Far East Group Limited Prospectus PDF

OFFER DOCUMENT DATED 25 JULY 2011
(Registered by the Singapore Exchange Securities Trading Limited acting as an agent on behalf of the Monetary Authority of Singapore on 25 July 2011)
A One-Stop
Refrigeration Systems
FAR EAST GROUP LIMITED
Far East Group Limited

112 Lavender Street, #04-00
Far East Refrigeration Building
Singapore 338728
Tel: (65) 6293 9733
Fax: (65) 6296 5326
www.fareastref.com.sg
Provider
This document is important. If you are in any doubt as to the action you should take, you should
consult your legal, financial, tax or other professional adviser(s).
Collins Stewart Pte. Limited (the Sponsor) has made an application to the Singapore Exchange Securities
Trading Limited (the SGX-ST) for permission to deal in, and for quotation of, all the ordinary shares (the
Shares) in the capital of Far East Group Limited (the Company) already issued and the new Shares
which are the subject of the Placement (the New Shares) on Catalist (as defined herein). The dealing in
and quotation of the Shares will be in Singapore dollars.
Companies listed on Catalist may carry higher investment risk when compared with larger or more established
companies listed on the Main Board of the SGX-ST. In particular, companies may list on Catalist without
a track record of profitability and there is no assurance that there will be a liquid market in the shares or
units of shares traded on Catalist. You should be aware of the risks of investing in such companies and
should make the decision to invest only after careful consideration and, if appropriate, consultation with
your professional adviser(s).
The Placement is made in or accompanied by this Offer Document that has been registered by the SGX-ST
acting as an agent on behalf of the Monetary Authority of Singapore (the Authority). We have not lodged
or registered this Offer Document in any other jurisdiction.
Neither the Authority nor the SGX-ST has examined or approved the contents of this Offer Document. Neither
the Authority nor the SGX-ST assumes any responsibility for the contents of this Offer Document, including
the correctness of any of the statements or opinions made or reports contained in this Offer Document.
The SGX-ST does not normally review the application for admission but relies on the Sponsor confirming
that our Company is suitable to be listed and complies with the Catalist Rules. Neither the Authority nor the
SGX-ST has in any way considered the merits of the Shares being offered for investment.
Far
East Group Limited
(Incorporated in the Republic of Singapore
The registration of this Offer Document by the SGX-ST does not imply that the Securities and Futures Act
(Chapter 289) of Singapore, or any other legal or regulatory requirements, or requirements under the SGXSTs listing rules, have been complied with.
Placement of 18,800,000
New Shares by way of
placement, at S$0.27 per
Share, payable in full on
application.
Acceptance of applications will be conditional upon the issue of the New Shares and permission being
granted by the SGX-ST for the listing and quotation of all our existing issued Shares and the New Shares on
Catalist. Monies paid in respect of any application accepted will be returned to you at your own risk, without
interest or any share of revenue or benefit arising therefrom, if the admission and listing do not proceed, and
you will not have any claims against us, the Sponsor or the Placement Agent (as defined herein).
After the expiration of six months from the date of registration of this Offer Document, no person shall make
an offer of securities, or allot, issue or sell any of our Shares, on the basis of this Offer Document, and no
officer or equivalent person or promoter of our Company will authorise or permit the offer of any of our Shares
or the allotment, issue or sale of any of our Shares, on the basis of this Offer Document.
on 18 March 1964)
(Company Registration No.:196400096C)
Sponsor and Placement Agent
Investing in our Shares involves risks which are described in the RISK FACTORS section of this
Offer Document.
Our Company is not part of, nor related in any way, to Far East Organization, its subsidiaries or
associated companies (the Far East Organization Group of Companies). Our Directors and Controlling
Shareholder (as defined herein) have no direct or indirect relationships with the Far East Organization
Group of Companies. Our Group (as defined herein) is also not engaged in the same line of business
as that of the Far East Organization Group of Companies.
COLLINS STEWART PTE. LIMITED

(Incorporated in the Republic of Singapore)
(Company Registration Number: 200713620D)
ABOUT US
Founded in 1953 as one of the pioneers

in the refrigeration and air-conditioning
b u s i n e s s i n S i n g a p o re , F a r E a s t
Group Limited (formerly known as Far
East Refrigeration (Pte.) Limited) is a
comprehensive provider of refrigeration and
air-conditioning systems and products in
the heating, ventilation, air-conditioning and
refrigeration (HVAC&R) industry. Our
Directors believe that we are one of the
leading regional distributors of commercial
and light industrial refrigeration systems
and products in the South-east Asia region.
Our Group has a broad customer base
of more than 1,000 active customers,
including distributors, dealers as well as
refrigeration and air-conditioning contractors
who use our products and services to
provide comprehensive refrigeration
and air-conditioning systems to endusers, such as supermarkets, cold store
distribution centres, food processing and
catering facilities, hotels, hospitals, food
and beverage establishments, convenient
stores, petrol stations, marine vessels, oil
rigs and barges.
Besides sourcing and distributing agency

products, our Group also manufactures
our in-house Eden brand of heat
exchangers and condensing units.
In particular, our products are widely
recognised and used by well-known
international and regional retail chains
such as Carrefour, Metro, Tesco, Giant,
Cold Storage and NTUC FairPrice as
well as Resorts World Sentosa and
Marina Bay Sands.
Headquartered in Singapore, our Group
has subsidiaries in Singapore, Malaysia
and Hong Kong as well as representative
offices in Vietnam and Indonesia. We also
have approximately 20 distributors and
dealers in countries including Malaysia,
Thailand, the Philippines, Myanmar,
Mauritius, Vietnam, Sri Lanka and Indonesia.
In line with our growth, our Groups revenue
rose from approximately S$29.2 million in
FY2008 to approximately S$32.6 million
in FY2010, while net profit rose from
approximately S$1.0 million in FY2008 to
approximately S$4.6 million in FY2010.
BUSINESS MODEL
Our Groups business activities can be broadly segmented as follows: Commercial and light industrial (refrigeration)
Residential and commercial (air-conditioning)
Oil, marine and gas (refrigeration and air-conditioning)
COMPETITIVE STRENGTHS
PROSPECTS
One-stop refrigeration systems

provider
The global demand for HVAC&R products is expected to

increase in tandem with the economic recovery in the next
few years, and barring unforeseen circumstances, the
factors that will drive our Groups growth include:-
Established reputation and track

record
Strong business relationships with
business partners
Wide distribution network
Strong research and development
capabilities
Provide quality products and
services at competitive prices
Experienced management team
Continual growth of the global and regional

economies, in particular, that of the Asia
Pacific region
Growth in the frozen food market
Increased demand for HVAC
products due to climate
change
Increased awareness of
global warming
BUSINESS STRATEGIES AND FUTURE PLANS

Expansion of sales and distribution network
Expansion and upgrade of existing manufacturing facilities
Research and development of new products
Expansion of business through acquisitions, joint
ventures or strategic alliances
CONTENTS
CORPORATE INFORMATION .............................................................................................................
DEFINITIONS ......................................................................................................................................
GLOSSARY OF TECHNICAL TERMS.................................................................................................
14
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS......................................
16
SELLING RESTRICTIONS ..................................................................................................................
18
DETAILS OF THE PLACEMENT .........................................................................................................
19
LISTING ON CATALIST .............................................................................................................
19
INDICATIVE TIMETABLE FOR LISTING ...................................................................................
22
OFFER DOCUMENT SUMMARY ........................................................................................................
23
THE PLACEMENT ...............................................................................................................................
26
PLAN OF DISTRIBUTION ...................................................................................................................
27
USE OF PROCEEDS FROM THE PLACEMENT AND EXPENSES INCURRED ..............................
28
MANAGEMENT AND PLACEMENT ARRANGEMENTS ...................................................................
29
RISK FACTORS ...................................................................................................................................
31
ISSUE STATISTICS .............................................................................................................................
39
DILUTION.............................................................................................................................................
41
CAPITALISATION AND INDEBTEDNESS ..........................................................................................
42
DIVIDEND POLICY ..............................................................................................................................
46
SELECTED CONSOLIDATED FINANCIAL INFORMATION ..............................................................
47
MANAGEMENTS DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND

FINANCIAL POSITION ........................................................................................................................
50
OVERVIEW ................................................................................................................................
50
SEASONALITY ..........................................................................................................................
54
INFLATION .................................................................................................................................
54
CHANGE OF ACCOUNTING POLICIES ...................................................................................
54
REVIEW OF OPERATING RESULTS ........................................................................................
55
REVIEW OF FINANCIAL POSITION .........................................................................................
59
LIQUIDITY AND CAPITAL RESOURCES..................................................................................
61
CAPITAL EXPENDITURES, DIVESTMENTS, COMMITMENTS AND

CONTINGENT LIABILITIES .......................................................................................................
63
FOREIGN EXCHANGE MANAGEMENT ...................................................................................
64
GENERAL INFORMATION ON OUR GROUP ....................................................................................
66
SHARE CAPITAL .......................................................................................................................
66
OUR GROUP STRUCTURE ......................................................................................................
69
OUR SUBSIDIARIES .................................................................................................................
70
SHAREHOLDERS ....................................................................................................................
71
MORATORIUM ...........................................................................................................................
72
CONTENTS
HISTORY ..............................................................................................................................................
73
BUSINESS ...........................................................................................................................................
76
BUSINESS OVERVIEW .............................................................................................................
76
OUR PRODUCTS ......................................................................................................................
77
OUR BUSINESS MODEL ..........................................................................................................
83
BUSINESS AND MANUFACTURING PROCESS......................................................................
84
AWARDS AND ACHIEVEMENTS ..............................................................................................
88
SALES AND MARKETING.........................................................................................................
88
DISTRIBUTION CHANNELS .....................................................................................................
89
MANUFACTURING FACILITY AND CAPACITY ........................................................................
89
QUALITY CONTROL AND SAFETY ASSURANCE ..................................................................
90
INVENTORY MANAGEMENT ....................................................................................................
91
OUR MAJOR SUPPLIERS ........................................................................................................
92
OUR MAJOR CUSTOMERS ......................................................................................................
93
CREDIT MANAGEMENT ...........................................................................................................
94
PROPERTIES AND FIXED ASSETS .........................................................................................
96
RESEARCH AND DEVELOPMENT ..........................................................................................
98
INTELLECTUAL PROPERTY ....................................................................................................
99
STAFF TRAINING ......................................................................................................................
101
INSURANCE ..............................................................................................................................
102
COMPETITION ..........................................................................................................................
102
OUR COMPETITIVE STRENGTHS...........................................................................................
103
PROSPECTS, BUSINESS STRATEGIES AND FUTURE PLANS .....................................................
105
PROSPECTS .............................................................................................................................
105
TREND INFORMATION AND ORDER BOOK ...........................................................................
106
OUR BUSINESS STRATEGIES AND FUTURE PLANS ...........................................................
107
DIRECTORS, EXECUTIVE OFFICERS AND STAFF..........................................................................
109
MANAGEMENT REPORTING STRUCTURE ............................................................................
109
DIRECTORS .............................................................................................................................
109
EXECUTIVE OFFICERS ............................................................................................................
113
EMPLOYEES .............................................................................................................................
115
REMUNERATION OF DIRECTORS, EXECUTIVE OFFICERS AND RELATED EMPLOYEES ....
116
SERVICE AGREEMENTS..........................................................................................................
116
CORPORATE GOVERNANCE ..................................................................................................
118
CONTENTS
INTERESTED PERSON TRANSACTIONS .........................................................................................
121
INTERESTED PERSONS .........................................................................................................
121
PAST INTERESTED PERSON TRANSACTIONS ....................................................................
122
PRESENT AND ON-GOING INTERESTED PERSON TRANSACTIONS .................................
125
SHAREHOLDERS MANDATE ...................................................................................................
131
OPINION OF THE INDEPENDENT FINANCIAL ADVISER.......................................................
135
GUIDELINES AND REVIEW PROCEDURES FOR FUTURE INTERESTED PERSON

TRANSACTIONS OTHER THAN THOSE COVERED IN THE SHAREHOLDERS MANDATE .....
136
POTENTIAL CONFLICTS OF INTERESTS ........................................................................................
138
INTERESTS OF DIRECTORS, CONTROLLING SHAREHOLDER OR THEIR ASSOCIATES .....
138
INTERESTS OF EXPERTS .......................................................................................................
140
INTERESTS OF THE SPONSOR AND THE PLACEMENT AGENT .........................................
140
CLEARANCE AND SETTLEMENT .....................................................................................................
141
GENERAL AND STATUTORY INFORMATION ...................................................................................
142
GOVERNMENT REGULATIONS .........................................................................................................
147
EXCHANGE CONTROLS ....................................................................................................................
153
APPENDIX A INDEPENDENT AUDITORS REPORT ON THE AUDITED CONSOLIDATED

FINANCIAL STATEMENTS OF FAR EAST GROUP LIMITED AND
SUBSIDIARY COMPANIES FOR THE FINANCIAL YEARS ENDED
31 DECEMBER 2008, 2009 AND 2010 ...................................................................
A-1
APPENDIX B SUMMARY OF THE CONSTITUTION OF OUR COMPANY ...................................
B-1
APPENDIX C DESCRIPTION OF OUR SHARES ..........................................................................
C-1
APPENDIX D TAXATION ................................................................................................................
D-1
APPENDIX E TERMS, CONDITIONS AND PROCEDURES FOR APPLICATION ........................
E-1
APPENDIX F LETTER FROM SAC CAPITAL PRIVATE LIMITED TO THE AUDIT COMMITTEE ....
F-1
CORPORATE INFORMATION
BOARD OF DIRECTORS
Loh Ee Ming
(Non-executive Chairman)
Steven Loh
(Chief Executive Officer and Executive Director)
David Leng
(Chief Operating Officer and Executive Director)
Karen Loh
(Non-executive Director)
Hew Koon Chan (Independent Director)
Andrew Mak
(Independent Director)
Tan Hwee Kiong (Independent Director)
COMPANY SECRETARY
Chia Foon Yeow, LLB (Hons)
COMPANY REGISTRATION
NUMBER
196400096C
REGISTERED OFFICE AND

:
PRINCIPAL PLACE OF BUSINESS
112 Lavender Street #04-00

Singapore 338728
SHARE REGISTRAR AND SHARE

TRANSFER OFFICE
Boardroom Corporate & Advisory Services Pte Ltd

50 Raffles Place #32-01
Singapore Land Tower
Singapore 048623
SPONSOR AND PLACEMENT

AGENT
Collins Stewart Pte. Limited

77 Robinson Road #21-02
Singapore 068896
INDEPENDENT AUDITORS AND

REPORTING ACCOUNTANTS
Ernst & Young LLP

1 Raffles Quay
North Tower, Level 18
Singapore 048583
(Partner-in-charge: Philip Ling Soon Hwa, a member of the
Institute of Certified Public Accountants of Singapore)
SOLICITORS TO THE PLACEMENT :

AND LEGAL ADVISERS TO OUR
COMPANY ON SINGAPORE LAW
Loo & Partners LLP

16 Gemmill Lane
Singapore 069254
LEGAL ADVISERS TO OUR

COMPANY ON MALAYSIA LAW
Naqiz and Partners

42A Lorong Dungun
Damansara Heights
50490 Kuala Lumpur
Malaysia

COMPANY ON HONG KONG LAW
Pang & Co. in association with Salans LLP

Suite 7601A, Level 76, International Commerce Centre
1 Austin Road West
Kowloon, Hong Kong

COMPANY ON THE PEOPLES
REPUBLIC OF CHINA LAW
Victory Legal Group

Unit J, 14 Floor, Huamin Empire Plaza,
No. 726, Yan An West Road,
Shanghai 200050
The Peoples Republic of China
CORPORATE INFORMATION
INDEPENDENT FINANCIAL
ADVISER
SAC Capital Private Limited

79 Anson Road #15-03
Singapore 079906
PRINCIPAL BANKERS
United Overseas Bank Limited

Jalan Sultan Branch
201 Jalan Sultan #01-06
Textile Centre
Singapore 199019
DBS Bank Ltd
6 Shenton Way #32-02
DBS Building Tower One
Singapore 068809
RECEIVING BANKER
The Bank of East Asia, Limited (Singapore Branch)

60 Robinson Road
BEA Building
Singapore 068892
DEFINITIONS
In this Offer Document and the accompanying Application Form, the following definitions apply where the
context so admits:Group Companies
Company or Far East Group

(formerly known as Far East Refrigeration (Pte.) Limited)
Edenkool
Edenkool Pte. Ltd.
Far East HK
Far East Refrigeration Limited
Far East JB
Far East Enterprises (J.B.) Sdn Bhd
Far East KL
Far East Enterprises (K.L.) Sdn Bhd
Far East Kuching
Far East Refrigeration (Kuching) Sdn. Bhd.
Far East Maju
Far East Maju Engineering Works Sdn. Bhd.
Far East Malaysia
Far East Refrigeration (M) Sdn Bhd, the holding company of Far
East Penang, Far East Maju, Fast East KL, Far East JB, FE&B,
Far East Kuching and Safety Enterprises
Far East Penang
Far East Enterprises (Penang) Sdn. Bhd.
FE&B
F E & B Engineering (M) Sdn. Bhd.
Green Point
Green Point (Singapore) Pte. Ltd.
Group
Our Company and our subsidiaries (as set out in the General
Information on our Group Our Subsidiaries section of this Offer
Document)
RSP
RSP Systems Pte Ltd
Safety Enterprises
Safety Enterprises Sdn. Bhd.
Other Corporations and Agencies

Angliss Singapore
Angliss Singapore Pte Ltd
Authority
The Monetary Authority of Singapore
Bitzer
Bitzer SE, a leading manufacturer of compressors in Germany
BSI
British Standards Institution, a leading global provider of

standards, management systems, business improvement and
regulatory approval information
CDP
The Central Depository (Pte) Ltd
Chinhero Development
Chinhero Development Limited
Chun Cheng Fishery
Chun Cheng Fishery Enterprise Pte Ltd

6
DEFINITIONS
CIAS
Changi International Airport Services Pte Ltd
Collins Stewart, Sponsor or

Placement Agent
Collins Stewart Pte. Limited
CPF
The Central Provident Fund
ERM
Eden Refrigeration Manufacturing (Jiangsu) Co., Ltd.

(())
HSA
Health Sciences Authority of Singapore
ISO
International Organisation of Standardisation
Old FER HK
Far East Refrigeration (Hong Kong) Limited
SAC Capital or Independent

Financial Adviser
SAC Capital Private Limited
SAIC
State Administration for Industry & Commerce of the Peoples

Republic of China
()
SCCS
Securities Clearing & Computer Services (Pte) Ltd
SGX-ST
Singapore Exchange Securities Trading Limited
SER
Shanghai Eden Refrigeration Co., Ltd.

()
SERM
Shanghai Eden Refrigeration Manufacturing Co., Ltd.

()
SIPO
State Intellectual Property Office of the Peoples Republic of China

()
UPL
Universal Pte. Ltd.
Ziehl-Abegg
Ziehl-Abegg AG
Acquisition Options
Options granted by UPL and SER to our Company pursuant

to which we have the options to acquire their respective equity
interests in, or the assets, businesses and undertakings of,
the Regional Affiliates as described in the Interested Person
Transactions Present and On-going Interested Person
Transactions section of this Offer Document
Adjusted EPS
The EPS of our Group based on the audited consolidated profit

for the year in FY2010, adjusted for a non-recurring income of
approximately S$1,062,000 in relation to gain on disposal of
investment properties
General
DEFINITIONS
Adjusted NTA
The NTA of our Group based on the audited consolidated

financial position of our Group as at 31 December 2010, adjusted
for the issuance of 8,312 new Shares (before the Sub-Division)
for a total cash consideration of approximately S$1,187,452
pursuant to the Pre-IPO Investment, subsequent to 31 December
2010
Application Form
The printed application form to be used for the purpose of the

Placement and which form part of this Offer Document
Application List
The list of applications for subscription of the New Shares
Articles or Articles of
Association
The articles of association of our Company, as amended,

supplemented or modified from time to time
ASEAN
The Association of South-east Asian Nations
Associate
(a)
(b)
Associated Company
Audit Committee
in relation to any director, chief executive officer, substantial

shareholder or controlling shareholder (being an individual)
means:(i)
his immediate family;
(ii)
the trustees, acting in their capacity as such trustees,

of any trust of which he or his immediate family is a
beneficiary or, in the case of a discretionary trust, is
a discretionary object; or
(iii)
any company in which he and his immediate family

together (directly or indirectly) have interests in
voting shares of an aggregate of not less than 30%
of the total votes attached to all voting shares; and
in relation to a substantial shareholder or a controlling

shareholder (being a company) means any other company
which is its subsidiary or holding company or is a fellow
subsidiary of any such holding company or one in the
equity of which it and/or such other company or companies
taken together (directly or indirectly) have an interest of
30% or more
In relation to a corporation, means:(a)
any corporation in which the corporation or its subsidiary

has, or the corporation and its subsidiary together have, a
direct interest of not less than 20% but not more than 50%
of the aggregate of the total votes attached to all voting
shares in the corporation; or
(b)
any corporation, other than a subsidiary of the corporation

or a corporation which is an associated company by virtue
of paragraph (a), the policies of which the corporation or its
subsidiary, or the corporation together with its subsidiary, is
able to control or influence materially
The audit committee of our Company as at the date of this Offer

Document, unless otherwise stated
8
DEFINITIONS
Board or Board of Directors
The board of Directors of our Company as at the date of this

Offer Document, unless otherwise stated
business trust
Has the same meaning as in Section 2 of the Business Trusts Act

(Chapter 31A) of Singapore
Catalist
The sponsor-supervised listing platform of the SGX-ST
Catalist Rules
Any or all of the rules in the SGX-ST Listing Manual Section B:

Rules of Catalist, as the case may be
CEO
Chief executive officer
Companies Act
The Companies Act (Chapter 50) of Singapore, as amended,

modified or supplemented from time to time
Controlling Shareholder
A person who:(a)
has an interest in our Shares of an aggregate of not less

than 15% or more of the total votes attached to our Shares;
or
(b)
in fact exercises control over our Company.
COO
Chief operating officer
Director
A director of our Company as at the date of this Offer Document,

unless otherwise stated
entity
Includes a corporation, an unincorporated association, a

partnership and the government of any state, but does not
include a trust
EPS
Earnings per Share
Executive Director
An executive director of our Company as at the date of this Offer

Document, unless otherwise stated
Executive Officer
A key executive of our Group as at the date of this Offer

Document, including any key executive who makes or participates
in making decisions that affect the whole or substantial part of
our business or has the capacity to make decisions which affect
significantly our financial standing, unless otherwise stated
Exposure Period
The minimum period of 14 calendar days (unless extended by the

SGX-ST) following the lodgement of this Offer Document by the
Sponsor with the SGX-ST acting as an agent on behalf of the
Authority, during which this Offer Document is exposed for public
comment
FY
Financial year ended or, as the case may be, ending 31

December
GDP
Gross domestic product
DEFINITIONS
GST
Goods & Services Tax
Hong Kong
The Hong Kong Special Administrative Region of the PRC
IB
Internet Banking
Independent Director
A non-executive independent Director of our Company as at the

date of this Offer Document, unless otherwise stated
Indochina
Countries in the Indochina region, namely Cambodia, Laos,

Vietnam and Myanmar
IPO
Initial public offering
IP Licence Agreement
The intellectual properties licence agreement dated 27 June 2011

entered into between our Company and the Regional Affiliates
for the use of trade marks and patents, details as described in
the Interested Person Transactions Present and On-going
Interested Person Transactions section of this Offer Document
Latest Practicable Date
20 June 2011, being the latest practicable date for the purposes
of lodgement of this Offer Document with the SGX-ST acting as
an agent on behalf of the Authority
Macau
The Macau Special Administrative Region of the PRC
Maju Facility
Our manufacturing facility located at Lot 1998/D Jalan

Perusahaan 3, Taman Industri Selesa Jaya, 43300 Balakong, Seri
Kembangan, Selangor Darul Ehsan, Malaysia
Management Agreement
The full sponsorship and management agreement dated 25 July

2011 entered into between our Company and Collins Stewart
pursuant to which Collins Stewart agreed to manage and sponsor
the Placement, details as described in the Management and
Placement Arrangements section of this Offer Document
Market Day
A day on which the SGX-ST is open for trading in securities
NAV
Net asset value
New Shares
The 18,800,000 new Shares in respect of which our Company

invites application to subscribe for pursuant to the Placement,
subject to and on the terms and conditions of this Offer
Document
Nominating Committee
The nominating committee of our Company as at the date of this

Offer Document, unless otherwise stated
Non-executive Director
A non-executive and non-independent Director of our Company

as at the date of this Offer Document, unless otherwise stated
NTA
Net tangible assets
Offer Document
This offer document dated 25 July 2011 issued by our Company

in respect of the Placement
10
DEFINITIONS
PBT
Profit before tax
PER
Price earnings ratio
period under review
The period which comprises FY2008, FY2009 and FY2010
Placement
The placement of the Placement Shares by the Placement Agent

on behalf of our Company for subscription at the Placement
Price, subject to and on the terms and conditions of this Offer
Document
Placement Agreement
The placement agreement dated 25 July 2011 entered into

between our Company and Collins Stewart pursuant to which
Collins Stewart agreed to subscribe and/or procure subscribers
for the Placement Shares, details as described in the
Management and Placement Arrangements section of this Offer
Document
Placement Price
S$0.27 for each Placement Share
Placement Shares
The 18,800,000 New Shares which are the subject of the

Placement
PRC
The Peoples Republic of China, excluding Hong Kong, Macau

and Taiwan, for the purpose of this Offer Document and for
geographical reference only
Pre-IPO Investment
The pre-IPO investment by the Pre-IPO Investors in our Company

as described in the General Information on our Group Share
Capital section of this Offer Document
Pre-IPO Investors
David Leng, Sam Cheung and Richard Chung
Regional Affiliates
SER, SERM and ERM
Registration
The registration of this Offer Document in its final form by the

SGX-ST acting as an agent on behalf of the Authority
Remuneration Committee
The remuneration committee of our Company as at the date of

this Offer Document, unless otherwise stated
SEA
South-east Asia
Securities Account
The securities account maintained by a Depositor with CDP but

does not include a securities sub-account
Service Agreements
The service agreements entered into between our Company

and our Executive Directors, Steven Loh and David Leng, as
described in the Directors, Executive Officers and Staff Service
Agreements section of this Offer Document
SFA or Securities and Futures

Act
The Securities and Futures Act (Chapter 289) of Singapore, as

amended, modified or supplemented from time to time
11
DEFINITIONS
SGXNET
The corporate announcement system maintained by the SGX-ST

for the submission of announcements by listed companies
Shareholders
Registered holders of Shares, except where the registered holder

is CDP, the term Shareholders shall, in relation to such Shares,
mean the Depositors whose Securities Accounts are credited
with Shares
Shares
Ordinary shares in the capital of our Company
Sub-Division
The sub-division of every one (1) Share into 600 Shares as

described in the General Information on our Group Share
Capital section of this Offer Document
Substantial Shareholder
A person who has an interest in the voting shares of our

Company, the total votes attached to which is not less than 5% of
the total votes attached to all the voting shares in our Company
HK$
Hong Kong dollars, the lawful currency of Hong Kong
JPY
Japanese Yen, the lawful currency of Japan
RM
Malaysia ringgit, the lawful currency of Malaysia
RMB
Renminbi, the lawful currency of the PRC
S$ and cents
Singapore dollars and cents respectively, the lawful currency of

Singapore
sqft
Square feet
US$
United States dollars, the lawful currency of the United States of

America
Euro, the lawful currency of the European Monetary Union
% or per cent.
Per centum
N.A.
Not applicable
Currencies, Units and Others
12
DEFINITIONS
For the purpose of this Offer Document, the following persons named in the second column below are
also known by the names set out in the first column:Name used in this Offer Document
Name in National Registration Identity Card

(NRIC)/Passport
Andrew Mak
Mak Yen-Chen Andrew
David Leng
Leng Chee Keong
Karen Loh
Loh Pui Lai
Loh Ee Ming
Loh Ah Peng @ Loh Ee Ming
Richard Chung
Chung Kong Poh
Sam Cheung
Cheung Wai Sum
Sharon Loh
Loh Pui-Pui Sharon
Steven Loh
Loh Mun Yew
The expressions Depositor, Depository Agent and Depository Register shall have the meanings
ascribed to them respectively in Section 130A of the Companies Act.
Words importing the singular shall, where applicable, include the plural and vice versa and words
importing the masculine gender shall, where applicable, include the feminine and neuter genders and
vice versa. References to persons shall include corporations.
Any reference in this Offer Document and the Application Form to any statute or enactment is a reference
to that statute or enactment as for the time being amended or re-enacted. Any word defined under the
Companies Act, the SFA or any statutory modification thereof and used in this Offer Document and the
Application Form shall, where applicable, have the meaning assigned to it under the Companies Act, the
SFA or any statutory modification thereof, as the case may be.
Any reference in this Offer Document and the Application Form to Shares being allotted to an applicant
includes allotment to CDP for the account of that Applicant.
Any reference to a time of day in this Offer Document shall be a reference to Singapore time unless
otherwise stated.
References in this Offer Document to we, our, and us refer to our Group.
Any discrepancies in the tables included herein between the listed amounts and the totals thereof are due
to rounding. Accordingly, figures shown as totals in certain tables may not be an arithmetic aggregation of
the figures that precede them.
Certain names with Chinese characters have been translated into English names. Such translations are
provided solely for the convenience of investors and may not have been registered with the relevant PRC
authorities and as such, should not be construed as representations that the English names actually
represent the Chinese characters.
13
GLOSSARY OF TECHNICAL TERMS

To facilitate a better understanding of the business of our Group, the following glossary provides
an explanation of some of the technical terms and abbreviations (which would not be treated as
being definitive of their meanings) used in this Offer Document relating to our business. The terms
and abbreviations and their assigned meanings may not correspond to standard industry or common
meanings, as the case may be, or usage of these terms.
Agency products
Refrigeration and air-conditioning products that we represent and

distribute, such as compressors, condensers, controllers, valves,
copper pipes and insulation materials.
Brine cooler
A heat exchange cooler designed to use brine as a medium for

heat transfer. Brine is a heat transfer fluid that remains in the
liquid state throughout the heat transfer cycle.
CNC
Computer Numerical Control, which refers to the automation

of machine tools that are operated by abstractly programmed
commands encoded on a storage medium, as opposed to
manually controlled via handwheels or levers, or mechanically
automated via cams alone.
Condenser
A heat exchanger that generally rejects all heat from the system.
The hot and high-pressure refrigerant gas is discharged from the
compressor to the condenser, which rejects the heat from the
gas to some cooler medium. Thus, the cool refrigerant condenses
back to the liquid state and drains from the condenser to continue
in the system cycle.
Condensing unit
A packaged assembly unit that consists of the condenser,

compressor, electrical controls, receiver, valves and other related
products.
Compressor
A pumping device used in a heat transfer system (air-conditioning

and refrigeration) to compress low-pressure, low-volume
refrigerant gas into high-pressure, high-temperature refrigerant
gas and circulates it through the system in a continuous cycle.
Custom coil
A heat exchanger coil that is designed and manufactured to the

customers specifications for a specific application.
EMS
Energy Management System, which comprises various

electronics, electrical components and intelligent software
algorithms to improve efficiency and reduce energy consumption
within the system.
ERP
Enterprise Resourcing Planning, a computer network system that

uses a database of information that is company-wide accessible.
It covers all functions of a business such as purchasing,
manufacturing, distribution, and inventory management.
Evaporator or Unit cooler
A heat exchange device or unit with a fan that draws air across
the coil to be cooled. This is achieved through the evaporative
process of the refrigerant whereby heat is extracted from the air
causing it to be cooled and subsequently circulated.
G4
Generation 4, the latest generation of our Eden brand of heat

exchangers.
14
GLOSSARY OF TECHNICAL TERMS

Green Program
An initiative by our Group to drive the industry towards a more

environmentally friendly approach to systems and products
design. It is intended to promote environmental awareness among
product designers, system designers and business owners.
HACCP
Hazard Analysis and Critical Control Point system certification,

an internationally recognised award granted to food and
beverage companies that meet the prescribed food safety and
hygiene standards, methodology and guidelines defined by
CODEX. CODEX is a collection of internationally adopted food
standards to protect the health of consumers and to ensure fair
practices in the food trade, established by the Codex Alimentarius
Commission which implements the Joint United Nations Food and
Agricultural Organisation and World Health Organisation (FAO/
WHO) Food Standards Programme.
Heat exchanger
A device built for efficient heat transfer from one medium to

another. It involves devices such as condenser and evaporator.
Heat transfer occurs in a heat exchanger when a fluid changes
from a liquid to a vapour (evaporator) and a vapour to a liquid
(condenser).
HVAC
Heating, ventilation and air-conditioning.
HVAC&R
Heating, ventilation, air-conditioning and refrigeration.
ISO9000
A series of international standards primarily concerned with

quality management and quality assurance.
ISO9001:2000
A constituent part of the ISO9000 series which specifies

the requirements for a quality management system for any
organisation that needs to demonstrate its ability to consistently
provide products that meet customer and applicable requirements
aim to enhance customer satisfaction.
ISO9001:2008
A constituent part of the ISO9000 series developed in order

to introduce clarifications to the existing requirements of the
ISO9001:2000.
Montreal Protocol
The Montreal Protocol on Substances that Deplete the Ozone

Layer, an international treaty designed to protect the ozone layer
by phasing out the production of numerous substances believed
to be responsible for ozone depletion.
Pipe insulation
A thermal insulation unit used to prevent heat loss and heat gain
from pipes, to save energy, minimise condensation and improve
effectiveness of thermal systems.
PVC trunking
A material made of polyvinyl chloride (PVC) used to enclose

copper pipes in refrigeration and air-conditioning applications.
Refrigerant
A medium used for heat transfer involving the removal of heat

through the latent heat processes which is a reversible phase
change from gas to liquid.
15
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

All statements contained in this Offer Document, statements made in press releases and oral statements
that may be made by us or our Directors, Executive Officers or employees acting on our behalf, that are
not statements of historical fact, constitute forward-looking statements. You can identify some of these
forward-looking statements by terms such as expect, believe, plan, intend, estimate, anticipate,
may, will, would and could or similar words. However, you should note that these words are not the
exclusive means of identifying forward-looking statements. All statements regarding our expected financial
position, business strategies, plans and prospects are forward-looking statements.
These forward-looking statements, including without limitation, statements as to:(a)
our revenue and profitability;
(b)
expected growth in demand;
(c)
expected industry trends;
(d)
anticipated expansion plans; and
(e)
other matters discussed in this Offer Document regarding matters that are not historical fact,
are only predictions. These forward-looking statements involve known and unknown risks, uncertainties
and other factors that may cause our actual results, performance or achievements to be materially
different from any future results, performance or achievements expected, expressed or implied by these
forward-looking statements. These risks, uncertainties and other factors include, among others:(a)
changes in political, social, economic and stock or securities market conditions and the regulatory
environment in Singapore and other countries in which we conduct business;
(b)
changes in currency exchange or interest rates;
(c)
the risk that we may be unable to realise our anticipated growth strategies and expected internal
growth;
(d)
changes in the availability and prices of raw materials which we require to operate our business;
(e)
changes in customer preferences;
(f)
changes in competitive conditions and our ability to compete under such conditions;
(g)
changes in our future capital needs and the availability of financing and capital to fund such needs;
(h)
other factors beyond our control; and
(i)
the factors described in the Risk Factors section of this Offer Document.
All forward-looking statements made by or attributable to us, or persons acting on our behalf, contained in
this Offer Document are expressly qualified in their entirety by such factors.
Given the risks and uncertainties that may cause our actual future results, performance or achievements
to be materially different from that expected, expressed or implied by the forward-looking statements in
this Offer Document, undue reliance must not be placed on these statements which apply only as at the
date of this Offer Document. None of our Company, the Sponsor and the Placement Agent or any other
person represents or warrants that our Groups actual future results, performance or achievements will be
as discussed in those statements. Further, our Company, the Sponsor and the Placement Agent disclaim
any responsibility to update any of those forward-looking statements to reflect future developments,
events or circumstances for any reason, even if new information becomes available or other events occur
in the future.
16
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

Our actual results may differ materially from those anticipated in these forward-looking statements as a
result of the risks faced by us. We, and the Sponsor and the Placement Agent disclaim any responsibility
to update any of those forward-looking statements or publicly announce any revisions to those forwardlooking statements to reflect future developments, events or circumstances. We are, however, subject to
the provisions of the SFA and the Catalist Rules regarding corporate disclosure. In particular, pursuant
to Section 241 of the SFA, if after the Registration but before the close of the Placement, our Company
becomes aware of (a) a false or misleading statement or matter in the Offer Document; (b) an omission
from the Offer Document of any information that should have been included in it under Section 243 of the
SFA; or (c) a new circumstance that has arisen since the Registration and would have been required by
Section 243 of the SFA to be included in the Offer Document if it had arisen before the Offer Document
was lodged and that is materially adverse from the point of view of an investor, our Company may lodge
a supplementary or replacement offer document with the SGX-ST acting as an agent on behalf of the
Authority.
17
SELLING RESTRICTIONS
This Offer Document does not constitute an offer, solicitation or invitation to subscribe for our Shares
in any jurisdiction in which such offer, solicitation or invitation is unlawful or is not authorised or to any
person to whom it is unlawful to make such offer, solicitation or invitation. No action has been or will be
taken under the requirements of the legislation or regulations of, or of the legal or regulatory authorities
of, any jurisdiction, except for the lodgement and/or registration of this Offer Document in Singapore in
order to permit a public offering of the New Shares and the public distribution of this Offer Document in
Singapore. The distribution of this Offer Document and the offering of the Shares in certain jurisdictions
may be restricted by the relevant laws in such jurisdictions. Persons who may come into possession of
this Offer Document are required by our Company, and the Sponsor and the Placement Agent to inform
themselves about, and to observe and comply with, any such restrictions at their own expense and
without liability to our Company, and the Sponsor and the Placement Agent.
Persons to whom a copy of this Offer Document has been issued shall not circulate to any other
person, reproduce or otherwise distribute this Offer Document or any information herein for any purpose
whatsoever nor permit or cause the same to occur.
18
DETAILS OF THE PLACEMENT

LISTING ON CATALIST
The Sponsor has made an application to the SGX-ST for permission to deal in, and for quotation of, all
our Shares already issued and the New Shares which are the subject of the Placement on Catalist. The
dealing in and quotation of the Shares will be in S$.
Companies listed on Catalist may carry higher investment risk when compared with larger or more
established companies listed on the Main Board of the SGX-ST. In particular, companies may list on
Catalist without a track record of profitability and there is no assurance that there will be a liquid market
in the shares or units of shares traded on Catalist. You should be aware of the risks of investing in such
companies and should make the decision to invest only after careful consideration and, if appropriate,
consultation with your professional adviser(s).
The Placement is made in or accompanied by this Offer Document that has been registered by the
SGX-ST acting as an agent on behalf of the Authority. We have not lodged or registered this Offer
Document in any other jurisdiction.
Neither the Authority nor the SGX-ST has examined or approved the contents of this Offer Document.
Neither the Authority nor the SGX-ST assumes any responsibility for the contents of this Offer Document,
including the correctness of any of the statements or opinions made or reports contained in this Offer
Document. The SGX-ST does not normally review the application for admission but relies on the Sponsor
confirming that our Company is suitable to be listed and complies with the Catalist Rules. Neither
the Authority nor the SGX-ST has in any way considered the merits of the Shares being offered for
investment.
The Registration does not imply that the SFA, or any other legal or regulatory requirements, or
requirements under the SGX-STs listing rules, have been complied with.
granted by the SGX-ST for the listing and quotation of all our existing issued Shares and the New Shares
on Catalist. Monies paid in respect of any application accepted will be returned to you at your own risk,
without interest or any share of revenue or other benefit arising therefrom, if the admission and listing do
not proceed, and you will not have any claims against us or the Sponsor and the Placement Agent.
After the expiration of six months from the date of Registration, no person shall make an offer of
securities, or allot, issue or sell any of our Shares, on the basis of this Offer Document; and no officer or
equivalent person or promoter of our Company will authorise or permit the offer of any of our Shares or
the allotment, issue or sale of any of our Shares, on the basis of this Offer Document.
We are subject to the provisions of the SFA and the Catalist Rules regarding corporate disclosure.
In particular, pursuant to Section 241 of the SFA, if after the Registration but before the close of the
Placement, we become aware of:(a)
a false or misleading statement or matter in the Offer Document;
(b)
an omission from the Offer Document of any information that should have been included in it under
Section 243 of the SFA; or
(c)
a new circumstance that has arisen since the Offer Document was lodged with the SGX-ST would
have been required by Section 243 of the SFA to be included in the Offer Document if it had arisen
before this Offer Document was lodged,
that is materially adverse from the point of view of an investor, we may lodge a supplementary or
replacement offer document with the SGX-ST acting as an agent on behalf of the Authority.
In the event that a supplementary or replacement offer document is lodged with the SGX-ST, the
Placement shall be kept open for at least 14 days after the lodgement of such supplementary or
replacement offer document.
19

Where prior to the lodgement of the supplementary or replacement offer document, applications have
been made under this Offer Document to subscribe for the New Shares and:(a)
(b)
where the New Shares have not been issued to the applicants, our Company shall either:(i)
within two days (excluding any Saturday, Sunday or public holiday) from the date of
lodgement of the supplementary or replacement offer document, give the applicants notice in
writing of how to obtain, or arrange to receive, a copy of the supplementary or replacement
offer document, and provide the applicants with an option to withdraw their applications and
take all reasonable steps to make available within a reasonable period the supplementary or
replacement offer document to the applicants who have indicated that they wish to obtain, or
who have arranged to receive, a copy of the supplementary or replacement offer document;
or
(ii)
within seven days from the date of lodgement of the supplementary or replacement offer
document, give the applicants the supplementary or replacement offer document, as the
case may be, and provide the applicants with an option to withdraw their applications; or
(iii)
treat the applications as withdrawn and cancelled, in which case the applications shall be
deemed to have been withdrawn and cancelled, and our Company shall, within seven days
from the date of lodgement of the supplementary or replacement offer document, return all
monies paid in respect of any application, without interest or a share of revenue or other
benefit arising therefrom; or
where the New Shares have been issued to the applicants, our Company shall either:(i)
within two days (excluding any Saturday, Sunday or public holiday) from the date of
lodgement of the supplementary or replacement offer document, give the applicants notice in
writing of how to obtain, or arrange to receive, a copy of the supplementary or replacement
offer document, and provide the applicants with an option to withdraw their applications and
take all reasonable steps to make available within a reasonable period the supplementary or
replacement offer document to the applicants who have indicated that they wish to obtain, or
have arranged to receive, a copy of the supplementary or replacement offer document;
(ii)
within seven days from the date of lodgement of the supplementary or replacement offer
document, give the applicants the supplementary or replacement offer document, as the
case may be, and provide the applicants with an option to return to our Company the New
Shares, which they do not wish to retain title in; or
(iii)
treat the issue of the New Shares as void, in which case the issue shall be deemed void
and our Company shall within seven days from the date of lodgement of the supplementary
or replacement offer document, return all monies paid in respect of any application, without
interest or a share of revenue or other benefit arising therefrom.
An applicant who wishes to exercise his option under paragraph (a)(i) or (a)(ii) to withdraw his application
shall, within 14 days from the date of lodgement of the supplementary or replacement offer document,
notify our Company of this, whereupon our Company shall, within seven days from the receipt of such
notification, return the application monies without interest or any share of revenue or other benefit arising
therefrom and at his own risk, and he will not have any claim against our Company, the Sponsor or the
Placement Agent.
An applicant who wishes to exercise his option under paragraph (b)(i) or (b)(ii) to return the New Shares
issued to him shall, within 14 days from the date of lodgement of the supplementary or replacement offer
document, notify our Company of this and return all documents, if any, purporting to be evidence of title
to those New Shares to our Company, whereupon our Company shall, within seven days from the receipt
of such notification and documents, if any, pay to him all monies paid by him for those Shares, without
interest or any share of revenue or other benefit arising therefrom and at his own risk, and the issue
of those Shares shall be deemed to be void, and he will not have any claim against our Company, the
Sponsor or the Placement Agent.
20

This Offer Document has been seen and approved by our Directors and they individually and collectively
accept full responsibility for the accuracy of the information given in this Offer Document and confirm,
having made all reasonable enquiries, that to the best of their knowledge and belief, the facts stated and
all expressions of opinion, intention and expectation in this Offer Document are fair and accurate in all
material respects as at the date of this Offer Document and that there are no material facts the omission
of which would make any statements in this Offer Document misleading, and that this Offer Document
constitutes full and true disclosure of all material facts about the Placement and our Group.
Neither our Company, the Sponsor and the Placement Agent nor any other parties involved in the
Placement is making any representation to any person regarding the legality of an investment by such
person under any investment or other laws or regulations. No information in this Offer Document should
be considered as being business, legal or tax advice regarding an investment in our Shares. Each
prospective investor should consult his own professional or other advisers for business, legal or tax advice
regarding an investment in our Shares.
No person has been or is authorised to give any information or to make any representation not contained
in this Offer Document in connection with the Placement and, if given or made, such information or
representation must not be relied upon as having been authorised by us, the Sponsor and the Placement
Agent. Neither the delivery of this Offer Document and the Application Form nor any documents relating to
the Placement, nor the Placement shall, under any circumstances, constitute a continuing representation
or create any suggestion or implication that there has been no change in our affairs or in the statements
of fact or information contained in this Offer Document since the date of this Offer Document. Where such
changes occur and are material or are required to be disclosed by law, the SGX-ST and/or any other
regulatory or supervisory body or agency, we may make an announcement of the same to the SGX-ST
and the public and if required, we may lodge a supplementary or replacement offer document with the
SGX-ST and will comply with the requirements of the SFA and/or any other requirements of the SGX-ST.
All applicants should take note of any such announcements and/or supplementary or replacement offer
document, and, upon the release of such an announcement and/or supplementary or replacement offer
document, shall be deemed to have notice of such changes.
Save as expressly stated in this Offer Document, nothing herein is, or may be relied upon as, a promise
or representation as to our future performance or policies. The New Shares are offered for subscription
solely on the basis of the information contained and representations made in this Offer Document.
This Offer Document has been prepared solely for the purpose of the Placement and may not be relied
upon by any persons other than the applicants in connection with their application for the New Shares or
for any other purpose.
This Offer Document does not constitute an offer, solicitation or invitation to subscribe for
the New Shares in any jurisdiction in which such offer, solicitation or invitation is unlawful or
unauthorised nor does it constitute an offer, solicitation or invitation to any person to whom it is
unlawful to make such offer, solicitation or invitation.
Copies of this Offer Document and the Application Form may be obtained on request, subject to
availability during office hours, from:Collins Stewart Pte. Limited
77 Robinson Road #21-02
Singapore 068896
An electronic copy of this Offer Document is also available on the SGX-ST website at
http://www.sgxcatalist.com.
The Application List will open immediately upon the Registration and will remain open until 12.00
noon on 4 August 2011 or for such further period or periods as our Directors may, in consultation
with the Sponsor and the Placement Agent, in their absolute discretion decide, subject to any
limitation under all applicable laws. In the event a supplementary offer document or replacement
offer document is lodged with the SGX-ST, the Application List will remain open for at least 14
days after the lodgement of the supplementary or replacement offer document.
21

Details of the procedures for application of the New Shares are set out in Appendix E Terms,
Conditions and Procedures for Application of this Offer Document.
INDICATIVE TIMETABLE FOR LISTING
An indicative timetable for the Placement and trading in our Shares is set out below for your reference:Indicative date/time
Event
4 August 2011, at 12.00 noon
Close of Application List
8 August 2011, at 9.00 a.m.
Commence trading on a ready basis
12 August 2011
Settlement date for all trades done on a ready basis
The above timetable is only indicative as it assumes that the date of closing of the Application List
is 4 August 2011, the date of admission of our Company to Catalist is 8 August 2011, the SGX-STs
shareholding spread requirement will be complied with and the New Shares will be issued and fully paidup prior to 8 August 2011.
The above timetable and procedures may be subject to such modification as the SGX-ST may, in its
absolute discretion, decide, including the commencement date of trading on a "ready" basis.
In the event of any changes in the closure of the Application List or the time period during which the
Placement is open, we will publicly announce the same:(a)
through an SGXNET announcement to be posted on the internet at the SGX-ST website

http://www.sgx.com; and
(b)
in a major English language newspaper in Singapore such as The Straits Times and/or The
Business Times.
We will provide details of the results of the Placement (including the level of subscription for the New
Shares), as soon as it is practicable after the closure of the Application List through the channels
described in (a) and (b) above.
Investors should consult the SGX-STs announcement on ready trading date on the Internet (at
the SGX-ST website http://www.sgx.com) or newspapers, or check with their brokers on the date
on which trading on a ready basis will commence.
22
OFFER DOCUMENT SUMMARY

The following summary highlights certain information found in greater detail elsewhere in this Offer
Document and should be read in conjunction with the full text of this Offer Document. As it is a summary,
it does not contain all the information that potential investors should consider before investing in our
Shares. We urge potential investors to read this entire Offer Document carefully, especially the matters
set out in the Risk Factors section of this Offer Document, before deciding to invest in our Shares.
OVERVIEW OF OUR GROUP
Our Company was incorporated in Singapore on 18 March 1964 under the Companies Act as a private
limited company under the name of Far East Refrigeration (Pte.) Limited. On 18 March 2011, the name
of our Company was changed to Far East Group Pte. Ltd.. Our Company was converted to the public
limited company and the name of our Company was changed to Far East Group Limited in connection
therewith on 25 July 2011.
OUR BUSINESS
We are a comprehensive provider of refrigeration and air-conditioning systems and products in the
HVAC&R industry, principally engaged in the sourcing and distribution of a wide range of agency products
as well as the manufacturing and distribution of heat exchangers and condensing units under our own
brand Eden. Our Directors believe that we are one of the leading regional distributors of commercial and
light industrial refrigeration systems and products in the SEA region.
Our head office is based in Singapore and we have subsidiaries in Singapore, Malaysia and Hong Kong,
as well as representative offices in Vietnam and Indonesia.
Please refer to the Business Business Overview section of this Offer Document for further details.
OUR COMPETITIVE STRENGTHS
Our Directors believe that our key competitive strengths are as follows:(i)
we are a one-stop refrigeration systems provider;
(ii)
we have an established reputation and track record;
(iii)
we have established strong business relationships with our business partners;
(iv)
we have a wide distribution network;
(v)
we have strong research and development capabilities;
(vi)
we provide quality products and services at competitive prices; and
(vii)
we have an experienced management team.
Please refer to the Business Our Competitive Strengths section of this Offer Document for further
details.
OUR BUSINESS STRATEGIES AND FUTURE PLANS
Our business strategies and future plans for the growth and expansion of our business are as follows:(i)
expansion of our sales and distribution network;
(ii)
expansion and upgrade of existing manufacturing facilities;
(iii)
research and development of new products; and
(iv)
expansion of our business through acquisitions, joint ventures or strategic alliances.
23

Please refer to the Prospects, Business Strategies and Future Plans Our Business Strategies and
Future Plans section of this Offer Document for further details.
WHERE YOU CAN FIND US
Our registered office and principal place of business is at 112 Lavender Street, #04-00, Far East
Refrigeration Building, Singapore 338728. Our telephone number is (65) 6293 9733 and our facsimile
number is (65) 6296 5326. Our main warehouse and workshop is located at 5 Third Lok Yang Road,
Singapore 628000 and our manufacturing facility is located at Lot 1998/D Jalan Perusahaan 3, Taman
Industri Selesa Jaya, 43300 Balakong, Seri Kembangan, Selangor Darul Ehsan, Malaysia. Our internet
address is http://www.fareastref.com.sg. Information contained in our website does not constitute
part of this Offer Document.
SUMMARY OF OUR FINANCIAL INFORMATION
The following tables represent a summary of the financial highlights of our Group and should be read in
conjunction with the Selected Consolidated Financial Information and Managements Discussion and
Analysis of Results of Operations and Financial Position sections, as well as the Independent Auditors
Report on the Audited Consolidated Financial Statements of Far East Group Limited and Subsidiary
Companies for the Financial Years Ended 31 December 2008, 2009 and 2010 set out in the Appendix A
of this Offer Document.
Selected items from the operating results of our Group
(S$000)
Turnover
Gross profit
Profit before tax
Profit for the year
Profit attributable to equity holders of the Company
Non-controlling interests
EPS(1) (cents)
EPS (fully diluted) (2) (cents)
Adjusted EPS(1) (cents)
Adjusted EPS (fully diluted)(2) (cents)
FY2008
Audited
FY2009
29,191
7,103
1,358
964
933
31
1.7
1.3
26,805
7,187
1,639
1,342
1,312
30
2.4
1.8
FY2010
32,616
10,719
5,449
4,553
4,506
47
8.4
6.2
6.4
4.8
(3)
(3),(4)
(3),(4)
(4)
(4)
(4)
(4)
Notes:(1)
For comparative purposes, the EPS for the period under review has been computed based on the profit attributable to
equity holders of our Company and the pre-Placement share capital of 53,520,000 Shares. The Adjusted EPS in FY2010
has been computed based on the profit attributable to equity holders of our Company, adjusted for non-recurring income of
approximately S$1,062,000 in relation to gain on disposal of investment properties, and the pre-Placement share capital of
53,520,000 Shares.
(2)
For comparative purposes, the fully diluted EPS for the period under review has been computed based on the profit
attributable to equity holders of our Company and the post-Placement share capital of 72,320,000 Shares. The Adjusted EPS
in FY2010 has been computed based on the profit attributable to equity holders of our Company, adjusted for non-recurring
income of approximately S$1,062,000 in relation to gain on disposal of investment properties, and the post-Placement share
capital of 72,320,000 Shares.
(3)
Includes non-recurring income of approximately S$1,062,000 in relation to gain on disposal of investment properties. For
illustration purposes, had such non-recurring income been excluded, our profit before tax, profit for the year and profit
attributable to equity holders of our Company would have been approximately S$4,387,000, S$3,491,000 and S$3,444,000
respectively.
(4)
Had the Service Agreements been in place since the beginning of FY2010, (i) the profit for the year and profit attributable to
equity holders of our Company in FY2010 would have been approximately S$4,210,000 and S$4,163,000 respectively; (ii) the
EPS and fully diluted EPS would have been 7.8 cents and 5.8 cents respectively; and (iii) the Adjusted EPS and fully diluted
Adjusted EPS would have been 5.8 cents and 4.3 cents respectively.
24

Selected items from the consolidated financial position of our Group
Audited as at
31 December 2010
(S$000)
ASSETS
Current assets
Non-current assets
20,311
7,799
28,110
LIABILITIES
Current liabilities
Non-current liabilities
11,751
2,985
14,736
Net assets
13,374
EQUITY
Equity attributable to equity holders of the Company
13,218
156
Total equity
13,374
NTA per Share(1) (cents)

Adjusted NTA per Share(1) (cents)
24.7
26.9
Note:(1)
The NTA per share and Adjusted NTA per Share as at 31 December 2010 have been computed based on our pre-Placement
share capital of 53,520,000 Shares.
25
THE PLACEMENT
Issue size
Placement in respect of 18,800,000 New Shares.

The New Shares will, upon issue and allotment, rank pari passu
in all respects with the existing issued Shares.
Placement Price
S$0.27 for each New Share.
The Placement
The Placement comprises an offering by the Placement Agent on

behalf of our Company of 18,800,000 Placement Shares at the
Placement Price, subject to and on the terms and conditions of
this Offer Document.
Purpose of the Placement
Our Directors consider that the listing of our Company and the
quotation of our Shares on Catalist will enhance our public image
locally and overseas and enable us to tap the capital markets for
the expansion of our operations.
The Placement will also provide members of the public with
an opportunity to participate in the equity of our Company. In
addition, the proceeds of the Placement will provide us with
additional capital to finance our business expansion.
Listing status
Prior to the Placement, there had been no public market for our
Shares. Our Shares will be quoted in S$ on Catalist, subject to
admission of our Company to Catalist and permission to deal in,
and for quotation of, our Shares being granted by the SGX-ST.
Risk factors
Investing in our Shares involves risks which are described in the

Risk Factors section of this Offer Document.
26
PLAN OF DISTRIBUTION
The Placement
The Placement is for 18,800,000 Placement Shares offered in Singapore by way of Placement, managed
and sponsored by Collins Stewart.
Prior to the Placement, there has been no public market for our Shares. The Placement Price was
determined by our Company in consultation with the Sponsor and the Placement Agent, taking into
consideration, amongst other things, prevailing market conditions and the estimated market demand for
the New Shares, determined through a book-building process. The Placement Price is the same for all
Placement Shares and is payable in full on application.
Pursuant to the Management Agreement, we have appointed Collins Stewart and Collins Stewart
has agreed to manage and sponsor the Placement. Please refer to the Management and Placement
Arrangements section of this Offer Document for further details on the Management Agreement.
Placement Shares
Pursuant to the Placement Agreement, Collins Stewart has agreed to subscribe for and/or procure
subscribers for the Placement Shares for a placement commission of 3.25% of the Placement Price for
each Placement Share, payable by our Company. Collins Stewart may, at its absolute discretion, appoint
one or more sub-placement agents for the Placement Shares. Please refer to the Management and
Placement Arrangements section of this Offer Document for further details on the Placement Agreement.
Subscribers of the Placement Shares may be required to pay a brokerage of up to 1.0% of the Placement
Price (plus GST thereon, if applicable) to the Placement Agent or any sub-placement agent that may be
appointed by the Placement Agent.
The Placement Shares are reserved for placement to members of the public and institutional investors
in Singapore at the Placement Price. Application for the Placement Shares may only be made by way
of Placement Shares Application Form. The terms, conditions and procedures for the application and
acceptance are set out in Appendix E Terms, Conditions and Procedures for Application of this Offer
Document.
None of our Directors or Substantial Shareholders intends to subscribe for the Placement Shares.
To the best of our knowledge and belief, as at the date of this Offer Document, we are not aware of any
person who intends to subscribe for more than 5% of the New Shares. However, through a book-building
process to assess market demand for our Shares, there may be person(s) who may indicate an interest
to subscribe for Shares amounting to more than 5% of the New Shares. If such person(s) were to make
an application for more than 5% of the New Shares pursuant to the Placement and are subsequently
allotted such number of Shares, we will make the necessary announcements at an appropriate time. The
final allotment of Shares will be in accordance with the shareholding spread and distribution guidelines as
set out in Rule 406 of the Catalist Rules.
No Shares shall be issued and allotted and/or allocated on the basis of this Offer Document later than six
months after the date of Registration.
27
USE OF PROCEEDS FROM THE PLACEMENT AND EXPENSES INCURRED

The estimated net proceeds raised from the Placement, after deducting estimated expenses of
approximately S$1.6 million, are approximately S$3.5 million.
The following table sets out the breakdown of the intended uses of net proceeds from the Placement and
the estimated expenses related to the Placement.
Amount
(S$000)
As a % of gross
proceeds from the
Placement
(a)
Expansion of our sales and distribution network
600
11.8
(b)
400
7.9
(c)
300
5.9
(d)
General working capital
2,200
43.3
3,500
68.9
Listing and processing fees

Professional fees
Placement commission and brokerage(2)
Miscellaneous expenses
43
1,014
165
354
0.8
20.0
3.3
7.0
Gross proceeds from the Placement
5,076
100.0
Net proceeds
Expenses(1)
Notes:(1)
Of the total estimated listing expenses of approximately S$1.6 million, S$440,000 will be capitalised against share capital and
the balance of the estimated listing expenses will be charged to the profit or loss.
(2)
Based on a placement commission of 3.25% of the Placement Price for each Placement Share.
Further details of our use of proceeds may be found in the Prospects, Business Strategies and Future
Plans Our Business Strategies and Future Plans section of this Offer Document.
In the event that the amount set aside to meet our Companys portion of the estimated expenses listed
above is in excess of the actual expenses incurred in connection with the Placement, such excess amount
will be applied towards our general working capital purpose.
Pending the deployment of the net proceeds as aforesaid, the funds will be placed in short-term deposits
with financial institutions, used to invest in short-term money market instruments and/or used for general
working capital requirements as our Directors may deem appropriate.
In the event that any part of our proposed uses of the net proceeds from the issue of the New Shares
does not materialise or proceed as planned, our Directors will carefully evaluate the situation and may
reallocate the intended funding to other purposes and/or hold such funds on short-term deposits for so
long as our Directors deem it to be in the interest of our Company and our Shareholders, taken as a
whole. Any change in the use of the net proceeds will be subject to Shareholders approval and the listing
rules of the SGX-ST and appropriate announcements will be made by our Company on the SGXNET.
28
MANAGEMENT AND PLACEMENT ARRANGEMENTS

Pursuant to the Management Agreement, our Company appointed Collins Stewart to manage and
sponsor the Placement. Collins Stewart will receive a management fee from our Company for such
services rendered.
Pursuant to the Placement Agreement, Collins Stewart agreed to subscribe for and/or procure subscribers
for the Placement Shares at the Placement Price at a placement commission of 3.25% of the aggregate
Placement Price for each Placement Share, payable by our Company. Collins Stewart may, at its absolute
discretion, appoint one or more sub-placement agents for the Placement.
Subscribers of the Placement Shares may be required to pay a brokerage of up to 1.0% of the Placement
Price (plus GST thereon, if applicable) to the Placement Agent.
Save as aforesaid, no commission, discount or brokerage, has been paid or other special terms granted
by our Company within the two years preceding the date of this Offer Document or is payable to any
Director, promoter, expert, proposed Director or any other person for subscribing or agreeing to subscribe
or procuring or agreeing to procure subscriptions for any shares in, or debentures of, our Company or our
subsidiaries.
If there shall have been, since the date of the Management Agreement and prior to or on the close of the
Application List:(i)
any breach of the warranties or undertakings in the Management Agreement which comes to the
knowledge of Collins Stewart; or
(ii)
any occurrence of certain specified events which comes to the knowledge of Collins Stewart; or
(iii)
any material adverse change, or any development involving a prospective material adverse change,
in the condition (financial or otherwise) of our Company and/or any of our subsidiaries; or
(iv)
any introduction or prospective introduction of or any change or prospective change in any

legislation, regulation, order, notice, policy, rule, guideline or directive (whether or not having
the force of law) and including, without limitation, any directive, notice or request issued by the
Authority, the Securities Industry Council of Singapore or the SGX-ST or relevant authorities
elsewhere, in the interpretation or application thereof by any court, government body, regulatory
authority or other competent authority in Singapore or elsewhere; or
(v)
any change, or any development involving a prospective change, in local, national or international,
financial (including stock market, foreign exchange market, inter-bank market or interest rates
or money market), political, industrial, economic, legal or monetary conditions, taxation or
exchange controls (including without limitation, the imposition of any moratorium, suspension or
material restriction on trading in securities generally on the SGX-ST due to exceptional financial
circumstances or otherwise material adverse changes in foreign exchange controls in Singapore
or overseas, or any combination of any such changes or developments or crisis, or any material
deterioration of any such conditions); or
(vi)
any imminent threat or occurrence of any local, national or international outbreak or escalation of
hostilities, insurrection, terrorist attacks or armed conflict (whether or not involving financial markets
in any jurisdiction); or
(vii)
any regional or local outbreak of disease that may have an adverse effect on the financial markets;
or
(viii)
any other occurrence of any nature whatsoever,
which has resulted or is in the reasonable opinion of Collins Stewart, (i) results or is likely to result in a
material adverse fluctuation or adverse conditions in the stock market in Singapore or elsewhere; or (ii)
is likely to materially prejudice the success of the Placement; or (iii) makes it impracticable, inadvisable,
inexpedient or uncommercial to proceed with any of the transactions contemplated in the Management
Agreement; or (iv) is likely to have a material adverse effect on the business, trading position, operations
29
MANAGEMENT AND PLACEMENT ARRANGEMENTS

or prospects of our Group and/or any of our subsidiaries or of our Group as a whole; or (v) results or
is likely to result in the issue of a notice of refusal to an admission of our Company to Catalist by the
SGX-ST to the Sponsor at any point prior to the listing of our Shares pursuant to the SFA; (vi) or makes it
uncommercial or otherwise contrary to observe or perform the terms of the Management Agreement, the
Sponsor may at any time prior to the close of the Application List rescind or terminate the Management
Agreement.
The Sponsor may terminate the Management Agreement if:(a)
at any time up to the close of the Application List, a notice of refusal to an admission of our
Company to Catalist is issued by the SGX-ST to the Sponsor; or
(b)
at any time after the Registration but before the close of the Application List, our Company fails
and/or neglects to lodge a supplementary or replacement Offer Document (as the case may be) if
we become aware of:(i)
a false or misleading statement in this Offer Document;
(ii)
an omission from this Offer Document of any information that should have been included in it
under Section 243 of the SFA; or
(iii)
a new circumstance that has arisen since this Offer Document was lodged with the SGX-ST
acting as an agent on behalf of the Authority and would have been required by Section 243
of the SFA to be included in the Offer Document if it had arisen before this Offer Document
was lodged,
that is materially adverse from the point of view of an investor; or

(c)
the Shares have not been admitted to the Official List of the SGX-ST on or before 8 August 2011
(or such other date as our Company and the Sponsor may agree).
The obligations under the Placement Agreement are conditional upon the Management Agreement not
being determined or rescinded pursuant to the provisions of the Management Agreement. In the case
of the non-fulfilment of any of the conditions in the Management Agreement or the release or discharge
of the Sponsor from its obligations under or pursuant to the Management Agreement, the Placement
Agreement shall be terminated and the parties shall be released from their respective obligations under
the Placement Agreement.
In the event that the Management Agreement and/or the Placement Agreement is terminated, our
Company reserves the right, at our absolute discretion, to cancel the Placement.
Save as disclosed above, we do not have any material relationship with the Sponsor and the Placement
Agent.
30
RISK FACTORS
An investment in our Shares involves significant risks. Prospective investors should carefully consider
and evaluate the following considerations and all other information contained in this Offer Document,
including our consolidated financial statements and related notes, before deciding to invest in our Shares.
Some of the following risk factors relate principally to the industry in which our Group operates and the
business of our Group in general. Other considerations relate principally to general economic and political
conditions and the securities market and ownership of our Shares, including possible future sales of
Shares. Additional risks not presently known to us or that we currently deem immaterial may also impair
our business operations.
Our business, results of operations, financial condition and prospects could be materially and adversely
affected by any of these risks. In such cases, the trading price of our Shares could decline due to any of
these risks and investors may lose all or part of their investment in our Shares.
This Offer Document also contains forward-looking statements that involve risks and uncertainties. The
actual results of our operations could differ materially from those anticipated in these forward-looking
statements as a result of certain factors, including the risks described below and elsewhere in this Offer
Document. Please refer to the Cautionary Note Regarding Forward-Looking Statements section of this
Offer Document for further details.
Before deciding to invest in our Shares, you should seek professional advice from your advisers about
your particular circumstances. To the best of our Directors knowledge and belief, all the risk factors that
are material to investors in making an informed judgement have been set out below.
RISKS RELATING TO OUR INDUSTRY AND BUSINESS
Our continued success is dependent on our management team and skilled personnel
Our Group is dependent on the continued employment and performance of our Executive Directors
and Executive Officers. Our management team is led by experienced personnel who have extensive
experience in our industry and possess in-depth knowledge and know-how of our business. Our
management team is guided by Loh Ee Ming (our Non-executive Chairman) and headed by Steven Loh
(our CEO and Executive Director), who each has more than 60 and 20 years experience in the HVAC&R
industry respectively and have been instrumental in formulating our business strategies and spearheading
the growth of our business operations. They are assisted by David Leng (our COO (Sales and Marketing)
and Executive Director) and our Executive Officers, Allan Ward, Richard Chung, and Tan Su Kim, each
of whom is experienced in his respective field and has qualified knowledge and/or expertise in running
our day-to-day operations. The loss of any of our key management staff for any reason without suitable
and timely replacements, and the inability to attract, train and retain qualified management personnel will
adversely affect our operations, revenue and profits. Please refer to the Directors, Executive Officers and
Staff section of this Offer Document for more details on the qualifications and working experience of our
Executive Directors and Executive Officers.
In addition, having a team of experienced and skilled managers and technical personnel is essential
to our business operations. Our industry and business require our managers and technical personnel,
such as engineers and technicians to be skilled and experienced in their respective disciplines. However,
owing to the specialised nature of our work, there is a limited supply of adequately skilled personnel in
our industry. Hence, our continued success depends largely on our ability to attract and retain skilled
employees. To the extent that we lose any of our skilled personnel for whatever reasons without suitable
or timely replacements and/or we are unable to recruit the required number of suitably skilled personnel,
either locally or from overseas, to meet our operational and business needs, our revenue and profitability
may be negatively affected. We may also have to pay substantial wages to attract and retain the required
personnel, and this may have an adverse impact on our operating margins.
We are dependent on our corporate name and reputation
We believe that we have an established corporate name and reputation, and are widely recognised by
peers, customers and suppliers in our industry. We consider our corporate name and reputation to be vital
in promoting recognition, customer loyalty and suppliers confidence. Hence, should there be any negative
publicity against our Group, or should there be any major defects found in our products and projects,
31
RISK FACTORS
which our Group is involved in, our corporate image and reputation will be adversely affected and our
customers may lose confidence in our products and services. This will adversely affect our business and
financial performance.
We are dependent on a major supplier
Bitzer is one of our major suppliers who supplies us with compressors, condensers, receivers and
relevant spare parts. Purchases from Bitzer had accounted for approximately 36.2%, 26.2% and 28.9%
of our Groups purchases in FY2008, FY2009 and FY2010 respectively. For further details of our major
suppliers, please refer to the Business Our Major Suppliers section of this Offer Document.
Our Directors believe that we depend significantly on our relationship with Bitzer. As we do not enter into
long-term contract with Bitzer, there is no assurance that it will continue to fulfil our requirements and
expectations in terms of cost and product quality, nor is there assurance that we will be able to continue
to source for products from Bitzer. In addition, should we fail to maintain good relationship with Bitzer, or
there is a prolonged lead time in delivery, or it fails to deliver our products on time, and we are unable to
source these products of similar quality from alternative suppliers on a timely basis, our business and/
or delivery timeline to our customers will be affected. This in turn may adversely affect our reputation if
our customers lose confidence in our products and services, and our revenue and profitability may be
adversely affected.
We are susceptible to fluctuations in the prices of our agency products and raw materials
Our agency products comprise mainly compressors, condensers, controllers, valves and copper pipes,
and these accounted for 83.9%, 85.9% and 90.0% of our total cost of sales in FY2008, FY2009 and
FY2010 respectively. The prices of such products which we can secure from our suppliers are influenced
by factors including the volume of our purchases and the general market conditions affecting such
products.
The key raw materials used in the manufacturing of our Eden brand of heat exchangers are mainly
copper pipes, galvanised sheets, aluminium sheets and fan sets. These raw materials accounted for
14.2%, 12.0% and 8.2% of our total cost of sales in FY2008, FY2009 and FY2010 respectively. We are
susceptible to fluctuations in the prices of such raw materials as these are commodities and their prices
are subject to the changes in global demand and supply conditions.
In the event that the prices of our agency products and raw materials fluctuate adversely against us and
we are unable to pass on the price increases to our customers, or find alternative sources of agency
products and raw materials of comparable quantity at acceptable prices, our financial performance will be
adversely affected.
We are exposed to credit risks of our customers
We typically grant credit terms of 30 to 90 days to our customers and based on our experience in FY2008,
FY2009 and FY2010, our customers typically made payment within the credit period. However, we may
be exposed to payment delays and/or defaults by our customers. In FY2008, FY2009 and FY2010, our
average trade debtors turnover days were 86 days, 73 days and 62 days respectively. Please refer to the
Business - Credit Management section of this Offer Document for the reasons for the fluctuations in the
average trade debtors turnover days over the period under review.
Any deterioration in the financial positions of our Groups customers may materially or adversely affect
our profits and cash flow as these customers may default on their payments to us. We cannot assure you
that the risks of default by our customers will not increase in the future or that we will not experience cash
flow problems as a result of such defaults. Should these events develop into actual events, our operations
and profitability will be adversely affected.
We are exposed to disputes and claims in relation to defects in workmanship and non-compliance
to contract specifications
Disputes and claims in relation to defects in workmanship and non-compliance to contract specifications
are common in our industry. There can be no assurance that any future disputes and claims will not
result in undue delays in payment by our customers or in protracted litigation, which will have a negative
32
RISK FACTORS
impact on our financial performance and corporate reputation. In addition, we may incur additional costs
in rectifying alleged defects. Such additional costs may have an adverse effect on our overall financial
performance.
We are dependent on our research and development capabilities
We strongly believe that our research and development capabilities are instrumental to our business
and provide us with a competitive edge over our competitors. Hence, we place a great emphasis on
research and development, in particular, in improving the efficiency and effectiveness of our products, and
developing cost-effective and environmentally friendly technology to meet the changing market needs of
the HVAC&R industry. Thus, in the event that our research and development capabilities are restricted by
the availability of our financial resources and/or research and development personnel, our business and
financial performance may be adversely impacted.
On the other hand, there is no assurance that the results of our research and development will be
commercially successful. In the event that our newly developed products cannot be broadly accepted
by our customers, our investment in research and development may not yield returns which match our
expectations, and this would adversely affect our profitability and prospects.
Our business may be affected by competition from existing industry players and new entrants
We operate in a competitive environment and we are subject to competition from existing industry players
and new entrants. Our success depends on our ability to compete effectively against our existing and
potential competitors on, amongst others, technological know-how, quality of products and services, price,
track record, reputation and timely delivery. There can be no assurance that we will be able to compete
successfully in the future. In the event that our competitors are able to provide products and services
of comparable or better quality at competitive prices, our business and financial performance will be
adversely affected.
We are subject to intellectual property risks
We rely on our registered trade marks and patents, for business operations. In particular, we rely on our
patents to protect some of our proprietary designs and functions and we consider our patents to be vital
in maintaining our competitveness. Please refer to the Business Intellectual Property section of this
Offer Document for further details on our trade marks and patents. Though our trade marks and patents
are registered, we are susceptible to third parties infringement of our intellectual property rights, and
there is no assurance that third parties will not copy or otherwise obtain and use our intellectual property
rights without authorisation.
Should we fail or be unable to assert our rights over such intellectual property, there may be an adverse
impact on our business and marketing plans. Adequate protection of our intellectual property is vital to our
business. In enforcing our rights against third parties infringements of our intellectual property rights, we
may incur substantial time, resources and costs in any intellectual property infringement claims initiated
by us and there is no assurance that we will be able to stop or prevent such infringement completely.
Hence, our business, reputation, financial condition and results of operations may be adversely affected if
we are unable to protect our intellectual property rights effectively.
In addition, some of our proprietary know-how and technical knowledge and technical expertise may not
be patentable. Although we have stringent controls for maintaining confidentiality, there is no assurance
that there will be no unauthorised disclosure of our proprietary information, or that our competitors will
not copy them. In the event that our proprietary know-how and technical expertise are replicated by our
competitors, there can be no assurance that we would be able to detect such unauthorised replications.
Hence, our business and financial performance may be adversely affected if we are unable to protect our
intellectual property rights effectively.
We cannot be certain that our systems, technologies and processes do not infringe valid patents or
intellectual property rights held by third parties. We may unknowingly infringe intellectual property rights
of third parties, in which case, we may have to incur substantial costs and resources in defending suits
that may be brought against us for alleged infringement of intellectual property owned by third parties. In
33
RISK FACTORS
addition, should we fail to defend against the suits brought against us, we will have to discontinue utilising
our systems, technologies and processes in our business and/or may be required to pay substantial
monetary damages. This will adversely affect our operations and business.
In addition, the approvals from the Trademark Office of the SAIC and the SIPO for the applications of the
transfers of trade marks and patents from SER to our Company are currently pending. Please refer to the
Business Intellectual Property section of this Offer Document for further details. There is no assurance
that the aforementioned approvals will be granted. Hence, in the event that the registration of the transfer
of the trade marks is not successful, or we fail to renew the registration of our trade marks upon expiry,
or the validity of our registered patents expire, we may not be able to prevent third parties from using our
trade marks and/or patents, which may adversely affect our reputation, brand image, financial condition
and results of operations.
Further, pursuant to to the IP Licence Agreement (please refer to the Interested Person Transactions
Present and On-going Interested Person Transactions section of this Offer Document), the Regional
Affiliates shall be entitled to use certain of our trade marks and patents for their manufacture, distribution,
promotion and sale of Eden brand of heat exchangers and condensing units in the PRC as well as
sale of these products to our Group. In the event that there are any major complaints or defects on the
Regional Affiliates products and/or services, or adverse publicity on the Regional Affiliates and trade
marks due to circumstances beyond our control, our reputation will be adversely affected and our
customers may lose confidence in our products and services, thereby adversely affecting our revenue
and profitability.
We are exposed to foreign exchange risks
Foreign exchange risks arise mainly from a mismatch between the currency of our sales and the currency
of our purchases. We may also suffer foreign currency losses if there are significant adverse fluctuations
in currency exchange rates between the time of our purchases and payments in foreign currencies and
the time of our sales and receipts. This may adversely affect our financial results.
In addition, as our reporting currency is in S$, the financial statements of our subsidiaries in Malaysia and
Hong Kong will need to be translated to S$ for consolidation purposes. As such, any material fluctuations
in foreign exchange rates will result in translation gains or losses on consolidation. Any such translation
gains or losses will be recorded as translation reserves or deficits as part of our Shareholders equity.
At present, while we do not have any formal policy for hedging against foreign exchange exposure, we
do use forward contracts to manage our foreign exchange risks from time to time. Typically, we do not
purchase forward currency contracts of amounts greater than our existing purchase commitments. We
will continue to monitor our foreign exchange exposure and may continue to employ forward currency
contracts to manage our foreign exchange exposure should the need arise. Prior to implementing any
formal hedging policies, we will seek the approval of our Board on the policy and put in place adequate
procedures which shall be reviewed and approved by our Audit Committee. Thereafter, all hedging
transactions entered into by our Group will be in accordance with set policies and procedures. Please
refer to the Managements Discussion and Analysis of Results of Operations and Financial Position
Foreign Exchange Management section of this Offer Document for further details.
We may face uncertainties in the expansion of our business
As described in the Prospects, Business Strategies and Future Plans Our Business Strategies and
Future Plans section of this Offer Document, our growth strategies include expansion of our sales
and distribution network, expansion and upgrade of existing manufacturing facilities and research and
development of new products, which will require substantial capital expenditures as well as financial
and management resources. The success of our expansion plans depends on many factors, some of
which are not within our control. Thus, there is no assurance that our expenditures in pursuing our growth
strategies and expansion plans or any such plans our Group may engage in the future will result in
successful implementation. While we have planned our expansion based on our current outlook of the
regional and global markets, we cannot be sure that such expansion plans will yield a sufficient level of
revenue or returns. If we are unsuccessful in materialising our business growth strategies and expansion
plans and fail to generate a sufficient level of revenue or returns after such expenditure, our business,
results of operations and financial position will be adversely affected.
34
RISK FACTORS
We may need further financing for future growth
We may come across other potential business opportunities that we deem favourable for our Groups
future growth and prospects. Under such circumstances, we may need to obtain additional equity or debt
financing. Additional equity financing may lead to a dilution in the interests of our Shareholders. Additional
debt financing may restrict our ability to pay dividends. Such financing may increase our vulnerability to
adverse economic conditions and also require us to set aside cash for interest and principal repayments.
Hence, our growth prospects may be limited due to a reduction in funds for capital expenditure, working
capital and other general corporate purposes, thus restricting our flexibility to plan for, or react to, changes
in our business and our industry. In addition, there is no assurance that we will be able to obtain additional
financing on terms that are acceptable to us, or at all.
We may not be able to keep pace with the changes in the technologies of our products due to
market and/or regulatory demands
Our industry is characterised by rapid and significant changes in, and changes in the applications of,
technology. We may need to modify our product specifications and/or introduce new technologies into
our products to keep abreast with market and/or regulatory demands, such as changes in our customers
preferences and/or implementation of new guidelines relating to the use of our systems and products.
Hence, the development of new technologies and/or introduction of new, or changes in, industry
standards, government regulations and industry guidelines may adversely affect the demand for certain of
our existing systems and products, or render certain of our systems and products obsolete.
For instance, pursuant to the Montreal Protocol, the R-22 refrigerant (a non-environmentally friendly but
widely used refrigerant throughout the world) is expected to be phased out by 2015, with R-410A and
R-507 as the viable alternative refrigerants for air-conditioning and refrigeration applications respectively.
However, with the introduction of the R-410A and R-507 refrigerants, adjustments and alterations to
current refrigeration and air-conditioning systems and products are required to replace and retrofit those
that are non-conforming, thereby increasing costs to manufacturers. In addition, it may render some of the
current air-conditioning and refrigeration systems and products obsolete.
Hence, it is essential that we continue to keep abreast of technological developments in order to
anticipate changes in technology and regulatory standards so as to ensure that our systems and products
are current, and continue to develop and introduce new and enhanced systems and products on a
timely basis. In the event that we are unable to keep up with such technological changes or cater to our
customers specifications and requirements, we may not be able to maintain our competitive edge and our
business will be adversely affected.
The outbreak of communicable diseases, if uncontrolled, could affect our business
An outbreak or resurgence of communicable diseases (such as the avian influenza), if uncontrolled, may
potentially affect our business and operations. In addition, if any of the employees in our manufacturing
facilities or the facilities of our suppliers and/or customers is infected with communicable diseases, we
may experience disruptions to our projects progress as we, our suppliers and our customers may be
required to temporarily stop activities for quarantine purposes. Accordingly, these disruptions to our
business and operations may result in a negative impact on our financial performance.
Our insurance coverage may not be adequate
We have general insurance coverage in respect of our business and employees, including insurance
coverage against burglary and fire on our fixed assets and inventories, as well as work injury,
hospitalisation, surgical and medical insurance for our employees. However, in the event that such claims
exceed the coverage of the insurance policies which we have taken up, we may be liable for the shortfall
between amounts claimed and amounts insured. We are not insured against the loss of key personnel,
business interruption and product liability. If the events outlined above were to occur, our business,
financial performance and financial position may be materially and adversely affected. Please refer to the
Business Insurance section of this Offer Document for more details.
35
RISK FACTORS
Fire, flood or other natural calamities may disrupt our operations and adversely affect our financial
position, results of operations and profitability
Our manufacturing facility is located in Selangor, Malaysia. Natural calamities, such as fire, earthquake,
flood or other natural disasters, resulting in significant damage to our manufacturing facility, major
disruptions to our manufacturing processes and damages to the infrastructure which affect the transport
of raw materials and products to and from our manufacturing facility, will have significant adverse effects
on our business, financial condition and results of operations. While we consider our insurance policies
in respect of loss and/or damage to our manufacturing equipment and facilities as well as inventories to
be adequate, such insurance may not be sufficient to cover all our potential losses. In the event that such
losses exceed the insurance coverage or is not covered by the insurance policies we have taken up, we
may be liable for the shortfall of the amounts claimed and will sustain financial losses, and may also incur
additional costs in the event of increased insurance premiums payable in future.
We may experience industry-related accidents that may expose us to liability claims
Due to the nature of our business operations, we are subject to the risks of our employees or third parties
being involved with accidents while on or near our premises or job sites, which may lead to serious
human injuries or in more severe cases, loss of human lives. Any significant accident, even for which we
may not be responsible or found to be at fault, may expose us to claims and liabilities which may result
in significant legal costs and damages, drawing on our resources including time and money. In addition,
although we maintain work injury compensation insurance policy, in the event that claims made against us
arising from accidents are in excess of our insurance coverage, and/or the insurance claims are contested
by the insurance companies or the affected persons, we will be required to pay for such compensation
and our insurance premiums will be increased in the future. This will adversely affect the corporate image
and financial performance of our Group.
We are exposed to prepayment risks to our suppliers
We make prepayments to certain suppliers in order to secure raw materials and products on better terms.
However, should such suppliers experience financial difficulties or disruptions to their businesses and fail
to deliver to us raw materials and products despite prepayments already having been made, or should
there be any disruption in or shortage of supply or reduction of allocation of raw materials and products
to us from our suppliers for any reason, we may be unable to recover the prepayments made to our
suppliers and may have to undertake contingency measures to source for alternative suppliers. There is
no assurance that such contingency measures will be sufficient to meet our project needs or that we will
be able to do so at comparable costs. If contingency measures are inadequate or the related costs are
higher, our business operations and financial performance will be adversely affected.
We are subject to any adverse change in the political, economic, regulatory or social conditions in
the countries that we operate in or in which we intend to expand our business
We are governed by the laws, regulations and government policies in each of the countries that we
operate in or in which we intend to expand our business and operations. Our business and future growth
is dependent on the political, economic, regulatory and social conditions in these countries. Any economic
downturn or changes in policies implemented by the governments in these countries, currency and
interest rate fluctuations, capital controls or capital restrictions, labour laws, changes in environmental
protection laws and regulations, duties and taxations and limitations on imports and exports could
materially and adversely affect our operations, financial performance and future growth.
Our operations may suffer a material adverse impact if there is a non-renewal of our licences and
certificates
We have obtained all requisite licences and certificates for our current business operations. However,
some of these licences are subject to periodic review and renewal by the relevant government authorities
and the standards of compliance required in relation thereto may from time to time be subject to changes.
Non-renewal of or the rejection of new applications for our licences and certificates will have a material
adverse effect on our operations and profitability.
36
RISK FACTORS
RISKS RELATING TO AN INVESTMENT IN OUR SHARES
Investments in securities quoted on Catalist involve a higher degree of risk and can be less liquid
than shares quoted on the Main Board of the SGX-ST
An application has been made for our Shares to be listed for quotation on Catalist, a listing platform
designed primarily for fast-growing and emerging or smaller companies to which a higher investment risk
tends to be attached as compared to larger or more established companies. An investment in shares
quoted on Catalist may carry higher risk than an investment in shares quoted on the Main Board of the
SGX-ST. Catalist was newly formed in December 2007 and the future success and liquidity in the market
of our own Shares cannot be guaranteed.
Our Controlling Shareholder, UPL and its Associates will retain significant control of our Group
after the Placement which will allow it to influence the outcome of decisions requiring approvals
from Shareholders
Upon completion of the Placement, our Controlling Shareholder, UPL and its Associates (namely, Steven
Loh and Sam Cheung) will beneficially own in aggregate 65.6% of our Companys post-Placement share
capital. As a result, our Controlling Shareholder and its Associates, if they act together, will be able to
exercise significant influence over matters requiring Shareholders approval, including the election of
Directors and the approval of significant corporate transactions, and will have veto power with respect to
any Shareholders action or approval requiring a majority vote. Such concentration of ownership may also
have the effect of delaying, preventing or deterring a change in control of our Group even if such change
may be beneficial to our minority Shareholders.
Future sale of our Shares could adversely affect the Share price
Any future sale of Shares can have a downward pressure on our Share price. The sale of a significant
amount of Shares in the public market after the Placement, or the perception that such sales may occur,
could adversely affect the market price of our Shares. These factors also affect our ability to sell additional
equity securities, if any. Except as otherwise described in the General Information on our Group
Moratorium section of this Offer Document, there will be no restriction imposed on our Shareholders to
dispose of their shareholdings.
Our Share price may fluctuate following the Placement
The market price of our Shares may fluctuate significantly and rapidly after the Placement as a result of,
among others, the following factors, some of which are beyond our control:(i)
variations in our operating results;
(ii)
changes in our assets and liabilities;
(iii)
the success or failure of our management team in implementing our business strategies and future
plans;
(iv)
gain or loss of an important business relationship or contract;
(v)
changes in analysts estimates of our financial performance or investors interests;
(vi)
announcements by us of significant acquisitions, strategic alliances or joint ventures;
(vii)
fluctuations in stock market prices and volume;
(viii)
our involvement in material litigation or other legal proceedings;
(ix)
additions or departures of key personnel; and
(x)
material changes or uncertainty in the political, economic and regulatory environment in the
markets that we operate.
These fluctuations may be exaggerated if the trading volume of our Shares is low.
37
RISK FACTORS
New investors will face immediate dilution and may experience future dilution
Our Placement Price of S$0.27 is higher than our Adjusted NTA per Share, after adjusting for the net
proceeds from the issue of New Shares, of approximately 24.8 cents. If we were liquidated immediately
following the Placement, each investor subscribing for the New Shares pursuant to the Placement would
receive less than the price he paid for his Shares. Please refer to the Dilution section of this Offer
Document for further details.
There has been no prior market for our Shares
Prior to the Placement, there has been no public market for our Shares. Although we have made an
application to the SGX-ST to list our Shares on Catalist, there is no assurance that an active trading
market for our Shares will develop, or if it develops, be sustained. There is no assurance that the market
price for our Shares will not decline below the Placement Price. The market price of our Shares could be
subject to significant fluctuations due to various external factors and events including the liquidity of our
Shares in the market, difference between our actual financial or operating results and those expected by
investors and analysts, the general market conditions and broad market fluctuations.
Negative publicity, including those relating to any of our Directors, Controlling Shareholder and
Executive Officers may adversely affect our Share price
Negative publicity or announcement relating to any of our Directors, Controlling Shareholder and
Executive Officers may adversely affect the markets perception of our Group or the Share performance
of our Company, whether or not it is justifiable, thereby adversely affecting our Share price.
38
ISSUE STATISTICS
PLACEMENT PRICE
27.0 cents
Adjusted NTA
Adjusted NTA per Share as at 31 December 2010:(a)
before adjusting for the estimated net proceeds from the issue of the New
Shares and based on our Companys pre-Placement share capital of
53,520,000 Shares
26.9 cents
(b)
after adjusting for the estimated net proceeds from the issue of the New
Shares and based on our Companys post-Placement share capital of
72,320,000 Shares
24.8 cents
Premium of Placement Price per Share over the Adjusted NTA per Share as at
31 December 2010:(a)
before adjusting for the estimated net proceeds from the issue of the New
Shares and based on our Companys pre-Placement share capital of
53,520,000 Shares
0.4%
(b)
after adjusting for the estimated net proceeds from the issue of the New
Shares and based on our Companys post-Placement share capital of
72,320,000 Shares
8.9%
Adjusted EPS
Adjusted EPS of our Group in FY2010 based on our Companys pre-Placement
share capital of 53,520,000 Shares
6.4 cents
Adjusted EPS of our Group in FY2010 based on our Companys pre-Placement

share capital of 53,520,000 Shares had the Service Agreements been effected for
FY2010
5.8 cents
PER
PER based on the Adjusted EPS of our Group in FY2010 based on our Companys
pre-Placement share capital of 53,520,000 Shares
4.2 times
PER based on the Adjusted EPS of our Group in FY2010 based on our Companys
pre-Placement share capital of 53,520,000 Shares had the Service Agreements
been effected for FY2010
4.7 times
NET OPERATING CASH FLOW(1)

Net operating cash flow per Share of our Group for FY2010 based on our
Companys pre-Placement share capital of 53,520,000 Shares
9.2 cents
Net operating cash flow per Share of our Group for FY2010 based on our
Companys pre-Placement share capital of 53,520,000 Shares had the Service
Agreements been effected for FY2010
8.6 cents
39
ISSUE STATISTICS
PRICE TO NET OPERATING CASH FLOW RATIO
Ratio of Placement Price to net operating cash flow per Share for FY2010
2.9 times
Ratio of Placement Price to net operating cash flow per Share had the Service
Agreements been effected for FY2010
3.1 times
MARKET CAPITALISATION
Market capitalisation based on the Placement Price and post-Placement share
capital of 72,320,000 Shares
S$19.5 million
Note:(1)
Net operating cash flow is defined as profit for the year attributable to Shareholders with depreciation expense added back.
40
DILUTION
Dilution is the amount by which the Placement Price paid by the applicants of our New Shares (New
Investors) exceeds our Adjusted NTA per Share immediately after the Placement. Our Adjusted NTA
per Share as at 31 December 2010, before adjusting for the estimated net proceeds due to our Company
from the Placement and based on the pre-Placement issued and paid-up share capital of 53,520,000
Shares was 26.9 cents per Share.
Pursuant to the Placement in respect of 18,800,000 New Shares at the Placement Price, our Adjusted
NTA per Share as at 31 December 2010, after adjusting for the estimated net proceeds from the
Placement and based on the post-Placement issued and paid-up share capital of 72,320,000 Shares
would have been 24.8 cents. This represents an immediate decrease in Adjusted NTA per Share of 2.1
cents to our existing Shareholders and an immediate dilution in Adjusted NTA per Share of 2.2 cents or
approximately 8.1% to our New Investors.
The following table illustrates the dilution on a per Share basis:Cents
Placement Price
27.0
Adjusted NTA per Share as at 31 December 2010, based on the pre-Placement share capital of
53,520,000 Shares
26.9
Decrease in Adjusted NTA per Share attributable to existing shareholders
(2.1)
Adjusted NTA per Share after the Placement(1)
24.8
Dilution in Adjusted NTA per Share to New Investors
2.2
Note:(1)
The computed Adjusted NTA per Share does not take into account our actual financial performance from 1 January 2011
up to the Latest Practicable Date and the interim dividend of S$2.0 million declared in February 2011 in respect of FY2011.
Depending on our actual financial results, our Adjusted NTA per Share may be higher or lower than the computed Adjusted
NTA per Share.
The following table summarises the average effective cost per Share paid by our Director and the Pre-IPO
Investors for Shares acquired by them (adjusted for Sub-Division) during the period of three years prior to
the date of lodgement of this Offer Document and by our new investors pursuant to the Placement:Number of
Shares
Director
David Leng
Pre-IPO Investors (excluding David Leng)
Sam Cheung
Richard Chung
New investors
Total
consideration
(S$)
Average effective
cash cost per
Share
(cents)
367,200(1)
87,430
23.8
4,200,000
420,000
1,000,020
100,002
23.8
23.8
18,800,000
5,076,000
27.0
Note:(1)
This relates to Shares acquired by David Leng pursuant to the Pre-IPO Investment.
Save as disclosed above and in the General Information on our Group Share Capital section of this
Offer Document, none of our Directors, Substantial Shareholders or their Associates have acquired any
Shares during the period of three years prior to the date of lodgement of this Offer Document.
41
CAPITALISATION AND INDEBTEDNESS

The following table, which should be read in conjunction with the Independent Auditors Report on
the Audited Consolidated Financial Statements of Far East Group Limited and Subsidiary Companies
for the Financial Years Ended 31 December 2008, 2009 and 2010 set out in the Appendix A and the
Managements Discussion and Analysis of Results of Operations and Financial Position section of this
Offer Document, shows our cash and cash equivalents as well as capitalisation and indebtedness as at
31 May 2011:(i)
based on unaudited consolidated balance sheet of our Group as at 31 May 2011; and
(ii)
as adjusted for the estimated net proceeds from the Placement, after deducting estimated
expenses related to the Placement.
($000)
As at 31 May 2011
Cash and cash equivalents

Cash and bank balances
Fixed deposits
As adjusted for the

net proceeds from the
Placement
3,141
36
6,641
36
3,177
6,677
4,426
18
480
4,426
18
480
175
127
175
127
5,226
5,226
51
791
51
791
1,669
1,669
2,511
2,511
7,737
7,737
Total shareholders equity
12,620
16,120
Total capitalisation and indebtedness
20,357
23,857
Indebtedness
Current
- Trust receipts and bills payable, secured and guaranteed
- Finance lease obligations, secured but non-guaranteed
- Loans from shareholders and directors, non-secured and
non-guaranteed
- Bank borrowings, secured and guaranteed
- Bank borrowings, unsecured but guaranteed
Non-current
- Finance lease obligations, secured but non-guaranteed
- Loans from shareholders and directors, non-secured and
non-guaranteed
- Bank borrowings, secured and guaranteed
Total indebtedness
As at the Latest Practicable Date, the amount owing by our Company to Loh Ee Ming amounted to
approximately S$1.2 million, which is on an unsecured and interest-free basis. This amount is currently
being repaid in monthly repayments of S$40,000. Pursuant to an undertaking by Loh Ee Ming, our
Company shall have the right to renegotiate such monthly repayment arrangement in the event our Audit
Committee is of the view that our Group is not in the financial position to make such monthly repayments,
taking into account our working capital and gearing position. Please refer to the Interested Person
Transactions Present and On-going Interested Person Transactions section of this Offer Document for
more details.
42

BORROWINGS
As at the Latest Practicable Date, our total banking facilities (utilised and unutilised) are as follows:-
Financial
institution
Type of
facility/
tenure
Amount of
facilities
granted
(000)
Amount
outstanding
as at the
Latest
Practicable
Date
Interest rate
(000)
(%)
Facilities
used by
Security
Singapore
United
Term loan
Overseas
(commencing
Bank Limited
on 1 October
2003 and
expiring on
30 September
2028)
DBS Bank
Ltd
Standard
Chartered
Bank
RHB Bank
Berhad
S$1,599
S$1,489
5.25
(i) Mortgage over the

property at 112,
Lavender Street, Far
East Refrigeration
Building, Singapore
338728; and
(ii) joint and several
guarantees by Loh
Ee Ming, Steven Loh
and Lim Keng Ann.
Overdraft
S$1,000
Prime(1) + 0.25
Trade facilities
S$6,000
S$1,049
COF(2) + 2.50
Term loan
(commencing
on 1 March
2009 and
expiring on 28
February 2014)
S$600
S$340
2.35
Overdraft
S$600
Prime(1) + 0.75
Trade facilities
S$2,000
S$1,839
Prime(1) + 0.50
Bridging loan
(commencing
on 1 May 2009
and expiring
on 28 February
2012)
S$1,000
S$27
5.00
S$100
Prime(1) + 0.25
Trade facilities
S$1,200
S$611
COF(2) + 3.00
Trade facilities
S$800
S$418
COF(2) + 2.50
Short term
revolving
credit
S$100
S$100
COF(2) + 2.50
Overdraft
Far East
Group
Far East
Group
(i) Joint and several

guarantees by Loh
Ee Ming, Steven Loh
and Sharon Loh; and
(ii) mortgage over the
property at 5 Third
Lok Yang Road,
Singapore 628000.
43
Far East
Group
Joint and several

guarantees by Loh Ee
Ming, Steven Loh, David
Leng, Lim Keng Ann and
Sharon Loh.
Far East
Group
Joint and several

Ming, Steven Loh, David
Leng and Sharon Loh.
Financial
institution
CIMB Bank
Berhad,
Singapore
Branch
Type of
facility/
tenure
Trade facilities
and overdraft
Amount of
facilities
granted
(000)
S$500
Amount
outstanding
as at the
Latest
Practicable
Date
Interest rate
(000)
(%)
COF(2) + 2.50
Facilities
used by
Security
Far East
Group
Joint and several

Ming, Steven Loh and
David Leng.
Far East
Maju
(i) Mortgage over a

detached two-storey
office building and
one-storey factory
at Lot 1998/D Jalan
Perusahaan 3, Taman
Industri Selesa Jaya,
43300 Balakong,
Seri Kembangan,
Selangor Darul
Ehsan, Malaysia;
Prime(1) + 0.50
Malaysia
United
Overseas
Bank
(Malaysia)
Berhad
Trade facilities
RM2,000
RM810
BLR(3) + 1.25
Overdraft
RM1,000
BLR(3) + 1.00
(ii) personal guarantee

by Dato Hee Ching@
Hei Wah; and
(iii) joint and several
guarantees by Loh
Ee Ming and Steven
Loh.
OCBC Bank
(Malaysia)
Berhad
Trade facilities
RM600
BLR(3) + 0.50
Overdraft
RM400
BLR(3) + 0.75
Far East
KL
(i) Deed of assignment

over two units of
shop lots at No.
1-1, 1-1A and 1-1B,
Jalan Kalong, Off
Jalan Sungai Besi,
55200 Kuala Lumpur,
Malaysia; and
guarantees by Loh
Ee Ming, Steven Loh,
Dato Hee Ching@
Hei Wah and Au Yong
Peng Kwan.
CIMB Bank
Berhad
Overdraft
RM140
BLR(3) + 2.00
Far East
Penang
(i) A legal charge of

RM190,000 over the
property at 60 Lebuh
Noordin, 10300 Pulau
Pinang, Malaysia;
and
guarantees by Loh
Ee Ming, Dato Hee
Ching@Hei Wah and
Steven Loh.
44
Financial
institution
Type of
facility/
tenure
Amount of
facilities
granted
(000)
Amount
outstanding
as at the
Latest
Practicable
Date
Interest rate
(000)
(%)
Facilities
used by
Security
Hong Kong
DBS Bank
Overdraft and
(Hong Kong)
trade facilities
Limited
HK$4,000
HK$1,458
Prime(1)
(overdraft)
Standard rate
quoted by
banks (trade
facilities)
Far East
HK
(i) All monies charge

on cash deposit
duly executed by
the borrower in favor
of the bank in an
amount of not less
than HK$2,500,000,
together with all
interests accrued
thereon;
(ii) mortgage over the
property at Flat B, 1st
floor, Tung On Court,
17, 19 and 21 Tung
On Street, Kowloon,
Hong Kong;
(iii) joint and several
guarantees by Loh
Ee Ming, Steven Loh
and Karen Loh; and
(iv) corporate guarantee
by Far East Group.
Notes:(1)
Prime rate refers to the respective banks prime rates.
(2)
COF refers to the respective banks cost of funds.
(3)
BLR refers to base lending rate of Malaysia.
As at the Latest Practicable Date, our total banking facilities amounted to approximately S$17.8
million equivalent, comprising utilised facilities of approximately S$6.4 million and unutilised facilities
of approximately S$11.4 million. To the best of our Directors knowledge, we are not in breach of any
of the terms and conditions or covenants associated with any credit arrangement or bank loan which
could materially affect our financial position and results or business operations, or the investments of our
Shareholders.
As set out in the table above, certain of our Interested Persons had provided joint and several personal
guarantees to secure banking facilities granted by banks to our Group. Please refer to the Interested
Person Transactions Present and On-going Interested Person Transactions: Provision of personal
guarantees by certain Interested Persons section of this Offer Document for further details.
45
DIVIDEND POLICY
Our Company and some of our subsidiaries had declared and/or paid dividends in respect of FY2008,
FY2009, FY2010 and FY2011 as follows:FY2008
Our Company
Far East Group
Our Subsidiaries
Far East KL
Far East Maju
Safety Enterprises
FE&B
Far East Penang
Far East Malaysia
Far East Kuching
RSP
FY2009
FY2010
S$2,000,000
RM1,477,000
RM575,500
RM189,000
RM162,200
RM57,400
S$14,000
RM276,000
RM369,070
RM50,000
RM40,000
RM760,000
RM10,000
FY2011(1)
S$2,000,000(2)
RM355,000
RM1,917,800
RM1,336,000
RM106,800
RM4,028,000
Notes:(1)
The dividends declared and/or paid in FY2011 are interim dividends.
(2)
As at the date of this Offer Document, S$2.0 million of dividends declared by our Company in FY2011 remain outstanding. We
intend to repay 50% of such amounts outstanding in FY2011, and the remaining 50% in FY2012, using internally generated
funds.
Save as disclosed above, neither our Company nor any of our subsidiaries has declared any dividend
during the period under review and up to the Latest Practicable Date.
We currently do not have a formal dividend policy. However, we intend to recommend and distribute
dividends of at least 20% of our net profit attributable to Shareholders for each of FY2011 and FY2012
(Proposed Dividends), subject to the factors outlined below. Investors should note that the foregoing
statement on the Proposed Dividends is merely a statement of our present intention and shall not
constitute a legally binding obligation on our Company or legally binding statement in respect of our future
dividends which may be subject to modification (including reduction or non-declaration thereof) in our
Directors sole and absolute discretion. Investors should not treat the Proposed Dividends as an indication
of our Groups future dividend policy. No inference should or can be made from any of the foregoing
statements as to our actual future profitability or ability to pay dividends.
There can be no assurance that dividends will be paid in the future or of the amount or timing of any
dividends that will be paid in the future. The form, frequency and amount of future dividends on our
Shares will depend on our earnings and financial position, including the level of our cash and retained
earnings, our results of operations, our capital needs, our plans for expansion and any restriction on
payment of dividends imposed on us by our financing arrangements (if any) and other factors as our
Directors may deem appropriate. We may declare dividends by ordinary resolution of our Shareholders at
a general meeting, but will not pay dividends in excess of the amount recommended by our Board. Our
Directors may also declare an interim dividend without seeking Shareholders approval.
Information relating to taxes payable on dividends is set out in Appendix D Taxation of this Offer
Document.
46
SELECTED CONSOLIDATED FINANCIAL INFORMATION

The following summary financial information of our Group should be read in conjunction with the full
text of this Offer Document, including the Independent Auditors Report on the Audited Consolidated
Financial Statements of Far East Group Limited and Subsidiary Companies for the Financial Years
Ended 31 December 2008, 2009 and 2010 as set out in Appendix A of this Offer Document and the
Managements Discussion and Analysis of Results of Operations and Financial Position section of this
Offer Document.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Audited
(S$000)
FY2008
FY2009
FY2010
Turnover
Cost of sales
29,191
(22,088)
26,805
(19,618)
32,616
(21,897)
7,103
7,187
10,719
603
(2,291)
(3,284)
(159)
(623)
9
713
(2,077)
(3,484)
(216)
(487)
3
1,453
(2,654)
(3,556)
(225)
(302)
14
1,358
(394)
1,639
(297)
5,449(3)
(896)
964
1,342
4,553(3),(4)
Gross profit
Other operating income
Distribution and selling expenses
Administrative expenses
Other operating expenses
Financial expenses
Interest income
Profit before tax
Tax expense
Profit for the year
Exchange differences on translating foreign operations
(321)
(215)
124
Total comprehensive income for the year
643
1,127
4,677(3)
Profit attributable to:Equity holders of the Company

933
31
1,312
30
4,506(3),(4)
47
964
1,342
4,553
1.7
1.3
2.4
1.8
EPS(1) (cents)
EPS (fully diluted)(2) (cents)
Adjusted EPS(1) (cents)
Adjusted EPS (fully diluted)(2) (cents)
8.4(4)
6.2(4)
6.4(4)
4.8(4)
Notes:(1)
For comparative purposes, the EPS for the period under review has been computed based on the profit attributable to
equity holders of our Company and the pre-Placement share capital of 53,520,000 Shares. The Adjusted EPS in FY2010
has been computed based on the profit attributable to equity holders of our Company, adjusted for non-recurring income of
approximately S$1,062,000 in relation to gain on disposal of investment properties, and the pre-Placement share capital of
53,520,000 Shares.
(2)
For comparative purposes, the fully diluted EPS for the period under review has been computed based on the profit
attributable to equity holders of our Company and the post-Placement share capital of 72,320,000 Shares. The Adjusted EPS
in FY2010 has been computed based on the profit attributable to equity holders of our Company, adjusted for non-recurring
income of approximately S$1,062,000 in relation to gain on disposal of investment properties, and the post-Placement share
capital of 72,320,000 Shares.
47

(3)
Includes non-recurring income of approximately S$1,062,000 in relation to gain on disposal of investment properties. For
illustration purposes, had such non-recurring income been excluded, our profit before tax, profit for the year and profit
attributable to equity holders of our Company would have been approximately S$4,387,000, S$3,491,000 and S$3,444,000
respectively.
(4)
Had the Service Agreements been in place since the beginning of FY2010, (i) the profit for the year and profit attributable to
equity holders of our Company in FY2010 would have been approximately S$4,210,000 and S$4,163,000 respectively; (ii) the
EPS and fully diluted EPS would have been 7.8 cents and 5.8 cents respectively; and (iii) the Adjusted EPS and fully diluted
Adjusted EPS would have been 5.8 cents and 4.3 cents respectively.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION

Audited
As at 31 December
2010
(S$000)
ASSETS
Non-current assets
Fixed assets
Unquoted investments
Deferred tax assets
Other receivables
7,518
89
174
18
7,799
Current assets
Inventories
Trade debtors
Other receivables
Deposits
Prepayments
Due from affiliated companies (trade)
Tax recoverable
Fixed deposits
8,200
6,647
137
101
1,253
217
6
1,400
2,350
20,311
LIABILITIES
Current liabilities
Trade payables
Gross amount due to customers for contract work-in-progress
Trust receipts and bills payable (secured)
Other creditors
Accruals and other liabilities
Provision for warranty
Dividends payable
Due to affiliated company (trade)
Due to affiliated company (non-trade)
Provision for income tax
Finance lease obligations (current)
Loan from shareholders and directors (current)
Term loans (current)
Bank overdrafts (secured)
1,495
593
3,424
768
1,749
50
1,636
255
111
597
18
550
448
57
11,751
Deferred tax liabilities
Finance lease obligations (non-current)
Loan from shareholders and directors (non-current)
Term loans (non-current)
152
58
1,032
1,743
2,985
Net assets
13,374
48

Audited
As at 31 December
2010
(S$000)
EQUITY
Share capital
Accumulated profits
Capital reserves
Translation reserve
8,135
5,812
322
(1,051)

13,218
156
Total equity
13,374
NTA per Share(1) (cents)
24.7
Adjusted NTA
Adjusted NTA per Share(1) (cents)
14,405
26.9
Note:(1)
The NTA per share and Adjusted NTA per Share as at 31 December 2010 have been computed based on our pre-Placement
share capital of 53,520,000 Shares.
49
MANAGEMENTS DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS

AND FINANCIAL POSITION
The following discussion of our results of our operations and financial position should be read in
conjunction with the Independent Auditors Report on the Audited Consolidated Financial Statements
of Far East Group Limited and Subsidiary Companies for the Financial Years Ended 31 December 2008,
2009 and 2010 as set out in Appendix A of this Offer Document. This discussion contains forwardlooking statements that involve risks and uncertainties. Our actual results may differ significantly from
those projected in the forward-looking statements. Factors that might cause future results to differ
significantly from those projected in the forward-looking statements include, but are not limited to, those
discussed below and elsewhere in this Offer Document, particularly in the Risk Factors section of this
Offer Document. Under no circumstances should the inclusion of such forward-looking statements herein
be regarded as a representation, warranty or prediction with respect to the accuracy of the underlying
assumptions by our Company, the Sponsor or the Placement Agent or any other person. Investors are
cautioned not to place undue reliance on these forward-looking statements that speak only as of the date
hereof. Please refer to the Cautionery Note Regarding Forward-Looking Statements section of this Offer
Document.
OVERVIEW
We have subsidiaries in Singapore, Malaysia and Hong Kong. In addition, we have set up a new
representative office in Vietnam and Indonesia in October 2010 and May 2011 respectively. Our Company
and subsidiaries in Singapore focus primarily on the business opportunities arising from Singapore and
other SEA countries. Our subsidiaries in Malaysia operate as retail and distribution offices covering
the Malaysian market whilst our subsidiary in Hong Kong serves as a business platform to the Hong
Kong and PRC markets. Our unquoted investment in the PRC relates to a trading company principally
engaged in the sourcing and distribution of refrigeration and air-conditioning parts in the PRC market.
Our representative office in Vietnam serves as our Groups gateway into the Indochina market (including
Vietnam, Cambodia, Laos and Myanmar) and our representative office in Indonesia covers the Indonesia
market.
Our head office is currently located at 112 Lavender Street, Far East Refrigeration Building, Singapore
338728, occupying an estimated gross floor area of 20,839 sqft. Our main warehouse and workshop is
located at 5 Third Lok Yang Road, Singapore 628000, occupying an estimated gross floor area of 25,112
sqft. Our manufacturing activities are undertaken by Far East Maju at Lot 1998/D Jalan Perusahaan 3,
Taman Industri Selesa Jaya, 43300 Balakong, Seri Kembangan, Selangor Darul Ehsan, Malaysia, with an
estimated gross floor area of approximately 39,719 sqft. Please refer to Business Properties and Fixed
Assets section of this Offer Document for further details on our manufacturing facility.
We have a broad customer base of more than 1,000 active customers, of which 50% are repeat
customers who have purchased from us for five years or more. Our customers include distributors,
dealers and refrigeration and air-conditioning contractors. As at the Latest Practicable Date, we have
appointed approximately 20 dealers and distributors with a wide business and distribution network in
their respective countries, including Malaysia, Thailand, the Philippines, Myanmar, Mauritius, Vietnam,
Sri Lanka and Indonesia. We also provide design and technical services to our dealers and distributors in
connection with the sale of our products. Please refer to the Business Distribution Channels section of
this Offer Document for further details.
Revenue
Our revenue is derived from three main business segments, namely (a) commercial and light industrial
(refrigeration); (b) residential and commercial (air-conditioning); and (c) oil, marine and gas (refrigeration
and air-conditioning). Please refer to the Business Our Business Model section of this Offer Document
for further details on our business segments.
50

Commercial and light industrial (refrigeration) is our core business segment, and contributed to
approximately 70.8%, 73.4% and 72.8% of our total revenue in FY2008, FY2009 and FY2010
respectively. Revenue generated from our residential and commercial (air-conditioning) business segment
accounted for approximately 18.5%, 17.5% and 19.0% of our total revenue in FY2008, FY2009 and
FY2010 respectively, whereas revenue generated from our oil, marine and gas (refrigeration and airconditioning) business segment accounted for approximately 10.7%, 9.1% and 8.2% of our total revenue
in the respective years.
Our revenue is mainly generated from Singapore, Malaysia and Indonesia, which accounted for
approximately 81.2%, 80.8% and 81.1% of our total revenue in FY2008, FY2009 and FY2010 respectively.
We also derive revenue from Hong Kong, Macau, the PRC, Vietnam, Myanmar, and other countries
(including the Philippines, Thailand, Mauritius and Sri Lanka).
Revenue is recognised when goods are delivered and accepted by our customers. Our revenue is mainly
denominated in S$, RM and HK$.
The key factors that affect our revenue include:(a)
General economic and/or socio-political environment. Our ability to secure new contracts and
projects may be affected by general economic and/or socio-political environment in the countries
where our Group and customers operate in, in particular, Asia. Any changes in the economic and/
or socio-political environment, in particular, in countries where we operate, mainly Singapore,
Malaysia and Indonesia, may lead to changes in, amongst other things, the level of customers
demand as well as an eventual impact on the demand for our products and services.
(b)
Changes in regulatory codes and practices in relation to refrigeration and air-conditioning which will
affect the type of products that our customers buy from us. For instance, new regulatory codes and
practices may be imposed pursuant to any food infections and/or scares which will in turn affect the
type of and level of demand for our products and services.
(c)
Supply and pricing of products that we distribute, which are dependent on the terms that we
are able to secure from our suppliers. In our negotiation with our customers, we will take into
consideration, inter alia, the general market pricing of such products and adjust our selling prices
accordingly, and this will affect our revenue.
(d)
Supply and pricing of raw materials. Our key raw materials used in the manufacturing of our Eden
brand of heat exchangers are mainly copper pipes, galvanised sheets, aluminum sheets and fan
sets. The pricing of such raw materials is largely determined by actual prevailing commodity pricing
based on global demand and supply conditions.
(e)
Availability of equivalent and competitive products through other distribution channels. Our revenue
is dependent on our ability to maintain our market position and pricing of our products. Our selling
prices may be affected if competition intensifies and our competitors adopt aggressive pricing
strategies in order to gain market share or with the entrance of new players.
(f)
Our ability to develop new and more energy-efficient Eden brand of products.
(g)
Fluctuations in foreign currencies. During the period under review, approximately 6% to 12% of
our total revenue was denominated in US$, which is not the functional currency of our Company
or subsidiaries. Fluctuations in US$ will affect our revenue, and the weakening of US$ against our
functional currency in S$, RM or HK$, as the case may be, will affect our revenue in an adverse
manner.
Please refer to the Risk Factors section of this Offer Document for other factors which may affect our
revenue.
51

Cost of sales
Our cost of sales accounted for approximately 75.7%, 73.2% and 67.1% of our revenue in FY2008,
FY2009 and FY2010 respectively.
Our cost of sales comprise cost of products, direct labour costs and overhead costs. The breakdown of
our cost of sales, as a percentage of total cost of sales, is as follows:As a percentage of total cost of sales (%)
Cost of products
Direct labour
Overheads
Total
FY2008
FY2009
FY2010
98.0
0.9
1.1
97.9
1.0
1.1
98.1
1.0
0.9
100.0
100.0
100.0
Our cost of products comprises mainly cost of agency products as well as cost of raw materials used
in the manufacture of our Eden brand of heat exchangers (mainly copper pipes, galvanised sheets,
aluminum sheets and fan sets). Cost of products also includes other incidental costs of our purchases,
such as inward freight charges which accounted for approximately 1.2% to 2.0% of our cost of sales
during the period under review. Our cost of products as a percentage of cost of sales remained relatively
stable at approximately 98% during the period under review.
Direct labour costs comprise mainly salaries and other related costs of our manufacturing staff. Our direct
labour costs remained relatively stable at approximately 1.0% of our cost of sales during the period under
review.
Our overhead costs comprise mainly depreciation of plant and machinery, replacement of tools and parts
of our plant and machinery, and factory maintenance costs. Our overhead costs remained relatively stable
at approximately 1.0% during the period under review.
The main factors affecting our cost of sales include:(a)
Cost of products. We purchase agency products for distribution to our customers, and these
comprise mainly compressors, condensers, controllers, valves, as well as copper pipes. The prices
of such products which we can secure from our suppliers are influenced by the general market
conditions affecting such products.
(b)
Cost of raw materials. Our raw materials comprise mainly copper pipes, galvanised sheets,
aluminum sheets and fan sets used in the manufacture of our Eden brand of heat exchangers.
The costs of these raw materials accounted for more than 60% of our total cost of raw materials
during the period under review. The prices of these raw materials are primarily dependent on actual
prevailing commodity pricing based on global demand and supply conditions.
(c)
Fluctuations in foreign currencies. Our purchases are mainly denominated in US$ and , which
accounted for more than 80% of our total purchases. Fluctuations in these currencies will affect our
cost of sales, and the strengthening of these currencies against our functional currencies in S$, RM
or HK$, as the case may be, will affect our cost of sales in an adverse manner.
(d)
Fluctuations in freight charges. We purchase our agency products and raw materials mainly from
overseas suppliers, which accounted for more than 80% of our total purchases during the period
under review. Inward freight charges accounted for approximately 1.2% to 2.0% of our cost of sales
during the period under review. Increase in freight rates due to increasing oil prices will affect our
cost of sales.
52

Other operating income relates mainly to rental income from our office space at the 2nd and 3rd floors of
our property at 112 Lavender Street, commission income in relation to referral of business from us to
the Regional Affiliates, namely SER and SERM, dividend income from unquoted investments, job credit
grants from the Singapore government under the Jobs Credit Scheme and gain on disposal of investment
properties.
Distribution and selling expenses accounted for approximately 7.8%, 7.7% and 8.1% of our total revenue
in FY2008, FY2009 and FY2010 respectively. The breakdown of our distribution and selling expenses for
the period under review is as follows:As a percentage of total distribution and
selling expenses (%)
Salaries and related costs
Travelling and entertainment
Outward freight charges
Running costs of vehicles
Others
Total
FY2008
FY2009
FY2010
64.7
18.5
4.5
4.4
7.9
72.5
13.3
3.9
3.4
6.9
71.6
12.2
4.4
2.9
8.9
100.0
100.0
100.0
Distribution and selling expenses comprise mainly salaries and related costs of our sales and marketing
staff, travelling and entertainment expenses, outward freight charges, running costs of vehicles, and other
expenses such as advertising and promotion expenses. Such expenses are affected by the number of
sales and marketing staff employed and the level of marketing efforts undertaken by us.
Administrative expenses accounted for approximately 11.3%, 13.0% and 10.9% of our total revenue in
FY2008, FY2009 and FY2010 respectively. The breakdown of our administrative expenses for the period
under review is as follows:As a percentage of total administrative expenses (%)
Salaries and related costs
Directors fee
Legal and professional fees
Rental expenses
Depreciation charges
Telephone and utilities charges
Others
Total
FY2008
FY2009
FY2010
51.4
4.4
11.8
4.4
6.5
5.7
15.8
53.4
4.4
12.2
5.4
6.1
5.3
13.2
51.7
4.9
13.1
7.8
5.2
5.8
11.5
100.0
100.0
100.0
Administrative expenses comprise mainly salaries and related expenses paid to our directors, finance
and administrative staff, directors fees, legal and professional fees, rental of premises, depreciation
costs of fixed assets, telephone and utilities charges as well as other expenses such as insurance, office
maintenance, property tax and office expenses.
Other operating expenses comprise mainly net foreign exchange losses, one-off licence fee paid to a
supplier, loss on disposal of investment in a subsidiary company in Hong Kong and loss on disposal of an
unquoted investment. Our other operating expenses remained relatively stable at S$0.2 million during the
period under review.
53

Financial expenses
Financial expenses accounted for approximately 2.1%, 1.8% and 0.9% of our total revenue in FY2008,
FY2009 and FY2010 respectively. Financial expenses relate mainly to interest charges on bank loans,
bills payable, bank overdrafts and finance lease obligations.
Interest income
Interest income relates to income received from our bank balances and accounted for approximately
0.03%, 0.01% and 0.04% of our total revenue in FY2008, FY2009 and FY2010 respectively.
Tax expense
Our Company and subsidiaries are subject to income tax at the applicable statutory tax rates in
Singapore, Malaysia and Hong Kong as the case may be. The applicable tax rates in Malaysia was 26%
in FY2008 and 25% in FY2009 and FY2010, whereas the applicable tax rates in Singapore was 18% in
FY2008 and 17% in FY2009 and FY2010. Our subsidiary in Hong Kong had no taxable income during the
period under review.
Deferred taxation is provided on all timing differences arising from the tax bases of assets and liabilities
and their carrying amounts in the financial statements. Our overall effective income tax rates for the period
under review are as follows:-
Income tax expense (S$000)

Profit before tax (S$000)
Effective tax rate (%)
FY2008
FY2009
FY2010
394
1,358
29.0
297
1,639
18.1
896
5,449
16.4
Our effective tax rate decreased from 29.0% in FY2008 to 18.1% in FY2009. The higher effective tax rate
in FY2008 was mainly due to an under-provision of deferred tax in prior years taken up in FY2008 and
certain of our expenses not deductible for tax purposes. Our effective tax rate decreased from 18.1% in
FY2009 to 16.4% in FY2010 mainly due to the utilisation of tax losses in one of our subsidiaries.
SEASONALITY
Our business is generally not subject to any significant seasonal fluctuations.
INFLATION
We do not consider the impact of inflation on our financial performance during the period under review to
be significant.
CHANGE OF ACCOUNTING POLICIES
Our accounting policies have been consistently applied by our Group for the period under review, except
for the changes in accounting policies arising from adoption of new and revised financial reporting
standards as detailed in Section 2.2 of Appendix A Independent Auditors Report on the Audited
Consolidated Financial Statements of Far East Group Limited and Subsidiary Companies for the Financial
Years Ended 31 December 2008, 2009 and 2010 of this Offer Document.
The adoption of new and revised standards resulted in changes to certain accounting policies but did not
impact on the financial position or performance of our Group.
54

REVIEW OF OPERATING RESULTS
For the purpose of discussion, we have segmented our revenue and gross profit by business segments
and geographical markets for the period under review. The following review of past performance should
be read in conjunction with the Independent Auditors Report on the Audited Consolidated Financial
Statements of Far East Group Limited and Subsidiary Companies for the Financial Years Ended
31 December 2008, 2009 and 2010 as set out in Appendix A of this Offer Document.
Review of past performance by business segments
Revenue
FY2008
S$000
%
FY2009
S$000
%
FY2010
S$000
%
Commercial and light industrial

(refrigeration)
20,642
70.8
19,662
73.4
23,733
72.8
Residential and commercial

(air-conditioning)
5,414
18.5
4,704
17.5
6,194
19.0
Oil, marine and gas

(refrigeration and airconditioning)
3,135
10.7
2,439
9.1
2,689
8.2
29,191
100.0
26,805
100.0
32,616
100.0
Gross profit
FY2008
S$000
%
FY2009
S$000
%
FY2010
S$000
%

(refrigeration)
4,876
68.7
5,431
75.6
7,990
74.5

(air-conditioning)
1,182
16.6
928
12.9
1,648
15.4
Oil, marine and gas

1,045
14.7
828
11.5
1,081
10.1
7,103
100.0
7,187
100.0
10,719
100.0
Gross profit margin (%)
FY2008
FY2009
FY2010

(refrigeration)
23.6
27.6
33.7

(air-conditioning)
21.8
19.7
26.6
Oil, marine and gas

33.3
33.9
40.2
Average
24.3
26.8
32.9
55

Review of past performance by geographical markets
We have segmented our geographical markets in accordance with the location of customers based on
our invoices. While it is possible to segment our revenue by geographical locations of our customers, the
allocation of cost of sales cannot be done in a similar manner with reasonable accuracy as we primarily
use the same resources for the manufacture and supply of our products for various markets. We do not
track the allocation of our cost of sales by geographical locations of our customers and any attempt to
match these expenses to revenue in the various geographical locations is not meaningful.
Revenue
FY2008
S$000
%
FY2009
S$000
%
FY2010
S$000
%
Singapore
Malaysia
Indonesia
Hong Kong / PRC(1)
Indochina(2)
Others(3)
12,250
7,808
3,632
1,643
1,645
2,213
42.0
26.7
12.5
5.6
5.6
7.6
11,083
7,572
2,996
2,127
810
2,217
41.4
28.2
11.2
7.9
3.0
8.3
13,756
8,872
3,810
3,383
922
1,873
42.2
27.2
11.7
10.4
2.8
5.7
29,191
100.0
26,805
100.0
32,616
100.0
Notes:(1)
Includes sales to Macau.
(2)
Relates to sales to Vietnam, Myanmar and Cambodia.
(3)
Includes sales to Phillipines, Thailand, Mauritius and Sri Lanka.
FY2009 vs FY2008
Revenue
Our revenue decreased by 8.2% or S$2.4 million, from approximately S$29.2 million in FY2008 to
The decrease in revenue was attributable to the decreased sales from all of our business segments,
with a decline of S$1.0 million from our commercial and light industrial (refrigeration) business segment,
S$0.7 million from our residential and commercial (air-conditioning) business segment and S$0.7 million
from our oil, marine and gas (refrigeration and air-conditioning) business segment. The decline in
revenue was mainly attributable to the lower customer demand due to the global economic and financial
crisis in FY2009. In addition, one of our key customers in the oil, marine and gas (refrigeration and airconditioning) business segment had shifted its operations out of Singapore and this partly contributed to
the decline in revenue in FY2009.
The decline in revenue in FY2009 was attributable to decreased sales of S$1.2 million from Singapore,
S$0.2 million from Malaysia, and S$0.6 million from Indonesia as compared to FY2008, as a result of the
lower customer demand due to the global economic and financial crisis in FY2009. The decline in revenue
generated from Singapore was also attributable to the abovementioned shifting of operations by one of
our key customers out of Singapore.
Gross profit
Our gross profit increased marginally by 1.2% or S$0.1 million, from approximately S$7.1 million in
FY2008 to approximately S$7.2 million in FY2009, despite a 8.2% decline in our revenue.
Our gross profit margin improved by 2.5 percentage points, from 24.3% in FY2008 to 26.8% in FY2009.
The improvement of our gross profit margin was mainly due to increased gross profit margins of our
commercial and light industrial (refrigeration) as well as oil, marine and gas (refrigeration and airconditioning) business segments, which were partially offset by the lower gross profit margin of our
residential and commercial (air-conditioning) business segment.
56

The gross profit margin of our commercial and light industrial (refrigeration) business segment improved
by 4.0 percentage points, from 23.6% in FY2008 to 27.6% in FY2009. This was mainly due to the
following:(i)
a decrease in provision for stock obsolescence (which was recognised as an expense in cost of
sales) in FY2009 as compared to FY2008, which had contributed to an improvement in gross profit
margin of approximately 1.6%; and
(ii)
an increase in average selling price of our products as we had introduced new series of
refrigeration products in FY2009 which had commanded higher margins.
Notwithstanding the aforementioned positive impact of the inventory write-down, the gross profit margin
of our residential and commercial (air-conditioning) business segment declined by 2.1 percentage points,
from 21.8% in FY2008 to 19.7% in FY2009. This was mainly due to the relatively high average cost of our
copper stock which we were unable to effectively pass on to our customers as this business segment is
relatively more competitive.
In the case of our oil, marine and gas (refrigeration and air-conditioning) business segment, the positive
impact of the inventory write-down was partially offset by more competitive pricing strategy in order to
capture market share in FY2009. As a result, the gross profit margin of this business segment improved
only marginally by 0.6 percentage points, from 33.3% in FY2008 to 33.9% in FY2009.
Other operating income increased by 18.1% or S$0.1 million, from approximately S$0.6 million in FY2008
to approximately S$0.7 million in FY2009, which was mainly attributable to an increase of approximately
S$0.2 million in commission income and S$0.1 million in jobs credit grants. The increase in other
operating income was partially reduced by a gain of approximately S$0.2 million in FY2008 in relation to
write-off of a long outstanding unclaimed debt, and there was no such item in FY2009.
Distribution and selling expenses decreased by 9.3% or S$0.2 million, from approximately S$2.3 million in
FY2008 to approximately S$2.1 million in FY2009, mainly due to a decrease of S$0.1 million in travelling
and entertainment expenses in FY2009 as we participated in fewer exhibitions due to the sluggish
economic conditions in the year.
Administrative expenses increased by 6.1% or S$0.2 million, from approximately S$3.3 million in FY2008
to approximately S$3.5 million in FY2009, mainly due to an increase of approximately S$0.2 million in
salaries and related costs with the addition of five new staff at Edenkool, a new subsidiary in Singapore.
Financial expenses
Our financial expenses decreased by 21.8% or S$0.1 million, from approximately S$0.6 million in FY2008
to approximately S$0.5 million in FY2009. This was mainly due to a decrease in interest rates on our bank
borrowings, coupled with a lower utilisation of bank overdrafts and trade facilities in FY2009.
Profit before tax
Profit before tax increased by 20.7% or S$0.2 million, from approximately S$1.4 million in FY2008 to
approximately S$1.6 million in FY2009. The increase was due to an increase in gross profit and other
operating income, decrease in distribution and selling expenses as well as financial expenses, partially
offset by an increase in administrative expenses.
Tax expense
Our income tax expenses were S$0.4 million and S$0.3 million, with effective tax rates of 29.0% and
18.1% in FY2008 and FY2009 respectively.
57

FY2010 vs FY2009
Our revenue increased by 21.6% or S$5.8 million, from approximately S$26.8 million in FY2009 to
The increase in revenue was attributable to increased sale from all our three business segments, with an
increase of S$4.1 million from our commercial and light industrial (refrigeration) business segment, S$1.5
million from our residential and commercial (air-conditioning) business segment and S$0.3 million from
our oil, marine and gas (refrigeration and air-conditioning) business segment. The increase in revenue
was attributable to new customers secured in FY2010 as a result of our intensified marketing efforts and
improved general economic conditions in the year.
The increase in revenue in FY2010 was attributable to increased sale of S$2.7 million from Singapore,
S$1.3 million from Malaysia, S$0.8 million from Indonesia and S$1.3 million from Hong Kong and
the PRC, as compared to FY2009. This was mainly due to our intensified marketing efforts and the
improvement in general economic conditions in FY2010.
Gross profit
Our gross profit increased by 49.1% or S$3.5 million, from approximately S$7.2 million in FY2009 to
Our gross profit margin improved by 6.1 percentage points, from 26.8% in FY2009 to 32.9% in FY2010,
due to an overall improvement in gross profit margins from all our three business segments, mainly
attributable to the following factors:(i)
we recorded a write-back of provision for stock obsolescence in FY2010 as compared to a

provision for stock obsolescence in FY2009, which contributed to an improvement in gross profit
margin of approximately 5.6%; and
(ii)
favourable currency exchange rates of our purchases which were mainly in US$ and . The
average exchange rate of US$ weakened against S$ by 6.9%, from S$1.00:US$0.6881 in FY2009
to S$1.00:US$0.7355 in FY2010. The average exchange rate of S$ and weakened by 13.0%,
from S$1.00:0.4935 in FY2009 to S$1.00:0.5575 in FY2010.

Other operating income increased by 103.9% or S$0.7 million, from approximately S$0.7 million in
FY2009 to approximately S$1.5 million in FY2010. This was mainly attributable to a gain of approximately
S$1.1 million on disposal of investment properties, partially offset by a decrease of approximately S$0.1
million in jobs credit grants and S$0.1 million in dividend income from an unquoted investment in FY2010.
Distribution and selling expenses increased by 27.8% or S$0.6 million, from approximately S$2.1 million
in FY2009 to approximately S$2.7 million in FY2010. This was mainly due to an increase of S$0.4 million
in salaries and related costs in FY2010 as we rewarded our staff with higher increment and bonuses in
the year.
Administrative expenses increased by 2.1% or S$0.1 million, from approximately S$3.5 million in FY2009
to approximately S$3.6 million in FY2010.
Financial expenses
Our financial expenses decreased by 38.0% or S$0.2 million, from approximately S$0.5 million in FY2009
to approximately S$0.3 million in FY2010. This was mainly due to a decrease in interest rates on our bank
borrowings, coupled with a lower utilisation of bank borrowings and trade facilities in FY2010.
58

Profit before tax
Profit before tax increased by 232.5% or S$3.8 million, from approximately S$1.6 million in FY2009 to
approximately S$5.4 million in FY2010. The increase was due to an increase in gross profit and other
operating income, as well as decrease in financial expenses, partially offset by an increase in distribution
and selling expenses and administrative expenses.
Tax expense
Our income tax expenses were S$0.3 million and S$0.9 million, with effective tax rates of 18.1% and
16.4% in FY2009 and FY2010 respectively.
REVIEW OF FINANCIAL POSITION
Non-current assets
Our non-current assets comprise fixed assets, unquoted investments, deferred tax assets and other
receivables. Non-current assets amounted to S$8.0 million, S$7.9 million and S$7.8 million as at
31 December 2008, 31 December 2009 and 31 December 2010 respectively, representing 28.0%, 32.5%
and 27.7% of our total assets respectively.
As at 31 December 2010, the net book value of our fixed assets amounted to S$7.5 million, or 26.7% of
our total assets, comprising mainly freehold land of S$2.8 million, buildings of S$3.2 million, leasehold
land and buildings of S$0.3 million, plant and machinery of S$0.1 million, motor vehicles of S$0.3
million, renovations of S$0.4 million as well as office equipment, furniture and fittings of S$0.3 million.
Our unquoted investment amounted to approximately S$89,000 which relates to our investment in the
PRC. Deferred tax assets amounted to approximately S$0.2 million and other receivables amounted to
approximately S$18,000 as at 31 December 2010.
Current assets
Current assets comprise mainly inventories, trade debtors, other receivables, deposits, prepayments,
amount due from affiliated companies (trade), fixed deposits as well as cash and bank balances.
Current assets amounted to S$20.6 million, S$16.5 million and S$20.3 million as at 31 December 2008,
31 December 2009 and 31 December 2010 respectively, representing 72.0%, 67.5% and 72.3% of our
total assets as at the respective dates.
As at 31 December 2010, inventories and trade debtors were the largest components of our current
assets, accounting for 40.4% and 32.7% of our current assets respectively. Our inventories comprise
finished goods, finished goods-in-transit, raw materials and work-in-progress. Inventories are recorded
net of inventories written down. Trade debtors are recorded net of allowance for doubtful debts. Other
receivables amounted to 0.7% of our current assets as at 31 December 2010 and comprise mainly
sundry debtors. Deposits amounted to approximately S$0.1 million as at 31 December 2010, representing
0.5% of our current assets. These relate to deposits made for utilities and rental. Prepayments amounted
to approximately S$1.3 million as at 31 December 2010, representing 6.2% of our current assets. These
relate to prepayment of rental for our Indonesian office, advance payments to our suppliers and other
prepayments for computer maintenance and professional fees. Amount due from affiliated companies
(trade) amounted to approximately S$0.2 million as at 31 December 2010, representing 1.1% of our
current assets. These relate to outstanding amount due for trade transactions with SER and SERM. The
remaining balance of current assets comprises fixed deposits of approximately S$1.4 million and cash
and bank balances of approximately S$2.4 million.
Current liabilities
Current liabilities comprise mainly trade payables, gross amount due to customers for contract work-inprogress, trust receipts and bills payable, other creditors, accruals and other liabilities, dividends payable,
amounts due to affiliated company (trade and non-trade), provision for income tax, current portion of
amount owing to then-shareholders and then-directors, and bank borrowings. Current liabilities amounted
59

to S$14.7 million, S$9.2 million and S$11.8 million as at 31 December 2008, 31 December 2009 and
31 December 2010 respectively, representing 77.3%, 67.4% and 79.7% of our total liabilities as at the
respective dates.
Trade payables amounted to approximately S$1.5 million as at 31 December 2010, representing 12.7%
of our current liabilities. Trade payables relate to purchases of finished products and raw materials from
third party suppliers. Gross amount due to customers for contract work-in-progress of approximately
S$0.6 million or 5.0% of current liabilities relates to deferred revenue on our project not yet recognised
in FY2010. Trust receipts and bills payable amounted to approximately S$3.4 million as at 31 December
2010, representing 29.1% of current liabilities. Trust receipts and bills payable relate to our purchases
and were secured by way of legal mortgages on certain of our fixed assets. Other creditors amounted
to approximately S$0.8 million as at 31 December 2010, representing 6.5% of our current liabilities.
These relate mainly to amounts owing to freight companies and sundry creditors, GST payable and other
payable for professional services rendered. Accruals and other liabilities amounted to approximately
S$1.7 million as at 31 December 2010, representing 14.9% of our current liabilities. Accruals and other
liabilities comprise mainly accruals for expenses and professional fees, provision for directors fees and
provision for bonus. Dividends payable amounted to approximately S$1.6 million as at 31 December
2010, representing 13.9% of our current liabilities. These relate mainly to dividends declared in
FY2010 which remained outstanding as at 31 December 2010. Trade and non-trade amounts owing to
our affiliated companies, SER and Old FER HK, amounted to approximately S$0.3 million and S$0.1
million respectively as at 31 December 2010, representing 2.2% and 0.9% of our current liabilities. As
at 31 December 2010, our provision for income tax amounted to approximately S$0.6 million, which
accounted for 5.1% of our current liabilities. The current portion of the amount owing to then-shareholders
and then-directors amounted to approximately S$0.6 million which relates to amounts owing to Loh Ee
Ming (our Non-executive Chairman) and David Leng (our COO (Sales and Marketing) and Executive
Director) who had, from time to time, extended advances to us for our working capital requirements.
These advances are unsecured and interest-free. The current portion of the advances is expected to be
repaid within the next financial year, based on agreed payment terms. The current portion of our bank
borrowings amounted to approximately S$0.4 million as at 31 December 2010, which accounted for
3.8% of our current liabilities. The remaining current liabilities were made up of provision for warranty of
approximately S$50,000, current portion of finance leases of approximately S$18,000 and bank overdraft
of approximately S$57,000.
Non-current liabilities comprise mainly deferred tax liabilities, non-current portion of our finance lease
obligations, bank borrowings, as well as amount owing to then-shareholders and then-directors, which
amounted to S$4.3 million, S$4.5 million and S$3.0 million as at 31 December 2008, 31 December 2009
and 31 December 2010 respectively. These accounted for 22.7%, 32.6% and 20.3% of our total liabilities
as at 31 December 2008, 31 December 2009 and 31 December 2010, respectively.
Deferred tax liabilities of approximately S$0.2 million arose as a result of an excess of net book value
over tax written down value of fixed assets. The non-current portion of our finance lease obligations
amounted to approximately S$58,000 and was secured to finance the purchase of a motor vehicle in
FY2010. The non-current portion of our bank borrowings amounted to approximately S$1.7 million as at
31 December 2010. The amount owing to then-shareholders and then-directors relates to amounts owing
to Loh Ee Ming and David Leng who had, from time to time, extended advances to us for our working
capital requirements. These advances are unsecured, interest-free and had no fixed terms of repayment.
As at 31 December 2010, equity attributable to equity holders of the Company amounted to approximately
S$13.2 million.
60

LIQUIDITY AND CAPITAL RESOURCES
We financed our growth and operations through a combination of shareholders equity (including retained
earnings), net cash generated from operating activities and indebtedness from financial institutions. Our
principal uses of cash have been for working capital requirements and capital expenditures.
As at 31 December 2010, our shareholders equity amounted to S$13.2 million and indebtedness
to financial institutions (comprising term loans, finance leases, bills payable, trust receipts and
bank overdrafts) amounted to approximately S$5.7 million. Our gearing ratio (defined as the sum of
indebtedness to financial institutions divided by shareholders equity) was 0.4 times. Our net current
assets amounted to S$8.6 million and our working capital ratio (defined as current assets divided by
current liabilities) was 1.7 times.
Had the issuance of 8,312 new Shares (before the Sub-Division) for a total cash consideration of
approximately S$1,187,452 pursuant to the Pre-IPO Investment, subsequent to 31 December 2010 been
accounted for, our shareholders equity as at 31 December 2010 would have amounted to approximately
S$14.4 million and our gearing ratio would be 0.4 times. In addition, our net current assets would amount
to S$9.7 million and our working capital ratio would be 1.8 times.
As at the Latest Practicable Date, we had an aggregate net cash surplus of S$2.6 million. Our total
banking facilities amounted to S$17.8 million equivalent (comprising trade facilities of S$12.2 million, term
loans of S$3.3 million and overdraft of S$2.3 million) of which S$11.4 million were unutilised.
Our Directors are of the reasonable opinion that, after taking into account the cash flows generated from
our operations, our banking facilities and our existing cash and cash equivalents, the working capital
available to us as at the date of lodgement of this Offer Document is sufficient for our present working
capital requirements and for at least 12 months after the listing of our Company on Catalist.
The Sponsor is of the reasonable opinion that, after having made due and careful enquiry and after taking
into account the cash flows generated from our operations, our banking facilities and our existing cash
and cash equivalents, the working capital available to our Group as at the date of lodgement of this Offer
Document is sufficient for our present working capital requirements and for at least 12 months after the
admission of our Company to Catalist.
We set out below a summary of our consolidated statements of cash flows for the period under review.
The following net cash flow summary should be read in conjunction with the full text of this Offer
Document, including the Independent Auditors Report on the Audited Consolidated Financial Statements
of Far East Group Limited and Subsidiary Companies for the Financial Years Ended 31 December 2008,
2009 and 2010 as set out in Appendix A of this Offer Document.
(S$000)
FY2008
Audited
FY2009
FY2010
Net cash from operating activities

Net cash (used in)/from investing activities
Net cash (used in)/from financing activities
790
(305)
225
2,755
(274)
130
1,798
872
(2,135)
Net increase in cash and cash equivalents

Cash and cash equivalents at beginning of year
710
(163)
2,611
547
535
3,158
547
3,158
3,693
Cash and cash equivalents at the end of the year(1)
Note:(1)
Cash and cash equivalents comprise fixed deposits as well as cash and bank balances, net of bank overdrafts.
61

FY2008
In FY2008, we generated net cash from operating activities before changes in working capital of S$3.2
million. Net cash used in working capital amounted to S$1.6 million. This was mainly due to a decrease
in trade debtors and other receivables of S$1.0 million, and a decrease in deposits and prepayments of
S$0.5 million, partially offset by an increase in inventories of S$1.5 million, a decrease in trust receipts
and bills payable of S$0.7 million, a decrease in accruals and other liabilities of S$0.2 million, and a
decrease in trade and other payables of S$0.8 million. We paid income tax of S$0.2 million and interest of
S$0.6 million in FY2008. The net cash generated from operating activities amounted to S$0.8 million.
Net cash used in investing activities of S$0.3 million was due to the purchase of plant and machinery
of S$0.2 million and other fixed assets of S$0.1 million. Net cash generated from financing activities of
S$0.2 million was due mainly to proceeds from term loans of S$0.5 million, partly offset by repayments of
term loans of S$0.1 million, repayment of loans to certain shareholders of S$0.1 million, and repayment
of obligations under finance leases of approximately S$26,000 and dividend payment of approximately
S$16,000.
As a result of the above, there was a net increase of S$0.7 million in our cash and cash equivalents, from
an overdraft of S$0.2 million as at 1 January 2008 to a cash surplus of S$0.5 million as at 31 December
2008.
FY2009
million. Net cash generated from working capital amounted to S$0.6 million. This was mainly due to a
decrease in inventories of S$2.5 million, a decrease in trade debtors and other receivables of S$2.6
million and an increase in accruals and other liabilities of S$0.7 million, partly offset by a decrease in trust
receipts and bills payable of S$3.9 million, an increase in deposits and prepayments of S$0.4 million and
a decrease in trade and other payables of S$0.9 million. We paid interest expenses of S$0.5 million and
income taxes of S$0.5 million. Net cash generated from operating activities amounted to S$2.8 million.
Net cash used in investing activities of S$0.3 million was mainly due to the purchase of motor vehicles of
S$0.2 million and other assets of S$0.1 milion, partially offset by proceeds from the sale of motor vehicles
of S$0.1 million.
Net cash generated from financing activities of S$0.1 million was due mainly to proceeds from term loans
of S$1.6 million, partly offset by repayments of term loans of S$0.8 million, repayment of loans to related
parties and certain shareholders of S$0.2 million and S$0.5 million respectively.
S$0.5 million as at 1 January 2009 to S$3.2 million as at 31 December 2009.
FY2010
million. Net cash used in working capital amounted to S$1.5 million. This was mainly due to an increase
in trade debtors and other receivables of S$2.2 million, an increase in deposits and prepayment of S$0.7
million, a decrease in accruals and other liabilities of S$0.2 million and a decrease in bills payable of
S$0.7 million, partly offset by a decrease in inventories of S$1.1 million, a decrease in gross amount due
to customers for contract work-in-progress of S$0.6 million and an increase in trade and other payables
of S$0.6 million. We paid income taxes of S$0.4 million and interest expenses of S$0.3 million in FY2010.
The net cash used in operating activities amounted to S$1.8 million.
Net cash generated from investing activities of S$0.9 million was due mainly to proceeds from the
disposal of our investment properties of S$1.2 million, partly offset by purchase of motor vehicles of S$0.1
million, office equipment and furniture of S$0.1 million and renovation of S$0.1 million.
62

Net cash used in financing activities of S$2.1 million was due mainly to repayments of term loans of
S$1.2 million, repayment of loans from certain shareholders of S$0.4 million and dividends paid to
shareholders of S$0.4 million.
S$3.2 million as at 1 January 2010 to S$3.7 million as at 31 December 2010.
CAPITAL EXPENDITURES, DIVESTMENTS, COMMITMENTS AND CONTINGENT LIABILITIES
Capital expenditures and divestments
Our capital expenditures and divestments during the period under review and the period from 1 January
2011 to the Latest Practicable Date are as follows:-
(S$000)
1 January 2011
to the Latest
Practicable Date
FY2008
FY2009
FY2010
195
17
51
20
26
30
74
24
213
17
3
81
102
39
196
13
23
22
13
309
342
438
71
1
13
154
1
7
5
4
14
168
31
Capital expenditures
Building
Plant and machinery
Renovations
Office equipment, furniture and fittings
Computers
Motor vehicles
Divestments
Plant and machinery
Renovations
Computers
Motor vehicles
The above capital expenditures were financed by internally generated funds and finance leases.
Commitments
Capital commitments
As at the Latest Practicable Date, we do not have any material capital commitments.
Operating lease commitments
As at the Latest Practicable Date, we have operating lease commitments as follows:(S$000)
Not later than one year
Later than one year but not later than five years
More than five years
161
242
866
63

The operating leases commitments comprise rent payable by us for the leased properties as disclosed in
the Business Properties and Fixed Assets section of this Offer Document.
We intend to finance the above operating lease commitments by internally generated funds.
Contingent liabilities
As at the Latest Practicable Date, we do not have any material contingent liabilities.
FOREIGN EXCHANGE MANAGEMENT
Transactions in foreign currencies are measured in the respective functional currencies of our Company
and our subsidiaries and are recorded on initial recognition in the functional currencies at exchange rates
approximating those ruling at the transaction dates. Monetary assets and liabiilites denominated in foreign
currencies are translated at the rate of exchange ruling at the balance sheet date. Non-monetary items
that are measured in terms of historical cost in a foreign currency are translated using the exchange rates
as at the dates of the initial transactions. Non-monetary items measured at fair value in a foreign currency
are translated using the exchange rates at a date when the fair value was determined.
Exchange differences arising on the settlement of monetary items or on translating monetary items at the
balance sheet date are recognised in profit or loss except for exchange differences arising on monetary
items that form part of our Groups net investment in foreign operations, which are recognised initially in
other comprehensive income and accumulated under foreign currency translation reserve in equity. The
foreign currency translation reserve is reclassified from equity to profit and loss of our Group on disposal
of our foreign operations.
Our reporting currency is in Singapore dollars and our operations are primarily carried out in Singapore,
Malaysia, Hong Kong and other SEA regions. Other than the respective functional currencies of our
subsidiaries, we also transact mainly in US$ and .
The percentage of our revenue, purchases and expenses denominated in currencies for the period under
review are as follows:(%)
FY2008
FY2009
FY2010
Percentage of revenue denominated in

S$
RM
US$
HK$
Others
54.9
26.8
12.4
5.0
0.9
55.3
27.4
9.2
6.5
1.6
58.3
25.9
6.3
9.0
0.5
Percentage of purchases denominated in

US$
S$
RM
JPY
Others
39.8
48.1
5.0
4.8
2.1
0.2
47.4
38.6
6.6
4.6
2.7
0.1
44.9
43.3
5.8
4.5
1.5
Percentage of expenses denominated in

S$
RM
HK$
70.6
22.9
6.5
72.0
21.1
6.9
67.4
27.7
4.9
64

To the extent that our revenue, purchases and expenses are not naturally matched in the same currency
and to the extent that there are timing differences between invoicing and collection or payment, we will
be exposed to fluctuations in the various currencies against the functional currencies of the respective
companies, which may adversely affect our earnings.
At present, while we do not have any formal policy for hedging against foreign exchange exposure, we
do use forward contracts to manage our foreign exchange risks from time to time. Typically, we do not
purchase forward currency contracts of amounts greater than our existing purchase commitments. We
will continue to monitor our foreign exchange exposure and may continue to employ forward currency
contracts to manage our foreign exchange exposure should the need arise. Prior to implementing any
formal hedging policies, we will seek the approval of our Board on the policy and put in place adequate
procedures which shall be reviewed and approved by our Audit Committee. Thereafter, all hedging
transactions entered into by our Group will be in accordance with the set policies and procedures.
Our net foreign exchange loss, and as a percentage of revenue and PBT, for the period under review
were as follows:-
Net foreign exchange loss (S$000)

As a percentage of revenue (%)
As a percentage of PBT (%)
65
FY2008
FY2009
FY2010
153
0.5
11.3
111
0.4
6.8
204
0.6
3.7
GENERAL INFORMATION ON OUR GROUP

SHARE CAPITAL
We were incorporated in Singapore on 18 March 1964 under the Companies Act as a private limited
company under the name of Far East Refrigeration (Pte.) Limited (Company Registration Number:
196400096C). On 18 March 2011, we changed our name to Far East Group Pte. Ltd.. On 25 July 2011,
we were converted into a public company and changed our name to Far East Group Limited.
As at the date of incorporation, our issued and paid-up capital was S$115,000.00 comprising 1,150
Shares allotted and issued to Loh Ee Ming (42.0%), Chan Tuck Kwye (42.0%) and Ng Tat Keong (16.0%).
As at 31 December 2010, the issued and paid-up share capital of our Company was S$8,134,740.00
comprising 80,888 Shares.
Pursuant to an investment agreement dated 1 February 2011 (the Investment Agreement) entered into
between our Company, UPL (our Controlling Shareholder), Steven Loh (our CEO and Executive Director),
David Leng (our COO (Sales and Marketing) and Executive Director) and Lim Keng Ann (collectively the
Majority Shareholders) and the Pre-IPO Investors, the Pre-IPO Investors subscribed for an aggregate
of 8,312 new Shares for a total cash consideration of S$1,187,452.32 (the Pre-IPO Investment). The
proceeds from the Pre-IPO Investment were used for general working capital purposes.
On 15 March 2011, our Company allotted and issued such number of Shares (before Sub-Division) to the
Pre-IPO Investors as set out below:Number of Shares
Sam Cheung
Richard Chung
David Leng
7,000
700
612
Total
8,312
Pursuant to the Investment Agreement, our Company and the Majority Shareholders jointly and severally
granted the Pre-IPO Investors a put option to require our Company and/or the Majority Shareholders to
acquire all of the Pre-IPO Investors Shares at an acquisition price equivalent to the principal amount
paid for such Shares plus a compounded annual interest of 4.0% in the event that our Company was
unsuccessful in the Placement (for any reason other than our Companys decision not to proceed with
the Placement). In the event of a material breach of the Investment Agreement or, amongst others, our
Company decided not to proceed with the Placement, the Majority Shareholders and our Company jointly
and severally granted the Pre-IPO Investors a put option to require the Majority Shareholders and/or our
Company to acquire all of the Pre-IPO Investors Shares at an acquisition price equivalent to the principal
amount paid for such Shares plus a compounded annual interest of 6.0%.
Further to the Pre-IPO Investment and as at the Latest Practicable Date, the issued and paid-up share
capital of our Company was S$9,322,192.32 comprising 89,200 Shares.
66

At an extraordinary general meeting held on 22 July 2011, our Shareholders approved, inter alia, the
following:(a)
the conversion of our Company into a public limited company and the change of our name to Far
East Group Limited;
(b)
the adoption of a new set of Articles of Association;
(c)
the sub-division of every one (1) Share into 600 Shares (the Sub-Division);
(d)
the issue of the New Shares pursuant to the Placement, which when allotted or allocated, issued
and fully-paid, will rank pari passu in all respects with the existing Shares;
(e)
the authorisation of our Directors, pursuant to Section 161 of the Companies Act, to:(i)
allot and issue Shares whether by way of rights, bonus or otherwise (including Shares
as may be issued pursuant to any Instrument (as defined below) made or granted by our
Directors while this resolution is in force notwithstanding that the authority conferred by this
resolution may have ceased to be in force at the time of issue of such Shares); and/or
(ii)
make or grant offers, agreements or options (collectively, Instruments) that might or would
require Shares to be issued, including but not limited to the creation and issue of warrants,
debentures or other instruments convertible into Shares,
at any time and upon such terms and conditions and for such purposes and to such persons as our
Directors may in their absolute discretion deem fit, provided that the aggregate number of Shares
issued pursuant to such authority (including Shares to be issued pursuant to any Instrument but
excluding Shares which may be issued pursuant to any adjustments (Adjustments) effected under
any relevant Instrument, which Adjustment shall be made in compliance with the provisions of
the Catalist Rules for the time being in force (unless such compliance has been waived by the
SGX-ST) and the Articles of Association for the time being of our Company), shall not exceed
100% of the issued share capital of our Company (excluding treasury shares) immediately after
the Placement, and provided that the aggregate number of such Shares to be issued other than
on a pro rata basis in pursuance to such authority (including Shares to be issued pursuant to any
Instrument but excluding shares which may be issued pursuant to any Adjustment effected under
any relevant Instrument) to the existing Shareholders shall not exceed 50% of the issued share
capital of our Company (excluding treasury shares) immediately after the Placement, and, unless
revoked or varied by our Company in general meeting, such authority shall continue in force until
the conclusion of the next Annual General Meeting of our Company or the date by which the next
Annual General Meeting of our Company is required by law to be held, whichever is the earlier; and
(f)
the adoption of the Shareholders Mandate (details of which are set out in the Interested Person
Transactions Shareholders Mandate section of this Offer Document).
As at the date of this Offer Document, there is only one class of shares in the capital of our Company,
being the Shares. A summary of the Articles of Association of our Company relating to, among others,
the voting rights of our Shareholders is set out in Appendix B Summary of the Constitution of our
Company of this Offer Document. There is no founder, management, deferred or unissued Shares
reserved for issuance for any purpose. No person has been, or is entitled to be, given an option to
subscribe for or purchase any shares in or debentures of our Company or our subsidiaries.
67

Details of changes in our issued and paid-up capital since 31 December 2010 and our issued and paidup share capital immediately after the Placement are as follows:Resultant
number of
issued Shares
Resultant issued
and paid-up share
capital
(S$)
Issued and fully paid Shares as at 31 December 2010

Issued and fully paid Shares pursuant to the Pre-IPO Investment
Issued and fully paid Shares pursuant to the Sub-Division
New Shares issued pursuant to the Placement
80,888
89,200
53,520,000
18,800,000
8,134,740
9,322,192
9,322,192
13,958,192
Post-Placement issued and paid-up share capital
72,320,000
13,958,192
Save as disclosed above, there were no changes in the issued and paid-up capital of our Company within
the three years preceding the date of this Offer Document.
The shareholders equity of our Company as at 31 December 2010, before and after adjustments to
reflect the Pre-IPO Investment and the issue of the New Shares pursuant to the Placement are set out
below:-
(S$000)
As at
31 December
2010
After adjusting
for the Pre-IPO
Investment
After the
Placement
8,135
1,803
9,322
1,803
13,958(1)
667
9,938
11,125
Share capital
Reserves(2)
14,625
Notes:(1)
After deducting expenses incurred relating to the Placement of approximately S$440,000 which will be capitalised against
share capital.
(2)
Reserves comprise accumulated profits and capital reserves.
68
Far East Penang

(Malaysia)
93.88%
Green Point
(Singapore)
100.0%
100.0%
69
FE&B
(Malaysia)
100.0%
100.0%
Far East Malaysia

(Malaysia)
Far East KL
(Malaysia)
100.0%
Edenkool
(Singapore)
Far East Maju

(Malaysia)
100.0%
Far East Group

(Singapore)
Our Group structure as at the date of this Offer Document is as follows:-
OUR GROUP STRUCTURE
Far East Kuching

(Malaysia)
100.0%
RSP
(Singapore)
57.1%
Safety Enterprises
(Malaysia)
100.0%
Far East HK
(Hong Kong)
100.0%
Far East JB
(Malaysia)
100.0%

OUR SUBSIDIARIES
The details of our subsidiaries as at the date of this Offer Document are as follows:Issued and
paid-up
capital
Equity
interest
held by our
Company
Name of
company
Date and place

of incorporation
Principal business/
Principal place of business
Edenkool
26 May 2009/
Singapore
Trading of refrigeration and airconditioning parts/

Singapore
S$200,000
100.0%
Far East HK
30 December 2005/
Hong Kong
Trading of refrigeration and airconditioning parts/

Hong Kong
HK$3,000,000
100.0%
Far East JB(1)
23 January 1980/
Malaysia
Trading of electrical, refrigeration RM1,000,000

and air-conditioning equipment
and parts/
Malaysia
100.0%
Far East KL
27 February 1976/
Malaysia
Trading of electrical, refrigeration RM2,760,000

and parts/
Malaysia
100.0%
Far East Kuching
10 May 1994/
Malaysia
Trading of electrical, refrigeration

and parts/
Malaysia
RM2
100.0%
Far East Maju
21 March 1983/
Malaysia
Manufacturing and trading of

electrical, refrigeration and
air-conditioning equipment and
parts/
Malaysia
RM2,839,000
100.0%
Far East Malaysia 26 January 1967/

Malaysia
Investment holding/
Malaysia
RM4,000,000
100.0%
Far East Penang
6 February 1980/
Malaysia

and parts/
Malaysia
RM850,000
93.88%(2)
FE&B
10 August 1987/
Malaysia

and parts/
Malaysia
RM400,000
100.0%
Green Point
13 July 2009/
Singapore
Repair and maintenance of

refrigeration and air-conditioning
compressors/ Singapore
S$2
100.0%
RSP
15 July 1998/
Singapore
Supply and solutions provider of

monitoring and energy
management systems/
Singapore
S$70,000
57.1%(3)
70
Name of
company
Date and place

of incorporation
Principal business/
Principal place of business
Safety Enterprises 4 June 1976/

Malaysia

and parts/
Malaysia
Issued and
paid-up
capital
Equity
interest
held by our
Company
RM20,000
100.0%
Notes:(1)
Far East JB has ceased operations since 2007.
(2)
The remaining shareholders of Far East Penang are Yap Kwong Sen (5.88%) and the estate of Lee Lee Boon (0.24%), both
of whom are not related to any of our Directors, Executive Officers and Substantial Shareholders.
(3)
The remaining 42.9% shareholding interest in RSP is owned by Richard Chung, one of our Executive Officers.
None of our subsidiaries is listed on any stock exchange.

SHAREHOLDERS
Our Shareholders and their respective shareholdings in our Company immediately before and after the
Placement are set out below:Before the Placement
Direct Interest
Number of
Shares
Directors
Loh Ee Ming(1),(2)
Steven Loh(1),(2)
David Leng
Karen Loh(1),(2)
Hew Koon Chan
Andrew Mak
Tan Hwee Kiong
Substantial Shareholder
(other than Directors)
UPL(2)
Other Shareholders
Lim Keng Ann(3)
Estate of Ng Tat Keong(4)
Estate of Chan Tuck Kwye(5)
Pre-IPO Investors
(other than Directors)
Sam Cheung(1)
Richard Chung(6)
Public
Total
After the Placement
Deemed Interest
Number of
Shares
654,600
3,700,200
1.2
6.9
42,570,000
42,570,000
4,200,000
79.5
79.5
7.9
42,570,000
79.5
439,800
711,600
823,800
0.8
1.3
1.6
4,200,000
420,000
Direct Interest
%
Number of
Shares
654,600
3,700,200
0.9
5.1
42,570,000
42,570,000
4,200,000
58.9
58.9
5.8
42,570,000
58.9
439,800
711,600
823,800
0.6
1.0
1.1
7.9
0.8
4,200,000
420,000
5.8
0.6
18,800,000
26.0
53,520,000
100.0
72,320,000
100.0
71
Number of
Shares
Deemed Interest

Notes:(1)
Loh Ee Ming (our Non-executive Chairman) is the father of Steven Loh (our CEO and Executive Director) and Karen Loh (our
Non-executive Director), and father-in-law of Sam Cheung (a Pre-IPO Investor). Steven Loh and Karen Loh are siblings. Karen
Loh is the wife of Sam Cheung.
(2)
UPL is an investment holding company incorporated in Singapore and the shareholders are Loh Ee Ming, Steven Loh, Karen
Loh, Lum Soo Mooi (spouse of Loh Ee Ming) and Sharon Loh (daughter of Loh Ee Ming and Lum Soo Mooi, and sibling of
Steven Loh and Karen Loh) with shareholding interests of 40.68%, 27.42%, 10.68%, 10.33% and 10.89% respectively. The
directors of UPL are Loh Ee Ming, Steven Loh, Sharon Loh and Lum Soo Mooi.
(3)
Lim Keng Ann is an employee of our Group and is not related to any of our Directors, Executive Officers and Substantial
Shareholders.
(4)
Ng Tat Keong is not related to any of our Directors, Executive Officers and Substantial Shareholders.
(5)
Chan Tuck Kwye is not related to any of our Directors, Executive Officers and Substantial Shareholders.
(6)
Richard Chung is one of our Executive Officers.
Saved as disclosed above, there are no family relationships amongst our Directors, Executive Officers
and Substantial Shareholders.
Save as disclosed above, our Company is not directly or indirectly owned or controlled, whether severally
or jointly, by any other corporation, any government or other natural or legal person.
The Shares held by our Directors and Substantial Shareholders do not carry different voting rights from
the New Shares which are the subject of the Placement. To the best of our knowledge, none of our
Directors is aware of any arrangement, the operation of which may at a subsequent date, result in a
change in control of our Company.
Save as disclosed above in the General Information on our Group Share Capital section of this Offer
Document, there were no significant changes in the percentages of ownership of our Directors and
Substantial Shareholders in our Company during the period under review and up to the Latest Practicable
Date.
There has not been any public take-over offer by a third party in respect of our Shares or by our Company
in respect of shares of another corporation or units of a business trust which has occurred between
1 January 2010 and the Latest Practicable Date.
MORATORIUM
To demonstrate their commitment to our Group, each of UPL (our Controlling Shareholder), Steven Loh
(our CEO and Executive Director) and the Pre-IPO Investors, who in aggregate hold 51,544,800 Shares,
in our Company immediately after the Placement (representing approximately 71.3% of the enlarged
issued share capital of our Company after the Placement), have undertaken not to sell, realise, transfer or
dispose of any part of their respective interests in the issued share capital of our Company immediately
after the Placement (adjusted for any bonus issue or sub-division) for a period of 12 months commencing
from the date of admission of our Company to Catalist.
In addition, Loh Ee Ming (our Non-executive Chairman), Steven Loh, Karen Loh (our Non-executive
Director), Lum Soo Mooi and Sharon Loh, being all the shareholders of UPL, have undertaken not to
sell, realise, transfer or dispose of any part of their respective interests in the issued share capital of UPL
immediately after the Placement (adjusted for any bonus issue or sub-division) for a period of 12 months
commencing from the date of admission of our Company to Catalist.
72
HISTORY
We are one of the pioneers in the refrigeration and air-conditioning business in Singapore with more than
58 years of experience in the HVAC&R industry.
Our history can be traced back to 1953 when Loh Ee Ming, our founder and Non-executive Chairman,
started a sole proprietorship to principally engage in the business of providing repair services of
refrigerators at a leased shop located at Bencoolen Street, Singapore. In March 1964, Loh Ee Ming,
together with Ng Tat Keong and Chan Tuck Kwye, incorporated our Company under the Companies Act
as a private limited company under the name of Far East Refrigeration (Pte.) Limited.
In 1966, we were principally engaged in the manufacturing and distribution of commercial refrigerators as
well as the trading of related spare parts with a staff strength of five employees. In the same year, as part
of our expansion plans, we shifted from our leased premises at Bencoolen Street to our own premises at
230 Serangoon Road, Singapore 218081 (230 Serangoon Road).
In 1967, Loh Ee Ming saw huge demand for commercial refrigerators in Malaysia and established our
first overseas subsidiary, Far East Malaysia, with a staff strength of approximately 20 employees to
focus primarily on the manufacturing and distribution of commercial refrigerators and installation of cold
rooms, as well as trading of refrigeration and air-conditioning parts in Johor, Kuala Lumpur and Penang in
Malaysia.
In 1971, our staff strength increased to approximately 15 employees in Singapore and we purchased a
property at 1120 Serangoon Road, Singapore 328205 (1120 Serangoon Road), with an estimated gross
floor area of 1,400 sqft, as our office, service workshop and additional warehouse for storage.
In 1973, to cater to our expansion requirements, we sold 230 Serangoon Road and moved to a leased
premise located at 3A Kinta Road, Singapore, which has an estimated gross floor area of approximately
4,000 sqft whilst maintaining our showroom at 1120 Serangoon Road. This new premise was used for
our sales and marketing activities in relation to commercial refrigerators as well as refrigeration and airconditioning parts.
In 1976, we acquired Far East KL and Safety Enterprises. Far East KL was focused on the manufacturing
and distribution of commercial refrigerators, whilst Safety Enterprises was focused on distribution of
imported refrigeration and air-conditioning parts in Kuala Lumpur.
In 1979, to cater to the increase in our export business volume, we acquired Elektro-Metall (Singapore)
Private Limited (Elektro-Metall), which owned a factory and warehouse with an estimated gross floor
area of 25,112 sqft at 5 Third Lok Yang Road, Singapore 628000 to enhance our warehouse and storage
capacities. This factory became our regional logistics hub distributing our products in larger volumes to
various countries in SEA, including Malaysia. In 2004, the business and assets of Elektro-Metall were
subsequently transferred to our Group and in 2008, Elektro-Metall was dissolved.
In 1980, as our business continued to grow in Malaysia, we established Far East JB to consolidate our
manufacturing facility from Far East Malaysia. In the same year, we established Far East Penang to focus
on marketing and distribution of commercial refrigerators as well as refrigeration and air-conditioning parts
in Penang.
In 1983, we acquired Far East Maju, a company located in Kuala Lumpur to principally engage in the
manufacture of condensers and assembly of condensing units.
In 1988, Loh Ee Ming saw the business potential in the PRC and in order to reduce our dependence on
the Singapore and Malaysia markets, we incorporated Far East Refrigeration (Hong Kong) Limited (Old
FER HK), which acted as a business platform for our Group to the PRC market.
In 1990, Steven Loh (our CEO and Executive Director, and son of Loh Ee Ming), joined our Group as a
retail sales executive. In 2003, he became our Group managing director.
In 1992, we streamlined our Groups businesses to focus on distribution of refrigeration and airconditioning systems and products and terminated the manufacturing of commercial refrigerators due to
intense competition in this business segment.
73
HISTORY
In 1993, as our business continued to expand, we recognised the importance of branding. To this end,
we created the Fascold brand for our manufactured range of products such as condensers, condensing
units, evaporators, and custom coils. These products were manufactured by Far East Maju.
In the same year, we acquired FE&B, which was principally engaged in the sales, marketing and
distribution of our products in South Malaysia.
In 1994, in order to garner greater market share and strengthen our market position in Malaysia, we
incorporated Far East Kuching in Kuching (the capital of East Malaysian state of Sarawak) to focus
primarily on the retailing and trading of refrigeration and air-conditioning parts, relevant spare parts and
components in East Malaysia.
In 1994, we adopted a computerised inventory system, ERP program, which enabled us to have better
control of our inventories and monitor the movement of our inventories on a real time basis. In 1995,
we introduced the fully computerised commercial Stock Control Inventory Management and Accounting
System (SCIMAS) to manage our inventories more efficiently and to provide information on our products
to our customers on a timely basis.
In 1998, we incorporated RSP to focus primarily on Energy Management Systems (EMS), refrigeration
monitoring as well as control and alarm management systems to cater to emerging demand for new
technology within the HVAC&R industry. With the establishment of RSP, we are equipped with the
advanced refrigeration technologies and online monitoring systems that help food-related companies to
comply with the HACCP requirements. We are also currently providing refrigeration monitoring as well
as control and alarm management systems to HSA (Singapore Blood Bank) and several cord blood
companies.
Over the years, we strive to maintain a quality management system to ensure only quality products and
services are provided to our customers. As a testament to our commitment, our Company was awarded
the ISO9001:2008 certification for assembly and trading of refrigeration parts since May 2002. Our
subsidiaries, Far East Maju and Safety Enterprises have also obtained the ISO9001:2008 certifications
since October 2004.
In 2003, we carried out a rebranding exercise and changed our in-house brand name to Eden. This was
part of our vision to launch a comprehensive range of innovative in-house manufactured heat exchangers
which uses high energy-efficient coil technologies. This was part of our Green Program which brings us
into the next phase of expansion, in line with the increasing environmental awareness in providing fresh
and hygienic food storage solutions to the community.
Our Eden brand of products, in particular, our Eden brand of heat exchangers, are manufactured by
our subsidiary, Far East Maju. Our Eden brand of products cover a wide range of international standard
and quality heat exchangers, including evaporators, brine coolers, condensers and custom coils,
which are extensively used in commercial, light industrial and marine applications. Today, Eden has a
comprehensive product range of G4 heat exchangers.
In 2003, in conjunction with our 50th anniversary since the commencement of our business, and to further
expand our operations, we acquired a new building at 112 Lavender Street, Singapore 338728, with an
estimated gross floor area of approximately 20,839 sqft (the Far East Refrigeration Building). The Far
East Refrigeration Building serves as our head office and retail centre.
From 2004 to 2005, our Group underwent a series of corporate restructuring exercises to achieve our
corporate objectives of becoming a comprehensive provider of refrigeration and air-conditioning systems
and products, and to streamline and rationalise our corporate structure and business activities of our
Group.
In December 2005, we incorporated a new Hong Kong subsidiary, Far East HK, to take over the business
and operations of Old FER HK. In 2009, we disposed of Old FER HK to Karen Loh. Please refer to the
Interested Person Transactions Past Interested Person Transactions section of this Offer Document for
further details.
74
HISTORY
In 2008, our Eden brand of heat exchangers were successfully tested in the laboratory of Ziehl-Abegg,
which is one of Europes accredited laboratories. The results of the tests certified that our products
specifications, such as noise level and air flow performance, were in line with markets requirements.
These certifications are a further testimony of the quality of our products. In particular, our Eden brand
of heat exchangers are widely recognised and used by well-known international and regional retail chains,
including Carrefour, Metro, Tesco and Giant. We were also one of the major suppliers of refrigeration
equipment to Singapores two Integrated Resorts, namely Resorts World Sentosa and Marina Bay Sands.
In 2009, we expanded our business into the servicing, repair and overhauling of Bitzers reciprocating and
screw compressors by establishing Green Point through a franchise program with Bitzer Refrigeration
Asia Limited (a wholly-owned subsidiary of Bitzer, a leading manufacturer of compressors in Germany).
In view of the rapid growth of residential and commercial air-conditioning business in Singapore, we
incorporated Edenkool in May 2009, to primarily focus on providing air-conditioning materials (such as
copper pipes, PVC trunkings, electrical wires, refrigerants, class O and 1 closed cell insulation pipes and
sheets) to the residential and commercial air-conditioning markets.
As part of our business strategy to expand regionally, we obtained a licence from the Vietnam
Department of Industry and Trade in September 2010 to set up a new representative office in Ho Chi Minh
City, Vietnam to serve as our Groups gateway into the Indochina market (namely Vietnam, Cambodia,
Laos and Myanmar).
In May 2011, we established a representative office in Indonesia to provide sales and marketing support
and assistance for our distributors and dealers in Indonesia.
Since our establishment, our Group has grown rapidly and we have evolved into a comprehensive
provider of refrigeration and air-conditioning systems and products in the HVAC&R industry. We have
grown from a provider of repair services of refrigerators to a distributor of a wide range of agency products
for several prominent manufacturers in the HVAC&R industry, as well as a manufacturer and distributor of
heat exchangers and condensing units under our own brand Eden. As at the Latest Practicable Date, we
have 118 employees, with subsidiaries in Singapore, Malaysia and Hong Kong as well as representative
offices in Vietnam and Indonesia.
On 18 March 2011, we changed our name to Far East Group Pte. Ltd.. On 25 July 2011, our Company
was converted into a public company and changed our name to Far East Group Limited. For further
details on the share capital of our Company, please refer to the General Information on our Group
Share Capital section of this Offer Document.
75
BUSINESS
BUSINESS OVERVIEW
For our agency products, some of the international brands that we distribute are Bitzer, Copeland,
Embraco, Danfoss, Emerson Flows, Eliwell, Honeywell, Saginomiya, Castel, ebm-papst, Ziehl-Abegg,
HARP and Aeroflex. For further details on the agency products that we distribute, please refer to the
Business Our Products section of this Offer Document.
We possess a comprehensive range of innovative in-house manufactured heat exchangers under our own
brand Eden, which use high energy-efficient coil technologies. Our Eden brand of heat exchangers are
used for refrigeration and cooling by prominent end-users in various industries, such as retail (Carrefour,
Metro, Tesco, Giant, Cold Storage and NTUC FairPrice), food and beverage (Resorts World Sentosa and
Marina Bay Sands), pharmaceutical (HSA (Singapore Blood Bank)), hospitality (The St. Regis Singapore,
Shangri-La Hotel Singapore and Capella Singapore), logistics (CIAS Flight Kitchen), food processing
(Chun Cheng Fishery and Angliss Singapore) and shipping (Jurong Shipyard Pte Ltd, Keppel Shipyard
Limited and Sembawang Shipyard Pte Ltd).
As part of our value-added services to our customers, we also provide design and consultancy services
in relation to refrigeration and air-conditioning systems, as well as relevant product trainings and aftersales support.
dealers as well as refrigeration and air-conditioning contractors who use our products and services to
provide comprehensive refrigeration and air-conditioning systems to end-users, such as supermarkets,
cold store distribution centres, food processing and catering facilities, hotels, hospitals, food and beverage
establishments, convenient stores, petrol stations, marine vessels, oil rigs and barges.
Our head office is based in Singapore and we have subsidiaries in Singapore, Malaysia and Hong Kong,
as well as representative offices in Vietnam and Indonesia. Our Company and subsidiaries in Singapore
focus primarily on the business opportunities arising from Singapore and other SEA countries. Our
subsidiaries in Malaysia operate as retail and distribution offices covering the Malaysian market whilst
our subsidiary in Hong Kong serves as a business platform to the Hong Kong and PRC markets. Our
representative office in Vietnam serves as our Groups gateway into the Indochina market while our
representative office in Indonesia covers the Indonesia market.
As at the Latest Practicable Date, we have appointed approximately 20 dealers and distributors with a
wide business and distribution network in their respective countries, including Malaysia, Thailand, the
Philippines, Myanmar, Mauritius, Vietnam, Sri Lanka and Indonesia. We also provide design and technical
services to our dealers and distributors in connection with the sale of our products. Please refer to the
Business Distribution Channels section of this Offer Document for further details.
Our head office is currently located at 112 Lavender Street, Far East Refrigeration Building, Singapore
338728, occupying an estimated gross floor area of 20,839 sqft. Our main warehouse and workshop is
located at 5 Third Lok Yang Road, Singapore 628000, occupying an estimated gross floor area of 25,112
sqft. Our manufacturing facility is located at Lot 1998/D Jalan Perusahaan 3, Taman Industri Selesa Jaya,
43300 Balakong, Seri Kembangan, Selangor Darul Ehsan, Malaysia, occupying an estimated gross floor
area of 39,719 sqft.
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BUSINESS
OUR PRODUCTS
We manufacture and distribute our Eden brand of heat exchangers and condensing units, as well as
represent and distribute agency products. As at the Latest Practicable Date, we have 13 series with more
than 300 models of evaporators, condensers and condensing units to serve the cooling requirements of
different business segments, some of which are as follows:Eden brand of heat exchangers and condensing units
Product
Product description
Cabinet unit coolers
These evaporators are used in

commercial refrigerators, wine coolers,
convenience stores and small cold
rooms. They are designed for energysaving purposes and offer more storage
space due to their slim design profile.
Low profile unit coolers
These evaporators are used in hotels,

restaurants, supermarkets, convenience
stores and food processing factories.
They are designed for energy-saving
purposes with efficient air circulation and
have modern aesthetic appearances.
High profile unit coolers
These evaporators are used in

supermarkets, hypermarkets, logistics
hubs and food processing factories.
They are designed for applications which
require high air circulation and usage
purposes.
Low air unit coolers / Dual throw unit coolers
These evaporators are used in food

processing rooms, wine coolers and
supermarkets. They are designed for food
processing areas which require controlled
temperatures and comfort cooling in work
areas.
Heavy duty unit coolers
These evaporators are used in semi-blast

freezing rooms, large cold storage rooms
and logistics hubs. They are designed for
large cold rooms which require critical air
circulation applications.
77
BUSINESS
Product
Product description
Titan unit coolers (blast freezer)
These evaporators are designed for ultrafast freezing applications to maintain food
freshness, prevent loss of product weight
and ultimate reduction in energy.
Matrix air-cooled condensers
These condensers are used in

refrigeration systems and commercial
air-conditioning. They are designed for
matrix application where condensers can
be multi-linked. These condensers also
have modern aesthetic appearance.
Matrix V air-cooled condensers
These condensers are used in

refrigeration installations and commercial
air-conditioning. They are designed for
installation sites with space constraints.
Jumbo air-cooled condensers
These condensers have large capacities

and are used in refrigeration installations,
hypermarkets and commercial airconditioning. They are designed for
multiple compressor applications and
closed circuit fluid coolers (radiators).
These air-cooled condensers have
modern aesthetic appearance.
Scrollpak condensing units
These condensing units use advance

scroll technologies from Copeland,
coupled with energy-efficient Eden G4
condensers. They are primarily used in
commercial refrigerators, wine chillers,
convenience stores and small cold rooms
offering quick installations.
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BUSINESS
Product
Product description
Polapak condensing units
These condensing units are technology

and quality-driven products which utilise
Bitzer reciprocating compressors and
energy-efficient Eden G4 condensers.
They are primarily used in commercial
refrigeration applications in hotels,
restaurants, large cold rooms and
logistics hubs, specially designed for
high performance applications and quick
installations.
E2pak frequency inverter condensing units
These condensing units use inverter

technology (compressor and condenser
fan) designed for applications with varying
loads in multiple evaporator refrigeration
systems, providing energy-saving
solutions to users. They are primarily
used in commercial refrigeration, wine
coolers, restaurants, logistics hubs,
supermarkets and convenience stores.
Compressors
Product
Brand / Country
Product description
Open type compressors
Bitzer / Germany
These compressors are

used in oil, marine and
gas (refrigeration and airconditioning) applications.
Semi-hermetic reciprocating compressors
Bitzer / Germany
These compressors are used

in commercial refrigeration and
air-conditioning applications.
79
BUSINESS
Product
Brand / Country
Product description
Semi-hermetic screw compressors
Bitzer / Germany
These compressors are

used in commercial and light
industrial refrigeration and airconditioning applications.
Controllers, thermostats, systems protection, thermal expansion valves and line components
Product
Brand / Country
Product description
Saginomiya /
Japan
Saginomiya offers an extensive

range of pressure controllers
and thermostats used in
refrigeration, air-conditioning
and fire protection systems.
Danfoss /
Denmark
Danfoss offers a comprehensive

range of thermal expansion
valves, commercial line
components, pressure and
temperature controllers used
in commercial and industrial
applications.
80
BUSINESS
Product
Brand / Country
Product description
Eliwell / Italy
Eliwell offers a comprehensive

range of electronic pressure,
temperature and humidity
controllers for commercial and
Eliwell also offers energysaving solutions and energy
management systems for
customers who require remote
monitoring features and energy
savings.
Honeywell / United
States of America
Honeywell
offers
a
comprehensive range of
thermostats, controllers, valves
and actuators used mainly in
residential and commercial airconditioning applications.
Emerson Flows /
United States of
America
Emerson Flows offers a

comprehensive range of
thermal expansion valves,
systems protection par ts
and line components used
in refrigeration and airconditioning applications.
Castel / Italy
Castel offers a comprehensive

range of line components,
systems protection par ts
and valves used mainly in
commercial refrigeration and
81
BUSINESS
Accessories
Product
Brand
Product description
Copper Pipes
Eden
We provide a comprehensive
range of our Eden brand
of high quality refrigeration
and air-conditioning copper
pipes. These copper pipes are
supplied in both hard drawn
length and annealed form,
after meticulous cleaning,
dehydrating and capping, to
ensure that internal cleanliness
standards are met. Most of
our Eden copper pipes have
undergone hydrostatic tests
conducted by the TV SD
PSB Pte Ltd in Singapore.
Insulation materials
Aeroflex
Aeroflex offers closed cell tubes

and sheet insulation materials
used in refrigeration and airconditioning applications. Such
insulation materials prevent
condensation and offer thermal
efficiency against heat loss.
Refrigerants
HARP, ICOOL
We carr y various types

of refrigerants used in
refrigeration
and
airconditioning applications.
Our Eden brand of heat exchangers and condensing units are developed by our research and
development team. During the period under review, we have developed a comprehensive range of G4
heat exchangers which uses high energy-efficient coil technologies.
All our Eden G4 condensers and evaporators are designed with the latest smart circuitry and
incorporate the inner groove tube technology, which allows the refrigerant to be evenly distributed
throughout the evaporators. This maximises coil efficiency and increases internal primary coil surface
area, thereby providing higher efficiency and cooling capacity with a smaller physical evaporator
dimension. This may result in a reduction of the number of evaporator fan motors used, hence reducing
the energy consumption of fan motors by up to 50%. In addition, our fins technology that are used in our
refrigeration and air-conditioning systems are made of high-grade aluminum (Aluminum Association - AA
1100 Standard) with Double Sine Wave Pattern and Rippled Fin Edges to provide higher heat transfer
82
BUSINESS
efficiency, which results in greater energy efficiency as compared with conventional fin designs. Some of
the designs are patented and registered with the relevant authority in the PRC. Please refer to Business
Intellectual Property section of this Offer Document for further details.
In 2008, our Eden brand of heat exchangers were successfully tested in the laboratory of Ziehl-Abegg,
which is one of Europes accredited laboratories. The results of the tests certified that our products
specifications, such as noise level and air flow performance, were in line with markets requirements.
These certifications are a further testimony of the quality of our products.
OUR BUSINESS MODEL
Our business activities can be broadly segmented into the following categories:(i)
Commercial and light industrial (refrigeration);
(ii)
Residential and commercial (air-conditioning); and
(iii)
Oil, marine and gas (refrigeration and air-conditioning).
The description of each of our Groups business segments are set out as follows:Commercial and light industrial (refrigeration)
Our Directors believe that we are one of the leading regional distributors of commercial and light industrial
refrigeration systems and products in SEA, including compressors, condensers, condensing units, multiple
compressor racks units, electronic controls, energy management solutions, service equipment and tools
and our Eden range of heat exchangers. Our customers are mainly refrigeration contractors, who use
our products and services to provide a comprehensive refrigeration system to the end users, such as
Carrefour, NTUC FairPrice, Resorts World Sentosa and Marina Bay Sands.
We purchase agency products from international brands such as Bitzer, Embraco, Danfoss, Emerson
Flows and Eliwell. In addition, we manufacture our Eden brand of heat exchangers and customise our
products to suit our customers specific design requirements.
We also offer value-added services to our customers by providing design and consultancy services in
relation to refrigeration and air-conditioning systems, as well as relevant product trainings and after-sales
support.
Our commercial and light industrial (refrigeration) business segment contributed approximately 70.8%,
73.4%, and 72.8% of our total revenue in FY2008, FY2009 and FY2010 respectively.
We distribute a wide range of air-conditioning materials, including copper pipes, insulation materials,
fittings, PVC trunkings and other relevant components for residential and commercial air-conditioning
applications. Our customers are mainly air-conditioning contractors and distributors, who use our
products and services to provide air-conditioning systems for residential and commercial projects, such
as condominiums, offices, warehouses and shopping complexes in Singapore and other SEA countries.
With our expertise and experience in the manufacture of heat exchangers, we are able to customise and
manufacture replacement air handling unit coils for commercial air-conditioning.
We purchase air-conditioning materials from international brands such as Aeroflex, Castel, Emerson
Flows and Honeywell.
Our residential and commercial (air-conditioning) business segment contributed approximately 18.5%,
17.5% and 19.0% of our total revenue in FY2008, FY2009 and FY2010 respectively.
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BUSINESS
We distribute a range of air-conditioning and refrigeration systems to the oil, marine and gas industry.
These products include our Eden brand of heat exchangers and packaged condensing units supplied
to ships, vessels and oil rigs, which are primarily used to preserve food, other perishables and also to
provide a cool and comfortable environment for the crew. Our customers are mainly project contractors
who supply our systems and products to shipyards, such as Jurong Shipyard Pte Ltd, Keppel Shipyard
Limited and Sembawang Shipyard Pte Ltd.
With our extensive experience in the HVAC&R industry, we are also able to provide consultancy, technical
support, product customisation and design services to our customers in the oil, marine and gas industry.
We purchase air-conditioning and refrigeration materials from international brands such as Bitzer, Danfoss
and Castel.
Our oil, marine and gas (refrigeration and air-conditioning) business segment contributed approximately
10.7%, 9.1%, and 8.2% of our total revenue in FY2008, FY2009 and FY2010 respectively.
BUSINESS AND MANUFACTURING PROCESS
Our business process
In general, our business process can be illustrated diagrammatically as follows:-
Marketing and customer enquiries
Submission of quotation and sales

order confirmation
Assembly, inspection and

testing
Processing of sales orders
Packing and delivery
After-sales service
A general description of the abovementioned business process is set out below:(1)
Marketing and customer enquiries

Our sales and marketing personnel take an active attitude towards seeking business opportunities
and constantly look for potential customers. Upon receipt of sales enquiries from our customers,
our sales and marketing personnel will liaise with them to understand the technical specifications
and requirements of the products and services required by them.
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BUSINESS
(2)
Submission of quotation and sales order confirmation

Based on our customers requirements, our sales and marketing personnel will prepare a quotation
setting out the product specifications, delivery schedule and payment terms. If our quotation
is acceptable, our customer will provide us with a purchase order or by signing the acceptance
confirmation provided in our quotation. We will accept the purchase order once we are satisfied that
we are able to fulfill the requirements of the contract.
(3)
Processing of sales orders

Upon receipt of the purchase order confirmation from our customers, our sales and marketing
personnel will check the availability of such products in our inventory. If the products are internally
available, our sales personnel will process the order by entering the purchase order into our
ERP system to notify our retail store or warehouse, where such ordered products are stored and
arrange the packing and schedule for delivery. In the event that the products are not available in
our inventory, our sales and marketing personnel will inform our procurement department, who will
undertake to place order for such products from our suppliers. Our sales and marketing personnel
will be informed on the delivery status so that they can advise our customers accordingly.
(4)
Assembly, inspection and testing

In relation to sales orders for a set of system which require assembly prior to delivery to our
customers, our engineers will be involved in assembling such system. In order to meet our
customers requirements, our engineers will confirm the designs with our customers and if required,
prepare the system drawings for approval. Upon receipt of the approval of our designs, our
manufacturing department will then proceed with the assembly in accordance with the approved
designed drawings. If any of the components required for the assembly process is not available
in our inventory, our procurement department will be informed and will undertake to procure such
components from our suppliers.
After the completion of the assembly of the system, our quality control personnel will carry out
a quality control check to ensure that the completed system is assembled in accordance with
the specifications. Upon requests from our customers, we will assist in the commissioning of the
system after our customers have completed installation.
(5)
Packing and delivery

Our store or warehouse will be notified through our ERP system to prepare the packing list and
pick the products ordered for packing and delivery. Prior to delivery to our customers, our store
or warehouse supervisor will verify the relevant documents (such as delivery order) and the items
to be delivered, and inform our sales and marketing department to prepare the invoices for our
customers.
(6)
After-sales service
Our sales personnel visit our customers regularly to provide updates on our products, follow-up on
pending quotations and delivery, as well as to offer a range of technical support services to them.
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Our manufacturing process
In general, the manufacturing process of a heat exchanger can be illustrated diagrammatically as follows:-
Incoming raw
materials
Fin press
section
Sheet metal
section
Tube
section
Sub-assembly section
Lacing
Expanding
Flaring
Belling
Leak test
Painting
Electrical
Brazing
Final assembly
section
Packing
Storage
Delivery
A general description of the manufacturing process of a heat exchanger is set out below:(1)
Incoming raw materials and components

To manufacture a heat exchanger, raw materials such as aluminum sheets, copper pipes,
galvanised steel and fan sets are required. We order our raw materials from our suppliers based on
our current inventory level, manufacturing schedule and sales forecast. All incoming raw materials
are examined thoroughly by our quality control personnel, on its quality and functions prior to using
them in our manufacturing process.
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(2)
Fin press, sheet metal and tube sections

(i)
Fin press section

The fin is made of aluminum or copper, which will be inserted and passed through the fin
press machines whereby holes and patterns are punched or formed respectively accordingly
to various diameters and patterns required. They are also cut accordingly to their required
sizes and consolidated into a stack for the final assembly section.
(ii)
Sheet metal section

Using CNC machines, galvanised steel or aluminum sheets are formed into various
components required for the final assembly section. These components include the casings,
end plates and base frames.
(iii)
Tube section
Copper pipes are straightened, cut, bent and capped to form various components such as
straight tubes, hairpin tubes, headers, distributors and other copper components required in
the final assembly section.
(3)
Sub-assembly section
In the sub-assembly section, the components produced or formed in the fin press, sheet metal and
tube sections as described above are assembled whereby:-
(4)
(a)
straight or hairpin tubes are laced through the fins and are internally expanded to form a
tight fit within the fins;
(b)
the ends of these tubes are then flared and belled for the insertion and brazing of return
bends;
(c)
distributors and headers are then inserted and brazed;
(d)
the coil is pressurised with nitrogen and then tested for leaks by immersing into a water tank;
(e)
various components are painted; and
(f)
electrical components such as electrical fans, defrost heaters, control boxes are then fitted
and wired accordingly.
Final assembly section

The various components that were produced and formed in the sub-assembly section such as
tubes, fins, distributors, headers, coils and electrical components will be assembled to become a
heat exchanger.
(5)
Packing, storage and delivery

Once the heat exchanger is fully assembled, it is packed and stored in our warehouse for delivery
to our customers.
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BUSINESS
AWARDS AND ACHIEVEMENTS
Our Company has been conferred the following awards and achievements since establishment:Awarding authority/
company
Award/Achievement
Description
Year of award
The Distributor of the Year
This award recognises us as

Bitzer
Bitzers top distributor in the Asia
Pacific Region, except for the PRC
Business Partner of the Year Award
This award recognises us as

Eliwell SPAs top distributor in the
Asia Pacific Region, except for the
PRC
Eliwell SPA
2003
Sales Commendation Award

(Environmental Controls HVAC)
This award commends us as

Honeywells sales achiever in its
Environmental Controls HVAC
products
Honeywell Pte Ltd
2010
Singapore SME500 Company
This award ranks and recognises

us as one of Singapores most
successful small and medium
enterprises in terms of sales
turnover and net profit
DP Information Group 2001, 2002,

2003 and 2010
2001, 2007 and

2008
SALES AND MARKETING

Our sales and marketing efforts are led by David Leng, our COO (Sales and Marketing) and Executive
Director and supported by our sales and marketing team which comprises 41 personnel as at
31 December 2010. Our sales and marketing team is divided according to our various products, business
or market segments so as to offer specialised and dedicated services to our customers. Our customers
comprise mainly distributors, dealers as well as refrigeration and air-conditioning contractors. We have a
broad customer base of more than 1,000 active customers, of which 50% are repeat customers who have
purchased from us for five years or more.
Our sales and marketing team plans and formulates the overall sales and marketing objectives and
strategies, and is responsible for each business segment. They are responsible for generating new
customer accounts while managing relationships with existing customers. They attend to customers
enquiries and provide timely quotations to customers according to their specifications and requirements.
In addition, they communicate and/or pay regular visits to our existing customers to obtain feedbacks on
our products and services, keeping us abreast of the changes in market trends, customers requirements
and demands so that we can better respond to the market situation.
Our sales and marketing team sets out our annual sales target for each of our subsidiary on an annual
basis. Such sales targets are projected based on our customers sales contributions in the previous two
years and through our discussions with our customers to understand their business trends going forward.
The actual sales results for each of our subsidiary is monitored by our sales and marketing team and
reviewed by David Leng. Our sales and marketing team holds regular meetings to review the market
trends and the actual sales results generated by each of our subsidiary.
We place great emphasis on our branding, advertising and promotion programmes. To promote our
products and services in the region, we regularly participate in numerous exhibitions and trade shows in
Singapore, Indonesia, Vietnam, the Philippines, Germany and the PRC. Since 1995, we have participated
annually in the China Refrigeration exhibition held in the PRC, which is the largest HVAC&R trade show
event in Asia. Our Eden brand of products were exhibited in Chillventa Nuremberg, Germany in 2008,
which was the largest global international trade fair for refrigeration, air-conditioning, ventilation products
and heat pumps. In addition, we also organise seminars and technical presentations for our customers
and distributors in SEA countries, including Singapore, Malaysia, Indonesia, Vietnam and the Philippines.
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BUSINESS
To improve our profile and increase public awareness of our products and services, we advertise in print
media, including trade magazines and industry directories, and display posters and banners relating to
our Group and products at our retail stores and distributors stores. In addition, we furnish our marketing
package (comprising posters, catalogues, folders, technical leaflets, gifts and banners), which contains
information and sales promotions of our products, to our distributors and customers.
Our corporate website (http://www.fareastref.com.sg/) and product website (http://www.edensolution.com)
are important sales and marketing channels, which contain information on, amongst others, our history,
product range and catalogues, news, corporate culture, awards and accolades, current promotions and
a downloadable survey form through which customers can lodge their complaints, compliments and
suggestions. Information contained in our internet websites does not constitute part of this Offer
Document.
Our sales and marketing activities have increased our corporate profile and public awareness of our
products and services. We are confident that our on-going sales and marketing efforts and activities will
continue to contribute to the growth of our market share and effectively market our products and services
to our customers in the local and regional markets.
DISTRIBUTION CHANNELS
We market and distribute our products and services through various distribution channels including
direct selling, representative offices, refrigeration and air-conditioning contractors, distributors and/
or dealers. In Singapore, Malaysia and Hong Kong, our products and services are directly distributed
through companies within our Group in the respective countries. Most of the companies within our Group
are equipped with showrooms, retail facilities and warehouses, to provide timely deliveries, and quality
products and services to our customers.
We have representative offices in Vietnam and Indonesia to serve as our Groups gateway into the
Indochina and Indonesia markets respectively, to generate sales leads and provide necessary assistance
to distributors and dealers in Vietnam and Indonesia.
To extend our regional reach, we have also appointed a number of distributors and dealers who are wellestablished and have a wide business and distribution network in their respective countries, including
Malaysia, Thailand, the Philippines, Myanmar, Mauritius, Vietnam, Sri Lanka and Indonesia. As at the
Latest Practicable Date, we have approximately 20 distributors and dealers who distribute our products to
end users, sub-distributors and sub-dealers, refrigeration and air-conditioning contractors and/or original
equipment manufacturer customers in the SEA region and other regions. We also provide design and
technical services to our distributors and dealers in connection with the sale of our products.
MANUFACTURING FACILITY AND CAPACITY
Our manufacturing facility is located at Lot 1998/D Jalan Perusahaan 3, Taman Industri Selesa
Jaya, 43300 Balakong, Seri Kembangan, Selangor Darul Ehsan, Malaysia, with a gross floor area of
approximately 39,719 sqft. Please refer to the Business Properties and Fixed Assets section of this
Offer Document for further details on our Maju Facility.
Our Maju Facility is primarily engaged in manufacturing and research and development of our Eden
brand of heat exchangers, including unit coolers, blast freezers/chillers and air cooled condensers.
Our Maju Facility is equipped with adequate machines and equipment, including fin presses, expander
machines, tube bending machines and a full range of sheet metal manufacturing machines.
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BUSINESS
The following table illustrates the annual manufacturing capacity, actual annual manufacturing output
and the utilisation rate for our manufacturing lines of coils at our Maju Facility for FY2008, FY2009 and
FY2010:Annual manufacturing
capacity (1)
(Units)
Actual annual
manufacturing output
(Units)
Utilisation rate
(%)
(2)
FY2008
FY2009
FY2010
FY2008
FY2009
FY2010
FY2008
FY2009
FY2010
7,200
7,200
7,200
6,670
4,980
4,590
92.6
69.1
63.7
Coils
Notes:(1)
Our annual manufacturing capacity is derived based on 22 manufacturing staff on one work shift of nine hours per day for 250
days in a year.
(2)
Utilisation rate is calculated based on our actual annual manufacturing output divided by our annual manufacturing capacity.
Our utilisation rate decreased from 92.6% in FY2008 to 69.1% in FY2009, mainly due to the relocation of
one of our major customers out of Singapore. In addition, due to the global economic crisis in FY2008,
the demand for our products declined in FY2009.
Our utilisation rate decreased from 69.1% in FY2009 to 63.7% in FY2010, mainly due to the decline in
the number of units of coils manufactured as the coils we manufactured during this period were larger
units of higher values.
During the period under review and up to the Latest Practicable Date, we have not experienced any form
of disruption to the operations in our Maju Facility.
QUALITY CONTROL AND SAFETY ASSURANCE
Quality control
We believe that quality control in our products and services is one of the key factors that contribute to
our growth and success. We have established a stringent quality management system for our business
operations and manufacturing process.
These quality control measures ensure that our products and services meet the requirements and
expectations of our customers. Our quality control measures, from sourcing and procurement of
raw materials and agency products to the delivery of our finished products, adhere closely to the ISO
guidelines. We are committed to comply with ISO9001 and will continuously improve on our quality control.
Our commitment to quality is evidenced by the following certifications received by us:Certifying
authority
Date of expiry
Assembly and trading of refrigeration

parts
BSI
12 May 2014
Fast East Maju
Design and manufacture of industrial

and commercial refrigeration systems
including heat exchangers and
condensing units
Global
Certification
Limited
17 August 2013
Safety Enterprises
Distribution and wholesale of premanufacturing products and parts for

refrigeration systems
Global
Certification
Limited
17 August 2013
Certification
Receiving party
Scope
ISO9001:2008
Far East Group
ISO9001:2008
ISO9001:2008
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BUSINESS
Our quality control measures include the following:Sourcing and procurement
We source and procure the raw materials that are used in our manufacturing, as well as agency
products that we distribute to our customers. We maintain an updated list of suppliers that are selected
through a process of formal audit and qualification checks, which are conducted by our procurement
manager, engineer and quality control personnel (the procurement team) by taking into account various
considerations, including product quality, specification compliance, service quality, delivery schedule,
payment terms and price. Suppliers performances are monitored by our procurement team regularly to
ensure that the quality of products supplied by them meet our requirements. In addition, our raw materials
and agency products are purchased at competitive prices without compromising on quality.
Incoming quality assurance
Upon receipt of the raw materials and agency products at our warehouse, our quality control personnel
will conduct inspections on them to ensure that there are no discrepancies in the quantity and quality
in accordance to our specifications. Should there be any discrepancy, such raw materials and agency
products would be rejected and returned to our suppliers. The raw materials and agency products that
pass our quality standards will be stored in our warehouses, pending delivery or manufacturing.
In-process quality assurance
During the course of manufacturing, our technicians will conduct periodic quality inspections based on our
internal quality control checklist.
Out-going quality assurance
Our quality control personnel will inspect our out-going finished products and their packaging thoroughly
to ensure that the quality, quantity and specifications are in accordance with our customers requirements
before delivery to our customers.
After-sales service and customer support
Our sales and marketing personnel maintain regular contact with our customers to foster and maintain
good business relationships and obtain feedbacks on our products and services. These frequent contact
with our customers also helps us to better understand the industries in which our customers operate and
allow us to service our customers business needs and provide efficient after-sales service.
In general, we provide standard product warranties of one year for our in-house manufactured products
and we offer back-to-back manufacturer warranties for our agency products that we represent and
distribute. Should our customers detect any manufacturing defects in our products within the warranty
period, we will make the necessary repairs or replacements.
Safety assurance
We have put in place comprehensive safety measures for our business operations and manufacturing
facility to ensure the safety of our staff. These measures include periodic fire drills, monthly manufacturing
equipment checks and regular meetings to cultivate safety awareness among our staff. We also ensure
that our manufacturing personnel are properly trained to operate our manufacturing machines safely.
INVENTORY MANAGEMENT
Our inventories comprise raw materials, refrigeration and air-conditioning systems and products, including
compressors, condensers, evaporators, condensing units, controllers, valves, copper pipes, and insulation
materials.
We have an ERP inventory management system in-place which tracks the movements of our inventories
in all our warehouses on a real-time basis. We also review our inventory levels periodically to ensure we
are able to continue to meet the needs of our customers.
Our inventories are maintained and replenished based on annual budgets, sales orders on hand and
anticipated demand patterns. We also take into consideration the delivery lead time before manufacturing
or placing orders with our suppliers.
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BUSINESS
Our average inventory turnover days for the period under review are as follows:-
Average inventory turnover days(1)
FY2008
FY2009
FY2010
181
179
136
Note:(1)
Average inventory turnover days are computed as follows:(Average inventories/cost of sales) x number of days
Where:Average inventory is defined as the average of the opening and closing amount of the relevant financial year.
Number of days is defined as the number of calendar days in the relevant financial year.
In general, delivery lead time from our suppliers range from two to four months. As such, we typically
maintain sufficient inventories of up to five months in order to meet the demand from our customers as
well as to support our subsidiaries operations.
In FY2008 and FY2009, we purchased our inventories in bulk to obtain more competitive prices from
our suppliers. In FY2010, we implemented a more stringent procurement policy and together with our
increase in sales in the year, our average inventory turnover days decreased from 179 days in FY2009 to
136 days in FY2010.
We regularly assess our inventories to identify slow moving inventories. Inventories that remained unsold
or unused for more than 12 months are provided for inventory obsolescence.
The write-down or write-back of inventories for the period under review are as follows:(S$000)
Inventories
Write-down/(write-back) of inventories
FY2008
FY2009
FY2010
11,164
8,109
8,200
1,074
557
(1,154)
In FY2008, we adopted a more stringent inventory obsolescence provision policy which resulted in higher
allowance for inventory obsolescence in FY2008. In FY2009, we made additional provision for inventory
obsolescence of approximately S$557,000 as our sales and business was affected by the global financial
crisis. In FY2010, we recorded an inventory write-back of approximately S$1,154,000.
OUR MAJOR SUPPLIERS
We purchase our raw materials and agency products, including compressors, condensers, controllers,
valves, copper pipes, cold room panels and insulation materials from different suppliers.
We also purchase heat exchangers and condensing units from SER, who is an Interested Person. Please
refer to Interested Person Transactions Interested Persons section of this Offer Document for further
details on SER.
The key considerations in selecting our suppliers, amongst others, include the quality of their products,
pricing, services and timeliness of delivery. We do not depend on a single supplier for our materials.
Generally, we do not enter into any long-term or exclusive contracts for the purchase of raw materials and
agency products so as to allow us flexibility in terms of pricing, quality and timeliness of delivery of our
supplies.
Save for agency products, our Directors believe that our raw materials and non-agency products can be
easily sourced from other suppliers. We purchase from suppliers who are able to offer us the required
quality at the most competitive prices.
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BUSINESS
The table below sets out our major suppliers which accounted for 5% or more of our total purchases
during the period under review:Name of supplier
Products purchased
Bitzer
Compressors, condensers,
receivers and spare parts
Changzhou Jingxue Freezing Equipment Co.,

Ltd. (Changzhou Jingxue)
()
Zhejiang Hailiang Co., Ltd. (Zhejiang Hailiang)
()
As a percentage of total purchases (%)

FY2008
FY2009
FY2010
36.2
26.2
28.9
Cold room panels
2.6
2.2
8.8
Copper pipes and fittings
5.7
5.9
6.6
44.5
34.3
44.3
Our purchases from Bitzer decreased in FY2009, mainly due to lower demand for Bitzer products as a
result of the global financial crisis. Our purchases from Bitzer increased from FY2009 to FY2010, mainly
attributable to an increase in demand for Bitzer products as the economy improved.
Our purchases of cold room panels from Changzhou Jingxue increased from FY2009 to FY2010, as we
supplied such panels to one of our major customers for its project. Please refer to the Business Our
Major Customers section of this Offer Document for futher details on this customer.
Our purchases of copper pipes and fittings from Zhejiang Hailiang increased from FY2008 to FY2010.
This was attributable to an increase in copper prices as well as an increase in demand for copper pipes
and fittings from our residential and commercial (air-conditioning) business segment over the period under
review.
To the best of our Directors knowledge, we are not aware of any information or arrangements which
would lead to a cessation or termination of our current relationship with any of our major suppliers.
Our Directors are of the opinion that our business and profitability will not be materially affected by the
loss of any single supplier and are currently not dependent on any particular industrial, commercial or
financial contract with any supplier.
As at the date of this Offer Document and save as disclosed above, none of our Directors or Substantial
Shareholders nor their respective Associates has any interest, direct or indirect, in any of the above major
suppliers.
OUR MAJOR CUSTOMERS
dealers and refrigeration and air-conditioning contractors in commercial and light industrial (refrigeration),
residential and commercial (air-conditioning) as well as oil, marine and gas (refrigeration and airconditioning) business segments.
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BUSINESS
The table below sets out our major customer which accounted for 5% or more of our revenue during the
period under review:Name of customer
Products and services supplied
Chun Cheng Fishery
Refrigeration systems and products

FY2008
FY2009
FY2010
10.4
Chun Cheng Fishery was our new customer in FY2010. Our sales to Chun Cheng Fishery in FY2010
comprised the design and supply of a comprehensive refrigeration system for its cold rooms and food
processing rooms.
Generally, we do not enter into long-term sales agreement with our customers. Our Directors are of
the opinion that our business and profitability are currently not dependent on any particular industrial,
commercial or financial contract with any customer.
To the best of our Directors knowledge, we are not aware of any information or arrangements which
would lead to a cessation or termination of our current relationship with any of our major customers.
As at the date of this Offer Document, none of our Directors or Substantial Shareholders nor their
respective Associates has any interest, direct or indirect, in the above major customer.
CREDIT MANAGEMENT
Credit terms from our suppliers
Credit terms granted by our suppliers depend on, inter alia, our relationship with the suppliers and the
size of transactions. Generally, our suppliers grant us credit terms ranging from 30 to 90 days.
We may make full payment to certain suppliers before the delivery of our order is made, in order to enjoy
early payment discounts.
Our average trade payables turnover days for FY2008, FY2009 and FY2010 are as follows:-
Average trade payables turnover days(1)
FY2008
FY2009
FY2010
41
34
27
Note:(1)
Average trade payables turnover days are computed as follows:(Average trade payables/costs of sales) x number of days
Where:Average trade payables is defined as the average of the opening and closing amount of the relevant financial year.
Our average trade payables turnover days decreased from 41 days in FY2008 to 27 days in FY2010 as
we made efforts to be more prompt in our settlements in order to secure more attractive terms from our
suppliers.
Credit terms to our customers
In general, we grant credit terms of 30 to 90 days to our customers. Our finance department is responsible
for overseeing and managing the collection from debtors on a monthly basis, and prepares a report of
outstanding amounts due from our customers for review by our credit committee, which is headed by one
of our Executive Directors. In addition, our finance department routinely communicates with our customers
directly on their respective credit terms and payment status so as to minimise our Groups credit risk
exposure to these customers.
We perform credit assessment of all our existing customers on a regular basis. In our assessment of the
credit terms to be extended to each customer, we take into consideration various factors, including their
creditworthiness, market reputation, the transaction volume, payment history and length of relationship
with us. For new customers, we usually require them to make cash payment upon or before delivery of our
products. Once our business relationship with these new customers is established and such customers
are deemed creditworthy, we will grant them a credit term, which is based on our credit assessment.
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BUSINESS
Our average trade debtors turnover days for FY2008, FY2009 and FY2010 are as follows:FY2008
FY2009
FY2010
86
73
62
Average trade debtors turnover days(1)

Note:(1)
Average trade debtors turnover days are computed as follows:(Average trade debtors/revenue) x number of days
Where:Average trade debtors is defined as the average of the opening and closing amount of the relevant financial year.
Our average trade debtors turnover days decreased from 86 days in FY2008 to 62 days in FY2010 as a
result of our tighter credit control over the years.
The collectability of trade debtors will be assessed based on factors, including but not limited to, the
length of time that such trade debtors have been outstanding and the financial standing of our trade
debtors. In the event that there are significant uncertainties regarding collectability, we will make the
necessary provisions or write-off the bad debt.
The amounts of provisions for doubtful debts, provisions for doubtful debts written back and bad debts
written off during the period under review were as follows:(S$000)
FY2008
FY2009
FY2010
300
223
(505)
12
456
80
(221)
(222)
33
(117)
(9)
12
Total
30
93
(81)

As a percentage of PBT (%)
0.1
2.2
0.3
5.7
(0.2)
(1.5)
Provisions for doubtful

Bad debts written off
debts
debts
debts
debts
(trade related)
(non-trade related)
written back (trade related)
written back (non-trade related)
In FY2008, we made provisions for doubtful debts of approximately S$523,000 which included (i)
trade related debts due from a related party of approximately S$180,000 as the company had ceased
operation; and (ii) non-trade related debts due from a third party of approximately S$223,000 in relation to
the balance of the proceeds from the sale of our business in Hong Kong in 2005.
In FY2009, we made a provision of trade related debts amounting to S$456,000 mainly in relation to a
customer who went into compulsory liquidation.
The ageing for our trade debtors as at 31 December 2010 is as follows:-
Trade debtors ageing (S$000)

Trade debtors ageing (%)
0 to 30
days
31 to 60
days
61 to 90
days
91 to 120
days
> 120
days
3,052
1,384
1,489
207
515
46.0
20.8
22.4
3.1
7.7
As at 31 December 2010, our trade debtors amounted to approximately S$6,647,000, of which

approximately S$4,892,000 (or approximately 73.6%) had been collected as at the Latest Practicable
Date.
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BUSINESS
PROPERTIES AND FIXED ASSETS
Properties
As at the Latest Practicable Date, our Group owned the following properties:-
Location
Country
Tenure
Estimated
gross floor
area
(sqft)
Encumbrances
Usage
Owner
112 Lavender
Street,Far East
Refrigeration Building,
Singapore 338728(1)
Singapore
Freehold
20,839
Mortgaged to
Head office,
United Overseas warehouse,
Bank Limited
showroom and
office
Far East
Group
5 Third Lok Yang Road,

Singapore 628000
Singapore
60-year
leasehold
commencing
from 1
January 1972
25,112
Mortgaged to
DBS Bank Ltd
Warehouse and
office
Far East
Group
Lot 1998/D Jalan

Perusahaan 3, Taman
Industri Selesa Jaya,
43300 Balakong, Seri
Kembangan, Selangor
Darul Ehsan, Malaysia
Malaysia
Freehold
39,719
Mortgaged to
United Overseas
Bank (Malaysia)
Bhd
Manufacturing
facility,
warehouse and
office
Far East
Maju
60 Lebuh Noordin,
10300 Pulau Pinang,
Malaysia
Malaysia
Freehold
3,265
Mortgaged to
CIMB Bank
Berhad
Warehouse and
office
Far East
Penang
1-1, 1-1A and 1-1B

Jalan Kalong, Off
Jalan Sungai Besi,
55200 Kuala Lumpur,
Malaysia
Malaysia
99-year
leasehold
commencing
from 16
November
1982
5,616
Mortgaged to
Warehouse and
OCBC Bank
office
(Malaysia) Berhad
Far East
KL
Flat B, 1st floor, Tung

On Court, 17, 19 and
21 Tung On Street,
Kowloon, Hong Kong
Hong Kong
75 years
renewable
for 75 years
commencing
from 18
September
1899
1,050
Mortgaged to
Office
DBS Bank (Hong
Kong) Limited
Far East
HK
Note:(1)
The second and third floors of this property are leased to third party tenants (the Tenants) for the operation of their business
for tenures of up to two years. As at the Latest Practicable Date, the Tenants have no business dealing with our Group and
none of our Directors, Controlling Shareholder or their Associates has any interest in the Tenants business.
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BUSINESS
As at the Latest Practicable Date, we leased the following properties:-
Location
Country
Tenure
Approximate
monthly
Estimated
rental and gross floor
fees
area
(sqft)
Usage
Lessor
51 Ubi Avenue 1,
Singapore
#01-04 and #02-04,
Paya Ubi Industrial
Park, Singapore
408933
1 July 2009
to 30 June
2011(1)
S$9,095
6,761
Jakarta Design
Center, 4th Floor
SR 26, Jl. Gatot
Subroto Kv. 53
Slipi, Jakarta
10260, Indonesia
1 November
2009 to 31
October
2011
US$434
334
Representative Far East

office
Group
PT Cipta
Paramula
Sejati
The OIIC Building, Vietnam

Level 3, Suite 303,
248-250 Nguyen
Dinh Chieu, Ward
6, District 3, Ho Chi
Minh City, Vietnam
3 November
2010 to 2
November
2011
US$598
354
Representative Far East

office
Group
Ocean
Information
Investment
Corporation
Lot 7758 and 7759, Malaysia

Section 64, KTLD,
Jalan Datuk Abang
Abdul Rahim,
93450 Kuching,
Sarawak, Malaysia
1 August
2010 to 31
July 2012
RM4,200
3,615
Warehouse
and office
Far East
Kuching
Kuching Park
Hotel Sdn Bhd
No. 12 & 12A,

Malaysia
Jalan Shah Bandar
2, Taman Ungku
Tun Aminah, 81300
Skudai, Johor,
Malaysia
1 January
2010 to 31
December
2012
RM1,600
3,079
Warehouse
and office
FE&B
Chuan Yuan
Realty Sdn
Bhd
Indonesia
Warehouse
and office
Lessee
Edenkool Paya Ubi

Industrial Park
Pte Ltd
G/F, Man On
Building, 2-4
Tung On Street,
Kowloon, Hong
Kong
Hong Kong 1 November HK$13,500

2010 to 31
October
2012
500
Warehouse
and retail
Far East
HK
Fung Keung
Shop A1-A2, G/F,

247 Reclamation
Street, Mongkok,
Kowloon, Hong
Kong
Hong Kong 16 June

2010 to 15
June 2012
400
Warehouse
and retail
Far East
HK
Choy Sai Hee

& Tsui Pui Kiu
3,000
Warehouse
Far East
HK
Chinhero
Development(2)
HK$18,800
Workshop Unit
Hong Kong 1 December HK$10,000
No. 7 on 18/F &
2008 to 30
Storeroom, Wah
November
Fat Industrial
2011
Building, Nos. 1016 Kung Yip Street,
Kwai Chung, New
Territories, Hong
Kong
97
BUSINESS
Notes:(1)
We did not renew the lease and had shifted our previous warehouse and office at this property to our existing premise at 112
Lavender Street, Far East Refrigeration Building, Singapore 338728.
(2)
Chinhero Development is an Interested Person. Please refer to the Interested Person Transactions Present and On-going
Interested Person Transactions section of this Offer Document for further details on the lease of this property from Chinhero
Development.
Fixed Assets
We own other material fixed assets comprising mainly equipment, furniture and fittings, office equipment
and motor vehicles. Our fixed assets had a net book value of approximately S$7,518,000 as at
31 December 2010.
To the best of our Directors knowledge, save as disclosed in the Government Regulations section of this
Offer Document, there are no regulatory requirements or environmental issues that may materially affect
our utilisation of the above properties and fixed assets.
RESEARCH AND DEVELOPMENT
Our Directors believe that we have a comprehensive range of innovative in-house manufactured heat
exchangers which utilise high energy-efficient coil technologies. We place great emphasis on continual
research and development efforts in order to meet changing market demands and requirements. In
particular, we intend to research and develop more energy-efficient products in conjunction with our
Green Program. This brings us into the next phase of expansion, in line with the increasing environmental
awareness in providing fresh and hygienic food storage solutions to the community.
Our research and development activities are carried out by our research and development team at Far
East Maju, and headed by Allan Ward, our COO (Engineering and Manufacturing). Our research and
development activities are also supported by our technical personnel from various departments within our
Group.
We have successfully developed an average of two to three series of products annually over the last
five years and to-date, we have 13 series with more than 300 models of evaporators, condensers and
condensing units to serve the cooling requirements of different business segments.
Please refer to Business Our Products section of this Offer Document for further details on the
products we developed.
All our Eden brand of G4 condensers and evaporators are designed with the latest smart circuitry
and incorporate the inner groove tube technology, which allows the refrigerant to be evenly distributed
throughout the evaporator. This maximises coil efficiency and increases internal primary coil surface
area, thereby providing higher efficiency and cooling capacity with a smaller physical evaporator
dimension. This may result in a reduction of the number of evaporator fan motors used, hence reducing
the energy consumption of fan motors by up to 50%. In addition, our fins technology that are used in our
refrigeration and air-conditioning systems are made of high-grade aluminum (Aluminum Association - AA
1100 Standard) with Double Sine Wave Pattern and Rippled Fin Edges to provide higher heat transfer
efficiency, which results in greater energy efficiency as compared with conventional fin designs.
Some of the designs are patented and registered with the relevant authority in the PRC. Please refer to
Business Intellectual Property section of this Offer Document for further details.
During the period under review, our research and development expenses were immaterial.
98
BUSINESS
INTELLECTUAL PROPERTY
Pursuant to the IP Licence Agreement, SER has acknowledged that it has been holding all its trade
marks and patents (Intellectual Properties) on behalf of our Company. As at the Latest Practicable Date,
such Intellectual Properties are in the process of being transferred to our Company. Please refer to the
Interested Person Transactions Present and On-going Interested Person Transactions section of this
Offer Document for further details on the IP Licence Agreement. The details of the Intellectual Properties
which are in the process of being transferred to our Company are as follows:Trade Marks
Trade Mark
Class
Registration
number
Place of
application
Registration
date
Date of
expiry
4285664
The PRC
For use on machinery

parts, including cutting
tools, motor and generator
cooling devices, pumps,
valves, air compressors,
hydraulic valves, welding
equipment, steam and grease
segregators, elevators, and
condensing units
7 March
2007
6 March
2017
11
4280192
The PRC
For use on refrigeration

facilities, air-conditioning
systems, evaporators, water
purifying facilities, electrical
heaters, arc lights, heat
exchangers, ovens, and water
cooling devices
14 May
2007
13 May
2017
11
4280166
The PRC
For use on refrigeration

facilities, air-conditioning
systems, evaporators, water
purifying facilities, electrical
heaters, swirl injectors, arc
lights, heat exchangers,
ovens, and water cooling
devices
11
8270743
The PRC
Application submitted for

use on refrigeration facilities,
air-conditioning systems,
evaporators, water purifying
facilities, electrical heaters,
arc lights, heat exchangers,
devices
-(1)
-(1)
11
8270738
The PRC
Application submitted for

use on refrigeration facilities,
air-conditioning systems,
evaporators, water purifying
facilities, electrical heaters,
arc lights, heat exchangers,
devices
-(1)
-(1)
Trade mark specifications
28 February 27 February
2007
2017
Note:(1)
The application for the registration of these trade marks was submitted on 12 May 2010, and are subject to the approval from
the relevant government authority.
99
BUSINESS
Patents
Patent
Description
Patent number
Date/Place of
application
Date of
approval
Patent right
period
Design Patent
()
Matrix Condenser
((2))
This patent relates to the

trapezium shape and design
of our matrix condensers,
which are different from
conventional square shaped
condensers. Our trapezium
shaped matrix condensers
prevent corrosion due to
water accumulation on
the exterior surface and
have modern aesthetic
appearance
ZL201030177809.4
21 May
2010/
the PRC
10 November
2010
10 years
from
21 May
2010
Jumbo Condenser
((1))

shape and design of our
jumbo condensers which
prevent corrosion due to
water accumulation on
the exterior surface and
appearance
ZL201030177815.X
21 May
2010/
the PRC
15 December
2010
10 years
from
21 May
2010
Unit Cooler
()

shape and design of our unit
coolers. Our unit coolers
appearance
ZL201030177798.X
21 May
2010/
the PRC
12 January
2011
10 years
from
21 May
2010
ZL201020201868.5
21 May
2010/
the PRC
15 December
2010
10 years
from
21 May
2010
Our Utility Model Patent

()
Heat Exchanger with
Radian Character
(
)
This patent relates to our

heat exchangers with
curved exterior corners (as
compared to sharp corners),
which reduce risks of injuries
and corrosion due to water
accumulation on the exterior
surface, and have modern
aesthetic appearance
As at the date of this Offer Document, the applications of the transfer of the above trade marks and
patents from SER to our Company are subject to approvals from the Trademark Office of the SAIC and
the SIPO respectively. The Legal Advisers to our Company on the PRC Law, Victory Legal Group, has
advised that the above-mentioned approvals from the relevant authorities for transfers will generally take
up to six months from the date of submission of applications to the authorities. Victory Legal Group does
not foresee any difficulty in obtaining the approval for the transfer of trade marks and patents within such
period of time. Barring unforeseen circumstances, we expect to obtain the approval for the transfer of the
trade marks and patents by end of 2011.
100
BUSINESS
Further to the above, we have applied for the registration of the following trade marks:Trade Mark
Class
Country of
application
Application number
Date of application
7 and 11
7
11
Singapore
Malaysia
Malaysia
T1105060B
2011007235
2011007236
18 April 2011
21 April 2011
21 April 2011
7 and 11
7
11
7 and 11
7 and 11
Singapore
Malaysia
Malaysia
Indonesia
Vietnam
T1105067Z
2011007237
2011007238
D00.2011.017136
4-2011-07388
18 April 2011
21 April 2011
21 April 2011
2 May 2011
21 April 2011
11
11
Singapore
Malaysia
T1105066A
2011007241
18 April 2011
21 April 2011
11
11
Singapore
Malaysia
T1105064E
2011007239
18 April 2011
21 April 2011
11
11
Singapore
Malaysia
T1105065C
2011007240
18 April 2011
21 April 2011
As at the Latest Practicable Date, the applications to register the trade marks as stated in the table
above have been submitted to the trade mark offices in the relevant jurisdictions and are subject to their
approval. We do not foresee any difficulty in obtaining the approval for the registration of the above trade
marks.
Save as disclosed above, our business or profitability is not materially dependent on any trademarks,
patents and/or other intellectual rights.
As at the Latest Practicable Date, we have not faced any claims for our infringement of other registered
intellectual properties held by third parties.
STAFF TRAINING
Our Directors believe that our employees are one of our most important assets. The technical competency
and product knowledge of our employees are instrumental to the continuous growth of our Group. As
such, we place great emphasis on the training and development of our employees and aim to equip them
with relevant skills and knowledge to perform their respective duties effectively, thereby increasing our
overall competitiveness and productivity.
For new employees, they undergo an orientation program which covers topics including our corporate
working culture, our industrys relevant rules and regulations, and our products, services and safety
requirements. In addition, new employees are required to undergo a one month on-the-job training to
familiarise themselves with their job scopes and duties.
In addition, our suppliers or our in-house engineers will periodically provide training for our sales
personnel and/or update them on newly launched products. When necessary, we also invite external
trainers and/or instructors to conduct training for our employees. To encourage our senior managers to
continually upgrade themselves, we provide them partial or full sponsorship of their enrolment in personal
enrichment courses. Such sponsorships will require our Executive Directors approval and the candidates
are typically subject to a service bond with our Group.
As most of our staff trainings are conducted internally, our training costs for FY2008, FY2009 and FY2010
were immaterial.
101
BUSINESS
INSURANCE
We maintain general insurance coverage in respect of our business and employees. Our insurance policy
coverage includes work injury compensation (for any mishap that occurs to our employees in the course
of their work), employee medical, hospitalisation and surgical, burglary, money, public liability, fire and
motor vehicles (for transport vehicles used by our Group). We are in the process of obtaining product
liability insurance in relation to our Eden brand of heat exchangers and condensing units.
Our Directors are of the view that the above insurance policies are adequate for our existing operations.
However, significant damage to our operations may still have a material adverse effect on our results
of operations or financial condition. We have not experienced any difficulties obtaining or renewing
our insurance policies or realising claims under any of our insurance policies. We perform an annual
review of our insurance coverage to ensure that it adequately satisfies both our business and regulatory
requirements, and we may increase our insurance coverage if we deem it necessary and appropriate.
COMPETITION
Our Directors believe that we operate in a competitive environment where the barriers to entry
are relatively high, mainly due to the nature of our industry and business being capital intensive and
competing factors such as technological know-how, track record, reputation and established relationships
with our suppliers and customers. We believe that the primary elements of competition for our business
are largely based on, amongst others, technological know-how, quality of our products and services,
price, track record, reputation and timely delivery.
To the best of our Directors knowledge and belief, our competitors are as follows:Company name
Business segment
Country
Distributor
Central Refrigeration & Air-Conditioning (Pte) Ltd
Commercial and light industrial (refrigeration)
Singapore
Lion City Refrigeration Parts Pte Ltd
Singapore
Peace Refrigeration Parts (Pte) Ltd
Singapore
United Refrigeration & Air-Conditioning
Malaysia
Century Equipment Co Ltd
Hong Kong
Manufacturer
PT Guntner Indonesia
Commercial and industrial (refrigeration)
Indonesia
None of our Directors, Substantial Shareholders or their respective Associates has any interest, direct or
indirect, in any of our competitors set out above.
102
BUSINESS
In view of our competitive strengths set out below, we believe that we are well-positioned to compete with
our competitors.
OUR COMPETITIVE STRENGTHS
We believe that our competitive strengths are as follows:We are a one-stop refrigeration systems provider
Our Directors believe that we are one of the leading regional distributors of commercial and light industrial
refrigeration systems and products in the SEA region with the ability to provide a one-stop solution for the
refrigeration industry.
With a comprehensive range of agency products and our Eden brand of heat exchangers and
condensing units, we are able to provide refrigeration system solutions to meet various stringent
specifications and requirements of our customers. We also maintain a comprehensive range of
replacement parts to provide after-sales support.
As part of our value-added services, we also provide design and consultancy services in relation to
refrigeration and air-conditioning systems, as well as relevant product trainings and after-sales support.
We have an established reputation and track record
With more than 58 years of experience in the HVAC&R industry, we have successfully built up our
reputation as a reliable refrigeration and air-conditioning systems provider in the commercial and light
industrial (refrigeration), residential and commercial (air-conditioning) as well as oil, marine and gas
(refrigeration and air-conditioning) business segments in the SEA region.
We have a diversified customer base comprising mainly distributors, dealers, refrigeration and airconditioning contractors who supply to end-users in various industries such as retail (Carrefour, Metro,
Tesco, Giant, Cold Storage and NTUC FairPrice), food and beverage (Resorts World Sentosa and
Marina Bay Sands), pharmaceutical (HSA (Singapore Blood Bank)), hospitality (The St. Regis Singapore,
Shangri-La Hotel Singapore and Capella Singapore), logistics (CIAS Flight Kitchen), food processing
(Chun Cheng Fishery and Angliss Singapore) and shipping (Jurong Shipyard Pte Ltd, Keppel Shipyard
Limited and Sembawang Shipyard Pte Ltd).
As a testament to our established reputation and track record, our Company was one of the winners of
the SME500 award in Singapore in 2001, 2002, 2003 and 2010.
We have established strong business relationships with our business partners
With considerable experience in the HVAC&R industry, we have built strong relationships with an
extensive network of suppliers and customers, whose support are instrumental to the success of our
business.
We have more than 10 years working relationship with most of our suppliers, and in particular, we have
established strong working relationships with Bitzer and Castel SRL over the past 30 years. On the
back of our reputation and well-established relationships with our suppliers, we are able to enjoy timely
supply of quality products at competitive price and/or better terms. We have also been recognised by our
suppliers, such as Bitzer and Eliwell SPA, who conferred us with awards recognising us as one of their
top distributors in the Asia Pacific Region (except for the PRC).
We have also established strong business relationships with our customers. As a testament of customer
satisfaction and loyalty, 50% of our active customer base of more than 1,000 customers are our repeat
customers who have regularly purchased from us for five years or more.
We have a wide distribution network
Our Group has a wide distribution network regionally including SEA, Hong Kong, the PRC, Indochina and
Indonesia. Most of the companies within our Group are equipped with showrooms, retail facilities and
warehouses, to provide timely deliveries, and quality products and services to our customers.
103
BUSINESS
In addition, we have appointed a number of distributors and dealers, who are well-established and have
a wide business and distribution networks in their respective countries, including Malaysia, Thailand, the
Philippines, Myanmar, Mauritius, Vietnam, Sri Lanka and Indonesia. As at the Latest Practicable Date, we
have approximately 20 distributors and dealers who distribute our products to end users, sub-distributors
and sub-dealers, refrigeration and air-conditioning contractors and/or original equipment manufacturer
customers in the SEA region and other regions. Please refer to Business - Distribution Channels section
of this Offer Document for further details.
We have strong research and development capabilities
Our research and development activities are undertaken by our research and development team at Far
East Maju, and headed by Allan Ward, our COO (Engineering and Manufacturing) who has more than 48
years of experience in the HVAC&R industry. Our research and development activities are also supported
by our technical personnel from various departments within our Group.
We have successfully developed an average of two to three series of products annually over the last
five years and to-date, we have 13 series with more than 300 models of evaporators, condensers and
condensing units to serve different business segments. Please refer to the Business Our Products
and Business Research and Development sections of this Offer Document for further details on the
products our Group has developed in the past.
We place great emphasis on continual research and development efforts in order to meet changing
market demands and requirements. In particular, we intend to research and develop more energy-efficient
products in conjunction with our Green Program. This brings us into the next phase of expansion, in line
with the increasing environmental awareness in providing fresh and hygienic food storage solutions to the
community.
We provide quality products and services at competitive prices
We place strong emphasis on the quality of our products and services, and have implemented stringent
quality control measurements in our business and manufacturing processes to ensure that we are able
to consistently provide quality products and services to our customers. For our agency products, we are
able to sell them to our dealers and distributors at competitive prices, due to our bulk purchasing volume
and well-established relationships with our suppliers. In addition, our sales and marketing department
maintains regular contact with our customers so as to (i) obtain their feedback with regard to our products
so that we can improve on the quality of our products and services; (ii) be updated with their business
needs; and (iii) foster good business relationships. As a testament to our efforts on quality assurance,
we have obtained the ISO 9001:2008 certifications. Please refer to the Business Quality Control and
Safety Assurance section of this Offer Document for further details on our quality controls of our products
and services.
We have an experienced management team
Our success to date has been largely attributable to the efforts of our experienced management team,
guided by Loh Ee Ming (our Non-executive Chairman) and spearheaded by Steven Loh (our CEO and
Executive Director). Loh Ee Ming and Steven Loh have more than 60 and 20 years experience in the
HVAC&R industry respectively and have been instrumental in formulating our business strategies and
spearheading the growth of our business operations. They are assisted by David Leng (our COO (Sales
and Marketing) and Executive Director) and our management team, including our Executive Officers, Allan
Ward, Richard Chung, and Tan Su Kim, each of whom is experienced in his respective field, possess
wide network of contacts within our industry, and has qualified knowledge and/or expertise in running the
day-to-day operations of our Group. Please refer to the Directors, Executive Officers and Staff section of
this Offer Document for further details on their experiences and qualifications. Our Directors believe that
our experienced management team will continue to lead the growth and expansion of our Group in the
future.
104
PROSPECTS, BUSINESS STRATEGIES AND FUTURE PLANS

PROSPECTS
With the recovery in the global and regional economies from the global financial crisis, our Directors
expect the global demand for HVAC&R products to increase in tandem with the economic recovery in
the next few years. The global demand for HVAC products is expected to increase by more than 6% per
annum through 2014. In particular, the demand for HVAC products in the Asia Pacific region is expected
to outpace the global average and increase by 6.6% per annum with the PRC contributing to the largest
share of the global demand1. Similarly, our Directors believe that the growth potential in the refrigeration
industry would augur well for our Groups business.
Based on the above, our Directors believe that, barring unforeseen circumstances, the following factors
will drive our growth:Continual growth of the global and regional economies, in particular, that of the Asia Pacific region
The GDP of Asia Pacific, as a whole, is expected to grow by 7.3% in FY20112. With continued growth,
modernisation and/or industrialisation, the per-capita income is also expected to increase, leading to
growing consumer affluence and higher consumer spending power.
Our Directors believe that the above factors will lead to the growth and development of some key
industries which typically have strong demand for HVAC&R products and services. These industries
include property (residential and commercial), food and beverage, pharmaceutical as well as hospitality
and tourism. In particular, our Directors expect the growth in tourism in the Asia Pacific countries will
lead to an increase in the number of hotels as well as food and beverage outlets, thus resulting in higher
demand for cold storage facilities.
With our current extensive sales and distribution network which covers many countries in the Asia Pacific,
our Group is well positioned to tap the growth of the Asia Pacific region.
With growing affluence, consumers are increasingly demanding on the quality of food in terms of
freshness and nutritional value. The cold chain process, which involves the unbroken link of processing,
handling, transport, storage, distribution and retail under chilling temperatures, ensures that food (in
particular, fish and meat) is preserved in a manner that retains freshness, flavour and nutritional quality.
In addition, freezing will kill or reduce many potentially harmful microbes which cause food poisoning, and
extends the shelf life of food.
In 2009, the global and Asia Pacific frozen food markets grew by 3.9% and 5.0% respectively. By 2014,
the global and Asia Pacific frozen food markets are forecasted to grow by 20.6% and 26.9% respectively
from 20093.
The information was derived from an article titled Global HVAC market to hit US88bn in 2014, obtained from the internet
website of http://www.constructionweekonline.com, published by ITP Business Publishing Ltd, which was accessed on 4 May
2011. ITP Business Publishing Ltd has not consented for the inclusion of the above information in this Offer Document for
the purposes of Secion 249 of the Securities and Futures Act and is therefore not liable for the relevant information under
Sections 253 and 254 of the Securities and Futures Act. While our Directors have taken reasonable action to ensure that the
information is extracted accurately and fairly and has been included in this Offer Document in its proper form and context,
they have not independently verified the accuracy of the relevant information.
The information was derived from an article titled Asia-Pacific region economic growth to reach 7.3% in 2011: UN report,
obtained from the internet website of Xinhua News Agency, which was accessed on 18 May 2011. Xinhua News Agency
has not consented for the inclusion of the above information in this Offer Document for the purposes of Secion 249 of the
Securities and Futures Act and is therefore not liable for the relevant information under Sections 253 and 254 of the Securities
and Futures Act. While our Directors have taken reasonable action to ensure that the information is extracted accurately and
fairly and has been included in this Offer Document in its proper form and context, they have not independently verified the
accuracy of the relevant information.
The information was derived from the reports titled Global Frozen Food and Frozen Food in Asia-Pacific dated October
2010 published by Datamonitor. Datamonitor has not consented for the inclusion of the above information in this Offer
Document for the purposes of Secion 249 of the Securities and Futures Act and is therefore not liable for the relevant
information under Sections 253 and 254 of the Securities and Futures Act. While our Directors have taken reasonable action
to ensure that the information is extracted accurately and fairly and has been included in this Offer Document in its proper
form and context, they have not independently verified the accuracy of the relevant information.
105

Our Directors believe that the growth in the frozen food market will lead to an increase in the demand
for our refrigeration products which cater to various applications in the cold chain process. With our
comprehensive range of HVAC&R products and experience in this industry, our Directors believe that we
have the capability to capitalise on the growth trend in the frozen food market.
Increased demand for HVAC products due to climate change
Our Directors observe that many countries have been experiencing abnormal weather patterns, including
unusually hot temperatures as well as heat waves in many parts of the world due to global warming. With
increasing temperatures, people need and seek comfortable temperatures, humidity as well as ventilation
and circulation in their homes, offices, stores and factories. There is increasing demand for appropriate
ventilation and cooling systems in both residential and non-residential buildings.
As a result, there will be an increasing demand for our HVAC products in the consumer and industry
sectors, both regionally and globally.
Increased awareness of global warming
There is increased public awareness of global warming and its negative impact on the environment in
recent years, and various nations are also making concerted efforts to address resulting environmental
issues. Our Directors have observed that there is a growing trend where consumers are advocating
bio-energy, alternative energy and environmentally friendly products that directly or indirectly reduce
greenhouse emissions which is one of the key contributors to global warming.
In view of the above, suppliers of HVAC&R products are now more aware of the urgency and importance
of introducing and implementing products that are more environmentally friendly. For instance, pursuant
to the Montreal Protocol, the R-22 refrigerant (a non-environmentally friendly but widely used refrigerant
throughout the world) is expected to be phased out by 2015, with R-410A and R-507 as viable alternative
refrigerants for air-conditioning and refrigeration applications respectively. However, with the introduction
of the R-410A and R-507 refrigerants, adjustments and alterations to current refrigeration and airconditioning systems and products are required to replace and/or retrofit those that are non-conforming.
Moving forward, our Directors believe that current HVAC&R products are expected to be re-engineered to
be more environmentally friendly with the introduction of new regulatory codes and standards. We believe
that the demand for re-engineered HVAC&R products and services will gradually increase in the future,
replacing the current ones in the market.
Our continual research and development activities, focusing on developing more energy-efficient and
environmentally friendly products in conjunction with our Green Program, should equip us with the
competitive advantage to meet future market demands and expectations.
TREND INFORMATION AND ORDER BOOK
Our Directors have observed the following trends based on the sales and operations of our Group as at
the Latest Practicable Date:(1)
The demand for our products is expected to increase in FY2011, on the back of improving
economic conditions, both regionally and globally.
(2)
The unit costs of our agency products and raw materials (such as copper and aluminium) are
expected to increase in FY2011. Such price increases may generally be passed on in the form of
higher average selling prices to our customers, in particular, in the commercial and light industrial
(refrigeration) and oil, marine and gas (refrigeration and air-conditioning) business segments.
(3)
With increased competition in the residential and commercial (air-conditioning) business segment,
generally more competitive product selling prices to our customers are expected in this business
segment.
106

For the period from 1 January 2011 to the Latest Practicable Date, we have confirmed sales orders
amounting to approximately S$17.4 million, of which S$13.6 million has been fulfilled as at the Latest
Practicable Date. Our confirmed sales orders are usually fulfilled within a period ranging from one to five
months. These confirmed sales orders are however subject to cancellation, deferral or rescheduling by
our customers. As such, the state of our order books at any point in time is not fully reflective or indicative
of our Groups overall financial results and performance at the relevant point in time.
Save as disclosed above and in the Risk Factors and the Managements Discussion and Analysis
of Results of Operations and Financial Position sections of this Offer Document, and barring any
unforeseen circumstances, our Directors are not aware of any significant recent trends in manufacturing,
sales and inventory, and in the costs and selling prices of products and services, or other known trends,
uncertainties, demands, commitments or events that are reasonably likely to have a material effect on our
net sales or revenue, profitability, liquidity or capital resources, or that would cause financial information
disclosed in this Offer Document to be not necessarily indicative of our future operating results or financial
position.
OUR BUSINESS STRATEGIES AND FUTURE PLANS
Our business strategies and future plans for the growth and expansion of our business are set out below:Expansion of our sales and distribution network
We plan to extend our presence to new and emerging markets, such as Australia, New Zealand, Sri
Lanka, India and the Middle East through the establishment of subsidiaries and/or representative offices
as well as the appointment of new distributors.
We may also expand our sales and distribution network in our existing markets such as Malaysia, Hong
Kong, Indonesia and Indochina should business opportunities arise.
We intend to utlilise approximately S$600,000 of our net proceeds from the Placement for the expansion
of our sales and distribution network.
We plan to purchase more high-tech machines and equipment (such as CNC machines for the
manufacturing of sheet metals) and upgrade our existing machines and equipment at our Maju Facility to
increase our manufacturing capacity.
We intend to utilise approximately S$400,000 of our net proceeds from the Placement for the expansion
and upgrading of our existing manufacturing facilities.
Our Directors believe that our research and development efforts have contributed significantly to our
growth. In order for us to maintain our competitive edge, we plan to continue focusing on our research
and development activities to improve our existing Eden brand of products and develop new products
that are more energy-efficient. We intend to expand our research and development team by hiring more
engineers and related personnel, purchasing new testing and measuring equipment and software.
We intend to utilise approximately S$300,000 of our net proceeds from the Placement for our research
and development activities.
Expansion of our business through acquisitions, joint ventures or strategic alliances
In addition to growing organically, we may consider expanding our business through acquisitions, joint
ventures or strategic alliances with parties who create synergistic values with our existing business.
Through such acquisitions, joint ventures and strategic alliances, we are looking to strengthen our market
position, increase our network of customers as well as expand into new complementary businesses.
107

Our Company had entered into option agreements dated 27 June 2011 with certain shareholders of each
of the Regional Affiliates, namely UPL and SER, to acquire their respective equity interests in or the
assets, businesses and undertakings of the Regional Affiliates. Please refer to the Interested Person
Transactions Present and On-going Interested Person Transactions section of this Offer Document for
further details on the Acquisition Options.
Save for the Acquisition Options, we have not engaged in any form of discussion with any potential party
to acquire its business or form joint ventures or strategic alliances as at the Latest Practicable Date. We
believe that our status as a listed company will position us to take advantage of such opportunities as
and when they arise. Should such opportunity arises, we will seek approval, where necessary, from our
Shareholders and the relevant authorities as required by the relevant laws and regulations.
108
DIRECTORS, EXECUTIVE OFFICERS AND STAFF

MANAGEMENT REPORTING STRUCTURE
The following chart shows our management reporting structure as at the Latest Practicable Date:-
Board of Directors
Steven Loh
CEO and Executive Director
David Leng
COO (Sales and Marketing) and
Executive Director
Allan Ward
COO (Engineering and
Manufacturing)
Tan Su Kim
Financial Controller
Richard Chung
Head of Systems and Projects
DIRECTORS
The Board of Directors is entrusted with the responsibility for the overall management of our Group. Our
Directors particulars as at the Latest Practicable Date are listed below:Name
Age
Address
Designation
Loh Ee Ming
77
90 Jellicoe Road, #36-27,

Singapore 208749
Non-executive Chairman
Steven Loh
44
2A Lincoln Road, #13-08,

Singapore 308364
CEO and Executive Director
David Leng
54
8 Kensington Park Drive, #06-02,

Singapore 557323
COO (Sales and Marketing) and

Executive Director
Karen Loh
39
Block A, 20/F, Unit A2,

Flora Garden,
50 Cloudview Road,
Hong Kong
Non-executive Director
Hew Koon Chan
49
15C Limau Garden,

Singapore 467938
Andrew Mak
42
8 West Coast Road, #03-05,

Singapore 126823
Tan Hwee Kiong
45
71 Jurong West Central 3, #05-17

Singapore 648335
109

Information on the business and working experience of our Directors is set out below:Loh Ee Ming is our Non-executive Chairman and the founder of our Group and has been our Director
since our incorporation on 18 March 1964. As the founder, he played a pivotal role in the growth and
development of our Group. With more than 60 years of experience in the HVAC&R industry, he possesses
in-depth knowledge of refrigeration and air-conditioning products and has established business
relationships and network of relevant contacts (such as our suppliers and customers) in the HVAC&R
industry. Prior to founding our Group, he was self-employed, principally engaged in the business of the
provision of repair services of refrigerators in Singapore. In 1964, he founded our Company and had been
involved in the overall operations as well as the growth and expansion of our Group. In 1990, he became
our Executive Chairman. In June 2011, he became our Non-executive Chairman, and will be responsible
for setting our vision and objectives and providing consultancy to our Group.
Steven Loh is our CEO and Executive Director and was appointed to our Board in 1990. He has more
than 20 years of experience in the HVAC&R industry. He is responsible for the formulation and execution
of our Groups business strategies, strategic directions and expansion plans, as well as managing our
Groups overall business development and financial performance. In 1990, he joined our Company as
a retail sales executive. In 1993, he became our sales manager and was promoted to director of sales
and business development in 1995, in charge of regional sales and business development in the SEA
region. In 1997, he became our assistant managing director, overseeing our Companys operations
and financial performance. In 2000, he became our assistant Group managing director, overseeing our
Groups operations and financial performance. In 2003, he became our Group managing director. He is
an associate member of the Business China Singapore (). He graduated from the University of
the Pacific, Stockton, California, with a degree in Bachelor of Science in Electrical Engineering in 1987. In
addition, he graduated from the University of South Australia with a Master of Business Administration in
1996. He was awarded the Outstanding Entrepreneur in the Asia Pacific Entrepreneurship Award 2011 on
24 June 2011.
David Leng is our COO (Sales and Marketing) and Executive Director and was appointed to our Board in
2005. He is responsible for overseeing our Groups sales, strategic marketing and business development
as well as growing our business in the SEA region. In 1981, he commenced his career with Tan Chong
Industrial Machinery Pte Ltd as a sales engineer and subsequently promoted to the position of assistant
manager. From 1991 to 1993, he was the manager of United Leasing Singapore Pte Ltd and from 1993 to
1995, he was the manager of Motor Image Enterprises Pte Ltd where he assisted the general manager in
managing the company, and was also responsible for sales, service, administration and logistics functions
of the company. Prior to joining our Group, he was the general manager of Barcelona Motors Pte Ltd
and Perocom Motors Pte Ltd (both of which are distributors of new motor vehicles), mainly responsible
for the day-to-day operations and the financial performance of the two companies from 1995 to 2003. He
joined our Group as our business development director and assistant Group managing director in 2004.
He obtained his Industrial Technician Certificate in Mechanical Engineering from the Singapore Technical
Institute in 1977. In addition, he obtained the Certificate in Sales and Marketing from the Marketing
Institute of Singapore in 1990.
Karen Loh is our Non-executive Director and was appointed to our Board on 28 June 2011. Karen Loh
commenced her career as a management trainee at our Company in 1988. From 1992 to 1993, she was
an accounts executive at our Company responsible for the accounts of our Companys subsidiaries then.
From 1993 to 1997, she was pursuing her studies in Australia. From 1997 and 2000 till present, she is a
director of Old FER HK and Far East HK respectively, and is responsible for overseeing the companies
finance and accounts departments. She obtained an Advanced Certificate in Accounting from Alexander
College in 1994.
Hew Koon Chan is our Independent Director and was appointed to our Board on 28 June 2011. He
is currently the managing director of Integer Capital Pte. Ltd., a company which provides business
consultancy services on mergers and acquisitions. From 1986 to 1988, Hew Koon Chan was a process
engineer at Texas Instruments Singapore (Pte) Ltd, and from 1988 to 2004, he was an investment director
at Seavi Venture Services Pte Ltd, a private equity firm which is an affiliate of Advent International
Corporation. Hew Koon Chan graduated from the National University of Singapore with a Bachelor of
110

Engineering (Mechanical) Degree. He also holds a Certified Diploma in Accounting and Finance conferred
by the Chartered Association of Certified Accountants and a Graduate Diploma in Financial Management
from the Singapore Institute of Management.
Andrew Mak is our Independent Director and was appointed to our Board on 28 June 2011. He is a
practising lawyer with more than 15 years experience in legal practice. Andrew Mak commenced his
legal career as an associate with Lee & Lee in 1995. Since then, he has been practising as a corporate
lawyer, with periods of practice in several prominent Singapore law firms as well as the Singapore office
of Denton Wilde Sapte, an international law firm. He is currently a partner with Kelvin Chia Partnership
(a commercial law firm established in Singapore with regional presence in several Asian cities including
Tokyo, Shanghai, Bangkok, Hanoi, Ho Chi Minh City, Yangon, Phnom Penh and Pyongyang) and has
been with the firm since July 2006. His current legal practice is focused on mergers and acquisitions,
joint ventures, capital markets, listed company work, general corporate and commercial work and crossborder transactions. He has also acted for both Singapore and PRC-related companies seeking listing on
the SGX-ST (including reverse takeovers). His listed company work includes acting for listed companies
in mergers and acquisitions/joint ventures transactions and fund raising and advising listed companies
on SGX-ST compliance. He is an independent director of Leader Environmental Technologies Limited, a
company listed on the Main Board of the SGX-ST. In addition, he also volunteers his time in community
service. Amongst other appointments, Andrew Mak is an assistant secretary of the Telok Blangah Citizens
Consultative Committee. Andrew Mak graduated from the National University of Singapore in 1994 with a
Bachelor of Laws (Second Class Honours Upper Division).
Tan Hwee Kiong is our Independent Director and was appointed to our Board on 28 June 2011. He has
more than 16 years of experience in HVAC&R industry. He commenced his career as sales manager in
LTG Air Engineering Pte Ltd from 1991 to 1997. From 1997 to 1999, he was an area sales manager in
Carrier Refrigeration (S) Pte Ltd, primarily responsible for sales to the Asia Pacific region. From 1999 to
2001, he was the country sales manager of Carrier Refrigeration Taiwan branch. From 2001 to 2002, he
was the general sales manager of Carrier Refrigeration Shanghai Co., Ltd.. From 2002 to 2003, he was
the director of the refrigeration division (ASEAN region) in Carrier International Corporation (Singapore).
During the tenure of his position at Carrier International Corporation (Singapore), he was awarded the
2003 Carrier President Award for successfully achieving a revenue growth of 34% in the Asia Pacific
region. From 2003 to 2004, he was the general manager of Qingdao Haier Carrier Refrigeration
(Qingdao, the PRC). From 2004 to 2005, he was a general manager (Asia) in Heatcraft Refrigeration
Asia (Shanghai, the PRC), which is the refrigeration division of Lennox International Inc., responsible
for manufacturing, sales and distribution as well as services networks and developing overall strategy in
Asia Region. From 2005 to 2006, he was the managing director of SPX Cooling Techologies Malaysia
and Singapore, responsible for developing SPX Cooling Technologies strategies for Asia Pacific region.
From 2006 to 2008, he was the managing director of Asia Commercial Refrigeration (Singapore),
responsible for the regional profit and loss of South Asia region. Since 2008, he has been the managing
director of Snap-On Tools (S) Pte Ltd as well as its regional director for SEA and Korea, responsible for
developing and implementing overall sales, distribution and operational strategies of the company in SEA,
Hong Kong, Taiwan and Korea. Tan Hwee Kiong graduated from University of London with a Bachelor of
Science (Economics) degree. He also obtained his Graduate Diploma in Marketing Management from
Singapore Institute of Management.
Loh Ee Ming (our Non-executive Chairman) is the father of Steven Loh (our CEO and Executive Director)
and Karen Loh (our Non-executive Director). Save as disclosed above and in the General Information
on our Group Shareholders section of this Offer Document, none of our Directors has any family
relationship with another Director or with any Substantial Shareholder of our Company.
There was no agreement or arrangement with our Substantial Shareholders, customers or suppliers
pursuant to which we will appoint any of them or any person nominated by any of them as our Director.
Experience and Training of our Directors
Our Executive Directors, namely Steven Loh and David Leng, our Non-executive Directors, namely Loh
Ee Ming and Karen Loh, and our Independent Director, Tan Hwee Kiong, do not have prior experience
as directors of public listed companies in Singapore, but have received relevant training to familiarise
themselves with the roles and responsibilities of a director of a company listed on the SGX-ST.
111

Our Independent Directors, Hew Koon Chan and Andrew Mak, have prior experience as directors of
public listed companies in Singapore and are familiar with the roles and responsibilities of the directors of
public listed companies on the SGX-ST.
Present and past directorships of our Directors
The present and past directorships of each Director held in the five years preceding the date of this Offer
Document, excluding those held in our Company, are set out below:Name
Present Directorships
Past Directorships
Loh Ee Ming
Group Companies
Far East JB
Far East KL
Far East Kuching
Far East Maju
Far East Malaysia
Far East Penang
FE&B
RSP
Group Companies
Nil
Other Companies
Energy Xchange Pte. Ltd.
Old FER HK
SER
UPL
Other Companies
Elektro-Metall (Singapore) Pte Ltd
Inner Mongolia Vibronic Jade Industry (S)
Pte Ltd
Magna-Tek Equipment (FE) Pte Ltd
Ya Cheng Automotive Accessories Pte. Ltd.
Group Companies
Edenkool
Far East JB
Far East KL
Far East Kuching
Far East Maju
Far East Malaysia
Far East Penang
FE&B
Greenpoint
RSP
Group Companies
Nil
Other Companies
Energy Xchange Pte. Ltd.
ERM
Old FER HK
SER
SERM
UPL
Other Companies
Elektro-Metall (Singapore) Pte Ltd
HVAC & R Products (S) Pte. Ltd.
Jas Metal Coatings Pte Ltd
Magna-Tek Equipment (FE) Pte Ltd
Naga Sumber Energi Batu Bara (S) Pte Ltd
Group Companies
Edenkool
Greenpoint
Group Companies
Nil
Other Companies
Nil
Other Companies
Daekk Properties Pte Ltd
HVAC & R Products (S) Pte. Ltd.
Inner Mongolia Vibronic Jade Industry (S)
Pte. Ltd.
Steven Loh
David Leng
112
Name
Present Directorships
Past Directorships
Karen Loh
Group Companies
Far East HK
Group Companies
Nil
Other Companies
Chinhero Development
ERM
Old FER HK
SERM
Youth Boutique Ltd
Other Companies
RSP Hong Kong Limited
Hew Koon Chan
Group Companies
Nil
Other Companies
Integer Capital Pte. Ltd.
Nordic Group Limited
Omega Excel Ltd
Plasmotech Pte Ltd
Roxy-Pacific Holdings Limited
SP Manufacturing Pte. Ltd.
Trinity Christian Centre Limited
Group Companies
Nil
Other Companies
Action Asia Limited
Nidec Component Technology Co., Ltd.
Andrew Mak
Group Companies
Nil
Group Companies
Nil
Other Companies
Leader Environmental Technologies
Limited
Other Companies
China Vogue Casualwear Ltd.
Group Companies
Nil
Group Companies
Nil
Other Companies
Snap-on Tools Singapore Pte Ltd
Other Companies
SPX Cooling Technologies Singapore Pte. Ltd.
Tan Hwee Kiong
EXECUTIVE OFFICERS
The day-to-day operations of our Group are entrusted to our Executive Officers who are responsible for
different functions of our Group whose particulars as at the Latest Practicable Date are set out below:Name
Age
Address
Position
Allan Ward
64
A-3A-13 Mozart Tower, Sophia

Condominium, Jalan Kiara 1,
Mont Kiara 50480, Kuala Lumpur,
Malaysia
COO (Engineering and

Manufacturing)
Richard Chung
42
Block 974 Hougang Street 91,

#08-226, Singapore 530974
Head of Systems and Projects
Tan Su Kim
49
2B Hong San Walk, #03-03

Singapore 689048
Financial Controller
The working and business experience and areas of responsibility of our Executive Officers are set out
below:Allan Ward is our COO (Engineering and Manufacturing) and is responsible for the overall day-to-day
operations of Far East Maju and Safety Enterprises. He is also responsible for all the engineering and
design of Eden products, research and development activities, our Groups manufacturing activities,
113

plant design, machinery evaluation and ensuring our ISO and design philosophies are not compromised.
Prior to joining our Group, he was an international business development manager of Bitzer Australia
Pty Ltd in Australia from 1998 to 2000, mainly responsible for growing the export sales of heat transfer
and unitary compressors to the Asia Pacific, the Middle East and India. From 1975 to 1998, he was a
refrigeration division business unit manager of F Muller Pty Ltd in Australia, where he was responsible
for domestic sales and international business development, product development and engineering
of refrigeration products. From 1963 to 1975, he commenced his career as a cadet engineer and
became the engineer director of Cooney Refrigeration Pty Ltd in Australia. He is a full member of the
American Society of Heating, Refrigerating and Air-Conditioning Engineers and the Australia Institute
of Refrigeration Air-Conditioning and Heating Engineers. He is the president and chairman of the
Commercial Refrigeration Manufacturers Association of Australia from 1991 to 1997, where he (i) was
responsible for implementing the Australia refrigeration industries codes of practice; (ii) represented
the refrigeration industry at government level; and (iii) unified industry specifications for refrigeration
equipment with regard to ratings, temperature regulation for food storage, and health and safety within
the refrigeration industry. He is appointed as an Australian Justice of the Peace by the Governor of New
South Wales, which is recognised in every state in Australia. He was awarded patents in the United States
of America, Australia and New Zealand as inventor of drop-in refrigeration unit. He obtained his Diploma
in Mechanical Engineering (Major in Refrigeration) from the Unversity of Technology, Sydney, in 1967 and
the Advanced Heat Transfer Design Certificate from McQuay/Muller Private Institute in 1974.
Richard Chung is our Head of Systems and Projects and is responsible for the management and
planning of all systems and projects. He leads our project teams, including our general managers
(projects) and project managers to deliver the projects in accordance with the project commitments and
ensure that the projects are properly managed and planned with sufficient staff and appropriate resources.
He joined our Company as a sales and marketing executive in 1995 and became the sales and marketing
manager in 1997. He was then promoted to the position of a divisional director (systems and projects) in
2006. He was invited as a speaker at various seminars, such as (i) the Asian Cold Chain Management
Conference on topics of Examining Trends in Temperature Control for the Food and Beverage Sector:
An International Overview and Examining Trends in Temperature Control for the Healthcare and
Pharmaceutical Sector: An International Overview in 2007, (ii) the Singapore Manufacturing Association/
Singapore Article Number Council/Singapore Cold Chain Workshop on the topic of Training Workshop
on Cold Chain Management in 2004 and (iii) SPRING Singapore seminars on topic of A Total Approach
to Cold Chain Management for Milk and Dairy Products in 2002. He is a member (individual capacity)
of the Singapore Cold Chain Committee for Milk and Dairy Products and the chairman (sub-group III
technology) of the Singapore Cold Chain Committee for Pork Products. He obtained his degree in
Bachelor of Science (Physics) from the National University of Singapore in 1993.
Tan Su Kim is our Financial Controller and is responsible for the financial and accounting functions,
including the review of monthly reports, analysis of accounts, budget, cash flow, credit control, Group
consolidation, audit, taxation and compliance with the financial reporting requirements of our Group. She
is also responsible for matters relating to personnel and administration, and also oversees the corporate
secretarial functions of our Group. In 1982, she joined Coopers & Lybrand (Kuala Lumpur) as an audit
assistant and was gradually promoted to a senior auditor in 1986, a position she held till 1987. From 1988
to 1992, she was a senior auditor, and subsequently promoted to audit assistant manager, with Ernst
and Young, where she was responsible for the planning, execution and finalisation of audit assignments,
technical review, problem solving and was also involved in conducting staff training and advancement.
From 1992 to 1994, she was a group internal auditor with Crystal Time (S) Pte Ltd, where she was
responsible for the internal audit of the group with subsidiaries in Malaysia and Hong Kong. Prior to joining
our Group in 1997, she was a senior accountant with Sembawang Engineering and Construction Group
from 1995 to 1996. She is a Certified Public Accountant of Malaysia as well as member of the Malaysian
Institute of Certified Public Accountants and the Malaysian Institute of Accountants. She obtained her
Higher School Certificate from the University of Cambridge Local Examinations Syndicate in 1981.
None of our Executive Officers has any family relationship with another Executive Officer nor are they so
related to any Director or Substantial Shareholder of our Company.
There was no agreement or arrangement with our Substantial Shareholders, customers, suppliers or
others pursuant to which we will appoint any of them or any person nominated by any of them as our
Executive Officer.
114

Present and past directorships of our Executive Officers
The present and past directorships held by our Executive Officers in the last five years preceding the date
of this Offer Document, excluding those held in our Company, are set out below:Name
Present directorships
Past directorships
Allan Ward
Group Companies
Far East Maju
Far East Malaysia
Safety Enterprises
Group Companies
Nil
Other Companies
Nil
Other Companies
SERM
Group Companies
Greenpoint
RSP
Group Companies
Nil
Other Companies
Nil
Other Companies
RSP Systems HK Ltd
Group Companies
Nil
Group Companies
Nil
Other Companies
Nil
Other Companies
Nil
Richard Chung
Tan Su Kim
EMPLOYEES
As at the Latest Practicable Date, we had 118 full-time employees. Our employees are not unionised. The
relationship and cooperation between the management and employees have been good and are expected
to continue in the future. There has not been any incidence of work stoppages or major labour disputes
which affected our operations.
The breakdown of our full-time employees by function and geographical location as at the end of each of
FY2008, FY2009 and FY2010 are as follows:Function
FY2008
FY2009
FY2010
10
33
34
2
35
9
44
36
2
32
9
41
31
2
32
114
123
115
FY2008
FY2009
FY2010
47
60
5
53
64
4
47
59
5
2
2
114
123
115
Senior Management
Sales and marketing
Administrative
Research and development
General staff and technicians
Total
Geographical Location
Singapore
Malaysia
Hong Kong
Vietnam
Indonesia
Total
115

REMUNERATION OF DIRECTORS, EXECUTIVE OFFICERS AND RELATED EMPLOYEES
The remuneration (including salary, bonus, directors fees and benefits-in-kind) paid or payable to each of
our Director and Executive Officer for services rendered to us in all capacities for FY2009, FY2010 and
FY2011 (estimated) in remuneration bands(1) are as follows:-
FY2009
FY2010
FY2011
(Estimated)(2)
A
B
A
A
N.A.
N.A.
N.A.
A
B
A
A
N.A.
N.A.
N.A.
A
B
A
A
A
A
A
B
A
A
B
A
A
B
A
A
Directors
Loh Ee Ming
Steven Loh
David Leng
Karen Loh
Hew Koon Chan
Andrew Mak
Tan Hwee Kiong
Executive Officers
Allan Ward
Richard Chung
Tan Su Kim
Notes:(1)
Band A means up to S$250,000 per annum.

Band B means from S$250,001 to S$500,000 per annum.
(2)
The estimated amount of remuneration payable in FY2011 excludes any bonus or any other profit-linked agreement or
arrangement.
We have not set aside or accrued any amounts to provide for pension, retirement or similar benefits for
our Directors, Executive Officers or any of our employees, except as required for purposes of compliance
with the relevant laws of the jurisdictions in which our Group operates.
Related Employees
As at the Latest Practicable Date, we did not have employees who were related to our Directors or
Substantial Shareholders.
Should we employ any employee who is related to our Directors or Substantial Shareholders in the future,
his employment and the proposed terms of his employment will be subject to the review and approval of
our Remuneration Committee. In addition, his remuneration will be reviewed annually by our Remuneration
Committee to ensure that his remuneration package is in line with our staff remuneration guidelines and
commensurate with his job scopes and level of responsibilities. Any bonus, pay increase and/or promotion
for such related employee will also be subject to the review and approval of our Remuneration Committee.
In the event that a member of our Remuneration Committee is related to the employee under review, he
will abstain from the review.
SERVICE AGREEMENTS
Our Company entered into respective Service Agreements with our Executive Directors, Steven Loh and
David Leng (each an Appointee) in June 2011.
The Service Agreements are valid for an initial period of three years with effect from 1 January 2011
(Initial Term). Upon the expiry of the Initial Term, the Service Agreements are automatically renewed
annually unless either party gives notice of its intention to terminate in the manner set out below. During
the Initial Term, either party may, as the case may be, terminate the Service Agreements at any time by
giving to the other party not less than six months notice in writing, or in lieu of notice, payment of an
116

amount equivalent to six months salary based on the Appointees last drawn monthly salary. Our Group
may also terminate the employment of the Appointees at any time without notice or payment in lieu of
notice under the following circumstances:(i)
if the Appointees are guilty of any gross default or grave misconduct in connection with or affecting
the business of our Group;
(ii)
in the event of any serious or repeated breach or non-observance by the Appointees of any of the
stipulations contained in the Service Agreements;
(iii)
if the Appointees become bankrupt or make any composition or enter into any deed of arrangement
with their creditors;
(iv)
if the Appointees shall become of unsound mind; or
(v)
if the Appointees commit any act of criminal breach of trust or dishonesty.
The Service Agreements provided for, amongst other things, the salary payable to the Appointees, annual
leave, medical benefits, grounds of termination and certain restrictive covenants (including non-compete
obligations). Under the terms of the respective Service Agreements, Steven Loh and David Leng are
entitled to a monthly fixed salary of S$30,800 and S$16,200 respectively.
Our Group will also provide each of the Appointee with a motor vehicle allowance and all related
expenses incurred in connection with the motor vehicle shall be borne by us. All reasonable travelling,
hotel and other expenses incurred by the Appointee in connection with our Groups business will also be
borne by us.
Each Appointee will also be paid an incentive bonus based on our PBT. For this purpose, PBT shall
refer to our Groups audited consolidated PBT before payment of incentive bonus, excluding any gains
from extraordinary items and after minority interests for the relevant financial year.
The amount of incentive bonus that each Appointee will receive in each financial year will be determined
as follows:PBT
Steven Loh
Incentive bonus
David Leng
Where PBT is S$3.0 million or less
Nil
Nil
Where PBT is above S$3.0 million

and up to S$6.0 million
4.0% of PBT in excess of

S$3.0 million
3.0% of PBT in excess of

S$3.0 million
Where PBT is above S$6.0 million
S$120,000 plus 5.0% of

the actual PBT in excess of
S$6.0 million
S$90,000 plus 3.5% of the

actual PBT in excess of
S$6.0 million
Under the Service Agreements, the remuneration of the Appointee is subject to annual review by the
Remuneration Committee.
Had the Service Agreements been in place with effect from 1 January 2010, the aggregate remuneration
(including CPF contributions and other benefits, if any) paid to the Appointees for FY2010 would have
been approximately S$839,000 (instead of S$426,000), and our PBT, net profit for the year and net profit
attributable to equity holders of our Company would have been S$5,036,000 (instead of S$5,449,000),
S$4,210,000 (instead of S$4,553,000) and S$4,163,000 (instead of S$4,506,000) respectively.
117

Save as disclosed above, there are no bonus or profit-sharing plans or any other profit-linked agreements
or arrangements between our Company, our subsidiaries and any of our Directors, Executive Officers or
employees. There are no existing or proposed service agreement entered or to be entered into by our
Directors which provide for benefits upon termination of employment.
CORPORATE GOVERNANCE
Our Directors recognise the importance of corporate governance and the offering of high standards of
accountability to our Shareholders. As such, our Board of Directors has formed three committees: (i) the
Audit Committee, (ii) the Remuneration Committee and (iii) the Nominating Committee.
Board of Directors
We currently have seven Directors on our Board, comprising two Executive Directors, two Non-executive
Directors and three Independent Directors.
Our Articles of Association provide that our Board of Directors will consist of not less than two Directors.
None of our Directors are appointed for any fixed terms.
Our Directors are appointed by our Shareholders at general meeting, and an election of Directors takes
place annually. One-third (or the number nearest to one-third) of our Directors, are required to retire from
office at each annual general meeting. Every Director must retire from office at least once every three
years. However, a retiring Director is eligible for re-election at the meeting at which he retires.
Audit Committee
Our Audit Committee comprises Hew Koon Chan, Andrew Mak and Tan Hwee Kiong. The Chairman of
the Audit Committee is Hew Koon Chan.
Our Independent Directors do not have any existing business or professional relationship of a material
nature with our Group, other Directors or Substantial Shareholders. They are also not related to the other
Directors or Substantial Shareholders.
Our Audit Committee will assist our Board of Directors in discharging their responsibility to safeguard our
assets, maintain adequate accounting records and develop and maintain effective systems of internal
control, with the overall objective of ensuring that our management creates and maintains an effective
control environment in our Group.
Our Audit Committee will provide a channel of communication between our Board of Directors, our
management and our external auditors on matters relating to audit.
Our Audit Committee shall meet semi-annually to perform the following functions:(a)
review the audit plans of the external auditors and our internal auditors, including the results of our
external and internal auditors review and evaluation of our system of internal controls;
(b)
review the annual consolidated financial statements and the external auditors report on those
financial statements, and discuss any significant adjustments, major risk areas, changes in
accounting policies, compliance with international financial reporting standards, concerns and
issues arising from their audits including any matters which the auditors may wish to discuss in
the absence of management, where necessary, before submission to our Board of Directors for
approval;
(c)
review the periodic consolidated financial statements comprising the profit and loss statements and
the balance sheets and such other information required by the Catalist Rules, before submission to
our Board of Directors for approval;
(d)
review and discuss with external and internal auditors (if any), any suspected fraud, irregularity
or infringement of any relevant laws, rules or regulations, which has or is likely to have a material
impact on our Groups operating results or financial position and our managements response;
118

(e)
review the co-operation given by our management to our external auditors;
(f)
review the report of the internal control review to be conducted within one year after our Companys
admission to Catalist and to consider and make recommendations to our Board whether to continue
such reviews;
(g)
consider the appointment and re-appointment of the external auditors and matters relating to
resignation or dismissal thereof;
(h)
review and ratify any interested person transactions falling within the scope of Chapter 9 of the
Catalist Rules;
(i)
review the guidelines and review procedures set out in the Interested Person Transactions
Guidelines and Review Procedures for Future Interested Person Transactions other than those
covered in the Shareholders Mandate section of this Offer Document and future interested person
transactions, if any;
(j)
monitor all the undertakings and agreements described in the Potential Conflicts of Interests
Interests of Directors, Controlling Shareholder or their Associates section of this Offer Document;
(k)
review any potential conflicts of interest;
(l)
review the adequacy and supervision of the finance and accounting team on an annual basis;
(m)
review the procedures by which employees of our Group may, in confidence, report to the Chairman
of our Audit Committee, possible improprieties in matters of financial reporting or other matters and
ensure that there are arrangements in place for independent investigation and follow-up actions in
relation thereto;
(n)
undertake such other reviews and projects as may be requested by our Board of Directors, and will
report to our Board its findings from time to time on matters arising and requiring the attention of
our Audit Committee; and
(o)
undertake generally such other functions and duties as may be required by law or the Catalist
Rules, and by such amendments made thereto from time to time.
Apart from the duties listed above, our Audit Committee shall commission and review the findings of
internal investigations into matters where there is any suspected fraud or irregularity, or failure of internal
controls or infringement of any Singapore law, rule or regulation which has or is likely to have a material
impact on our Groups operating results and/or financial position. Each member of our Audit Committee
shall abstain from voting on any resolutions in respect of matters in which he is interested.
Our Audit Committee shall also commission an annual internal control audit until such time as our Audit
Committee is satisfied that our Groups internal controls are robust and effective enough to mitigate our
Groups internal control weaknesses (if any). Prior to the decommissioning of such annual audit, our
Board is required to report to the SGX-ST and the Sponsor on how the key internal control weaknesses
have been rectified, and the basis for the decision to decommission the annual internal control audit.
Thereafter, such audits may be initiated by our Audit Committee as and when it deems fit to satisfy itself
that our Groups internal controls remain robust and effective. Upon completion of the internal control
audit, appropriate disclosure will be made via SGXNET of any material, price-sensitive internal control
weaknesses and any follow-up actions to be taken by our Board.
Our Audit Committee, (a) having conducted an interview with Tan Su Kim; (b) considered her qualifications
and past working experience (as described in the Directors, Management and Staff Executive Officers
section of this Offer Document; (c) observed her abilities, familiarity and diligence in relation to the
financial matters and information on our Group; and (d) noted the absence of any negative feedback from
Ernst & Young LLP, is of the view that Tan Su Kim is suitable for the position of Financial Controller.
119

Remuneration Committee
Our Remuneration Committee comprises Tan Hwee Kiong, Andrew Mak and Hew Koon Chan. The
Chairman of the Remuneration Committee is Tan Hwee Kiong. Our Remuneration Committee will
recommend to our Board of Directors a framework of remuneration for our Directors and Executive
Officers and determine specific remuneration packages for each Executive Director. The recommendations
of our Remuneration Committee should be submitted for endorsement by the entire Board of Directors.
All aspects of remuneration, including but not limited to Directors fees, salaries, allowances, bonuses
and benefits-in-kind shall be covered by our Remuneration Committee. In addition, our Remuneration
Committee will perform an annual review of the remuneration of employees related to our Directors
and Substantial Shareholders to ensure that their remuneration packages are in line with our staff
remuneration guidelines and commensurate with their respective job scope and level of responsibilities.
They will also review and approve any bonuses, pay increases and/or promotion for these employees.
Each member of the Remuneration Committee shall abstain from voting on any resolution in respect of
his remuneration package. Our Remuneration Committee shall also review the remuneration of our senior
management.
Nominating Committee
Our Nominating Committee comprises Andrew Mak, Hew Koon Chan and Tan Hwee Kiong. The Chairman
of the Nominating Committee is Andrew Mak.
The Nominating Committee is responsible for the following:(a)
to make recommendations to the Board on all board appointments, including re-nominations, having
regard to the Directors contribution and performance (for example, attendance, preparedness,
participation and candour);
(b)
to determine annually whether or not a Director is independent;
(c)
in respect of a Director who has multiple board representations on various companies, to decide
whether or not such Director is able to and has been adequately carrying out his/her duties as
Director, having regard to the competing time commitments that are faced when serving on multiple
boards;
(d)
to decide how the Boards performance may be evaluated and propose objective performance
criteria, as approved by the Board that allows comparison with its industry peers, and address how
the Board has enhanced long term shareholders value; and
(e)
to assess the performance of the Board and contribution of each Director to the effectiveness of
the Board.
Each member of the Nominating Committee shall abstain from voting on any resolution relating to the
assessment of his performance or his re-nomination as Director.
120
INTERESTED PERSON TRANSACTIONS

Save as disclosed in the General Information on our Group Share Capital section of this Offer
Document and below, none of our Directors, Controlling Shareholder and their respective Associates
(each, an Interested Person) was or is interested in any transaction undertaken by our Group which
is considered material in itself within the period under review and up to the Latest Practicable Date (the
Relevant Period).
INTERESTED PERSONS
Particulars of the Interested Persons (save for the particulars of our Directors, Executive Officers
or Controlling Shareholder of our Company, which are disclosed in the General Information on our
Group Shareholders and/or Directors, Management and Staff sections of this Offer Document,
respectively) are as follows:SER
SER, a company established in the PRC on 28 November 2002, is primarily engaged in the marketing
and distribution of Eden brand of heat exchangers and condensing units, as well as Eliwell
brand of temperature controllers in the PRC. SER also exports the Eden brand of heat exchangers
and condensing units exclusively to Far East Group. SER is wholly owned by UPL (our Controlling
Shareholder) which is in turn owned by Loh Ee Ming (our Non-executive Chairman), Steven Loh (our
CEO and Executive Director), Karen Loh (our Non-executive Director), Lum Soo Mooi (spouse of Loh
Ee Ming) and Sharon Loh (daughter of Loh Ee Ming and Lum Soo Mooi, and sibling of Steven Loh and
Karen Loh) with shareholding interests of 40.68%, 27.42%, 10.68%, 10.33% and 10.89% respectively.
The directors of SER are Loh Ee Ming, Steven Loh and Wong Thiam Hock (an unrelated third party). The
legal representative of SER is Steven Loh.
SERM
SERM, a company established in the PRC on 4 April 2007, is primarily engaged in the manufacturing
of Eden brand of heat exchangers and condensing units. The shareholders of SERM are SER, Sam
Cheung (a Pre-IPO Investor and spouse of Karen Loh, our Non-executive Director) and Fuco Rudyanto
Chandra (an unrelated third party), with shareholding interests of 80.0%, 5.0% and 15.0% respectively.
The directors of SERM are Steven Loh, Karen Loh and Fuco Rudyanto Chandra. The legal representative
of SERM is Steven Loh.
ERM
ERM, a company established in the PRC on 1 June 2010, is primarily engaged in the manufacturing of
Eden brand of heat exchangers and condensing units. The shareholders of ERM are UPL, Sam Cheung
and Fuco Rudyanto Chandra, with shareholding interests of 80.0%, 5.0% and 15.0% respectively. The
directors of ERM are Steven Loh, Karen Loh and Fuco Rudyanto Chandra. The legal representative of
ERM is Steven Loh.
PT Far East Indonesia (Far East Indonesia)
Far East Indonesia, a company incorporated in Indonesia on 8 October 2001, was primarily engaged
in the trading of refrigeration and air-conditioning parts in Indonesia. Far East Indonesia had ceased
operations since 2008. The shareholders of Far East Indonesia are Steven Loh and two unrelated third
parties, namely Karisma Kamdani and Karesna Kamdani, with shareholding interests of 60%, 20% and
20% respectively. The directors of Far East Indonesia are Steven Loh and Karesna Kamdani. As at the
Latest Practicable Date, Far East Indonesia is in the process of winding up.
Far East Refrigeration (Hong Kong) Limited (Old FER HK)
Old FER HK, a company incorporated in Hong Kong on 24 May 1988, was primarily engaged in the
trading of refrigeration and air-conditioning parts in Hong Kong. Old FER HK had ceased operations
since 2007. Prior to 2009, the shareholders of Old FER HK were our Company, UPL, Karen Loh and
two unrelated third parties, namely Mak Hon Chong and Kadir Chandra, with shareholding interests of
93.88%, 3.20%, 0.86%, 0.34% and 1.72% respectively. Our Company and UPL had disposed of their
respective shareholding interests in Old FER HK to Karen Loh on 1 June 2009. The current shareholders
of Old FER HK are Karen Loh (97.94%), Mak Hon Chong (0.34%) and Kadir Chandra (1.72%). The
directors of Old FER HK are Loh Ee Ming, Steven Loh and Karen Loh.
121

Chinhero Development Limited (Chinhero Development)
Chinhero Development, a company incorporated in Hong Kong on 19 October 1990, is primarily an
investment holding company. The shareholders of Chinhero Development are Sam Cheung and Tsui Shui
Ngan (mother of Sam Cheung), with shareholding interests of 95.0% and 5.0% respectively. The directors
of Chinhero Development Ltd are Sam Cheung, Karen Loh and Tsui Shui Ngan.
PAST INTERESTED PERSON TRANSACTIONS
(1)
Disposal of Old FER HK to our Non-executive Director, Karen Loh

Pursuant to an instrument of transfer dated 1 June 2009, our Company disposed of its entire
93.88% equity interest in Old FER HK to Karen Loh for a cash consideration of HK$1.00. The 3.2%
equity interest in Old FER HK which was held by UPL was also sold to Karen Loh for a cash
consideration of HK$1.00. The disposal considerations were on a willing buyer willing seller basis,
taking into consideration the fact that Old FER HK was loss making prior to 2005 and had ceased
operations since 2007.
The transactions were not conducted on an arms length basis as the aggregate consideration was
at a nominal value of HK$2.00.
(2)
Provision of personal guarantees by certain Interested Persons

During the Relevant Period, Loh Ee Ming, Steven Loh, David Leng, Lim Keng Ann (our
Shareholder) and Sharon Loh (a shareholder of UPL, daughter of Loh Ee Ming and sibling of
Steven Loh and Karen Loh) (collectively the Guarantors) had provided joint and several personal
guarantees to secure banking facilities for our Group as follows:Financial
institution
Amount of
facilities
guaranteed
(000)
Interest rate
(%)
S$100
Prime(2) + 1.75
Trade
facilities
S$1,200
Prime(2) + 0.25
Overdraft
US$100
Prime(2) + 0.50
Trade
facilities
US$800
COF(3) + 2.25
S$500
Prime(2) + 0.375
S$1,400
Prime(2)
S$750
Prime(2) + 1.00
(overdraft)
Type of
facility
Details of guarantee(1)
Singapore
Bank of China
Citibank
Overdraft
Oversea-Chinese
Banking Corporation
Limited
Overdraft
The Bank of
East Asia, Limited
Overdraft
and trade
facilities
Trade
facilities
Joint and several guarantees by Steven

Loh, Lim Keng Ann, Loh Ee Ming,
Sharon Loh and David Leng
Joint and several guarantees by Loh

Ee Ming, Steven Loh and David Leng

Ee Ming, Steven Loh, David Leng,
Sharon Loh and Lim Keng Ann

Ee Ming, Steven Loh, David Leng,
Sharon Loh and Lim Keng Ann
SIBOR(4) + 2.00
(trade facilities)
United Overseas
Bank Limited
Overdraft
S$30
Prime(2) + 0.50
122
Joint and several guarantees by Steven

Loh and David Leng
Financial
institution
Amount of
facilities
guaranteed
(000)
Interest rate
(%)
Details of guarantee(1)
Overdraft
RM300
BLR(5) + 1.25
Trade
facilities
RM300
BLR(5) + 1.75

Ee Ming, Steven Loh and an unrelated
third party, Dato Hee Ching@Hei Wah
Type of
facility
Malaysia
Maybank
Notes:(1)
These facilities were also supported by other guarantees and securities provided by our Group.
(2)
(3)
(4)
SIBOR refers to the Singapore Interbank Offer Rate.
(5)
The largest aggregate outstanding amount guaranteed during the Relevant Period, based on
month-end balances, was approximately S$2.7 million. As at the Latest Practicable Date, the above
facilities had been fully settled and the guarantees provided by the Interested Persons had been
discharged.
As no fees were charged by the Interested Persons for the provision of the guarantees, the above
arrangements were not carried out on an arms length basis.
(3)
Provision of guarantees to certain Interested Persons

During the Relevant Period, our Company had provided corporate guarantees for the banking
facilities granted to SER and SERM as set out below:-
Financial institution
Type of
facilities
Amount of
facilities
guaranteed
Interest rate
Details of guarantee
SER
United Overseas
Bank (China)
Limited, Shanghai
Branch
Working
capital loan
and trade
finance
US$200,000 or
RMB1,450,000
115% of the
(i) Corporate guarantee by Far
Peoples Bank of
East Group; and
China base rate
(ii) Personal guarantee by Steven
Loh
Working
capital loan
US$300,000 and
115% of the
(i) Corporate guarantee by Far
Peoples Bank of
East Group;
China base rate
(ii) Corporate guarantee by SER;
100% of the
and
Peoples Bank of
China base rate (iii) Personal guarantee by Steven
Loh
SERM
United Overseas
Bank (China)
Limited, Shanghai
Branch
RMB3,000,000
The largest aggregate outstanding amount guaranteed during the Relevant Period, based on
month-end balances, was equivalent to approximately S$425,000. As at the Latest Practicable
Date, the aggregate outstanding amount guaranteed was equivalent to approximately S$388,007.
As at the date of this Offer Document, our Company has been discharged of the above guarantees.
123

As no fees were charged by Far East Group for the provision of the guarantees, the above
arrangements were not carried out on an arms length basis. We do not intend to enter into similar
arrangements in the future.
(4)
Advances to certain Interested Persons

During the Relevant Period, our Company had extended advances to SER and SERM for their
working capital requirements. Details of such advances as at the end of FY2008, FY2009 and
FY2010, and as at the Latest Practicable Date, and the largest aggregate amount outstanding
during the Relevant Period, based on month-end balances were as follows:-
(S$000)
SER
SERM
As at 31
December
2008
As at 31
December
2009
As at 31
December
2010
As at the
Latest
Practicable
Date
Largest
amount
outstanding
during the
Relevant
Period
168
207
242
Such advances were not carried out on arms length basis as they were on unsecured, interest-free
basis and had no fixed terms of repayment. We do not intend to enter into such transactions in the
future.
(5)
Commission income from the Regional Affiliates

During the Relevant Period, we had received commission income from the Regional Affiliates for
referral of customers to them. The commission income ranged from 7% to 15% of the purchases
made by such customers from the Regional Affiliates. The commission income received from the
Regional Affiliates during the Relevant Period were as follows:-
FY2008
FY2009
FY2010
From 1 January
2011 to Latest
Practicable Date
SER
40
43
SERM
42
84
92
(S$000)
Our Executive Directors are of the opinion that the above transactions were conducted on an arms
length basis and were on normal commercial terms. In the event that such arrangements occur
in the future, we will comply with the procedures set out in the Interested Person Transactions
Guidelines and Review Procedures for Future Interested Person Transactions other than those
covered in the Shareholders Mandate section of this Offer Document and be subject to the
relevant provisions of Chapter 9 of the Catalist Rules and/or other applicable provisions of the
Catalist Rules.
124

PRESENT AND ON-GOING INTERESTED PERSON TRANSACTIONS
(1)
Advances to and from certain Interested Persons

During the Relevant Period, UPL had procured advances from us for its working capital
requirements. Such advances were on unsecured, interest-free basis and had no fixed terms of
repayment. In addition, we had received advances from Loh Ee Ming, David Leng and Old FER HK
from time to time for our working capital requirements.
Details of such advances as at the end of FY2008, FY2009 and FY2010, and as at the Latest
Practicable Date, and the largest aggregate amount outstanding during the Relevant Period, based
on month-end balances were as follows:-
(S$000)
As at 31
December
2008
As at 31
December
2009
As at 31
December
2010
As at the Largest amount

Latest
outstanding
Practicable
during the
Date
Relevant Period
Amounts due to:Loh Ee Ming

David Leng
Old FER HK
2,366
1,866
1,432
1,211
2,610
177
150
150
677
111
107
111
121
22
584
Amounts due from:UPL
Save for an advance granted by David Leng to our Company in February 2009 of S$500,000
(Interest-bearing Loan) which was interest-bearing for two months at an interest rate of 4.5% per
annum, the advances from the aforementioned Interested Persons during the Relevant Period were
made on a preferential basis as they were unsecured and interest-free. The Interest-bearing Loan
was made on an arms length basis and was repaid to David Leng in May 2009.
The outstanding amount of $107,000 owing to Old FER HK as at the Latest Practicable Date has
no fixed terms of repayment.
The outstanding amount of S$1.2 million owing to Loh Ee Ming as at the Latest Practicable Date
is currently being repaid by monthly repayments of S$40,000. Pursuant to an undertaking by Loh
Ee Ming, our Company shall have the right to renegotiate such monthly repayment arrangement in
the event our Audit Committee is of the view that our Group is not in the financial position to make
such monthly repayments, taking into account our working capital and gearing position.
(2)
Dividends payable to certain Interested Persons

The amount of dividends due to certain Interested Persons, namely UPL, Steven Loh and David
Leng, as at the end of FY2010 and as at the Latest Practicable Date, and the largest aggregate
amount outstanding during the Relevant Period, based on month-end balances were as follows:-
(S$000)
As at
31 December
2010
UPL
As at the
Largest amount
Latest Practicable outstanding during
Date
the Relevant Period
1,308
1,754
3,062
Steven Loh
27
27
54
David Leng
138
138
275
The amount of dividends due to the aforesaid Interested Persons as at the Latest Practicable Date
relate to the interim dividends declared by our Company in respect of FY2011. We intend to repay
50% of such amounts outstanding in FY2011 and the remaining 50% in FY2012, using internally
generated funds.
125

(3)
Provision of personal guarantees by certain Interested Persons

As at the Latest Practicable Date, Loh Ee Ming, Steven Loh, David Leng, Lim Keng Ann and
Sharon Loh (collectively the Guarantors) had provided joint and several personal guarantees to
secure banking facilities granted to our Group as follows:-
Financial
institution
Type of facility/
tenure
Amount
outstanding
as at the
Amount of
Latest
facilities Practicable
granted
Date
(000)
(000)
Interest rate
(%)
Facilities
used by
Security(1)
Singapore
United
Overseas
Bank
Limited
DBS Bank
Ltd
Term loan
(commencing
on 1 October
2003 and
expiring on
30 September
2028)
S$1,599
S$1,489
5.25
Overdraft
S$1,000
Prime(2) + 0.25
Trade facilities
S$6,000
S$1,049
COF(3) + 2.50
Term loan
(commencing
on 1 March
2009 and
expiring on 28
February 2014)
S$600
S$340
2.35
Overdraft
S$600
Prime(2) + 0.75
Trade facilities
S$2,000
S$1,839
Prime(2) + 0.50
Bridging loan
(commencing
on 1 May 2009
and expiring
on 28 February
2012)
S$1,000
S$27
5.00
S$100
Prime(2) + 0.25
Standard
Chartered
Bank
Overdraft
Trade facilities
S$1,200
S$611
COF(3) + 3.00
RHB Bank
Berhad
Trade facilities
S$800
S$418
COF(3) + 2.50
Short term
revolving credit
S$100
S$100
COF(3) + 2.50
126
Far East
Group
Joint and several

guarantees by Loh
Ee Ming, Steven
Loh and Lim Keng
Ann
Far East
Group
Joint and several

guarantees by Loh
Ee Ming, Steven
Loh and Sharon
Loh
Far East
Group
Joint and several

guarantees by Loh
Ee Ming, Steven
Loh, David Leng,
Lim Keng Ann and
Sharon Loh
Far East
Group
Joint and several

guarantees by Loh
Ee Ming, Steven
Loh, David Leng
and Sharon Loh

Amount
outstanding
as at the
Amount of
Latest
facilities Practicable
granted
Date
(000)
(000)
Financial
institution
Type of facility/
tenure
CIMB Bank
Berhad
Trade facilities
and overdraft
S$500
COF(3) + 2.50
Prime(2) + 0.50
Far East
Group
Joint and several

guarantees by Loh
Ee Ming, Steven
Loh and David
Leng
United
Overseas
Bank
(Malaysia)
Berhad
Trade facilities
RM2,000
RM810
BLR(4) + 1.25
Far East
Maju
Overdraft
RM1,000
BLR(4) + 1.00
Joint and several

guarantees by
Loh Ee Ming and
Steven Loh
OCBC Bank
(Malaysia)
Berhad
Trade facilities
RM600
BLR(4) + 0.50
Far East
KL
Overdraft
RM400
BLR(4) + 0.75
Joint and several

guarantees by Loh
Ee Ming, Steven
Loh, Dato Hee
Ching@Hei Wah
and Au Yong Peng
Kwan
CIMB Bank
Berhad
Overdraft
RM140
BLR(4) + 2.00
Far East
Penang
Joint and several

guarantees by Loh
Ee Ming, Dato Hee
Ching@Hei Wah
and Steven Loh
HK$4,000
HK$1,458
Prime(2)
(overdraft)
Far East
HK
Joint and several

guarantees by Loh
Ee Ming, Steven
Loh and Karen
Loh
Interest rate
(%)
Facilities
used by
Security(1)
Malaysia
Hong Kong
DBS Bank
Overdraft and
(Hong Kong)
trade facilities
Limited
Standard rate
quoted by
banks (trade
facilities)
Notes:(1)
These facilities were also supported by other guarantees and securities provided by our Group.
(2)
(3)
(4)
The largest aggregate outstanding amount guaranteed by the Guarantors during the Relevant
Period, based on month-end balances, was approximately S$11.9 million. As as the Latest
Practicable Date, the aggregate outstanding amount guaranteed was approximately S$7.7 million.
As no fees were charged by the Guarantors for the provision of the guarantees, the above
arrangements were not carried out on an arms length basis.
127

Subsequent to the Placement, the Guarantors intend to procure the discharge of the above
personal guarantees. In the event that the banks do not agree to release the Guarantors from
the above personal guarantees, and we are unable to secure alternative bank facilities on similar
terms, the Guarantors have undertaken to continue to provide the relevant personal guarantees
until such time when we are able to secure alternative facilities on similar terms from other financial
institutions.
(4)
Lease of property from Chinhero Development

On 21 November 2008, we entered into a lease agreement with Chinhero Development pursuant to
which our subsidiary, Far East HK leased the premises located at Workshop Unit No. 7 on 18/F &
Storeroom, Wah Fat Industrial Building, Nos. 10-16 Kung Yip Street, Kwai Chung, New Territories,
Hong Kong, at monthly rental of HK$10,000 for three years until 30 November 2011. For further
details on this leased property, please refer to the Business Properties and Fixed Assets section
of this Offer Document.
The rental rate was derived at on an arms length basis, taking into consideration the prevailing
rental rates of similar properties in the market.
Future renewal of the lease shall be subject to the review procedures set out in Interested Person
Transactions Guidelines and Review Procedures for Future Interested Person Transactions other
than those covered in the Shareholders Mandate section of this Offer Document.
(5)
Transactions with the Regional Affiliates

(a)
Technical and management services agreement

On 27 June 2011, the Regional Affiliates entered into a technical and management services
agreement with our Company (the Technical and Management Services Agreement)
pursuant to which our Company shall provide technical support, business development
and general management services to the Regional Affiliates, for a period of two years
commencing from the date of our admission to Catalist (the Service Period).
The persons assigned by our Company to provide such services (Assigned Persons) are
Steven Loh, Allan Ward (our COO (Engineering and Manufacturing)) and Wong Thiam Hock
(our Regional Manager).
In consideration of the provision of the technical and management services, the Regional
Affiliates shall pay our Company an annual fee of S$95,000 (Annual Consideration). The
Annual Consideration has been derived by imputing a certain mark-up on the time costs
of the Assigned Persons, taking into consideration that Steven Loh, Allan Ward and Wong
Thiam Hock shall spend no more than 30, 15 and 50 business days respectively per annum
at the premises of the Regional Affiliates in the PRC in discharging their services.
The Technical and Management Services Agreement shall terminate in any of the following
events, whichever is the earliest:(i)
UPL (and its Associates) ceases to be our Controlling Shareholder;
(ii)
our Company exercises all the Acquisition Options; or
(iii)
our Company ceases to be listed on the SGX-ST (whether on the Main Board or
Catalist).
Our Directors are of the view that the Technical and Management Services Agreement was
negotiated on an arms length basis and is on normal commercial terms.
The terms of the Technical and Management Services Agreement shall be subject to review
and approval of our Audit Committee every two years.
128

(b)
Intellectual properties licence agreement

On 27 June 2011, the Regional Affiliates entered into an intellectual properties licence
agreement with our Company (the IP Licence Agreement). SER has acknowledged in the
IP Licence Agreement that it has been holding all its trade marks and patents (Intellectual
Properties) on behalf of our Company. Such Intellectual Properties are in the process of
being transferred to our Company for an aggregate consideration of US$400, being the
administrative costs of the transfer process. For further details on the Intellectual Properties,
please refer to the Business Intellectual Property section of this Offer Document.
Pursuant to the IP Licence Agreement, the Regional Affiliates shall be entitled to use the
Intellectual Properties for their manufacture, distribution, promotion and sale of Eden brand
of heat exchangers and condensing units in the PRC and sale of these products to our
Group. A licencing fee (Licencing Fee) shall be payable to our Company on a quarterly
basis, with a credit term of 60 days. The Licencing Fee shall be computed based on 2.0%
of the revenue which the Regional Affiliates derive from their sale of Eden brand of heat
exchangers and condensing units in the PRC. The Licencing Fee has been determined
by our Company after taking into consideration the results of a benchmarking analysis
undertaken by an independent accounting firm commissioned by our Company. The tenure
of the IP Licence Agreement is for a perpetual period commencing from 1 January 2011.
The Regional Affiliates have undertaken to make available supporting documents to us,
including their quarterly management accounts, annual audited accounts and sales invoices,
for purpose of facilitating the computation of the Licencing Fee payable by the Regional
Affiliates.
The other salient terms and conditions of the IP Licence Agreement are, inter alia, as
follows:(i)
the Regional Affiliates shall protect and enhance the value of the goodwill of the
Intellectual Properties, failing which, the Regional Affiliates shall be liable for and will
indemnify our Company against any and all liability, loss, costs and other expenses of
similar nature suffered, directly or indirectly, by our Company over any misappropriation
of the intellectual property rights licenced to the Regional Affiliates; and
(ii)
the Regional Affiliates are not allowed to grant or sub-licence to any other party the
use of the Intellectual Properties, unless prior written consent of our Company has
been obtained.
To safeguard the interests of our Group, Loh Ee Ming and Steven Loh have jointly and
severally undertake to indemnify our Group against any misappropriation of the intellectual
property rights by any of the Regional Affiliates pursuant to the IP Licence Agreement
(Indemnity Undertaking).
The Independent Financial Adviser has been appointed to advise our Audit Committee on
whether the IP Licence Agreement is on normal commercial terms and is not prejudicial to
the interest of our Company and our minority Shareholders. Please refer to the Interested
Person Transactions - Opinion of the Independent Financial Adviser section of this Offer
Document for the opinion of the Independent Financial Adviser. Our Audit Committee, having
considered the opinion of the Independent Financial Adviser, is of the view that the IP
Licence Agreement is on normal commercial terms and is not prejudicial to the interest of
our Company and our minority Shareholders.
The IP Licence Agreement which constitutes an interested person transaction shall be
deemed to have been specifically approved by Shareholders upon their subscription of our
Shares in connection with the Placement and will thereafter not be subject to Rules 905 and
906 of the Catalist Rules to the extent that there is no variation or amendment to the terms
of the IP Licence Agreement (including the fees charged) which is adverse to our Group.
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Any future variation or amendment or renewal of the terms of the IP Licence Agreement,
including any changes to the Licencing Fee, shall be subject to the approval of our Audit
Committee.
The Indemnity Undertaking shall subsist and be effective without limit in point of time, but
shall terminate in any of the following events, whichever is the earliest:-
(c)
(i)
(ii)
our Company exercises all the Acquisition Options;
(iii)
Catalist); or
(iv)
the termination of the IP Licence Agreement.
Options to acquire the equity interests of Regional Affiliates

Pursuant to three separate option agreements dated 27 June 2011 entered into between our
Company and certain shareholders of each of the Regional Affiliates, namely, UPL and SER
(the Acquisition Option Agreements), our Company was granted options to acquire their
respective equity interests in or the assets, businesses and undertakings of the Regional
Affiliates (the Acquisition Options). In addition, our Company shall have the first right of
refusal to acquire the respective shareholdings of UPL and SER in the Regional Affiliates
in the event UPL and SER intend to dispose of the same. The purchase consideration shall
be determined by reference to at least two independent valuers to be appointed by our Audit
Committee.
The exercise of the Acquisition Options shall be subject to the relevant provisions of the
Catalist Rules and approval of Shareholders. UPL and its Associates (being Interested
Persons) shall abstain from voting on resolutions concerning the Acquisition Options. Our
Audit Committee shall also appoint an independent financial adviser to advise on whether the
exercise of the Acquisition Options will be in the interest of our Company and our minority
Shareholders.
The Acquisition Options shall terminate in any of the following events, whichever is the
earliest:(i)
when UPL (and its Associates) ceases to be our Controlling Shareholder; or
(ii)
Catalist).
Our Directors are of the view that the Acquisition Options are beneficial to our Group and are
not prejudicial to the interests of our Company and our minority Shareholders.
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(d)
Trade Transactions
During the Relevant Period, there were trade transactions between our Company, and SER
and SERM. The aggregate amounts of such transactions with SER and SERM in FY2008,
FY2009 and FY2010 and from 1 January 2011 to the Latest Practicable Date were as
follows:-
(S$000)
FY2008
FY2009
FY2010
From 1 January
2011 to Latest
Practicable Date
861
898
793
366
23
35
28
26
27
199
14
Transactions with SER

Purchases from SER(1)
Sales to SER(2)
Transactions with SERM

Sales to SERM(3)
Notes:(1)
These relate mainly to our Eden brand of heat exchangers and condensing units.
(2)
These relate to refrigeration and air-conditioning parts for the assembly of condensing units.
(3)
These relate mainly to fan motors for SERMs urgent requirements to be assembled onto the heat
exchangers.
Our purchases from and sales to SER and SERM were on normal commercial terms. We
intend to continue with trade transactions with SER and SERM in the future. We may also
enter into trade transactions with ERM in the future. Such transactions shall be subject to the
guidelines and review procedures under the Shareholders Mandate set out in the Interested
Person Transactions Shareholders Mandate section of this Offer Document.
SHAREHOLDERS MANDATE
Chapter 9 of the Catalist Rules states that where the value of a single interested person transaction or
the aggregate value of all transactions entered into with the same Interested Person during a financial
year reaches or exceeds:(a)
3% of the groups latest audited net tangible assets, the listed company is required to make an
immediate announcement of the transaction; and
(b)
5% of the groups latest audited net tangible assets, the listed company is required to make an
immediate announcement and seek shareholders approval for that transaction.
Interested person transactions of value less than S$100,000 are not required to be aggregated.
Under Chapter 9 of the Catalist Rules, a listed company may seek a shareholders mandate for recurrent
transactions of a revenue or trading nature or those necessary for its day-to-day operations, which may
be carried out with the listed companys interested persons, but not for the purchase or sale of assets,
undertakings or businesses.
We anticipate that our Group would, in the ordinary course of business, enter into transactions including
but not limited to the transactions set out in this section with persons which are considered interested
persons as defined in Chapter 9 of the Catalist Rules. It is likely that such transactions will occur with
some degree of frequency and could arise at any time and from time to time.
131

Due to the time-sensitive nature of commercial transactions, obtaining a shareholders mandate
will enable our Group, in our normal course of business, to enter into categories of interested person
transactions set out below with certain categories of Interested Persons (as defined below), provided
such interested person transactions are made on an arms length basis and on normal commercial terms
and are not prejudicial to the interests of our Company and our minority Shareholders.
Pursuant to Rule 920(2) of the Catalist Rules, Far East Group may treat a general mandate as having
been obtained from our Shareholders for us to enter into interested person transactions with the
Interested Persons, if the information required under Rule 920(1)(b) of the Catalist Rules is included in
the offer document. The information required under Rule 920(1)(b) is as follows:(i)
the classes of Interested Persons with which the entity at risk will be transacting;
(ii)
the nature of the transactions contemplated under the mandate;
(iii)
the rationale for, and benefits to, the entity at risk;
(iv)
the methods or procedures for determining transaction prices;
(v)
the independent financial advisers opinion on whether the methods or procedures in (iv) above are
sufficient to ensure that the transactions will be carried out on normal commercial terms and will
not be prejudicial to the interests of our Company and our minority Shareholders;
(vi)
an opinion from the audit committee if it takes a different view to the independent financial adviser;
(vii)
a statement from us that we will obtain a fresh mandate from Shareholders if the methods and
procedures in (iv) become inappropriate; and
(viii)
a statement that the Interested Person will abstain, and has undertaken to ensure that its
associates will abstain, from voting on the resolution approving the transaction.
On 22 July 2011, our Shareholders approved a mandate (the Shareholders Mandate) for us to enter
into the following categories of interested person transactions with the following Interested Persons (as
explained below). Accordingly, our new Shareholders who subscribe for our New Shares in the Placement
are deemed to have approved the Shareholders Mandate.
The Shareholders Mandate will take effect from the admission of our Company to Catalist and will be
effective until the earlier of the following: (i) the first annual general meeting following our admission
to Catalist, or (ii) first anniversary of our date of admission to Catalist. Thereafter, approval from
Shareholders for renewal of the Shareholders Mandate will be sought at each subsequent annual general
meeting.
UPL, Steven Loh and Sam Cheung will abstain, and have undertaken that their Associates will abstain,
from voting on the resolutions for the renewal of the Shareholders Mandate in respect of any Shares
respectively held by them and their Associates.
Loh Ee Ming, Steven Loh, Karen Loh and Sam Cheung will also decline to accept nomination as proxy or
otherwise from any Shareholder to vote on the resolutions for the renewal of the Shareholders Mandate,
unless given specific instructions by the Shareholder in the relevant proxy form as to how his votes are to
be casted.
Categories of Interested Persons
The Shareholders Mandate will apply to our Groups transactions with SER, SERM and ERM (the
Mandated Interested Persons).
132

Categories of interested person transactions
The transactions with the Mandated Interested Persons covered by the Shareholders Mandate relate to
the purchase and sale of products in the normal course of our business (of a revenue or trading nature or
which are necessary for our day-to-day operations), comprising the following:(a)
purchase of Eden brand of products (comprising heat exchangers and condensing units) from the
Mandated Interested Persons (through SER); and
(b)
sale of agency products for the assembly of condensing units to the Mandated Interested Persons.
Transactions with Interested Persons that do not fall within the ambit of the Shareholders Mandate shall
be subject to the relevant provisions of Chapter 9 and/or other applicable provisions of the Catalist Rules.
Rationale for and benefits of the Shareholders Mandate
The Mandated Interested Persons are engaged primarily in the manufacture and distribution of our Eden
brand of heat exchangers and condensing units in the PRC pursuant to the IP Licence Agreement. Please
refer to the Business Intellectual Property and Interested Person Transactions Present and Ongoing Interested Person Transactions sections of this Offer Document for further details.
We purchase such products from the Mandated Interested Persons, in the ordinary course of our
business, for distribution in markets outside the PRC. Our Maju Facility manufactures the Eden brand
of heat exchangers but not condensing units. As such, the Mandated Interested Persons are the only
suppliers of our Eden brand of condensing units.
We also engage in sale of refrigeration and air-conditioning products to the Mandated Interested Persons
for their assembly of heat exchangers and condensing units. The Directors believe that such sale
transactions would, to a large extent, ensure that parts and components used in the manufacture of the
heat exchangers and condensing units by the Mandated Interested Persons will meet our technical and
quality specifications.
The Shareholders Mandate and the renewal of the Shareholders Mandate on an annual basis will
eliminate the need to convene general meetings from time to time to seek Shareholders approval as
and when potential transactions with the relevant Interested Persons arise, thereby eliminating the
administrative time and expenses in convening such meetings, without compromising the corporate
objectives and adversely affecting the business opportunities available to our Group.
The Shareholders Mandate is intended to facilitate recurrent transactions of a revenue or trading nature
or those necessary for day-to-day operations, provided that they are carried out on an arms length basis
and on normal commercial terms and are not prejudicial to the interests of our Company and our minority
Shareholders.
Disclosure will be made in our annual report of the aggregate value of interested person transactions
conducted pursuant to the Shareholders Mandate during the financial year and in the annual reports for
subsequent years that the Shareholders Mandate continues in force. In addition, we will announce the
aggregate value of transactions conducted pursuant to the Shareholders Mandate during the relevant
financial period within the required time frame stipulated in the Catalist Rules.
133

Guidelines and review procedures under Shareholders Mandate
We shall implement the following procedures to supplement existing internal control procedures to ensure
that interested person transactions are undertaken on an arms length basis and on normal commercial
terms consistent with our usual business practice and policies:Purchases from the Mandated Interested Persons
(a)
Our Eden brand of condensing units can only be purchased from the Mandated Interested
Persons (through SER) whereas our Eden brand of heat exchangers can be purchased from the
Mandated Interested Persons and our Maju Facility. As such products are proprietary in nature,
our Executive Directors believe that we would not be able to obtain comparable quotations from
independent third parties for the same or similar products.
(b)
When there is a need to make a purchase (whether upon the receipt of an enquiry from our
customers or to stock up our inventory), we will check with our Maju Facility and the Mandated
Interested Persons on their ability to fulfil our requirements taking into consideration pricing,
delivery schedule and payment terms. We will give priority to purchasing from our Maju Facility if it
is able to fulfil our orders based on our price and delivery schedule requirements. In the event such
orders are unable to be fulfilled by our Maju Facility, we will purchase from the Mandated Interested
Persons.
(c)
Purchases from the Mandated Interested Persons shall be based on a price list which has been
evaluated and pre-approved by an Executive Officer who does not have an interest in such
transaction at the start of each financial year (the Pre-approved Price List). Any revisions of
the Pre-approved Price List during the year shall be subject to re-evaluation and approval by an
Executive Director who does not have an interest in such transaction. The Pre-approved Price List
shall be compared to the prices for similar products quoted by our Maju Facility. Prior to purchasing
from the Mandated Interested Persons, we will ensure that the prices are comparable or lower than
those of our Maju Facility.
(d)
In assessing the price for purchases from the Mandated Interested Person, references shall also
be made to the prices of the same or reasonably similar products sold to independent third parties,
contemporaneously in time, by the Mandated Interested Persons. The Mandated Interested Persons
shall provide our Group with two recent invoices for the same or reasonably similar products sold to
independent third parties for comparison. In general, the prices and terms extended to our Group
by the Mandated Interested Persons shall be no less favourable than to their respective third party
customers.
In determining whether the price and terms offered by the Mandated Interested Persons are fair
and reasonable, factors such as, but not limited to, delivery schedules, specification requirements,
quality, payment terms, track record, preferential rates, discounts and/or rebates offered for bulk
purchases will be taken into consideration.
(e)
All purchases from the Mandated Interested Persons shall be recorded in an interested person
transaction register (IPT Register) setting out details of the transactions, relevant evaluations in
paragraph (d) above and approvals.
Sales to the Mandated Interested Persons

(a)
When selling products to the Mandated Interested Persons, the price and terms of two other
successful transactions of a similar nature with independent third party customers will be used for
comparison, taking into consideration the credit worthiness and repayment history of the customers
and sales volume.
(b)
The sale price to the Mandated Interested Persons shall not be lower than the lowest sale price of
the two other comparable successful transactions with independent third party customers.
In reviewing the prices and terms offered to the Mandated Interested Persons, all pertinent factors,
including but not limited to, delivery schedules and requirements, specification requirements and
payment terms, will be taken into consideration.
134

(c)
All sales transactions with the Mandated Interested Persons shall be recorded in the IPT Register,
setting out details of the transactions, relevant evaluations in paragraph (b) above and approvals.
In addition, to supplement internal control procedures to ensure that all interested person transactions
covered by the Shareholders Mandate will be carried out on normal commercial terms and will not
be prejudicial to the interests of our Company and our minority Shareholders, the following limits for
transactions with the Mandated Interested Persons shall be applied:(i)
where an individual transaction is below US$200,000, such transaction shall be subject to

the review and prior approval by an Executive Director who does not have an interest in such
transaction; and
(ii)
where an individual transaction is equal to or in excess of US$200,000, such transaction shall be

subject to the review and prior approval by our Audit Committee.
Our Audit Committee shall review the IPT Register on a half-yearly basis, to ensure that all transactions
with the Mandated Interested Persons are carried out in accordance with the guidelines and procedures
set out above.
Our Audit Committee shall review from time to time such guidelines and procedures to determine if
they continue to be adequate and/or commercially practicable in ensuring that transactions between the
Mandated Interested Persons and our Group are conducted on normal commercial terms, and are not
prejudicial to the interests of our Company and minority Shareholders.
Our Audit Committee may also engage external parties to carry out such periodic reviews if deemed
necessary or appropriate. Further, if during these periodic reviews, our Audit Committee is of the view
that the above guidelines and procedures are not sufficient to ensure that transactions with Mandated
Interested Persons will be conducted on normal commercial terms and will not be prejudicial to the
interests of our Company and minority Shareholders, we will revert to our Shareholders for a fresh
mandate based on new guidelines and procedures. During the period prior to obtaining a fresh mandate
from Shareholders, all transactions with the Mandated Interested Persons shall be subject to the review
and prior approval by our Audit Committee.
OPINION OF THE INDEPENDENT FINANCIAL ADVISER
SAC Capital has been appointed as the Independent Financial Adviser to the Audit Committee to
express an opinion, for the purposes of Chapter 9 of the Catalist Rules, on whether (i) the method and
review procedures for determining the transaction prices of the interested person transactions under the
Shareholders Mandate, if applied strictly, are sufficient to ensure that these interested person transactions
will be carried out on normal commercial terms and will not be prejudicial to the interests of our Company
and our minority Shareholders, and (ii) the IP Licence Agreement was entered into on normal commercial
terms and will not be prejudicial to the interests of our Company and our minority Shareholders.
Based on its evaluation of the Shareholders Mandate and the IP Licence Agreement, and subject to the
qualifications and assumptions as set out in its letter, SAC Capital is of the opinion that:(i)
the guidelines and review procedures of our Company as set out in the Interested Person
Transactions Shareholders Mandate: Guidelines and review procedures under Shareholders
Mandate section of this Offer Document for determining the transaction prices of the interested
person transactions under the Shareholders Mandate, if applied strictly, are sufficient to ensure
that such transactions will be conducted on normal commercial terms and will not be prejudicial to
the interests of our Company and our minority Shareholders; and
(ii)
the IP Licence Agreement was entered into on normal commercial terms and is not prejudicial to
the interests of our Company and our minority Shareholders.
Please refer to Appendix F Letter from SAC Capital Private Limited to the Audit Committee of this
Offer Document for the full text of the letter from the Independent Financial Adviser.
135

GUIDELINES AND REVIEW PROCEDURES FOR FUTURE INTERESTED PERSON TRANSACTIONS
OTHER THAN THOSE COVERED IN THE SHAREHOLDERS MANDATE
To ensure that interested person transactions not covered by the Shareholders Mandate (Other
Interested Person Transactions) are undertaken on an arms length basis, on normal commercial terms
and will not be prejudicial to our Company and our minority Shareholders, our Audit Committee will adopt
the following procedures when reviewing Other Interested Person Transactions:
(a)
Where practicable, when purchasing products from or engaging the services of an Interested
Person, two other quotations from non-Interested Persons will be obtained for comparison to
ensure that the interests of minority Shareholders are not compromised. The purchase price or fee
for services shall not be higher than the most competitive price or fee of the two other quotations
from non-Interested Persons. In determining the most competitive price or fee, all pertinent factors,
including but not limited to quality, delivery time and track record will be taken into consideration.
Where it is not practicable to obtain two other quotations from non-Interested Persons for any
particular transaction, our Audit Committee shall be consulted on the procedures to be adopted
in order to ensure that the proposed transaction with the Interested Person is carried out at arms
length and on normal commercial terms.
(b)
When selling products or providing services to an Interested Person, the price and terms of two
other successful transactions of a similar nature with independent third party customers will be
used for comparison, taking into consideration the credit worthiness and repayment history of
the customers and sales volume. The sale price to the Interested Person shall not be lower than
the lowest sale price of the two comparable successful transactions with independent third party
customers. In reviewing the prices and terms offered to the Interested Person, all pertinent factors,
including but not limited to, delivery schedules and requirements, specification requirements and
payment terms will be taken into consideration. Where it is not practicable to obtain two other
successful transactions of a similar nature with other third party customers, our Audit Committee
shall be consulted on the procedures to be adopted in order to ensure that the proposed
transaction with the Interested Person is carried out at arms length and on normal commercial
terms.
(c)
When leasing properties from or to an Interested Person, our Directors shall take appropriate steps
to ensure that such rent is commensurate with the prevailing market rates, including adopting
measures such as making relevant enquiries with landlords of similar properties, engaging an
independent valuer to ascertain the market rental for the relevant properties or obtaining suitable
reports or reviews published by property agents (as necessary). The rent payable shall be based
on the most competitive market rental rate of similar properties in terms of size and location, based
on the results of the relevant enquiries.
Such transactions with an Interested Person equal to or exceeding $100,000 will be reviewed and
approved by a Director or our Financial Controller, who shall not be an Interested Person in respect of the
particular transaction. In addition, any Other Interested Person Transaction of a value equal to or more
than 3% of our latest audited NTA value will be approved by our Audit Committee prior to entry into such
transactions, and will be announced.
Should the value of any Other Interested Person Transaction exceed 5% of our Groups last audited NTA,
it must be announced and made subject to approval by Shareholders of our Company. All Other Interested
Person Transactions above $100,000 (or its equivalent) must be recorded in the IPT Register. In the event
that these transactions are entered into with the same Interested Person (including his Associates) during
the current financial year, such transactions are to be aggregated for purposes of determining whether
shareholder approvals and/or announcements are necessary.
Our Audit Committee will review all Other Interested Person Transactions, if any, and examine any
supporting documents or such other data deemed necessary by our Audit Committee for such review, at
least half yearly to ensure that they are carried out at arms length and in accordance with the procedures
outlined above. It will take into account all relevant non-quantitative factors. In the event that a member
of our Audit Committee is interested in any Other Interested Person Transaction, he will abstain from
136

reviewing that particular transaction. Furthermore, if during these periodic reviews, our Audit Committee
believes that the guidelines and procedures as stated above are not sufficient to ensure that interests of
minority Shareholders are not prejudiced, our Company will adopt new guidelines and procedures.
In addition, our Audit Committee will include the review of Other Interested Person Transactions as part
of its standard procedures while examining the adequacy of internal controls. Our Directors will also
ensure that all disclosure, approval and other requirements on interested person transactions, including
those required by prevailing legislation, the Catalist Rules and accounting standards, are complied with.
In addition, such transactions will also be subject to Shareholders approval if deemed necessary by the
Catalist Rules.
Should there be recurring transactions between any Interested Person(s) and our Group, and our Audit
Committee deems fit that a mandate be obtained from the Shareholders, we shall proceed to obtain the
necessary Shareholders mandate for such transactions.
137
POTENTIAL CONFLICTS OF INTERESTS

INTERESTS OF DIRECTORS, CONTROLLING SHAREHOLDER OR THEIR ASSOCIATES
UPL (our Controlling Shareholder) wholly owns SER while UPL and its Associates have an aggregate
85% shareholding interests in SERM and ERM respectively. Please refer to the Interested Person
Transactions Interested Persons section of this Offer Document for details on the businesses and
shareholder structure of the Regional Affiliates.
Our Directors believe that any potential conflict of interests resulting from UPL (our Controlling
Shareholder) and its Associates having substantial shareholding interests in the Regional Affiliates is
mitigated in view of the following:(a)
The Regional Affiliates, under the IP Licence Agreement, are principally engaged in the
manufacture and sale of the Eden brand of heat exchangers and condensing units solely in the
PRC market (save for sale of such products to our Group outside the PRC). Our Groups business
activities in the PRC, on the other hand, are focused on the distribution of agency products
(excluding the Eliwell brand of temperature controllers which is carried by the Regional Affiliates).
As such, there is a clear product differentiation in the geographical markets where the Regional
Affiliates and our Group operate;
(b)
Pursuant to a deed of undertaking dated 27 June 2011, the Regional Affiliates have each
irrevocably undertaken and undertaken to procure, to the fullest possible extent, that they
shall endeavour to fulfil or give priority to our Groups orders of the Eden brand of products
manufactured by the Regional Affiliates. The aforesaid deed of undertaking shall subsist and be
effective without limit in point of time, but shall terminate in any of the following events, whichever is
the earliest:(i)
(ii)
when our Company exercises all Acquisition Options; or
(iii)
our Company ceases to be listed on the SGX-ST (whether on the Main Board or Catalist);
(c)
Pursuant to the IP Licence Agreement, our Company shall be entitled to the Licencing Fee which
is based on 2.0% of the revenue which the Regional Affiliates derive from their sale of Eden
brand of heat exchangers and condensing units in the PRC. For further details of the IP Licence
Agreement, please refer to the Interested Person Transactions Interested Persons section of this
Offer Document;
(d)
The Regional Affiliates as well as UPL, the shareholders of UPL and Sam Cheung (the Affiliates
Shareholders) have, pursuant to a deed of non-compete undertaking dated 27 June 2011 (the
Non-compete Deed), irrevocably undertaken and undertaken to procure, to the fullest possible
extent, that:(i)
the Regional Affiliates, the Affiliates Shareholders and their present or future subsidiaries or
associated companies (where applicable) shall not, solely or jointly with or on behalf of any
other person or entity, directly or indirectly, carry on or be engaged in any business or activity
which is outside its existing scope of business;
(ii)
the Regional Affiliates and the Affiliates Shareholders shall not, without the prior written
consent of our Company, either solely or jointly with or on behalf of any other person directly
or indirectly solicit or entice away, or endeavour to solicit or entice away, any employee of
our Group or any related company. The Regional Affiliates and the Affiliates Shareholders
shall not cause or permit any person directly or indirectly under its control or its directors,
employees or shareholders to directly or indirectly solicit or entice away, or endeavour to
solicit or entice away, any employee of our Group or any related company;
(iii)
the Affiliates Shareholders have agreed that they will disclose any conflict and will abstain
from voting and discussions on matters in which there is a conflict of interest between our
Group and the Regional Affiliates; and
138

(iv)
SER and the Affiliates Shareholders undertake to grant us or our nominee(s) the first right
of refusal in the event that any of them intend or decide to dispose of all or any part of their
respective interests in the Regional Affiliates or its businesses, assets and/or undertakings
(as may be applicable) subject to applicable rules and regulations.
The Non-compete Deed shall subsist and be effective without limit in point of time, but shall
terminate in any of the following events, whichever is the earliest:(i)
(ii)
when our Company exercises all the Acquisition Options; or
(iii)
our Company ceases to be listed on the SGX-ST (whether on the Main Board or Catalist).
Any changes in the scope of the Non-compete Deed shall be subject to the review and approval of
our Audit Committee;
(e)
Pursuant to the Acquisition Option Agreements dated 27 June 2011, our Company shall have the
options to acquire the respective equity interests in, or the assets, businesses and undertakings,
held by UPL and SER in the Regional Affiliates, as the case may be. For further details on the
Acquisition Option Agreements, please refer to the Interested Person Transactions Present and
On-going Interested Person Transactions section of this Offer Document;
(f)
Pursuant to the Technical and Management Services Agreement dated 27 June 2011, the Assigned
Persons have each irrevocably undertaken and undertaken to procure, to the fullest possible
extent:(i)
to monitor and ensure that the businesses of the Regional Affiliates are not competing with
our Group;
(ii)
to highlight any potential conflicts of interests arising from our Regional Affiliates to our
Board; and
(iii)
to act in the best interests of our Group, and to place the interests of our Group above that of
the Regional Affiliates at all times.
For further details on the Technical and Management Services Agreement, please refer to the
Interested Person Transactions Present and On-going Interested Person Transactions section of
this Offer Document; and
(g)
Under the terms and conditions of the IP Licence Agreement, the Regional Affiliates shall protect
and enhance the value of the goodwill of the Intellectual Properties, failing that, the Regional
Affiliates shall be liable for and will indemnify our Company against any liability, loss, costs
and other expenses of similar nature suffered, directly or indirectly, by our Company over any
misappropriation of the intellectual property rights licenced to the Regional Affiliates.
To further safeguard the interests of our Group, Loh Ee Ming and Steven Loh have jointly and
severally provided the Indemnity Undertaking. For further details on the Indemnity Undertaking,
please refer to the Interested Person Transactions Present and On-going Interested Person
Transactions section of this Offer Document.
Save as disclosed above and in the Interested Person Transactions section of this Offer Document,
during the period under review and from 1 January 2011 to the Latest Practicable Date:(a)
none of our Directors, Controlling Shareholder or any of their Associates has any interest, direct
or indirect, in any material transactions to which our Company or any of our subsidiary was or is a
party;
139

(b)
none of our Directors, Controlling Shareholder or any of their Associates has any interest, direct or
indirect, in any entity carrying on the same business or dealing in similar services which competes
materially or directly with the existing business of our Group; and
(c)
none of our Directors, Controlling Shareholder or any of their Associates has any interest, direct or
indirect, in any enterprise or company that is our customer or supplier of goods or services.
INTERESTS OF EXPERTS
None of the experts named in this Offer Document:(i)
is employed on a contingent basis by our Company or our subsidiaries;
(ii)
has a material interest, whether direct or indirect, in our Shares or in the shares of our subsidiaries;
or
(iii)
has a material economic interest, whether direct or indirect, in our Company, including an interest
in the success of the Placement.
INTERESTS OF THE SPONSOR AND THE PLACEMENT AGENT

In the reasonable opinion of our Directors, the Sponsor and the Placement Agent do not have a material
relationship with our Company save that the Placement is managed by the Sponsor and the Placement
is undertaken by the Placement Agent. Please refer to the Management and Placement Arrangements
section of this Offer Document for details on our management and placement arrangements.
140
CLEARANCE AND SETTLEMENT

Upon listing and quotation on Catalist, our Shares will be traded under the book-entry settlement
system of the CDP, and all dealings in and transactions of our Shares through Catalist will be effected
in accordance with the terms and conditions for the operation of securities accounts with the CDP, as
amended from time to time.
Our Shares will be registered in the name of CDP or its nominee and held by CDP for and on behalf of
persons who maintain, either directly or through depository agents, securities accounts with CDP. Persons
named as direct securities account holders and depository agents in the depository register maintained by
the CDP, rather than CDP itself, will be treated, under our Articles of Association and the Companies Act,
as members of our Company in respect of the number of Shares credited to their respective securities
accounts.
Persons holding our Shares in securities account with CDP may withdraw the number of Shares they own
from the book-entry settlement system in the form of physical share certificate(s). Such share certificate(s)
will, however, not be valid for delivery pursuant to trades transacted on Catalist, although they will be
prima facie evidence of title and may be transferred in accordance with our Articles of Association. A
fee of S$10.00 for each withdrawal of 1,000 Shares or less and a fee of S$25.00 for each withdrawal
of more than 1,000 Shares is payable upon withdrawing the Shares from the book-entry settlement
system and obtaining physical share certificates. In addition, a fee of S$2.00 or such other amount as
our Directors may decide, is payable to the share registrar for each share certificate issued and a stamp
duty of S$10.00 is also payable where our Shares are withdrawn in the name of the person withdrawing
our Shares or S$0.20 per S$100.00 or part thereof of the last-transacted price where it is withdrawn
in the name of a third party. Persons holding physical share certificates who wish to trade on Catalist
must deposit with CDP their share certificates together with the duly executed and stamped instruments
of transfer in favour of CDP, and have their respective securities accounts credited with the number of
Shares deposited before they can effect the desired trades. A fee of S$10.00 is payable upon the deposit
of each instrument of transfer with CDP. The above fees may be subject to such charges as may be in
accordance with CDPs prevailing policies or the current tax policies that may be in force in Singapore
from time to time.
Transactions in our Shares under the book-entry settlement system will be reflected by the sellers
securities account being debited with the number of Shares sold and the buyers securities account being
credited with the number of Shares acquired. No transfer of stamp duty is currently payable for the Shares
that are settled on a book-entry basis.
A Singapore clearing fee for trades in our Shares on Catalist is payable at the rate of 0.04% of the
transaction value subject to a maximum of S$600.00 per transaction. The clearing fee, instrument of
transfer deposit fee and share withdrawal fee may be subject to Singapore GST at the prevailing 7.0% (or
such other rate prevailing from time to time).
Dealings of our Shares will be carried out in S$ and will be effected for settlement on CDP on a scripless
basis. Settlement of trades on a normal ready basis on Catalist generally takes place on the third Market
Day following the transaction date, and payment for the securities is generally settled on the following
business day. CDP holds securities on behalf of investors in securities accounts. An investor may open a
direct account with CDP or a sub-account with a CDP depository agent. The CDP depository agent may
be a member company of the SGX-ST, bank, merchant bank or trust company.
141
GENERAL AND STATUTORY INFORMATION

INFORMATION ON DIRECTORS AND EXECUTIVE OFFICERS
1.
None of our Directors, Executive Officers and Controlling Shareholder:(a)
has, at any time during the last 10 years, had an application or a petition under any
bankruptcy laws of any jurisdiction filed against him or against a partnership of which he was
a partner at the time when he was a partner or at any time within two (2) years from the date
he ceased to be a partner;
(b)
has, at any time during the last 10 years, had an application or a petition under any law of
any jurisdiction filed against an entity (not being a partnership) of which he was a director or
an equivalent person or a key executive, at the time when he was a director or an equivalent
person or a key executive of that entity or at any time within 2 years from the date he ceased
to be a director or an equivalent person or a key executive of that entity, for the winding up or
dissolution of that entity or, where that entity is the trustee of a business trust, that business
trust, on the ground of insolvency;
(c)
has any unsatisfied judgement against him;
(d)
has ever been convicted of any offence, in Singapore or elsewhere, involving fraud or
dishonesty which is punishable with imprisonment, or has been the subject of any criminal
proceedings (including any pending criminal proceedings of which he is aware) for such
purpose;
(e)
has ever been convicted of any offence, in Singapore or elsewhere, involving a breach of any
law or regulatory requirement that relates to the securities or futures industry in Singapore
or elsewhere, or has been the subject of any criminal proceedings (including any pending
criminal proceedings of which he is aware) for such breach;
(f)
has, at any time during the last 10 years, had judgement entered against him in any
civil proceedings in Singapore or elsewhere involving a breach of any law or regulatory
requirement that relates to the securities or futures industry in Singapore or elsewhere, or a
finding of fraud, misrepresentation or dishonesty on his part, nor has he been the subject of
any civil proceedings (including any pending civil proceedings of which he is aware) involving
an allegation of fraud, misrepresentation or dishonesty on his part;
(g)
has ever been convicted in Singapore or elsewhere of any offence in connection with the
formation or management of any entity or business trust;
(h)
has ever been disqualified from acting as a director or an equivalent person of any entity
(including the trustee of a business trust), or from taking part directly or indirectly in the
management of any entity or business trust;
(i)
has ever been the subject of any order, judgement or ruling of any court, tribunal or
governmental body permanently or temporarily enjoining him from engaging in any type of
business practice or activity;
(j)
has ever, to his knowledge, been concerned with the management or conduct, in Singapore
or elsewhere, of affairs of:(i)
any corporation which has been investigated for a breach of any law or regulatory
requirement governing corporations in Singapore or elsewhere;
(ii)
any entity (not being a corporation) which has been investigated for a breach of any
law or regulatory requirement governing such entities in Singapore or elsewhere;
(iii)
any business trust which has been investigated for a breach of any law or regulatory
requirement governing business trusts in Singapore or elsewhere; or
142

(iv)
any entity or business trust which has been investigated for a breach of any law or
regulatory requirement that relates to the securities or futures industry in Singapore or
elsewhere,
in connection with any matter occurring or arising during the period when he was so
concerned with the entity or business trust; and
(k)
has been the subject of any current or past investigation or disciplinary proceedings, or has
been reprimanded or issued any warning, by the Authority or any other regulatory authority,
exchange, professional body or governmental agency, whether in Singapore or elsewhere.
Loh Ee Ming (our Non-executive Chairman)

In 2004, Loh Ee Ming was charged under Section 67(1)(b) of the Road Traffic Act for driving a
motor vehicle whilst under the influence of alcohol. He pleaded guilty to this charge and was fined
a total of S$1,800 and suspended from driving for one year and four months.
Steven Loh (our CEO and Executive Director)
In 2006, Steven Loh was charged under Section 67(1)(b) of the Road Traffic Act for driving a motor
vehicle whilst under the influence of alcohol. He pleaded guilty to the charge and was fined a total
of S$2,500 and suspended from driving for one and a half years.
David Leng (our COO (Sales and Marketing) and Executive Director)
In 2003, David Leng was charged under Section 67(1)(b) of the Road Traffic Act for driving a motor
vehicle whilst under the influence of alcohol. He pleaded guilty to this charge and was fined a total
of S$5,000 and suspended from driving for two and a half years.
SHARE CAPITAL
2.
Save as disclosed below and in the General Information on our Group Share Capital section
of this Offer Document, there were no changes in the issued and paid-up share capital of our
Company and our subsidiaries within the three years preceding the Latest Practicable Date:Date of issue
Number of shares
issued
Consideration per
share
8,312
S$142.86
2
199,998
S$1.00
S$1.00
Incorporation
Capital injection
S$2.00
S$200,000.00
1,000,000
HK$1.00
Capital injection
HK$3,000,000.00
Purpose
Resultant issued
share capital
Our Company
15 March 2011
Pre-IPO investment
S$9,322,192.32
Edenkool
26 May 2009
17 July 2009
Far East HK
30 April 2009
3.
Save as disclosed above and in the General Information on our Group Share Capital section of
this Offer Document, no shares in, or debentures of, our Company or our subsidiaries have been
issued, or are proposed to be issued, as fully or partly paid for cash or for a consideration other
than cash, during the last three years preceding the date of lodgement of this Offer Document.
143

MATERIAL CONTRACTS
4.
The following contracts, not being contracts entered into in the ordinary course of business, have
been entered into by our Company and our subsidiaries within the two years preceding the date of
lodgement of this Offer Document and are or may be material:(a)
three separate agreements dated 27 June 2011 entered into between our Company, UPL
and SER pursuant to which our Company was granted options to acquire their respective
equity interests in, or the assets, businesses and undertakings of, the Regional Affiliates
(please refer to the Interested Person Transactions Present and On-going Interested
Person Transactions section of this Offer Document for further details);
(b)
an agreement dated 27 June 2011 entered into between our Company and the Regional
Affiliates pursuant to which our Company shall provide technical support, business
development and general management services to the Regional Affiliates for a period of two
years commencing from the date of our admission to Catalist (please refer to the Interested
Person Transactions Present and On-going Interested Person Transactions section of this
Offer Document for further details);
(c)
an agreement dated 27 June 2011 entered into between our Company and the Regional
Affiliates for the use of trade marks and patents (please refer to the Interested Person
Transactions Present and On-going Interested Person Transactions section of this Offer
Document for futher details);
(d)
an agreement dated 23 March 2011 entered into between our Company and SER pursuant
to which SER shall transfer all its patents to our Company (please refer to the Business
Intellectual Property section of this Offer Document for further details of the transfer of
patents); and
(e)
an agreement dated 1 February 2011 entered into between our Company, the majority
Shareholders of our Company (being UPL, Steven Loh, David Leng and Lim Keng Ann)
and the Pre-IPO Investors pursuant to which the Pre-IPO Investors agreed to subscribe
for an aggregate of 8,312 new Shares (before Sub-Division) to be issued by our Company
(please refer to the General Information on our Group Share Capital section of this Offer
Document for further details).
Save as disclosed above, our Group has not entered into any material contracts, not being
contracts entered into in the ordinary course of business within the two years preceding the date of
lodgement of this Offer Document.
LITIGATION
5.
There are no legal or arbitration proceedings, including those which are pending or known to be
contemplated, which may have or have had during the last 12 months before the date of this Offer
Document, a material effect on our Groups financial position or profitability.
MISCELLANEOUS
6.
Save as disclosed in this Offer Document, our Directors are not aware of any relevant material
information including trading factors or risks which are unlikely to be known or anticipated by the
general public and which could materially affect the profits of our Company and our subsidiaries.
7.
Save as disclosed in this Offer Document, the financial condition and operations of our Group are
not likely to be affected by any of the following:(a)
known trends or demands, commitments, events or uncertainties that will result in or are
reasonably likely to result in our Groups liquidity increasing or decreasing in any material
way;
(b)
material commitments for capital expenditure;

144

(c)
unusual or infrequent events or transactions or any significant economic changes that

materially affected the amount of reported income from operations; and
(d)
known trends or uncertainties that have had or that we reasonably expect will have a material
favourable or unfavourable impact on revenues or operating income.
8.
Save as disclosed in this Offer Document, our Directors are not aware of any event which has
occurred since 31 December 2010 (being the end of the period covered by the most recent
financial statements of our Group included in this Offer Document) to the Latest Practicable Date
which may have a material effect on the financial position and results of our Group.
9.
Details, including the name, address and professional qualifications (including membership in a
professional body) of our auditors for the period under review are as follows:Name and address
Ernst & Young LLP
One Raffles Quay
North Tower, Level 18
Singapore 048583
Partner-in-charge/
Professional qualification
Membership in
professional body
Philip Ling Soon Hwa /

Certified Public Accountant
Institute of Certified Public

Accountants of Singapore
We currently have no intention of changing our auditors after the admission of our Company to
Catalist.
CONSENTS
10.
Ernst & Young LLP, the Independent Auditors and Reporting Accountants, has given and have not
withdrawn their written consent to the issue of this Offer Document with the inclusion herein of
the Independent Auditors Report on the Audited Consolidated Financial Statements of Far East
Group Limited and Subsidiary Companies for the Financial Years Ended 31 December 2008, 2009
and 2010 in the form and context in which it is included and references to their name in the form
and context in which it appears in this Offer Document and to act in such capacity in relation to this
Offer Document.
11.
Collins Stewart Pte. Limited, the Sponsor and the Placement Agent, has given and has not
withdrawn its written consent to the issue of this Offer Document with the inclusion herein of its
name and references thereto in the form and context in which it appears in this Offer Document
and to act in such capacity in relation to this Offer Document.
12.
Loo & Partners LLP, the Solicitors to the Placement and Legal Advisers to our Company on
Singapore Law, has given and has not withdrawn its written consent to the issue of this Offer
Document with the inclusion herein of its name and references thereto in the form and context
in which it appears in this Offer Document and to act in such capacity in relation to this Offer
Document.
13.
Naqiz and Partners, the Legal Advisers to our Company on Malaysia Law, has given and has not
withdrawn its written consent to the issue of this Offer Document with the inclusion herein of its
name and references thereto in the form and context in which it appears in this Offer Document
and to act in such capacity in relation to this Offer Document.
14.
Pang & Co. in association with Salans LLP, the Legal Advisers to our Company on Hong Kong Law,
has given and has not withdrawn its written consent to the issue of this Offer Document with the
inclusion herein of its name and references thereto in the form and context in which it appears in
this Offer Document and to act in such capacity in relation to this Offer Document.
145

15.
Victory Legal Group, the Legal Advisers to our Company on PRC Law, has given and has not
withdrawn its written consent to the issue of this Offer Document with the inclusion herein of the
statement in the Business - Intellectual Property section of this Offer Document, in the form and
context in which they are included and references to its name in the form and context in which it
appears in this Offer Document and to act in such capacity in relation to this Offer Document.
16.
SAC Capital, as the Independent Financial Adviser to the Audit Committee, has given and has
not withdrawn its written consent to the issue of this Offer Document with the inclusion herein
of the statement in the Interested Person Transactions - Opinion of the Independent Financial
Adviser section of this Offer Document and the Letter from SAC Capital Private Limited to the
Audit Committee set out in Appendix F of this Offer Document, in the form and context in which
it is included and references to their name in the form and context in which it appears in this Offer
Document and to act in such capacity in relation to this Offer Document.
17.
Each of the Share Registrar and Share Transfer Office, the Principal Bankers and the Receiving
Banker do not make or purport to make any statement in this Offer Document or any statement
upon which a statement in this Offer Document is based and each of them makes no representation
regarding any statement in this Offer Document and to the maximum extent permitted by law,
expressly disclaims and takes no responsibility for any liability to any person which is based on, or
arises out of, any statement, information or opinions in, or omission from, this Offer Document.
RESPONSIBILITY STATEMENT BY OUR DIRECTORS

18.
This Offer Document has been seen and approved by our Directors and they individually and
collectively accept full responsibility for the accuracy of the information given herein and confirm,
having made all reasonable enquiries, that to the best of their knowledge and belief, the facts
stated and the opinions expressed herein are fair and accurate in all material respects as of the
date hereof and there are no material facts the omission of which would make any statements in
this Offer Document misleading and that this Offer Document constitutes full and true disclosure of
all material facts about the Placement and our Group.
DOCUMENTS AVAILABLE FOR INSPECTION

19.
The following documents or copies thereof may be inspected at our registered office at 112
Lavender Street, #04-00, Far East Refrigeration Building, Singapore 338728, during normal
business hours for a period of six months from the date of Registration:(a)
the Memorandum and Articles of Association of our Company;
(b)
the Independent Auditors Report on the Audited Consolidated Financial Statements of Far
East Group Limited and Subsidiary Companies for the Financial Years Ended 31 December
2008, 2009 and 2010 set out in Appendix A of this Offer Document;
(c)
the Letter from SAC Capital Private Limited to the Audit Committee set out in Appendix F of
this Offer Document;
(d)
the material contracts referred to in paragraph 4 above;
(e)
the letters of consent referred to in paragraphs 10 to 17 above; and
(f)
the Service Agreements.
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GOVERNMENT REGULATIONS
We are subject to all relevant laws and regulations of the countries where our business operations
are located. Save as disclosed below, as at the Latest Practicable Date, our business operations were
not subject to any special legislations or regulatory controls other than those generally applicable to
companies and businesses incorporated and/or operating in Singapore, Malaysia and Hong Kong. We
have thus far not experienced any adverse effect on our business in complying with these regulations.
Singapore
We have identified the main laws and regulations that materially affect our operations and the relevant
regulatory bodies in the following countries (apart from those pertaining to general business requirements)
as set out below.
Regulation of Imports and Exports Act (Cap. 272A)
Under the Regulation of Imports and Exports Act (Cap. 272A), the Director-General of Customs appointed
under Section 4(1) of the Customs Act (Cap. 70) may make regulations for the registration, regulation and
control of all or any class of goods imported into, exported from, transshipped in or in-transit through
Singapore. The Regulation of Imports and Exports Regulations (RIER) was prescribed in 1999 to control
the import, export or trans-shipment of goods through requirements of permits. We are, by virtue of our
import and export business, subject to the RIER.
Pursuant to Regulation 37(1) of the RIER, the Director-General of Customs may maintain a register
containing the particulars of importers, exporters, common carriers or any other person who desires to
apply for a permit or any other form of approval under the RIER.
Workplace Safety and Health Act 2006
Under the Ministry of Manpowers (MOM) Workplace Safety and Health Act 2006 (WSHA), every
employer has the duty to take, so far as is reasonably practicable, such measures as are necessary
to ensure the safety and health of his employees at work. These measures include providing and
maintaining for the employees a work environment which is safe, without risk to health, and has adequate
facilities and arrangements for their welfare at work, ensuring that sufficient safety measures are taken
in respect of any machinery, equipment, plant, article or process used by the employees, ensuring
that the employees are not exposed to hazards arising out of the arrangement, disposal, manipulation,
organisation, processing, storage, transport, working or use of things in their workplace or near their
workplace and under the control of the employer, developing and implementing procedures for dealing
with emergencies that may arise while those persons are at work and ensuring that the person at work
has adequate instruction, information, training and supervision as is necessary for that person to perform
his work.
More specific duties imposed by the MOM on employers are laid out in the Workplace Safety and
Health (General Provisions) Regulations. Some of these duties include taking effective measures to
protect persons at work from the harmful effects of any exposure to any bio-hazardous material which
may constitute a risk to their health and ensuring that machineries and equipment in the workplace are
safe for use. In addition to the above, under the WSHA, inspectors appointed by the Commissioner for
Workplace Safety and Health (CWSH) may, inter alia, enter, inspect and examine any workplace and
any machinery, equipment, plant, installation or article at any workplace, to make such examination and
inquiry as may be necessary to ascertain whether the provisions of the WSHA are complied with. In
connection with the foregoing, an authorised examiner has inspected a lifting equipment that we use for
our operations and has issued a Certificate of Test/Thorough Visual Examination of Lifting Equipment
which is valid until 23 May 2012. In the said certificate, the examiner declared that the lifting equipment
complies with all of the requirements under the Workplace Safety and Health (General Provisions)
Regulations.
Under the WSHA, the CWSH may serve a remedial order or a stop-work order in respect of a workplace
if he is satisfied that (i) the workplace is in such condition, or is so located, or any part of the machinery,
equipment, plant or article in the workplace is so used, that any process or work carried on in the
workplace cannot be carried on with due regard to the safety, health and welfare of the persons at work;
(ii) any person has contravened any duty imposed by the WSHA; or (iii) any person has done any act, or
has refrained from doing any act which, in the opinion of the CWSH, poses or is likely to pose a risk to
147
the safety, health and welfare of persons at work. The remedial order shall direct the person served with
the order to take such measures, to the satisfaction of the CWSH, to inter alia remedy any danger so as
to enable the work or process in the workplace to be carried on with due regard to the safety, health and
welfare of the persons at work, whilst the stopwork order shall direct the person served with the order to
immediately cease to carry on any work indefinitely or until such measures as are required by the CWSH
have been taken to remedy any danger so as to enable the work in the workplace to be carried on with
due regard to the safety, health and welfare of the persons at work.
Workplace Safety and Health (Registration of Factories) Regulations 2008 (2008 WSH Factories
Regulations)
Pursuant to the 2008 WSH Factories Regulations which came into operation on 1 November 2008
repealing the Workplace Safety and Health (Registration of Factories) Regulations 2006, any person who
desires to occupy or use any premises as a factory falling within any of the classes of factories described
in the First Schedule of the 2008 WSH Factories Regulations must apply to the CWSH to register the
premises as a factory one month before the factory starts operations. A certificate of registration issued
by the CWSH is valid for a period of one year, or such other period as the CWSH may determine, and
may be renewed subsequently upon the payment of a renewal fee.
Under the 2008 WSH Factories Regulations, any person who desires to occupy or use any premises as a
factory not falling within any of the classes of factories described in the First Schedule of the 2008 WSH
Factories Regulations must, before the commencement of operation of the factory, submit a notification to
the CWSH informing the CWSH of his intention to occupy or use those premises as such a factory. The
notification is not subject to any renewal requirements.
However, in the event that the CWSH is of the view that the factory in respect of which a notification has
been submitted is to pose or likely to pose a risk to the safety, health and welfare of persons at work in
the factory, the CWSH may, by notice in writing, (i) specify the date from which the notification shall cease
to be valid; and (ii) direct the occupier of the factory to register the factory notwithstanding that the factory
does not fall within any of the classes of the factories described in the First Schedule.
As our premises at 5 Third Lok Yang Road, Singapore 628000, does not fall under any of the classes
of the factories described in the First Schedule, a notification to the CWSH will suffice. However, the
2008 WSH Factories Regulations states that notwithstanding the revocation of the Workplace Safety and
Health (Registration of Factories) Regulations, any certificate of registration or factory permit issued under
the revoked Regulations which was valid immediately before 1st November 2008 shall, if it was issued
in respect of a factory not falling within any of the classes of factories described in the First Schedule,
be deemed to be a notification made under Regulation 5 in respect of that factory. In a letter dated
14 October 2010, the CWSH confirmed that our premises at 5 Third Lok Yang Road is under the Factory
Notification Scheme.
Work Injury Compensation Act (Cap. 354)
The Work Injury Compensation Act (Cap. 354) (WICA), as regulated by the MOM, applies to all
employees (with the exception of those set out in the Fourth Schedule of the WICA), who have entered
into or works under a contract of service or apprenticeship with an employer, in respect of injury suffered
by them in the course of their employment and sets out, inter alia, the amount of compensation that they
are entitled to and the method(s) of calculating such compensation.
The WICA provides that if in any employment, personal injury by accident arising out of and in the
course of the employment is caused to an employee, his employer shall be liable to pay compensation
in accordance with the provisions of the WICA. The amount of compensation shall be computed in
accordance with a fixed formula as set out in the Third Schedule of the WICA, subject to a maximum and
minimum limit.
148
Employment of Foreign Workers
The availability and the employment cost of skilled and unskilled foreign workers are affected by the
Governments policies and regulations on the immigration and employment of foreign workers in
Singapore. The policies and regulations are set out in, inter alia, the Employment of Foreign Manpower
Act (Cap. 91A) and the relevant Government Gazettes.
The availability of foreign workers is regulated by the MOM through the following policy instruments:(a)
approved source countries;
(b)
issuance of work permits;
(c)
the imposition of security bonds and levies;
(d)
dependency ceilings based on the ratio of local to foreign workers; and
(e)
skill trade test requirement whereby the foreign worker will need to meet a basic skill requirement
before he can work in Singapore.
Under the work permit conditions, employers are required to provide acceptable accommodation for their
foreign workers. Such accommodation must meet the statutory requirements set by various government
agencies, including the National Environment Agency, the Public Utilities Board, the Singapore Civil
Defence Force and the Building & Construction Authority.
In relation to the employment of foreign mid-level skilled workers, employers must ensure that such
persons apply for a S Pass. The S Pass is intended for foreigners who:earn a monthly fixed income of at least S$1,800; and
have degree or diploma level educational qualifications.
In relation to the employment of foreign professionals and executives, employers must ensure that such
persons apply for an employment pass. The employment pass is intended for foreigners who:earn a monthly fixed income of at least S$2,500; and
have recognised qualifications.
An employer of foreign workers is also subject to, inter alia, the provisions set out in the Employment Act
(Cap. 91), the Immigration Act (Cap. 133) and the regulations issued pursuant to the Immigration Act.
From 1 January 2008, employers are required to purchase and maintain insurance for the medical
expenses of their work permit and S Pass holders during their stay in Singapore. The requirement to
purchase and maintain insurance is included as a condition of the work permit or S Pass.
Hazardous Substances Licence (HS Licence)
The HS Licence is required for any person who wishes to import, use, keep in storage and supply
hazardous substances controlled under Section 22 of the Environmental Protection and Management Act
(Cap. 94A) (EPMA). Our Company is currently a holder of a HS Licence for the following Annex C GPI
ozone depleting substances: 1) 1-chloro-1,1-difluoro-ethane (100% purity) and 2) chlorodifluoromethane
(100% purity). The licence is subject to the provisions of the EPMA, the EPMA (Hazardous Substances)
Regulations, the EPMA (Ozone Depleting Substances) Regulations and to the following conditions, inter
alia:1)
the licence holder shall state, among other things, the type of controlled ozone depleting
substances imported and/or exported, the weight in metric tonne, the calculated level of import
and/or export, the country of origin and/or final destination and the value in S$ in his application for
import and/or export;
149
2)
annually and not later than 31 January of each year, the licence holder must submit to the Pollution
Control Department, National Environmental Agency (PCD-NEA) the certified calculated level of
imports and/or exports of the controlled substance, with such details as the type, the country of
origin, and/or final destination and value of the imports and/or exports in S$;
3)
prior approval from PCD-NEA shall be obtained for the import or export of the hazardous substance
under the licence. Misdeclaration shall constitute a prosecutable offence;
4)
the licence holder shall maintain an up-to-date inventory of the controlled hazardous substance
imported and/or exported and shall submit a monthly return of such inventory records to the PCDNEA; and
5)
the licence holder shall properly label the containers of the controlled substances. Any licence
holder found mislabeling will be liable for prosecution. Random checks will be conducted by PCDNEA officials.
Electrical Installation Licence

Our Company is a holder of an Electrical Installation Licence. The Electricity Act (Cap. 89A) and the
Electricity (Electrical Installations) Regulations 2002 require an electrical installation licence when for the
use or operation of an electrical installation of approved load exceeding 45 kilo volt ampere (kVA) for nondomestic purposes.
Malaysia
Manufacturing Licence under the Industrial Co-Ordination Act 1975 issued by the Ministry of
International Trade and Industry (MITI)
Malaysias manufacturing sector is governed by the Industrial Co-ordination Act 1975 (ICA 1975). The
ICA 1975 was introduced with the aim to maintain an orderly development and growth in the countrys
manufacturing sector. The ICA 1975 requires manufacturing companies with shareholders funds of RM2.5
million and above or engaging 75 or more full-time paid employees to apply for a manufacturing licence
for approval by the Ministry of International Trade and Industry (MITI). Applications for manufacturing
licences are to be submitted to the Malaysian Industrial Development Authority (MIDA), an agency under
MITI in charge of the promotion and coordination of industrial development in Malaysia.
As at the date of this Offer Document, MITI has issued a manufacturing licence to Far East Maju for the
manufacturing of packaged refrigeration systems and parts thereof (Manufacturing Licence) effective
from 31 July 2004. Some of the standard conditions attached to the Manufacturing Licence are as
follows:(i)
any sale of shares in Far East Maju must be notified to MITI;
(ii)
Far East Maju is required to train Malaysian citizens so as to channel a transfer in technology and
skills in all levels and positions; and
(iii)
Far East Maju is required to carry out the approved activities in accordance with all applicable
Malaysian laws and regulations.
The Manufacturing Licence is valid for an indefinite period subject to MITIs right to revoke the
Manufacturing Licence for breach of any of the conditions imposed.
We confirm that all our licences, registrations and permits are current and existing. We have also not
committed any offences in relation to:(a)
the terms or conditions of our licences, registrations or permits; or
(b)
any Malaysian laws or regulations to which we or our business is subject.
150
We have also not received any notices from or been subject to any penalties imposed by any regulatory
body or authority in Malaysia administering or having responsibility or jurisdiction over our licences (or the
lack thereof).
Occupational Safety and Health
Under the Malaysian Occupational Safety and Health Act 1994 (OSHA 1994) and the Occupational
Safety and Health (Safety and Health Officer) Order 1997 (P.U.(A) 316/1997), an employer involved in
a manufacturing activity utilising specific heavy equipment and machinery employing more than 100
employees shall employ a safety and health officer. An employee under the OSHA 1994 is defined to
include an independent contractor engaged by an employer or a self-employed person and any employee
of the independent contractor.
Section 30 of the OSHA 1994 also states that an employer is required to establish a safety and
health committee at the place of work if there are 40 or more persons employed at the place of work.
The Occupational Safety and Health (Safety and Health Committee) Regulations 1996 stipulates that
a safety and health committee shall consist of a chairman, secretary, representatives of employer and
representatives of employees. Where there are 100 persons or less employed, there shall not be less
than two representatives each from the employees and the management on the committee.
As at Latest Practicable Date, all the Malaysian companies in our Group employ less than 40 employees
and is therefore exempted from employing a safety and health officer or establishing a safety and health
committee.
Employment Laws and Regulations
The main legislation, the Employment Act 1955 applies to all employees in Peninsular Malaysia and the
Federal Territory of Labuan whose monthly wages do not exceed RM1,500 and all manual labourers
irrespective of their wages. Employers may draw up the contract of service but it should not contravene
the minimum benefits stipulated under the law.
Some of the obligations of an employer under the Employment Act 1955 are as follows:(i)
every employee must be given a written contract of service containing the terms and conditions of
the employment, including provisions relating to the termination of contract;
(ii)
maintenance of labour register pertaining to personal particulars of employees, payment of wages

and deduction of wages;
(iii)
special provisions for the protection of female employees pertaining to night work and maternity
benefits;
(iv)
normal hours of work and other provisions relating to numbers of working hours;
(v)
entitlement of paid annual leave, sick leave and public holidays; and
(vi)
rate of payment for overtime and extra work.
We have entered into letters of engagement with all our employees and the terms of employment for our
employees are consistent with general Malaysian practice and do not contravene Malaysian employment
regulations.
Hong Kong
Ozone Layer Protection Ordinance (Chapter 403 of the Laws of Hong Kong)
Far East HK is engaged in the trade and provision of refrigeration and air-conditioning parts in Hong
Kong. As part of its business, it imports hydrochlorofluorocarbons (HCFCs). The Ozone Layer Protection
Ordinance (the Ordinance), Chapter 403 of the Laws of Hong Kong, requires any person who imports
or exports a scheduled substance, HCFC being one of such scheduled substance, to be registered under
151
the Ordinance and to obtain a licence for each import or export of such scheduled substance. Far East
HK has been registered under Section 5 of the Ordinance and the registration is valid until 31 December
2011.
As at the Latest Practicable Date and to the best of our Directors knowledge, we are in compliance
with all applicable laws and regulations which are material to our business operations in the countries
we operate, and we have obtained all the necessary business licences and permits for our business
operations in the countries we operate.
152
EXCHANGE CONTROLS
Singapore
Currently, there are no Singapore governmental laws, decrees, regulations or other legislation that may
affect the following:(i)
the import or export of capital, including the availability of cash and cash equivalents for use by our
Group; and
(ii)
the remittance of dividends, interest or other payments to non-resident holders of our Companys
securities.
Malaysia
There are no restrictions on the repatriation of capital, profits, dividends, interest, fees or rental by foreign
direct investors or portfolio investors, subject to the applicable reporting requirements, and any withholding
tax, and provided such remittance is effected through authorised channels, such as licensed banks or
licensed remittance operators. Such remittance should be in foreign currency (save for the currency of
Israel) as the remittance of RM in excess of RM10,000 will require prior permission from the Foreign
Exchange Administration Department of Bank Negara Malaysia.
Hong Kong
There are no exchange controls in Hong Kong.
153
APPENDIX A INDEPENDENT AUDITORS REPORT ON THE AUDITED

CONSOLIDATED FINANCIAL STATEMENTS OF FAR EAST GROUP LIMITED
AND SUBSIDIARY COMPANIES FOR THE FINANCIAL YEARS ENDED
31 DECEMBER 2008, 2009 AND 2010
Co. Reg. No. 196400096C

(formerly known as Far East Group Pte. Ltd.)
And Subsidiary Companies

Report on Audited Consolidated Financial
Statements
31 December 2008, 2009 and 2010
A-1

31 DECEMBER 2008, 2009 AND 2010
Index
Page
Statement by Directors
A-3
Independent Auditors Report
A-4
Consolidated Balance Sheets
A-5
Consolidated Profit and Loss Accounts
A-8
Consolidated Statement of Comprehensive Income
A-9
Consolidated Statement of Changes in Equity
A-10
Consolidated Cash Flows Statement
A-13
Notes to the Financial Statements
A-16
A-2

31 DECEMBER 2008, 2009 AND 2010
Statement by Directors
We, Loh Mun Yew and Leng Chee Keong, being two of the directors of Far East Group Limited (formerly
known as Far East Group Pte. Ltd.), do hereby state that, in the opinion of the directors,
(a)
the accompanying consolidated financial statements together with notes thereto are drawn up so
as to give a true and fair view of the state of affairs of the Group as at 31 December 2008, 2009
and 2010 and of the results of the business and changes in equity and cash flows of the Group for
the years ended 31 December 2008, 2009 and 2010; and
(b)
at the date of this statement there are reasonable grounds to believe that the Company will be able
to pay its debts as and when they fall due.
On behalf of the Board of Directors,
Loh Mun Yew

Director
Leng Chee Keong

Director
Singapore
25 July 2011
A-3

31 DECEMBER 2008, 2009 AND 2010
The Board of Directors
112 Lavender Street #04-00
Singapore 338728
Dear Sirs,
We have audited the accompanying consolidated financial statements of Far East Group Limited (formerly
known as Far East Group Pte. Ltd.) (the Company) and its subsidiary companies (collectively, the Group)
set out on pages A-5 to A-76, which comprise the balance sheets of the Group as at 31 December 2008,
2009 and 2010, the consolidated profit and loss accounts, consolidated statements of comprehensive
income, consolidated statements of changes in equity and consolidated cash flows statements of the
Group for the financial years ended 31 December 2008, 2009 and 2010, and a summary of significant
accounting policies and other explanatory information.
Managements Responsibility for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of these consolidated financial
statements in accordance with Singapore Financial Reporting Standards, and for such internal control as
management determines is necessary to enable the preparation of financial statements that are free from
material misstatement, whether due to fraud or error.
Auditors Responsibility
Our responsibility is to express an opinion on these consolidated financial statements based on our audit.
We conducted our audit in accordance with Singapore Standards on Auditing. Those standards require
that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance
about whether the consolidated financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures
in the consolidated financial statements. The procedures selected depend on the auditors judgment,
including the assessment of the risks of material misstatement of the consolidated financial statements,
whether due to fraud or error. In making those risk assessments, the auditor considers internal control
relevant to the entitys preparation and fair presentation of the consolidated financial statements in
order to design audit procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the entitys internal control. An audit also includes evaluating
the appropriateness of accounting policies used and the reasonableness of accounting estimates made
by management, as well as evaluating the overall presentation of the consolidated financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our audit opinion.
Opinion
In our opinion, the consolidated financial statements of the Group are properly drawn up in accordance
with Singapore Financial Reporting Standards so as to present fairly, in all material respects, the state of
affairs of the Group as at 31 December 2008, 2009 and 2010 and the results, changes in equity and cash
flows of the Group for the years ended on those dates.
Other matter
This report has been prepared solely in connection with the proposed listing of the Companys shares
on the Singapore Exchange Securities Trading Limited for inclusion in the Offer Document. This report
is made solely to you, as a body, and for no other purpose. We do not assume responsibility towards or
accept liability to any other person for the contents of this report.
Ernst & Young LLP
Public Accountants and
Certified Public Accountants
Singapore
25 July 2011
A-4

31 DECEMBER 2008, 2009 AND 2010
CONSOLIDATED BALANCE SHEETS
as at 31 December 2008, 2009 and 2010
(In Singapore dollars)
Note
Non-current assets
Fixed assets
Investment properties
Deferred tax assets
Other receivables
2010
$
2009
$
2008
$
4
5
7
8
11
7,518,145
88,968
174,014
18,329
7,402,526
214,146
91,183
199,231
7,523,044
244,936
102,424
171,998
9
10
11
8,199,554
6,646,543
136,827
101,384
1,253,187
217,647
6,052
1,399,779
2,350,114
8,108,720
4,213,089
143,635
98,420
555,843
21,978
86,447
8,832
22,887
409,785
2,778,697
11,164,269
6,150,983
403,546
65,037
231,028
120,814
289,747
301,373
68,062
151,501
1,686,888
20,311,087
16,448,333
20,633,248
Current assets
Inventories
Trade debtors
Other receivables
Deposits
Prepayments
Due from holding company (non-trade)
Due from affiliated companies (trade)
Due from affiliated companies (non-trade)
Tax recoverable
Fixed deposits
12
12
12
A-5

31 DECEMBER 2008, 2009 AND 2010
as at 31 December 2008, 2009 and 2010 (contd)
Note
2010
$
2009
$
2008
$
Current liabilities
Trade payables
Gross amount due to customers for contract
work-in-progress
Other creditors
Dividends payable
Due to affiliated company (trade)
Due to affiliated company (non-trade)
Loan from related party
Provision for income tax
Finance lease obligations (current)
Loans from shareholders and directors (current)
Term loans (current)
Derivative financial instruments
13
1,495,044
1,361,692
1,974,489
14
15
593,000
3,423,536
767,512
1,749,428
50,000
1,636,087
255,143
110,958
596,973
17,927
550,000
447,641
203
57,374
4,164,239
268,734
1,929,602
82,295
90,968
16,148
125,095
390,000
748,947
30,981
8,083,933
538,472
1,209,338
82,254
234,433
22,706
150,000
164,364
4,350
703,772
286,571
1,291,985
11,750,826
9,208,701
14,746,667
8,560,261
7,239,632
5,886,581
8
19
152,307
58,480
144,600
177,807
9,737
21
20
1,032,397
1,742,490
1,625,897
2,679,591
1,838,773
2,315,304
13,374,043
10,696,630
9,587,362
16
17
12
12
18
19
21
20
35
15
Net current assets

Deferred tax liabilities
Finance lease obligations (non-current)
Loans from shareholders and directors
(non-current)
Term loans (non-current)
Total net assets
A-6

31 DECEMBER 2008, 2009 AND 2010
as at 31 December 2008, 2009 and 2010 (contd)
Note
Share capital and reserves

Share capital
Accumulated profits
Capital reserve
Translation reserve
22
23
2010
$
2009
$
2008
$
8,134,740
5,812,040
322,393
(1,051,441)
8,134,740
3,305,706
322,393
(1,175,957)
8,134,740
1,993,269
322,393
(964,689)
13,217,732
156,311
10,586,882
109,748
9,485,713
101,649
13,374,043
10,696,630
9,587,362
The accompanying accounting policies and explanatory notes form an integral part of the financial
statements.
A-7

31 DECEMBER 2008, 2009 AND 2010
CONSOLIDATED PROFIT AND LOSS ACCOUNTS
for the financial years ended 31 December 2008, 2009 and 2010
Note
Turnover
Cost of sales
2009
$
2008
$
32,616,138
(21,897,153)
26,805,412
(19,617,616)
29,191,390
(22,088,842)
10,718,985
1,452,735
(2,654,288)
(3,555,725)
(225,125)
7,187,796
712,498
(2,077,241)
(3,484,476)
(215,788)
7,102,548
603,450
(2,290,990)
(3,284,443)
(158,768)
5,736,582
(301,659)
14,489
2,122,789
(486,697)
3,004
1,971,797
(622,949)
8,936
5,449,412
(896,600)
1,639,096
(296,930)
1,357,784
(393,875)
Profit for the year
4,552,812
1,342,166
963,909
Attributable to:
Equity holders of the Company
4,506,334
46,478
1,312,437
29,729
933,165
30,744
4,552,812
1,342,166
963,909
9.3
2.7
1.9
Gross profit
Profit from operations
Financial expenses
Interest income
Profit before tax
Tax expense
Earnings per share

Basic and diluted (cents)
24
2010
$
25
26
27
29
30
31
statements.
A-8

31 DECEMBER 2008, 2009 AND 2010
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Profit for the year

Other comprehensive income
Exchange differences on translating foreign operations
2010
$
2009
$
4,552,812
1,342,166
124,601
(214,613)
2008
$
963,909
(320,923)
Total comprehensive income for the year
4,677,413
1,127,553
642,986
Attributable to:
Equity holders of the Company
4,630,850
46,563
1,101,169
26,384
613,562
29,424
4,677,413
1,127,553
642,986
statements.
A-9

31 DECEMBER 2008, 2009 AND 2010
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Attributable to equity holders of the Company
As at 1 January 2008
Equity,
total
$
Equity
attributable
to owners of
the parent,
total
$
Share
capital
$
Accumulated
profits
$
8,948,676
8,872,151
8,134,740
1,060,104
322,393
Capital
reserve
$
Translation
reserve
$
Noncontrolling
interests
$
(645,086)
76,525
Profit for the year

Other comprehensive
income
963,909
933,165
933,165
(320,923)
(319,603)
(319,603)
(1,320)
Total comprehensive
income for the year
642,986
613,562
933,165
(319,603)
29,424
(1,097)
(1,097)
(3,203)
(3,203)
(4,300)
(4,300)
9,485,713
8,134,740
1,993,269
322,393
Dividends declared
to non-controlling
interest, representing
total contributions by
and distributions to
owners
Non-controlling
interest discharged
arising from the
disposal of interest
in a subsidiary,
representing
total changes in
ownership interests
in subsidiaries
Total transactions
with owners in their
capacity as owners
As at 31 December
2008
9,587,362
A-10
(964,689)
30,744
101,649

31 DECEMBER 2008, 2009 AND 2010
for the financial years ended 31 December 2008, 2009 and 2010 (contd)
Equity,
total
$
Equity
attributable
to owners of
the parent,
total
$
Share
capital
$
Accumulated
profits
$
9,587,362
9,485,713
8,134,740
1,993,269
322,393
Profit for the year

Other comprehensive
income
1,342,166
1,312,437
1,312,437
(211,268)
(3,345)
1,101,169
1,312,437
(211,268)
26,384
Total comprehensive
income for the year
(214,613)
1,127,553
(211,268)
Capital
reserve
$
Translation
reserve
$
Noncontrolling
interests
$
(964,689)
101,649
29,729
Dividends declared
to non-controlling
interest, representing
total contributions by
and distributions to
owners
Non-controlling
interest discharged
arising from the
disposal of interest
in a subsidiary,
representing
total changes in
ownership interests
in subsidiaries
(6,006)
(6,006)
(12,279)
(12,279)
Total transactions
with owners in their
capacity as owners
(18,285)
(18,285)
10,586,882
8,134,740
3,305,706
322,393
As at 31 December
2009
10,696,630
A-11
(1,175,957)
109,748

31 DECEMBER 2008, 2009 AND 2010
Profit for the year
Other comprehensive
income
Equity,
total
$
Equity
attributable
to owners of
the parent,
total
$
Share
capital
$
Accumulated
profits
$
10,696,630
10,586,882
8,134,740
3,305,706
322,393
4,552,812
4,506,334
4,506,334
46,478
124,601
124,516
124,516
85
Capital
reserve
$
Translation
reserve
$
Noncontrolling
interests
$
(1,175,957)
109,748
Total comprehensive
income for the year
Dividends (Note 32),
representing total
transactions with
owners in their
capacity as owners
4,677,413
4,630,850
4,506,334
124,516
46,563
(2,000,000)
(2,000,000)
(2,000,000)
As at 31 December
2010
13,374,043
13,217,732
8,134,740
A-12
5,812,040
322,393
(1,051,441)
156,311

31 DECEMBER 2008, 2009 AND 2010
CONSOLIDATED CASH FLOWS STATEMENT
Note
Cash flows from operating activities

Profit before tax
Adjustments:
Allowance for doubtful trade debts
Allowance for doubtful trade debts written back
Sundry debts written off
Allowance for doubtful sundry debts
Allowance for doubtful sundry debts written back
Allowance for doubtful debts due from an affiliated
company
Allowance for doubtful debts due from an affiliated
company written back
Inventories written down
Inventories written back
Fixed asset written off
Loss on disposal of subsidiary
Loss on disposal of unquoted investment
Gain on disposal of investment in associated
company
Gain on disposal of investment properties, net
Gain on disposal of fixed assets, net
Depreciation of fixed assets
Depreciation of investment properties
Net fair value loss on derivatives
Interest expense
Interest income
Negative goodwill written off
Warranty expense
Translation difference
2010
$
2009
$
2008
$
5,449,412
1,639,096
1,357,784
33,367
(66,996)
12,273
(8,914)
Operating profit before working capital changes
(49,991)
(1,154,215)
342
(43,928)
557,059
33,814
38
(1,062,245)
(7,881)
432,741
24,999
203
301,659
(14,489)
50,000
47,081
(53,747)
416,336
12,008
486,697
(3,004)
(200,749)
3,987,346
A-13
456,233
(176,827)
80,474
(222,402)
2,981,098
119,381
(505,015)
11,848
222,928
180,639
1,074,247
50
(1)
(4,474)
412,725
12,897
622,949
(8,936)
(1,512)
(249,797)
3,245,713

31 DECEMBER 2008, 2009 AND 2010
Note
Cash flows from operating activities (contd)

(Increase)/decrease in:
Gross amount due to customers for contract workin-progress
Inventories
Other receivables
Deposits and prepayments
Trade debtors
Due from affiliated company, net
Due from associated company, net
Due from holding company, net
Increase/(decrease) in:
Trade payables
Trust receipts and bills payable
Other creditors
2010
$
2009
$
2008
$
593,000
1,063,381
(14,878)
(700,308)
(2,399,825)
186,608
21,978
2,498,490
401,839
(358,198)
1,659,976
441,623
46,959
(1,485,834)
274,465
466,620
442,510
285,669
329,586
(332,276)
133,352
(740,703)
498,778
(180,174)
(612,797)
(3,919,694)
(269,738)
720,264
(793,832)
(672,923)
31,360
(176,006)
Cash generated from operations

Interest paid
Income taxes paid
Income taxes refunded
Interest income
2,448,555
(301,659)
(389,192)
26,015
14,489
3,589,822
(486,697)
(462,286)
110,822
3,004
1,615,052
(622,949)
(211,380)
8,936
Net cash generated from operating activities
1,798,208
2,754,665
789,659
11,059
Cash flows from investing activities

Proceeds from disposal of unquoted investment
Acquisition of additional equity interest in subsidiary
companies
Proceeds from disposal of investment properties
Proceeds from disposal of associated company
Proceed from sale of fixed assets
Purchase of fixed assets
Net cash generated from/(used in) investing activities
A-14
1,203,002
13,526
(344,410)
56,872
(341,462)
(1,691)
1
5,730
(309,202)
872,118
(273,531)
(305,162)

31 DECEMBER 2008, 2009 AND 2010
Note
2010
$
2009
$
2008
$
Cash flows from financing activities

Dividends paid
Repayment of loans from shareholders and directors
Repayment of loans from related party
Repayment of finance lease obligations
Repayment of term loans
Proceeds from term loans
(446,208)
(433,500)
(17,193)
(1,238,407)
(5,965)
(526,648)
(150,000)
(14,087)
(773,337)
1,600,000
(16,112)
(111,051)
(26,102)
(129,676)
507,920
Net cash (used in)/generated from financing activities
(2,135,308)
129,963
224,979
Net increase in cash and cash equivalents

Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year
33
535,018
3,157,501
2,611,097
546,404
709,476
(163,072)
3,692,519
3,157,501
546,404
statements.
A-15

31 DECEMBER 2008, 2009 AND 2010
NOTES TO THE FINANCIAL STATEMENTS
31 December 2008, 2009 and 2010
1.
Corporate information
Far East Group Limited (formerly known as Far East Group Pte. Ltd.) (the Company) is a private
limited company domiciled and incorporated in Singapore. The address of the Companys registered
office and principal place of business is 112 Lavender Street, #04-00 Far East Refrigeration
Building, Singapore 338728.
The Companys holding and ultimate holding company is Universal Pte. Ltd., incorporated in
Singapore.
The principal activities of the Company consist of trading of refrigeration parts, servicing of
refrigerators and cold rooms, construction and installation of commercial refrigerators and cold
rooms and all other incidental business of refrigeration.
The principal activities of the subsidiary companies are shown in Note 6.
2.
Summary of significant accounting policies
2.1
Basis of preparation
The consolidated financial statements of the Group have been prepared in accordance with
Singapore Financial Reporting Standards (FRS).
The financial statements have been prepared on a historical cost basis except as disclosed in the
accounting policies below.
The financial statements are presented in Singapore Dollars (SGD or $).
2.2
Changes in accounting policies

The accounting policies adopted have been consistently applied by the Group during the financial
years ended 31 December 2008, 2009 and 2010, except for the adoption of the following standards
and interpretations that are mandatory for annual periods beginning on or after 1 January 2008,
2009 and 2010:
Amendments to FRS 1 (Revised) Presentation of Financial Statements (Capital Disclosures)
FRS 107 Financial Instruments: Disclosures
FRS 1 Presentation of Financial Statements (Revised)
Amendments to FRS 18 Revenue
Amendments to FRS 23 Borrowing Costs
Amendments to FRS 32 Financial Instruments: Presentation and FRS 1 Puttable Financial
Instruments and Obligations Arising on Liquidation
Amendments to FRS 101 First-time Adoption of Financial Reporting Standards and FRS 27
Consolidated and Separate Financial Statements Cost of an Investment in a Subsidiary,
Jointly Controlled Entity or Associate
A-16

31 DECEMBER 2008, 2009 AND 2010
31 December 2008, 2009 and 2010 (contd)
2.
Summary of significant accounting policies (contd)
2.2
Changes in accounting policies (contd)

Amendments to FRS 102 Share-based Payment Vesting Conditions and Cancellations
Amendments to FRS 107 Financial Instruments: Disclosures
FRS 108 Operating Segments
INT FRS 113 Customer Loyalty Programmes
INT FRS 116 Hedges of a Net Investment in a Foreign Operation
INT FRS 118 Transfer of Assets from Customers
Improvements to FRSs issued in 2008
FRS 103 Business Combinations (revised) and FRS 27 Consolidated and Separate Financial
Statements (revised)
Amendments to FRS 39 Financial Instruments: Recognition and Measurement Eligible
Hedged Item
Amendments to FRS 105 Non-current Assets Held for Sale and Discontinued Operations
INT FRS 117 Distribution of Non-cash Assets to Owners
Improvements to FRSs issued in 2009
Adoption of these standards and interpretations did not have any effect on the financial performance
or position of the Group. They did however give rise to additional disclosures, including, in some
cases, revisions to accounting policies.
The principal effect of these changes are as follows:
Amendments to FRS 1 Presentation of Financial Statements (Capital Disclosures)
Amendments to FRS 1 require the Group to make new disclosures to enable users of the financial
statements to evaluate the Groups objectives, policies and processes for managing capital. These
new disclosures are shown in Note 36.
FRS 107 Financial Instruments: Disclosure
This standard requires disclosures that enable users to evaluate the significance of the Groups
financial instruments and the nature and extent of risks arising from those financial instruments.
The new disclosures are included throughout the financial statements.
FRS 1 Presentation of Financial Statements Revised presentation
The revised FRS 1 separates owner and non-owner changes in equity. The statement of changes
in equity includes only details of transactions with owners, with all non-owner changes in equity
presented in the statement of other comprehensive income. In addition, the Standard introduces
the statement of comprehensive income which presents income and expense recognised in the
period. This statement may be presented in one single statement, or two linked statements. The
Group has elected to present this statement as two linked statements.
A-17

31 DECEMBER 2008, 2009 AND 2010
2.
2.2

Amendments to FRS 107 Financial Instruments: Disclosures
The amendments enhance disclosures about fair value measurement and liquidity risk. The
amendments introduce a three-level hierarchy for fair value measurement disclosures for each
class of financial instruments recorded at fair value. For liquidity disclosure, the amendments
permit derivative liabilities to be excluded from maturity analysis, unless the contractual maturities
are essential for an understanding of the timing of the cash flows. The amendments also require
issued financial guarantee contracts to be recorded in the contractual maturity analysis based on
the maximum amount guaranteed, and allocated to the earliest date the financial guarantee can
be drawn down, irrespective of whether it is likely that the guarantees will be drawn or the amount
that is expected to be paid. The liquidity disclosures and fair value measurement disclosures are
presented in Notes 36 and 37.
FRS 103 Business Combinations (revised)
The revised FRS 103 introduces a number of changes to the accounting for business combinations
that will impact the amount of goodwill recognised, the reported results in the period that an
acquisition occurs, and future reported results. Changes in significant accounting policies resulting
from the adoption of the revised FRS 103 include:
-
Transaction costs would no longer be capitalised as part of the cost of acquisition but will be
expensed immediately;
Consideration contingent on future events are recognised at fair value on the acquisition date
and any changes in the amount of consideration to be paid will no longer be adjusted against
goodwill but recognised in profit or loss;
The Group elects for each acquisition of a business, to measure non-controlling interest at
fair value, or at the non-controlling interests proportionate share of the acquirees identifiable
net assets, and this impacts the amount of goodwill recognised; and
When a business is acquired in stages, the previously held equity interests in the acquiree
is remeasured to fair value at the acquisition date with any corresponding gain or loss
recognised in profit or loss, and this impacts the amount of goodwill recognised.
According to its transitional provisions, the revised FRS 103 has been applied prospectively. Assets
and liabilities that arose from business combinations whose acquisition dates are before 1 January
2010 are not adjusted.
A-18

31 DECEMBER 2008, 2009 AND 2010
2.
2.2

FRS 27 Consolidated and Separate Financial Statements (revised)
Changes in significant accounting policies resulting from the adoption of the revised FRS 27
include:
2.3
A change in the ownership interest of a subsidiary that does not result in a loss of control
is accounted for as an equity transaction. Therefore, such a change will have no impact on
goodwill, nor will it give rise to a gain or loss recognised in profit or loss;
Losses incurred by a subsidiary are allocated to the non-controlling interest even if the losses
exceed the non-controlling interest in the subsidiarys equity; and
When control over a subsidiary is lost, any interest retained is measured at fair value with the
corresponding gain or loss recognised in profit or loss.
According to its transitional provisions, the revised FRS 27 has been applied prospectively,
and does not impact the Groups consolidated financial statements in respect of transactions
with non-controlling interests, attribution of losses to non-controlling interests and disposal
of subsidiaries before 1 January 2010. The changes will affect future transactions with noncontrolling interests.
FRS and INT FRS not yet effective

The Group has not adopted the following standards and interpretations that have been issued but
not yet effective:
Effective for annual
periods beginning
on or after
Description
Amendment to FRS 32 Financial Instruments: Presentation - Classification
of Rights Issues
1 February 2010
Amendments to FRS 101 Additional Exemptions for First-time Adopters
1 July 2010
INT FRS 119 Extinguishing Financial Liabilities with Equity Instruments
1 July 2010
Revised FRS 24 Related Party Disclosures
1 January 2011
Amendments to INT FRS 114 Prepayments of a Minimum Funding

Requirement
1 January 2011
INT FRS 115 Agreements for the Construction of Real Estate
1 January 2011
Improvements to FRSs 2010
1 January 2011
Amendments to FRS 101 Severe Hyperinflation and Removal of Fixed

Dates for First-time Adopters
1 July 2011
Amendments to FRS 107 Disclosures: Transfer of Financial Assets
1 July 2011
Amendments to FRS 101 Severe Hyperinflation and Removal of Fixed

Dates for First-time Adopters
1 January 2012
Amendments to FRS 12 Deferred Tax: Recovery of Underlying Assets
1 January 2012
A-19

31 DECEMBER 2008, 2009 AND 2010
2.
2.3
FRS and INT FRS not yet effective (contd)

Except for the revised FRS 24, the directors expect that the adoption of the other standards and
interpretations above will have no material impact on the financial statements in the period of initial
application. The nature of the impending changes in accounting policy on adoption of the revised
FRS 24 is described below.
Revised FRS 24 Related Party Disclosures
The revised FRS 24 clarifies the definition of a related party to simplify the identification of such
relationships and to eliminate inconsistencies in its application. The revised FRS 24 expands
the definition of a related party and would treat two entities as related to each other whenever
a person (or a close member of that persons family) or a third party has control or joint control
over the entity, or has significant influence over the entity. The revised standard also introduces a
partial exemption of disclosure requirements for government-related entities. The Group is currently
determining the impact of the changes to the definition of a related party has on the disclosure of
related party transaction. As this is a disclosure standard, it will have no impact on the financial
position or financial performance of the Group when implemented in 2011.
2.4
Foreign currency
The Groups financial statements are presented in Singapore dollars, which is also the Companys
functional currency. Each entity in the Group determines its own functional currency and items
included in the financial statement of each entity are measured using that functional currency.
(a)
Foreign currency transactions

Transactions in foreign currencies are measured in the respective functional currencies of
the Company and its subsidiaries and are recorded on initial recognition in the functional
currencies at exchange rates approximating those ruling at the transaction dates. Monetary
assets and liabilities denominated in foreign currencies are translated at the rate of exchange
ruling at the balance sheet date. Non-monetary items that are measured in terms of historical
cost in a foreign currency are translated using the exchange rates as at the dates of the
initial transactions. Non-monetary items measured at fair value in a foreign currency are
translated using the exchange rates at the date when the fair value was determined.
Exchange differences arising on the settlement of monetary items or on translating monetary
items at the balance sheet date are recognised in profit or loss except for exchange
differences arising on monetary items that form part of the Groups net investment in foreign
operations, which are recognised initially in other comprehensive income and accumulated
under foreign currency translation reserve in equity. The foreign currency translation reserve
is reclassified from equity to profit or loss of the Group on disposal of the foreign operation.
A-20

31 DECEMBER 2008, 2009 AND 2010
2.
2.4
Foreign currency (contd)

(b)
Group companies
On consolidation, the results and financial position of foreign operations are translated into
SGD using the following procedures:
-
Assets and liabilities are translated at the rate ruling at that balance sheet date; and
Income and expenses are translated at average exchange rates for the year, which
approximates the exchange rates at the dates of the transactions.
All resulting exchange differences are recognised initially in other comprehensive income and
accumulated under a separate component of equity as foreign currency translation reserve.
On disposal of a foreign operation, the cumulative amount recognised in foreign currency
translation reserve relating to that foreign operation is recognised in profit or loss.
In the case of a partial disposal without loss of control of a subsidiary that includes a foreign
operation, the proportionate share of the cumulative amount of the exchange differences are
re-attributed to non-controlling interest and are not recognised in profit or loss.
2.5
Subsidiaries and basis of consolidation

(a)
Subsidiaries
A subsidiary is an entity over which the Group has the power to govern the financial and
operating policies so as to obtain benefits from its activities. The Group generally has such
power when it, directly or indirectly, holds more than 50% of the issued share capital, or
controls more than half of the voting power, or controls the composition of the board of
directors.
A-21

31 DECEMBER 2008, 2009 AND 2010
2.
2.5
Subsidiaries and basis of consolidation (contd)

(b)
Basis of consolidation
Business combinations from 1 January 2010
The consolidated financial statements comprise the financial statements of the Company
and its subsidiaries as at the end of the reporting period. The financial statements of the
subsidiaries used in the preparation of the consolidated financial statements are prepared for
the same reporting date as the Company. Consistent accounting policies are applied to like
transactions and events in similar circumstances.
All intra-group balances, income and expenses and unrealised gains and losses resulting
from intra-group transactions are eliminated in full.
Subsidiaries are consolidated from the date of acquisition, being the date on which the Group
obtains control, and continue to be consolidated until the date that such control ceases.
Business combinations are accounted for by applying the acquisition method. Identifiable
assets acquired and liabilities assumed in a business combination are measured initially at
their fair values at the acquisition date. Acquisition-related costs are recognised as expenses
in the periods in which the costs are incurred and the services are received.
When the Group acquires a business, it assesses the financial assets and liabilities assumed
for appropriate classification and designation in accordance with the contractual terms,
economic circumstances and pertinent conditions as at the acquisition date. This includes
the separation of embedded derivatives in host contracts by the acquiree.
Any contingent consideration to be transferred by the acquirer will be recognised at fair value
at the acquisition date. Subsequent changes to the fair value of the contingent consideration
which is deemed to be an asset or liability, will be recognised in accordance with FRS
39 either in profit or loss or as change to other comprehensive income. If the contingent
consideration is classified as equity, it is not be remeasured until it is finally settled within
equity.
In business combinations achieved in stages, previously held equity interests in the acquiree
are remeasured to fair value at the acquisition date and any corresponding gain or loss is
recognised in profit or loss.
The Group elects for each individual business combination, whether non-controlling interest
in the acquiree (if any) is recognised on the acquisition date at fair value, or at the noncontrolling interests proportionate share of the acquiree identifiable net assets.
Any excess of the sum of the fair value of the consideration transferred in the business
combination, the amount of non-controlling interest in the acquiree (if any), and the fair value
of the Groups previously held equity interest in the acquiree (if any), over the net fair value
of the acquirees identifiable assets and liabilities is recorded as goodwill. In instances where
the latter amount exceeds the former, the excess is recognised as gain on bargain purchase
in profit or loss on the acquisition date.
A-22

31 DECEMBER 2008, 2009 AND 2010
2.
2.5
Subsidiaries and basis of consolidation (contd)

(b)
Basis of consolidation (contd)

Business combinations before 1 January 2010
In comparison to the above mentioned requirements, the following differences applied:
Business combinations are accounted for by applying the purchase method. Transaction
costs directly attributable to the acquisition formed part of the acquisition costs. The noncontrolling interest (formerly known as minority interest) was measured at the proportionate
share of the acquirees identifiable net assets.
Business combinations achieved in stages were accounted for as separate steps.
Adjustments to those fair values relating to previously held interests are treated as a
revaluation and recognised in equity.
When the Group acquired a business, embedded derivatives separated from the host
contract by the acquiree are not reassessed on acquisition unless the business combination
results in a change in the terms of the contract that significantly modifies the cash flows that
would otherwise be required under the contract.
Contingent consideration was recognised if, and only if, the Group had a present obligation,
the economic outflow was more likely than not and a reliable estimate was determinable.
Subsequent measurements to the contingent consideration affected goodwill.
2.6
Transactions with non-controlling interests

Non-controlling interest represents the equity in subsidiaries not attributable, directly or indirectly, to
owners of the Group, and are presented separately in the consolidated statement of comprehensive
income and within equity in the consolidated balance sheet, separately from equity attributable to
owners of the Group.
Changes in the Group owners ownership interest in a subsidiary that do not result in a loss of
control are accounted for as equity transactions. In such circumstances, the carrying amounts of
the controlling and non-controlling interests are adjusted to reflect the changes in their relative
interests in the subsidiary. Any difference between the amount by which the non-controlling interest
is adjusted and the fair value of the consideration paid or received is recognised directly in equity
and attributed to owners of the parent.
2.7
Affiliated companies
An affiliated company is a company, not being a subsidiary company, associated company or joint
venture company in which one or more of the directors or shareholders of the Company or its
subsidiaries have a significant equity interest or exercise significant influence.
A-23

31 DECEMBER 2008, 2009 AND 2010
2.
2.8
Related parties
A party is considered to be related to the Group if:
(a)
2.9
The party, directly or indirectly through one or more intermediaries,

(i)
controls, is controlled by, or is under common control with, the Group;
(ii)
has an interest in the Group that gives it significant influence over the Group; or
(iii)
has joint control over the Group;
(b)
The party is an associate;
(c)
The party is a jointly-controlled entity;
(d)
The party is a member of the key management personnel of the Group or its parent;
(e)
The party is a close member of the family of any individual referred to in (a) or (d); or
(f)
The party is an entity that is controlled, jointly controlled or significantly influenced by or for
which significant voting power in such entity resides with, directly or indirectly, any individual
referred to in (d) or (e); or
(g)
The party is a post-employment benefit plan for the benefit of the employees of the Group, or
of any entity that is a related party of the Group.
Fixed assets
All fixed assets are initially recorded at cost. Such cost includes the cost of replacing part of the
fixed asset and borrowing costs that are directly attributable to the acquisition, construction or
production of a qualifying fixed asset. The accounting policy for borrowing cost is set out in Note
2.18. The cost of an item of fixed asset is recognised as an asset, if and only if, it is probable that
future economic benefits associated with the item will flow to the Group and the cost of the item
can be measure reliably.
Subsequent to recognition, fixed assets are measured at cost less accumulated depreciation and
any accumulated impairment losses.
Freehold land has an unlimited useful life and therefore is not depreciated. Depreciation is
computed on a straight-line basis over the estimated useful life of the asset as follows:
Buildings
Leasehold land and buildings
Plant and machinery
Motor vehicles
Renovation
Computers
50 years
Lease term
5 to 10 years
5 years
3 to 10 years
3 to 10 years
3 years
A-24

31 DECEMBER 2008, 2009 AND 2010
2.
2.9
Fixed assets (contd)

The carrying values of fixed assets are reviewed for impairment when events or changes in
circumstances indicate that the carrying value may not be recoverable.
The residual value, useful life and depreciation method are reviewed at each financial year-end,
and adjusted prospectively, if appropriate.
A fixed asset is derecognised upon disposal or when no future economic benefits are expected
from its use or disposal. Any gain or loss arising on derecognition of the asset is included in profit
or loss in the year the asset is derecognised.
2.10 Investment properties

Investment properties are properties that are either owned by the Group or leased under a
finance lease in order to earn rentals or for capital appreciation, or both, rather than for use in the
production or supply of goods or services, or for administrative purposes, or in the ordinary course
of business. Investment properties comprise completed investment properties and properties
that are being constructed or developed for future use as investment properties. Properties held
under operating leases are classified as investment properties when the definition of investment
properties is met and they are accounted for as finance leases. The carrying amount includes
the cost of replacing part of an existing investment property at the time that cost is incurred if the
recognition criteria is met.
Investment properties are initially recorded at cost including transaction costs. Subsequent to
recognition, the Groups investment properties are measured at cost less accumulated depreciation
and accumulated impairment losses.
Freehold land that is classified as investment property has an unlimited useful life and therefore is
not depreciated. Depreciation of other investment properties is computed on a straight-line basis
over the estimated useful life of 50 years.
Investment properties are derecognised when either they have been disposed of or when the
investment property is permanently withdrawn from use and no future economic benefit is expected
from its disposal. Any gains or loss on the retirement or disposal of an investment property are
recognised in profit or loss in the year of retirement or disposal.
A-25

31 DECEMBER 2008, 2009 AND 2010
2.
2.11 Impairment of non-financial assets

The Group assesses at each reporting date whether there is an indication that an asset may be
impaired. If any such indication exists, or when annual impairment testing for an asset is required,
the Group makes an estimate of the assets recoverable amount.
An assets recoverable amount is the higher of an assets or cash-generating units fair value less
costs to sell and its value in use and is determined for an individual asset, unless the asset does
not generate cash inflows that are largely independent of those from other assets or groups of
assets. Where the carrying amount of an asset or cash-generating unit exceeds its recoverable
amount, the asset is considered impaired and is written down to its recoverable amount. In
assessing value in use, the estimated future cash flows expected to be generated by the asset
are discounted to their present value using a pre-tax discount rate that reflects current market
assessments of the time value of money and the risks specific to the asset. Impairment losses of
continuing operations are recognised in profit or loss in those expense categories consistent with
the function of the impaired asset.
An assessment is made at each reporting date as to whether there is any indication that previously
recognised impairment losses recognised for an asset may no longer exist or may have decreased.
If such indication exists, the Group estimates the assets or cash generating units recoverable
amount. A previously recognised impairment loss is reversed only if there has been a change in
the estimates used to determine the assets recoverable amount since the last impairment loss
was recognised. If that is the case, the carrying amount of the asset is increased to its recoverable
amount. That increase cannot exceed the carrying amount that would have been determined, net of
depreciation, had no impairment loss been recognised previously. Reversal of an impairment loss
is recognised in profit or loss. After such a reversal, the depreciation charge is adjusted in future
periods to allocate the assets revised carrying amount, less any residual value, on a systematic
basis over its remaining useful life.
2.12 Financial assets
Initial recognition and measurement
Financial assets are recognised on the balance sheet when, and only when, the Group becomes
a party to the contractual provisions of the financial instrument. The Group determines the
classification of its financial assets at initial recognition.
When financial assets are recognised initially, they are measured at fair value, plus, in the case of
financial assets not at fair value through profit or loss, directly attributable transaction costs.
A-26

31 DECEMBER 2008, 2009 AND 2010
2.
2.12 Financial assets (contd)

Subsequent measurement
The subsequent measurement of financial assets depends on their classification as follows:
(a)
Financial assets at fair value through profit or loss

Financial assets at fair value through profit or loss include financial assets held for trading
and financial assets designated upon initial recognition at fair value through profit or loss.
Financial assets are classified as held for trading if they are acquired for the purpose of
selling or repurchasing in the near term. This category includes derivative financial
instruments entered into by the Group that are not designated as hedging instruments in
hedge relationships as defined by FRS 39. Derivatives, including separated embedded
derivatives are also classified as held for trading unless they are designated as effective
hedging instruments.
The Group has not designated any financial assets upon initial recognition at fair value
through profit or loss.
Subsequent to initial recognition, financial assets at fair value through profit or loss are
measured at fair value. Any gains or losses arising from changes in fair value of the financial
assets are recognised in profit or loss. Net gains or net losses on financial assets at fair
value through profit or loss include exchange differences, interest and dividend income.
(b)
Loans and receivables

Non-derivative financial assets with fixed or determinable payments that are not quoted in an
active market are classified as loans and receivables. Subsequent to initial recognition, loans
and receivables are measured at amortised cost using the effective interest method, less
impairment. Gains and losses are recognised profit or loss when the loans and receivables
are derecognised or impaired, and through the amortisation process.
(c)
Available-for-sale financial assets

Available-for-sale financial assets include equity and debt securities. Equity investments
classified as available-for-sale are those, which are neither classified as held for trading nor
designated at fair value through profit or loss.
The Group classifies its unquoted investment as available-for-sale financial assets.
After initial recognition, available-for-sale financial assets are measured at fair value. Any
gains or losses from changes in fair value of the financial asset are recognised in other
comprehensive income, except that impairment losses, foreign exchange gains and losses
on monetary items and interest calculated using the effective interest method are recognised
in profit or loss. The cumulative gain or loss previously recognised in other comprehensive
income is reclassified from equity to profit or loss as a reclassification adjustment when the
financial asset is derecognised.
Investments in equity instruments that do not have a quoted market price in an active market
and whose fair value cannot be reliably measured are measured at cost less impairment
loss.
A-27

31 DECEMBER 2008, 2009 AND 2010
2.
2.12 Financial assets (contd)

Derecognition
A financial asset is derecognised where the contractual right to receive cash flows from the asset
has expired. On derecognition of a financial asset in its entirety, the difference between the carrying
amount and the sum of the consideration received and any cumulative gain or loss that had been
recognised in other comprehensive income is recognised in profit or loss.
2.13 Cash and cash equivalents
Cash and cash equivalents comprise cash on hand, demand deposits and short-term, highly liquid
investments that are readily convertible to known amounts of cash and which are subject to an
insignificant risk of changes in value. These also include bank overdrafts that form an integral part
of the Groups cash management.
2.14 Impairment of financial assets
The Group assesses at each balance sheet date whether there is any objective evidence that a
financial asset is impaired.
(a)
Financial assets carried at amortised cost

For financial assets carried at amortised cost, the Group first assesses individually whether
objective evidence of impairment exists individually for financial assets that are individually
significant, or collectively for financial assets that are not individually significant. If the Group
determines that no objective evidence of impairment exists for an individually assessed
financial asset, whether significant or not, it includes the asset in a group of financial
assets with similar credit risk characteristics and collectively assesses them for impairment.
Assets that are individually assessed for impairment and for which an impairment loss is, or
continues to be recognised are not included in a collective assessment of impairment.
If there is objective evidence that an impairment loss on financial assets carried at amortised
cost has been incurred, the amount of the loss is measured as the difference between the
assets carrying amount and the present value of estimated future cash flows discounted
at the financial assets original effective interest rate. If a loan has a variable interest rate,
the discount rate for measuring any impairment loss is the current effective interest rate.
The carrying amount of the asset is reduced through the use of an allowance account. The
impairment is recognised in profit or loss.
When the asset becomes uncollectible, the carrying amount of impaired financial assets is
reduced directly or if an amount was charged to the allowance account, the amounts charged
to the allowance account are written off against the carrying value of the financial asset.
To determine whether there is objective evidence that an impairment loss on financial assets
has been incurred, the Group considers factors such as the probability of insolvency or
significant financial difficulties of the debtor and default or significant delay in payments.
If, in a subsequent period, the amount of the impairment loss decreases and the decrease
can be related objectively to an event occurring after the impairment was recognised, the
previously recognised impairment loss is reversed. Any subsequent reversal of an impairment
loss is recognised in profit or loss, to the extent that the carrying value of the asset does not
exceed its amortised cost at the reversal date.
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31 DECEMBER 2008, 2009 AND 2010
2.
2.14 Impairment of financial assets (contd)

(b)
Financial assets carried at cost

If there is objective evidence (such as significant adverse changes in the business
environment where the issuer operates, probability of insolvency or significant financial
difficulties of the issuer) that an impairment loss on a financial asset carried at cost has been
incurred, the amount of the loss is measured as the difference between the assets carrying
amount and the present value of estimated future cash flows discounted at the current
market rate of return for a similar financial asset. Such impairment losses are not reversed in
subsequent periods.
(c)

In the case of equity investments classified as available-for-sale, objective evidence of
impairment include (i) significant financial difficulty of the issuer or obligor, (ii) information
about significant changes with an adverse effect that have taken place in the technological,
market, economic or legal environment in which the issuer operates, and indicates that the
cost of the investment in equity instrument may not be recovered; and (iii) a significant or
prolonged decline in the fair value of the investment below its costs. Significant is to be
evaluated against the original cost of the investment and prolonged against the period in
which the fair value has been below its original cost.
If an available-for-sale financial asset is impaired, an amount comprising the difference
between its acquisition cost (net of any principal payment and amortisation) and its current
fair value, less any impairment loss previously recognised in profit or loss, is transferred from
other comprehensive income and recognised in profit or loss. Reversals of impairment losses
in respect of equity instruments are not recognised in profit or loss; increase in their fair value
after impairment are recognised directly in other comprehensive income.
In the case of debt instruments classified as available-for-sale, impairment is assessed
based on the same criteria as financial assets carried at amortised cost. However, the
amount recorded for impairment is the cumulative loss measured as the difference between
the amortised cost and the current fair value, less any impairment loss on that investment
previously recognised in profit or loss. Future interest income continues to be accrued based
on the reduced carrying amount of the asset and is accrued using the rate of interest used to
discount the future cash flows for the purpose of measuring the impairment loss. The interest
income is recorded as part of finance income. If, in a subsequent year, the fair value of a
debt instrument increases and the increases can be objectively related to an event occurring
after the impairment loss was recognised in profit or loss, the impairment loss is reversed in
profit or loss.
A-29

31 DECEMBER 2008, 2009 AND 2010
2.
2.15 Inventories
Inventories are stated at the lower of cost and net realisable value.
Cost is determined using the weighted average method. The cost of raw materials includes cost of
purchase. The cost of work-in-progress and finished goods includes materials, all direct expenditure
and an attributable proportion of overheads.
Where necessary, allowance is provided for damaged, obsolete and slow moving items to adjust
the carrying value of inventories to the lower of cost and net realisable value.
Net realisable value is the estimated selling price in the ordinary course of business, less estimated
costs of completion and the estimated costs necessary to make the sale.
2.16 Financial liabilities
Initial recognition and measurement
Financial liabilities are recognised on the balance sheet when, and only when, the Group becomes
a party to the contractual provisions of the financial instrument. The Group determines the
classification of its financial liabilities at initial recognition.
All financial liabilities are recognised initially at fair value plus, in the case of financial liabilities not
at fair value through profit or loss, directly attributable transaction costs.
Subsequent measurement
The measurement of financial liabilities depends on their classification as follows:
(a)
Financial liabilities at fair value through profit or loss

Financial liabilities at fair value through profit or loss includes financial liabilities held for
trading and financial liabilities designated upon initial recognition as at fair value. Financial
liabilities are classified as held for trading if they are acquired for the purpose of selling in the
near term. This category includes derivative financial instruments entered into by the Group
that are not designated as hedging instruments in hedge relationships. Separated embedded
derivatives are also classified as held for trading unless they are designated as effective
hedging instruments.
Subsequent to initial recognition, financial liabilities at fair value through profit or loss are
measured at fair value. Any gains or losses arising from changes in fair value of the financial
liabilities are recognised in profit or loss.
The Group has not designated any financial liabilities upon initial recognition at fair value
through profit or loss.
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31 DECEMBER 2008, 2009 AND 2010
2.
2.16 Financial liabilities (contd)

Subsequent measurement (contd)
(b)
Other financial liabilities

After initial recognition, other financial liabilities are subsequently measured at amortised
cost using the effective interest rate method. Gains and losses are recognised in profit or
loss when the liabilities are derecognised, and through the amortisation process.
Derecognition
A financial liability is derecognised when the obligation under the liability is discharged or cancelled
or expires. When an existing financial liability is replaced by another from the same lender on
substantially different terms, or the terms of an existing liability are substantially modified, such an
exchange or modification is treated as a derecognition of the original liability and the recognition of
a new liability, and the difference in the respective carrying amounts is recognised in profit or loss.
2.17 Financial guarantee
A financial guarantee contract is a contract that requires the issuer to make specified payments to
reimburse the holder for a loss it incurs because a specified debtor fails to make payment when
due.
Financial guarantees are recognised initially at fair value, adjusted for transaction costs that are
directly attributable to the issuance of the guarantee. Subsequent to initial recognition, financial
guarantees are recognised as income in profit or loss over the period of the guarantee. If it is
probable that the liability will be higher than the amount initially recognised less amortisation, the
liability is recorded at the higher amount with the difference charged to profit or loss.
2.18 Borrowing costs
Borrowing costs are expenses when incurred except for borrowing costs directly attributable to the
acquisition, construction or production of a qualifying asset which are capitalised. Capitalisation of
borrowing costs commences when the activities to prepare the asset for its intended use or sale are
in progress and the expenditures and borrowing costs are incurred. Borrowing costs are capitalised
until the assets are substantially completed for their intended use or sale. All other borrowing costs
are expensed in the period they occur. Borrowing costs consist of interest and other costs that an
entity incurs in connection with the borrowing of funds.
2.19 Provisions
Provisions are recognised when the Group has a present obligation (legal or constructive) where, as a
result of a past event, it is probable that an outflow of resources embodying economic benefits will be
required to settle the obligation and a reliable estimate can be made of the amount of the obligation.
Provisions are reviewed at each balance sheet date and adjusted to reflect the current best
estimate. If it is no longer probable that an outflow of economic resources will be required to
settle the obligation, the provision is reversed. If the effect of the time value of money is material,
provisions are discounted using a current pre tax rate that reflects, where appropriate, the risks
specific to the liability. When discounting is used, the increase in the provision due to the passage
of time is recognised as a finance cost.
A-31

31 DECEMBER 2008, 2009 AND 2010
2.
2.20 Employee benefits

(a)
Defined contribution plans

The Group participates in the national pension schemes as defined by the laws of the
countries in which it has operations. In particular, the Singapore companies in the Group
make contributions to the Central Provident Fund scheme in Singapore, a defined
contribution pension scheme. Contributions to national pension schemes are recognised as
an expense in the period in which the related service is performed.
(b)
Employee leave entitlement

Employee entitlements to annual leave are recognised as a liability when they accrue to
employees. The estimated liability for leave is recognised for services rendered by employees
up to balance sheet date.
2.21 Leases
The determination of whether an arrangement is, or contains a lease is based on the substance of
the arrangement at inception date: whether fulfilment of the arrangement is dependent on the use
of a specific asset or assets or the arrangement conveys a right to use the asset. For arrangements
entered into prior to 1 January 2005, the date of inception is deemed to be 1 January 2005 in
accordance with the transitional requirements of INT FRS 104.
(a)
As lessee
Finance leases, which transfer to the Group substantially all the risks and rewards incidental
to ownership of the leased item, are capitalised at the inception of the lease at the fair value
of the leased asset or, if lower, at the present value of the minimum lease payments. Any
initial direct costs are also added to the amount capitalised. Lease payments are apportioned
between the finance charges and reduction of the lease liability so as to achieve a constant
rate of interest on the remaining balance of the liability. Finance charges are charged to profit
or loss. Contingent rents, if any, are charged as expenses in the periods in which they are
incurred.
Capitalised leased assets are depreciated over the shorter of the estimated useful life of
the asset and the lease term, if there is no reasonable certainty that the Group will obtain
ownership by the end of the lease term.
Operating lease payments are recognised as an expense in profit or loss on a straight-line
basis over the lease term. The aggregate benefit of incentives provided by the lessor is
recognised as a reduction of rental expense over the lease term on a straight-line basis.
(b)
As lessor
Leases where the Group retains substantially all the risks and rewards of ownership of
the asset are classified as operating leases. Initial direct costs incurred in negotiating an
operating lease are added to the carrying amount of the leased asset and recognised over
the lease term on the same bases as rental income. The accounting policy for rental income
is set out in Note 2.22(e). Contingent rents are recognised as revenue in the period in which
they are earned.
A-32

31 DECEMBER 2008, 2009 AND 2010
2.
2.22 Revenue
Revenue is recognised to the extent that it is probable that the economic benefits will flow
to the Group and the revenue can be reliably measured. Revenue is measured at fair value of
consideration received or receivable, excluding discounts, rebates, and sales taxes or duty. The
Group assesses its revenue arrangements to determine if it is acting as principal or agent. The
Group has concluded that it is acting as a principal in all of its revenue arrangements. The following
specific recognition criteria must also be met before revenue is recognised:
(a)
Sale of goods
Revenue is recognised upon the transfer of significant risk and rewards of ownership of the
goods to the customer. Revenue is not recognised to the extent where there are significant
uncertainties regarding recovery of the consideration due, associated costs or the possible
return of goods.
(b)
Installation work on projects

Project revenue is recognised by reference to the stage of completion at the balance sheet
date. Stage of completion is determined by reference to cost incurred as a percentage of
total estimated cost for each contract. Where the contract outcome cannot be measured
reliably, revenue is recognised to the extent of the expenses recognised that are recoverable.
(c)
Interest income
Interest income is recognised using the effective interest method.
(d)
Dividend income
Dividend income is recognised when the Groups right to receive payment is established.
(e)
Rental income
Rental income is accounted for on a straight-line basis over the lease terms. The aggregate
costs of incentives provided to lessees are recognised as a reduction of rental income over
the lease term on a straight-line basis.
2.23 Income taxes

(a)
Current tax
Current tax assets and liabilities for the current and prior periods are measured at the
amount expected to be recovered from or paid to the taxation authorities. The tax rates and
tax laws used to compute the amount are those that are enacted or substantively enacted
by the balance sheet date, in the countries where the Group operates and generates taxable
income.
Current taxes are recognised in profit or loss except to the extent that the tax relates to
items recognised outside profit or loss, either in other comprehensive income or directly in
equity. Management periodically evaluates positions taken in the tax returns with respect to
situations in which applicable tax regulations are subject to interpretations and establishes
provisions where appropriate.
A-33

31 DECEMBER 2008, 2009 AND 2010
2.
2.23 Income taxes (contd)

(b)
Deferred tax
Deferred tax is provided using the liability method on temporary differences at the balance
sheet date between the tax bases of assets and liabilities and their carrying amounts for
financial reporting purposes.
Deferred tax liabilities are recognised for all temporary differences, except:
-
where the deferred tax liability arises from the initial recognition of goodwill or of an
asset or liability in a transaction that is not a business combination and, at the time of
the transaction, affects neither the accounting profit nor taxable profit or loss; and
In respect of temporary differences associated with investments in subsidiary, where

the timing of the reversal of the temporary differences can be controlled and it is
probable that the temporary differences will not reverse in the foreseeable future.
Deferred tax assets are recognised for all deductible temporary differences, carry forward of
unused tax credits and unused tax losses, to the extent that it is probable that taxable profit
will be available against which the deductible temporary differences, and the carry forward of
unused tax credits and unused tax losses can be utilised except:
-
where the deferred tax asset relating to the deductible temporary difference arises
from the initial recognition of an asset or liability in a transaction that is not a business
combination and, at the time of the transaction, affects neither the accounting profit
nor taxable profit or loss; and
in respect of deductible temporary differences associated with investments in

subsidiaries, deferred tax assets are recognised only to the extent that it is probable
that the temporary differences will reverse in the foreseeable future and taxable profit
will be available against which the temporary differences can be utilised.
The carrying amount of deferred tax assets is reviewed at each balance sheet date and
reduced to the extent that it is no longer probable that sufficient taxable profit will be available
to allow all or part of the deferred tax asset to be utilised. Unrecognised deferred tax assets
are reassessed at each balance sheet date and are recognised to the extent that it has
become probable that future taxable profit will allow the deferred tax asset to be utilised.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply
to the year when the asset is realised or the liability is settled, based on tax rates (and tax
laws) that have been enacted or substantively enacted at the balance sheet date.
Deferred tax relating to items recognised outside profit or loss is recognised outside profit or
loss. Deferred tax items are recognised in correlation to the underlying transaction either in
other comprehensive income or directly in equity and deferred tax arising from a business
combination is adjusted against goodwill on acquisition.
Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists
to set off current tax assets against current tax liabilities and the deferred taxes relate to the
same taxable entity and the same taxation authority.
A-34

31 DECEMBER 2008, 2009 AND 2010
2.
2.23 Income taxes (contd)

(c)
Sales tax
Revenues, expenses and assets are recognised net of the amount of sales tax except:
-
where the sales tax incurred on a purchase of assets or services is not recoverable
from the taxation authority, in which case the sales tax is recognised as part of the
cost of acquisition of the asset or as part of the expense item as applicable; and
receivables and payables that are stated with the amount of sales tax included.
The net amount of sales tax recoverable from, or payable to, the taxation authority is included
as part of receivables or payables in the balance sheet.
2.24 Share capital and share issue expense
Proceeds from issuance of ordinary shares are recognised as share capital in equity. Incremental
costs directly attributable to the issuance of ordinary shares are deducted against share capital.
2.25 Government grants
Government grants are recognised at their fair value when there is reasonable assurance that the
grant will be received and all attaching conditions will be complied with. When the grant relates
to an expense item, it is recognised in profit or loss as other operating income over the period
necessary to match them on a systematic basis to the costs that it is intended to compensate.
2.26 Segment reporting
For management purposes, the Group is organised into operating segments based on their
products and services which are independently managed by the respective segment managers
responsible for the performance of the respective segments under their charge. The segment
managers report directly to the management of the Company who regularly review the segment
results in order to allocate resources to the segments and to assess the segment performance.
Additional disclosures on each of these segments are shown in Note 39, including the factors used
to identify the reportable segments and the measurement basis of segment information.
A-35

31 DECEMBER 2008, 2009 AND 2010
3.
Significant accounting estimates and judgements

Estimates, assumptions concerning the future and judgements are made in the preparation of
the financial statements. They affect the application of the Groups accounting policies, reported
amounts of assets, liabilities, income and expenses, and disclosures made. They are assessed
on an on-going basis and are based on experience and relevant factors, including expectations of
future events that are believed to be reasonable under the circumstances. However, uncertainty
about these assumptions and estimates could result in outcomes that could require a material
adjustment to the carrying amount of the asset or liability affected in the future periods.
(a)
Key sources of estimation uncertainty

The key assumptions concerning the future and other key sources of estimation uncertainty
at the balance sheet date, that have a significant risk of causing a material adjustment to the
carrying amounts of assets and liabilities within the next financial year are discussed below.
(i)
Estimated useful lives of fixed assets

Fixed assets are depreciated on a straight-line basis over their estimated useful lives.
The estimated useful life reflects the managements estimate of the periods that the
Group intends to derive future economic benefits from the use of the fixed assets. The
carrying amount of the Groups fixed assets as at 31 December 2010 were $7,518,145
(2009: $7,402,526; 2008: $7,523,044). Changes in the business plans and strategies,
expected level of usage and future technological developments could impact the
economic useful lives of these assets, therefore future depreciation charges could be
revised.
(ii)
Impairment of receivables
The Group assesses at each balance sheet whether there is objective evidence that
receivables have been impaired. Impairment loss is calculated based on a review of
the current status of existing receivables and historical collections experience. Such
allowances are adjusted periodically to reflect the actual and past experience. As at
31 December 2010, the carrying amount of trade and other receivables of the Group,
including balances with affiliated, associated and holding companies amounted to
$7,019,346 (2009: $4,473,981; 2008: $7,266,463).
(iii)
Income taxes
The Group has exposure to income taxes in numerous jurisdictions. Significant
judgement is involved in determining the group-wide provision for income taxes. There
are certain transactions and computations for which the ultimate tax determination is
uncertain during the ordinary course of business. The Group recognises liabilities for
expected tax issues based on estimates of whether additional taxes will be due. Where
the final tax outcome of these matters is different from the amounts that were initially
recognised, such differences will impact the income tax and deferred tax provisions in
the period in which such determination is made. As at 31 December 2010, the carrying
amounts of the Groups provision for income tax, deferred tax assets and deferred tax
liabilities were $596,973 (2009: $125,095; $164,364), $174,014 (2009: $199,231; 2008:
$171,998) and $152,307 (2009: $144,600; 2008: $177,807) respectively.
A-36

31 DECEMBER 2008, 2009 AND 2010
3.
Significant accounting estimates and judgements (contd)

(a)
Key sources of estimation uncertainty (contd)

(iv)
Allowance for inventories

The management of the Group reviews an aging analysis of inventories at each
balance sheet date and makes allowance for obsolete and slow-moving inventory
items that are identified as obsolete and slow-moving. The carrying value of inventories
as at 31 December 2010 for the Group amounted to $8,199,554 (2009: $8,108,720;
2008: $11,164,269).
(v)

The provision for warranty is recognised for expected warranty claims, based on past
experience of the level of warranty claims. It is expected that all of these costs will
have been incurred within 1 year from the balance sheet date. The Group provided
$50,000 (2009: $Nil; 2008: $Nil) of warranty provisions as at 31 December 2010.
(vi)

The Group recognises project sales and installation works by reference to the stage
of completion at the balance sheet date, when the outcome of a contract can be
estimated reliably. The stage of completion is measured by reference to the proportion
that costs incurred for work performed to date bear to the estimated total contract
costs. Significant assumptions are required to estimate the total contract costs, and
these estimates are made based on experience and knowledge of project managers.
The carrying amounts of assets and liabilities arising from project sales and installation
works at the balance sheet date are disclosed in Note 14.
(b)
Critical judgements made in applying accounting policies

The following are the judgements made by management in the process of applying the
Groups accounting policies that have a significant effect on the amounts recognised in the
financial statements.
Impairment of investment
The Group follows the guidance of FRS 36 in determining when an investment is impaired.
This determination requires significant judgement. The Group evaluates, among other
factors, the financial health of and near-term business outlook for the investment, including
factors such as industry and sector performance, changes in technology and operational and
financing cash flow.
A-37

31 DECEMBER 2008, 2009 AND 2010
4.
Fixed assets
Cost
As at 1.1.2008
Additions
Disposals
Write off
Translation
difference
Freehold
land
$
Buildings
$
2,775,973
3,841,526
(90,543)
Leasehold
land
Plant
and
and
buildings machinery
$
$
630,014
(12,060)
1,703,813
195,147
(81,969)
Motor
vehicles
$
Office
equipment,
furniture
and fittings
$
571,792
26,235
1,043,595
50,752
(2,946)
(1,871)
Renovation
$
978,059
17,260
(16,749)
(29,087)
(8,573)
581,278
212,649
(154,327)
1,060,443
73,794
(491)
(27,800)
(5,472)
(9,694)
(3,022)
1,789,191
2,838
(922)
634,128
196,012
(13,784)
1,124,052
102,192
(5,489)
1,013,914
81,250
(7,409)
As at
31.12.2008
and 1.1.2009
Additions
Disposals
Write off
Translation
difference
2,775,973
As at
31.12.2009
and 1.1.2010
Additions
Disposals
Write off
Translation
difference
2,775,973
3,724,678
16,819
608,753
35,389
18,839
35,871
8,433
11,942
1,875
2,775,973
3,776,886
627,592
1,826,978
824,789
1,232,697
1,089,630
As at
31.12.2010
3,750,983
1,105
(27,410)
617,954
(9,201)
1,816,991
A-38
986,746
30,190
Computers
$
Total
$
1,000,238 12,545,010
19,808
309,202
(2,946)
(1,871)
(8,952)
(247,933)
1,011,094 12,601,462
23,724
341,462
(1)
(154,819)
(13,468)
(13,468)
(2,923)
(85,522)
1,018,426 12,689,115
38,899
438,010
(2,932)
(25,047)
(717)
(6,206)
3,026
115,375
1,056,702 13,211,247

31 DECEMBER 2008, 2009 AND 2010
4.
Accumulated
depreciation
and
impairment
loss
At 1.1.2008
Charge for the
year
Disposals
Write off
Translation
difference
As at 31.12.2008
and 1.1.2009
Charge for the
year
Disposals
Write off
Translation
difference
As at 31.12.2009
and 1.1.2010
Charge for the
year
Disposals
Write off
Translation
difference
Leasehold
land
and
Plant and
buildings machinery
$
$
Freehold
land
$
Buildings
$
398,465
397,664
1,383,820
507,067
57,779
6,893
126,737
37,476
(10,092)
(4,031)
(66,575)
446,152
400,526
1,443,982
57,500
6,545
128,825
(3,339)
(1,751)
(22,093)
735,873
Renovation
$
Computers
$
Total
$
437,361
935,895
63,473
(1,690)
(1,821)
85,557
34,810
412,725
(1,690)
(1,821)
(14,449)
(17,535)
(6,607)
(7,652)
(126,941)
530,094
778,300
516,311
963,053
4,796,145
5,078,418
36,597
(151,496)
66,255
(197)
86,287
34,327
(1)
(13,468)
416,336
(151,694)
(13,468)
(4,833)
(6,106)
(2,263)
(2,618)
(43,003)
500,313
405,320
58,021
10,357
96,385
(323)
86,109
(13,784)
67,538
(5,147)
85,987
(3,992)
28,344
(1,303)
(717)
4,673
(54,734)
31,090
4,444
8,299
2,386
2,880
563,007
360,943
1,677,866
487,131
908,942
684,716
1,010,497
5,693,102
Net book value

As at
31.12.2008
2,775,973
3,304,831
217,428
373,009
51,184
282,143
470,435
48,041
7,523,044
As at
31.12.2009
2,775,973
3,224,365
203,433
238,477
223,766
285,800
413,579
37,133
7,402,526
As at
31.12.2010
2,775,973
3,213,879
266,649
149,112
337,658
323,755
404,914
46,205
7,518,145
As at
31.12.2010
1,550,714
Motor
vehicles
$
Office
equipment,
furniture
and fittings
$
A-39
410,362
838,252
600,335
981,293
5,286,589
432,741
(19,402)
(5,864)
(962)

31 DECEMBER 2008, 2009 AND 2010
4.

The following fixed assets are used as collateral for the Groups term loans and other bank facilities
such as trust receipts and bank overdrafts:
(a)
Freehold land and buildings of the Group with net book values amounting to $5,989,852
(2009: $6,000,338; 2008: $6,080,804); and
(b)
Leasehold land and buildings of the Group with net book value amounting to $266,649 (2009:
$203,433; 2008: $217,428).
During the financial year ended 31 December 2010, the Group acquired fixed assets with an
aggregate cost of $93,600 (2009: $Nil; 2008: $Nil) by means of finance leases. The cash outflow on
acquisition of fixed assets amounted to $344,410 (2009: $341,462; 2008: $309,202).
Net book values of fixed assets under finance leases are as follows:
2010
$
Motor vehicles
5.
2009
$
107,822
2008
$
9,444
Investment properties
2010
$
Cost
At beginning of year
Disposal
2009
$
696,784
(640,577)
(56,207)
At end of year
Accumulated depreciation
Charge for the year
Disposal
482,638
24,999
(499,819)
(7,818)
2008
$
717,139
(20,355)
726,875
(9,736)
696,784
717,139
472,203
12,008
(1,573)
460,571
12,897
(1,265)
At end of year
482,638
472,203
Net book value

As at 31 December
214,146
244,936
The property rental income earned by the Group for the year ended 31 December 2010 from its
investment properties, all of which are leased out under operating leases, amounted to $42,539
(2009: $62,245; 2008: $61,015). Direct operating expenses (including repairs and maintenance)
arising on the rental-earning investment properties amounted to $3,222 (2009: $5,557; 2008:
$5,006).
A-40

31 DECEMBER 2008, 2009 AND 2010
5.
Investment properties (contd)

Investment properties with net book values amounting to $Nil (2009: $214,146; 2008: $244,936) are
pledged with banks to secure the Groups bank facilities such as trust receipts and bank overdrafts
as disclosed in Note 15.
The fair value of investment properties as at 31 December 2010 were approximately $Nil (2009:
$1,074,000; 2008: $1,032,000). Valuations are performed by accredited independent valuers with
recent experience in the location and category of the properties being valued.
6.
Investments in subsidiary companies

The Group had the following subsidiary companies as at 31 December 2010:
Name of
subsidiary
company
Principal activities
Country of
incorporation and
place of business
Effective equity
held by the Group
2010
2009
2008
%
%
%
Held by the Company

Far East Refrigeration (M)
Sdn Bhd #
Investment holding
Malaysia
100
100
100
Far East Refrigeration (Hong Trading of refrigeration

Kong) Limited *
parts
Hong Kong
Nil
Nil
93.88
Far East Refrigeration

Limited +
Trading of refrigeration and

air-conditioning parts
Hong Kong
100
100
100
RSP Systems Pte Ltd @
Supply and solutions

provider of refrigeration
and air-conditioning
monitoring and energy
management systems
Singapore
57.1
57.1
57.1
Edenkool Pte. Ltd. @
Trading of refrigeration and

air-conditioning parts
Singapore
100
100
Nil
Green Point (Singapore)

Pte. Ltd. @
Repair and maintenance

for refrigeration and airconditioning compressors
Singapore
100
100
Nil
A-41

31 DECEMBER 2008, 2009 AND 2010
6.
Investments in subsidiary companies (contd)

Name of
subsidiary
company
Principal activities
Country of
incorporation and
place of business
Effective equity
held by the Group
2010
2009
2008
%
%
%
Held by subsidiary company

Far East Maju Engineering
Works Sdn. Bhd. #
Manufacturing and trading

of electrical, refrigeration
equipment and parts
Malaysia
100
100
100
Far East Enterprises (K.L.)

Sdn Bhd #
Trading of electrical,
refrigeration and airconditioning equipment
and parts
Malaysia
100
100
100
Far East Enterprises

(Penang) Sdn. Bhd. #
and parts
Malaysia
93.88
93.88
93.88
FE & B Engineering (M)

Sdn. Bhd. #
and parts
Malaysia
100
100
100
Far East Refrigeration

(Kuching) Sdn. Bhd. #
and parts
Malaysia
100
100
100
Far East Enterprises (J.B.)

Sdn Bhd #
and parts
Malaysia
100
100
100
Safety Enterprises Sdn.

Bhd. #
and parts
Malaysia
100
100
100
Audited by Ho & Chung CPA Limited for 2008 and 2009. Audited by a member firm of Ernst & Young Global for 2010.
Audited by Ho & Chung CPA Limited.
Audited by a member firm of Ernst & Young Global.
This subsidiary ceased trading activities in the financial year ended 31 December 2007.
Audited by Wong, Lee and Associates.
During the financial year ended 31 December 2009, the Group disposed off its entire interest in Far
East Refrigeration (Hong Kong) Limited to a related party for a cash consideration of HK$1.
A-42

31 DECEMBER 2008, 2009 AND 2010
7.
(a)

2010
$
Unquoted equity shares, at cost
Allowance for impairment in value
(b)
2009
$
2008
$
95,865
(6,897)
371,865
(276,000)
(4,682)
383,945
(276,000)
(5,521)
88,968
91,183
102,424
The Group had the following unquoted investments as at 31 December 2010:

Name of
company
Country of
incorporation and
place of business
Effective equity
held by the Group
2010 2009 2008
%
%
%
2010
$
Cost of investment
2009
2008
$
$
Held by the Company

Yantai Acme
Refrigeration
Equipment Co. Ltd
Peoples Republic
of China
Nil
10.80
10.80
276,000
276,000
Held by subsidiary companies

Guangzhou Fayi
Trading Limited
Company
Peoples Republic
of China
30.00
30.00
30.00
95,865
95,865
95,865
RSP Systems HK
Limited
Hong Kong
Nil
Nil
28.55
12,080
95,865
(6,897)
371,865
(276,000)
(4,682)
383,945
(276,000)
(5,521)
88,968
91,183
102,424
Allowance for impairment in value

A-43

31 DECEMBER 2008, 2009 AND 2010
7.
Unquoted investments (contd)

Investments in unquoted investment are measured at cost less impairment losses as there is no
quoted market price in an active market and the fair value of these investments cannot be reliably
measured.
The Groups interest in Guangzhou Fayi Trading Limited Company is held in trust for the Group
by the majority shareholder of the investee. Notwithstanding that the Group has an effective
shareholding of 30% in Guangzhou Fayi Trading Limited Company, the investment is not classified
as associated company as the Group does not have significant influence in the operating and
financing policies of the company.
During the financial year ended 31 December 2009, the Group disposed off its entire 28.55%
interest in RSP Systems HK Limited for a cash consideration of $11,059.
During the financial year ended 31 December 2010, the Group wrote off its 10.8% interest in Yantai
Acme Refrigeration Equipment Co. Ltd against allowance for impairment in value. Yantai Acme
Refrigeration Equipment Co. Ltd have ceased operations as their business license has expired.
8.
Deferred taxation
Deferred tax assets arise as a result of:
Unabsorbed capital allowance

Provisions
2010
$
2009
$
2008
$
174,014
199,231
(12,713)
184,711
174,014
199,231
171,998
152,307
144,600
177,807
2010
$
2009
$
2008
$
6,065,458
721,201
995,780
417,115
6,020,334
936,389
993,919
158,078
9,243,470
291,749
1,420,189
208,861
8,199,554
8,108,720
11,164,269
Deferred tax liabilities arise as a result of:

Excess of net book value over tax written down value
of fixed assets
9.
Inventories
Balance sheet
Finished goods
Finished goods-in-transit
Raw materials
Work-in-progress
A-44

31 DECEMBER 2008, 2009 AND 2010
9.
Inventories (contd)
2010
$
2009
$
2008
$
20,593,610
18,837,872
19,343,569
557,059
1,074,247
Profit or loss
Inventories recognised as an expense in cost of sales
Inclusive of the following charge:
- Inventories written down
- Inventories written back
(1,154,215)
The management of the Group reviews an aging analysis of inventories to identify obsolete and
slow-moving inventory items at each balance sheet date. An allowance for obsolete and slowmoving inventory items amounting to $Nil (2009: $557,059; 2008, $1,074,247) was provided with
inventories written down to adjust the carrying value of inventories to the lower of cost and net
realisable value. In 2010, allowance for obsolete and slow-moving inventory items amounting to
$1,154,215 (2009: $Nil; 2008: $Nil) was written back as previously identified obsolete and slowmoving inventory items were sold during the financial year.
10.
Trade debtors
Third party trade debtors

Allowance for doubtful debts
2010
$
2009
$
2008
$
7,387,906
(741,363)
5,252,491
(1,039,402)
7,603,924
(1,452,941)
6,646,543
4,213,089
6,150,983
Trade debtors are non-interest bearing and are generally on 30 to 90 days terms. They are
recognised at their original invoice amounts which represent their fair values on initial recognition.
Debtors that are past due but not impaired
The Group has trade debtors amounting to $3,836,260 (2009: $1,898,907; 2008: $3,329,057) that
are past due at the balance sheet date but not impaired. These debtors are unsecured and the
analysis of their aging at the balance sheet date is as follows:
Trade debtors past due:

Less than 30 days
30 to 60 days
61 to 90 days
91 to 120 days
More than 120 days
A-45
2010
$
2009
$
2008
$
2,101,876
514,080
726,668
87,527
406,109
1,084,063
383,585
150,535
83,537
197,187
1,401,264
1,226,316
196,077
207,124
298,276
3,836,260
1,898,907
3,329,057

31 DECEMBER 2008, 2009 AND 2010
10.
Trade debtors (contd)

Debtors that are impaired
The Groups trade debtors that are impaired as at 31 December 2010 amounted to $741,363 (2009:
$1,039,402; 2008: $1,452,941). The movements in allowance for doubtful debts used to record the
impairment during the financial year are as follows:
Allowance for the year
Reclassification (previously classified as allowance against
amount due from an associated company (Note 12))
Written off against allowance
Written-back
At end of year
2010
$
2009
$
2008
$
1,039,402
33,367
1,452,941
456,233
1,814,914
119,381
(243,101)
(66,996)
(21,309)
741,363
(691,457)
(176,827)
(1,488)
1,039,402
196,000
(162,309)
(505,015)
(10,030)
1,452,941
Trade debtors that are individually determined to be impaired at the balance sheet date relate to
debtors that are in significant financial difficulties and have defaulted on payments. These debts are
not secured by any collateral or credit enhancements.
Allowance for doubtful debts amounting to $66,996 (2009: $176,827; 2008: $505,015) was writtenback as these previously impaired amounts were recovered from trade debtors during the financial
year.
Trade debtors denominated in foreign currencies as at 31 December are as follows:
United States Dollar

Euro
Ringgit Malaysia
Renminbi
Australian Dollar
A-46
2010
$
2009
$
237,783
15,346
45,068
5,803
531,278
16,150
103,505
2,370
2008
$
1,081,555
172,312
24,864

31 DECEMBER 2008, 2009 AND 2010
11.
Other receivables
2010
$
2009
$
2008
$
Sundry debtors
Allowance for doubtful sundry debtors
136,827
221,239
(77,604)
699,533
(295,987)
Other receivables, current

Amount due from staff, representing other receivables,
non-current
136,827
143,635
403,546
18,329
155,156
143,635
403,546
Movements in allowance for doubtful sundry debtors during the year are as follows:
2010
$
Written off against allowance
Written-back
2009
$
77,604
(62,489)
(8,914)
(6,201)
At end of year
2008
$
295,987
80,474
(71,802)
(222,402)
(4,653)
108,152
222,928
(35,205)
112
77,604
295,987
Other debtors that are individually determined to be impaired at the balance sheet date relate to
debtors that are in significant difficulties and have defaulted on payments. These debts are not
secured by any collateral or credit enhancements.
Allowance for doubtful sundry debtors amounting to $8,914 (2009: $222,402; 2008: $Nil) was
written back as these previously impaired accounts were recovered from sundry debtors during the
financial year.
12.
Amount due from/(to) holding/affiliated companies

These balances are unsecured, non-interest bearing and are expected to be repaid in cash within
twelve months from the end of the financial year.
Movements in allowance for doubtful amount due from affiliated companies are as follows:
Written-back
At end of year
A-47
2010
$
2009
$
2008
$
136,711
(49,991)
180,639
(43,928)
180,639
86,720
136,711
180,639

31 DECEMBER 2008, 2009 AND 2010
12.
Amount due from/(to) holding/affiliated companies (contd)

The Group wrote back $49,991 (2009: $43,928; 2008: $Nil) of allowance for doubtful debt due from
an affiliated company as these previously impaired amounts were recovered during the financial year.
As a result of the disposal of investment in an associated company during the financial year ended
31 December 2008, the related allowance amounting to $196,000 provided during the financial
year ended 31 December 2007 had been reclassified to allowance for doubtful trade debts.
Included in the amount due from holding/affiliated companies are amounts denominated in the
following currencies:
2010
$
Renminbi
2009
$
18,925
2008
$
112,606
96,306
Included in the amount due to holding/affiliated companies are amounts denominated in the
following currencies:
2010
$
Ringgit Malaysia
13.
255,143
2009
$
69,319
16,148
2008
$
234,433
Trade payables
These amounts are non-interest bearing. Trade payables are normally settled on 30 to 90 days
terms.
Trade payables denominated in foreign currencies as at 31 December are as follows:

Euro
Ringgit Malaysia
Renminbi
Japanese Yen
Singapore Dollar
Great Britain Pound
A-48
2010
$
2009
$
2008
$
567,998
284,632
1,043
70,421
22,754
434,483
103,221
13,756
263,012
2,464
607,030
292,816
33,938
11,054
383,896
1,369
10,587

31 DECEMBER 2008, 2009 AND 2010
14.

2010
$
Aggregate amount of costs incurred and recognised
profits to date
Less: Progress billings
15.
2009
$
2008
$
3,657,000
(4,250,000)
(593,000)
Trust receipts, bills payable and bank overdrafts (secured)

Trust receipts, bills payable and bank overdrafts are secured by way of legal mortgage on the
Groups freehold land and buildings, leasehold land and buildings and investment property with
net book values amounting to $5,989,852, $226,649 and $Nil (2009: $6,000,338, $203,433
and $214,146; 2008: $6,080,804, $217,428 and $244,936) respectively, and joint and several
guarantees by certain directors of the Group.
Trust receipts and bank overdrafts of certain subsidiary company are also secured by a debenture
over the fixed and floating assets of certain subsidiary companies.
The trust receipts and bills payable bear interest ranging from 0.50% to 1.25% (2009: 0.25%
to 0.5%; 2008: 0.5% to 1%) per annum above the banks prime rates and 2.0% to 3.0% (2009:
Nil; 2008: Nil) per annum above the banks cost of funds. As at 31 December 2010, the effective
interest rates range from 1.4% to 4.4% (2009: 2.5% to 5.0%; 2008: 3.5% to 5.25%) per annum.
The bank overdrafts bear interest ranging from 0.25% to 2.00% (2009: 0.25% to 1.75%; 2008:
0.25% to 1.75%) per annum above the banks prime rates. As at 31 December 2010, the effective
interest rates range from 5.00% to 6.30% (2009: 5.00%; 2008: 5.25% to 5.375%) per annum.
Trust receipts denominated in foreign currencies as at 31 December are as follows:
2010
$
Euro
Japanese Yen
Singapore Dollar
713,157
1,899,907
A-49
2009
$
2008
$
812,908
232,445
107,920
144,835
53,108
60,000

31 DECEMBER 2008, 2009 AND 2010
16.
Accrued operating expenses

Deposits received
17.
2010
$
2009
$
2008
$
1,616,579
132,849
1,786,785
142,817
912,117
297,221
1,749,428
1,929,602
1,209,338

A provision is recognised for expected warranty claims on certain products sold during the last
year, based on past experience of the level of repairs and returns. It is expected that these costs
will be incurred in the next financial year. Assumptions used to calculate the provision for warranties
were based on current sales levels and current information available about returns based on a oneyear warranty period for the relevant products sold.
During the financial year, based on the earlier mentioned statistics and warranty claims experience,
management estimated the provision for warranty at approximately $50,000. Accordingly, provision
for warranty of $50,000 (2009: $Nil; 2008: $Nil) was made during the financial year.
18.

Loan from related party amounting to $Nil (2009: $Nil; 2008: $150,000) bears interest at Nil (2009:
Nil; 2008: 0.5%) per month, was unsecured and repayable on demand. The loan was fully repaid
during the financial year ended 31 December 2009.
A-50

31 DECEMBER 2008, 2009 AND 2010
19.
Finance lease obligations

Minimum
lease
payments
$
2010
1 year to 5 years
Not later than 1 year
2009
1 year to 5 years
2008
1 year to 5 years
Interest
$
Present
value of
principal
$
62,328
20,784
3,849
2,856
58,480
17,927
83,112
6,705
76,407
12,046
5,376
2,309
1,026
9,737
4,350
17,422
3,335
14,087
During the financial year ended 31 December 2009, the Group repaid all the finance lease
obligations. In the financial years ended 31 December 2010 and 2008, the finance lease terms
were 5 years and ranged from 1 to 5 years respectively with options to purchase at the end of the
lease term. Finance lease terms do not contain restrictions concerning dividends, additional debt or
further leasing. As at 31 December 2010, the effective interest rates was 4.19% (2009: Nil; 2008:
6.4%) per annum.
A-51

31 DECEMBER 2008, 2009 AND 2010
20.
Term loans
2010
$
2009
$
2008
$
Secured term loans

(a)
(b)
(c)
(d)
(e)
Term loan bears interest at 4.5% per annum for the

first year of the loan with effect from May 2005; bears
interest at banks prime lending rate per annum for the
second year and thereafter bears interest at 0.9% per
annum above the banks prime lending rate. The term
loan is repayable in 84 monthly instalments commencing
December 2005.
281,231
376,212
Commercial property loan bears interest at 3.25% per

annum for the first year of the loan with effect from 30
June 2003; bears interest at 3.5% per annum for the
second year, bears interest at the banks prime lending
rates for the third to fifth year, bears interest at 3.75%
per annum for the sixth year, bears interest at 4.5%
per annum for the seventh year, and thereafter bears
interest at 0.75% per annum over the banks commercial
financing rate. The term loan is repayable in 300 monthly
instalments commencing 1 October 2003.
1,515,390
1,567,820
1,622,115
Short term loan bears interest at 2.94% (2009: 3.4%;

2008: 4.13%) per annum with effect from 22 October
2010 (2009: 22 October 2009; 2008: 22 July 2008). The
loan is repayable in lump sum together with interest on
24 January 2011.
100,571
100,662
101,833
Term loan bears interest at 3.375% per annum for the

first year of the loan with effect from March 2009; and
thereafter at 1.5% per annum above the 12 months
Singapore Interbank Offered Rate. The term loan is
repayable in 60 monthly instalments commencing April
2009.
399,777
516,639
Bridging loan bears interest fixed at 5% per annum with

effect from May 2009. The loan is repayable in 36 monthly
instalments commencing June 2009.
174,393
516,900
A-52

31 DECEMBER 2008, 2009 AND 2010
20.
Term loans (contd)

2010
$
2009
$
2008
$
445,286
501,715
2,190,131
3,428,538
2,601,875
447,641
1,742,490
748,947
2,679,591
286,571
2,315,304
2,190,131
3,428,538
2,601,875
Secured term loans (contd)

(f)
Term loan bears interest at 2% per annum below Prime

Rate with effect from 17 July 2008. The term loan is
repayable in 120 monthly instalments commencing
17 August 2008.
Repayable within 12 months

Repayable after 12 months
(a)
The term loan was secured by a first party legal charge for RM1,500,000 and second legal
charge for RM3,000,000 over freehold land and leasehold land and building with total net
book value of $Nil (2009: $1,418,828; 2008: $1,455,902) and joint and several guarantees by
certain directors.
(b)
The term loan is secured by legal mortgages over freehold land and buildings with a net
book value of $4,429,172 (2009: $4,468,364; 2008: $4,507,554), and joint and several
guarantees by certain directors.
(c)
The term loan is secured by joint and several guarantees by certain directors.
(d)
The term loan is secured by a first legal charge over leasehold land and building with a net
book value of $117,072 (2009: $122,537; 2008: $Nil) and joint and several guarantees by
certain directors.
(e)
The bridging loan is secured by joint and several guarantees by certain directors.
(f)
The term loan was secured by a legal mortgage over leasehold building and investment
property with total net book value of $Nil (2009: $20,697; 2008: $46,503) and joint and
several guarantees by certain directors and related parties.
As at 31 December 2010, the effective interest rates range from 2.35% to 5.25% (2009: 2.41% to
7.40%; 2008: 3.25% to 7.40%) per annum.
21.
Loans from shareholders and directors

Loans from shareholders and directors are unsecured, bear interest at 0% (2009: 0% or 4.5%;
2008: 0%) per annum and are to be settled in cash. As at 31 December 2010, the Group expects
to make repayment of $550,000 (2009: $390,000; 2008: $703,772) within the next financial year,
based on agreed upon repayment terms with shareholders and directors.
A-53

31 DECEMBER 2008, 2009 AND 2010
22.
Share capital
Issued and fully paid:

At beginning and at end of year
Number of ordinary shares
2010
$
2009
$
2008
$
8,134,740
8,134,740
8,134,740
80,888
80,888
80,888
The holders of the ordinary shares are entitled to receive dividends as and when declared by the
Company. All ordinary shares carry one vote per share without restriction. The ordinary shares
have no par value.
23.
Translation reserve
The translation reserve represents exchange differences arising from the translation of the financial
statements of foreign operations whose functional currencies are different from the Groups
presentation currency.
24.
Turnover
Turnover represents the invoiced value of goods sold net of returns and allowances, sales tax
and goods and services tax. Significant intra-group transactions have been excluded from Group
turnover.
Sale of goods
Project sales and installation works
Project maintenance service
A-54
2010
$
2009
$
2008
$
28,503,867
4,069,081
43,190
25,357,184
1,417,033
31,195
27,664,732
1,521,078
5,580
32,616,138
26,805,412
29,191,390

31 DECEMBER 2008, 2009 AND 2010
25.

2010
$
Commission income
Dividend income
Long outstanding unclaimed debt written off
Rental income
Negative goodwill written off
Gain on disposal of investment in an associated company
Gain on disposal of investment properties, net
Gain on disposal of fixed assets, net
Grant income from jobs credit scheme
Others
2009
$
2008
$
135,279
184,079
1,062,245
7,881
17,310
45,941
190,695
100,751
195,610
53,747
101,481
70,214
46,445
76,188
185,567
273,844
1,512
1
4,474
15,419
1,452,735
712,498
603,450
During the financial year ended 31 December 2009, the Singapore Finance Minister announced
the introduction of a Jobs Credit Scheme (Scheme). Under this Scheme, the Group received a 12%
cash grant on the first $2,500 of each months wages for each employee on their Central Provident
Fund payroll. The Group received its grant income of $101,481 in four receipts in March, June,
September and December 2009. The government extended the Jobs Credit scheme for half a year
in 2010 and the Group received a cash grant of $17,310 at stepped-down rates of 6% and 3% in
March and June 2010 respectively.
26.
License fee paid to a supplier

Foreign exchange loss, net
Loss on disposal of investment in a subsidiary company
Loss on disposal of an unquoted investment
Others
A-55
2010
$
2009
$
2008
$
203,960
21,165
60,108
110,780
33,814
38
11,048
153,019
5,749
225,125
215,788
158,768

31 DECEMBER 2008, 2009 AND 2010
27.
Profit from operations

Other than as disclosed in Notes 25 and 26, profit from operations is determined after charging/
(crediting) the following:
Sundry debts written off

Depreciation of fixed assets
Depreciation of investment properties
Directors fees
- directors of the Company
- directors of subsidiary companies
Directors remuneration
- directors of the Company
- directors of subsidiary companies
Allowance for doubtful trade debts written back
Allowance for doubtful trade debts
Allowance for doubtful trade debts due from an affiliated
company
Allowance for doubtful trade debts due from an affiliated
company written back
Allowance for doubtful sundry debts
Allowance for doubtful sundry debts written back
Warranty expenses
Inventories written down
Inventories written back
Fixed assets written off
Net fair value loss on derivatives
Personnel expenses (Note 28)
28.
2010
$
2009
$
2008
$
12,273
432,741
24,999
416,336
12,008
11,848
412,725
12,897
121,500
53,911
99,000
53,803
88,500
54,408
585,596
348,400
(66,996)
33,367
556,843
339,043
(176,827)
456,233
529,856
309,945
(505,015)
119,381
180,639
(49,991)
(8,914)
50,000
(1,154,215)
342
203
3,951,323
(43,928)
80,474
(222,402)
557,059
3,565,246
222,928
1,074,247
50
3,171,316
2010
$
2009
$
2008
$
3,615,477
326,252
9,594
3,275,787
280,597
8,862
2,909,517
255,556
6,243
3,951,323
3,565,246
3,171,316
Personnel expenses
Wages and salaries *

Central Provident Fund contributions *
Other social expenses, net
Personnel expenses include amounts disclosed as directors remuneration in Note 27.
A-56

31 DECEMBER 2008, 2009 AND 2010
29.
Financial expenses
Interest expense
- finance lease obligations
- bank overdrafts
- term loans
- related party
- trust receipts
- director
- others
30.
2010
$
2009
$
2008
$
3,587
8,838
127,808
160,963
463
2,519
45,216
146,782
5,500
275,489
5,583
5,608
1,427
96,193
138,393
9,000
368,923
9,013
301,659
486,697
622,949
2010
$
2009
$
2008
$
864,125
(2,984)
381,315
(22,824)
325,203
(34,605)
17,755
17,704
(59,913)
1,229
18,710
84,143
(2,877)
424
Tax expense
Current tax
- current year
- over provision in respect of prior years
Deferred tax
- current year
- under provision in respect of prior years
Reduction in opening deferred taxes resulting from
reduction in tax rate
896,600
296,930
393,875
As at 31 December 2010, the Group had unutilised tax losses of approximately $584,000 (2009:
$264,000; 2008: $372,000) available for offset against future taxable profits, subject to agreement
of the relevant income tax authorities and compliance with certain provisions of the tax legislation
of the respective countries in which the subsidiary companies operate.
A-57

31 DECEMBER 2008, 2009 AND 2010
30.
Tax expense (contd)

A reconciliation between the tax expense and the product of accounting profit multiplied by the
applicable tax rate for the years ended 31 December was as follows:
Accounting profit
Tax at the applicable rate of 17% (2009: 17%; 2008: 18%)
Tax effect of expenses not deductible in determining taxable
profit, net
Tax effect arising from differences in tax rates
(Over)/under provision in respect of prior years
Deferred tax asset not recognised
Tax exemption
Effect of utilisation of reinvestment allowance
Utilisation of deferred tax asset previously not recognised
Reduction in opening deferred taxes resulting from
reduction in tax rate
Others
Tax expense
2010
$
2009
$
2008
$
5,449,412
1,639,096
1,357,784
926,400
278,646
244,401
118,984
(119,524)
14,720
54,545
(49,081)
(7,115)
(57,066)
19,220
(13,044)
(21,595)
83,674
(31,074)
(9,839)
(6,181)
48,433
130,475
49,538
21,781
(40,651)
(38,938)
(21,588)
14,737
(2,877)
896,600
296,930
424
393,875
The corporate income tax rate applicable to Singapore companies of the Group was reduced to
17% for the year of assessment 2010 onwards from 18% for the year of assessment 2009.
31.
Earnings per share

Basic earnings per share is calculated by dividing profit for the year that is attributable to ordinary
equity holders of the Company by the average number of ordinary shares outstanding during the
year.
Diluted earnings per share is calculated by dividing the profit attributable to ordinary equity holders
of the Company by the weighted average number of ordinary shares outstanding during the year
plus the weighted average number of ordinary shares that would be issued on the conversion of all
the diluted potential ordinary shares into ordinary shares. There were no potential dilutive ordinary
shares existing during the respective financial years.
A-58

31 DECEMBER 2008, 2009 AND 2010
31.
Earnings per share (contd)

The following table reflects the profit for the year and share data used in the computation of basic
and diluted earnings per share for the financial years ended 31 December 2010, 2009 and 2008:
Profit for the year attributable to ordinary equity holders of the

Company used in computation of basic and diluted earnings
per share ($)
Average number of ordinary shares (1)
(1)
32.
2010
$
2009
$
4,506,334
1,312,437
933,165
48,532,800
48,532,800
48,532,800
For comparative purposes, earnings per share for the financial years reported on have been computed on the profit
for the year attributable to ordinary equity holders divided by the number of ordinary shares adjusted for the subdivision for every one ordinary share into 600 ordinary shares (see Note 40 (d) (iii)).
Dividends
2010
$
Declared during the financial year:
Interim exempt (one-tier) dividend for 2010: $24.73
(2009: $Nil; 2008: $Nil) per share
33.
2008
$
2009
$
2,000,000
2008
$

2010
$
2009
$
2008
$

Bank overdrafts
Fixed deposits
2,350,114
(57,374)
1,399,779
2,778,697
(30,981)
409,785
1,686,888
(1,291,985)
151,501
3,692,519
3,157,501
As at 31 December 2010, fixed deposits earn interest at 0.15% to 2.75% per annum.
A-59
546,404

31 DECEMBER 2008, 2009 AND 2010
33.
Cash and cash equivalents (contd)

Cash and cash equivalents denominated in foreign currencies as at 31 December are as follows:

Euro
Japanese Yen
Renminbi
Singapore Dollar
34.
2010
$
2009
$
2008
$
597,483
64,933
73,763
3,132
5
522,329
100,672
45,172
190,976
229,846
415
Related party information

In addition to the related party information disclosed elsewhere in the financial statements,
significant transactions with related parties, on terms agreed between the parties, were as follows:
(a)
(b)
Sales of goods and services

2010
$
2009
$
2008
$
Income
Sale of goods to affiliated companies
Commission income from affiliated companies
233,760
135,279
27,797
123,739
49,009
46,444
Expenses
Purchases from affiliated companies
Rental paid to a related party
Interest expense paid to a director
Interest expense paid to a related party
792,804
21,192
897,530
22,548
5,583
5,500
860,557
20,952
9,000
2010
$
2009
$
2008
$
Short-term employee benefits

Central Provident Fund contributions
889,921
44,075
859,038
36,848
796,479
43,322
Total compensation paid to key management personnel
933,996
895,886
839,801
Compensation of key management personnel
Total compensation paid to key management personnel relates to Directors remuneration in

Note 27.
A-60

31 DECEMBER 2008, 2009 AND 2010
35.
Contingent liabilities and commitments

(a)
Contingent liabilities
The Company issued corporate guarantees to banks for securing banking facilities of
subsidiary and affiliated companies.
(b)
Lease commitments
As a lessee
As at 31 December 2010, the Group had aggregate lease commitments in respect of stores
and offices of $1,389,000 (2009: $1,490,000; 2008: $1,397,000) payable as follows:

One year through five years
After five years
2010
$
2009
$
2008
$
208,000
298,000
883,000
217,000
338,000
935,000
103,000
307,000
987,000
1,389,000
1,490,000
1,397,000
Most leases contain renewable options. Lease terms do not contain restrictions on the
Groups activities concerning dividends, additional debt or further leasing.
Minimum lease payments recognised as an expense in profit or loss of the Group for the
financial year ended 31 December 2010 amounted to $268,192 (2009: $179,571; 2008:
$135,945).
As a lessor
The Group leases out freehold and leasehold buildings under operating lease arrangements,
with leases negotiated up to a term of 2 years with options to renew upon expiry of lease
periods. The terms of the lease generally also require the tenant to pay a security deposit.
As at 31 December 2010, the Group had aggregate future minimum lease receivables under
non-cancellable operating leases as follows:
2010
$
One year through five years
A-61
2009
$
2008
$
51,000
101,000
39,000
152,000
48,000
51,000
140,000
200,000

31 DECEMBER 2008, 2009 AND 2010
35.
Contingent liabilities and commitments (contd)

(c)
Forward contracts commitments

The forward contracts commitments are secured by way of legal mortgage on the Groups
freehold and leasehold land and buildings with net book value amounting to $4,429,172 and
$117,072 (2009: $4,468,364 and $122,537; 2008: $4,507,554 and $128,004) respectively
and joint and several guarantees by certain directors of the Company.
The net fair value of these derivative contracts amounted to a liability of approximately $203
(2009: $Nil; 2008: $Nil).
The Group has outstanding forward contracts as at 31 December 2010 to purchase the
following:
-
EUR 200,521 (2009: $Nil; 2008: $Nil) for a consideration of $171,389 and
HKD1,036,000 (2009: $Nil; 2008: $Nil);
US$Nil (2009: US$15,572; 2008: US$206,954) for a consideration of $Nil (2009:

$22,361; 2008: $310,257); and
JPY 2,000,000 (2009: $Nil; 2008: $Nil) for a consideration of HKD 191,200 (2009: $Nil;
2008: $Nil).
within 5 months (2009: 2 months; 2008: 5 months) from the end of the financial year.
36.
Financial risk management objectives and policies

The Groups principal financial instruments, other than derivative financial instruments and
available-for-sale financial assets, comprise bank loans, bank overdrafts, trust receipts, bills
payable, finance leases, cash and fixed deposits. The main purpose of these financial instruments
is to finance the Groups operations. The Group has various other financial assets and liabilities
such as trade receivables and trade payables, which arise directly from its operations.
The Group also enters into derivative transactions, including principally foreign currency forward
contracts. The purpose is to manage the foreign exchange currency risk arising from the Groups
operations. It is, and has been throughout the year under review, the Groups policy that no trading
in derivative financial instruments shall be undertaken.
The main risks arising from the Groups financial instruments are interest rate risk, liquidity risk,
foreign exchange risk and credit risk. The Board reviews and agrees policies for managing each of
these risks and they are summarised below.
There has been no change to the Groups exposure to these financial risks or the manner in which
it manages and measures the risks.
A-62

31 DECEMBER 2008, 2009 AND 2010
36.
Financial risk management objectives and policies (contd)

Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of the Groups financial
instruments will fluctuate because of changes in market interest rates. The Groups exposure to
interest rate risk arises primarily from their loans and borrowings.
Information relating to the Groups interest rate exposure is also disclosed in the notes on the
Groups borrowings.
Sensitivity analysis for interest rate risk
At the balance sheet date, if SGD interest rate had been 50 (2009: 50; 2008: 50) basis points
lower/higher with all other variables held constant, the Groups profit net of tax would have been
$28,000 (2009: $38,000; 2008: $58,000) higher/lower, arising mainly as a result of lower/higher
interest expense on floating rate loans and borrowings. The analysis is performed on the same
basis for 2009 and 2008.
Liquidity risk
Liquidity risk is the risk that the Group will encounter difficulty in meeting financial obligations due
to shortage of funds. The Groups exposure to liquidity risk arises primarily from mismatches of the
maturities of financial assets and liabilities. The Groups objective is to maintain a balance between
continuity of funding and flexibility through the use of stand-by credit.
In the management of liquidity risk, the Group monitors and maintains a level of cash and bank
balances deemed adequate by the management to finance the Groups operations and mitigate the
effects of fluctuations in cash flows.
Short-term funding is obtained from overdraft and revolving credit facilities.
A-63

31 DECEMBER 2008, 2009 AND 2010
36.

Liquidity risk (contd)
The table below summaries the maturity profile of the Groups financial assets and liabilities at the
balance sheet date based on contractual undiscounted repayment obligations:
Group
1 year
or less
$
1 to 5
years
$
More
than
5 years
$
Total
$
2010
Financial assets
Trade debtors
Other receivables
Total undiscounted financial assets
Financial liabilities
Trade payables
Other payables and liabilities
Loan and borrowings
Derivative financial instruments
Total undiscounted financial liabilities
Total net undiscounted financial assets/

(liabilities)
6,864,190
136,827
3,749,893
18,329
6,864,190
155,156
3,749,893
10,750,910
18,329
10,769,239
1,750,187
4,263,985
20,784
4,567,620
203
62,328
1,613,754
1,908,164
1,750,187
4,263,985
83,112
8,089,538
203
10,602,779
1,676,082
1,908,164
14,187,025
(1,657,753)
(1,908,164)
(3,417,786)
148,131
A-64

31 DECEMBER 2008, 2009 AND 2010
36.

Liquidity risk (contd)
Group
1 year
or less
$
More
than
5 years
$
1 to 5
years
$
Total
$
2009
Financial assets
Trade debtors
Other receivables
4,299,536
174,445
3,188,482
4,299,536
174,445
3,188,482
7,662,463
7,662,463
Trade payables
Loan and borrowings
1,452,660
2,296,779
5,467,701
2,482,669
2,583,517
1,452,660
2,296,779
10,533,887
9,217,140
2,482,669
2,583,517
14,283,326
(1,554,677)
(2,482,669)
(2,583,517)
(6,620,863)
Total net undiscounted financial liabilities
2008
Financial assets
Trade debtors
Other receivables
6,440,730
825,733
1,838,389
6,440,730
825,733
1,838,389
9,104,852
9,104,852
Trade payables
Loan and borrowings
2,208,922
1,852,770
10,627,014
1,529,636
3,354,714
2,208,922
1,852,770
15,511,364
14,688,706
1,529,636
3,354,714
19,573,056
Total net undiscounted financial liabilities
(5,583,854)
(1,529,636)
(3,354,714)
(10,468,204)
A-65

31 DECEMBER 2008, 2009 AND 2010
36.

Foreign exchange risk
The Group operates internationally and is exposed to foreign exchange risk arising from various
currency exposures, primarily with respect to United States dollar (USD), Euro, Chinese Renminbi
(RMB), Ringgit Malaysia (RM) and Japanese Yen (JPY). Foreign exchange risk arises when future
commercial transactions, recognised assets or liabilities, investments in foreign operations whose
net assets are denominated in a currency other than the respective functional currencies of the
Group entities, primarily Singapore dollar, Hong Kong dollar (HKD) and Ringgit Malaysia.
The Group uses foreign currency denominated assets as a natural hedge against its foreign
currency denominated liabilities. The Group also enters into forward foreign exchange contracts to
hedge its foreign currency risk. It is the Groups policy not to trade in derivative contracts.
The Group is exposed to currency translation risk arising from its net investments in foreign
operations, including Malaysia and Hong Kong. The Group net investments in foreign operations
are not hedged as currency position in RM and HKD are considered to be long-term in nature.
Sensitivity analysis for foreign currency risk
The following table demonstrates the sensitivity of the Groups profit net of tax to a reasonably
possible change in the USD, EUR, RMB, RM and JPY exchange rates against SGD, with all other
variables held constant.
2010
$
Profit net of tax

2009
$
2008
$
USD/SGD
-strengthened 5% (2009: 5%; 2008: 5%)

-weakened 5% (2009: 5%; 2008: 5%)
+35,000
35,000
27,000
+27,000
+24,000
24,000
EUR/SGD
-strengthened 5% (2009: 5%; 2008: 5%)

-weakened 5% (2009: 5%; 2008: 5%)
87,000
+87,000
14,000
+14,000
+7,000
7,000
RMB/SGD -strengthened 5% (2009: 5%; 2008: 5%)

-weakened 5% (2009: 5%; 2008: 5%)
+5,000
5,000
+34,000
34,000
RM/SGD
-strengthened 5% (2009: 5%; 2008: 5%)

-weakened 5% (2009: 5%; 2008: 5%)
+2,000
2,000
+4,000
4,000
+5,000
5,000
JPY/SGD
-strengthened 5% (2009: 5%; 2008: 5%)

-weakened 5% (2009: 5%; 2008: 5%)
2,000
+2,000
16,000
+16,000
22,000
+22,000
A-66

31 DECEMBER 2008, 2009 AND 2010
36.

Credit risk
Credit risk is the risk of loss that may arise on outstanding financial instruments should a
counterparty default on its obligations. The Groups exposure to credit risk arises primarily from
trade receivables. For other financial assets (including cash and cash equivalents and derivatives),
the Group minimises credit risk by dealing with high credit rating counterparties.
The Groups objective is to seek continual revenue growth while minimising losses incurred due to
increased credit risk exposure.
The Group trades only with recognised and creditworthy third parties. It is the Groups policy that
all customers who wish to trade on credit terms are subject to credit verification procedures. In
addition, receivable balances are monitored on an ongoing basis with the result of minimising the
Groups exposure to bad debts.
With respect to credit risk arising from the other financial assets of the Group, which comprise cash
and cash equivalents and other debtors (including related party balances), the Groups exposure to
credit risk arises from default of the counterparty, with a maximum exposure equal to the carrying
amount of these instruments.
Since the Group trades only with recognised and creditworthy third parties, there is no requirement
for collateral.
Credit risk concentration profile
The Group determines concentrations of credit risk by monitoring the country sector profile of its
trade debtors on an ongoing basis. The credit risk concentration profile of the Groups trade debtors
at the balance sheet date is as follows:
2010
$
Singapore
Malaysia
Indonesia
Hong Kong/Macau/ Peoples
Republic of China
Indo-China*
Other countries
2009
% of
total
2008
% of
total
% of
total
3,435,333
1,691,946
527,737
52%
25%
8%
1,866,681
1,065,563
614,530
44%
25%
15%
3,088,356
1,348,560
653,243
50%
22%
11%
759,019
25,239
207,269
11%
0%
4%
317,744
25,980
322,591
7%
1%
8%
311,613
23,804
725,407
5%
0%
12%
6,646,543
100%
4,213,089
100%
6,150,983
100%
* Relates to Vietnam, Myanmar and Cambodia.

At the balance sheet date, approximately 54% (2009: 26%; 2008: 23%) of the Groups trade debtors
were due from 5 major customers.
A-67

31 DECEMBER 2008, 2009 AND 2010
36.

Credit risk (contd)
Financial assets that are neither past due nor impaired
Trade and other debtors that are neither past due nor impaired are creditworthy debtors with good
payment record with the Group. Other receivables, deposit and prepayments, fixed deposit and
cash and bank balances that are neither past due nor impaired are placed with or entered into with
reputable financial institutions or companies with high credit ratings and no history of default.
Financial assets that are either past due or impaired
Information regarding financial assets that are either past due or impaired is disclosed in Note 10
(Trade debtors), Note 11 (Other receivables) and Note 12 (Amount due from/(to) holding/affiliated
companies).
37.
Fair value of financial instruments

Fair value is defined as the amount at which the instrument could be exchanged in a current
transaction between knowledgeable willing parties in an arms length transaction, other than in a
forced or liquidation sale. Fair values are obtained from quoted market prices, discounted cash flow
models and option pricing models as appropriate.
2010
$
Carrying amount
2009
$
2008
$
Fair value
2009
$
2010
$
2008
$
Financial assets
Available for sale financial assets
88,968
91,183
102,424
4,213,089
143,635
98,420
6,150,983
403,546
65,037
6,646,543
155,156
101,384
4,213,089
143,635
98,420
6,150,983
403,546
65,037
Loans and receivables

Trade debtors
6,646,543
Other receivables
155,156
Deposits
101,384
Due from holding
company
Due from affiliated

companies
217,647
Fixed deposits
1,399,779
Cash and bank balances 2,350,114
21,978
120,814
21,978
120,814
95,279
409,785
2,778,697
591,120
151,501
1,686,888
217,647
1,399,779
2,350,114
95,279
409,785
2,778,697
591,120
151,501
1,686,888
10,870,623
7,760,883
9,169,889
10,870,623
7,760,883
9,169,889
*Refer to Note 37(c).
A-68

31 DECEMBER 2008, 2009 AND 2010
37.
Fair value of financial instruments (contd)

2010
$
Carrying amount
2009
$
2008
$
2010
$
Fair value
2009
$
2008
$
Financial liabilities carried at amortised cost
Trade payables
Trust receipts and bills
payable
Other creditors
Accruals and other
liabilities
Dividend payable
Due to affiliated company
Term loans
Bank overdrafts
Loans from shareholders

and directors
1,495,044
1,361,692
1,974,489
1,495,044
1,361,692
1,974,489
3,423,536
767,512
4,164,239
268,734
8,083,933
538,472
3,423,536
767,512
4,164,239
268,734
8,083,933
538,472
1,749,428
1,636,087
366,101
76,407
2,190,131
57,374
1,929,602
82,295
107,116
3,428,538
30,981
1,209,338
82,254
257,139
150,000
14,087
2,601,875
1,291,985
1,749,428
1,636,087
366,101
76,407
2,190,131
57,374
1,929,602
82,295
107,116
3,428,538
30,981
1,209,338
82,254
257,139
150,000
14,087
2,601,875
1,291,985
11,761,620
11,373,197
16,203,572
11,761,620
11,373,197
16,203,572
1,582,397
2,015,897
2,542,545
13,344,017
13,389,094
18,746,117
*Refer to Note 37(c).
A-69

31 DECEMBER 2008, 2009 AND 2010
37.

The following methods and assumptions are used to estimate the fair value of each class of
financial instrument:
(a)
Fair value of financial instruments that are carried at fair value

The following table shows an analysis of financial instruments carried at fair value by level of
fair value hierarchy:
Quoted
prices in
active
markets
for identical
instruments
(Level 1)
Financial liabilities:
Derivatives (Note 35)
- Forward currency contracts
Group
2010
$
Significant
Significant
other
unobservable
observable
inputs
inputs
(Level 2)
(Level 3)
(203)
Total
(203)
No comparatives have been presented as there were no financial instruments carried at fair
value as at 31 December 2009.
Fair value hierarchy
The Company classifies fair value measurement using a fair value hierarchy that reflects the
significance of the inputs used in making the measurements. The fair value hierarchy have
the following levels:
Level 1 Quoted prices (unadjusted) in active markets for identical assets or liabilities
Level 2 Inputs other than quoted prices included within Level 1 that are observable
for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from
prices), and
Level 3 Inputs for the asset or liability that are not based on observable market data
(unobservable inputs)
There have been no transfers between Level 1 and Level 2 during the financial years ended
2010 and 2009.
Derivatives (Note 35): Forward currency contracts are valued by financial institutions using a
valuation technique with market observable inputs.
A-70

31 DECEMBER 2008, 2009 AND 2010
37.

(b)
Financial instruments whose carrying amount approximates fair value

Management has determined that the carrying amounts of cash and cash equivalents, trade
debtors, other receivables, trade payables, trust receipts and bill payables, other creditors,
amount due from/(to) affiliated and holding companies, loan from related parties and term
loans, reasonably approximate their fair values because these are mostly short term in
nature or are repriced frequently.
Obligations under finance leases
The carrying amount of obligations under finance leases approximates their fair values as
the current lending rates for similar type of lending arrangement is not materially different
from the rates obtained by the Group.
(c)
Financial instruments carried at other than fair value

Loan from shareholders and directors
The loan from shareholders and directors have no fixed repayment terms. The loan from
shareholders and directors are repayable only when the cash flows of the Group permits.
Accordingly, the fair values of these balances are not determinable as the timing of the future
cash flows arising from these balances cannot be estimated reliably.
Unquoted equity investments
In the directors opinion, it is not practicable to determine the fair value of the unquoted equity
investments held as long-term investments and carried at cost less impairment losses. The
expected cash flows from these investments are believed to be in excess of the carrying
amount.
38.
Capital management
The primary objective of the Groups capital structure is to maintain an efficient mix of debt and
equity in order to achieve a low cost of capital, while taking into account the desirability of retaining
financial flexibility to pursue business opportunities and adequate access to liquidity to mitigate the
effect of unforeseen events on cash flows.
The directors regularly review the Groups capital structure and made adequate adjustments to
reflect economic conditions, business strategies and future commitments. No changes were made
to the objectives, policies or processes during the years ended 31 December 2008, 2009 and 2010.
A-71

31 DECEMBER 2008, 2009 AND 2010
38.
Capital management (contd)

The Group is required to comply with certain financial covenants as imposed by certain financial
institutions with respect to bank facilities that were granted. The most restrictive covenants require
the Group to maintain a gearing ratio covering borrowings from financial institutions of not more
than 3 times against the Groups net worth and net worth of not less than $8.5 million at all times.
The Group continuously monitors its compliance with these covenants. As at 31 December 2008,
2009 and 2010, the Group has complied with these covenants.
2010
$
2008
$

Finance lease obligation
Term loans
3,423,536
76,407
2,190,131
57,374
4,164,239
3,428,538
30,981
8,083,933
14,087
2,601,875
1,291,985
Net debt
5,747,448
7,623,758
11,991,880
Share capital and reserves
13,217,732
10,586,882
9,485,713
Total capital
13,217,732
10,586,882
9,485,713
0.43
0.72
1.26
Gearing ratio
39.
2009
$
Segment information
For management purposes, the Group is organised into business units based on products and
services, and has three reportable operating segments as follows:
-
Residential and commercial (air-conditioning) segment relates to sale and distribution of

air-conditioning materials which mainly comprises of copper pipes, copper tubes, Class O
and Class 1 closed cell insulation pipes and sheets, PVC trunkings, electrical wires and
refrigerants.
Commercial and light industrial (refrigeration) segment relates to sale of refrigeration

component parts including compressors, condensers, condensing units, multiple compressor
racks units, electronic controls, energy management solutions, service equipments and tools
and the Groups range of thermal heat exchangers comprising of evaporators, condensers
and custom coils.
Oil, marine and gas (refrigeration and air-conditioning) segment relates to sales and
distribution of a range of air-condition and refrigeration systems suitable for the oil, marine
and gas industry. These products include the Groups brand of heat exchangers and
packaged condensing units installed onboard ships, vessels and oil rigs, which are primarily
used to preserve food, other perishables and also to provide air-condition for the living and
working spaces of the vessels crew.
A-72

31 DECEMBER 2008, 2009 AND 2010
39.
Segment information (contd)

Except as indicated above, no operating segment have been aggregated to form the above
reportable operating segment.
Management monitors the operating results of its business units separately for the purpose of
making decisions about resource allocation and performance assessment. Segment performance
is evaluated based on gross profit or loss.
Income and expenses (other than revenue and cost of sales) are managed on a group basis and
are not allocated to operating segments.
2010
Revenue
Cost of sales
Gross profit
2009
Revenue
Cost of sales
Gross profit
2008
Revenue
Cost of sales
Gross profit
Residential and
commercial
(airconditioning)
$
Commercial
and light
industrial
(refrigeration)
$
Oil, marine and

gas
(refrigeration
and airconditioning)
$
Total
$
6,194,465
(4,546,391)
23,732,437
(15,742,026)
2,689,236
(1,608,736)
32,616,138
(21,897,153)
1,648,074
7,990,411
1,080,500
10,718,985
4,704,147
(3,775,597)
19,661,618
(14,230,466)
2,439,647
(1,611,553)
26,805,412
(19,617,616)
928,550
5,431,152
828,094
7,187,796
5,414,430
(4,233,067)
20,641,502
(15,765,412)
3,135,458
(2,090,363)
29,191,390
(22,088,842)
1,181,363
4,876,090
1,045,095
7,102,548
A-73

31 DECEMBER 2008, 2009 AND 2010
39.
Segment information (contd)

Geographical information
Revenue and non-current assets information based on the geographical location of customers and
assets respectively are as follows:
Revenue
Singapore
Malaysia
Indonesia
Hong Kong/Macau/Peoples Republic of China
Indo-China*
Others
2010
$
2009
$
2008
$
13,755,693
8,872,299
3,810,232
3,382,777
922,370
1,872,767
11,083,158
7,572,458
2,996,464
2,127,215
809,507
2,216,610
12,249,862
7,808,003
3,632,106
1,642,935
1,644,897
2,213,587
32,616,138
26,805,412
29,191,390
2010
$
2009
$
2008
$
5,166,439
2,325,051
44,984
5,053,977
2,546,440
16,255
5,094,285
2,621,827
51,868
7,536,474
7,616,672
7,767,980
* Relates to Vietnam, Myanmar and Cambodia.
Non-current assets
Singapore
Malaysia
Hong Kong
Non-current assets information presented above consist of fixed assets, investment properties and
other receivables as presented in the consolidated balance sheet.
Information about a major customer
Revenue from one major customer amounted to $3,400,000 (2009: $Nil; 2008: $Nil), arising from
project sales and installation works in the residential and commercial cooling segment.
40.
Events occurring after the balance sheet date

(a)
On 15 February 2011, the Company declared an interim exempt (one-tier) dividend of $24.73
per share, amounting to $2,000,000.
(b)
On 17 March 2011, the Company issued 8,312 new ordinary shares for a cash consideration
of $1,187,452.
(c)
On 18 March 2011, the Company changed its name from Far East Refrigeration (Pte) Limited
to Far East Group Pte. Ltd.
A-74

31 DECEMBER 2008, 2009 AND 2010
40.
Events occurring after the balance sheet date (contd)

(d)
At an extraordinary general meeting held on 22 July 2011, the shareholders approved, inter
alia, the following:
(i)
the conversion of the Company into a public limited company and the change of the
name to Far East Group Limited;
(ii)
the adoption of a new set of Articles of Association;
(iii)
the sub-division of every one ordinary share into 600 ordinary shares (the SubDivision);
(iv)
the issue of 18,800,000 new ordinary shares pursuant to the placement, which when
allotted or allocated, issued and fully-paid, will rank pari passu in all respects with the
existing ordinary shares; and
(v)
the authorisation of the Directors, pursuant to Section 161 of the Companies Act, to
allot and issue ordinary shares whether by way of rights, bonus or otherwise
(including ordinary shares as may be issued pursuant to any Instrument (as
defined below) made or granted by the Directors while this resolution is in force
notwithstanding that the authority conferred by this resolution may have ceased
to be in force at the time of issue of such ordinary shares), and/or
make or grant offers, agreements or options (collectively, Instruments) that
might or would require ordinary shares to be issued, including but not limited to
the creation and issue of warrants, debentures or other instruments convertible
into ordinary shares,
at any time and upon such terms and conditions and for such purposes and to such
persons as the Directors may in their absolute discretion deem fit, provided that the
aggregate number of ordinary shares issued pursuant to such authority (including
ordinary shares to be issued pursuant to any Instrument but excluding ordinary shares
which may be issued pursuant to any adjustments (Adjustments) effected under
any relevant Instrument, which Adjustment shall be made in compliance with the
provisions of the Catalist Rules for the time being in force (unless such compliance
has been waived by the SGX-ST) and the Articles of Association for the time being
of the Company), shall not exceed 100% of the issued share capital of the Company
(excluding treasury shares) immediately after the placement, and provided that the
aggregate number of such ordinary shares to be issued other than on a pro rata basis
in pursuance to such authority (including ordinary shares to be issued pursuant to
any Instrument but excluding shares which may be issued pursuant to any Adjustment
effected under any relevant Instrument) to the existing shareholders shall not
exceed 50% of the issued share capital of the Company (excluding treasury shares)
immediately after the placement, and, unless revoked or varied by the Company in
general meeting, such authority shall continue in force until the conclusion of the next
Annual General Meeting of the Company or the date by which the next Annual General
Meeting of the Company is required by law to be held, whichever is the earlier; and
(vi)
the adoption of the Shareholders Mandate.
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31 DECEMBER 2008, 2009 AND 2010
41.
Authorisation of financial statement

The financial statements for the years ended 31 December 2008, 2009 and 2010 were authorised
for issue in accordance with a directors resolution dated on 25 July 2011.
A-76
APPENDIX B SUMMARY OF THE CONSTITUTION OF OUR COMPANY

The discussion below provides a summary of certain provisions of our Articles of Association and the
laws of Singapore. This discussion is only a summary and is qualified by reference to Singapore law and
our Memorandum and Articles of Association.
Registration number
We are registered in Singapore with the Accounting and Corporate Regulatory Authority (ACRA) under
the company registration number 196400096C.
Summary of our Articles of Association
1.
Directors
(a)
Ability of interested directors to vote

A Director shall not vote in respect of any contract, proposed contract or arrangement in
which he has any personal material interest, and he shall not be counted in the quorum
present at the meeting.
(b)
Remuneration
Fees payable to Non-executive Directors shall be a fixed sum (not being a commission
on or a percentage of profits or turnover of our Company) as shall, from time to time, be
determined by our Company in general meeting. Fees payable to Directors shall not be
increased except at a general meeting convened by a notice specifying the intention to
propose such increase.
Any Director who holds any executive office, or who serves on any committee of our
Directors, or who performs services outside the ordinary duties of a Director, may be
paid extra remuneration by way of salary, commission or otherwise, as the Directors may
determine.
The remuneration of an Executive Chairman shall be fixed by our Directors and may be by
way of salary or commission or participation in profits or by any or all of these modes but
shall not be by a commission on or a percentage of turnover.
Our Directors shall have power to pay pensions or other retirement, superannuation, death
or disability benefits to (or to any person in respect of) any Director for the time being holding
any executive office and for the purpose of providing any such pensions or other benefits, to
contribute to any scheme or fund or to pay premiums.
(c)
Borrowing
Our Directors may exercise all the powers of our Company to raise or borrow money, to
mortgage or charge its undertaking, property and uncalled capital, and to issue debentures
and other securities for any debt, liability or obligation of our Company.
(d)
Retirement age limit

There is no retirement age limit for Directors under our Articles of Association. Section 153(1)
of the Companies Act however, provides that no person of or over the age of 70 years shall
be appointed a director of a public company, unless he is appointed or re-appointed as a
director of the company or authorised to continue in office as a director of the company by
way of an ordinary resolution passed at an annual general meeting of the company.
(e)
Shareholding qualification
There is no shareholding qualification for Directors in the Articles of Association of our
Company.
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2.
Share rights and restrictions

Our Company currently has one class of Shares, namely, ordinary shares. Only persons who are
registered on our register of members and in cases in which the person so registered is CDP, the
persons named as the depositors in the depository register maintained by CDP for the ordinary
shares, are recognised as our Shareholders.
(a)
Dividends and distribution

We may, by ordinary resolution of our Shareholders, declare dividends at a general meeting,
but we may not pay dividends in excess of the amount recommended by our Board of
Directors. We must pay all dividends out of our profits available for distribution. All dividends
are paid pro-rata amongst our Shareholders in proportion to the amount paid up on each
Shareholders ordinary shares, unless the rights attaching to an issue of any ordinary share
provide otherwise. Unless otherwise directed, dividends are paid by cheque or warrant
sent through the post to each Shareholder at his registered address. Notwithstanding the
foregoing, the payment by us to CDP of any dividend payable to a Shareholder whose name
is entered in the depository register shall, to the extent of payment made to CDP, discharge
us from any liability to that Shareholder in respect of that payment.
The payment by our Directors of any unclaimed dividends or other moneys payable on or
in respect of a Share into a separate account shall not constitute our Company a trustee in
respect thereof. All dividends unclaimed after being declared may be invested or otherwise
made use of by our Directors for the benefit of our Company. Any dividend unclaimed after
a period of six (6) years after having been declared may be forfeited and shall revert to our
Company but our Directors may thereafter at their discretion annul any such forfeiture and
pay the dividend so forfeited to the person entitled thereto prior to the forfeiture.
Our Directors may retain any dividends or other moneys payable on or in respect of a Share
on which our Company has a lien, and may apply the same in or towards satisfaction of the
debts, liabilities or engagements in respect of which the lien exists.
(b)
Voting rights
A holder of our ordinary shares is entitled to attend, speak and vote at any general meeting,
in person or by proxy. Proxies need not be a Shareholder. A person who holds ordinary
shares through the SGX-ST book-entry settlement system will only be entitled to vote at a
general meeting as a Shareholder if his name appears on the depository register maintained
by CDP 48 hours before the general meeting. Except as otherwise provided in our Articles of
Association, two or more Shareholders must be present in person or by proxy to constitute
a quorum at any general meeting. Under our Articles of Association, on a show of hands,
every Shareholder present in person and by proxy shall have one vote, and on a poll, every
Shareholder present in person or by proxy shall have one vote for each ordinary share
which he holds or represents. A poll may be demanded in certain circumstances, including
by the Chairman of the meeting or by any shareholder present in person or by proxy and
representing not less than one-tenth of the total voting rights of all Shareholders having the
right to attend and vote at the meeting or by any two Shareholders present in person or by
proxy and entitled to vote. In the case of a tie vote, whether on a show of hands or a poll, the
Chairman of the meeting shall be entitled to a casting vote.
3.
Change in capital
Changes in the capital structure of our Company (for example, an increase, consolidation,
cancellation, sub-division or conversion of our share capital) require Shareholders to pass an
ordinary resolution. Ordinary resolutions generally require at least 14 days notice in writing. The
notice must be given to each of our Shareholders who have supplied us or (as the case may be)
the CDP with an address in Singapore for the giving of notices and must set forth the place, the
day and the hour of the meeting. However, we are required to obtain our Shareholders approval
by way of a special resolution for any reduction of our share capital, subject to the conditions
prescribed by law.
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4.
Variation of rights of existing Shares or classes of Shares

Subject to the Companies Act, whenever the Share capital of our Company is divided into different
classes of Shares, the special rights attached to any class may be varied or abrogated either with
the consent in writing of the holders of three-quarters of the total voting rights of the issued Shares
of the class or with the sanction of a special resolution passed at a separate general meeting of
the holders of the Shares of the class. To every such separate general meeting the provisions of
our Articles of Association relating to general meetings of our Company and to the proceedings
thereat shall mutatis mutandis apply, except that the necessary quorum shall be two persons at
least holding or representing by proxy at least one-third of the total voting rights of the issued
Shares of the class, and that any holder of Shares of the class present in person or by proxy may
demand a poll and that every such holder shall on a poll have one vote for every Share of the
class held by him, provided always that where the necessary majority for such a special resolution
is not obtained at such general meeting, consent in writing if obtained from the holders of threequarters of the total voting rights of the issued Shares of the class concerned within two months of
such general meeting shall be as valid and effectual as a special resolution carried at such general
meeting. These provisions shall apply to the variation or abrogation of the special rights attached
to some only of the Shares of any class as if each group of Shares of the class differently treated
formed a separate class the special rights whereof are to be varied or abrogated.
The relevant Article does not impose more significant conditions than the Companies Act in this
regard.
5.
Limitations on foreign or non-resident shareholders

There are no limitations imposed by Singapore law or by our Articles of Association on the rights of
our Shareholders who are regarded as non-residents of Singapore, to hold or vote their Shares.
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APPENDIX C DESCRIPTION OF OUR SHARES

The following statements are brief summaries of the rights and privileges of our Shareholders conferred
by the laws of Singapore, the Catalist Rules and our Articles of Association (Articles). These statements
summarise the material provisions of our Articles but are qualified in entirety by reference to our Articles,
a copy of which is available for inspection at our registered office during normal business hours for a
period of six months from the date of this Offer Document.
Our Shares
Our Articles of Association provide that we may issue Shares of different classes with such preferential,
deferred, qualified or other special rights, privileges, conditions or restrictions as our Board of Directors
may determine.
As at the Latest Practicable Date, the total issued and paid-up capital of our Company was
S$9,322,192.32 comprising 89,200 Shares. Please refer to the section General Information on our Group
Share Capital of this Offer Document for further details on our share capital.
All of our Shares are in registered form. We may, subject to the provisions of the Companies Act and the
rules of the SGX-ST, purchase our own Shares. However, we may not, except in circumstances permitted
by the Companies Act, grant any financial assistance for the acquisition or proposed acquisition of our
Shares.
New Shares
New Shares may only be issued with the prior approval of our Shareholders in a general meeting. The
aggregate number of Shares to be issued pursuant to a share issue mandate may not exceed 50%
(or 100% if the New Shares are to be issued by way of renounceable issue on a pro rata basis to our
Shareholders, or such other limit as may be prescribed by the SGX-ST) of the issued share capital of
our Company, of which the aggregate number of Shares to be issued other than on a pro rata basis
to our Shareholders may not exceed 20% (or such other limit as may be prescribed by the SGX-ST)
of the issued share capital of our Company (the percentage of issued share capital being based on
our Companys issued share capital at the time such authority is given after adjusting for new shares
arising from the conversion of convertible securities or employee share options on issue at the time such
authority is given and any subsequent consolidation or sub-division of Shares). The approval, if granted,
will lapse at the conclusion of the annual general meeting following the date on which the approval was
granted or the date by which the annual general meeting is required by law to be held, whichever is the
earlier.
Subject to the foregoing, the provisions of the Companies Act and any special rights attached to any
class of shares currently issued, our Board of Directors control the allotment and issue of all new Shares
and may impose such rights and restrictions as it may think fit.
Shareholders
Only persons who are registered in our register of members and, in cases in which the person so
registered is CDP, the persons named as the Depositors in the Depository Register maintained by CDP
for the Shares, are recognised as our Shareholders. We will not, except as required by law, recognise
any equitable, contingent, future or partial interest in any Share or other rights for any Share other than
the absolute right thereto of the registered holder of that Share or of the person whose name is entered
in the Depository Register for that Share. We may close our register of members for any time or times
if we provide the SGX-ST with at least ten clear Market Days notice. However, the register of members
may not be closed for more than 30 days in aggregate in any calendar year. We would typically close our
register of members to determine Shareholders entitlement to receive dividends and other distributions.
Transfer of Shares
There is no restriction on the transfer of fully paid Shares except where required by law or the Catalist
Rules or the rules or by-laws of any stock exchange on which our Company is listed. Our Shares may
be transferred by a duly signed instrument of transfer in a form approved by the SGX-ST or any stock
exchange on which our Company is listed. Our Board of Directors may decline to register any transfer of
Shares which are not fully paid Shares or Shares on which we have a lien. Our Board of Directors may
also decline to register any instrument of transfer unless, among other things, it has been duly stamped
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and is presented for registration together with the share certificate and such other evidence of title as
they may require. We will replace lost or destroyed Share certificates if it is properly notified and if the
applicant pays a fee which will not exceed S$2.00 and furnishes any evidence and indemnity that our
Board of Directors may require.
General meetings of Shareholders
Subject to the provisions of the Companies Act and except as otherwise provided in our Articles, we
are required to hold an annual general meeting every year. Our Board of Directors may convene an
extraordinary general meeting whenever it thinks fit and must do so if Shareholders representing not
less than 10% of the total voting rights of all Shareholders request in writing that such a meeting be held.
In addition, two or more Shareholders holding not less than 10% of our issued share capital may call a
meeting. Unless otherwise required by law or by our Articles, voting at general meetings is by ordinary
resolution, requiring an affirmative vote of a simple majority of the votes cast at the meeting. An ordinary
resolution suffices, for example, for the appointment of directors. A special resolution, requiring the
affirmative vote of at least 75% of the votes cast at the meeting, is necessary for certain matters under
Singapore law, including voluntary winding up of our Company, amendments to our Memorandum and
Articles of Association, a change of our corporate name and a reduction in our share capital.
We must give at least 21 days notice in writing for every general meeting convened for the purpose of
passing a special resolution. Ordinary resolutions generally require at least 14 days notice in writing. The
notice must be given to each of our Shareholders who have supplied us with an address in Singapore for
the giving of notices and must set forth the place, the day and the hour of the meeting and, in the case of
special business, the general nature of that business.
Voting rights
A holder of our Shares is entitled to attend, speak and vote at any general meeting, in person or by
proxy. Proxies need not be Shareholders. A person who holds Shares through the SGX-ST bookentry settlement system will only be entitled to vote at a general meeting as a Shareholder if his name
appears on the depository register maintained by CDP 48 hours before the general meeting. Except as
otherwise provided in our Articles, two or more Shareholders must be present in person or by proxy to
constitute a quorum at any general meeting. Under our Articles, on a show of hands, every Shareholder
present in person and by proxy shall have one vote (provided that in the case of a Shareholder who is
represented by two proxies, the chairman of the meeting shall be entitled to treat the first named proxy
as the authorised representative to vote on a show of hands), and on a poll, every Shareholder present
in person or by proxy shall have one vote for each Share which he holds or represents. A poll may be
demanded in certain circumstances, including by the chairman of the meeting or by any Shareholder
present in person or by proxy and representing not less than one-tenth of the total voting rights of all
shareholders having the right to attend and vote at the meeting or by any two Shareholders present in
person or by proxy and entitled to vote. In the case of an equality of votes, whether on a show of hands
or a poll, the chairman of the meeting shall be entitled to a casting vote.
Dividends
We may, by ordinary resolution of our Shareholders, declare dividends at a general meeting, but we
may not pay dividends in excess of the amount recommended by our Board of Directors. We must
pay all dividends out of our profits available for distribution. All dividends are paid pro rata among our
Shareholders in proportion to the amount paid up on each Shareholders Shares, unless the rights
attaching to an issue of any Share provides otherwise. Unless otherwise directed, dividends are paid by
cheque or warrant sent through the post to each Shareholder at his registered address. Notwithstanding
the foregoing, the payment by us to CDP of any dividend payable to a Shareholder whose name is
entered in the Depository Register shall, to the extent of payment made to CDP, discharge us from any
liability to that Shareholder in respect of that payment.
Bonus and rights issue
Our Board of Directors may, with approval of our shareholders at a general meeting, capitalise any
reserves or profits (including profits or moneys carried and standing to any reserve) and distribute the
same as bonus Shares credited as paid-up to our Shareholders in proportion to their shareholdings. Our
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Board of Directors may also issue rights to take up additional Shares to Shareholders in proportion to
their shareholdings. Such rights are subject to any conditions attached to such issue and the regulations
of any stock exchange on which we are listed.
Takeovers
Under the Singapore Code on Take-overs and Mergers (Singapore Take-over Code), issued by the
Authority pursuant to section 321 of the Securities and Futures Act, any person acquiring an interest,
either on his own or together with parties acting in concert with him, in 30% or more of the voting Shares
must extend a takeover offer for the remaining voting Shares in accordance with the provisions of the
Singapore Take-over Code. In addition, a mandatory takeover offer is also required to be made if a person
holding, either on his own or together with parties acting in concert with him, between 30% and 50% of
the voting shares acquires additional voting shares representing more than 1% of the voting shares in any
six month period.
Under the Singapore Take-over Code, parties acting in concert comprise individuals or companies,
who pursuant to an arrangement or understanding (whether formal or informal), co-operate, through
the acquisition by any of them of shares in a company, to obtain or consolidate effective control of that
company. Certain persons are presumed (unless the presumption is rebutted) to be acting in concert with
each other, and they are as follows:(a)
the following companies:(i)
a company
(ii)
the parent company of (i);
(iii)
the subsidiaries of (i);
(iv)
the fellow subsidiaries of (i);
(v)
the associated companies of (i), (ii), (iii) or (iv); and
(vi)
companies whose associated companies include any of (i), (ii), (iii), (iv) or (v);
(b)
a company with any of its directors (together with their close relatives, related trusts as well as
companies controlled by any of the directors, their close relatives and related trusts);
(c)
a company with any of its pension funds and employee share schemes;
(d)
a person with any investment company, unit trust or other fund whose investment such person
manages on a discretionary basis, but only in respect of the investment account which such person
manages;
(e)
a financial or other professional adviser, including a stockbroker, with its customer in respect of the
shareholdings of:(i)
the adviser and persons controlling, controlled by or under the same control as the adviser;
and
(ii)
all the funds which the adviser manages on a discretionary basis, where the shareholdings
of the adviser and any of those funds in the customer total 10% or more of the customers
equity share capital;
(f)
directors of a company (together with their close relatives, related trusts and companies controlled
by any of such directors, their close relatives and related trusts) which is subject to an offer or
where the directors have reason to believe a bona fide offer for their company may be imminent;
(g)
partners; and
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(h)
the following persons and entities:(i)
an individual;
(ii)
the close relatives of (i);
(iii)
the related trusts of (i);
(iv)
any person who is accustomed to act in accordance with the instructions of (i); and
(v)
companies controlled by any of (i), (ii), (iii) or (iv).
Under the Singapore Take-over Code, a mandatory offer made with consideration other than cash must
be accompanied by a cash alternative at not less than the highest price paid by the offeror or any person
acting in concert within the six months preceding the acquisition of shares which triggered the mandatory
offer obligation.
Liquidation or other return of capital
If our Company liquidates or in the event of any other return of capital, holders of our Shares will be
entitled to participate in any surplus assets in proportion to their shareholdings, subject to any special
rights attaching to any other class of shares.
Indemnity
As permitted by Singapore law, our Articles provide that, subject to the Companies Act, our Board of
Directors and officers shall be entitled to be indemnified by us against any liability incurred in defending
any proceedings, whether civil or criminal, which relate to anything done or omitted to have been done
as an officer, director or employee and in which judgement is given in their favour or in which they are
acquitted or in connection with any application under any statute for relief from liability in respect thereof
in which relief is granted by the court. We may not indemnify our Directors and officers against any liability
which by law would otherwise attach to them in respect of any negligence, default, breach of duty or
breach of trust of which they may be guilty in relation to us.
Limitations on rights to hold or vote Shares
Except as described in Voting Rights and Takeovers above, there are no limitations imposed by
Singapore law or by our Articles on the rights of non-resident shareholders to hold or vote in respect of
our Shares.
Minority rights
The rights of minority shareholders of Singapore-incorporated companies are protected under Section 216
of the Companies Act, which gives the Singapore courts a general power to make any order, upon
application by any of our shareholders, as they think fit to remedy any of the following situations where:(a)
our affairs are being conducted or the powers of our Board of Directors are being exercised in a
manner oppressive to, or in disregard of the interests of, one or more of our shareholders; or
(b)
we take an action, or threaten to take an action, or our shareholders pass a resolution, or propose
to pass a resolution, which unfairly discriminates against, or is otherwise prejudicial to, one or more
of our shareholders, including the applicant.
Singapore courts have a wide discretion as to the relief they may grant and that relief is in no way limited
to those listed in the Companies Act. Without prejudice to the foregoing, the Singapore courts may:(a)
direct or prohibit any act or cancel or vary any transaction or resolution;
(b)
regulate the conduct of our affairs in the future;
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(c)
authorise civil proceedings to be brought in our name of, or on behalf of, by a person or persons
and on such terms as the court may direct;
(d)
provide for the purchase of a minority Shareholders Shares by our other Shareholders or by us
and, in the case of a purchase of Shares by us, a corresponding reduction of our share capital; or
(e)
provide that our Company be wound up.
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APPENDIX D TAXATION
The following is a discussion of certain tax matters relating to Singapore income tax, capital gains tax,
stamp duty, estate duty and GST consequences in relation to the purchase, ownership and disposal of
our Shares. The discussion is limited to a general description of certain tax consequences in Singapore
with respect to the ownership of shares and is based on laws, regulations and interpretations now in effect
and available as at the date of this Offer Document. The laws, regulations and interpretations, however,
may change at any time, and any change could be retroactive to the date of issuance of our Shares.
These laws and regulations are also subject to various interpretations and the relevant tax authorities or
the courts of Singapore could later disagree with the explanations or conclusions set out below.
Prospective purchasers of our Shares should consult their tax advisers concerning the tax
consequences of owning and disposing of our Shares. Neither our Company, our Directors nor
any other persons involved in the Placement accepts responsibility for any tax effects or liabilities
resulting from the subscription, purchase, holding or disposal of our Shares.
Individual income tax
Individual taxpayers who are Singapore tax residents are subject to Singapore income tax on income
accrued in or derived from Singapore. All foreign-sourced income (except for income received through a
partnership in Singapore) received on or after 1 January 2004 in Singapore by tax resident individuals will
be exempt from tax. Certain Singapore-sourced investment income (such as interest from debt securities)
derived by tax resident individuals on or after 1 January 2004 from certain financial instruments (other
than income derived through a partnership in Singapore or from the carrying on of a trade, business or
profession) will be exempt from tax.
For a Singapore tax resident individual, the tax rate will vary according to the individuals circumstances
but is subject to a maximum rate of 20.0%.
Non-resident individuals, subject to certain exceptions, are generally subject to income tax on income
accrued in or derived from Singapore at the prevailing rate of 20.0%.
An individual will be regarded as being resident in Singapore in a year of assessment if, in the preceding
year, he was physically present in Singapore or exercised employment in Singapore (other than as a
director of a company) for 183 days or more, or if he resides in Singapore.
Corporate income tax
Corporate taxpayers who are Singapore tax residents are subject to Singapore income tax on income
accrued in or derived from Singapore and subject to certain exceptions, on foreign-sourced income
received or deemed to be received in Singapore from outside Singapore. Foreign-sourced income in the
form of dividends, branch profits and services income received or deemed to be received in Singapore by
resident corporate taxpayers on or after 1 June 2003 will be exempt from Singapore income tax if certain
prescribed conditions are met.
Non-resident corporate taxpayers are subject to Singapore income tax on income accrued in or derived
from Singapore and subject to certain exceptions, on foreign income received or deemed to be received
in Singapore from outside Singapore.
A corporate taxpayer is regarded as resident for Singapore tax purposes if its business is controlled and
managed in Singapore.
The prevailing corporate tax rate in Singapore is 17.0%. Further, corporate tax exemption will apply to the
first S$300,000 of a companys chargeable income as follows:(i)
75.0% of up to the first S$10,000 of a companys chargeable income (excluding Singapore

dividends); and
(ii)
50.0% of up to the next S$290,000 of a companys chargeable income (excluding Singapore

dividends).
The remaining chargeable income will be fully taxable at the corporate tax rate of 17.0%.
D-1
APPENDIX D TAXATION
Cash dividend distributions
Dividends paid by a Singapore tax resident company would be considered as sourced from Singapore.
Dividends received in respect of the shares of a Singapore tax resident company by either Singapore tax
resident or non-Singapore tax resident shareholders are not subject to Singapore withholding tax.
Under the one-tier corporate tax system in Singapore, the tax paid by a Singapore tax resident company
is a final tax and the after-tax profits of the company can be distributed to its shareholders as one-tier tax
exempt dividends.
Where our Company is tax resident in Singapore, our Company may distribute one-tier tax exempt
dividends to our Shareholders. The dividends will be exempt from Singapore income tax in the hands of
our Shareholders.
Bonus issues and scrip dividends
Under current Singapore tax law and practice, a capitalisation of profits followed by the issue of new
shares, credited as fully paid, pro-rata to shareholders (bonus issue) does not represent a distribution
of dividends by a company to its shareholders. Therefore, a Singapore resident shareholder receiving
shares by way of a bonus issue should not have a liability to Singapore income tax.
When a dividend is to be satisfied wholly or in part in the form of an allotment of ordinary shares credited
as fully paid, the dividend declared will be treated as income to its shareholders. However, under the
one-tier corporate tax system and where our Company is tax resident in Singapore, such a dividend will
be exempt from Singapore income tax. Similarly, when our Shareholders are given the right to elect to
receive an allotment of ordinary Shares credited as fully paid in lieu of cash, the dividend declared will be
treated as one-tier tax exempt dividend income and will not be subject to Singapore income tax.
Gains on disposal of ordinary Shares
Singapore does not impose tax on capital gains. Gains may be construed to be of an income nature and
subject to Singapore income tax if they arise from or are otherwise connected with the activities of a trade
or business carried on in Singapore. The gains may also be liable to tax in the hands of the shareholders
if the shares were acquired with the intention or purpose of making a profit by sale and not with the
intention to be held for long-term investment purposes.
Any gains from the disposal of the Shares are not taxable in Singapore unless the seller is regarded
as having derived gains of an income nature in Singapore, in which case, the gains would be subject
to tax at the prevailing corporate tax rate. Because the precise tax status will vary from shareholder
to shareholder, Shareholders should consult their own professional adviser on the Singapore tax
consequences that may apply to their individual circumstances.
Stamp duty
There is no stamp duty payable on the subscription, allotment or holding of the Shares.
Stamp duty is payable on the instrument of transfer of the Shares at the rate of S$0.20 for every S$100 or
any part thereof, computed on the amount or value of consideration. The amount or value of consideration
is the actual consideration or market value of the Shares, whichever is higher.
The purchaser is liable for stamp duty, unless there is an agreement to the contrary. No stamp duty
is payable if no instrument of transfer is executed or the instrument of transfer is executed outside
Singapore. However, stamp duty would be payable if the instrument of transfer which is executed outside
Singapore is received in Singapore.
Stamp duty is, however, not applicable in respect of electronic transfers of the Shares through the CDP.
Estate duty
The Singapore estate duty was abolished with effect from 15 February 2008.
D-2
APPENDIX D TAXATION
Goods and Services Tax (GST)
The sale of our Shares by an investor belonging in Singapore through a SGX-ST member or to another
person belonging in Singapore is an exempt supply not subject to GST. Any GST (e.g. GST on brokerage)
incurred by the investor in connection with the making of this exempt supply will generally become an
additional cost to the investor unless the investor satisfies certain conditions prescribed under the GST
legislation or by the Comptroller of GST.
Where the Shares are sold by a GST registered investor to a person belonging outside Singapore (and
who is outside Singapore at the time of the supply), the sale is a taxable supply subject to GST at zerorate. Consequently, any GST incurred by him in the making of this zero-rated supply for the purpose of
his business will, subject to the provisions of the GST legislation, be recoverable as an input tax credit in
his GST returns.
Investors should seek their own tax advice on the recoverability of GST incurred on expenses in
connection with the sale of shares.
Services such as brokerage, handling and clearing services rendered by a GST registered person to an
investor belonging in Singapore in connection with the investors purchase, sale or holding of the Shares
will be subject to GST at the prevailing rate, that is, 7.0%. Similar services rendered contractually to an
investor belonging outside Singapore are subject to GST at zero-rate, provided that the investor is not
physically present in Singapore at the time the services are performed and the services provided do not
directly benefit a person who belongs in Singapore.
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APPENDIX E TERMS, CONDITIONS AND PROCEDURES FOR APPLICATION

You are invited to subscribe for the New Shares at the Placement Price, subject to the following terms
and conditions:1.
YOUR APPLICATION MUST BE MADE IN LOTS OF 1,000 NEW SHARES OR INTEGRAL

MULTIPLES THEREOF. YOUR APPLICATION FOR ANY OTHER NUMBER OF NEW SHARES
WILL BE REJECTED.
2.
Your application for the New Shares may only be made by way of printed Placement Shares
Application Form.
YOU MAY NOT USE CPF FUNDS TO APPLY FOR THE NEW SHARES.
3.
You are allowed to submit only one application in your own name for the New Shares.
If you, not being an approved nominee company, have submitted an application for the
New Shares in your own name, you should not submit any other application for the New
Shares for any other person. Such separate applications shall be deemed to be multiple
applications and will be liable to be rejected at the discretion of our Company, the Sponsor
or the Placement Agent.
Joint applications shall be rejected. Multiple applications for New Shares shall be liable
to be rejected at the discretion of our Company. If you submit or procure submissions of
multiple share applications, you may be deemed to have committed an offence under the
Penal Code, Chapter 224 of Singapore and the SFA, and your applications may be referred
to the relevant authorities for investigation. Multiple applications or those appearing to be or
suspected of being multiple applications will be liable to be rejected at the discretion of our
Company, the Sponsor or the Placement Agent.
4.
We will not accept applications from any person under the age of 21 years, undischarged
bankrupts, sole proprietorships, partnerships or non-corporate bodies, joint Securities Account
holders of CDP and from applicants whose addresses (as furnished in their Application Forms)
bear post office box numbers. No person acting or purporting to act on behalf of a deceased person
is allowed to apply under the Securities Account maintained with CDP in the name of the deceased
at the time of application.
5.
We will not recognise the existence of a trust. Any application by a trustee or trustees must be
made in his/her/their own name(s) and without qualification or, where the application is made by
way of an Application Form by a nominee, in the name(s) of an approved nominee company or
approved nominee companies after complying with paragraph 6 below.
6.
WE WILL ONLY ACCEPT APPLICATIONS FROM APPROVED NOMINEE COMPANIES. Approved

nominee companies are defined as banks, merchant banks, finance companies, insurance
companies, licensed securities dealers in Singapore and nominee companies controlled by them.
Applications made by persons acting as nominees other than approved nominee companies shall
be rejected.
7.
IF YOU ARE NOT AN APPROVED NOMINEE COMPANY, YOU MUST MAINTAIN A SECURITIES
ACCOUNT WITH CDP IN YOUR OWN NAME AT THE TIME OF YOUR APPLICATION. If you do
not have an existing Securities Account with CDP in your own name at the time of your application,
your application will be rejected. If you have an existing Securities Account with CDP but fail to
provide your Securities Account number or provide an incorrect Securities Account number in
Section B of the Application Form, your application is liable to be rejected. Subject to paragraph 8
below, your application shall be rejected if your particulars such as name, NRIC/passport number,
nationality, permanent residence status and CDP Securities Account number provided in your
Application Form differ from those particulars in your Securities Account as maintained with CDP.
If you have more than one individual direct Securities Account with CDP, your application shall be
rejected.
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8.
If your address as stated in the Application Form is different from the address registered
with CDP, you must inform CDP of your updated address promptly, failing which the
notification letter on successful allotment and other correspondences from CDP will be sent
to your address last registered with CDP.
9.
Our Company reserves the right to reject any application which does not conform strictly
to the instructions set out in the Application Form and in this Offer Document or with the
terms and conditions of this Offer Document or, in the case of an application by way of
an Application Form, which is illegible, incomplete, incorrectly completed or which is
accompanied by an improperly drawn up or improper form of remittance. Our Company
further reserves the right to treat as valid any applications not completed or submitted
or effected in all respects in accordance with the instructions set out in the Application
Form or the terms and conditions of this Offer Document, and also to present for payment
or other processes all remittances at any time after receipt and to have full access to all
information relating to, or deriving from, such remittances or the processing thereof.
10.
Our Company reserves the right to reject or accept, in whole or in part, or to scale down or to ballot
any application, without assigning any reason therefor, and no enquiry and/or correspondence on
the decision of our Company will be entertained. In deciding the basis of allotment which shall be
at our discretion, due consideration will be given to the desirability of allotting the New Shares to a
reasonable number of applicants with a view to establishing an adequate market for our Shares.
11.
Share certificates will be registered in the name of CDP or its nominee and will be forwarded only
to CDP. It is expected that CDP will send to you, at your own risk, within 15 Market Days after the
close of the Application List, a statement of account stating that your Securities Account has been
credited with the number of New Shares allotted to you. This will be the only acknowledgement
of application monies received and is not an acknowledgement by our Company. You irrevocably
authorise CDP to complete and sign on your behalf as transferee or renouncee any instrument
of transfer and/or other documents required for the issue or transfer of the New Shares allotted to
you.
12.
You irrevocably authorise CDP to disclose the outcome of your application, including the number
of New Shares allotted to you pursuant to your application, to us, the Sponsor and the Placement
Agent and any other parties so authorised by the foregoing persons.
13.
Any reference to you or the applicant in this section shall include an individual, a corporation,
an approved nominee company and trustee applying for the New Shares by way of a Placement
Shares Application Form.
14.
By completing and delivering an Application Form in accordance with the provisions of this Offer
Document, you:(a)
irrevocably offer, agree and undertake to subscribe for the number of New Shares specified
in your application (or such smaller number for which the application is accepted) at the
Placement Price for each New Share and agree that you will accept such New Shares as
may be allotted to you, in each case on the terms of, and subject to the conditions set out in
this Offer Document and the Memorandum and Articles of Association of our Company;
(b)
warrant the truth and accuracy of the information contained, and representations and
declarations made, in your application, and acknowledge and agree that such information,
representations and declarations will be relied on by our Company in determining whether to
accept your application and/or whether to allot any New Shares to you;
(c)
agree that the aggregate Placement Price for the New Shares applied for is due and payable
to our Company upon application; and
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(d)
15.
agree and warrant that, if the laws of any jurisdictions outside Singapore are applicable
to your application, you have complied with all such laws and none of our Company, the
Sponsor and/or the Placement Agent will infringe any such laws as a result of the acceptance
of your application.
Our acceptance of applications will be conditional upon, inter alia, our Company being satisfied
that:(a)
permission has been granted by the SGX-ST to deal in and for quotation of all our existing
Shares and the New Shares on Catalist;
(b)
the Management Agreement and the Placement Agreement referred to in the Management
and Placement Arrangements section of this Offer Document have become unconditional
and have not been terminated or cancelled prior to such date as we may determine; and
(c)
no stop order has been issued under the SFA which directs that no further shares to which
this Offer Document relates be allotted and/or allocated.
16.
We will not hold any application in reserve.
17.
We will not allot shares on the basis of this Offer Document later than six months after the date of
Registration.
18.
Additional terms and conditions for application by way of an Application Form are set out below.
ADDITIONAL TERMS AND CONDITIONS FOR APPLICATION USING AN APPLICATION FORM

You shall make an application by way of an Application Form on and subject to the terms and conditions
of this Offer Document including but not limited to the terms and conditions appearing below as well as
those set out in Appendix E Terms, Conditions and Procedures for Application of this Offer Document
as well as the Memorandum and Articles of Association of our Company.
1.
Your application for the New Shares must be made using the WHITE Application Forms
for Placement Shares accompanying and forming part of this Offer Document. ONLY ONE
APPLICATION shall be enclosed in each envelope.
We draw your attention to the detailed instructions contained in the Application Form and this
Offer Document for the completion of the Application Form which must be carefully followed. Our
Company reserves the right to reject applications which do not conform strictly to the
instructions set out in the Application Form and this Offer Document or to the terms and
conditions of this Offer Document or which are illegible, incomplete, incorrectly completed
or which are accompanied by improperly drawn remittances or improper form of remittances
or which are not honoured upon their first presentation.
2.
Your Application Form must be completed in English. Please type or write clearly in ink using
BLOCK LETTERS.
3.
All spaces in the Application Form, except those under the heading FOR OFFICIAL USE ONLY,
must be completed and the words NOT APPLICABLE or N.A. should be written in any space
that is not applicable.
4.
Individuals, corporations, approved nominee companies and trustees must give their names in full.
You must make your application, in the case of individuals, in your full names as they appear in
your identity card (if applicants have such identification documents) or in your passport and, in the
case of corporations, in your full names as registered with a competent authority. If you are not an
individual, you must complete the Application Form under the hand of an official who must state
the name and capacity in which he signs the Application Form. If you are a corporation completing
the Application Form, you are required to affix your Common Seal (if any) in accordance with
your Memorandum and Articles of Association or equivalent constitutive documents. If you are a
E-3

corporate applicant and your application is successful, a copy of your Memorandum and Articles
of Association or equivalent constitutive documents must be lodged with our Companys Share
Registrar and Share Transfer Office. Our Company reserves the right to require you to produce
documentary proof of identification for verification purposes.
5.
(a)
You must complete Sections A and B and sign on page 1 of the Application Form.
(b)
You are required to delete either paragraph 7(a) or 7(b) on page 1 of the Application Form.
Where paragraph 7(a) is deleted, you must also complete Section C of the Application Form
with particulars of the beneficial owner(s).
(c)
If you fail to make the required declaration in paragraph 7(a) or 7(b), as the case may be, on
page 1 of the Application Form, your application is liable to be rejected.
6.
You, whether an individual or corporate applicant, whether incorporated or unincorporated

and wherever incorporated or constituted, will be required to declare whether you are a citizen
or permanent resident of Singapore or a corporation in which citizens or permanent residents of
Singapore or any body corporate constituted under any statute of Singapore have an interest in the
aggregate of more than 50 per cent. of the issued share capital of or interests in such corporations.
If you are an approved nominee company, you are required to declare whether the beneficial
owner of the New Shares is a citizen or permanent resident of Singapore or a corporation, whether
incorporated or unincorporated and wherever incorporated or constituted, in which citizens or
permanent residents of Singapore or any body corporate whether incorporated or unincorporated
and wherever incorporated or constituted under any statute of Singapore have an interest in the
aggregate of more than 50 per cent. of the issued share capital of or interests in such corporation.
7.
Your application must be accompanied by a remittance in Singapore currency for the full amount
payable, in respect of the number of New Shares applied for, in the form of a BANKERS DRAFT
or CASHIERS ORDER drawn on a bank in Singapore, made out in favour of FAR EAST GROUP
SHARE ISSUE ACCOUNT crossed A/C PAYEE ONLY, with your name and address of the
applicant written clearly on the reverse side. We will not accept applications not accompanied
by any payment or accompanied by any other form of payment. We will reject remittances
bearing NOT TRANSFERABLE or NON TRANSFERABLE crossings. The completed and signed
WHITE Placement Shares Application Form, and your remittance in full in respect of the number
of New Shares applied for in accordance with the terms and conditions of this Offer Document,
with your name and address written clearly on the reverse side, must be enclosed and sealed in
an envelope to be provided by you. The sealed envelope must be DESPATCHED BY ORDINARY
POST OR DELIVERED BY HAND, at your own risk, to Boardroom Corporate & Advisory
Services Pte Ltd, 50 Raffles Place, #32-01, Singapore Land Tower, Singapore 048623, to arrive
by 12.00 noon on 4 August 2011 or such other time as our Company may, in consultation
with the Sponsor, decide. Local Urgent Mail or Registered Post must NOT be used. No
acknowledgement of receipt will be issued by our Company, the Sponsor or the Placement Agent
for applications and application monies received.
8.
Monies paid in respect of unsuccessful applications are expected to be returned (without interest
or any share of revenue or other benefit arising therefrom) to you by ordinary post within 24 hours
of balloting of applications at your own risk. Where your application is rejected or accepted in part
only, the full amount or the balance of the application monies, as the case may be, will be refunded
(without interest or any share of revenue or other benefit arising therefrom) to you by ordinary
post at your own risk within 14 Market Days after the close of the Application List, provided that
the remittance accompanying such application which has been presented for payment or other
processes has been honoured and the application monies have been received in the designated
share issue account. In the event that the Placement is cancelled by us following the termination
of the Placement Agreement, the application monies received will be refunded (without interest or
any share of revenue or any other benefit arising therefrom) to you by ordinary post or telegraphic
transfer at your own risk within 5 Market Days of the termination of the Placement. In the event
that the Placement is cancelled by us following the issuance of a stop order by the SGX-ST, acting
E-4

as an agent on behalf of the Authority, the application monies received will be refunded (without
interest or any share of revenue or other benefit arising therefrom) to you by ordinary post at your
own risk within 14 Market Days from the date of the stop order.
9.
Capitalised terms used in the Application Form and defined in this Offer Document shall bear the
meanings assigned to them in this Offer Document.
10.
By completing and delivering the Application Form, you agree that:(a)
in consideration of our Company having distributed the Application Form to you and agreeing
to close the Application List at 12.00 noon on 4 August 2011 or such other time or date as
our Directors may, in consultation with the Sponsor, decide:(i)
your application is irrevocable; and
(ii)
your remittance will be honoured on first presentation and that any application monies
returnable may be held pending clearance of your payment without interest or any
share of revenue or other benefit arising therefrom;
(b)
all applications, acceptances and contracts resulting therefrom under the Placement shall
be governed by and construed in accordance with the laws of Singapore and that you
irrevocably submit to the non-exclusive jurisdiction of the Singapore courts;
(c)
in respect of the New Shares for which your application has been received and not rejected,
acceptance of your application shall be constituted by written notification and not otherwise,
notwithstanding any remittance being presented for payment by or on behalf of our
Company;
(d)
you will not be entitled to exercise any remedy of rescission for misrepresentation at any time
after acceptance of your application;
(e)
in making your application, reliance is placed solely on the information contained in this Offer
Document and none of our Company, the Sponsor and the Placement Agent nor any other
person involved in the Placement shall have any liability for any information not so contained;
(f)
you consent to the disclosure of your name, NRIC/passport number, address, nationality,
permanent residence status, CDP Securities Account number, CPF Investment Account
number (if applicable) and share application amount to our Share Registrar and Share
Transfer Office, CDP, SCCS, SGX-ST, our Company, the Sponsor and the Placement Agent
or other authorised operators; and
(g)
you irrevocably agree and undertake to subscribe for the number of New Shares applied
for as stated in the Application Form or any smaller number of such New Shares that may
be allotted to you in respect of your application. In the event that our Company decides to
allot any smaller number of New Shares or not to allot any New Shares to you, you agree to
accept such decision as final.
E-5
APPENDIX F LETTER FROM SAC CAPITAL PRIVATE LIMITED

TO THE AUDIT COMMITTEE
25 July 2011
The Audit Committee of Far East Group Limited
Mr Hew Koon Chan
Mr Andrew Mak
Mr Tan Hwee Kiong
Dear Sirs
(A)
PROPOSED SHAREHOLDERS MANDATE FOR INTERESTED PERSON TRANSACTIONS
(B)
LICENSE OF TRADEMARKS AND PATENTS BY THE COMPANY TO SHANGHAI EDEN

REFRIGERATION CO., LTD., SHANGHAI EDEN REFRIGERATION MANUFACTURING CO., LTD.
AND EDEN REFRIGERATION MANUFACTURING (JIANGSU) CO., LTD. AS AN INTERESTED
PERSON TRANSACTION
Unless otherwise defined herein, all terms in the Offer Document shall have the same meanings in this
letter.
1.
INTRODUCTION
This letter has been prepared in relation to the proposed initial public offering (the IPO) and the
listing of and quotation for the ordinary shares (the Shares) of Far East Group Limited (Far East
Group or the Company) on the Singapore Exchange Securities Trading Limited (SGX-ST).
The Company anticipates that the Company and its subsidiaries (the Group) would, in the
ordinary course of business, enter into certain transactions with persons which are considered
interested persons as defined in Chapter 9 of the SGX-ST Listing Manual Section B: Rules of
Catalist (the Catalist Rules). It is likely that such transactions will occur with some degree of
frequency and could arise at any time and from time to time.
Under Chapter 9 of the Catalist Rules, a listed company may seek a shareholders mandate
for recurrent transactions of a revenue or trading nature or those necessary for its day-to-day
operations, which may be carried out with the listed companys interested persons, but not for the
purchase or sale of assets, undertakings or businesses.
Pursuant to Rule 920(2) of the Catalist Rules, the Company may treat a general mandate as
having been obtained from its shareholders for it to enter into interested person transactions if the
information required under Rule 920(1)(b) of the Catalist Rules is included in the offer document
issued in connection with the IPO. Accordingly, on 22 July 2011, the shareholders of the Company
approved a mandate (the Shareholders Mandate) for the Group to enter into certain categories
of interested person transactions with Shanghai Eden Refrigeration Co., Ltd. (SER), Shanghai
Eden Refrigeration Manufacturing Co., Ltd. (SERM) and Eden Refrigeration Manufacturing
(Jiangsu) Co., Ltd. (ERM) (the Regional Affiliates). Pursuant thereto, new Shareholders who
subscribe for the New Shares in the Invitation are deemed to have approved the Shareholders
Mandate.
In addition, pursuant to an intellectual properties licence agreement (the IP Licence Agreement)
entered into between the Company and the Regional Affiliates on 27 June 2011, the Company
has granted the Regional Affiliates the right to use the list of trademarks and patents set out in
the section entitled Business Intellectual Property in the Offer Document in consideration of
receiving licensing fees computed based on 2% of the revenue derived from the sale of Eden
brand of heat exchangers and condensing units by the Regional Affiliates in the PRC (the
Licencing Fee). As set out above, entering into the IP Licence Agreement with the Regional
Affiliates would constitute an interested person transaction pursuant to Chapter 9 of the Catalist
Rules. New Shareholders who subscribe for the New Shares in connection with the placement are
deemed to have also approved the IP Licence Agreement.
F-1

Pursuant to Rule 920(1)(b)(v) of the Catalist Rules, the Company has appointed SAC Capital
Private Limited (SAC Capital) as the independent financial adviser in respect of the Shareholders
Mandate and the IP Licence Agreement.
This letter has been prepared for the use of the audit committee of the Company (the Audit
Committee) in connection with their consideration of the IP Licence Agreement and the
proposed adoption of the Shareholders Mandate to be incorporated into the offer document to the
shareholders of the Company (the Shareholders) dated 25 July 2011 (the Offer Document)
to be lodged with the SGX-ST, acting as agent on behalf of the Monetary Authority of Singapore,
in connection with the proposed listing of the Company on Catalist, the sponsor supervised listing
platform of the SGX-ST.
2.
TERMS OF REFERENCE
We have been appointed as the independent financial adviser to the Audit Committee to express
an opinion, for the purposes of Chapter 9 of the Catalist Rules, on whether (i) the method and
review procedures for determining the transaction prices of the interested person transactions
under the Shareholders Mandate, if applied strictly, are sufficient to ensure that these interested
person transactions will be carried out on normal commercial terms and will not be prejudicial to
the interests of the Company and its minority Shareholders, and (ii) the IP Licence Agreement was
entered into on normal commercial terms and will not be prejudicial to the interests of the Company
and its minority Shareholders.
We were not privy to the negotiations entered into by the Company in relation to the interested
person transactions contemplated under the Shareholders Mandate or the IP Licence Agreement
nor were we involved in the deliberations leading up to the decision of the Directors to undertake
the Shareholders Mandate and the IP Licence Agreement. We do not, by this letter, warrant the
merits of the Shareholders Mandate and the IP Licence Agreement. We have also not conducted
a comprehensive independent review of the business, operations or financial condition of the
Company and/or its subsidiaries (the Group) or any of the Regional Affiliates.
For the purposes of arriving at our opinion in respect of the Shareholders Mandate and the IP
Licence Agreement, we have taken into account the review procedures set up by the Company for
determining the transaction prices of the interested person transactions under the Shareholders
Mandate and the financial terms of the IP Licence Agreement but have not evaluated, and have
not been requested to comment on, the strategic or commercial merits or risks of the Shareholders
Mandate and the IP Licence Agreement or the prospects or earnings potential of the Company or
the Group. Such evaluation shall remain the sole responsibility of the Directors.
In the course of our evaluation and for the purposes of our opinion herein, we have held
discussions with the management of the Company (the Management). We have relied on the
information and representations, whether written or verbal, provided to us by the Directors and the
Management, including information contained in the Offer Document. We have not independently
verified such information or representations and accordingly cannot and do not warrant, and do
not accept any responsibility for, the accuracy, completeness or adequacy of these information
or representations. We have, however, made such enquiry and exercised such judgement (as we
deemed necessary) in assessing the information and representations provided to us, and have
found no reason to doubt the reliability of such information or representations.
The Directors (including those who may have delegated detailed supervision of the Offer
Document) have confirmed to us that, having made all reasonable enquiries and to the best of
their knowledge and belief, (a) all material information available to them in connection with the
Shareholders Mandate and the IP Licence Agreement has been disclosed in the Offer Document;
(b) such information is true and accurate in all material respects; and (c) there is no other material
information or fact, the omission of which would cause any information disclosed to us or the
facts stated in the Offer Document to be inaccurate, incomplete or misleading in any material
F-2

respect. Accordingly, no representation or warranty, expressed or implied, is made by us and no
responsibility is accepted by us concerning the accuracy, completeness or adequacy of such
information or facts.
Our opinion, as set out in this letter, is based on the market, economic, industry and other
applicable conditions prevailing on, and the information made available to us, as of the date of
this letter. Such conditions may change significantly over a relatively short period of time and we
assume no responsibility to update, revise or reaffirm our opinion in the light of any subsequent
development after the date of this letter that may affect our opinion contained herein.
Our opinion in relation to the Shareholders Mandate and the IP Licence Agreement should
be considered in the context of the entirety of this letter and the Offer Document.
The Company has been separately advised by its own advisers in the preparation of the Offer
Document (other than this letter). We have had no role or involvement and have not provided any
advice, financial or otherwise, in the preparation, review and verification of the Offer Document
(other than this letter). Accordingly we accept no responsibility for and express no views, expressed
or implied, on the contents of the Offer Document (other than this letter).
3.
PRINCIPAL ACTIVITIES OF THE GROUP

The Group is a comprehensive provider of refrigeration and air-conditioning systems and products
in the heating, ventilation, air-conditioning and refrigeration (HVAC&R) industry, principally
engaged in the sourcing and distribution of a wide range of agency products as well as the
manufacturing and distribution of heat exchangers and condensing units under its own brand
Eden.
For the agency products, some of the international brands that the Group distributes are Bitzer,
Copeland, Embraco, Danfoss, Emerson Flows, Eliwell, Honeywell, Saginomiya, Castel, ebm-papst,
Ziehl-Abegg, HARP and Aeroflex.
The Group also possesses a comprehensive range of innovative in-house manufactured heat
exchangers, under its own brand Eden, which use high energy-efficient coil technologies. The
Eden brand of heat exchangers are used for refrigeration and cooling by prominent end-users
in various industries, such as retail (Carrefour, Metro, Tesco, Giant, Cold Storage and NTUC
FairPrice), food and beverage (Resorts World Sentosa and Marina Bay Sands), pharmaceutical
(HSA (Singapore Blood Bank)), hospitality (The St. Regis Singapore, Shangri-La Hotel Singapore
and Capella Singapore), logistics (CIAS Flight Kitchen), food processing (Chun Cheng Fishery
and Angliss Singapore) and shipping (Jurong Shipyard Pte Ltd, Keppel Shipyard Limited and
Sembawang Shipyard Pte Ltd). The Groups Eden brand of heat exchangers and condensing units
are manufactured at the Groups manufacturing facility located at Lot 1998/D Jalan Perusahaan 3,
Taman Industri Selesa Jaya, 43300 Balakong, Seri Kembangan, Selangor Darul Ehsan, Malaysia
(the Maju Facility), as well as procured from the interested person, SER.
As part of the Groups value-added services to its customers, it also provides design and
consultancy services in relation to refrigeration and air-conditioning systems, as well as relevant
product trainings and after-sales support.
For more information on the business of the Group, please refer to the section entitled Business
in the Offer Document.
4.
SHAREHOLDERS MANDATE
4.1
Background
The Group purchases the Eden brand of heat exchangers and condensing units from SER, which
are manufactured by SERM. The Group also sells refrigeration and air-conditioning parts for the
assembly of condensing units to SER, and fan motors to SERM on an ad-hoc basis to be used in
the production of its heat exchangers. The Group also anticipates entering into transactions with
ERM for similar products in the future.
F-3

The aggregate amounts for such transactions with SER and SERM in FY2008, FY2009 and
FY2010 and from 1 January 2011 to the Latest Practicable Date were as follows:
(S$000)
From
1 January 2011
to the Latest
Practicable Date
FY2008
FY2009
FY2010
861
898
793
366
23
35
28
26
27
199
14
Transactions with SER

Purchases from SER(1)
Sales to SER(2)
Transactions with SERM
Sales to SERM(3)
Notes:
(1)
These relate mainly to the Eden brand of heat exchangers and condensing units.
(2)
These relate to refrigeration and air-conditioning parts for the assembly of condensing units.
(3)
These mainly relate to fan motors for SERMs urgent requirements to be assembled onto the heat exchangers.
Please see below for details of SER, SERM and ERM:

SER
SER is a company established in the PRC on 28 November 2002 and is primarily engaged in
the marketing and distribution of Eden brand of heat exchangers and condensing units, as well
as Eliwell brand of temperature controllers in the PRC. SER also exports the Eden brand of
heat exchangers and condensing units exclusively to Far East Group. SER is wholly-owned by
Universal Pte. Ltd. (UPL), a controlling shareholder of the Company, which is in turn owned by
Loh Ee Ming (Non-executive Chairman of the Company), Steven Loh (CEO and Executive Director
of the Company), Karen Loh (Non-executive Director of the Company), Lum Soo Mooi (spouse
of Loh Ee Ming) and Sharon Loh (daughter of Loh Ee Ming and Lum Soo Mooi, and sibling of
Steven Loh and Karen Loh) with shareholding interests of 40.68%, 27.42%, 10.68%, 10.33% and
10.89% respectively. The directors of SER are Loh Ee Ming, Steven Loh and Wong Thiam Hock (an
unrelated third party). The legal representative of SER is Steven Loh.
SERM
SERM is a company established in the PRC on 4 April 2007 and is primarily engaged in the
manufacturing of Eden brand of heat exchangers and condensing units. The shareholders of
SERM are SER, Sam Cheung (a Pre-IPO investors of the Company and spouse of Karen Loh)
and Fuco Rudyanto Chandra (an unrelated third party), with shareholding interests of 80.0%, 5.0%
and 15.0% respectively. The directors of SERM are Steven Loh, Karen Loh and Fuco Rudyanto
Chandra. The legal representative of SERM is Steven Loh.
ERM
ERM is a company established in the PRC on 1 June 2010 and is primarily engaged in the
manufacturing of Eden brand of heat exchangers and condensing units. The shareholders of ERM
are UPL, Sam Cheung and Fuco Rudyanto Chandra, with shareholding interests of 80.0%, 5.0%
and 15.0% respectively. The directors of ERM are Steven Loh, Karen Loh and Fuco Rudyanto
Chandra. The legal representative of ERM is Steven Loh.
As UPL, the controlling shareholder of SER, SERM (through its direct interest in SER) and ERM,
is also a controlling shareholder of the Company, UPL and its associates are interested persons
of the Company and the transactions between the Group and SER, SERM and ERM and their
associates would constitute interested person transactions under Chapter 9 of the Catalist Rules.
F-4

The Group anticipates that they would, in the ordinary course of business, enter into transactions
with SER, SERM and ERM and it is likely that such transactions will occur with some degree of
frequency and could arise at any time and from time to time.
4.2
Requirements under Chapter 9

Under Chapter 9 of the Catalist Rules, a listed company may seek a shareholders mandate
for recurrent transactions of a revenue or trading nature or those necessary for its day-to-day
operations, which may be carried out with the listed companys interested persons, but not for the
purchase or sale of assets, undertakings or businesses.
Due to the time-sensitive nature of commercial transactions, such a mandate will enable the Group,
in the normal course of business, to enter into categories of interested person transactions with
certain categories of interested persons, provided such interested person transactions are made on
an arms length basis and on normal commercial terms and are not prejudicial to the interests of
the Company and its minority Shareholders.
Pursuant to Rule 920(2) of the Catalist Rules, the Company may treat a general mandate as having
been obtained from its Shareholders for them to enter into interested person transactions with its
interested persons, if the information required under Rule 920(1)(b) of the Catalist Rules is included
in the Offer Document.
On 22 July 2011, the shareholders of the Company approved the Shareholders Mandate for
the Group to enter into the categories of interested person transactions as set out in the section
entitled Interested Person Transactions - Shareholders Mandate: Categories of Interested Person
Transactions with SER, SERM and ERM. Accordingly, new Shareholders who subscribe for the
New Shares in the Invitation are deemed to have approved the Shareholders Mandate. This would
enable the Group, in its normal course of business, to enter into the interested person transactions
with the Regional Affiliates, provided such interested person transactions are made on an arms
length basis and on normal commercial terms.
4.3
Interested Person Transactions

Salient information on the interested person transactions under the Shareholders Mandate
including:
(a)
Categories of Interested Persons;
(b)
Categories of interested person transactions;
(c)
Rationale for and benefits of the Shareholders Mandate; and
(d)
Guidelines and review procedures under the Shareholders Mandate;
is set out in the section entitled Interested Person Transactions - Shareholders Mandate of the
Offer Document.
4.4
Validity Period of the Shareholders Mandate

The Shareholders Mandate will be effective from the admission of the Company to Catalist and will
be effective until the earlier of the following:
(a)
the first annual general meeting following its admission to Catalist; or
(b)
the first anniversary of the date of admission to Catalist.
Thereafter, approval from Shareholders for the renewal of the Shareholders Mandate will be sought
at each subsequent annual general meeting.
F-5

UPL, Steven Loh and Sam Cheung will abstain, and have undertaken that their Associates will
abstain, from voting on the resolutions for the renewal of the Shareholders Mandate in respect of
any Shares respectively held by them and their Associates.
Loh Ee Ming, Steven Loh, Karen Loh and Sam Cheung will also decline to accept nomination
as proxy or otherwise from any Shareholder to vote on the resolutions for the renewal of the
Shareholders Mandate, unless given specific instructions by the Shareholder in the relevant proxy
form as to how his votes are to be cast.
4.5
Disclosure
In accordance with the requirements of Chapter 9 of the Catalist Rules, disclosure will be made in
the Companys annual report of the aggregate value of interested person transactions conducted
pursuant to the Shareholders Mandate during the financial year, and in the annual reports for
subsequent financial years that the Shareholders Mandate continues in force. The Company
will also announce the aggregate value of transactions conducted pursuant to the Shareholders
Mandate during the relevant financial period within the required time frame stipulated in the Catalist
Rules.
4.6
Evaluation of the Shareholders Mandate

In our evaluation of the Shareholders Mandate, we have considered, inter alia, the following:
(a)
the rationale for and benefits of the Shareholders Mandate as set out in the section entitled
Interested Person Transactions Shareholders Mandate: Rationale for and benefits of the
Shareholders Mandate of the Offer Document; and
(b)
the guidelines and review procedures under the Shareholders Mandate and, in particular,
the role of the Audit Committee in enforcing the Shareholders Mandate, as set out in the
section entitled Interested Person Transactions Shareholders Mandate: Guidelines and
review procedures under Shareholders Mandate of the Offer Document.
5.
INTELLECTUAL PROPERTIES LICENCE AGREEMENT
5.1
Background
On 27 June 2011, the Regional Affiliates entered into the IP Licence Agreement with the Company.
SER has acknowledged in the IP Licence Agreement that SER has been holding all of its trade
marks and patents as set out in the section entitled Business Intellectual Property in the Offer
Document (the Intellectual Properties) on behalf of the Company. Such Intellectual Properties
are in the process of being transferred to the Company for an aggregate consideration of US$400,
being the administrative costs of the transfer process. For further details on the Intellectual
Properties, please refer to the section entitled Business Intellectual Property of the Offer
Document.
As at the Latest Practicable Date, the applications of the transfer of the trade marks and patents
from SER to the Company are subject to approvals from the Trademark Office of the SAIC and the
SIPO respectively. The legal adviser to the Company on PRC law does not foresee any difficulty in
obtaining the approvals for the transfer of the trade marks and patents from SER to the Company
within six months from the date of submission of applications to the authorities.
Upon the transfer of these Intellectual Properties, SER and SERM will no longer be able to use
these Intellectual Properties. As each of SER and SERM is currently distributing and manufacturing
products under the Intellectual Properties, the Company and the Regional Affiliates have entered
into the IP Licence Agreement pursuant to which the Company has granted the Regional Affiliates
the right to use and incorporate these Intellectual Properties in their products.
F-6

5.2
Terms of the IP Licence Agreement

Pursuant to the IP Licence Agreement, the Regional Affiliates shall be entitled to use the
Intellectual Properties for their manufacture, distribution, promotion and sale of Eden brand of
heat exchangers and condensing units in the PRC and sale of Eden brand of heat exchangers
and condensing units to the Group. The Licencing Fee shall be computed based on 2.0% of the
revenue which the Regional Affiliates derive from their sale of Eden brand of heat exchangers and
condensing units in the PRC. The Licencing Fee shall be payable to the Company on a quarterly
basis, with a credit term of 60 days. The tenure of the IP Licence Agreement is for a perpetual
period commencing from 1 January 2011.
The Regional Affiliates have undertaken to make available supporting documents to the Company,
including their quarterly management accounts, annual audited accounts and sales invoices for
purposes of facilitating the computation of the Licencing Fee payable by the Regional Affiliates.
The other salient terms and conditions of the IP Licence Agreement are, inter alia, as follows:
(a)
the Regional Affiliates shall protect and enhance the value of the goodwill of the Intellectual
Properties, failing which, the Regional Affiliates shall be liable for and will indemnify the
Company against any and all liability, loss, costs and other expenses of similar nature
suffered, directly or indirectly, by the Company over any misappropriation of the intellectual
property rights licensed to the Regional Affiliates; and
(b)
the Regional Affiliates are not allowed to grant or sub-licence to any other party the use of
the Intellectual Properties, unless prior written consent of the Company has been obtained.
Please refer to the section entitled Interested Person Transactions Present and On-going
Interested Person Transactions: Transactions with Regional Affiliates Intellectual Properties
Licence Agreement of the Offer Document for further details on the IP Licence Agreement.
5.3
Interested Person Transaction

As set out in paragraph 4.1 of this letter, SER, SERM and ERM are interested persons of the
Company and entering into the IP Licence Agreement with SER, SERM and ERM will constitute an
interested person transaction.
Although it is not possible to ascertain at this juncture whether the Licencing Fee will cross the
applicable threshold under Chapter 9 of the Catalist Rules so as to require Shareholders approval,
the Directors have decided to seek Shareholders approval for entering into the IP Licence
Agreement.
The IP Licence Agreement shall be deemed to have been specifically approved by Shareholders
upon their subscription of the New Shares in connection with the Placement and will thereafter
not be subject to Rules 905 and 906 of the Catalist Rules to the extent that there is no variation
or amendment to the terms of the IP Licence Agreement (including the fees charged) which is
adverse to the Group. Any future variation or amendment or renewal of the terms of the IP Licence
Agreement, including any changes to the Licencing Fee, shall be subject to the approval of the
Audit Committee.
5.4
Royalty Benchmarking Analysis

Prior to signing the IP Licence Agreement, the Company commissioned an independent accounting
firm to undertake a benchmarking analysis on the royalty rates to be charged by the Group to
the Regional Affiliates in relation to the Intellectual Properties, in connection with a study on the
transfer pricing procedures of the Group. The Group has taken into consideration the results of the
royalty benchmarking analysis in determining the Licencing Fee.
F-7

5.5
Evaluation of the IP Licence Agreement

In our evaluation of the financial terms of the IP Licence Agreement, we have taken into account
the following relevant factors which have a significant bearing on our assessment:
(a)
the background of the IP Licence Agreement;
(b)
an assessment of the key terms of the IP Licence Agreement; and
(c)
other relevant considerations.
5.5.1 Background of the IP Licence Agreement

As set out in the IP Licence Agreement, SER has been holding all of the Intellectual Properties on
behalf of the Company and they are now in the process of being transferred to the Company.
The Group procures its Eden brand of heat exchangers from the Maju Facilities and the Regional
Affiliates, while its Eden brand of condensing units are procured only from the Regional Affiliates.
Following the transfer of these Intellectual Properties, the Group will continue to purchase
the Eden brand of heat exchangers and condensing units from SER, which are manufactured
by SERM. These purchase transactions will be covered by the Shareholders Mandate under
the categories of interested person transactions. The IP Licence Agreement will ensure that
the Regional Affiliates can continue to use the Intellectual Properties in the distribution and
manufacturing of these products for sale to the Group based on the Groups requirements, including
quality assurance, technical specifications and delivery schedules.
In addition, the IP Licence Agreement will also enable the Regional Affiliates to continue to use
the Intellectual Properties for their distribution and manufacturing of these products for sale to their
customers subject to, the Company being granted the first right and priority to purchase the products.
5.5.2 Assessment of the Key Terms of the IP Licence Agreement
We understand that in determining, inter alia, a royalty rate to be charged to the Regional Affiliates
pursuant to the licensing of the Intellectual Properties, the Company has commissioned an
independent accounting firm to undertake a benchmarking analysis on the royalty rates that should
be charged by the Group to the Regional Affiliates.
In the benchmark analysis, the analysis was conducted based on the comparable uncontrolled
price method. The comparable uncontrolled price method involves identifying comparable third party
agreements and in which royalty rates from these agreements are obtained and a range of royalty
rates is determined to either substantiate or established a royalty rate that would be consistent with
the arms length principle. A search was conducted through a database1 using the following North
American Industry Classification System (NAICS) codes:
NAICS Code
Description
3334
Ventilation, Heating, Air-Conditioning, and Commercial Refrigeration Equipment

Manufacturing
3332
Industrial Machinery Manufacturing
As noted from the benchmark analysis report, the said database contains 11,073 agreements and is based on agreements
obtained primarily from the US Securities and Exchange filings of companies that are listed on the US stock exchange. The
agreements are available through the public filings at the Securities and Exchange Royalty for various industries and classified
under different agreement types (license agreements, technology license agreements, trademark license agreements,
franchise agreements, cost sharing agreements and R&D agreements). The database allows searching for agreements by the
SIC codes, keywords, agreement types, royalty rates, exclusivity, agreement number and contract party criteria.
The database is updated regularly but not systematically and it does not represent an exhaustive search of the SEC filings.
The last update of the database was made in March 2010 when the SEC filing were reviewed.
F-8

We have reviewed the key terms of the IP Licence Agreement and compared it against comparable
licensing agreements (the Comparable Licensing Agreements) on trademark and patents for
products similar to the Group which had been identified in the benchmarking analysis provided to
us. A summary of the terms of these Comparable Licensing Agreements are set out in the table
below.
In making the comparison with the Comparable Licensing Agreements, we wish to highlight that
the Comparable Licensing Agreements are not directly comparable to the IP Licence Agreement in
terms of, inter alia, the trademarks and patents involved in the Comparable Licensing Agreements,
the geographical market, composition of business activities, business models and other relevant
criteria and that such licensing arrangements may have fundamentally different objectives and any
comparison made with the Comparable Licensing Agreements merely serve as an illustrative guide
for the perceived commercial fairness of the IP Licence Agreement.
Description of Intellectual
Properties
Licensor
Licensee
McQuay
International
O.Y.L
Manufacturing
Company
Sdn Bhd
Trademarks relating to
2% of the net sales 5 years (auto
heating, ventilating and air of licensed products
renewed
conditioning products
unless
terminated by
written notice)
No
McQuay
International
Shenzhen
O.Y.L Electrical
Co. Ltd.
Trademarks relating to 2% to 5% of the net 5 years (auto

renewed
heating, ventilating and air sales of licensed
products
unless
terminated by
written notice)
No
McQuay
International
P.T. O.Y.L
Sentra
Manufacturing
Trademarks relating to
2% of the net sales 5 years (auto
heating, ventilating and air of licensed products
renewed
unless
terminated by
written notice)
No
Enersyst
Development
Center, Inc.
Ross
Industries, Inc.
5% of charged
Patents, proprietary
information and know-how
sale price of
relating to coolers, chillers licensed products;
and freezers technologies a minimum annual
payment of
US$100,000
Perpetual
unless
terminated
by mutual
agreement.
Licensee
has the right
to terminate
unilaterally
after 2.5 years.
Yes(1)
Sir Worldwide,
LLC
Channel
Freeze
Technologies,
Inc.
Patent and trademarks

5% of net sales of
relating to Ice Technology licensed products
Units (automated machinery
and related
for freezing ice, food,
materials(2)
food by-products, nonfoods, freeze-thawed
residual products, thermal
energy storage, making
recreational snow, and
other applications)(2)
Perpetual
Yes
Perpetual
No
Company
Regional
Affiliates
Trademarks and patents

relating to refrigeration
products
F-9
Licence Fee
2% of net sales
of licensed
products
Tenure
Exclusivity

Notes:
(1)
Save for licensed devices made, used and sold in Japan.
(2)
It was agreed, inter alia, that Sir Worldwide, LLC (Sir Worldwide) shall grant Channel Freeze Technologies, Inc.
(Channel Freeze) the exclusive right to manufacture and sell the Channel Ice Technology Units throughout
the world for (i) U.S. Patent No. 5029453 and (ii) all trade secrets, patents, patent applications, know-how and
technology used by Sir Worldwide in connection with its CIT Units. Sir Worldwide shall also, inter alia, assign and
transfer to Channel Freeze the trademark CIT Units or Channel Ice Technology Units, all intellectual property
relating to the business and assets of Sir Worldwide. In consideration, Channel Freeze shall compensate Sir
Worldwide as follows:
(i)
Fee Payment: 10% of net gross invoice price on Channel Ice Technology Units sold to distributors, or 13%
of net gross invoice price on Channel Ice Technology Units sold at base price (having the meaning of price
listed for end user or retail sales); and
(i)
Royalty Payment: 5% of net sales of the Channel Ice Technology Units and related materials.
In our analysis, we have only taken into consideration the royalty payment in respect of this agreement.
(a)
Licencing Fee
Based on the above, we note that the licensing fees of the above Comparable Licensing
Agreements range between 2% and 5% of the net sales of licensed products, save for one
transaction in which a minimum royalty fee of US$100,000 is chargeable. On the above
basis, it would appear that the licensing fee of 2% on the sales of products under the Eden
brand charged by the Company on the Regional Affiliates is within the range of licensing
fees charged in the Comparable Licensing Agreements, albeit at the low end of the range of
licensing rates charged.
We also note that the licence rights granted under 3 of the above Comparable Licensing
Agreements are not exclusive to the licensee and 2 are exclusive to the licensee. We
observe that where the licence rights granted are exclusive to the licensee, the licensing fees
are generally higher than those where the licence rights are non-exclusive to the licensee.
Under the IP Licence Agreement, the licence rights granted are not exclusive to the Regional
Affiliates. In this regard, the Licensing Fee of 2% on the sales of heat exchangers and
condensing units under the Eden brand charged by the Company on the Regional Affiliates
is within the range of licensing fees charged in the comparable licensing agreements with
non-exclusivity clauses. 2 of these comparable licensing agreements with non-exclusivity
clauses charged licensing fees at 2% of the net sales of licensed products, while the
remaining licensing agreement charged a licensing fee of 2% to 5% of the net sales of
licensed products.
(b)
Tenure
The tenure of the IP Licence Agreement is for a perpetual period commencing from
1 January 2011 unless terminated by either parties. We note that this is within the range of
tenures of the Comparable Licensing Agreements where the tenure ranged from a term of 5
years (auto renewed unless terminated by written notice) or with a perpetual term.
5.5.3 Other Relevant Considerations

We have also considered the following:
(a)
Non-exclusive basis of licence rights

We note that the licence under the IP Licence Agreement is granted on a non-exclusive
basis. This gives the Company the flexibility to grant the licensing of the Intellectual
Properties to other licensees should the need arises. This may be to the benefit of the Group
especially if the country size is large, as is the case for the PRC.
F-10

(b)
Additional source of income

The Licencing Fee represents an additional source of income for the Company. Solely for
illustration purposes, assuming that the IP Licence Agreement had been effective from
1 January 2010, based on the consolidated revenue of SER, SERM and ERM in FY2010
and the Licencing Fee, the amount of licensing fees receivable in FY2010 will amount to
approximately RMB563,000.
(c)
Indemnity to the Group

We note that to safeguard the interest of the Company, the IP Licence Agreement has
provided that the Regional Affiliates shall protect and enhance the value of the goodwill of
the Intellectual Properties, failing which, the Regional Affiliates shall be liable for and will
indemnify the Company against any and all liability, loss, costs and other expenses of similar
nature suffered, directly or indirectly, by the Company over any misappropriation of the
intellectual property rights licensed to the Regional Affiliates.
In addition to the indemnity from the Regional Affiliates as set out in paragraph 5.2 of this
letter, to further safeguard the interests of the Group, Loh Ee Ming and Steven Loh, who
are also shareholders in UPL and directors of the Regional Affiliates (where applicable),
have jointly and severally undertaken to indemnify the Group against any misappropriation
of the intellectual property rights by any of the Regional Affiliates pursuant to the IP Licence
Agreement (the Indemnity Undertaking).
The Indemnity Undertaking shall subsist and be effective without limit in point of time, but
shall terminate in any of the following events, whichever is the earliest:
UPL (and its Associates) ceases to be the Controlling Shareholder;
the Company exercises all the Acquisition Options;
the Company ceases to be listed on the SGX-ST (whether on the Main Board or
Catalist); or
the termination of the IP Licence Agreement.
6.
OTHER REVIEW PROCEDURES

The Audit Committee will also review all other interested person transactions (other than the
interested person transactions pursuant to the Shareholders Mandate) to ensure that the prevailing
rules and regulations of the SGX-ST (in particular, Chapter 9 of the Catalist Rules) are complied
with.
Salient information on other review procedures to ensure that interested person transactions
not covered by the Shareholders Mandate are undertaken on an arms length basis, on normal
commercial terms and will not be prejudicial to the Company and its minority Shareholders, are set
out in the section entitled Interested Persons Transactions Guidelines and Review Procedures
for Future Interested Person Transactions other than those covered in the Shareholders Mandate
of the Offer Document.
F-11

7.
OUR OPINION
Having regard to our evaluation of the Shareholders Mandate and the IP Licence Agreement, the
details of which are set out in paragraphs 4.6 and 5.5 of this letter, and subject to the qualifications
and assumptions set out in this letter, we are of the opinion that:
(a)
the guidelines and review procedures of the Company as set out in the section entitled
Interested Person Transactions Shareholders Mandate: Guidelines and Review Procedures
under Shareholders Mandate of the Offer Document for determining the transaction prices
of the interested person transactions under the Shareholders Mandate, if applied strictly, are
sufficient to ensure that such transactions will be conducted on normal commercial terms
and will not be prejudicial to the interests of the Company and its minority Shareholders;
(b)
the IP Licence Agreement was entered into on normal commercial terms and is not
prejudicial to the interests of the Company and its minority Shareholders having considered,
inter alia, the following:
(i)
the background in which the IP Licence Agreement was entered into;
(ii)
an assessment of the reasonableness of the Licencing Fee and the tenure of the IP
Licence Agreement as a comparison to the Comparable Licensing Agreements in the
royalty benchmarking analysis; and
(iii)
other relevant considerations as set out in paragraph 5.5.3 of this letter.
Our opinion is addressed to the Audit Committee in connection with and for the purpose
of their consideration of the Shareholders Mandate and the IP Licence Agreement and for
inclusion in the Offer Document. Whilst a copy of this letter may be reproduced in the Offer
Document, neither the Company nor the Directors may reproduce, disseminate or quote this
letter (or any part thereof) for any other purpose at any time and in any manner without the
prior written consent of SAC Capital.
Our opinion is governed by, and construed in accordance with, the laws of Singapore, and
is strictly limited to the matters stated herein and does not apply by implication to any other
matter.
Yours faithfully
For and on behalf of
SAC CAPITAL PRIVATE LIMITED
Ong Hwee Li
CEO
Bernard Lim
Partner
F-12
ABOUT US

rigs and barges.

Marina Bay Sands.
BUSINESS MODEL
PROSPECTS

provider


record
business partners
capabilities

Pacific region
change
global warming

ABOUT US

rigs and barges.

Marina Bay Sands.
BUSINESS MODEL
PROSPECTS

provider


record
business partners
capabilities

Pacific region
change
global warming

OFFER DOCUMENT DATED 25 JULY 2011
(Registered by the Singapore Exchange Securities Trading Limited acting as an agent on behalf of the Monetary Authority of Singapore on 25 July 2011)
A One-Stop
Refrigeration Systems
FAR EAST GROUP LIMITED

112 Lavender Street, #04-00
Singapore 338728
Tel: (65) 6293 9733
Fax: (65) 6296 5326
www.fareastref.com.sg
Provider
This document is important. If you are in any doubt as to the action you should take, you should
consult your legal, financial, tax or other professional adviser(s).
Collins Stewart Pte. Limited (the Sponsor) has made an application to the Singapore Exchange Securities
Trading Limited (the SGX-ST) for permission to deal in, and for quotation of, all the ordinary shares (the
Shares) in the capital of Far East Group Limited (the Company) already issued and the new Shares
which are the subject of the Placement (the New Shares) on Catalist (as defined herein). The dealing in
and quotation of the Shares will be in Singapore dollars.
Companies listed on Catalist may carry higher investment risk when compared with larger or more established
companies listed on the Main Board of the SGX-ST. In particular, companies may list on Catalist without
a track record of profitability and there is no assurance that there will be a liquid market in the shares or
units of shares traded on Catalist. You should be aware of the risks of investing in such companies and
should make the decision to invest only after careful consideration and, if appropriate, consultation with
your professional adviser(s).
The Placement is made in or accompanied by this Offer Document that has been registered by the SGX-ST
acting as an agent on behalf of the Monetary Authority of Singapore (the Authority). We have not lodged
or registered this Offer Document in any other jurisdiction.
Neither the Authority nor the SGX-ST has examined or approved the contents of this Offer Document. Neither
the Authority nor the SGX-ST assumes any responsibility for the contents of this Offer Document, including
the correctness of any of the statements or opinions made or reports contained in this Offer Document.
The SGX-ST does not normally review the application for admission but relies on the Sponsor confirming
that our Company is suitable to be listed and complies with the Catalist Rules. Neither the Authority nor the
SGX-ST has in any way considered the merits of the Shares being offered for investment.
Far
East Group Limited
(Incorporated in the Republic of Singapore
The registration of this Offer Document by the SGX-ST does not imply that the Securities and Futures Act
(Chapter 289) of Singapore, or any other legal or regulatory requirements, or requirements under the SGXSTs listing rules, have been complied with.
Placement of 18,800,000
New Shares by way of
placement, at S$0.27 per
Share, payable in full on
application.
granted by the SGX-ST for the listing and quotation of all our existing issued Shares and the New Shares on
Catalist. Monies paid in respect of any application accepted will be returned to you at your own risk, without
interest or any share of revenue or benefit arising therefrom, if the admission and listing do not proceed, and
you will not have any claims against us, the Sponsor or the Placement Agent (as defined herein).
After the expiration of six months from the date of registration of this Offer Document, no person shall make
an offer of securities, or allot, issue or sell any of our Shares, on the basis of this Offer Document, and no
officer or equivalent person or promoter of our Company will authorise or permit the offer of any of our Shares
or the allotment, issue or sale of any of our Shares, on the basis of this Offer Document.
on 18 March 1964)
(Company Registration No.:196400096C)
Sponsor and Placement Agent
Investing in our Shares involves risks which are described in the RISK FACTORS section of this
Offer Document.
Our Company is not part of, nor related in any way, to Far East Organization, its subsidiaries or
associated companies (the Far East Organization Group of Companies). Our Directors and Controlling
Shareholder (as defined herein) have no direct or indirect relationships with the Far East Organization
Group of Companies. Our Group (as defined herein) is also not engaged in the same line of business
as that of the Far East Organization Group of Companies.
COLLINS STEWART PTE. LIMITED

(Incorporated in the Republic of Singapore)
(Company Registration Number: 200713620D)

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OFFER DOCUMENT DATED 25 JULY 2011

FAR EAST GROUP LIMITED

Far East Group Limited

Sponsor and Placement Agent

COLLINS STEWART PTE. LIMITED

Founded in 1953 as one of the pioneers

Besides sourcing and distributing agency

One-stop refrigeration systems

The global demand for HVAC&R products is expected to

Established reputation and track

Continual growth of the global and regional

BUSINESS STRATEGIES AND FUTURE PLANS

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

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS......................................

SELLING RESTRICTIONS ..................................................................................................................

DETAILS OF THE PLACEMENT .........................................................................................................

LISTING ON CATALIST .............................................................................................................

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

OFFER DOCUMENT SUMMARY ........................................................................................................

THE PLACEMENT ...............................................................................................................................

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

USE OF PROCEEDS FROM THE PLACEMENT AND EXPENSES INCURRED ..............................

MANAGEMENT AND PLACEMENT ARRANGEMENTS ...................................................................

RISK FACTORS ...................................................................................................................................

ISSUE STATISTICS .............................................................................................................................

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

DIVIDEND POLICY ..............................................................................................................................

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

MANAGEMENTS DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND

CHANGE OF ACCOUNTING POLICIES ...................................................................................

REVIEW OF OPERATING RESULTS ........................................................................................

REVIEW OF FINANCIAL POSITION .........................................................................................

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

CAPITAL EXPENDITURES, DIVESTMENTS, COMMITMENTS AND

FOREIGN EXCHANGE MANAGEMENT ...................................................................................

GENERAL INFORMATION ON OUR GROUP ....................................................................................

SHARE CAPITAL .......................................................................................................................

OUR GROUP STRUCTURE ......................................................................................................

OUR SUBSIDIARIES .................................................................................................................

BUSINESS OVERVIEW .............................................................................................................

OUR PRODUCTS ......................................................................................................................

OUR BUSINESS MODEL ..........................................................................................................

BUSINESS AND MANUFACTURING PROCESS......................................................................

AWARDS AND ACHIEVEMENTS ..............................................................................................

SALES AND MARKETING.........................................................................................................

DISTRIBUTION CHANNELS .....................................................................................................

MANUFACTURING FACILITY AND CAPACITY ........................................................................

QUALITY CONTROL AND SAFETY ASSURANCE ..................................................................

INVENTORY MANAGEMENT ....................................................................................................

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

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

CREDIT MANAGEMENT ...........................................................................................................

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

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

INTELLECTUAL PROPERTY ....................................................................................................

STAFF TRAINING ......................................................................................................................

OUR COMPETITIVE STRENGTHS...........................................................................................

PROSPECTS, BUSINESS STRATEGIES AND FUTURE PLANS .....................................................

TREND INFORMATION AND ORDER BOOK ...........................................................................

OUR BUSINESS STRATEGIES AND FUTURE PLANS ...........................................................

DIRECTORS, EXECUTIVE OFFICERS AND STAFF..........................................................................

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