ndirectors\ndirectors\n2006\n2005\nEmoluments bands \nUS$ Nil – US$15,000\n7\n8\nUS$15,001 - US$ 700,000 \n–\n–\nUS$700,001 - US$800,000\n1\n3\nUS$800,001 - US$900,000\n2\n–\n10\n11\n(b)\nFive highest paid individuals \nThe five individuals whose emoluments were the highest in the Group for the year include 3\n(2005: 3) directors whose emoluments are reflected in the analysis presented above. The\nemoluments payable to the remaining 2 (2005: 2) individuals are as follows:\n2006\n2005\nUS$’000\nUS$’000\nBasic salaries, housing allowances and other allowances \nand benefits in kind \n459\n446\nBonuses \n550\n627\nPension Costs\n27\n20\n1,036\n1,093\nThe emoluments fall within the following bands:\nNumber of individuals\n2006\n2005\nEmoluments bands \nUS$300,000 – US$450,000\n1\n1\nUS$450,001 – US$700,000\n–\n–\nUS$700,001 – US$750,000\n1\n1\n2\n2\n(c)\nNo emoluments were paid in both 2005 and 2006 by the companies comprising the Group to\nany of the directors or the five highest paid individuals as an inducement to join or upon\njoining the Group or as compensation for loss of office.\nC-29\nAPPENDIX C – CONSOLIDATED FINANCIAL STATEMENTS\nFOR THE YEAR ENDED 31 DECEMBER 2006\n\n\nUNI-ASIA FINANCE CORPORATION\n(Incorporated in the Cayman Islands with limited liability)\nNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS \nFOR THE YEAR ENDED 31 DECEMBER 2006\n15\nProperty, plant and equipment \nLeasehold\nFurniture\nimprove-\nOffice\nand\nMotor\nments\nequipment\nfixtures\nvehicles\nTotal\nUS$’000\nUS$’000\nUS$’000\nUS$’000\nUS$’000\nCost\nAt 1 January 2006\n370\n259\n53\n93\n775\nAdditions\n666\n55\n117\n–\n838\nDisposals \n(53)\n(13)\n–\n(93)\n(159)\nExchange translation \n(1)\n–\n1\n–\n–\nWritten off \n(316)\n(67)\n(38)\n–\n(421)\nAt 31 December 2006\n666\n234\n133\n–\n1,033\nAccumulated depreciation\nAt 1 January 2006\n368\n187\n53\n20\n628\nCharge \n181\n57\n17\n23\n278\nDisposals \n(53)\n(10)\n–\n(43)\n(106)\nExchange translation \n–\n(1)\n–\n–\n(1)\nWritten off\n(315)\n(65)\n(38)\n–\n(418)\nAt 31 December 2006\n181\n168\n32\n–\n381\nNet book value \nAt 31 December 2006\n485\n66\n101\n–\n652\nCost\nAt 1 January 2005\n385\n321\n61\n64\n831\nAdditions\n2\n38\n–\n93\n133\nDisposals\n–\n(2)\n–\n(64)\n(66)\nExchange translation\n(8)\n(2)\n–\n–\n(10)\nWritten off\n(9)\n(96)\n(8)\n–\n(113)\nAt 31 December 2005\n370\n259\n53\n93\n775\nAccumulated depreciation\nAt 1 January 2005\n356\n229\n60\n63\n708\nCharge\n27\n57\n1\n21\n106\nDisposals\n-\n(1)\n–\n(64)\n(65)\nExchange translation\n(6)\n(2)\n–\n–\n(8)\nWritten off\n(9)\n(96)\n(8)\n–\n(113)\nAt 31 December 2005\n368\n187\n53\n20\n628\nNet book value\nAt 31 December 2005\n2\n72\n–\n73\n147\nC-30\nAPPENDIX C – CONSOLIDATED FINANCIAL STATEMENTS\nFOR THE YEAR ENDED 31 DECEMBER 2006\n\n\nUNI-ASIA FINANCE CORPORATION\n(Incorporated in the Cayman Islands with limited liability)\nNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS \nFOR THE YEAR ENDED 31 DECEMBER 2006\n16\nLoans receivable\n2006\n2005\nUS$’000\nUS$’000\nParticipation in loans\nRepayable within one year\nInterest rate at:\nLIBOR plus 1.25% p.a. (2005: LIBOR plus 1.25% p.a.)\n50\n100\nLIBOR plus 2% p.a.(2005: Nil) \n3,000\n–\n3,050\n100\nParticipation in loans\nRepayable between one and two years\nInterest rate at:\nLIBOR plus 1.25% p.a. (2005: LIBOR plus 1.25% p.a.)\n–\n50\n6% p.a.\n2,500\n–\n2,500\n50\nLoans receivable\n5,550\n150\nThe carrying amount of the loans approximates their fair value.\n17\nInvestments\n2006\n2005\nUS$’000\nUS$’000\nNon-Hong Kong\nUnlisted shares\n191\n191\nUnlisted shares – shiping business (Note (a) below)\n8,288\n3,699\nUnlisted performance notes – properties investment (Note 29(f))\n–\n55\nUnlisted performance notes – distressed debt (Note 29(f))\n1,031\n1,746\nUnlisted performance notes – shipping (Note 29 (f))\n9,739\n9,746\n19,249\n15,437\nNote: Investments are designated at fair value through profit or loss.\nC-31\nAPPENDIX C – CONSOLIDATED FINANCIAL STATEMENTS\nFOR THE YEAR ENDED 31 DECEMBER 2006\n\n\nUNI-ASIA FINANCE CORPORATION\n(Incorporated in the Cayman Islands with limited liability)\nNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS \nFOR THE YEAR ENDED 31 DECEMBER 2006\n17\nInvestments (Continued)\n(a)\nWithin unlisted shares - shipping business are investments totalling US$8,288k (2005:\nUS$3,699k) in six shipping companies which own and run cargo ships.\nCountry/place \nIssued and\nDec 2006 \nDec 2005 \nand date of\nfully paid up\n% of\n% of \nPrincipal\nName\nincorporation\nshare capital\nholdings\nholdings\nactivities\nNiigata Seimitsu\nJapan\nJPY3,874,300,000\n0.14%\n0.14%\nManufacturing\nCo. Ltd.\n17 January 1981\nelectronic devices\nEuroAsia II Inc., \nPanama\nUS$10,000\n15%\n15%\nShipping investment\nPanama\n12 April 2002\nand management\nEuroAsia III Inc., \nPanama\nUS$10,000\n–\n15%\nShipping investment\nPanama\n12 April 2002\nand management\nAP Real Estate \nCayman Islands\nUS$1,000\n5.26%\n5.26%\nJapanese property\nLtd.\n12 April 2000\ninvestment and \nmanagement\nRS Property \nCayman Islands\nUS$1,000\n–\n10%\nJapanese property\nInvestment\n28 August 2000\ninvestment and\nmanagement\nSearex Asset \nBritish Virgin Islands\nUS$1,000\nSeries 1 : \nSeries 1 : \nShipping investment\nManagement \n30 December 2003\n29.39%\n29.41%\nand management\nLimited\nSeries 2:\nSeries 2:\n28.26%\n19.57% \nAAA Strategic \nCayman Islands\nUS$1,000\nSeries 1:\nSeries 1:\nDistressed debts\nInvestment Limited\n26 July 2001\n20%\n20%\ninvestment and\nSeries 2:\nSeries 2:\nmanagement\n33.3%\n33.3%\nFortitude \nPanama\nUS$1,000\n38%\n38%\nShip owning and\nContainership S.A.\n26 November 2004\nchartering\nUnion \nPanama\nUS$1,000\n38%\n38%\nShip owning and\nContainership S.A.\n26 November 2004\nchartering\nFalcon \nPanama\nUS$1,000\n38%\n38%\nShip owning and\nContainership S.A.\n26 November 2004\nchartering\nHarmonic Shipping \nPanama\nUS$10,000\n40.4%\n**\nShip owning and\nS.A.\n29 April 2005\nchartering\nSunrise Shipping \nPanama\nUS$10,000\n46%\n–\nShip owning and\nS.A.\n17 April 2006\nchartering\n**\nAs 31 December 2005, the Group had a commitment to purchase 40.4% of the share\ncapital of Harmonic Shipping S.A.\nPlease refer to Note 19(f) for those entities which have applied the exemption under IAS 28\nand have been fair valued in accordance with IAS 39.\nC-32\nAPPENDIX C – CONSOLIDATED FINANCIAL STATEMENTS\nFOR THE YEAR ENDED 31 DECEMBER 2006\n\n\nUNI-ASIA FINANCE CORPORATION\n(Incorporated in the Cayman Islands with limited liability)\nNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS \nFOR THE YEAR ENDED 31 DECEMBER 2006\n17\nInvestments (Continued)\nPerformance notes:\n(a)\nDistressed debt performance notes are redeemed semi-annually, in whole or in part, based\non net cash recovered from underlying assets funded by the original note’s issuance.\nRemaining performance notes are redeemed at their principal amounts on such other date\nas may be agreed to by the subscribers of the performance notes.\n(b)\nShipping performance notes are redeemed semi-annually, in whole or in part, based on net\ncash recovered from the operation or the disposal of underlying assets. There are no\nmaturity dates for the shipping performance notes invested by the Group.\n18\nDerivative financial Instruments \n(a)\nForward foreign exchange contracts\nThere was a JPY 1 billion (US$8.6m) USD forward contract outstanding at 31 December\n2006 (2005: Nil).\nThe transaction was entered alongside a back-to-back arrangement\ncontract with Harmonic Shipping S.A. for the equivalent amount in Yen upon maturity of that\ncontract. Unrealised gain or losses on forward foreign exchange contracts are recognised\ndirectly in the consolidated income statement.\n(b)\nHedge of net Investment in foreign entity\nThe Group’s Yen denominated borrowing is designated as a hedge of the net investment in\nan associate of the Group, Capital Advisers Co, Ltd. The fair value of the borrowing was\nJPY502m (US$4.222m) (2005: JPY1,065m (US$9.041m)).\nThe foreign exchange loss\nUS$61k (2005: US$879k Loss) on translation of the borrowings to US dollar at balance\nsheet date was recognised in reserves in shareholders equity.\nC-33\nAPPENDIX C – CONSOLIDATED FINANCIAL STATEMENTS\nFOR THE YEAR ENDED 31 DECEMBER 2006\n\n\nUNI-ASIA FINANCE CORPORATION\n(Incorporated in the Cayman Islands with limited liability)\nNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS \nFOR THE YEAR ENDED 31 DECEMBER 2006\n19\nInvestments in associates\n(a)\nMovement of investments in associates\n2006\n2005\nUS$’000\nUS$’000\nCapital Advisers Co. Ltd.\nAt the beginning of year\n6,585\n6,928\nShare of results after tax\n1,918\n570\nExchange differences\n(106)\n(913)\n8,397\n6,585\nUni-Ships and Management Ltd.\nAt the beginning of year\n63\n–\nInvestment in associate\n–\n39\nShare of results after tax\n11\n24\nExchange differences\n1\n–\n75\n63\n8,472\n6,648\n(b)\nSummary of significant associates’ assets, liabilities and results\nA summary of Capital Advisers Co. Ltd.’s assets, liabilities and results are as follows:\n2006\n2005\nUS$’000\nUS$’000\nInvestments in property related projects\n11,135\n13,018\nCash and cash equivalents\n10,767\n6,240\nOther assets\n26,861\n12,181\nTotal assets\n48,763\n31,439\nAmount due to Uni-Asia Finance Corporation\n(4)\n(756)\nOther liabilities\n(29,973)\n(15,956)\nMinority interest\n(42)\n(29)\nShareholders’ equity \n18,744\n14,698\nCompany’s 44.8% interest in shareholders’ equity\n8,397\n6,585\nC-34\nAPPENDIX C – CONSOLIDATED FINANCIAL STATEMENTS\nFOR THE YEAR ENDED 31 DECEMBER 2006\n\n\nUNI-ASIA FINANCE CORPORATION\n(Incorporated in the Cayman Islands with limited liability)\nNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS \nFOR THE YEAR ENDED 31 DECEMBER 2006\n19\nInvestments in associates (Continued)\nFor the\nFor the\nyear ended\nyear ended\n31 December\n31 December\n2006\n2005\nUS$’000\nUS$’000\nResults to 31 December 2006, translated at an average rate \nof JPY116.15 (2005: JPY114.00) to US$1:\nRevenue\n29,435\n11,382\nStaff costs\n(3,180)\n(2,354)\nInterest expense\n(176)\n(201)\nOther expenses\n(17,724)\n(6,314)\nProfit before tax\n8,355\n2,513\nTaxation\n(4,075)\n(1,241)\nProfit after tax\n4,280\n1,272\nProfit before tax - Company’s interest\n3,743\n1,126\nTaxation - Company’s interest\n(1,825)\n(556)\nProfit after tax - Company’s interest (of which Company has 44.8% \ninterest, 2005: 44.8%)\n1,918\n570\nA summary of Uni Ships and Management Limited’s assets, liabilities and results are as follows:\n2006\n2005\nUS$’000\nUS$’000\nCash and cash equivalents\n277\n231\nOther assets\n4\n10\nTotal assets\n281\n241\nOther liabilities\n(31)\n(32)\nShareholders’ equity \n250\n209\nCompany’s 30% interest shareholders’ equity\n75\n63\nC-35\nAPPENDIX C – CONSOLIDATED FINANCIAL STATEMENTS\nFOR THE YEAR ENDED 31 DECEMBER 2006\n\n\nUNI-ASIA FINANCE CORPORATION\n(Incorporated in the Cayman Islands with limited liability)\nNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS \nFOR THE YEAR ENDED 31 DECEMBER 2006\n19\nInvestments in associates (Continued)\nFor the\nFor the\nyear ended\nyear ended\n31 December\n31 December\n2006\n2005\nUS$’000\nUS$’000\nRevenue\n724\n229\nOther expenses\n(676)\n(131)\nProfit before tax\n48\n98\nTaxation\n(8)\n(17)\nProfit after tax\n40\n81\nProfit before tax - Company’s interest\n14\n29\nTaxation - Company’s interest\n(3)\n(5)\n- Profit after tax - Company’s interest (of which Company has 30%)\n11\n24\n(c)\nDetails of associates\nAs at 31 December 2006, details of the associates, both of which are unlisted, were as\nfollows:\nDec 2006\nDec 2005\nPrincipal\nCountry/place\nIssued and\nAttributable\nAttributable\nactivities and\nand date of\nfully paid up\nequity\nequity\nplace of\nName\nincorporation\nshare capital\ninterest\ninterest\noperation\nIndirectly held:\nCapital Advisers \nJapan\nJPY892,500,000\n44.8%\n44.8%\nJapan Property\nCo. Ltd. \n24 February 2000\ncommon \ncommon\ninvestment and\nshares\nshares\nmanagement\nDirectly held:\nUni-Ships and \nHong Kong\nHK$1,000,000\n30%\n30%\nHong Kong\nManagement \n25 January 2005\ncommon\ncommon\nProject\nLtd.\nshares\nshares\nmanagement\nfor vessels\nC-36\nAPPENDIX C – CONSOLIDATED FINANCIAL STATEMENTS\nFOR THE YEAR ENDED 31 DECEMBER 2006\n\n\nUNI-ASIA FINANCE CORPORATION\n(Incorporated in the Cayman Islands with limited liability)\nNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS \nFOR THE YEAR ENDED 31 DECEMBER 2006\n19\nInvestments in associates (Continued)\n(d)\nLoan due from associates\nLoan due from associates was fully settled in March 2006 (2005: US$756k equivalent to\nJPY89m). Interest charged on loan due from associates for the year was US$2k (2005:\nUS$60k).\n(e)\nAmounts due from associates\nThe amounts due from associate are unsecured, interest free and with no fixed repayment\nterms.\n(f)\nOther associates \nThe following investments apply the IAS 28 scope exclusion and are fair valued in\naccordance with IAS 39 (see note 2(b)(ii))\nTotal profit\n% \nCountry of \nTotal\nTotal\nTotal\n(loss)\ninterest\nName\nincorporation\nassets\nliabilities\nincome\nafter tax\nheld\nUS$’000\nUS$’000\nUS$’000\nUS$’000\n2006\nFortitude Containership S.A.*\nPanama\n7,364\n(7,528)\n14\n(442)\n38.00%\nUnion Containership S.A. *\nPanama\n7,365\n(7,530)\n14\n(452)\n38.00%\nFalcon Containership S.A.*\nPanama\n7,362\n(7,497)\n14\n(406)\n38.00%\nHarmonic Shipping S.A.\nPanama\n27,018\n(26,106)\n4,003\n265\n40.40%\nSunrise Shipping S.A\nPanama\n23,166\n(22,558)\n1,152\n(205)\n46.00%\n72,275\n(71,219)\n5,197\n(1,240)\n2005\nFortitude Containership S.A.\nPanama\n7,347\n(7,069)\n8\n(152)\n38.00%\nUnion Containership S.A.\nPanama\n7,347\n(7,060)\n8\n(151)\n38.00%\nFalcon Containership S.A.\nPanama\n7,346\n(7,075)\n8\n(153)\n38.00%\n22,040\n(21,204)\n24\n(456)\n*vessels to be delivered in 2007.\nC-37\nAPPENDIX C – CONSOLIDATED FINANCIAL STATEMENTS\nFOR THE YEAR ENDED 31 DECEMBER 2006\n\n\nUNI-ASIA FINANCE CORPORATION\n(Incorporated in the Cayman Islands with limited liability)\nNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS \nFOR THE YEAR ENDED 31 DECEMBER 2006\n20\nAccounts receivable\nIn general, the Group grants a credit period of 7 to 60 days to its customers. The aging analysis of\nthe accounts receivable is as follows:\n2006\n2005\nUS$’000\nUS$’000\n30 days or less\n1,491\n464\nOver 90 days\n–\n1\n1,491\n465\n21\nCash and bank balances\n2006\n2005\nUS$’000\nUS$’000\nCash at bank and in hand\n6,946\n5,565\nShort term bank deposits\n15,259\n21,979\nCash and cash equivalents\n22,205\n27,544\nThe effective interest rate on short term bank deposits was 0.36% (2005: 0.2%) and these deposits\nhave an average maturity below 30 days.\n22\nShare capital\n2006\n2005\nUS$’000\nUS$’000\nAuthorized:\n60,000,000 shares of US$1 each\n60,000\n60,000\nIssued and fully paid:\n28,000,000 shares of US$1 each\n28,000\n28,000\nC-38\nAPPENDIX C – CONSOLIDATED FINANCIAL STATEMENTS\nFOR THE YEAR ENDED 31 DECEMBER 2006\n\n\nUNI-ASIA FINANCE CORPORATION\n(Incorporated in the Cayman Islands with limited liability)\nNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS \nFOR THE YEAR ENDED 31 DECEMBER 2006\n23\nAccounts payable\nThe aging analysis of the accounts payable is as follows:\n2006\n2005\nUS$’000\nUS$’000\n30 days or less\n278\n226\nBetween 61-90 days\n–\n1\n278\n227\n24\nBorrowings\n2006\n2005\nUS$’000\nUS$’000\nRepayable per terms of revolving loan facility \n- Secured \n4,222\n9,041\nIncluded in borrowings is a secured loan of JPY502m (approximately US$4,222k) collateralized by\na cash deposit of US$5,053k with the same financial institution (2005: a loan totaling JPY9,041k\ncollateralized by a cash deposit of approximately US$10,082k with the same financial institution).\nThe fair value of borrowings approximate the carrying amounts.\n2006\n2005\nWeighted average effective interest rates:\nBank borrowing - JPY\n0.42%\n0.34%\nBank borrowing - US$\n5.73%\n2.97%\nCash deposit\n0.36%\n0.20%\nThe borrowings of the Group are at floating JPY LIBOR rates:\n2006\n2005\nUS$’000\nUS$’000\nRevolving secured loan due within one year\n4,222\n9,041\nTotal borrowings\n4,222\n9,041\nC-39\nAPPENDIX C – CONSOLIDATED FINANCIAL STATEMENTS\nFOR THE YEAR ENDED 31 DECEMBER 2006\n\n\nUNI-ASIA FINANCE CORPORATION\n(Incorporated in the Cayman Islands with limited liability)\nNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS \nFOR THE YEAR ENDED 31 DECEMBER 2006\n25\nSubsidiary companies\n(a)\nDetails of principal investments in subsidiaries\nDetails of the principal subsidiaries within the Group at the date of this report are as follows:\nDec 2006\nDec 2005\nPrincipal\nCountry/place\nIssued and\nAttributable\nAttributable\nactivities and\nand date of\nfully paid up\nequity\nequity\nplace of\nName\nincorporation\nshare capital\ninterest\ninterest\noperation\nDirectly held:\nUni-Asia Capital \nSingapore\nUS$1,000,000\n100%\n100%\nShip chartering\n(Singapore) \n7 August 1997\narrangement\nLimited\nSingapore\nOff-Shore Property British Virgin Islands\nUS$1\n100%\n100%\nHolding and\nInvestment \n23 April 1998\ninvestment \nCorporation\ncompany BVI\nUni-Asia Capital \nHong Kong\nHKD20\n100%\n100%\nProperty \nCompany Limited\n27 June 1997\nInvestment\nHong Kong\nUni-Asia Fund \nHong Kong\nHKD20\n100%\n100%\nDormant\nManagement \n27 June 1997\nHong Kong\nCompany Limited\nUni-Asia Services \nHong Kong\nHKD20\n100%\n100%\nDormant\nand Agency \n27 June 1997\nHong Kong\nLimited\nPanmax Tanker \nPanama\n*\n100%\n100%\nShipping Holding\nS.A. \n30 October 2006\nPanama\nIndirectly held:\nUni-Asia Finance \nJapan\nJPY 10,000,000\n100%\n100%\nCorporate\nCorporation \n9 November 1998\nfinance services\n(Japan)\nJapan\n* \nThe Group has no direct share ownership in the company, but is deemed to have\ncontrol and all risks and rewards of Panmax Tanker S.A.\n(b)\nAmounts due from /to subsidiaries\nThe amounts due from/ to subsidiaries are unsecured, interest free and with no fixed\nrepayment terms.\nC-40\nAPPENDIX C – CONSOLIDATED FINANCIAL STATEMENTS\nFOR THE YEAR ENDED 31 DECEMBER 2006\n\n\nUNI-ASIA FINANCE CORPORATION\n(Incorporated in the Cayman Islands with limited liability)\nNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS \nFOR THE YEAR ENDED 31 DECEMBER 2006\n26\nCash generated from operations\n(a)\nReconciliation of profit before taxation to cash generated from operations \n2006\n2005\nUS$’000\nUS$’000\nProfit before taxation\n11,831\n9,918\nAdjustments for:\nDepreciation\n278\n106\nInterest income\n(1,543)\n(940)\nInterest expenses\n83\n42\nResults of associates\n(1,929)\n(594)\nInterest from loans to associate\n(2)\n(60)\nNet foreign exchange loss\n180\n452\nDecrease/(Increase)in rental and utility deposits paid\n60\n(207)\n(Increase) in accounts receivable\n(1,053)\n(165)\nDecrease/(increase) in prepaid expenses\n31\n(19)\nIncrease/(decrease) in accounts payable\n51\n(2,038)\nIncrease in accrued expenses\n438\n240\n(Decrease)/increase in amount due to associates\n(10)\n11\n(Increase) in amount due from associates\n(4)\n–\nLoss/(Gain) on disposal of fixed assets\n16\n(2)\nInvestment returns\n(7,983)\n(5,011)\nCash generated from operations\n444\n1,733\nC-41\nAPPENDIX C – CONSOLIDATED FINANCIAL STATEMENTS\nFOR THE YEAR ENDED 31 DECEMBER 2006\n\n\nUNI-ASIA FINANCE CORPORATION\n(Incorporated in the Cayman Islands with limited liability)\nNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS \nFOR THE YEAR ENDED 31 DECEMBER 2006\n27\nFinancial risk management \n(a)\nFinancial risk factors \nThe Group holds financial assets and liabilities, transacts in foreign exchange transactions\nwith third parties and has mismatched Yen denominated assets and liabilities. All these\noperations give rise to risk exposures.\nFinancial instruments traded or held include cash and cash equivalents, investments, loans\nand receivables and borrowings.\nForward rate agreements are used to manage the Group’s own exposures to foreign\nexchange risk as part of its asset and liability management process. The principal derivative\ninstruments used by the Group are foreign exchange rate related contracts. Most of the\nGroup’s derivative positions have been entered into to hedge investments in subsidiaries.\n(i)\nMarket risk\nMarket risk is the risk that the value of a financial instrument will fluctuate as a result\nof changes in market prices, whether those changes are caused by factors specific to\nthe individual financial instrument or by factors affecting all financial instruments\ntraded in or indexed to a market. The Group is exposed to market risk on financial\ninstruments that are valued at market prices and primarily consist of investments,\nloans, property development projects and marketable securities.\n(ii)\nForeign exchange risk\nThe Group has certain investments in Japan, whose net assets are exposed to foreign\ncurrency translation risk. Currency exposure arising from the net assets of the Group’s\nforeign operations is managed primarily through borrowings denominated in the\nrelevant foreign currencies.\nC-42\nAPPENDIX C – CONSOLIDATED FINANCIAL STATEMENTS\nFOR THE YEAR ENDED 31 DECEMBER 2006\n\n\nUNI-ASIA FINANCE CORPORATION\n(Incorporated in the Cayman Islands with limited liability)\nNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS \nFOR THE YEAR ENDED 31 DECEMBER 2006\n27\nFinancial risk management (Continued)\nThe table below summarizes the Group’s exposure to currency risk. (Amounts shown are in US$\n‘000 equivalent)\nAs at 31 December 2006\nYen\nUS$\nOther\nTotal\nASSETS\nNon-current assets\nProperty, plant and equipment\n7\n557\n88\n652\nLoans receivable\n–\n2,500\n–\n2,500\nInvestments\n191\n19,058\n–\n19,249\nInvestments in associates\n8,397\n75\n–\n8,472\nDeposit for purchase of vessel\n3,944\n–\n–\n3,944\n12,539\n22,190\n88\n34,817\nCurrent assets\nLoans receivable\n–\n3,050\n–\n3,050\nDeposit pledged as collateral\n–\n5,053\n–\n5,053\nCash and bank balances\n1,099\n21,061\n45\n22,205\nOther current assets\n189\n1,864\n394\n2,447\n1,288\n31,028\n439\n32,755\n13,827\n53,218\n527\n67,572\nLIABILITIES\nNon-current liabilities\nDeferred tax liabilities\n–\n636\n–\n636\n–\n636\n–\n636\nCurrent liabilities\nBorrowings\n4,222\n–\n–\n4,222\nOther current liabilities\n73\n1,964\n911\n2,948\n4,295\n1,964\n911\n7,170\nC-43\nAPPENDIX C – CONSOLIDATED FINANCIAL STATEMENTS\nFOR THE YEAR ENDED 31 DECEMBER 2006\n\n\nUNI-ASIA FINANCE CORPORATION\n(Incorporated in the Cayman Islands with limited liability)\nNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS \nFOR THE YEAR ENDED 31 DECEMBER 2006\n27\nFinancial risk management (Continued)\nAs at 31 December 2006\nYen\nUS$\nOther\nTotal\nASSETS\nNon-current assets\nProperty, plant and equipment\n1\n144\n2\n147\nLoans receivable\n–\n50\n–\n50\nInvestments\n246\n15,191\n–\n15,437\nInvestments in associates\n6,585\n63\n–\n6,648\nLoan amounts due from associate\n756\n–\n–\n756\n7,588\n15,448\n2\n23,038\nCurrent assets\nLoans receivable\n–\n100\n–\n100\nDeposit pledged as collateral\n–\n10,082\n–\n10,082\nCash and bank balances\n5,306\n21,884\n354\n27,544\nOther current assets\n8\n662\n515\n1,185\n5,314\n32,728\n869\n38,911\n12,902\n48,176\n871\n61,949\nLIABILITIES\nNon-current liabilities\nDeferred tax liabilities\n–\n264\n–\n264\n–\n264\n–\n264\nCurrent liabilities\nBorrowings\n9,041\n–\n–\n9,041\nOther current liabilities\n286\n1,412\n990\n2,688\n9,327\n1,412\n990\n11,729\n(iii)\nInterest rate risk\nInterest rate risk is the risk that the value of a financial instrument will fluctuate as a\nresult of changes in market interest rates and the cash flow risks associated with the\nvariability of cash flows from floating rate financial instruments. The Group is exposed\nto interest rate risk primarily from interest rate re-pricing differences between\ncustomers’ loans, borrowings, cash and cash equivalents and shareholders’ capital.\nC-44\nAPPENDIX C – CONSOLIDATED FINANCIAL STATEMENTS\nFOR THE YEAR ENDED 31 DECEMBER 2006\n\n\nUNI-ASIA FINANCE CORPORATION\n(Incorporated in the Cayman Islands with limited liability)\nNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS \nFOR THE YEAR ENDED 31 DECEMBER 2006\n27\nFinancial risk management (Continued)\n(iv) \nCredit risk\nCredit risk is the risk of loss resulting from the failure of counterparties to meet the\nterms of their obligations. The Group is exposed to credit risk through loans and\ninvestments, and through counterparty default risk on transactions, including foreign\nexchange transactions in the process of settlement.\n(v) \nLiquidity risk\nPrudent liquidity risk management implies maintaining sufficient cash and marketable\nsecurities, the availability of funding through an adequate amount of committed credit\nfacilities and the ability to close out market positions.\n(b)\nRisk management\nThe Group’s principal risks are market risk, credit risk and foreign exchange risk. The\ndirectors consider the interest rate risk and liquidity risk of the Group to be immaterial.\nMarket risk and credit risk\nThe Group seeks to minimise these risks by performing detailed reviews of loan\ncounterparties or asset issuers prior to purchase approval, and by either selling on\nparticipated loans to other parties or entering into offsetting loans payable when the directors\nwish to preserve the Group’s liquidity. The Group seeks to minimize adverse movements in\nmarket price of financial instruments by extensive due diligence procedures to ensure\nacquisitions at prices below their perceived market value.\nForeign exchange and interest rate risk\nThe Group operates internationally and is exposed to foreign exchange risk arising from\nvarious currency exposures in particular Japanese Yen. Foreign exchange risk arises from\nfuture commercial transactions, recognised assets and liabilities and net investments in\nforeign operations. To manage their foreign exchange risk the Group may use forward foreign\nexchange contracts. Foreign exchange risk arises when the future commercial transaction or\nrecognised assets or liabilities are denominated in a currency that is not the entity’s\nfunctional currency.\nThe Group has certain investments in foreign operations, which are exposed to foreign\ncurrency translation risk. Currency exposure arising from these investments of the Group’s\nforeign operations is managed through borrowings denominated in the relevant foreign\ncurrencies.\nThe Group may also manage exposure to interest rate risk through the use of interest rate\nswaps. These are commitments to exchange one set of cash flows for another. Swaps result\nin an economic exchange of currencies or interest rates (for example, fixed rate for floating\nrate) or a combination of all these (i.e. cross-currency interest rate swaps). No exchange of\nprincipal takes place, except for certain currency swaps. The Group’s credit risk represents\nthe potential cost to replace the swap contracts if counterparties fail to perform their\nobligation. This risk is monitored on an ongoing basis with reference to the current fair value,\na proportion of the notional amount of the contracts and the liquidity of the market. To\ncontrol the level of credit risk taken, the Group assesses counterparties using the same\ntechniques as for its lending activities.\nC-45\nAPPENDIX C – CONSOLIDATED FINANCIAL STATEMENTS\nFOR THE YEAR ENDED 31 DECEMBER 2006\n\n\nUNI-ASIA FINANCE CORPORATION\n(Incorporated in the Cayman Islands with limited liability)\nNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS \nFOR THE YEAR ENDED 31 DECEMBER 2006\n27\nFinancial Risk Management (Continued)\nLiquidity risk \nThe Group will maintain sufficient cash and marketable securities, the availability of funding\nthrough an adequate amount of committed credit facilities and the ability to close out market\npositions.\n(c)\nFair value estimation \nThe fair value of financial instruments that are not traded in an active market (for example,\nover-the-counter derivatives) is determined by using valuation techniques. The Group uses a\nvariety of methods and makes assumptions that are based on market conditions existing at\neach balance sheet date. Quoted market prices or dealer quotes for similar instruments are\nused for long-term debt. Other techniques, such as estimated discounted cash flows, are\nused to determine fair value for the remaining financial instruments. The fair value of interest\nrate swaps is calculated as the present value of the estimated future cash flows. The fair\nvalue of forward foreign exchange contracts is determined using quoted forward exchange\nrates at the balance sheet date.\nThe nominal value less impairment provision of trade receivables and payables are assumed\nto approximate their fair values.\n28\nCommitments\n(a)\nCapital commitments\nCapital expenditure contracted for at the balance sheet date but not yet incurred is as\nfollows:\n2006\n2005\nUS$’000\nUS$’000\nLeasehold Improvement\n–\n515\n(b)\nLease commitments\nCommitments, under non-cancellable operating leases with a term of more than one year,\nfall due:\n2006\n2005\nUS$’000\nUS$’000\nWithin one year\n1,053\n1,096\nLater than one year and not later than five years\n890\n1,156\n1,943\n2,252\nC-46\nAPPENDIX C – CONSOLIDATED FINANCIAL STATEMENTS\nFOR THE YEAR ENDED 31 DECEMBER 2006\n\n\nUNI-ASIA FINANCE CORPORATION\n(Incorporated in the Cayman Islands with limited liability)\nNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS\nFOR THE YEAR ENDED 31 DECEMBER 2006\n28\nCommitments (Continued)\n(c)\nInvestment commitments\n2006\n2005\nUS$’000\nUS$’000\nInvestment for Harmonic Shipping S.A.\n–\n4\nShareholder loans\n1,283\n1,283\nIn 2005 the Company committed to purchase 40.4% of the share capital of Harmonic\nShipping whose principal activity is the owning of ships and the transaction was completed in\nMarch 2006.\nShareholder loans represent the outstanding balance of the maximum commitment to\nFortitude Containership S.A., Union Containership S.A. and Falcon Containership S.A. as\ncontained in the shareholders loan agreements dated 15 August 2006.\nIn November 2006, the Group entered, through its wholly owned subsidiary, Panmax Tanker\nS.A., into a shipbuilding contract for the construction and purchase of a product tanker\namounting to JPY4.69 billion for delivery in 2010.\n29\nRelated party transactions\nRelated parties include investments, associates and property development projects held for sale\nwhere the Group holds a beneficial interest in, and is also contracted as a service provider to\nmanage or administer such investment, company, entity or property.\nRelated party transactions are carried out under normal commercial terms and conditions and\ngenerate fee income as disclosed in Note 5, investment returns as disclosed in Note 6, directors’\nremunerations and other allowances as disclosed in Note 14, investments in associates and\namounts due from associates as disclosed in Note 19.\nRelated party balances comprise the unlisted performance notes and unlisted shares as disclosed\nin Note 17.\nC-47\nAPPENDIX C – CONSOLIDATED FINANCIAL STATEMENTS\nFOR THE YEAR ENDED 31 DECEMBER 2006\n\n\nUNI-ASIA FINANCE CORPORATION\n(Incorporated in the Cayman Islands with limited liability)\nNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS\nFOR THE YEAR ENDED 31 DECEMBER 2006\n29\nRelated party transactions (Continued)\nThe following transactions were carried out with related parties:\n2006\n2005\nUS$’000\nUS$’000\nIncome Statement\nAgency, arrangement, administration and incentive fees from shipping \nfinance, investment and management (Note (a))\n1,986\n2,387\nAgency, advisory, administration and incentive fees from distressed \nloans (Note (b))\n667\n700\nAdministration service fee (Note (c))\n226\n51\nArrangement fee from shipping investment management (Note (d) & (e))\n423\n1,982\nReturn on performance notes – shipping business (Note (f))\n4,291\n2,491\nReturn on performance notes – distressed debt (Note (f))\n371\n318\nGain on sales of investment (Note (g))\n–\n248\nLoan interest income from loan to investment company (Note (h))\n300\n–\nLoan interest income from loan to associate company (Note(i))\n2\n60\nBalance Sheet \nLoan due from investment company (Note (h))\n5,500\n–\nLoan due from associates (Note (i))\n–\n756\nAmount due from associates (Note (j))\n4\n–\nAmount due to associates (Note (j))\n1\n11\nNotes:\n(a)\nThe Group is entitled to receive from Searex Asset Management Limited, an investment of\nthe Group, the following fees:\n(i)\na minimum administration fee of US$5K per month for each shipping asset owned by\nSearex Asset Management Limited, including the vessels being acquired which are\nsubject of a memorandum of agreement, payable quarterly in advance.\n(ii)\na brokerage fee for the arrangement of chartering of vessel.\n(iii)\nan incentive fee up to 10% of the sum of the net proceeds, accumulated cash balance\nand liabilities outstanding from the disposal of certain vessels.\n(iv)\na loan arrangement fee for the finance arrangement of a vessel.\nC-48\nAPPENDIX C – CONSOLIDATED FINANCIAL STATEMENTS\nFOR THE YEAR ENDED 31 DECEMBER 2006\n\n\nUNI-ASIA FINANCE CORPORATION\n(Incorporated in the Cayman Islands with limited liability)\nNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS\nFOR THE YEAR ENDED 31 DECEMBER 2006\n29\nRelated party transactions (Continued)\n(b)\nThe Group is entitled to receive from AAA Strategic Investment Limited, an investment of the\nGroup, the following fees:\n(i)\nan administration fee of US$75k per annum for performance notes series 1 payable\nsemi-annually in advance and an administration fee for performance notes series 2\npayable semi-annually in advance in the amount of US$50k for the full or partial\nissuance of performance notes of each of the first three US$5 million amounts up to a\nmaximum of US$150k.\n(ii)\nan agency fee of US$25k per annum for performance notes series 1 payable semi-\nannually in advance, and an agency fee for performance notes series 2, payable semi-\nannually in advance, in the amount of US$50k per annum for the full or partial\nissuance of each of the first three US$5 million tranches of performance notes.\n(iii)\nan incentive fee, calculated on an asset by asset basis, in addition to the\nadministration fee. The initial incentive fee is calculated as 20% of the cumulative\ncash recovered from each asset in excess of 110% of that asset’s initial cost. The\nsubsequent incentive fee is calculated as twenty percent of additional cash recovered\nfrom each asset in excess of that asset’s additional cost.\nThe incentive fee is\ncalculated and paid semi-annually.\n(iv)\nPerformance Note Series 1 Fund was fully redeemed in December 2006 \n(c)\nThe Group is entitled to receive from Uni Ships and Management Limited (USML), an\nassociated company of the Group, a monthly administration service fee of US$6,335 in\nrespect to the administration, accounting and financial matters of USML. In September 2006,\nthe Group received an incentive fee of US$150k from USML.\n(d) \nThe Group is entitled to receive from Fortitude Containership S.A., Falcon Containership SA\nand Union Containership SA, investments of the Group, a monthly administration fee of\nUS$7K per month in respect of administration of each company.\n(e)\nThe Group is entitled to receive from Sunrise Shipping S.A., investment of the Group, a\nmonthly administration fee of US$5K per month in respect of administration of the company.\nIn addition, as per the shareholders agreement, the Group is entitled to receive a fee for\nfinancing arrangement for the outstanding contract price of the vessel of Sunrise Shipping\nS.A..\n(f)\nPerformance notes are redeemed semi-annually, in whole or in part, calculated based on net\ncash recovered from the underlying assets. Performance note redemptions are determined\nbased on the total original cost of recovered assets less the deduction of fees and other\nexpenses incurred in recovery of such assets. Recovery amounts from assets in excess of\nthat required for performance note repayments are paid out as interest on those\nperformance notes.\n(g)\nIn June 2005, the Company disposed of its equity interest in Glade Mate Investment, to a\nrelated party, Searex Asset Management Limited.\nC-49\nAPPENDIX C – CONSOLIDATED FINANCIAL STATEMENTS\nFOR THE YEAR ENDED 31 DECEMBER 2006\n\n\nUNI-ASIA FINANCE CORPORATION\n(Incorporated in the Cayman Islands with limited liability)\nNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS\nFOR THE YEAR ENDED 31 DECEMBER 2006\n29\nRelated party transactions (Continued)\n(h)\nLoan due from investment companies\n(i)\nHarmonic Shipping S.A.\nThe outstanding principal balance of US$3million is charged on floating interest rate of\n2% per annum over LIBOR with a final maturity date on 13 March 2007.\n(ii)\nSunrise Shipping S.A.\nThe outstanding balance of US$2.5million is charged on interest rate of 6% per\nannum with a final maturity date on 10 Sep 2011.\n(i)\nLoan due from associates constituted loans to Capital Advisers Co. Ltd.\nThe principal balance and interest accrued on an unsecured revolving short term loan facility\nhas been fully settled (2005: US$756k equivalent to JPY489 million). The interest rate was\nrevised to 1.375% per annum since May 2004 Interest charged on amounts due from Capital\nAdvisers Co. Ltd during the year was US$2k (Dec 2005: US$60k).\n(j)\nThe amount due from associates and the amount due to associate are unsecured, interest\nfree and have no fixed repayment term.\n30\nDeposits pledged as collateral\nAs at 31 December 2006, the Group had US$5,053k (2005: US$10,082k) of deposits pledged as\ncollateral against Japanese Yen denominated revolving bank loan facilities.\n31\nContingencies\nIn November 2006, Panmax Tanker S.A. (“Panmax”), a wholly owned subsidiary of the Group,\nentered into a shipbuilding contract with Xing Long Maritime S.A for the construction and sale of a\nproduct tanker with delivery in 2010. The Group issued a performance guarantee amounting to\nJPY4.69billion to Xing Long Maritime S.A. for the due performance by Panmax for the ship sales\ncontract.\n32\nPost balance sheet events\nOn 4 January 2007, the Group has made a deposit amounting to RMB700k for purchasing offices\nin Guangzhou. The final payment of RMB 6.3 million will be fully settled by April 2007.\nOn 9 January 2007, Guangzhou Yayuan Property Management Company Limited was set up and\non 5 February 2007, the Group injected US$3million into this newly established wholly owned\nsubsidiary of the Group. The primary business of this new subsidiary is to carry out property\ninvestment activities in Guangzhou.\nOn 7 February 2007, the Group entered into JPY1.02 billion (US$8.5m) forward contract with\nmaturity on 13 March 2007. This transaction was entered alongside a back-to-back arrangement\ncontract with Harmonic Shipping S.A. for the equivalent amount in Yen upon maturity of that\ncontract.\nC-50\nAPPENDIX C – CONSOLIDATED FINANCIAL STATEMENTS\nFOR THE YEAR ENDED 31 DECEMBER 2006\n\n\nUNI-ASIA FINANCE CORPORATION\n(Incorporated in the Cayman Islands with limited liability)\nNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS\nFOR THE YEAR ENDED 31 DECEMBER 2006\n32\nPost balance sheet events (Continued)\nOn 12 March 2007 the Group provided additional US$3.2m shareholder’s loan to Harmonic\nShipping SA for financing of working capital.\nOn 11 April 2007 the Group provided additional US$0.2m shareholder’s loan to Falcon\nContainership S.A. for financing of working capital.\nOn 17 April 2007 the Company launched a shipping fund in Singapore, the Akebono Shipping\nFund 1. The fund has raised equity of US$42.9 million through the issuance of performance notes\nto investors. The Company has committed to subscribe for US$12.2 million of performance notes.\nOn 25 May 2007, the Group injected US$ 2.8 million as 1st installment of 35% subscription of\nAkebono performance notes.\nOutstanding loans due from Harmonic Shipping S.A (amounting USD$8.4m) were fully repaid on\n30 April 2007.\nOn 1 May 2007, the Group, on behalf of Panmax Tanker S.A, entered into JPY469m (US$ 3,933k)\nUSD forward contract with maturity date on 31 May 2007.\nOn 2 May 2007, the Group, on behalf of Matin Shipping Limited, entered into JPY357.5m (US$\n2,998k) USD forward contract with maturity date on 31 May 2007.\nOn 3 May 2007, the Group injected US$5k and granted a shareholder’s loan of US$995k to Rich\nContainership S.A. representing a 50% interest in the newly set up SPC. The principal activity of\nthis company is ship chartering.\nOn 7 May 2007, the outstanding US$4,663k performance note from Series II, of Searex Asset\nManagement Limited, were fully redeemed.\nOn 28 May 2007, the Group has extended the US$4 million loan to Panmax Tanker S.A. for\nsettlement of 1st instalment of shipbuilding contract with Xing Long Maritime S.A.\nOn 30 May 2007, Mitsui & Co. Ltd has provided US$4m loan to Panmax Tanker S.A for settlement\nof 2nd installment of shipbuilding contract with Xing Long Maritime S.A.\nOn 31 May 2007, the Group injected US$400 and granted a shareholder’s loan of US$1,203k to\nMatin Shipping Ltd representing a 40% interest in the newly set up SPC. The principal activity of\nthis company is ship chartering.\nOn 19 June 2007, Panmax Tanker S.A. was injected into the Akebono Fund. The transfer is\ndeemed as a disposal from the Group’s perspective. The Group holds a 35% interest in Akebono\nFund.\n33\nApproval of the consolidated financial statements\nThe consolidated financial statements were approved by the board of directors on 27 June 2007.\nC-51\nAPPENDIX C – CONSOLIDATED FINANCIAL STATEMENTS\nFOR THE YEAR ENDED 31 DECEMBER 2006\n\n\nSet out below is a summary of certain provisions of the Memorandum and Articles of Association of our\nCompany.\n1.\nMEMORANDUM OF ASSOCIATION \nThe Memorandum of Association of the Company was adopted on 26 June 2007 and states, inter\nalia, that the liability of members of the Company is limited, that the objects for which the Company\nis established are unrestricted and the Company shall have full power and authority to carry out\nany object not prohibited by the Cayman Companies Law or any other law of the Cayman Islands.\nThe Memorandum of Association is available for inspection at the address specified in “General\nand Statutory Information – Documents Available for Inspection” on page 173 of this Prospectus.\n2.\nARTICLES OF ASSOCIATION \nThe Articles of Association of the Company were adopted on 26 June 2007 and include provisions\nto the following effect:\n2.1 \nClasses of Shares \nThe share capital of the Company consists of ordinary shares. The authorised capital of the\nCompany at the date of adoption of the Articles of Association is US$120,000,000 divided into\n750,000,000 Shares.\n2.2 \nDirectors \n2.2.1\nPower to vote on a proposal, arrangement or contract in which he is interested \nA Director (or his alternate Director in his absence) shall not vote on any resolution of the\nDirectors in respect of any contract or arrangement or proposed contract or arrangement in\nwhich he has directly or indirectly a personal material interest.\n2.2.2 \nPower to vote on remuneration for himself and other Directors, and quorum at such Board\nmeetings \nThe remuneration to be paid to the Directors shall be such remuneration as the Company\nfrom time to time shall determine in general meeting and shall not be increased except\npursuant to an ordinary resolution passed at a general meeting where notice of the\nproposed increase shall have been given in the notice convening the general meeting. A\nDirector cannot vote on his own remuneration. Fees payable to non-executive Directors\nshall be by a fixed sum, and not by a commission on or a percentage of profits or turnover.\nSalaries payable to executive Directors may not include a commission on or a percentage\nof turnover. Such remuneration shall be deemed to accrue from day to day. The Directors\nshall also be entitled to be paid their travelling, hotel and other expenses properly incurred\nby them in going to, attending and returning from meetings of the Directors, or any\ncommittee of the Directors, or general meetings of the Company, or otherwise in connection\nwith the business of the Company, or to receive a fixed allowance in respect thereof as may\nbe determined by the Directors from time to time, or a combination partly of one such\nmethod and partly the other.\n2.2.3 \nBorrowing powers of Directors\nThe Directors may exercise all the powers of the Company to borrow money and to\nmortgage or charge its undertaking, property and uncalled capital or any part thereof and\nissue debentures, debenture stock and other securities whether outright or as security for\nany debt, liability or obligation of the Company or of any third party. These provisions may\nbe varied by amendments to the Articles of Association of the Company.\nAPPENDIX D – SUMMARY OF THE CONSTITUTION OF OUR COMPANY\nD-1\n\n\n2.2.4 \nAge limit for retirement of Directors\nThere is no age limit imposed under the Articles of Association of the Company for\nretirement of Directors.\n2.2.5\nShareholding qualification of Directors\nA shareholding qualification for Directors may be fixed by the Company in general meeting,\nbut unless and until so fixed no qualification shall be required.\n2.3\nVariation of rights of existing shares or classes of shares \nIf at any time the share capital of the Company is divided into different classes of shares,\npreference capital other than redeemable preference capital may be repaid and the rights attached\nto any class (unless otherwise provided by the terms of issue of the shares of that class) may,\nwhether or not the Company is being wound-up, be varied with the sanction of a Special\nResolution (which is defined in the Articles of Association of the Company to be a resolution\napproved by not less than sixty-seven percent (67%) of such Members present in person or by\nproxy at a general meeting of the Company) passed at a general meeting of the holders of the\nshares of that class, provided always that where the necessary majority for such a Special\nResolution is not obtained at such general meeting, consent in writing  if obtained from the holders\nof three-fourths of the issued shares of the class concerned within two months of such general\nmeeting shall be as valid and effectual as a Special Resolution carried at such general meeting.\nThe provisions of these Articles relating to general meetings shall apply to every such general\nmeeting of the holders of one class of shares except that the necessary quorum shall be one\nperson holding or representing by proxy at least one-third of the issued shares of the class and that\nany holder of shares of the class present in person or by proxy may demand a poll.\nThe rights conferred upon the holders of the shares of any class issued with preferred or other\nrights shall not, unless otherwise expressly provided by the terms of issue of the shares of that\nclass, be deemed to be varied by the creation or issue of further shares ranking pari passu\ntherewith.\n2.4\nAlteration of Capital \n(a)\nSubject to and in so far as permitted by the provisions of the Cayman Companies Law, the\nCompany may from time to time by Ordinary Resolution (which is defined in the Articles of\nAssociation of the Company to be a resolution passed by a simply majority of Members\npresent in person or by proxy at a general meeting of the Company or approved in writing by\nall the Members entitled to vote at a general meeting) alter or amend its Memorandum\notherwise than with respect to its name and objects and may, without restricting the\ngenerality of the foregoing:\n(i)\nincrease the share capital by such sum to be divided into shares of such amount or\nwithout nominal or par value as the resolution shall prescribe and with such rights,\npriorities and privileges annexed thereto, as the Company in general meeting may\ndetermine;\n(ii)\nconsolidate and divide all or any of its share capital into shares of larger amount than\nits existing shares;\n(iii)\nby subdivision of its existing shares or any of them divide the whole or any part of its\nshare capital into shares of smaller amount than is fixed by the Memorandum or into\nshares without nominal or par value; and\n(iv)\ncancel any shares which at the date of the passing of the resolution have not been\ntaken or agreed to be taken by any person.\nAPPENDIX D – SUMMARY OF THE CONSTITUTION OF OUR COMPANY\nD-2\n\n\n(b)\nAll new shares created hereunder shall be subject to the same provisions with reference to\nthe payment of calls, lien, transfer, transmission, forfeiture and otherwise as the shares in the\noriginal share capital.\n(c)\nWithout prejudice to Article 14 of the Articles of Association and subject to the provisions of\nthe Cayman Companies Law, the Company may by Special Resolution reduce its share\ncapital and any capital redemption reserve fund.\n2.5 \nRights, preferences and restrictions attaching to each class of shares\nSubject to the provisions, if any, in that behalf in the Memorandum and to any direction that may be\ngiven by the Company in general meeting and without prejudice to any special rights previously\nconferred on the holders of existing shares, the Directors may allot, issue, grant options over or\notherwise dispose of shares of the Company (including fractions of a share) with or without\npreferred, deferred or other special rights or restrictions, whether in regard to dividend, voting,\nreturn of capital or otherwise and to such persons, at such times and on such other terms as they\nthink proper. The Company shall not issue shares in bearer form.\nSubject to any special rights conferred on the holders of any shares or class of shares, any share\nin the Company may be issued with or have attached thereto such preferred, deferred, qualified or\nother special rights or restrictions, whether with regard to dividend, voting, return of capital or\notherwise, as the Company may be ordinary resolution determine or, if there has not been any\nsuch determination or so far as the same shall not make specific provision, as the Board may\ndetermine.\nExcept as permitted under the rules or regulations of the SGX-ST or any direction given by the\nCompany in general meeting, all new shares shall before issue be offered to such persons who as\nat the date of the offer are entitled to receive notices from the Company of general meetings in\nproportion, as far as the circumstances admit, to the amount of the existing shares to which they\nare entitled. The offer shall be made by notice specifying the number of shares offered, and limiting\na time within which the offer, if not accepted, will be deemed to be declined. After the expiration of\nthat time, or on the receipt of an intimation from the person to whom the offer is made that he\ndeclines to accept the shares offered or any part thereof, the Directors may dispose of those\nshares in such manner as they think most beneficial to the Company. The Directors may likewise\nso dispose of any new shares which (by reason of the ratio which the new shares bear to shares\nheld by persons entitled to an offer of new shares) cannot, in the opinion of the Directors, be\nconveniently offered.\nSubject to the provisions of the Cayman Companies Law and the Memorandum, shares may be\nissued on the terms that they are, or at the option of the Company of the holder are, to be\nredeemed on such terms and in such manner as the Company, before the issue of the shares, may\nby Special Resolution determine.\nSubject to the provisions of the Cayman Companies Law and the Memorandum, the Company may\npurchase its own shares, including any redeemable shares, in any manner provided that such\nmanner of purchase has first been authorised by the Company in general meeting and may take\npayment therefor in any manner authorised by the Cayman Companies Law, including out of\ncapital.\n2.6\nTime limit for lapse of dividend entitlement\nThere is no time limit imposed under the Articles of Association of the Company for lapse of\ndividend entitlements of Shareholders.\n2.7\nRestrictions on ownership of shares\nThere are no limitations on the right to own shares.\nAPPENDIX D – SUMMARY OF THE CONSTITUTION OF OUR COMPANY\nD-3\n\n\n1.\nIntroduction \nThe Cayman Companies Law is derived, to a large extent, from the older Companies Acts of\nEngland, although there are significant differences between the Cayman Companies Law and the\ncurrent Companies Act of England. Set out below is a summary of certain provisions of the\nCayman Companies Law, although this does not purport to contain all applicable qualifications and\nexceptions or to be a complete review of all matters of corporate law and taxation which may differ\nfrom equivalent provisions in jurisdictions with which interested parties may be more familiar.\n2.\nIncorporation \nThe Company was incorporated in the Cayman Islands as an exempted company with limited\nliability on 17 March 1997 under the Cayman Companies Law (1995 Revision). As such, its\noperations must be conducted mainly outside the Cayman Islands. The Company is required to file\nan annual return each year with the Registrar of Companies of the Cayman Islands and pay a fee\nwhich is based on the size of its authorised share capital.\n3.\nShare capital \nThe Cayman Companies Law permits a company to issue ordinary shares, preference shares,\nredeemable shares or any combination thereof. Investors should note that the position under\nCayman Companies Law is different from that under Singapore law, which provides that shares of\na company incorporated in the Cayman Islands shall have a par value.\nThe Cayman Companies Law provides that where a company issues shares at a premium,\nwhether for cash or otherwise, a sum equal to the aggregate amount of the value of the premia on\nthose shares shall be transferred to an account called the “share premium account”. At the option\nof a company, these provisions may not apply to premia on shares of that company allotted\npursuant to any arrangement in consideration of the acquisition or cancellation of shares in any\nother company and issued at a premium. The Cayman Companies Law provides that the share\npremium account may be applied by a company, subject to the provisions, if any, of its\nmemorandum and articles of association, in such manner as the company may from time to time\ndetermine including, but without limitation:\n(a)\npaying distributions or dividends to members;\n(b) \npaying up unissued shares of the company to be issued to members as fully paid bonus\nshares;\n(c) \nin the redemption and repurchase of shares (subject to the provisions of section 37 of the\nCayman Companies Law);\n(d) \nwriting-off the preliminary expenses of the company;\n(e)\nwriting-off the expenses of, or the commission paid or discount allowed on, any issue of\nshares or debentures of the company; and \n(f) \nproviding for the premium payable on redemption or purchase of any shares or debentures\nof the company.\nNo distribution or dividend may be paid to members out of the share premium account unless\nimmediately following the date on which the distribution or dividend is proposed to be paid the\ncompany will be able to pay its debts as they fall due in the ordinary course of business.\nThe Cayman Companies Law provides that, subject to confirmation by the Grand Court of the\nCayman Islands, a company limited by shares or a company limited by guarantee and having a\nshare capital may, if so authorised by its articles of association, by special resolution reduce its\nshare capital in any way.\nAPPENDIX E – SUMMARY OF CAYMAN ISLANDS COMPANY LAW\nE-1\n\n\nSubject to the detailed provisions of the Cayman Companies Law, a company limited by shares or\na company limited by guarantee and having a share capital may, if so authorised by its articles of\nassociation, issue shares which are to be redeemed or are liable to be redeemed at the option of\nthe company or a shareholder. In addition, such a company may, if authorised to do so by its\narticles of association, purchase its own shares, including any redeemable shares. However, if the\narticles of association do not authorise the manner of purchase, a company cannot purchase any\nof its own shares unless the manner of purchase has first been authorised by an ordinary\nresolution of the company. At no time may a company redeem or purchase its shares unless they\nare fully paid. A company may not redeem or purchase any of its shares if, as a result of the\nredemption or purchase, there would no longer be any member of the company holding shares. A\npayment out of capital by a company for the redemption or purchase of its own shares is not lawful\nunless immediately following the date on which the payment is proposed to be made, the company\nshall be able to pay its debts as they fall due in the ordinary course of business.\nThere is no statutory restriction in the Cayman Islands on the provision of financial assistance by a\ncompany for the purchase of, or subscription for, its own or its holding company’s shares.\nAccordingly, a company may provide financial assistance if the directors of the company consider,\nin discharging their duties of care and to act in good faith, for a proper purpose and in the interests\nof the company, that such assistance can properly be given. Such assistance should be on an\narm’s-length basis.\nInvestors should note that the position under Cayman Companies Law is different from that under\nSingapore law, which provides statutory restrictions against a company giving financial assistance\nto any person directly or indirectly for the purpose of, or in connection with, the acquisition of that\ncompany’s shares or shares of its holding company. Financial assistance includes the making of a\nloan, the giving of a guarantee, the provision of security, and the release of a debt or obligation.\n4.\nDividends and distributions \nWith the exception of section 34 of the Cayman Companies Law, there are no statutory provisions\nrelating to the payment of dividends. Based upon English case law which is likely to be persuasive\nin the Cayman Islands in this area, dividends may be paid only out of profits. In addition, section 34\nof the Cayman Companies Law permits, subject to a solvency test and the provisions, if any, of the\ncompany’s memorandum and articles of association, the payment of dividends and distributions out\nof the share premium account (see paragraph 3 above for further details).\n5.\nShareholders’ suits \nThe Cayman Islands courts can be expected to follow English case law precedents. The rule in\nFoss v. Harbottle (and the exceptions thereto which permit a minority shareholder to commence a\nclass action against or derivative actions in the name of the company to challenge (a) an act which\nis ultra vires the company or illegal, (b) an act which constitutes a fraud against the minority where\nthe wrongdoers are themselves in control of the company, and (c) an action which requires a\nresolution with a qualified (or special) majority which has not been obtained) has been applied and\nfollowed by the courts in the Cayman Islands.\n6.\nProtection of minorities\nIn the case of a company (not being a bank) having a share capital divided into shares, the Grand\nCourt of the Cayman Islands may, on the application of members holding not less than one fifth of\nthe shares of the company in issue, appoint an inspector to examine into the affairs of the company\nand to report thereon in such manner as the Grand Court shall direct.\nAny shareholder of a company may petition the Grand Court of the Cayman Islands which may\nmake a winding up order if the court is of the opinion that it is just and equitable that the company\nshould be wound up.\nAPPENDIX E – SUMMARY OF CAYMAN ISLANDS COMPANY LAW\nE-2\n\n\nClaims against a company by its shareholders must, as a general rule, be based on the general\nlaws of contract or tort applicable in the Cayman Islands or their individual rights as shareholders\nas established by the company’s memorandum and articles of association.\nThe English common law rule that the majority will not be permitted to commit a fraud on the\nminority has been applied and followed by the courts of the Cayman Islands.\nInvestors should note that the position under Cayman Companies Law is different from that under\nSingapore law, which provides that the rights of minority shareholders are entrenched in the\nCompanies Act, which provides that shareholders may apply to the Singapore courts for an order\nto remedy situations where (i) a company’s affairs are being conducted or the powers of the\ncompany’s directors are being exercised in a manner oppressive to, or in disregard of the interests\nof one or more of the company’s shareholders as shareholders of the company; or (ii) a company\nhas done an act, or threatens to do an act, or the members or holders of debentures have passed\nor propose to pass some resolution, which unfairly discriminates against, or is otherwise prejudicial\nto, one or more of the company’s shareholders.\n7.\nDisposal of assets\nThe Cayman Companies Law contains no specific restrictions on the powers of directors to\ndispose of assets of a company. As a matter of general law, in the exercise of those powers, the\ndirectors must discharge their duties of care and to act in good faith, for a proper purpose and in\nthe interests of the company.\nInvestors should note that the position under Cayman Companies Law is different from that under\nSingapore law, which provides that prior approval of the company at a general meeting is required\nbefore the directors can carry into effect any proposals for disposing of the whole or substantially\nthe whole of the company’s undertaking or property, notwithstanding anything in a company’s\nmemorandum or articles of association.\n8.\nAccounting and auditing requirements\nThe Cayman Companies Law requires that a company shall cause to be kept proper books of\naccount with respect to:\n(a)\nall sums of money received and expended by the company and the matters in respect of\nwhich the receipt and expenditure takes place;\n(b) \nall sales and purchases of goods by the company; and \n(c) \nthe assets and liabilities of the company.\nProper books of account shall not be deemed to be kept if there are not kept such books as are\nnecessary to give a true and fair view of the state of the company’s affairs and to explain its\ntransactions.\n9.\nRegister of members \nAn exempted company may, subject to the provisions of its articles of association, maintain its\nprincipal register of members and any branch registers at such locations, whether within or without\nthe Cayman Islands, as its directors may, from time to time, think fit. There is no requirement under\nthe Cayman Companies Law for an exempted company to make any returns of members to the\nRegistrar of Companies in the Cayman Islands. The names and addresses of the members are,\naccordingly, not a matter of public record and are not available for public inspection.\nAPPENDIX E – SUMMARY OF CAYMAN ISLANDS COMPANY LAW\nE-3\n\n\n10.\nInspection of books and records \nMembers of a company will have no general right under the Cayman Companies Law to inspect or\nobtain copies of the register of members or corporate records of the company. They will, however,\nhave such rights as may be set out in the company’s articles of association.\n11.\nSpecial resolutions \nThe Cayman Companies Law provides that a resolution is a special resolution when it has been\npassed by a majority of not less than two-thirds (or such greater number as may be specified in the\narticles of association of the company) of such members as, being entitled to do so, vote in person\nor, where proxies are allowed, by proxy at a general meeting of which notice specifying the\nintention to propose the resolution as a special resolution has been duly given. Written resolutions\nsigned by all the members entitled to vote for the time being of the company may take effect as\nspecial resolutions if this is authorised by the articles of association of the company.\nInvestors should note that the position under Cayman Companies Law is different from that under\nSingapore law, which provides that a special resolution must be passed by at least three-fourths of\nmembers voting (in person or by proxy) at a general meeting of which not less than 21 days’\nwritten notice has been duly given.\n12.\nSubsidiary owning shares in parent \nThe Cayman Companies Law does not prohibit a Cayman Islands company acquiring and holding\nshares in its parent company provided its objects so permit. The directors of any subsidiary making\nsuch acquisition must discharge their duties of care and to act in good faith, for a proper purpose\nand in the interests of the subsidiary.\nInvestors should note that the position under Cayman Companies Law is different from that under\nSingapore law, which prohibits a company from being a member of a company which is its holding\ncompany, and any allotment or transfer of shares in a company to its subsidiary is deemed to be\nvoid.\n13.\nReconstructions \nThere are statutory provisions which facilitate reconstructions and amalgamations approved by a\nmajority in number representing 75 per cent. in value of shareholders or creditors, depending on\nthe circumstances, as are present at a meeting called for such purpose and thereafter sanctioned\nby the Grand Court of the Cayman Islands. Whilst a dissenting shareholder would have the right to\nexpress to the Grand Court his view that the transaction for which approval is sought would not\nprovide the shareholders with a fair value for their shares, the Grand Court of the Cayman Islands\nis unlikely to disapprove the transaction on that ground alone in the absence of evidence of fraud\nor bad faith on behalf of management and if the transaction were approved and consummated the\ndissenting shareholder would have no rights comparable to the appraisal rights (i.e. the right to\nreceive payment in cash for the judicially determined value of his shares) ordinarily available, for\nexample, to dissenting shareholders of United States corporations.\n14.\nTake-overs \nWhere an offer is made by a company for the shares of another company and, within four months\nof the offer, the holders of not less than 90 per cent. of the shares which are the subject of the offer\naccept, the offeror may at any time within two months after the expiration of the said four months,\nby notice require the dissenting shareholders to transfer their shares on the terms of the offer. A\ndissenting shareholder may apply to the Grand Court of the Cayman Islands within one month of\nthe notice objecting to the transfer. The burden is on the dissenting shareholder to show that the\nGrand Court should exercise its discretion, which it will be unlikely to do unless there is evidence of\nfraud or bad faith or collusion as between the offeror and the holders of the shares who have\naccepted the offer as a means of unfairly forcing out minority shareholders.\nAPPENDIX E – SUMMARY OF CAYMAN ISLANDS COMPANY LAW\nE-4\n\n\n15.\nIndemnification \nCayman Islands law does not limit the extent to which a company’s articles of association may\nprovide for indemnification of officers and directors, except to the extent any such provision may be\nheld by the Cayman Islands courts to be contrary to public policy (e.g. for purporting to provide\nindemnification against the consequences of committing a crime).\n16.\nLiquidation \nA company is placed in liquidation either by an order of the court or by a special resolution (or, in\ncertain circumstances, an ordinary resolution) of its members. A liquidator is appointed whose\nduties are to collect the assets of the company (including the amount (if any) due from the\ncontributories (shareholders)), settle the list of creditors and discharge the company’s liability to\nthem, rateably if insufficient assets exist to discharge the liabilities in full, and to settle the list of\ncontributories and divide the surplus assets (if any) amongst them in accordance with the rights\nattaching to the shares.\n17.\nStamp duty on transfers \nNo stamp duty is payable in the Cayman Islands on transfers of shares of Cayman Islands\ncompanies except those which hold interests in land in the Cayman Islands.\n18.\nExchange control\nThere are no exchange control regulations or currency restrictions in the Cayman Islands.\nAPPENDIX E – SUMMARY OF CAYMAN ISLANDS COMPANY LAW\nE-5\n\n\n1.\nNAME OF THE SCHEME\nThe Scheme shall be called the “Uni-Asia Share Option Scheme”.\n2.\nDEFINITIONS\n2.1\nIn the Scheme, unless the context otherwise requires, the following words and expressions shall\nhave the following meanings:\n“Act”\nThe Companies Act, Chapter 50 of Singapore, as amended,\nmodified or supplemented from time to time.\n“Adoption Date”\nThe date on which the Scheme is adopted by the Company in\ngeneral meeting.\n“Aggregate Subscription Cost”\nThe total amount payable for Shares which may be acquired on\nthe exercise of an Option.\n“Articles”\nThe articles of association of our Company as amended,\nsupplemented or modified from time to time.\n“Associate”\nShall have the meaning assigned to it in the Listing Manual of\nthe SGX-ST.\n“Auditors”\nThe auditors of the Company for the time being.\n“Board”\nThe board of directors of the Company.\n“Cayman Companies Law”\nThe Companies Law, Cap. 22 (Law 3 of 1961, as consolidated\nand revised) of the Cayman Islands.\n“CDP”\nThe Central Depository (Pte) Limited.\n“Committee”\nA committee comprising directors of the Company who are\nconcurrently members of the remuneration committee of the\nBoard, duly authorised, appointed and nominated by the Board\npursuant to the Rules to administer the Scheme.\n“Company” or “Uni-Asia”\nUni-Asia Finance Corporation, an exempted company\nincorporated on 17 March 1997 in the Cayman Islands with\nlimited liability.\n“control”\nThe capacity to dominate decision-making, directly or indirectly,\nin relation to the financial and operating policies of the\nCompany.\n“Controlling Shareholder”\nA Shareholder exercising control over the Company and unless\nrebutted, a person who controls directly or indirectly a\nshareholding of fifteen (15) per cent. or more of the Company’s\nissued share capital shall be presumed to be a Controlling\nShareholder of the Company.\n“CPF”\nCentral Provident Fund.\n“Date of Grant”\nIn relation to an Option, the date on which the Option is\ngranted pursuant to Rule 6.\n“Director”\nA person holding office as a director for the time being of the\nCompany or its Subsidiaries, as the case may be.\nAPPENDIX F – RULES OF THE UNI-ASIA SHARE OPTION SCHEME\nF-1\n\n\n“Employee”\nAn employee of our Group (including any Group Executive\nDirector) selected by the Committee to participate in the\nScheme in accordance with Rule 4.1.\n“Exercise Period”\nSubject as provided in Rules 8 and 9, the period for the\nexercise of an Option, being a period commencing:\n(1)\nin the case of an Market Price Option granted to an\nEmployee (other than Options granted to Non-Executive\nDirectors), a period commencing after the first\nanniversary of the Date of Grant and expiring on the tenth\nanniversary of such Date of Grant, or such other shorter\nperiod determined by the Committee; and\n(2)\nin the case of a Market Price Option granted to Non-\nExecutive Directors, a period commencing after the first\nanniversary of the Date of Grant and expiring on the fifth\nanniversary of such Date of Grant, or such other short\nperiod determined by the Committee,\nProvided that in the case of an Incentive Option, such Option\nmay not be exercised before the second anniversary of the\nDate of Grant.\n“Exercise Price”\nThe price at which a Participant shall subscribe for each Share\nupon the exercise of an Option which shall be the price as\ndetermined in accordance with Rule 7.1, as adjusted in\naccordance with Rule 12.\n“Grantee”\nThe person to whom an offer of an Option is made.\n“Group”\nThe Company and its Subsidiaries (as they may exist from time\nto time).\n“Group Executive Director”\nA Director who performs an executive function within our\nGroup.\n“HK$”\nHong Kong dollar.\n“Incentive Option”\nAn Option granted with the Exercise Price set at a discount to\nthe Market Price.\n“Market Day”\nA day on which the Stock Exchange is open for trading in\nsecurities.\n“Market Price”\nA price equal to the average of the last dealt prices for the\nShares on the Stock Exchange over the three (3) consecutive\nTrading Days immediately preceding the Date of Grant of that\nOption, as determined by the Committee by reference to the\ndaily official list or any other publication published by the Stock\nExchange, rounded to the nearest whole cent in the event of\nfractional prices.\n“Market Price Option”\nAn Option granted with the Exercise Price set at the Market\nPrice.\nAPPENDIX F – RULES OF THE UNI-ASIA SHARE OPTION SCHEME\nF-2\n\n\n“Non-Executive Director”\nA Director of the Company or its Subsidiaries, as the case may\nbe, other than a Group Executive Director.\n“Offer Date”\nThe date on which an offer to grant an Option is made\npursuant to the Scheme.\n“Option”\nThe right to subscribe for Shares granted or to be granted to an\nEmployee pursuant to the Scheme and for the time being\nsubsisting.\n“Participant”\nThe holder of an Option.\n“Rules”\nRules of the Uni-Asia Share Option Scheme.\n“Scheme”\nThe Uni-Asia Share Option Scheme, as the same may be\nmodified or altered from time to time.\n“Securities Account”\nThe securities account maintained by a Depositor with CDP\n.\n“SGX-ST”\nSingapore Exchange Securities Trading Limited.\n“Shareholders”\nRegistered holders of Shares.\n“Shares”\nOrdinary shares of par value US$0.16 each in the capital of the\nCompany.\n“Stock Exchange”\nThe Singapore Exchange Securities Trading Limited and any\nother stock exchange on which the Shares are quoted or listed.\n“Subsidiaries”\nA company which is for the time being a subsidiary of the\nCompany as defined by Section 5 of the Act.\n“Trading Day”\nA day on which the Shares are traded on the Stock Exchange.\n“S$”\nSingapore dollar.\n“US$”\nUnited States dollar.\n2.2\nThe terms “Depositor” and “Depository Agent” shall have the meanings ascribed to them\nrespectively by Section 130A of the Act and the term “Associate” shall have the meaning ascribed\nto it by the Listing Manual or any other publication prescribing rules or regulations for corporations\nadmitted to the Official List of the SGX-ST (as modified, supplemented or amended from time to\ntime).\n2.3\nWords importing the singular number shall, where applicable, include the plural number and vice\nversa. Words importing the masculine gender shall, where applicable, include the feminine and\nneuter gender.\n2.4\nAny reference to a time of a day in the Scheme is a reference to Singapore time.\n2.5\nAny reference in the Scheme to any enactment is a reference to that enactment as for the time\nbeing amended or re-enacted. Any word defined under the Companies Act, the Cayman\nCompanies Law, or any statutory modification thereof and used in the Scheme shall have the\nmeaning assigned to it under the Act or the Cayman Companies Law, as the case may be.\nAPPENDIX F – RULES OF THE UNI-ASIA SHARE OPTION SCHEME\nF-3\n\n\n3.\nOBJECTIVES OF THE SCHEME\nThe Scheme is a share incentive plan. The Scheme is proposed on the basis that it is important to\nretain staff whose contributions are essential to the well-being and prosperity of the Group and to\ngive recognition to outstanding Employees and Non-Executive Directors who have contributed to\nthe growth of the Group. The Scheme will give Participants an opportunity to have a personal\nequity interest in the Company at no direct cost to its profitability and will help to achieve the\nfollowing positive objectives:\n(a)\nto motivate each Participant to optimise his performance standards and efficiency and to\nmaintain a high level of contribution to the Group;\n(b)\nto retain key employees and Directors of the Group whose contributions are essential to the\nlong-term growth and profitability of the Group;\n(c)\nto instil loyalty to, and a stronger identification by the Participants with the long-term\nprosperity of, the Company;\n(d)\nto attract potential employees with relevant skills to contribute to the Group and to create\nvalue for the Shareholders of the Company; and\n(e)\nto align the interests of the Participants with the interests of the Shareholders.\n4.\nELIGIBILITY OF PARTICIPANTS \n4.1\nEmployees and Non-Executive Directors (other than Controlling Shareholders and their Associates)\nare eligible to participate in the Scheme.\n4.2\nThe Employee’s eligibility to participate in the Scheme shall be at the absolute discretion of the\nCommittee, which would be exercised judiciously, and in addition, such person must:\n(a)\nbe confirmed in his/her employment with the Group and not be on probation and have been\nin the full time service of the Group for at least 12 months on or prior to the Date of Grant;\n(b)\nhave attained the age of twenty-one (21) years on or before the Date of Grant; and\n(c)\nnot be an undischarged bankrupt and must not have entered into a composition with his\ncreditors.\n4.3\nEmployees and Non-Executive Directors who are Controlling Shareholders and their Associates\nare not eligible to participate in the Scheme.\n4.4\nSubject to the Act and any requirement of the Stock Exchange, the terms of eligibility for\nparticipation in the Scheme may be amended from time to time at the absolute discretion of the\nCommittee, which would be exercised judiciously.\n4.5\nParticipants who participate in the Scheme are eligible to participate in other schemes\nimplemented by other companies, if approved by the Committee.\n5.\nMAXIMUM ENTITLEMENT\nSubject to Rule 4 and Rule 11, the aggregate number of Shares in respect of which Options may\nbe offered to a Grantee for subscription in accordance with the Scheme shall be determined at the\ndiscretion of the Committee, which would be exercised judiciously, who shall take into account\ncriteria such as the rank within the Group, performance, years of service and potential for future\ndevelopment of the Grantee.\nAPPENDIX F – RULES OF THE UNI-ASIA SHARE OPTION SCHEME\nF-4\n\n\n6.\nGRANT AND ACCEPTANCE OF OPTIONS\n6.1\nSubject as provided in Rule 11, the Committee may grant Options at any time during the period\nwhen the Scheme is in force, except that no Options may be offered and/or granted during the\nperiod of 30 days immediately preceding the date the Company announces its interim and/or final\nresults (whichever the case may be). In the event that an announcement on any matter of an\nexceptional nature involving unpublished price sensitive information is made, Options may only be\ngranted on or after the third Market Day from the date on which such announcement is released.\n6.2\nThe Letter of Offer to grant an Option shall be in, or substantially in, the form set out in Schedule\nA, subject to such modification as the Committee may from time to time determine.\n6.3\nAn Option shall be personal to the person to whom it is granted and shall not be transferred (other\nthan to a Participant’s personal representative on the death of that Participant), charged, assigned,\npledged or otherwise disposed of, in whole or in part, except with the prior approval of the\nCommittee.\n6.4\nThe grant of an Option under this Rule 6 shall be accepted by the Grantee within thirty (30) days\nfrom the Date of Grant of that Option and, in any event, not later than 5.00 p.m. on the 30th day\nfrom such Date of Grant by completing, signing and returning the Acceptance Form in or\nsubstantially in the form set out in Schedule B, subject to such modification as the Committee may\nfrom time to time determine, accompanied by payment of US$1.00 as consideration.\n6.5\nIf a grant of an Option is not accepted in the manner as provided in Rule 6.4, such offer shall, upon\nthe expiry of the thirty (30) day period, automatically lapse and become null, void and of no effect.\n7.\nEXERCISE PRICE\n7.1\nSubject to any adjustment pursuant to Rule 12, the Exercise Price for each Share in respect of\nwhich an Option is exercisable shall be determined by the Committee, in its absolute discretion, on\nthe Date of Grant, at:\n(a)\na price equal to the Market Price; or\n(b)\na price which is set at a discount to the Market Price, provided that:\n(i)\nthe maximum discount shall not exceed twenty (20) per cent. of the Market Price; and\n(ii)\nthe Shareholders in general meeting shall have authorised, in a separate resolution,\nthe making of offers and grants of Options under the Scheme at a discount not\nexceeding the maximum discount as aforesaid.\nThe Exercise Price shall in no event be less than the nominal value of a Share.\n7.2\nIn making any determination under Rule 7.1(b) on whether to give a discount and the quantum of\nsuch discount, the Committee shall be at liberty to take into consideration such criteria as the\nCommittee may, at its absolute discretion, deem appropriate, including but not limited to:\n(a)\nthe performance of the Company and its Subsidiaries, as the case may be, taking into\naccount financial parameters such as net profit after tax, return on equity and earnings\ngrowth;\n(b)\nthe years of service and individual performance of the Participant;\n(c)\nthe contribution of the Participant to the success and development of the Company and/or\nthe Group; and\n(d)\nthe prevailing market conditions.\nAPPENDIX F – RULES OF THE UNI-ASIA SHARE OPTION SCHEME\nF-5\n\n\n8.\nRIGHTS TO EXERCISE OPTIONS\n8.1\nOptions granted with the Exercise Price set at Market Price shall only be exercisable, in whole or in\npart (provided that an Option may be exercised in part only in respect of 1000 Shares or any\nmultiple thereof), at any time, by a Participant after the first anniversary of the Date of Grant of that\nOption, Provided always that the Options (other than Options granted to Non-Executive Directors)\nshall be exercised before the tenth anniversary of the relevant Date of Grant and Options granted\nto Non-Executive Directors shall be exercised before the fifth anniversary of the relevant Date of\nGrant, or such earlier date as may be determined by the Committee, failing which all unexercised\nOptions shall immediately lapse and become null and void and a Participant shall have no claim\nagainst the Company.\n8.1\nOptions granted with the Exercise Price set at a discount to Market Price shall only be exercisable,\nin whole or in part (provided that an Option may be exercised in part only in respect of 1000\nShares or any multiple thereof), at any time, by a Participant after the second anniversary of the\nDate of Grant of that Option, Provided always that the Options (other than Options granted to Non-\nExecutive Directors and Independent Directors) shall be exercised before the tenth anniversary of\nthe relevant Date of Grant and Options granted to Non-Executive Directors and Independent\nDirectors shall be exercised before the fifth anniversary of the relevant Date of Grant, or such\nearlier date as may be determined by the Committee, failing which all unexercised Options shall\nimmediately lapse and become null and void and a Participant shall have no claim against the\nCompany.\n8.3\nAn Option shall, to the extent unexercised, immediately lapse without any claim whatsoever against\nthe Company:\n(a)\nin the event of misconduct on the part of the Participant as determined by the Committee in\nits discretion;\n(b)\nsubject to Rule 8.4(b), where the Participant ceases at any time to be in the employment of\nany of our Group, for any reason whatsoever;\n(c)\nthe bankruptcy of the Participant or the happening of any other event which results in his\nbeing deprived of the legal or beneficial ownership of an Option; or\n(d)\nthe company by which he is employed ceasing to be a company within our Group, or the\nundertaking or part of the undertaking of such company being transferred otherwise than to\nanother company within our Group.\nFor the purpose of Rule 8.3(b), the Participant shall be deemed to have ceased to be so employed\nas of the last day of his employment.\nFor avoidance of doubt, no Option shall lapse pursuant to Rule 8.3(b) in the event of any transfer of\nemployment of a Participant between the Group.\n8.4\nIn any of the following events, namely:\n(a)\nwhere the Participant ceases at any time to be in the employment of any of our Group or, in\nthe case of a Non-Executive Director, ceases at any time to be a Director, by reason of:\n(i)\nill health, injury or disability (in each case, evidenced to the satisfaction of the\nCommittee);\n(ii)\nredundancy;\n(iii)\nretirement at or after the legal retirement age; or\n(iv)\nretirement before the legal retirement age with the consent of the Committee; or\nAPPENDIX F – RULES OF THE UNI-ASIA SHARE OPTION SCHEME\nF-6\n\n\n(b)\nany other event approved in writing by the Committee, \nthe Participant may exercise any Option:\n(i)\nin the case where the cessation of employment or cessation to be a director, as the\ncase may be, occurs after the first day of the Exercise Period in respect of such\nOption, within the period of eighteen (18) months after the date of such cessation of\nemployment or such cessation to be a director, as the case may be, or before the\nexpiry of the Exercise Period in respect of that Option, whichever is earlier, and upon\nexpiry of such period the Option shall lapse; and\n(ii)\nin the case where the cessation of employment or cessation to be a director, as the\ncase may be, occurs before the first day of the Exercise Period in respect of such\nOption, within the period of eighteen (18) months after the first day of the Exercise\nPeriod in respect of that Option, and upon expiry of such period the Option shall\nlapse.\n8.5\nIf a Participant dies, whether or not while still in the employment of the Group or, in the case of a\nNon-Executive Director, still in the appointment as a Director, and at the date of his death holds\nany unexercised Option, such Option shall continue to be exercisable by the duly appointed\npersonal representatives of the Participant:\n(a)\nin the case where death occurs after the first day of the Exercise Period in respect of such\nOption, within the period of eighteen (18) months after the date of such cessation of\nemployment or before the expiry of the Exercise Period in respect of that Option, whichever\nis earlier, and upon expiry of such period the Option shall lapse; and\n(b)\nin the case where the death occurs before the first day of the Exercise Period in respect of\nsuch Option, within the period of eighteen (18) months after the first day of the Exercise\nPeriod in respect of that Option, and upon expiry of such period, the Option shall lapse.\n9.\nTAKE-OVER AND WINDING-UP OF THE COMPANY\n9.1\nNotwithstanding Rule 8 but subject to Rule 9.5, in the event of a take-over being made for the\nShares, a Participant shall be entitled to exercise any Option held by him and as yet unexercised,\nin respect of such number of Shares comprised in that Option as may be determined by the\nCommittee in its absolute discretion, in the period commencing on the date on which such offer is\nmade or, if such offer is conditional, the date on which such offer becomes or is declared\nunconditional, as the case may be, and ending on the earlier of:\n(a)\nthe expiry of six (6) months thereafter, unless prior to the expiry of such six-month period, at\nthe recommendation of the officer and with the approvals of the Committee and the Stock\nExchange, such expiry date is extended to a later date (in either case, being a date falling\nnot later than the expiry of the Exercise Period relating thereto); or\n(b)\nthe date of expiry of the Exercise Period relating thereto, \nwhereupon the Option then remaining unexercised shall lapse.\nProvided that if during such period, the offeror becomes entitled or bound to exercise rights of\ncompulsory acquisition under the provisions of the Act and, being entitled to do so, gives notice to\nthe Participants that it intends to exercise such rights on a specified date, the Option shall remain\nexercisable by the Participant until the expiry of such specified date or the expiry of the Exercise\nPeriod relating thereto, whichever is earlier. Any Option not so exercised shall lapse provided that\nthe rights of acquisition or obligations to acquire shall have been exercised or performed, as the\ncase may be. If such rights or obligations have not been exercised or performed, the Option shall,\nnotwithstanding Rule 8, remain exercisable until the expiry of the Exercise Period relating thereto.\nAPPENDIX F – RULES OF THE UNI-ASIA SHARE OPTION SCHEME\nF-7\n\n\n9.2\nIf under any applicable laws, the court sanctions a compromise or arrangement proposed for the\npurposes of, or in connection with, a scheme for the reconstruction of the Company or its\namalgamation with another company or companies, each Participant shall be entitled,\nnotwithstanding Rule 8 but subject to Rule 9.5, to exercise any Option then held by him, in respect\nof such number of Shares comprised in that Option as may be determined by the Committee in its\nabsolute discretion, during the period commencing on the date upon which the compromise or\narrangement is sanctioned by the court and ending either on the expiry of 60 days thereafter or the\ndate upon which the compromise or arrangement becomes effective, whichever is later (but not\nafter the expiry of the Exercise Period relating thereto), whereupon the Option shall lapse and\nbecome null and void.\n9.3\nIf an order is made for the winding-up of the Company on the basis of its insolvency, all Options, to\nthe extent unexercised, shall lapse and become null and void.\n9.4\nIn the event a notice is given by the Company to its members to convene a general meeting for the\npurposes of considering and, if thought fit, approving a resolution to voluntarily wind-up the\nCompany, the Company shall on the same date as or soon after it dispatches such notice to each\nmember of the Company give notice thereof to all Participants (together with a notice of the\nexistence of the provision of this Rule 9.4) and thereupon, each Participant (or his personal\nrepresentative) shall be entitled to exercise all or any of his Options at any time not later than two\n(2) Business Days prior to the proposed general meeting of the Company by giving notice in writing\nto the Company, accompanied by a remittance for the Aggregate Subscription Cost whereupon the\nCompany shall as soon as possible and in any event, no later than the Business Day immediately\nprior to the date of the proposed general meeting referred to above, allot the relevant Shares to the\nParticipant credited as fully paid.\n9.5\nIf in connection with the making of a general offer referred to in Rule 9.1 or the scheme referred to\nin Rule 9.2 or the winding-up referred to in Rule 9.4, arrangements are made (which are confirmed\nin writing by the Auditors, acting only as experts and not as arbitrators, to be fair and reasonable)\nfor the compensation of Participants, whether by the continuation of their Options or the payment of\ncash or the grant of other options or otherwise, a Participant holding an Option, as yet not\nexercised, may not, at the discretion of the Committee, be permitted to exercise that Option as\nprovided for in this Rule 9.\n9.6\nTo the extent that an Option is not exercised within the periods referred to in this Rule 9, it shall\nlapse and become null and void.\n10.\nEXERCISE OF OPTIONS, ALLOTMENT AND LISTING OF SHARES\n10.1\nSubject to Rules 8.1, an Option may be exercised, in whole or in part, by a Participant giving notice\nin writing to the Company in or substantially in the form set out in Schedule C, subject to such\nmodification as the Committee may from time to time determine.\nSuch notice must be\naccompanied by payment in cash for the Aggregate Subscription Cost in respect of the Shares for\nwhich that Option is exercised and any other documentation the Committee may require. An\nOption shall be deemed to be exercised upon receipt by the Company of the said notice, duly\ncompleted, and the Aggregate Subscription Cost. All payments made shall be made by cheque,\ncashiers’ order, banker’s draft or postal order made out in favour of the Company or such other\nmode of payment as may be acceptable to the Company.\n10.2\nSubject to such consents or other required action of any competent authority under any regulations\nor enactment for the time being in force as may be necessary and subject to the compliance with\nthe terms of the Scheme and the Memorandum of Association and Articles of the Company, the\nCompany shall, within ten (10) Market Days after the exercise of an Option, allot the relevant\nShares and despatch to CDP the relevant share certificates by ordinary post or such other mode\nas the Committee may deem fit.\nThe Company shall, as soon as practicable after such allotment, apply to the Stock Exchange for\npermission to deal in and for quotation of such Shares, if necessary.\nAPPENDIX F – RULES OF THE UNI-ASIA SHARE OPTION SCHEME\nF-8\n\n\n10.3\nShares which are allotted on the exercise of an Option by a Participant shall be issued in the name\nof CDP to the credit of the securities account of that Participant maintained with CDP\n, the securities\nsub-account of that Participant maintained with a Depository Agent or (where applicable) the CPF\ninvestment account maintained with a CPF agent bank.\n10.4\nShares allotted and issued on exercise of an Option shall:\n(a)\nbe subject to all the provisions of the Memorandum of Association and Articles of the\nCompany; and\n(b)\nrank in full for all entitlements, including dividends or other distributions declared or\nrecommended in respect of the then existing Shares, the Record Date for which is on or\nafter the relevant date upon which such exercise occurred, and shall in all other respects\nrank pari passu with other existing Shares then in issue.\n“Record Date” means the date fixed by the Company for the purposes of determining entitlements\nto dividends or other distributions to or rights of holders of Shares.\n10.5\nThe Company shall keep available sufficient unissued Shares to satisfy the full exercise of all\nOptions for the time being remaining capable of being exercised.\n11.\nLIMITATION ON THE SIZE OF THE SCHEME\nThe aggregate nominal amount of new Shares over which the Committee may grant Options on\nany date, when added to the nominal amount of new Shares issued and issuable in respect of (a)\nall Options granted under the Scheme, and (b) all awards granted under any other share option,\nshare incentive, performance share or restricted share plan implemented by the Company and for\nthe time being in force, shall not exceed fifteen (15) per cent. of the issued share capital of the\nCompany on the day preceding that date.\n12.\nADJUSTMENT EVENTS \n12.1\nIf a variation in the issued ordinary share capital of the Company (whether by way of a\ncapitalisation of profits or reserves or rights issue, reduction, subdivision, consolidation, distribution\nor otherwise) shall take place, then:\n(a)\nthe Exercise Price of the Shares, the nominal amount, class and/or number of Shares\ncomprised in an Option to the extent unexercised; and/or\n(b)\nthe nominal amount, class and/or number of Shares over which Options may be granted\nunder the Scheme,\nshall be adjusted in such manner as the Committee may determine to be appropriate.\n12.2\nUnless the Committee considers an adjustment to be appropriate, the following (whether singly or\nin combination) shall not be regarded as events requiring adjustment:\n(a)\nany issue of securities as consideration for an acquisition or a private placement of securities\nor pursuant to any initial public offering of the Shares on the SGX-ST;\n(b)\nany increase in the number of issued Shares as a consequence of the exercise of options or\nother convertibles issued from time to time by the Company entitling the holders thereof to\nacquire new Shares in the capital of the Company (including the exercise of any Options\ngranted pursuant to the Scheme and any previous or future employee share option\nscheme(s));\nAPPENDIX F – RULES OF THE UNI-ASIA SHARE OPTION SCHEME\nF-9\n\n\n(c)\nany issue of Shares pursuant to any scrip dividend scheme for the time being of the\nCompany; and\n(d)\nany reduction in the number of issued Shares as a result of the cancellation of issued\nShares purchased by the Company by way of market purchase(s) effected on the SGX-ST\non which the Company is listed pursuant to a share purchase mandate (or any renewal\nthereof) given by the Shareholders of the Company in general meeting and for the time\nbeing in force.\n12.3\nNotwithstanding the provisions of Rule 12.1:\n(a)\nno such adjustment shall be made if as a result:\n(i)\nthe Exercise Price shall fall below the nominal amount of a Share and if such\nadjustment would, but for this paragraph (a), result in the Exercise Price being less\nthan the nominal amount of a Share, the Exercise Price payable shall be the nominal\namount of a Share; or\n(ii)\nthe Participant receives a benefit that a Shareholder does not receive; and\n(b)\nany adjustment (except in relation to a capitalisation issue) must be confirmed in writing by\nthe Auditors (acting only as experts and not as arbitrators) to be in their opinion, fair and\nreasonable.\n12.4\nUpon any adjustment required to be made pursuant to this Rule 12, the Company shall notify the\nParticipant (or his duly appointed personal representatives where applicable) in writing and deliver\nto him (or his duly appointed personal representatives where applicable) a statement setting forth\nthe Exercise Price thereafter in effect and the nominal value, class and/or number of Shares\nthereafter to be issued on the exercise of the Option. Any adjustment shall take effect upon such\nwritten notification being given.\n13.\nADMINISTRATION OF THE SCHEME\n13.1\nThe Scheme shall be administered by the Committee in its absolute discretion with such powers\nand duties as are conferred on it by the Board, provided that no member of the Committee shall\nparticipate in any deliberation or decision in respect of Options to be granted to him or held by him.\nThe Committee has powers to determine, inter alia, the following:\n(a)\npersons to be granted Options;\n(b)\nnumber of Options to be offered; and\n(c)\nrecommendations for modifications to the Scheme.\n13.2\nThe Committee shall also have the power, from time to time, to make and vary such regulations\n(not being inconsistent with the Scheme) for the implementation and administration of the Scheme\nas they think fit. Any matter pertaining or pursuant to the Scheme and any dispute and uncertainty\nas to the interpretation of the Scheme, any rule, regulation or procedure thereunder or any rights\nunder the Scheme shall be determined by the Committee.\n13.3\nNeither the Scheme nor the grant of Options under the Scheme shall impose on the Company or\nthe Committee any liability whatsoever in connection with:\n(a)\nthe lapsing or early expiry of any Options pursuant to any provision of the Scheme;\n(b)\nthe failure or refusal by the Committee to exercise, or the exercise by the Committee of, any\ndiscretion under the Scheme; and/or\nAPPENDIX F – RULES OF THE UNI-ASIA SHARE OPTION SCHEME\nF-10\n\n\n(c)\nany decision or determination of the Committee made pursuant to any provision of the\nScheme.\nAny decision or determination of the Committee made pursuant to any provision of the Scheme\n(other than a matter to be certified by the Auditors) shall be final, binding and conclusive.\n14.\nNOTICES\n14.1\nAny notice required to be given by a Participant to the Company shall be sent or made to the\nprincipal place of business of the Company or such other addresses (including electronic mail\naddresses) or facsimile number, and marked for the attention of the Committee, as may be notified\nby the Company to him in writing.\n14.2 Any notices or documents required to be given to a Participant or any correspondence to be made\nbetween the Company and the Participant shall be given or made by the Committee (or such\nperson(s) as it may from time to time direct) on behalf of the Company and shall be delivered to\nhim by hand or sent to him at his home address, electronic mail address or facsimile number\naccording to the records of the Company or the last known address, electronic mail address or\nfacsimile number of the Participant.\n14.3\nAny notice or other communication from a Participant to the Company shall be irrevocable, and\nshall not be effective until received by the Company. Any other notice or communication from the\nCompany to a Participant shall be deemed to be received by that Participant, when left at the\naddress specified in Rule 14.2 or, if sent by post, on the day following the date of posting or, if sent\nby electronic mail or facsimile transmission, on the day of despatch.\n15.\nMODIFICATIONS TO THE SCHEME\n15.1\nAny or all the provisions of the Scheme may be modified and/or altered at any time and from time\nto time by resolution of the Committee, except that:\n(a)\nno modification or alteration shall alter adversely the rights attaching to any Option granted\nprior to such modification or alteration except with the consent in writing of such number of\nParticipants who, if they exercised their Options in full, would thereby become entitled to not\nless than three-quarters in nominal amount of all the Shares which would fall to be allotted\nupon exercise in full of all outstanding Options;\n(b)\nany modification or alteration which would be to the advantage of Participants under the\nScheme shall be subject to the prior approval of the Shareholders in general meeting; and\n(c)\nno modification or alteration shall be made without the prior approval of the Stock Exchange\nand such other regulatory authorities as may be necessary.\n15.2\nNotwithstanding anything to the contrary contained in Rule 15.1, the Committee may at any time by\nresolution (and without other formality, save for the prior approval of the Stock Exchange) amend or\nalter the Scheme in any way to the extent necessary to cause the Scheme to comply with any\nstatutory provision or the provision or the regulations of any regulatory or other relevant authority or\nbody (including the Stock Exchange).\nWritten notice of any modification or alteration made in accordance with this Rule 15 shall be given\nto all Participants.\nAPPENDIX F – RULES OF THE UNI-ASIA SHARE OPTION SCHEME\nF-11\n\n\n16.\nTERMS OF EMPLOYMENT UNAFFECTED\nThe terms of employment of a Participant shall not be affected by his participation in the Scheme,\nwhich shall neither form part of such terms nor entitle him to take into account such participation in\ncalculating any compensation or damages on the termination of his employment for any reason.\n17.\nDURATION OF THE SCHEME\n17.1\nThe Scheme shall continue to be in force at the discretion of the Committee, subject to a maximum\nperiod of ten (10) years commencing on the Adoption Date, provided always that the Scheme may\ncontinue beyond the above stipulated period with the approval of the Shareholders by ordinary\nresolution in general meeting and of any relevant authorities which may then be required.\n17.2\nThe Scheme may be terminated at any time by the Committee, at the discretion of the Committee,\nor by resolution of the Company in general meeting, subject to all relevant approvals which may be\nrequired and if the Scheme is so terminated, no further Options shall be offered by the Company\nhereunder.\n17.3\nThe termination of the Scheme shall not affect Options which have been granted and accepted as\nprovided in Rule 6.4, whether such Options have been exercised (whether fully or partially) or not.\n18.\nTAXES\nAll taxes (including income tax) arising from the exercise of any Option granted to any Participant\nunder the Scheme shall be borne by that Participant.\n19.\nCOSTS AND EXPENSES OF THE SCHEME\n19.1\nEach Participant shall be responsible for all fees of CDP relating to or in connection with the issue\nand allotment of any Shares pursuant to the exercise of any Option in CDP’s name, the deposit of\nshare certificate(s) with CDP\n, the Participant’s securities account with CDP\n, or the Participant’s\nsecurities sub-account with a Depository Agent or (where applicable) the CPF investment account\nwith a CPF agent bank.\n19.2\nSave for the taxes referred to in Rule 18 and such other costs and expenses expressly provided in\nthe Scheme to be payable by the Participants, all fees, costs and expenses incurred by the\nCompany in relation to the Scheme including but not limited to the fees, costs and expenses\nrelating to the allotment and issue of Shares pursuant to the exercise of any Option shall be borne\nby the Company.\n20.\nDISCLAIMER OF LIABILITY\nNotwithstanding any provisions herein contained, the Committee and the Company shall not under\nany circumstances be held liable for any costs, losses, expenses and damages whatsoever and\nhowsoever arising in any event, including but not limited to the Company’s delay in issuing the\nShares or applying for or procuring the listing of the Shares on the Stock Exchange in accordance\nwith Rule 10.2.\n21.\nDISCLOSURE IN ANNUAL REPORT\nThe following disclosures (as applicable) will be made by the Company in its annual report for so\nlong as the Scheme continues in operation:\n(a)\nthe names of the members of the Committee administering the Scheme;\nAPPENDIX F – RULES OF THE UNI-ASIA SHARE OPTION SCHEME\nF-12\n\n\n(b)\nthe information in respect of Options granted to the following Participants in the table set out\nbelow:\n(i)\nDirectors of the Company; and\n(ii)\nParticipants, other than those in (i) above, who receive five (5) per cent. or more of the\ntotal number of Options available under the Scheme.\nName of\nNumber of\nAggregate\nAggregate\nAggregate\nParticipant\nShares\nnumber of\nnumber of\nnumber of\ncomprised\nShares\nShares\nShares\nin Options\ncomprised\ncomprised\ncomprised\ngranted\nin Options\nin Options\nin Options\nduring\ngranted\nexercised\noutstanding\nfinancial\nsince\nsince\nas at end of\nyear under\ncommencement\ncommencement\nfinancial year\nreview\nof Scheme\nof Scheme\nunder review\n(including\nto end of\nto end of\nterms)\nfinancial year\nfinancial year\nunder review\nunder review\n(c)\nthe number of Incentive Options during the financial year under review in the following\nbands:\nDiscount to the\nAggregate number of\nProportion of\nMarket Price\nIncentive Options\nIncentive Options\n%\ngranted during the\nto Market Price Options\nfinancial year under review\ngranted during the\nfinancial year under review\n0-10\n11-20\n22.\nABSTENTION FROM VOTING\nParticipants who are Shareholders are to abstain from voting on any Shareholders’ resolution\nrelating to the Scheme.\n23.\nDISPUTES\nAny disputes or differences of any nature arising hereunder shall be referred to the Committee and\nits decision shall be final and binding in all respects.\n24.\nGOVERNING LAW\nThe Scheme shall be governed by, and construed in accordance with, the laws of Singapore. The\nParticipants, by accepting Options in accordance with the Scheme, and the Company submit to the\nexclusive jurisdiction of the courts of Singapore.\nAPPENDIX F – RULES OF THE UNI-ASIA SHARE OPTION SCHEME\nF-13\n\n\nSchedule A\nUNI-ASIA SHARE OPTION SCHEME\nLETTER OF OFFER\nSerial No:\nDate:\nTo:\n[Name]\n[Designation]\n[Address]\nPrivate and Confidential\nDear Sir/Madam,\n1.\nWe have the pleasure of informing you that, pursuant to the Uni-Asia Share Option Scheme\n(“Scheme”), you have been nominated to participate in the Scheme by the Committee (the\n“Committee”) appointed by the Board of Directors of Uni-Asia Finance Corporation (the “Company”)\nto administer the Scheme. Terms as defined in the Scheme shall have the same meaning when\nused in this letter.\n2.\nAccordingly, in consideration of the payment of a sum of US$1.00, an offer is hereby made to grant\nyou an option (the “Option”), to subscribe for and be allotted \nShares at the price\nof S$ \nfor each Share.\n3.\nThe Option is personal to you and shall not be transferred, charged, pledged, assigned or\notherwise disposed of by you, in whole or in part, except with the prior approval of the Committee.\n4.\nThe Option shall be subject to the terms of the Scheme, a copy of which is available for inspection\nat the business address of the Company.\n5.\nIf you wish to accept the offer of the Option on the terms of this letter, please sign and return the\nenclosed Acceptance Form with a sum of US$1.00 not later than 5.00 p.m. on \n,\nfailing which this offer will lapse.\nYours faithfully,\nFor and on behalf of\nUni-Asia Finance Corporation\nName:\nDesignation:\nAPPENDIX F – RULES OF THE UNI-ASIA SHARE OPTION SCHEME\nF-14\n\n\nAPPENDIX F – RULES OF THE UNI-ASIA SHARE OPTION SCHEME\nF-15\nSchedule B\nUNI-ASIA SHARE OPTION SCHEME\nACCEPTANCE FORM\nSerial No:\nDate:\nTo:\nThe Committee,\nUni-Asia Share Option Scheme\nUni-Asia Finance Corporation\nClosing Date for Acceptance of Offer:\nNumber of Shares Offered:\nExercise Price for each Share: S$\nTotal Amount Payable:\nI have read your Letter of Offer dated \nand agree to be bound by the terms of the Letter\nof Offer and the Scheme referred to therein. Terms defined in your Letter of Offer shall have the same\nmeanings when used in this Acceptance Form.\nI hereby accept the Option to subscribe for \nShares at S$\nfor each Share. I\nenclose cash for US$1.00 in payment for the purchase of the Option/I authorise my employer to deduct\nthe sum of US$1.00 from my salary in payment for the purchase of the Option.\nI understand that I am not obliged to exercise the Option.\nI confirm that my acceptance of the Option will not result in the contravention of any applicable law or\nregulation in relation to the ownership of shares in the Company or options to subscribe for such shares.\nI agree to keep all information pertaining to the grant of the Option to me confidential.\nI further acknowledge that you have not made any representation to induce me to accept the offer and\nthat the terms of the Letter of Offer and this Acceptance Form constitute the entire agreement between\nus relating to the offer.\n\n\nPlease print in block letters\nName in full\n:\nDesignation\n:\nAddress\n:\nNationality\n:\n*NRIC/Passport No.\n:\nSignature\n:\nDate\n:\nNote:\n*\nDelete accordingly\nAPPENDIX F – RULES OF THE UNI-ASIA SHARE OPTION SCHEME\nF-16\n\n\nAPPENDIX F – RULES OF THE UNI-ASIA SHARE OPTION SCHEME\nF-17\nSchedule C\nUNI-ASIA SHARE OPTION SCHEME\nFORM OF EXERCISE OF OPTION\nTotal number of ordinary shares of US$0.16 each \n(the “Shares”) offered at S$\nfor each\nShare (the “Exercise Price”) under the Scheme\non \n(Date of Grant)\n:\nNumber of Shares previously allotted thereunder\n:\nOutstanding balance of Shares to be allotted\nthereunder\n:\nNumber of Shares now to be subscribed\n:\nTo:\nThe Committee,\nUni-Asia Share Option Scheme,\nUni-Asia Finance Corporation\n1.\nPursuant to your Letter of Offer dated \nand my acceptance thereof, I hereby\nexercise the Option to subscribe for \nShares in Uni-Asia Finance Corporation\n(the “Company”) at S$\nfor each Share.\n2.\nI enclose a *cheque/cashier’s order/banker’s draft/postal order no.\nfor\nby way of subscription for the total number of the said Shares.\n3.\nI agree to subscribe for the said Shares subject to the terms of the Letter of Offer, the Uni-Asia\nShare Option Scheme and the Memorandum of Association and Articles of the Company.\n4.\nI declare that I am subscribing for the said Shares for myself and not as a nominee for any other\nperson.\n5.\nI request the Company to allot and issue the Shares in the name of The Central Depository (Pte)\nLimited (“CDP”) for credit of my *Securities Account with CDP/Sub-Account with the Depository\nAgent/CPF investment account with my Agent Bank specified below and I hereby agree to bear\nsuch fees or other charges as may be imposed by CDP in respect thereof.\n\n\nPlease print in block letters\nName in full\n:\nDesignation\n:\nAddress\n:\nNationality\n:\n*NRIC/Passport No.\n:\n*Direct Securities\nAccount No.\n:\nOR\n*Sub-Account No.\n:\nName of Depository\nAgent\n:\nOR\n*CPF Investment\nAccount No.\n:\nName of Agent Bank\n:\nSignature\n:\nDate\n:\nNote:\n*\nDelete accordingly\nAPPENDIX F – RULES OF THE UNI-ASIA SHARE OPTION SCHEME\nF-18\n\n\nApplications are invited for the subscription of the New Shares at the Invitation Price, subject to the\nfollowing terms and conditions:\n1.\nYOUR APPLICATION MUST BE MADE IN LOTS OF 1,000 NEW SHARES OR INTEGRAL\nMULTIPLES THEREOF. YOUR APPLICATION FOR ANY OTHER NUMBER OF NEW SHARES\nWILL BE REJECTED.\n2.\nYour application for the Offer Shares may be made by way of the printed WHITE Offer Shares\nApplication Forms or by way of Automated Teller Machine (“ATMs”) belonging to the Participating\nBanks (“ATM Electronic Applications”) or the Internet Banking (“IB”) websites of the relevant\nParticipating Banks (“Internet Electronic Applications”).\nApplication for Internet Placement Shares (also referred to as “Internet Electronic Application”) may\nonly be made by way of an Internet Electronic Application through the website of DBS Vickers\nSecurities Online (Singapore) Pte Ltd (“DBS Vickers Online”) at “www.dbsvonline.com” if you have\nan Internet trading account with DBS Vickers Online. Internet Electronic Applications, both through\nthe IB websites of the relevant Participating Banks and the website of DBS Vickers Online, shall,\ntogether with ATM Electronic Applications, be referred to as “Electronic Applications”.\nApplications for Placement Shares (other than Internet Placement Shares and Reserved Shares)\nmay only be made by way of the printed BLUE Placement Shares Application Forms or in such\nother forms of application as the Manager deems appropriate.\nApplication for Reserved Shares may only be made by way of the printed PINK Reserved Shares\nApplication Forms.\nYou may not use your CPF funds to apply for the New Shares.\n3.\nYou (being other than an approved nominee company) are allowed to submit ONLY one\napplication in your own name for:\n(a) \nthe Offer Shares by any one of the following:\n\u0002\nOffer Shares Application Form;\n\u0002\nATM Electronic Application; or\n\u0002\nInternet Electronic Application; or\n(b) \nthe Placement Shares (other than the Reserved Shares) by any one of the following:\n\u0002\nInternet Electronic Application;\n\u0002\nPlacement Shares Application Form; or\n\u0002\nin such other forms of application as the Manager deems appropriate.\nIf more than one application is submitted for either the Offer Shares or Placement Shares\n(other than the Reserved Shares), such separate applications shall be deemed to be\nmultiple applications and shall be rejected.\nIf you have made an application for the Placement Shares (other than the Reserved Shares),\nyou should not make any application for the Offer Shares and vice versa. Such separate\napplications shall be deemed to be multiple applications and shall be rejected.\nG-1\nAPPENDIX G – TERMS, CONDITIONS AND PROCEDURES FOR\nAPPLICATION AND ACCEPTANCE\n\n\nJoint or multiple applications will be rejected. Persons submitting or procuring submissions of\nmultiple share applications (whether for Offer Shares, Placement Shares or both Offer Shares and\nPlacement Shares) may be deemed to have committed an offence under the Penal Code (Chapter\n224) of Singapore and the Securities and Futures Act (Chapter 289) of Singapore and such\napplications may be referred to the relevant authorities for investigation. Multiple applications or\nthose appearing to be or suspected of being multiple applications (other than as provided herein)\nwill be liable to be rejected at the discretion of our Company.\nAn applicant who has made an application for Reserved Shares using a Reserved Shares\nApplication Form may:\n(a) \nsubmit one separate application for Offer Shares in his own name either by way of an Offer\nShares Application Form or through an Electronic Application; or\n(b)\nsubmit one separate application for Placement Shares (other than the Reserved Shares) by\nway of a Placement Shares Application Form or one separate application by way of an\nInternet Electronic Application through the website of DBS Vickers Online or such other\nforms of application as the Manager deems appropriate, \nprovided he adheres to the terms and conditions of this Prospectus. Such separate applications will\nnot be treated as multiple applications.\n4.\nWe will not accept applications from any person under the age of 21 years, undischarged\nbankrupts, sole-proprietorships, partnerships, non-corporate bodies, joint Securities Account\nholders of CDP and applicants whose addresses (furnished in their printed Application Forms or in\nsuch other forms of application as the Manager deems appropriate or, in the case of Electronic\nApplications, contained in the records of the relevant Participating Banks or DBS Vickers Online, as\nthe case may be) bear post office box numbers. No person acting or purporting to act on behalf of\na deceased person is allowed to apply under the Securities Account with CDP in the deceased\nname at the time of application.\nIn addition, applicants who wish to subscribe for the Placement Shares through the website of DBS\nVickers Online:\n(a)\nmust not be corporations, sole-proprietorships, partnerships, or any other business entities;\n(b)\nmust be over the age of 21 years;\n(c)\nmust not be undischarged bankrupts;\n(d)\nmust apply for the Placement Shares in Singapore;\n(e)\nmust have a mailing address in Singapore; and\n(f)\nmust be customers who maintain trading accounts with DBS Vickers Online.\n5.\nWe will not recognise the existence of a trust. Any application by a trustee or trustees must be\nmade in his/their own name(s) and without qualification or, where the application is made by way of\na printed Application Form by a nominee, in the name(s) of an approved nominee company or\napproved nominee companies after complying with paragraph 7 below.\n6.\nWE WILL ONLY ACCEPT NOMINEE APPLICATIONS FROM APPROVED NOMINEE\nCOMPANIES. Approved nominee companies are defined as banks, merchant banks, finance\ncompanies, insurance companies, licenced securities dealers in Singapore and nominee\ncompanies controlled by them. Applications made by nominees other than approved nominee\ncompanies will be rejected.\nG-2\nAPPENDIX G – TERMS, CONDITIONS AND PROCEDURES FOR\nAPPLICATION AND ACCEPTANCE\n\n\n7.\nIF YOU ARE NOT AN APPROVED NOMINEE COMPANY, YOU MUST MAINTAIN A SECURITIES\nACCOUNT WITH CDP IN YOUR OWN NAME AT THE TIME OF YOUR APPLICATION. If you do\nnot have an existing Securities Account with CDP in your own name at the time of application, your\napplication will be rejected (if you apply by way of an Application Form) or you will not be able to\ncomplete your Electronic Application (if you apply by way of an Electronic Application). If you have\nan existing Securities Account but fail to provide your Securities Account number or provide an\nincorrect Securities Account number in section B of the Application Form or in your Electronic\nApplication, as the case may be, your application is liable to be rejected. Subject to paragraph 8\nbelow, your application shall be rejected if your particulars such as name, NRIC/passport number,\nnationality, permanent residence status and CDP Securities Account number, provided in your\nApplication Form, or in the case of an Electronic Application, contained in the records of the\nrelevant Participating Bank or DBS Vickers Online at the time of your Electronic Application, as the\ncase may be, differ from those particulars in your Securities Account as maintained by CDP\n. If you\nhave more than one individual direct Securities Account with CDP\n, your application shall be\nrejected.\n8.\nIf your address as stated in the Application Form or, in the case of an Electronic\nApplication, contained in the records of the relevant Participating Bank or DBS Vickers\nOnline, as the case may be, is different from the address registered with CDP, you must\ninform CDP of your updated address promptly, failing which the notification letter on\nsuccessful allocation will be sent to your address last registered with CDP.\n9.\nOur Company reserves the right to reject any application which does not conform strictly to the\ninstructions set out in the Application Forms and this Prospectus (including the instructions set out\nin the Electronic Applications) or which does not comply with the instructions for Electronic\nApplications or with the terms and conditions of this Prospectus or, in the case of an application by\nway of an Application Form, which is illegible, incomplete, incorrectly completed or which is\naccompanied by an improperly drawn up or improper form of remittance. Our Company further\nreserves the right to treat as valid any applications not completed or submitted or effected in all\nrespects in accordance with the instructions set out in the Application Forms and this Prospectus\n(including the instructions set out in the Electronic Applications), and also to present for payment or\nother processes all remittances at any time after receipt and to have full access to all information\nrelating to, or deriving from, such remittances or the processing thereof.\n10.\nOur Company reserves the right to reject or to accept, in whole or in part, or to scale down or to\nballot any application, without assigning any reason therefor, and we will not entertain any enquiry\nand/or correspondence on our decision except in respect of applications which have been balloted\nbut subsequently rejected where the reasons for such rejection will be provided to the Applicant.\nThis right applies to applications made by way of Application Forms and by way of Electronic\nApplications. In deciding the basis of allotment, our Company will give due consideration to the\ndesirability of allotting the New Shares to a reasonable number of applicants with a view to\nestablishing an adequate market for the Shares.\n11.\nShare certificates will be registered in the name of CDP and will be forwarded only to CDP\n. It is\nexpected that CDP will send to you, at your own risk, within 15 Market Days after the close of the\nApplication List, a statement of account stating that your Securities Account has been credited with\nthe number of New Shares allotted to you. This will be the only acknowledgement of application\nmonies received and is not an acknowledgement by our Company. You irrevocably authorise CDP\nto complete and sign on your behalf as transferee or renounce any instrument of transfer and/or\nother documents required for the issue or transfer of the New Shares allotted to you. This\nauthorisation applies to applications made by way of printed Application Forms, or such other\nforms of application as the Manager deems appropriate and by way of Electronic Applications.\n12.\nThe New Shares may be reallocated between the Placement and the Offer at the discretion of the\nManager.\nG-3\nAPPENDIX G – TERMS, CONDITIONS AND PROCEDURES FOR\nAPPLICATION AND ACCEPTANCE\n\n\nIn the event of an under-subscription for the Reserved Shares as at the close of the Application\nList, the number of Reserved Shares under-subscribed shall be made available to satisfy\napplications for Placement Shares by way of Placement Shares Application Forms or in any other\nform of application as may be deemed appropriate by the Manager to the extent that there is an\nover-subscription for such Placement Shares as at the close of the Application List or to satisfy\nexcess applications for Offer Shares, to the extent that there is an over-subscription for Offer\nShares as at the close of the Application List.\nIn the event of an under-subscription for Internet Placement Shares to be applied for through the\nwebsite of DBS Vickers Online as at the close of the Application List, that number of Internet\nPlacement Shares under-subscribed shall be made available to satisfy applications for Placement\nShares by way of Placement Shares Application Forms to the extent that there is an over-\nsubscription for such Placement Shares as at the close of the Application List or to satisfy excess\napplications for Offer Shares, to the extent that there is an over-subscription for Offer Shares as at\nthe close of the Application List.\nIn the event of an over-subscription for Offer Shares as at the close of the Application List and/or\nPlacement Shares (including Internet Placement Shares) are fully subscribed or over-subscribed\nas at the close of the Application List, the successful applications for Offer Shares will be\ndetermined by ballot or otherwise as determined by our Directors, in consultation with the Manager,\nand approved by the SGX-ST.\n13.\nYou irrevocably authorise CDP to disclose the outcome of your application, including the number of\nNew Shares allotted to you pursuant to your application, to our Company, the Manager, the\nUnderwriter, the Placement Agent, DBS Vickers Online and any other parties so authorised by\nCDP\n, our Company and the Manager.\n14.\nAny reference to “you” or the “Applicant” in this section shall include an individual, a corporation, an\napproved nominee company or trustee applying for Offer Shares by way of an Offer Shares\nApplication Form or by way of an Electronic Application and a person applying for Placement\nShares (including Internet Placement Shares) by way of Placement Shares Application Form or by\nway of an Internet Placement Application.\n15.\nBy completing and delivering an Application Form or such other application as the Manager deems\nappropriate and, in the case of an ATM Electronic Application, by pressing the “Enter” or “OK” or\n“Confirm” or “Yes” key or any other relevant key on the ATM or in the case of an Internet Electronic\nApplication, by clicking “Submit” or “Continue” or “Yes” or “Confirm” or any other button on the IB\nwebsite of the relevant Participating Banks or the website of DBS Vickers Online (as the case may\nbe) in accordance with the provisions herein, you:\n(a)\nirrevocably offer, agree and undertake to subscribe for the number of New Shares specified\nin your application (or such smaller number for which the application is accepted) at the\nInvitation Price for each New Share and agree that you will accept such New Shares as may\nbe allotted to you, in each case on the terms of, and subject to the conditions set out in, this\nProspectus and the Memorandum and Articles of Association of our Company;\n(b)\nagree that in the event of any inconsistency between the terms and conditions for application\nset out in this Prospectus and those set out in the website of DBS Vickers Online, or the IB\nwebsites or ATMs of the Participating Banks, the terms and conditions set out in this\nProspectus shall prevail;\n(c)\nagree that the aggregate Invitation Price for the New Shares applied for is due and payable\nto the Company upon application;\n(d)\nwarrant the truth and accuracy of the information contained, and representations and\ndeclarations made, in your application, and acknowledge and agree that such information,\nrepresentations and declarations will be relied on by our Company in determining whether to\naccept your application and/or whether to allot any New Shares to you; and\nG-4\nAPPENDIX G – TERMS, CONDITIONS AND PROCEDURES FOR\nAPPLICATION AND ACCEPTANCE\n\n\n(e)\nagree and warrant that if the laws of any jurisdictions outside Singapore are applicable to\nyour application, you have complied with all such laws and none of our Company, the\nManager, Underwriter and Placement Agent will infringe any such laws as a result of the\nacceptance of your application.\n16.\nOur acceptance of applications will be conditional upon, inter alia, our Company being satisfied\nthat:\n(a)\npermission has been granted by the SGX-ST to deal in, and for quotation of, all the issued\nShare and, the New Shares on the Official List of the SGX-ST;\n(b)\nthe Management and Underwriting Agreement and the Placement Agreement referred to in\nthe section entitled “General and Statutory Information” of this Prospectus have become\nunconditional and have not been terminated; and\n(c)\nthe Monetary Authority of Singapore (the “Authority”) has not issued a stop order which\ndirects that no or no further Shares to which this Prospectus relates be alloted or issued\n(“Stop Order”).\n17.\nIn the event that a Stop Order in respect of the New Shares is issued by the Authority or other\ncompetent authority, and:\n(a) \nthe New Shares have not been issued, we will (as required by law) deem all applications to\nbe withdrawn and cancelled and our Company shall refund the application monies (without\ninterest or any share of revenue or other benefit arising therefrom and at your own risk) to\nyou within 14 days of the date of the Stop Order; or\n(b) \nif the New Shares have already been issued but trading has not commenced, the issue will\n(as required by law) be deemed void and we will refund your payment for the New Shares\n(without interest or any share of revenue or other benefit arising therefrom and at your own\nrisk) to you within 14 days from the date of the Stop Order.\nThis shall not apply where only an interim Stop Order has been issued.\n18.\nIn the event that an interim Stop Order in respect of the New Shares is served by the Authority or\nother competent authority, no Shares shall be issued to you until the Authority revokes the interim\nStop Order.\n19.\nThe Authority is not able to serve a Stop Order in respect of the New Shares if the New Shares\nhave been issued and listed on the SGX-ST and trading in them has commenced.\n20.\nWe will not hold any application in reserve.\n21.\nWe will not allot or allocate any Shares on the basis of this Prospectus later than six months after\nthe date of registration of this Prospectus.\n22.\nAll payments in respect of any application for New Shares, and all refunds in respect of any\nunsuccessful application thereto, shall be made in Singapore currency.\n23.\nAdditional terms and conditions for applications by way of Application Forms are set out in the\nsection entitled “Additional Terms and Conditions for Applications Using Printed Application Forms”\non pages G-6 to G-10 of this Prospectus.\n24.\nAdditional terms and conditions for applications by way of Electronic Applications are set out in the\nsection entitled “Additional Terms and Conditions for Electronic Applications” on pages G-11 to G-\n20 of this Prospectus.\nG-5\nAPPENDIX G – TERMS, CONDITIONS AND PROCEDURES FOR\nAPPLICATION AND ACCEPTANCE\n\n\nADDITIONAL TERMS AND CONDITIONS FOR APPLICATIONS USING PRINTED APPLICATION\nFORMS\nApplications by way of Application Forms shall be made on and subject to the terms and\nconditions of this Prospectus, including but not limited to the terms and conditions appearing\nbelow as well as those set out under the section “TERMS, CONDITIONS AND PROCEDURES FOR\nAPPLICATION AND ACCEPTANCE” on pages G-1 to G-20 of this Prospectus, as well as the\nMemorandum and Articles of Association of our Company.\n1.\nYour application for the Offer Shares must be made using the WHITE Offer Shares Application\nForms and WHITE official envelopes “A” and “B”, accompanying and forming part of this\nProspectus.\nApplications for Placement Shares (other than Internet Placement Shares and Reserved Shares)\nby way of Application Forms must be made using the BLUE Placement Shares Application Forms\naccompanying and forming part of this Prospectus or in such other forms of application as the\nManager deems appropriate.\nWithout prejudice to the rights of the Company, the Manager has been authorised to accept, for\nand on behalf of the Company, such other form of applications, as the Manager deems\nappropriate. Applications for Reserved Shares must be made using the Pink Reserved Shares\nApplication Forms.\nWe draw your attention to the detailed instructions contained in the respective Application Forms\nand this Prospectus for the completion of the Application Forms which must be carefully followed.\nOur Company reserves the right to reject applications which do not conform strictly to the\ninstructions set out in the Application Forms and this Prospectus or to the terms and\nconditions of this Prospectus or which are illegible, incomplete, incorrectly completed or\nwhich are accompanied by improperly drawn remittances.\n2.\nYou must complete your Application Forms in English. Please type or write clearly in ink using\nBLOCK LETTERS.\n3.\nYou must complete all spaces in your Application Forms except those under the heading “FOR\nOFFICIAL USE ONLY” and you must write the words “NOT APPLICABLE” or “N.A.” in any space\nthat is not applicable.\n4.\nIndividuals, corporations, approved nominee companies and trustees must give their names in full.\nIf you are an individual, you must make your application using your full name as it appears in your\nidentity card (if you have such an identification document) or in your passport and, in the case of\ncorporations, in your full names as registered with a competent authority. If you are not an\nindividual, you must complete the Application Form under the hand of an official who must state\nthe name and capacity in which he signs the Application Form. If you are a corporation completing\nthe Application Form, you are required to affix your Common Seal (if any) in accordance with your\nmemorandum and articles of association or equivalent constitutive documents. If you are a\ncorporate Applicant and your application is successful, a copy of your memorandum and articles of\nassociation or equivalent constitutive documents must be lodged with our Company’s Share\nRegistrar and Singapore Share Transfer gent. Our Company reserves the right to require you to\nproduce documentary proof of identification for verification purposes.\n5.\n(a)\nYou must complete Sections A and B and sign page 1 of the Application Form.\n(b)\nYou are required to delete either paragraph 7(a) or 7(b) on page 1 of the Application Form.\nWhere paragraph 7(a) is deleted, you must also complete Section C of the Application Form\nwith particulars of the beneficial owner(s).\n(c)\nIf you fail to make the required declaration in paragraph 7(a) or 7(b), as the case may be, on\npage 1 of the Application Form, your application is liable to be rejected.\nG-6\nAPPENDIX G – TERMS, CONDITIONS AND PROCEDURES FOR\nAPPLICATION AND ACCEPTANCE\n\n\n6.\nYou (whether an individual or corporate Applicant, whether incorporated or unincorporated and\nwherever incorporated or constituted) will be required to declare whether you are a citizen or\npermanent resident of Singapore or a corporation in which citizens or permanent residents of\nSingapore or any body corporate constituted under any statute of Singapore having an interest in\nthe aggregate of more than 50 per cent. of the issued share capital of or interests in such\ncorporations. If you are an approved nominee company, you are required to declare whether the\nbeneficial owner of the New Shares is a citizen or permanent resident of Singapore or a\ncorporation, whether incorporated or unincorporated and wherever incorporated or constituted, in\nwhich citizens or permanent residents of Singapore or any body corporate incorporated or\nconstituted under any statute of Singapore have an interest in the aggregate of more than 50 per\ncent. of the issued share capital of or interests in such corporation.\n7.\nYou may apply for the New Shares using only cash. Each application must be accompanied by a\ncash remittance in Singapore currency for the full amount payable, in respect of the number of New\nShares applied for, in the form of a BANKER’S DRAFT, CASHIER’S ORDER or POSB CASHIER’S\nORDER drawn on a bank in Singapore, made out in favour of “UNI-ASIA SHARE ISSUE\nACCOUNT” crossed “A/C PAYEE ONLY” with your name and address written clearly on the reverse\nside. APPLICATIONS NOT ACCOMPANIED BY ANY PAYMENT OR ACCOMPANIED BY ANY\nOTHER FORM OF PAYMENT WILL NOT BE ACCEPTED. REMITTANCES BEARING “NOT\nTRANSFERABLE” OR “NON TRANSFERABLE” CROSSINGS WILL BE REJECTED.\nNo acknowledgement of receipt will be issued by our Company or the Manager for applications or\napplication monies received.\n8.\nMonies paid in respect of unsuccessful applications are expected to be returned (without interest or\nany share of revenue or other benefit arising therefrom) to you by ordinary post within 24 hours of\nthe balloting at your own risk. Where your application is rejected or accepted in part only, the full\namount or the balance of the application monies, as the case may be, will be refunded (without\ninterest or any share of revenue or other benefit arising therefrom) to you by ordinary post at your\nown risk within 14 Market Days after the close of the Application List, provided that the remittance\naccompanying such application which has been presented for payment or other processes has\nbeen honoured and the application monies have been received in the designated share issue\naccount.\n9.\nCapitalised terms used in the Application Forms and defined in this Prospectus shall bear the\nmeanings assigned to them in this Prospectus.\n10.\nBy completing and delivering the Application Form, you agree that:\n(a)\nin consideration of our Company having distributed the Application Form to you and agreeing\nto close the Application List at 12:00 noon on 15 August 2007 or such other time or date as\nour Directors may, in consultation with the Manager, decide and by completing and delivering\nthis Application Form:\n(i)\nyour application is irrevocable; and\n(ii)\nyour remittance will be honoured on first presentation and that any monies returnable\nmay be held pending clearance of your payment without interest or any share of\nrevenue or other benefit arising therefrom;\n(b)\nall applications, acceptances or contracts resulting therefrom under the Invitation shall be\ngoverned by and construed in accordance with the laws of Singapore and that you\nirrevocably submit to the non-exclusive jurisdiction of the Singapore courts;\nG-7\nAPPENDIX G – TERMS, CONDITIONS AND PROCEDURES FOR\nAPPLICATION AND ACCEPTANCE\n\n\n(c)\nin respect of the New Shares for which your application has been received and not rejected,\nacceptance of your application shall be constituted by written notification by or on behalf of\nour Company and not otherwise, notwithstanding any remittance being presented for\npayment by or on behalf of our Company;\n(d)\nyou will not be entitled to exercise any remedy of rescission for misrepresentation at any\ntime after acceptance of your application;\n(e)\nreliance is placed solely on information contained in this Prospectus and that none of our\nCompany, the Manager, Underwriter and Placement Agent or any other person involved in\nthe Invitation shall have any liability for any information not so contained;\n(f)\nyou consent to the disclosure of your name, NRIC/passport number, address, nationality,\npermanent resident status, CDP Securities Account number and share application amount to\nour Share Registrar, SGX-ST, CDP\n, SCCS, our Company, the Manager, Underwriter and\nPlacement Agent;\n(g)\nyou irrevocably agree undertake to subscribe the number of New Shares applied for as\nstated in the Application Form or any smaller number of such New Shares that may be\nallotted and/or allocated to you in respect of your application. In the event that our Company\ndecides to allot and/or allocate any smaller number of New Shares or not to allot and/or\nallocate any New Shares to you, you agree to accept such decision as final; and\n(h)\nyou irrevocably authorise CDP to complete and sign on your behalf as transferee or\nrenouncee any instrument of transfer and/or other documents required for the issue or\ntransfer of the New Shares that may be alloted to you.\nApplications for Offer Shares\n1.\nYour application for Offer Shares MUST be made using the WHITE Offer Shares Application Forms\nand WHITE official envelopes “A” and “B”.\n2.\nYou must:\n(a)\nenclose the WHITE Offer Shares Application Form, duly completed and signed, together with\nyour correct remittance in accordance with the terms and conditions of this Prospectus, in\nthe WHITE official envelope “A” provided;\n(b)\nin appropriate spaces on the WHITE official envelope “A”:\n(i)\nwrite your name and address;\n(ii)\nstate the number of Offer Shares applied for;\n(iii)\ntick the relevant box to indicated the form of payment; and\n(v)\naffix adequate Singapore postage;\n(c)\nSEAL THE WHITE OFFICIAL ENVELOPE “A”;\n(d)\nwrite, in the special box provided on the larger WHITE official envelope “B” addressed to\nDBS Bank Ltd, Equity Capital Markets, 6 Shenton Way, #36-01 DBS Building Tower\nOne, Singapore 068809, the number of Offer Shares you have applied for; and\nG-8\nAPPENDIX G – TERMS, CONDITIONS AND PROCEDURES FOR\nAPPLICATION AND ACCEPTANCE\n\n\n(e)\ninsert WHITE official envelope “A” into WHITE official envelope “B”, seal WHITE official\nenvelope “B”, affix adequate Singapore postage on WHITE official envelope “B” (if\ndespatching by ordinary post) and thereafter DESPATCH BY ORDINARY POST OR\nDELIVER BY HAND the documents at your own risk to DBS Bank Ltd, Equity Capital\nMarkets, 6 Shenton Way, #36-01 DBS Building Tower One, Singapore 068809, so as to\narrive by 12:00 noon on 15 August 2007 or such other time or date as our Directors may, in\nconsultation with the Manager, decide. Local Urgent Mail or Registered Post must NOT\nbe used. No acknowledgement of receipt will be issued for any application or remittance\nreceived.\n3.\nApplications that are illegible, incomplete or incorrectly completed or accompanied by improperly\ndrawn remittances or which are not honoured upon their first presentation may be rejected.\n4.\nONLY ONE APPLICATION should be enclosed in each envelope. No acknowledgement of receipt\nwill be issued for any application or remittance received.\nApplications for Placement Shares (other than Internet Placement Shares and Reserved Shares)\n1.\nYour application for Placement Shares (other than Internet Placement Shares and Reserved\nShares) must be made using the BLUE Placement Shares Application Forms or in such other\nforms of application as the Manager deems appropriate.\n2.\nThe completed and signed BLUE Placement Shares Application Form and your remittance, in\naccordance with the terms and conditions of this Prospectus, for the full amount payable in respect\nof the number of Placement Shares applied for with your name, CDP Securities Account number\nand address written clearly on the reverse side, must be enclosed and sealed in an envelope to be\nprovided by you. You must affix adequate Singapore postage on the envelope (if despatching by\nordinary post) and thereafter the sealed envelope must be DESPATCHED BY ORDINARY POST\nOR DELIVERED BY HAND at your own risk to DBS Bank Ltd, Equity Capital Markets, 6\nShenton Way, #36-01 DBS Building Tower One, Singapore 068809, for the attention of Equity\nCapital Markets, to arrive by 12:00 noon on 15 August 2007 or such other time or date as our\nDirectors may, in consultation with the Manager, decide. Local Urgent Mail or Registered Post\nmust NOT be used. No acknowledgement receipt will be issued for any application or remittance\nreceived.\n3.\nApplications that are illegible, incomplete or incorrectly completed or accompanied by improperly\ndrawn remittances or which are not honoured upon their first presentation may be rejected.\n4.\nONLY ONE APPLICATION should be enclosed in each envelope. No acknowledgement of receipt\nwill be issued for any application or remittance received.\n5.\nAlternatively, you may remit your application monies by electronic transfer to the account of DBS\nBank Ltd, Shenton Way Branch, Current Account No. 003-710216-4 in favour of “UNI-ASIA\nSHARE ISSUE ACCOUNT” for the number of Placement Shares applied for by 12.00 noon on 15\nAugust 2007. Applicants who remit their application monies via electronic transfer should send\na copy of the telegraphic transfer advice slip to DBS Bank Ltd, Equity Capital Markets, 6\nShenton Way #36-01, DBS Building Tower One, Singapore 068809, for the attention of Equity\nCapital Markets, to arrive by 12.00 noon on 15 August 2007, or such other time or date as our\nDirectors may, in consultation with the Manager, decide.\nG-9\nAPPENDIX G – TERMS, CONDITIONS AND PROCEDURES FOR\nAPPLICATION AND ACCEPTANCE\n\n\nApplications for Reserved Shares\n1.\nYour application for Reserved Shares must be made using the PINK Reserved Shares Application\nForms or in such other forms of application as the Manager deems appropriate.\n2.\nThe completed and signed PINK Reserved Shares Application Form and your remittance, in\naccordance with the terms and conditions of the Prospectus, for the full amount payable in respect\nof the number of Reserved Shares applied for with your name, CDP Securities Account number\nand address written clearly on the reverse side, must be enclosed and sealed in an envelope to be\nprovided by you. You must affix adequate Singapore postage on the envelope (if despatching by\nordinary post) and thereafter the sealed envelope must be DESPATCHED BY ORDINARY POST\nOR DELIVERED BY HAND at your own risk to Lim Associates (Pte) Ltd, 3 Church Street, #08-\n01 Samsung Hub, Singapore 049483, for the attention of Mr. David Woo, to arrive by 12:00 noon\non 15 August 2007 or such other time or date as our Directors may, in consultation with the\nManager, decide. Local Urgent Mail or Registered Post must NOT be used.\n3.\nApplications that are illegible, incomplete or incorrectly completed or accompanied by improperly\ndrawn remittances or which are not honoured upon their first presentation may be rejected.\n4.\nONLY ONE APPLICATION should be enclosed in each envelope. No acknowledgement of receipt\nwill be issued by any application or remittance received.\nG-10\nAPPENDIX G – TERMS, CONDITIONS AND PROCEDURES FOR\nAPPLICATION AND ACCEPTANCE\n\n\nADDITIONAL TERMS AND CONDITIONS FOR ELECTRONIC APPLICATIONS\nThe procedures for Electronic Applications are set out on the ATM screens (in the case of ATM Electronic\nApplications) and in the case of Internet Electronic Applications on the IB website screens of the relevant\nParticipating Banks and the website screen of DBS Vickers Online (the “Steps”). Currently, DBS Bank and\nUOB Group are the only Participating Banks through which the Internet Electronic Applications through\nthe IB websites may be made.\nFor illustration purposes, the procedures for Electronic Applications through ATMs, the IB website of DBS\nBank and the website of DBS Vickers Online are set out in the paragraphs “Steps for ATM Electronic\nApplications for Offer Shares through ATMs of DBS Bank (including POSB ATMs)” and the “Steps\nfor Internet Electronic Applications for Offer Shares through the IB website of DBS Bank” and the\n“Steps for Internet Electronic Applications for Placement Shares through the website of DBS\nVickers Online” appearing on pages G-16 to G-20 of this Prospectus.\nPlease read carefully the terms of this Prospectus, the Steps and the terms and conditions for Electronic\nApplications set out below before making an Electronic Application. Any reference to “you” or the\n“Applicant” in the “Additional Terms and Conditions for Electronic Applications”, and the Steps shall refer\nto you making an application for Offer Shares through an ATM or the IB website of a relevant Participating\nBank, or an application for Internet Placement Shares through the website of DBS Vickers Online.\nThe Steps set out the actions that you must take at ATMs or the IB website of DBS Bank or the website\nof DBS Vickers Online to complete an Electronic Application. The actions that you must take at the ATMs\nor the IB websites of the other Participating Banks are set out on the ATM screens or the IB website\nscreens of the relevant Participating Banks.\nYou must have an existing bank account with and be an ATM cardholder of the relevant Participating\nBanks before you can make an Electronic Application at the ATMs of the relevant Participating Banks. An\nATM card issued by one Participating Bank cannot be used to apply for the Offer Shares at an ATM\nbelonging to other Participating Banks. Upon the completion of your ATM Electronic Application\ntransaction, you will receive an ATM transaction slip (“Transaction Record”), confirming the details of your\nATM Electronic Application. The Transaction Record is for your retention and should not be submitted with\nany printed Application Form.\nYou must ensure that you enter your own Securities Account Number when using the ATM card\nissued to you in your own name. If you fail to use your own ATM card or do not key in your own\nSecurities Account number, your application will be rejected. If you operate a joint bank account\nwith any of the Participating Banks, you must ensure that you enter your own Securities Account\nnumber when using the ATM card issued to you in your own name. Using your own Securities\nAccount number with an ATM card which is not issued to you in your own name will render your\nElectronic Application liable to be rejected.\nFor an Internet Electronic Application, you must have a bank account with and/or a User Identification\n(“User ID”) and a Personal Identification Number (“PIN”) given by the relevant participating Banks or DBS\nVickers Online, in the case of you applying for Internet Placement Shares through the website of DBS\nVickers Online. Upon completion of your Internet Electronic Application through the IB website of DBS,\nthere will be an on-screen confirmation (“Confirmation Screen”) of the application which can be printed\nout by you for your record. This printed record of the Confirmation Screen is for your retention and should\nnot be submitted with any printed Application Form.\nIf you are making an Internet Electronic Application, you must ensure that the mailing address of your\naccount selected for the application is in Singapore and you must declare that the application is being\nmade in Singapore. Otherwise, your application is liable to be rejected. In this connection, you will be\nasked to declare that you are in Singapore at the time when you make the application.\nG-11\nAPPENDIX G – TERMS, CONDITIONS AND PROCEDURES FOR\nAPPLICATION AND ACCEPTANCE\n\n\nYour Electronic Application shall be made on the terms and subject to the conditions of this\nProspectus, including but not limited to, the terms and conditions appearing below and those set\nout under the section on “TERMS, CONDITIONS AND PROCEDURES FOR APPLICATION AND\nACCEPTANCE” on pages G-1 to G-20 of this Prospectus, as well as the Memorandum and Articles\nof Association of our Company.\n1.\nIn connection with your Electronic Application for the Offer Shares or Placement Shares in the case\nof you applying for Internet Placement Shares through the website of DBS Vickers Online, you are\nrequired to confirm statements to the following effect in the course of activating the Electronic\nApplication:\n(a)\nthat you have received a copy of this Prospectus (in the case of ATM Electronic\nApplications only) and have read, understood and agreed to all the terms and\nconditions of application for the Offer Shares or Internet Placement Shares and this\nProspectus prior to effecting the Electronic Application and agree to be bound by the\nsame;\n(b)\nthat you consent to the disclosure of your name, NRIC/passport number, address,\nnationality, permanent resident status, CDP Securities Account number, and share\napplication amount (the “Relevant Particulars”) from your account with the relevant\nParticipating Bank or DBS Vickers Online, as the case may be, to our Share Registrar,\nSGX-ST, CDP, SCCS, our Company, the Manager, the Underwriter and the Placement\nAgent (the “Relevant Parties”); and\n(c)\nthat this is your only application for the Offer Shares or Placement Shares (other than\nReserved Shares), as the case may be, and it is made in your name and at your own\nrisk.\nYour application will not be successfully completed and cannot be recorded as a completed\ntransaction unless you press the “Enter” or “OK” or “Confirm” or “Yes” or any other relevant key in\nthe ATM or click “ Confirm” or “OK” or “Submit” or “Continue” or “Yes” or any other relevant button\non the Internet screen. By doing so, you shall be treated as signifying your confirmation of each of\nthe above three statements. In respect of statement 1(b) above, your confirmation, by pressing the\n“Enter” or “OK” or “Confirm” or “Yes” or any other relevant key or by clicking “Confirm” or “OK” or\n“Submit” or “Continue” or “Yes” or any other relevant button, shall signify and shall be treated as\nyour written permission, given in accordance with the relevant laws of Singapore, including Section\n47(2) of the Banking Act (Chapter 19) of Singapore, to the disclosure by that Participating Bank or\nDBS Vickers Online, as the case may be, of the Relevant Particulars of your account(s) with that\nParticipating Bank or DBS Vickers Online to the Relevant Parties.\n2.\nBY MAKING AN ELECTRONIC APPLICATION, YOU CONFIRM THAT YOU ARE NOT APPLYING\nFOR OFFER SHARES AS NOMINEE OF ANY OTHER PERSON AND THAT ANY ELECTRONIC\nAPPLICATION THAT YOU MAKE IS THE ONLY APPLICATION MADE BY YOU AS BENEFICIAL\nOWNER.\nYOUR SHALL MAKE ONLY ONE ELECTRONIC APPLICATION FOR OFFER SHARES AND\nSHALL NOT MAKE ANY OTHER APPLICATION FOR OFFER SHARES, WHETHER AT THE\nATMS OF ANY PARTICIPATING BANK OR THE IB WEBSITES OF ANY RELEVANT\nPARTICIPATING BANK OR THE WEBSITE OF DBS VICKERS ONLINE, AS THE CASE MAY BE,\nON THE APPLICATION FORMS. IF YOU HAVE MADE AN APPLICATION FOR OFFER SHARES\nON AN APPLICATION FORM, YOU SHALL NOT MAKE AN ELECTRONIC APPLICATION FOR\nOFFER SHARES AND VICE VERSA.\nG-12\nAPPENDIX G – TERMS, CONDITIONS AND PROCEDURES FOR\nAPPLICATION AND ACCEPTANCE\n\n\n3.\nYou must have sufficient funds in your bank account with your Participating Bank at the time you\nmake your Electronic Application at the ATM or IB website of the relevant Participating Bank, failing\nwhich such Electronic Application will not be completed. Any Electronic Application made at the\nATM or IB website of the relevant Participating Bank which does not conform strictly to the\ninstructions set out in this Prospectus or on the screens of the ATM or IB website of the relevant\nParticipating Bank through which your Electronic Application is being made shall be rejected.\nFor Offer Shares, you may make an ATM Electronic Application at the ATM of any\nParticipating Bank or an Internet Electronic Application at the IB websites of the relevant\nParticipating Banks, using only cash by authorising such Participating Bank to deduct the\nfull amount payable from your account with such Participating Bank. If you make an\napplication to subscribe for Internet Placement Shares through the website of DBS Vickers\nOnline, you must have sufficient funds in your nominated automatic payment account with\nan automatic payment facility (direct debit/credit authorisation or “GIRO”) with DBS Vickers\nOnline. Your application will be rejected if there are insufficient funds in your account for\nDBS Vickers Online to deduct the full amount payable from your account for your\napplication.\n4.\nYou irrevocably agree and undertake to subscribe for and to accept the number of Offer Shares or\nPlacement Shares, as the case may be, applied for as stated on the Transaction Record or the\nConfirmation Screen or any lesser number of such Offer Shares or Placement Shares that may be\nallotted and/or allocated to you in respect of your Electronic Application. In the event that our\nCompany decides to allot and/or allocate any lesser number of such Offer Shares or Placement\nShares or not to allot any Offer Shares or Placement Shares to you, you agree to accept such\ndecision as final. If your Electronic Application is successful, your confirmation (by your action of\npressing the “Enter” or “OK” or “Confirm” or “Yes” or any other relevant key on the ATM or clicking\n“Confirm” or “OK” or “Submit” or “Continue” or “Yes” or any other relevant button on the Internet\nscreen) of the number of Offer Shares or Placement Shares applied for shall signify and shall be\ntreated as your acceptance of the number of Offer Shares or Placement Shares that may be\nallotted and/or allocated to you and your agreement to be bound by the Memorandum and Articles\nof Association of our Company. You also irrevocably authorise CDP to complete and sign on your\nbehalf as tranferee or renouncee any instrument of transfer and/or other documents required for\nthe issue or transfer of the New Shares that may be alloted to you.\n5.\nWe will not keep any application in reserve. Where your Electronic Application is unsuccessful, the\nfull amount of the application monies will be refunded (without interest or any share of revenue or\nother benefit arising therefrom) to you by being automatically credited to your account with your\nParticipating Bank or if you have applied for the Internet Placement Shares through DBS Vickers\nOnline, by ordinary post or such other means as DBS Vickers Online may agree with you, at your\nown risk, within 24 hours of the balloting provided that the remittance in respect of such application\nwhich has not been presented for payment or other processes has been honoured and the\napplication monies have been received in the designated share issue account. Trading on a “when-\nissued” basis, if applicable, is expected to commence after such refund has been made.\nWhere your Electronic Application is rejected or accepted in part only, the full amount or the\nbalance of the application monies, as the case may be, will be refunded (without interest or\nany share of revenue or other benefit arising therefrom) to you by being automatically\ncredited to your account with your Participating Bank or if you have applied for the Internet\nPlacement Shares through DBS Vickers Online, by ordinary post or such other means as\nDBS Vickers Online may agree with you, at your own risk, within 14 Market Days after the\nclose of the Application List provided that the remittance in respect of such application\nwhich has been presented for payment or other processes has been honoured and the\napplication monies have been received in the designated share issue account.\nG-13\nAPPENDIX G – TERMS, CONDITIONS AND PROCEDURES FOR\nAPPLICATION AND ACCEPTANCE\n\n\nResponsibility for timely refund of application monies from unsuccessful or partially successful\nElectronic Applications lies solely with the respective Participating Banks and with DBS Vickers\nOnline (as the case may be). Therefore, you are strongly advised to consult your Participating Bank\nor DBS Vickers Online as to the status of your Electronic Application and/or the refund of any\nmoney to you from unsuccessful or partially successful Electronic Application, to determine the\nexact number of Shares allotted and/or allocated to you before trading the Shares on the SGX-ST.\nNone of the SGX-ST, the CDP\n, the SCCS, the Participating Banks, DBS Vickers Online, our\nCompany, the Manager, the Underwriter and the Placement Agent assume any responsibility for\nany loss that may be incurred as a result of you having to cover any net sell positions or from buy-\nin procedures activated by the SGX-ST.\nIf your Electronic Application is unsuccessful, no notification will be sent by the relevant\nParticipating Bank or DBS Vickers Online.\nIt is expected that successful applicants who applied for Internet Placement Shares through the\nwebsite of DBS Vickers Online will be notified of the results of their application through the website\nof DBS Vickers Online no later than the evening of the day immediately prior to the commencement\nof trading of the Shares on the SGX-ST.\n6.\nApplicants who make ATM Electronic Applications for Offer Shares through the ATMs of the\nfollowing banks may check the provisional results of their ATM Electronic Applications as follows:\nBank\nTelephone\nOther Channels\nOperating Hours\nService\nexpected from\nDBS Bank\n1800-339 6666\nInternet Banking\n24 hours a day\nEvening of the\n(for POSB account holders)\nwww.dbs.com(1)\nballoting day\n1800-111 1111\n(for DBS account holders)\nOCBC\n1800-363 3333\nATM/ Internet Banking/\n24 hours a day\nEvening of the\nPhonebanking (2)\nballoting day\nUOB Group\n1800-222 2121\nATM (Other Transactions\n24 hours a day\nEvening of the\n“IPO Enquiry”)\nballoting day\nwww.uobgroup.com (1) (3)\nNotes:\n(1)\nIf you have made your Internet Electronic Application through the IB websites of DBS Bank or UOB Group, you may\ncheck the results of your application through the same channels listed in the table above in relation to ATM Electronic\nApplication made at the ATMs of DBS Bank or UOB Group.\n(2)\nIf you have made your Internet Electronic Application through the ATM of the OCBC Bank, you may check the results\nof your application through OCBC ATMs, OCBC Personal Internet Banking or OCBC Phone banking services.\n(3)\nIf you have made your Electronic Application through the ATM or the IB website of the UOB Group, you may check\nthe results of your application through UOB Personal Internet Banking, UOB ATMs or UOB Phone Banking services.\n7.\nATM Electronic Applications shall close at, and Internet Electronic Application and Internet\nPlacement Application must be received by, 12:00 noon on 15 August 2007, or such other\ntime and date as our Directors may, in consultation with the Manager decide. Subject to\nparagraph 9 below, all Internet Electronic Applications and Internet Placement Applications are\ndeemed to be received when they enter the designated information system of the relevant\nParticipating Bank or DBS Vickers Online, as the case may be.\nG-14\nAPPENDIX G – TERMS, CONDITIONS AND PROCEDURES FOR\nAPPLICATION AND ACCEPTANCE\n\n\n8.\nYou are deemed to have irrevocably requested and authorised our Company to:\n(a)\nregister the Offer Shares or Placement Shares, as the case may be, allotted and/or allocated\nto you in the name of CDP for deposit into your Securities Account;\n(b)\nsend the relevant Share certificate(s) to CDP;\n(c)\nreturn or refund (without interest or any share of revenue earned or other benefit arising\ntherefrom) the application monies, should your Electronic Application be unsuccessful, by\nautomatically crediting your bank account with your Participating Bank or if you have applied\nfor the Internet Placement Shares through DBS Vickers Online, by ordinary post or such\nother means as DBS Vickers Online may agree with you, at your risk, within 24 hours of the\nballoting PROVIDED THAT the remittance in respect of such application which has been\npresented for payment or such other proccess has been honoured and application monies\nreceived in the designated share issue account; and\n(d)\nreturn or refund (without interest or any share of revenue or other benefit arising therefrom)\nthe balance of the application monies, should your Electronic Application be accepted in part\nonly, by automatically crediting your bank account with your Participating Bank or if you have\napplied for the Internet Placement Shares through DBS Vickers Online, by ordinary post or\nsuch other means as DBS Vickers Online may agree with you, at your risk, within 14 Market\nDays after the close of the Application List PROVIDED THAT the remittance in respect of\nsuch application which has been presented for payment or such other proccess has been\nhonoured and application monies received in the designated share issue account.\n9.\nYou irrevocably agree and acknowledge that your Electronic Application is subject to risks of\nelectrical, electronic, technical and computer-related faults and breakdown, fires, acts of God and\nother events beyond the control of the Participating Banks, DBS Vickers Online, our Company, the\nManager, Underwriter and Placement Agent, and in any such event our Company, the Manager,\nDBS Vickers Online and/or the relevant Participating Bank do not receive your Electronic\nApplication, or data relating to your Electronic Application or the tape or any other devices\ncontaining such data is lost, corrupted or not otherwise accessible, whether wholly or partially for\nwhatever reason, you shall be deemed not to have made an Electronic Application and you shall\nhave no claim whatsoever against our Company, the Manager, Underwriter and Placement Agent,\nDBS Vickers Online and/or the relevant Participating Bank for the Offer Shares or Placement\nShares, as the case may be, applied for or for any compensation, loss or damage.\n10.\nWe do not recognise the existence of a trust. Any Electronic Application by a trustee must be made\nin his own name and without qualification. Our Company will reject any application by any person\nacting as nominee (other than approved nominee companies).\n11.\nAll your particulars in the records of your Participating Bank or DBS Vickers Online at the time you\nmake your Electronic Application shall be deemed to be true and correct and your Participating\nBank, DBS Vickers Online and any other Relevant Parties shall be entitled to rely on the accuracy\nthereof. If there has been any change in your particulars after making your Electronic Application,\nyou shall promptly notify your Participating Bank or DBS Vickers Online (as the case may be).\n12.\nYou should ensure that your personal particulars as recorded by both CDP and the relevant\nParticipating Bank or DBS Vickers Online (as the case may be) are correct and identical,\notherwise, your Electronic Application is liable to be rejected. You should promptly inform CDP\nof any change in address, failing which the notification letter on successful allotment will be sent to\nyour address last registered with CDP\n.\nG-15\nAPPENDIX G – TERMS, CONDITIONS AND PROCEDURES FOR\nAPPLICATION AND ACCEPTANCE\n\n\n13.\nBy making and completing an Electronic Application, you are deemed to have agreed that:\n(a)\nin consideration of our Company making available the Electronic Application facility, through\nthe Participating Banks and DBS Vickers Online acting as agents of our Company, at the\nATMs and the IB websites of the relevant Participating Banks (if any) and at the website of\nDBS Vickers Online:\n(i)\nyour Electronic Application is irrevocable; and\n(ii)\nyour Electronic Application, the acceptance by our Company and the contract resulting\ntherefrom under the Invitation shall be governed by and construed in accordance with\nthe laws of Singapore and you irrevocably submit to the non-exclusive jurisdiction of\nthe Singapore courts;\n(b)\nnone of our Company, the Manager, Underwriter and Placement Agent, the Participating\nBanks or DBS Vickers Online shall be liable for any delays, failures or inaccuracies in the\nrecording, storage or in the transmission or delivery of data relating to your Electronic\nApplication to our Company or CDP due to breakdowns or failure of transmission, delivery or\ncommunication facilities or any risks referred to in paragraph 9 above or to any cause\nbeyond their respective controls;\n(c)\nin respect of the Offer Shares or the Placement Shares, as the case may be, for which your\nElectronic Application has been successfully completed and not rejected, acceptance of your\nElectronic Application shall be constituted by written notification by or on behalf of our\nCompany and not otherwise, notwithstanding any payment received by or on behalf of our\nCompany;\n(d)\nyou will not be entitled to exercise any remedy for rescission for misrepresentation at any\ntime after acceptance of your application; and\n(e)\nreliance is placed solely on information contained in this Prospectus and that none of our\nCompany, the Manager, Underwriter and Placement Agent nor any other person involved in\nthe Invitation shall have any liability for any information not so contained.\nSteps for ATM Electronic Applications for Offer Shares through ATMs of DBS Bank (Including\nPOSB ATMs)\nInstructions for ATM Electronic Applications will appear on the ATM screens of the Participating Banks.\nFor illustration purposes, the steps for making an ATM Electronic Application through a DBS Bank ATM\n(including POSB ATM) are shown below. Certain words appearing on the screen are in abbreviated form\n(“A/c”, “amt”, “appln”, “&”, “I/C”, “SGX” and “No.” refer to “Account”, “amount”, “application”, “and”, “NRIC”,\n“SGX-ST” and “Number” respectively. Instructions for ATM Electronic Applications on the ATM screens of\nParticipating Banks (other than DBS Bank (including POSB ATMs)), may differ slightly from those\nrepresented below.\nStep\n1.\nInsert your personal DBS Bank or POSB ATM Card\n2.\nEnter your Personal Identification Number\n3.\nSelect “CASHCARD & MORE SERVICES”\n4.\nSelect “LANGUAGE” (FOR CUSTOMERS USING MULTI-LANGUAGE CARD)\n5.\nSelect “ESA-IPO SHARE/INVESTMENTS”\n6.\nSelect “ELECTRONIC SECURITY APPLICATION (IPOS/BOND/ST-NOTES)”\nG-16\nAPPENDIX G – TERMS, CONDITIONS AND PROCEDURES FOR\nAPPLICATION AND ACCEPTANCE\n\n\n7.\nRead and understand the following statements which will appear on the screen:\n\u0002\nTHE OFFER OF SECURITIES (OR UNITS OF SECURITIES) WILL BE MADE IN, OR\nACCOMPANIED BY, A COPY OF THE PROSPECTUS/DOCUMENT OR PROFILE\nSTATEMENT (AND IF APPLICABLE, A COPY OF THE REPLACEMENT OR\nSUPPLEMENTARY PROSPECTUS/DOCUMENT OR PROFILE STATEMENT) WHICH CAN\nBE OBTAINED FROM ANY DBS/POSB BRANCH IN SINGAPORE AND, WHERE\nAPPLICABLE, THE VARIOUS PARTICIPATING BANKS DURING BANKING HOURS,\nSUBJECT TO AVAILABILITY.\n\u0002\nIN \nTHE \nCASE \nOF \nSECURITIES \nOFFERING \nTHAT \nIS \nSUBJECT \nTO \nA\nPROSPECTUS/OFFER INFORMATION STATEMENT/DOCUMENT REGISTERED WITH\nTHE AUTHORITY, ANYONE WISHING TO ACQUIRE THESE SECURITIES (OR UNITS OF\nSECURITIES) SHOULD READ THE PROSPECTUS/DOCUMENT OR PROFILE\nSTATEMENT (AS SUPPLEMENTED OR REPLACED, IF APPLICABLE) BEFORE\nSUBMITTING HIS APPLICATION WHICH WILL NEED TO BE MADE IN THE MANNER SET\nOUT \nIN \nTHE \nPROSPECTUS/DOCUMENT \nOR \nPROFILE \nSTATEMENT \n(AS\nSUPPLEMENTED \nOR \nREPLACED, \nIF \nAPPLICABLE).\nA \nCOPY \nOF \nTHE\nPROSPECTUS/DOCUMENT OR PROFILE STATEMENT, AND IF APPLICABLE, A COPY\nOF THE REPLACEMENT OR SUPPLEMENTARY PROSPECTUS/DOCUMENT OR\nPROFILE STATEMENT HAS BEEN LODGED WITH AND REGISTERED BY THE\nMONETARY AUTHORITY OF SINGAPORE WHO ASSUMES NO RESPONSIBILITY FOR\nITS OR THEIR CONTENTS.\n\u0002\nPRESS THE “ENTER” KEY TO CONFIRM THAT YOU HAVE READ AND UNDERSTOOD.\n8.\nSelect “UNIASIA” to display details\n9.\nPRESS THE “ENTER” KEY TO ACKNOWLEDGE:\n\u0002\nYOU HAVE READ, UNDERSTOOD AND AGREED TO ALL TERMS OF THE APPLICATION\nAND PROSPECTUS/DOCUMENT OR PROFILE STATEMENT, AND IF APPLICABLE, THE\nREPLACEMENT OR SUPPLEMENTARY PROSPECTUS/DOCUMENT OR PROFILE\nSTATEMENT.\n\u0002\nYOU CONSENT TO DISCLOSE YOUR NAME, NRIC/PASSPORT NO., ADDRESS,\nNATIONALITY, CDP SECURITIES A/C NO., CPF INVESTMENT A/C NO. AND SECURITY\nAPPLICATION AMOUNT FROM YOUR BANK A/C(S) TO SHARE AND SHARE APPLN\nAMOUNT FROM YOUR BANK A/C(S) TO SHARE REGISTRARS, SGX, SCCS, CDP\n, CPF\nAND THE ISSUER/VENDOR(S).\n\u0002\nFOR FIXED AND MAX PRICE SECURITY APPLICATION, THIS IS YOUR ONLY\nAPPLICATION AND IT IS MADE IN YOUR OWN NAME AND AT YOUR OWN RISK.\n\u0002\nTHE MAXIMUM PRICE FOR EACH SHARE IS PAYABLE IN FULL ON APPLICATION AND\nSUBJECT TO REFUND IF THE FINAL PRICE IS LOWER.\n\u0002\nFOR TENDER SECURITY APPLICATIONS, THIS IS YOUR ONLY APPLICATION AT THE\nSELECTED TENDER PRICE AND IS MADE IN YOUR OWN NAME AND AT YOUR OWN\nRISK.\n\u0002\nYOU ARE NOT A US PERSON AS REFERRED TO IN THE PROSPECTUS/DOCUMENT\nOR PROFILE STATEMENT AND IF APPLICABLE, THE REPLACEMENT OR\nSUPPLEMENTARY PROSPECTUS/DOCUMENT OR PROFILE STATEMENT.\nG-17\nAPPENDIX G – TERMS, CONDITIONS AND PROCEDURES FOR\nAPPLICATION AND ACCEPTANCE\n\n\n\u0002\nTHERE MAY BE A LIMIT ON THE MAXIMUM NUMBER OF SECURITIES THAT YOU CAN\nAPPLY FOR SUBJECT TO AVAILABILITY, YOU MAY BE ALLOCATED A SMALLER\nNUMBER OF SECURITIES THAN YOU APPLIED FOR OR (IN THE CASE OF AN EARLIER\nCLOSURE UPON FULL SUBSCRIPTION) YOUR APPLICATION MAY BE REJECTED IF\nALL THE AVAILABLE SECURITIES HAVE BEEN FULLY ALLOCATED TO EARLIER\nAPPLICANTS.\n10.\nSelect your nationality\n11.\nSelect the payment method (i.e. by cash, CPF Funds, or a combination of cash and CPF Funds)\n12.\nSelect the DBS Bank account (AutoSave/Current/Savings/Savings Plus) or the POSB account\n(current/ savings) from which to debit your application monies\n13.\nEnter the number of securities you wish to apply for using cash\n14.\nEnter your own 12-digit CDP Securities Account number (Note: This step will be omitted\nautomatically if your CDP Securities Account number has already been stored in the Bank’s\nrecords)\n15.\nCheck the details of your share application, your NRIC/passport number and CDP Securities\nAccount number and number of securities on the screen and press the “ENTER” key to confirm\napplication\n16.\nRemove the Transaction Record for your reference and retention only\nSteps for Internet Electronic Application for Offer Shares through the IB website of DBS Bank\nFor illustrative purposes, the steps for making an Internet Electronic Application through the DBS Bank IB\nwebsite is shown below. Certain words appearing on the screen are in abbreviated form (“A/c”, “amt”, “&”,\n“I/C”, “SGX” and “No.” refer to “Account”, “amount”, “and”, “NRIC”, “SGX-ST” and “Number” respectively)\nStep\n1.\nClick on to DBS Bank website at www.dbs.com\n2.\nLogin to Internet banking\n3.\nEnter your User ID and PIN\n4.\nSelect “Electronic Security Application (ESA)”\n5.\nClick “Yes” to proceed and to warrant that you have observed and complied with all applicable laws\nand regulations\n6.\nSelect your country of residence and click “I confirm”\n7.\nClick on “UNIASIA” and click the “Submit” button\n8.\nClick “Confirm” to confirm:\n(a)\nYou have read, understood and agreed to all terms of application and the\nProspectus/Document or Profile Statement and if applicable, the Supplementary or\nReplacement Prospectus/ Document or Profile Statement\nG-18\nAPPENDIX G – TERMS, CONDITIONS AND PROCEDURES FOR\nAPPLICATION AND ACCEPTANCE\n\n\n(b)\nYou consent to disclose your name, I/C or Passport number, address, nationality, CDP\nSecurities Account number., CPF Investment account number (if applicable) and\nsecurities application amount from your DBS/POSB Account(s) to Share Registrars,\nSGX, SCCS, CDP, CPF Board and issuer/vendor(s)\n(c)\nYou are not a US Person (as such term is defined in Regulation S under the US\nSecurities Act of 1933, as amended)\n(d)\nYou understand that the securities mentioned herein have not been and will not be\nregistered under the U.S. Securities Act of 1933 as amended (the “U.S. Securities Act”)\nor the securities laws of any State of the United States and may not be offered or sold\nin the United States or to, or for the account or benefit of any “U.S. person” (as\ndefined in Regulation S under the U.S. Securities Act) except pursuant to an\nexemption from or in a transaction subject to, the registration requirements of the U.S.\nSecurities Act and applicable State security laws. There will be no public offer of the\nsecurities mentioned herein in the United States. Any failure to comply with this\nrestriction may constitute a violation of the United States securities laws\n(e)\nThis application is made in your own name and at your own risk\n(f)\nFor FIXED/MAX price securities application, this is your only application. For TENDER\nprice securities application, this is your only application at the selected tender price\n9.\nFill in details for share application and click “Submit”\n10.\nCheck the details of your share application, your I/C/passport No. and click “OK” to confirm your\napplication\n11.\nPrint Confirmation Screen (optional) for your reference & retention only\nSteps for Internet Electronic Application for Placement Shares through the website of DBS Vickers\nOnline\nFor illustrative purposes, the steps for making an application through the website of DBS Vickers Online is\nshown below:\nStep\n1.\nAccess the website at www.dbsvonline.com\n2.\nLogin with user ID and password\n3.\nClick on IPO Centre hyperlink to go to the IPO Section \n4.\nClick on the IPO issue hyperlink\n5.\nClick “Yes” to represent, warrant and confirm, inter alia, that you are in Singapore, you have\nobserved and complied with all applicable laws and regulations, you have a mailing address in\nSingapore, you have read, understood and agreed to the “APPLICATION TERMS AND\nCONDITIONS” and the “GENERAL TERMS AND DISCLAIMERS” and you are not a U.S. person\n(as such term is defined in Regulation S under the US Securities Act of 1933, as amended)\n6.\nConfirm the IPO applying for and its details by clicking on the “Next” button\nG-19\nAPPENDIX G – TERMS, CONDITIONS AND PROCEDURES FOR\nAPPLICATION AND ACCEPTANCE\n\n\n7.\nClick “Yes, I have read the above terms and conditions and wish to subscribe” and click “Submit” to\nconfirm, inter alia:\n(a)\nYou have read, understood and agreed to the terms and conditions set out in the\nProspectus/Document or Profile Statement including the notes and instructions for the\ncompletion of this Application Form and that this application has been made in accordance\nwith the Prospectus/Document or Profile Statement including such notes and instructions.\n(b)\nYou have read and understood the disclaimers.\n(c)\nYou have read, understood and agreed to the “APPLICATION TERMS AND CONDITIONS”\nand the “GENERAL TERMS AND DISCLAIMERS”.\n(d)\nYou consent to the disclosure of your name, NRIC or passport number, address, nationality\nand permanent resident status, CDP Securities Account number, CPF Investment Account\nnumber (as applicable) and share application amount from your account with DBS Vickers\nOnline to the Share Registrar, SCCS, SGX-ST, CDP\n, CPF (if applicable), Issuer and the\nIssue Manager.\n(e)\nThis application is your only application for the Shares and it is made in your own name and\nat your own risk.\n(f)\nThis application is made in Singapore.\n(g)\nYou understand that these are not deposits or other obligations of or guaranteed or insured\nby DBS Vickers Online and are subject to investment risks, including the possible loss of the\nprincipal amount invested.\n(h)\nYou declare that (i) you are not under 21 years of age, (ii) you are not a corporation, sole-\nproprietorship, partnership or any other business entity, (iii) you are not an undisclosed\nbankrupt, (iv) you are in Singapore, (v) you have a mailing address in Singapore and (vi) you\nare not a US person (within the meaning of Regulation S under the US Securities Act of\n1933, as amended).\n8.\nFill in amount of share applied for and preferred payment mode, then click “Submit”\n9.\nCheck and verify details of your share application and your personal particulars on the screen\n10.\nEnter your password and click “Submit” to continue\n11.\nClick on “Application Status” to check your IPO application details\n12.\nPrint page for your reference and retention only\nG-20\nAPPENDIX G – TERMS, CONDITIONS AND PROCEDURES FOR\nAPPLICATION AND ACCEPTANCE\n\n\n\n\nUNI-ASIA FINANCE CORPORATION\nSUITE A, 26TH FLOOR\nADMIRALTY CENTRE TOWER I\n18 HARCOURT ROAD\nHONG KONG","difficulty":"hard","domain":"Single-Document QA","length":"long","question":"According to the report, which of the following statements about the UNI-ASIA finance corporation is true?","sub_domain":"Financial"}

Source: https://huggingface.co/datasets/zai-org/LongBench-v2

initial import

Posting: /agents

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