Leaping Forward

Annual Report 2006Leaping Forward

Corporate ProfileApex-Pal is a homegrown food & beverage solutions provider on a fasttrack to global growth. Established in 1996, the Company beganfocusing on and investing in the fast-paced food and beverageindustry when it set up Sakae Sushi the next year.Since then, Apex-Pal has developed and grown an excitingstable of food and beverage brands and solutions, through itsflair for understanding consumer trends and its sensitivity tothe needs of diners. Today, Apex-Pal is more than a star on therestaurant scene; the Group is also involved in franchising itsbrands, in food import and distribution, in business-to-businesssupplies and in event catering. As a young, dynamicand innovative solutions provider, Apex-Palregularly breaks new grounds, offeringSingapore a taste of internationaldining trends through brandssuch as Sakae Sushi, Crepes& Cream, Sakae Teppanyaki, UmaUma Men and Sho-U. Now and intofuture, Apex-Pal remains committed togrowth through rewarding partnershipsits associates, while it continues to bevitally engaged with the communities ofwhich it is a part of.theglobalwithAnnual Report 2006 • Leaping Forward • 1

BrandsSakae Sushi, Apex-Pal’s flagship brand, is atrendy quick service kaiten (conveyor belt)sushi concept that has become synonymouswith a fun-filled, value for money diningexperience. As the only kaiten sushi chain tooffer a fuss free 2-tier pricing system, Sakae’scustomers can sit back and enjoy their mealwithout having to constantly think and calculatethe bill they are chalking up.From the very beginning, Sakae Sushi hasoffered diners a unique dining experience. Apremier kaiten (sushi conveyor belt) restaurant,it pioneered the concept of ‘Interactive Menu’built into each table. The restaurant alsoblazed trails in featuring an intercom systemand selfservice hot water taps integrated intotables for fun, efficient and hassle-free dining.Today, Sakae Sushi has become a bywordfor excellence. For example, not only doesthe chain use quality Japanese rice, the riceused for the sushi served in our restaurants isenriched with Vitamin E. Its outstanding qualitywas recognized in 2003 when it was conferredthe Singapore Promising Brand Award.Whichever countries they are found in, SakaeSushi pampers customers with a menufeaturing over 100 varieties of sushi. Selectedoutlets also offer teppanyaki, Kaminabe andYakimono.The specialty of Crepes & Cream is itsingenious and inventive crepes. The restaurantalso offers dessert lovers an assortment ofdelectable desserts and ice cream creations.For its crepes, desserts and ice creams,Crepes & Cream serves only Bud’s Ice Creamof San Francisco. Bud’s Ice Cream is not onlyrated one of the world’s best ice cream, itis made from skimmed milk for a healthierchoice. For appetisers and main courses,diners are presented with a menu featuring anexciting medley of Italian, Japanese, Chineseand Continental dishes.Diverse as the menu is, the common threadthat runs throughout is an embrace of culinarycreativity, quality ingredients and supremefreshness.Sho-U is the symbol of unprecedentedboldness. Its design is inspired by the dramaticintensity and vivid hues of Japanese Kabukitheatre, providing a dining experience, whichjuxtaposes the spirit of the ‘traditional’ with anunconventional and surprising aesthetic.The overall art direction of Sho-U is headedby the critically acclaimed Mr Colin Seah,whose work was awarded “Designs of theYear 2006”. Other great hands that played apart in shaping Sho-U into an image perfectdining destination include Singaporean artistMs Lee Meiling, whose fabric art installationsof the sakura (cherry) flowers complement themain walls, ceiling and private room, as well asMs Jo Soh of ‘I Love Hansel’ fame, whodesigned the uniforms of all the serviceconsultants. Not forgetting the master of thekitchen, Toshihiro Ueda - commonly known asTommy-san, who has 15 years of internationalexperience at the helm of restaurants.It is hoped that Sho-U, which is derivedfrom ‘shoyu’ – an essential ingredientin Japanese food, would live up toits namesake and feature as onessential in the diets of food lovingpeople here.2• Annual Report 2006 • Leaping Forward

Board Of DirectorsDOUGLAS FOOFOO LILIANLIM CHEEYONGANDY ONGSIEW KWEECHAN WING LEONG6• Annual Report 2006 • Leaping Forward

Operations ReviewApex-Pal International registered anotheryear of sterling growth – 28.4% onthe back of a turnover of $66.6 millionand a 41.2% increase in profit beforetax from $4.7 million inFY2005 to $6.7 million inFY2006.The Group added a total of18 outlets – an average of 1.5per month - in China, Malaysia,Philippines and Singaporeto number almost 60 outletsacross the region at the end ofFY2006.8• Annual Report 2006 • Leaping Forward

Corporate StructureSakaeSushiSho-UNouvelleEventsApex-PalInvestmentPte. Ltd.Crepes &CreamPT. Apex PalInternationalApex-PalMalaysia SdnBhdSakae Sushi(HongKong)LtdInnotechConsultingSakaeTeppanyakiUma UmaMenShanghaiApex-Pal Co.,LtdApex-PalInternational(Beijing) LtdHibikiJapaneseRestaurantApex-PalShanghaiCo., LtdApex-Pal(USA) Inc.Apex-PalF&B (Beijing)LtdAnnual Report 2006 • Leaping Forward • 11

Social and Recreation ActivitiesApex-Pal Annual Dinner & DanceApex-Pal Annual Dinner & Dance is held ona yearly basis for all Apex-Pal associateswhere all employees let their hair down for anenjoyable dinner together, like a big family.Human Resource & Colleagues YearlyGet-Together SessionsHuman Resource Department will organiseyearly Get-Together Sessions with our fellowcolleagues to share about the latest HumanResource policies as well as new staff welfarebenefits.It is also a feedback session where employeeshare their experiences with our HR colleaguesand provide suggestions on creating a betterworking environment.Giving to the CommunityYearly Chinese New Year Visit &Reunion DinnerIn an effort to spread the festive atmosphereand the celebration of the Lunar New Year to theless fortunate and needy, volunteers from theGroup, comprising staff from all departments,visited the elderly tenants of rental apartmentsin Radin Mas areas which include Redhill Close,Telok Blangah Crescent, Telok Blangah Riseand Henderson Road on a yearly basis. Themajority of these elderly tenants are single, over60 years of age, unemployable, failing in healthand do not have any relatives or kins to dependon for care or support.The Group donated a host of necessities suchas toiletries, towels and medicated oil in a bid tohelp ease their daily discomforts. Hopefully, ourefforts made a difference in the lives of theseless fortunate in the festive period.Apex-Pal Overseas TripA 1-day overseas trip to Malaysia was speciallyorganized for our Apex-Pal’s associates andtheir family members.It was an enjoyable day filled with educationaltours to fruit & herbs farm as well as templevisits. Sumptuous seafood lunch and a 8-course Chinese dinner were provided and ofcourse not be missed out : Shopping @ thenewly opened JUSTCO Shopping mall.Through these outings, we hope to forgecloser ties between the company, our fellowcolleagues and their loved ones.Apex-Pal Soccer TeamAs part of the health promotion effort, our fellowcolleagues have come together and form ourvery own Apex-Pal’s soccer team.Yearly Excursion for Students of MINDSApex-Pal orgainses yealy excursion outingto educationally sub-normal (ESN) studentsof ages 14 to 18 and teachers from variousMINDS school.The students and teachers will learn the artof sushi-making from our experienced Chef.With the help of our staff who volunteered theirassistance, the students thoroughly enjoyedtheir learning experience while our volunteersin turn learnt the art of patience and effectivecommunication. We hope that this initiativehas helped to open doors to possible careeropportunities for these students.12• Annual Report 2006 • Leaping Forward

Social and Recreation ActivitiesHuman Resource DevelopmentWorkforce Skills Qualification –Food & BeverageApex-Pal International Ltd has officially beencertified as a Workforce Skills Qualification(WSQ) Training Centre by WorkforceDevelopment Agency (WDA) since 2006With the F&B WSQ in place, employers in theF&B industry will be able to recruit employeeswith a national certificate that is recognisedby all. This will be helpful for employersas the employees with this skills-basedqualifications, are people who have beenassessed to be competent in a particular skill.This way, employers are able to save time bynot retraining the new employees what theyalready know or are competent in. It is a winwinoutcome for all parties as productivity andprofitability of a business often depends on thequalities and skills of its employees.This Diploma is designed to prepare individualseeking the exciting and rapidly growingtourism and hospitality industry. The objectiveof this Diploma is to provide them with ahigh level of interpersonal skills, range ofidentification and analytical problem skills andstrategies practical to the industry.As part of the Company’s lifelong learningcommitment, we are proud to be able toprovide continuous opportunities for our fellowcolleagues for their personal development andupgrading.Excellent Service AwardWe have a total of 210 Excellent Service Awardrecipients for year 2006: - 46 Star Winners, 67Gold Winners (Executive & Non-Executive), 97Silver Winners. Going the Extra Miles (GEM) forour guests and fellow colleagues.Diploma Graduates - Tourism & HospitalityManagementWe have a total of 16 employees who wentfor the Diploma in Tourism & HospitalityManagement fully sponsored by our Company.Apex-Pal Team Building ProgrammeTeam building programme were organised forall Management and Restaurant Managers aswell as for office colleagues in year 2006. Theobjectives for the teambuilding programme areto foster better relationships and communicationamong colleagues as well as to share thecompany’s objectives for the upcoming yearahead.Annual Report 2006 • Leaping Forward • 13

Taking A Leap ForwardUSACHINAHONGKONGTHAILANDPHILIPPINESSINGAPOREMALAYSIAINDONESIA14• Annual Report 2006 • Leaping Forward

Financial HighlightsRevenue(S$ MILLION)Profit before tax(S$ MILLION)8000080007000070006000066,64560006,697500004000030000200001000023,48136,64545,16151,905500040003000200010003,3052,679 2,7964,74302002 2003 2004 2005 2006Year02002 2003 2004 2005 2006YearNet Tangible Assets Per Share(CENTS)Earnings Per Share(CENTS)151212.7414.454.03.53.03.463.749636.038.8210.092.52.01.51.00.52.862.141.9602002 2003 2004 2005 2006Year02002 2003 2004 2005 2006YearRESULTS 2002 2003 2004 2005 2006S$’000 S$’000 S$’000 S$’000 S$’000Revenue 23,481 36,645 45,161 51,905 66,645Profit before tax 3,305 2,679 2,796 4,743 6,697Profit attributable toshareholders 2,570 2,049 2,085 3,684 5,081Non-current assets 4,662 4,169 4,833 4,627 12,433Net current assets 2,409 5,553 6,230 9,238 8,503Non-current liabilities 1,600 298 301 289 421Shareholder’s equity 5,471 9,424 10,762 13,576 20,515Net tangible assetsper share (cents) 6.03 8.82 10.09 12.74 14.45Earnings per share (cents) 2.86 2.14 1.96 3.46 3.74Annual Report 2006 • Leaping Forward • 15

Corporate InformationAuditorsBoard of DirectorsCompany Secretaries16 • Annual Report 2006 • Leaping ForwardDouglas Foo Peow Yong Chief Executive Officer Phyllis Phua Lee Boon CPA, SingaporeFoo Lilian Executive Director /Executive Vice PresidentLim Chee Ying LLB, Hons, ACISAndy Ong Siew Kwee Independent Director Registered OfficeLim Chee Yong Independent Director 10 Collyer Quay,Chan Wing Leong Independent Director #13-01/05 Ocean BuildingAudit CommitteeLim Chee Yong ChairmanSingapore 049315Company Registration No. 199604816ETel: (65) 6438 6629Chan Wing LeongAndy Ong Siew KweeFax: (65) 6438 6639Share RegistrarNominating CommitteeLim Associates (Pte) LtdLim Chee Yong Chairman3 Church StreetChan Wing LeongDouglas Foo Peow Yong#08-01 Samsung HubSingapore 049483Remuneration CommitteeChan Wing Leong ChairmanLim Chee YongDouglas Foo Peow YongDeloitte & ToucheCertified Public Accountants6 Shenton Way, #32-00DBS Building Tower TwoSingapore 068809Partner-in-charge: Aric Loh Siang KheeDate of appointment: 19 March 2003Principal Bankers• Citibank, N.A.• Standard Chartered Bank• The Hongkong and Shanghai BankingCorporation Limited

FINANCIAL CONTENTSCorporate Governance Report • 18Report of the Directors • 27Independent Auditors’ Report • 30Balance Sheets • 31Consolidated Profit and Loss Statement • 32Statements of Changes in Equity • 33Consolidated Cash Flow Statement • 34Notes to the Financial Statement • 35Statement of Directors • 57Statistics of Shareholdings • 58Shareholders’ Information • 59Notice of Annual General Meeting • 60Proxy Form

Corporate Governance ReportApex-Pal International Ltd. (the “Company”) and together with its subsidiaries, (the “Group”) continuously committed to maintaining a highstandard of corporate governance and has put in place self-regulatory corporate practices to protect the interests of its shareholders andenhance long-term shareholder value.The Board of Directors (the “Board”) is pleased to report compliance of the Company with the benchmark set by the Code of CorporateGovernance 2005 (the “Code”), except where otherwise stated.BOARD MATTERSPrinciple 1: Board’s Conduct of AffairsApart from its statutory duties and responsibilities, the Board oversees the management and affairs of the Group. It focuses on strategies andpolicies, with particular attention paid to growth and financial performance. It delegates the formulation of business policies and day-to-daymanagement to the Executive Directors.The principal functions of the Board are:(a)(b)(c)(d)to approve the Group’s key business strategies and financial objectives;to approve major investments and divestments, and funding proposals;to oversee the processes for evaluating the adequacy of internal controls, risk management, financial reporting and compliance; andto assume responsibility for corporate governance.The Board discharges its responsibilities either directly or indirectly through Board Committees such as Nominating Committee, RemunerationCommittee and Audit Committee. These committees function within clearly defined terms and references and operating procedures, which arereviewed on a regular basis. The effectiveness of each committee is also constantly reviewed by the Board.Every Executive Director receives appropriate training to develop individual skills in order to discharge his or her duties. The Group also providesextensive information about its history, mission and values to the Directors.The Board holds at least two scheduled meetings each year to review and deliberate on the key activities and business strategies of the Group,including reviewing and approving acquisitions, financial performance, and to endorse the release of the interim and annual financial results.Where necessary, additional meetings may be held to address significant transactions or issues. The Company’s Articles of Association permit aBoard meeting to be conducted by way of tele-conference and video-conference.18• Annual Report 2006 • Leaping Forward

Corporate Governance Report (cont’d)The number of Board and Board Committee Meetings held in FY2006 and the attendance of each member of the Board is as follows:-Name of DirectorNo. of MeetingsHeldBoardNo. of MeetingsAttendedNo. of MeetingsHeldAudit CommitteeNo. of MeetingsAttendedDouglas Foo Peow Yong 2 2 - -Foo Lilian 2 2 - -Lim Chee Yong 2 2 3 3Andy Ong Siew Kwee 2 2 3 3Chan Wing Leong 2 2 3 3Name of DirectorRemuneration CommitteeNo. of MeetingsHeldNo. of MeetingsAttendedNominating CommitteeNo. of MeetingsHeldNo. of MeetingsAttendedDouglas Foo Peow Yong 2 2 1 1Foo Lilian - - - -Lim Chee Yong 2 2 1 1Andy Ong Siew Kwee - - - -Chan Wing Leong 2 2 1 1During the financial year, the directors received briefings on regulatory changes to the Listing Manual of the SGX-ST and changes to theAccounting Standards. The directors also received updates on the business of the Group through regular presentations and meetingsPrinciple 2: Board Composition and GuidanceThe Board comprises:Executive Directors:Douglas Foo Peow YongFoo Lilian(Executive Director and CEO)(Executive Director)Non-Executive Directors:Andy Ong Siew KweeLim Chee YongChan Wing Leong(Non-executive and Independent Director)(Non-executive and Independent Director)(Non-executive and Independent Director)The Directors appointed are qualified professionals who possess a diverse range of expertise to provide a balanced view within the Board.Key information regarding the Directors’ academic and professional qualifications and other appointments is set out on page 7 of the AnnualReport.The independence of each Director is reviewed by the Nominating Committee. The Nominating Committee adopts the definition of whatconstitutes an Independent Director from the Code.The Board has examined its size and is of the view that it is an appropriate size for effective decision-making, taking into account the scope andnature of the operations of the Company. The composition of the Board will be reviewed on an annual basis by Nominating Committee to ensurethat the Board has the appropriate mix of expertise and experience.Annual Report 2006 • Leaping Forward • 19

Corporate Governance Report (cont’d)Principle 3: Role of Chairman and Chief Executive OfficerIt is the view of the Board that it is in the best interests of the Group to adopt a single leadership structure, i.e. where the CEO and the Chairmanof the Board is the same person, so as to ensure that the decision-making process of the Group would not be unnecessarily hindered.The Board is of the view that there are sufficient safeguards and checks to ensure that the process of decision making by the Board isindependent and based on collective decisions without any individual exercising any considerable concentration of power or influence. Further,all the Board committees are chaired by Independent Directors of the Company.The Group’s Chairman and CEO is Mr Douglas Foo Peow Yong, who is responsible for the day-to-day operations of the Group, as well asmonitoring the quality, quantity and timeliness of information flow between the Board and the management. Mr Foo is the founder of the Groupand has played a key role in developing the Group’s business. Through the Group’s successful development in these few years, Mr Foo hasdemonstrated his vision, strong leadership and enthusiasm in this business.Mr Andy Ong Siew Kwee will be appointed as the lead independent director of the Company, who is being made available to shareholderswhere they have concerns when contact through the normal channels of the Chairman or CEO has failed to resolve or for which such contactis inappropriate.Principle 6: Access to InformationTo assist the Board in fulfilling its responsibilities, the Board is provided with management reports containing complete, adequate and timelyinformation, and papers containing relevant background or explanatory information required to support the decision-making process. The Boardis also provided with updates on the relevant new laws, regulations and changing commercial risks in the Company’s operating environment.Orientation to the Company’s business strategies and operations is conducted as and when required.All Directors have separate and independent access to senior management and to the Company Secretaries. At least one of the Joint CompanySecretaries attends all Board meetings and prepare minutes of meetings, and assist the Chairman in ensuring that Board procedures are followedand reviewed so that the Board functions effectively, and the Company’s Articles of Association and relevant rules and regulations, includingrequirements of the Companies Act and the Listing Manual of Singapore Exchange Securities Trading Limited (SGX-ST), are complied with.In the event that the Directors, whether as a group or individually, require independent professional advice in the furtherance of their duties, thecost of such professional advice will be borne by the Company.BOARD COMMITTEENominating Committee (“NC”)Principle 4: Board MembershipThe NC comprises Mr Lim Chee Yong as Chairman, Mr Chan Wing Leong and Mr Douglas Foo Peow Yong as members. The majority of whom,including the Chairman of the NC, are independent non-executive directors. The Chairman of the NC is not associated in any way with anysubstantial shareholders of the Company.20• Annual Report 2006 • Leaping Forward

Corporate Governance Report (cont’d)The Board has approved written terms of reference of the NC. The NC is responsible for:-(a)(b)(c)(d)reviewing and making recommendations to the Board on all candidates nominated for appointment to the Board;reviewing all candidates nominated for appointment as senior management staff;reviewing and recommending to the Board on an annual basis, the Board structure, size and composition, taking into account the balancebetween Executive and Non-Executive, Independent and Non-Independent Directors and having regard at all times to the principles ofcorporate governance and the Code;procuring that at least one-third of the Board shall comprise Independent Directors;(e) making recommendations to the Board on the continuation of the services of any Director who has reached the age of 70;(f)(g)(h)identifying and making recommendations to the Board as to which Directors are to retire by rotation and to be put forward for re-election ateach Annual General Meeting (“AGM”) of the Company, having regard to the Directors’ contribution and performance, including IndependentDirectors;determining whether a Director is independent (taking into account the circumstances set out in the Code and other salient factors); andproposing a set of objective performance criteria to the Board for approval and implementation, to evaluate the effectiveness of the Boardas a whole and the contribution of each Director to the effectiveness of the Board.All Directors are subject to the provisions of the Company’s Articles of Association whereby one-third of the Directors are required to retire andsubject themselves to re-election by shareholders at every AGM.A newly-appointed Director will have to submit himself for re-election at the AGM immediately following his appointment and, thereafter, besubjected to the one-third-rotation rule.The NC recommended to the Board that Mr Douglas Foo Peow Yong and Ms Foo Lilian be nominated for re-appointment at the forthcomingAGM.In making the recommendation, the NC had considered the Directors’ overall contribution and performance.When a vacancy arises under any circumstances, or where it is considered that the Board would benefit from the services of a new director withparticular skills, the NC, in consultation with the Board, determines the selection criteria and identifies candidates with the appropriate expertiseand experience for the position. The NC then nominates the most suitable candidate to be appointed to the Board. Under the Company’s Articlesof Association, any director appointed by the Board shall hold office only until the conclusion of the next Annual General Meeting and shall thenbe eligible for re-election at that meeting.Principle 5: Board PerformanceOn an annual basis, the NC in consultation with the Chairman of the Board, will review and evaluate the performance of the Board as a whole,taking into consideration the attendance record at the meetings of the Board and Board Committees and also the contribution of each directorto the effectiveness of the Board.Annual Report 2006 • Leaping Forward • 21

Corporate Governance Report (cont’d)The NC conducted an assessment of the functions and effectiveness of the Board as a whole and the contribution of each director to theeffectiveness of the Board in financial year 2006. The assessment report was reviewed by the Board and the recommendations duly noted. Theassessment concentrated on a number of factors, including achieving financial targets, performance of the Board, performance of individualdirector’s vis-à-vis attendance and contributions during board meetings.Remuneration Committee (“RC”)Principle 7: Procedures for Developing Remuneration PoliciesThe RC comprises Mr Chan Wing Leong as Chairman and Mr Lim Chee Yong and Mr Douglas Foo Peow Yong as members. The majority of whom,including the Chairman of the RC, are independent and non-executive directors.The Board has approved written terms of reference of the RC. The RC is responsible for:-(a)(b)(c)(d)(e)recommending to the Board a framework of remuneration for the Board and the key executives of the Group covering all aspects ofremuneration such as Director’s fees, salaries, allowances, bonuses, options and benefits-in-kind;proposing to the Board, appropriate and meaningful measures for assessing the performance of the Executive Directors;determining the specific remuneration package for each Executive Director;considering the eligibility of Directors for benefits under long-term incentive schemes; andconsidering and recommending to the Board the disclosure of details of the Company’s remuneration policy, level and mix of remunerationand procedure for setting remuneration and details of the specific remuneration packages of the Directors and key executives of theCompany to those required by law or by the Code.In carrying out the above responsibilities, the RC may obtain independent external legal and other professional advice as it deems necessary. Theexpenses of such advice shall be borne by the Company.The RC’s recommendations are made in consultation with the Chairman of the Board and submitted to the entire Board for endorsement. Thepayment of fees to non-executive directors is subject to approval at the annual general meeting of the Company. The Directors are not involvedon deciding their own remuneration. The members of the RC do not participate in any decisions concerning their own remuneration.22• Annual Report 2006 • Leaping Forward

Corporate Governance Report (cont’d)The Company has a share option scheme known as Apex-Pal Employee Share Option Scheme (the “ESOS”) which was approved by shareholdersof the Company. The ESOS complies with the relevant rules as set out in Chapter 8 of the Listing Manual. The ESOS will provide eligibleparticipants with an opportunity to participate in the equity of the Company and to motivate them towards better performance through increaseddedication and loyalty. The ESOS is administered by the RC. No options were granted under the ESOS during the financial year ended 31December 2006.Audit Committee (“AC”)Principle 11: Audit CommitteeThe AC comprises Mr Lim Chee Yong, Mr Chan Wing Leong and Mr Andy Ong Siew Kwee. The Chairman of the AC is Mr Lim Chee Yong. All ofthe AC including the Chairman of the AC, are independent and non-executive directors.The Board has approved the written terms of reference of the AC. Its functions are as follows:-(a)(b)(c)(d)(e)(f)(g)review and evaluate financial and operating results and accounting policies;review audit plan of external auditors, their evaluation of the system of internal accounting controls and their audit report;review the Group’s financial results and the announcements before submission to the Board for approval;review the assistance given by the management to external auditors;consider the appointment/ re-appointment of external auditors;review interested person transactions; andother functions as required by law or the Code.The AC meets regularly and also holds informal meetings and discussions with the management from time to time, The AC has full discretion toinvite any Director or executive officer to attend its meetings.The AC has been given full access to and obtained the co-operation from the management of the Company. The AC has reasonable resourcesto enable it to discharge its functions properly.The AC has met with the external auditors without the presence of the management to review matters that might be raised privately. The AC alsomet with the external auditors to discuss the results of their examinations and their evaluations of the systems of internal accounting controls.The AC has reviewed the volume of non-audit services to the Group by the external auditors, and being satisfied that the nature and extent ofsuch services will not prejudice the independence and objectivity of the external auditors, is pleased to recommend their re-appointment.The AC is in the process of establishing a whistle blowing policy to enable persons employed by the Group a channel to report any suspicionsof non-compliance with regulations, policies and fraud, etc, to the appropriate authority for resolution, without any prejudicial implications forthese employees. The AC will be vested with the power and authority to receive, investigate and enforce appropriate action when any such noncompliancematter is brought to its attention.24• Annual Report 2006 • Leaping Forward

Corporate Governance Report (cont’d)Principle 12 and 13: Internal Controls and Internal AuditThe Board is cognizant of its responsibility for maintaining a sound system of internal controls to safeguard the shareholders’ investments andthe Group’s assets and business. The Company’s external auditors, Deloitte & Touche, will carry out, in the course of their statutory audit, a reviewof the effectiveness of the Company’s material internal controls, annually to the extent of their scope as laid out in their audit plan. Material noncomplianceand internal control weaknesses noted during their audit, and the auditors’ recommendations, are reported to the AC members.For FY2006, the Board is of the view that based on the reports from the auditors, the system of internal controls that has been maintained bythe Company’s management throughout the financial year is adequate to meet the needs of the Company.KPMG has been appointed in January 2005 as the Company’s internal auditors for the purposes of reviewing the effectiveness of the Company’smaterial internal controls. The AC has reviewed the internal audit programme, the scope and results of internal audit procedures and is satisfiedthat the internal audit function is adequately resourced and has appropriate standing within the Company.COMMUNICATION WITH SHAREHOLDERSPrinciple 10: AccountabilityThe board is accountable to the shareholders and is mindful of its obligations to furnish timely information and to ensure full disclosure ofmaterial information to shareholders in compliance with statutory requirements and the Listing Manual.The Board provides the shareholders with a detailed and balanced explanation and analysis of the Group’s performance, position and prospectson a half-yearly basis.The management provides the Board with appropriately detailed management accounts of the Group’s performance, position and prospects ona half-yearly basis.Principles 14 and 15: Communications with ShareholdersThe Company does not practise selective disclosure. Information on any new initiatives is disseminated via SGXNET, news releases and theCompany’s website. Price-sensitive information is publicly released on an immediate basis where required under the Listing Manual. Where animmediate announcement is not possible, the announcement is made as soon as possible to ensure that shareholders and the public have afair access to the information.The AGM of the Company is a principal forum for dialogue and interaction with all shareholders. All shareholders will receive the Annual Reportand the notice of AGM. At the AGM, shareholders will be given the opportunity to voice their views and to direct questions regarding the Groupto the Directors including the chairpersons of each of the Board committees. The external auditors are also present to assist the Directors inaddressing any relevant queries from the shareholders.The Company ensures that there are separate resolutions at general meetings on each distinct issue.The Company’s Articles of Association allow a member of the Company to appoint one or two proxies to attend and vote at general meetings.Annual Report 2006 • Leaping Forward • 25

Corporate Governance Report (cont’d)RISK MANAGEMENT(Listing Manual Rule 1207(4)(b)(iv))The Company does not have a Risk Management Committee. However, the management regularly reviews the Company’s business andoperational activities to identify areas of significant business risks as well as appropriate measures to control and mitigate these risks. Themanagement reviews all significant control policies and procedures and highlights all significant matters to the Directors and the AC.SECURITIES TRANSACTIONS(Listing Manual Rule 1207(18))The Company will put in place an internal code on dealings in securities with respect to dealings in securities by Directors and officers ofthe Group. Directors, management and officers of the Group who have access to price-sensitive, financial or confidential information are notpermitted to deal in the Company’s shares during the periods commencing one month before the announcement of the Group’s annual or halfyearlyresults and ending on the date of announcement of such results, or when they are in possession of unpublished price-sensitive informationon the Group. To provide further guidance to employees on dealing in the Company’s shares, the Company has adopted a code of conduct ontransactions in the Company’s shares.MATERIAL CONTRACTS(Listing Manual Rule 1207(8))Save for the service agreements between the Executive Directors and the Company, there were no material contracts of the Company or itssubsidiaries involving the interest of any Director or controlling shareholders subsisting as at the financial year ended 31 December 2006.INTERESTED PARTY TRANSACTIONS(Listing Manual Rule 907)The Company has established procedures to ensure that all transactions with interested persons are reported in a timely manner to the AC andthat the transactions are on an arm’s length basis.The Company confirms that the aggregate value of all interested person transactions during the financial year under review is less thanS$100,000.26• Annual Report 2006 • Leaping Forward

Report of the DirectorsThe directors present their report together with the audited consolidated financial statements of the group and balance sheet and statement ofchanges in equity of the company for the financial year ended December 31, 2006.1 DIRECTORSThe directors of the company in office at the date of this report are:Douglas Foo Peow YongFoo LilianAndy Ong Siew KweeLim Chee YongChan Wing Leong2 ARRANGEMENTS TO ENABLE DIRECTORS TO ACQUIRE BENEFITS BY MEANS OF THE ACQUISITION OF SHARES AND DEBENTURESNeither at the end of the financial year nor at any time during the financial year did there subsist any arrangement whose object is to enablethe directors of the company to acquire benefits by means of the acquisition of shares or debentures in the company or any other bodycorporate.3 DIRECTORS’ INTERESTS IN SHARES AND DEBENTURESThe directors of the company holding office at the end of the financial year had no interests in the share capital and debentures of thecompany and related corporations as recorded in the register of directors’ shareholdings kept by the company under Section 164 of theSingapore Companies Act except as follows:Name of directors and companyShareholdings registeredin which interests are heldin the name of directorAt At AtJanuary 1, December 31, January 21,Interest in Apex-Pal International Ltd. (Ordinary shares) 2006 2006 2007Douglas Foo Peow Yong 88,799,640 # 88,799,640 88,799,640Andy Ong Siew Kwee 266,400 # 470,400 470,400# Adjusted for the bonus share issue during the financial year on the basis of 1 bonus share to be credited as fully paid for every 5existing shares.By virtue of section 7 of the Singapore Companies Act, Douglas Foo Peow Yong is deemed to have an interest in the company and all therelated corporations of the company.Annual Report 2006 • Leaping Forward • 27

Report of the Directors (cont’d)4 DIRECTORS’ RECEIPT AND ENTITLEMENT TO CONTRACTUAL BENEFITSSince the beginning of the financial year, no director of the company has received or become entitled to receive a benefit which isrequired to be disclosed under Section 201(8) of the Singapore Companies Act, by reason of a contract made by the company or a relatedcorporation with the director or with a firm of which he is a member, or with a company in which he has a substantial financial interestexcept as disclosed in the financial statements.5 SHARE OPTIONSa) The Apex-Pal Employees’ Share Option Scheme (“the ESOS”) was approved by the shareholders of the company at an ExtraordinaryGeneral Meeting held on July 14, 2003.The committee administering the Scheme comprises:Chan Wing Leong (Chairman)Lim Chee YongDouglas Foo Peow YongUnder the Share Option Scheme, an option entitles the option holder to subscribe for a specific number of new ordinary shares inthe company comprised in the option at the subscription price per share determined with reference to the market price of the sharesat the time of grant of the option. The Share Option Committee may at its discretion, fix the subscription price at a discount up to20% off market price. Options granted with the subscription price set at the market price shall only be exercised after the firstanniversary of the date of grant of that option. Options granted with the market price set at a discount to the market price shall only beexercised after the second anniversary. The shares under option may be exercised in whole or in part on the payment of the relevantsubscription price. Options granted under the ESOS will have a life span of ten years.There were no unissued shares of the company under options granted pursuant to the Share Option Scheme.b) During the financial year, no options to take up unissued shares of the company or its subsidiaries was granted and there were noshares of the company or its subsidiaries issued by virtue of the exercise of an option to take up unissued shares.c) At the end of the financial year, there were no unissued shares of the company or its subsidiaries under option.6 AUDIT COMMITTEEThe Audit Committee of the company is chaired by Mr Lim Chee Yong, a non-executive director, and includes Mr Andy Ong Siew Kwee, anon-executive director and Mr Chan Wing Leong, a non-executive director. The Audit Committee has met three times since the last AnnualGeneral Meeting (“AGM”) and has reviewed the following, where relevant, with the executive directors and the external and internal auditorsof the company:a) the audit plans and results of the external and internal auditors’ examination and evaluation of the group’s systems of internalaccounting controls;b) the group’s financial and operating results and accounting policies;c) the financial statements of the company and the consolidated financial statements of the group before their submission to thedirectors of the company and the external auditors’ report on those financial statements;28• Annual Report 2006 • Leaping Forward

Report of the Directors (cont’d)6 AUDIT COMMITTEE (CONT’D)d) the half-yearly and annual announcements as well as the related press releases on the results and financial position of the companyand the group;e) the co-operation and assistance given by the management to the group’s external auditors; andf) the re-appointment of the external auditors of the group.The Audit Committee has full access to and co-operation of the management and has been given the resources required for it to dischargeits function properly. It also has full discretion to invite any director and executive officer to attend its meetings. The external and internalauditors have unrestricted access to the Audit Committee.The Audit Committee has recommended to the directors the nomination of Deloitte & Touche for re-appointment as external auditors of thegroup at the forthcoming AGM.7 AUDITORSThe auditors, Deloitte & Touche, have expressed their willingness to accept re-appointment.ON BEHALF OF THE DIRECTORSDouglas Foo Peow YongFoo LilianMarch 12, 2007Annual Report 2006 • Leaping Forward • 29

Independent Auditors’ ReportINDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF APEX-PAL INTERNATIONAL LTD.We have audited the financial statements of Apex-Pal International Ltd. (the “company”) and its subsidiaries (the “group”) which comprise thebalance sheets of the group and the company as at set December 31, 2006, the profit and loss statement, statement of changes in equity andcash flow statement of the group and the statement of changes in equity of the company for the year then ended, and a summary of significantaccounting polices and other explanatory notes, as set out on pages 31 to 56.Directors’ ResponsibilityThe company’s directors are responsible for the preparation and fair presentation of these financial statements in accordance with SingaporeFinancial Reporting Standards and the Singapore Companies Act, Cap. 50 (the “Act”). This responsibility includes: designing, implementing andmaintaining internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement,whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable inthe circumstances.Auditors’ responsibilityOur responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance withSingapore Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance whether the financial statements are free from material misstatement.An audit involves performing procedures to obtain audit evidence about the amounts and disclosure in the financial statements. The proceduresselected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial statements, whetherdue to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fairpresentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose ofexpressing and opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accountingpolicies used and the reasonableness of accounting estimates made by directors, as well as evaluating the overall presentation of the financialstatements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.OpinionIn our opinion:a) the consolidated financial statements of the group and the balance sheet and statement of changes in equity of the company are properlydrawn up in accordance with the provisions of the Act and Singapore Financial Reporting Standards so as to give a true and fair view of thestate of affairs of the group and company as at December 31, 2006 and of the results, changes in equity and cash flows of the group andthe changes in equity of the company for the financial year ended on that date; andb) the accounting and other records required by the Act to be kept by the company and by the subsidiary incorporated in Singapore of whichwe are the auditors have been properly kept in accordance with the provisions of the Act.DELOITTE & TOUCHECertified Public AccountantsAric Loh Siang KheePartnerAppointed on March 19, 2003SingaporeMarch 12, 200730• Annual Report 2006 • Leaping Forward

Balance Sheets31 DECEMBER 2006GroupCompanyNote 2006 2005 2006 2005$’000 $’000 $’000 $’000ASSETSCurrent assetsCash and bank balances 6 10,148 10,681 8,634 9,578Trade receivables 7 1,187 786 1,156 778Other receivables and prepayments 8 4,234 3,150 3,301 2,620Inventories 798 569 748 547Total current assets 16,367 15,186 13,839 13,523Non-current assetsSubsidiaries 9 - - 184 184Due from subsidiaries 9 - - 3,253 2,139Property, plant and equipment 10 12,433 4,623 11,053 3,921Intangible asset 11 - 4 - 4Total non-current assets 12,433 4,627 14,490 6,248Total assets 28,800 19,813 28,329 19,771LIABILITIES AND SHAREHOLDERS’ EQUITYCurrent liabilitiesTrade payables 3,591 2,877 3,142 2,509Accruals 2,861 2,002 2,386 1,910Due to subsidiaries - - 32 6Current portion of finance leases 12 8 - - -Income tax payable 1,404 1,069 1,400 1,063Total current liabilities 7,864 5,948 6,960 5,488Non-current liabilitiesDeferred taxation 13 411 289 400 280Finance lease 12 10 - - -Total non-current liabilities 421 289 400 280Capital and reservesIssued capital 14 10,736 4,260 10,736 4,260Share premium - 2,876 - 2,876Currency translation reserve (44) (45) - -Accumulated profits 9,823 6,485 10,233 6,867Total equity 20,515 13,576 20,969 14,003Total liabilities and equity 28,800 19,813 28,329 19,771See accompanying notes to the financial statements.Annual Report 2006 • Leaping Forward • 31

Consolidated Profit and Loss StatementYEAR ENDED 31 DECEMBER 2006GroupNote 2006 2005$’000 $’000Revenue 15 66,645 51,905Cost of sales (17,955) (14,589)Gross profit 48,690 37,316Other operating income 16 363 166Administrative expenses (27,272) (20,597)Other operating expenses (15,083) (12,139)Finance cost (1) (3)Profit before income tax 17 6,697 4,743Income tax expense 18 (1,616) (1,059)Profit after income tax 5,081 3,684Basic earnings per share (cents) 19 3.74 2.8832• Annual Report 2006 • Leaping ForwardSee accompanying notes to the financial statements.

Statements of Changes in EquityYEAR ENDED 31 DECEMBER 2006CurrencyIssued Share translation Accumulatedcapital premium reserve profits Total$’000 $’000 $’000 $’000 $’000GroupBalance at January 1, 2005 4,260 2,876 (27) 3,653 10,762Currency translation differences - - (18) - (18)Net profit for the year - - - 3,684 3,684Dividend paid (Note 20) - - - (852) (852)Balance at December 31, 2005 4,260 2,876 (45) 6,485 13,576Currency translation differences - - 1 - 1Net profit for the year - - - 5,081 5,081Dividend paid (Note 20) - - - (1,743) (1,743)Issue of shares, net of expenses 3,600 - - - 3,600Transfer from share premium account 2,876 (2,876) - - -Balance at December 31, 2006 10,736 - (44) 9,823 20,515CompanyBalance at January 1, 2005 4,260 2,876 - 3,636 10,772Net profit for the year - - - 4,083 4,083Dividend paid (Note 20) - - - (852) (852)Balance at December 31, 2005 4,260 2,876 - 6,867 14,003Net profit for the year - - - 5,109 5,109Dividend paid (Note 20) - - - (1,743) (1,743)Issue of shares, net of expenses 3,600 - - - 3,600Transfer from share premium account 2,876 (2,876) - - -Balance at December 31, 2006 10,736 - - 10,233 20,969See accompanying notes to financial statements.Annual Report 2006 • Leaping Forward • 33

Consolidated Cash Flow StatementYEAR ENDED 31 DECEMBER 20062006 2005$’000 $’000Cash flows from operating activitiesProfit before income tax 6,697 4,743Adjustments for:Depreciation expense 2,166 1,689Amortisation of intangible asset 4 14Loss on disposal of plant and equipment 85 263Impairment allowance on trade receivables 4 73Interest expense 1 3Interest income (199) (82)Operating profit before working capital changes 8,758 6,703Trade receivables (405) 94Other receivables and prepayments (1,078) (714)Inventories (229) 59Trade payables 714 102Accruals 853 706Cash generated from operations 8,613 6,950Interest paid (1) (3)Interest received 199 82Income tax paid (1,159) (688)Net cash from operating activities 7,652 6,341Cash flows used in investing activitiesProceeds on disposal of plant and equipment 44 86Purchase of property, plant and equipment (Note A) (10,105) (1,820)Net cash used in investing activities (10,061) (1,734)Cash flows used in financing activitiesDividend paid (1,743) (852)Proceeds on issue of shares, net of expenses 3,600 -Finance lease payments (9) -Net cash from (used in) financing activities 1,848 (852)Net effect of exchange rate changes in consolidating subsidiaries 28 (44)Net (decrease) increase in cash (533) 3,711Cash and bank balances at beginning of year 10,681 6,970Cash and bank balances at end of year 10,148 10,681Note A:During the financial year, the group acquired property, plant and equipment with an aggregate cost of $10,132,000 (2005 : $1,820,000) ofwhich, $27,000 (2005 : $Nil) was acquired under finance lease arrangement. Cash payments of $10,105,000 (2005 : $1,820,000) were madeto purchase property, plant and equipment.34• Annual Report 2006 • Leaping ForwardSee accompanying notes to financial statements.

Notes to the Financial Statements31 DECEMBER 20061 GENERALThe company (Registration No. 199604816E) incorporated in the Republic of Singapore with its principal place of business and registeredoffice at 10 Collyer Quay, #13-01/05 Ocean Building, Singapore 049315 (2005 : 1 Raffles Place, #49-00 OUB Centre, Singapore 048616).The company is listed on the Singapore Exchange Securities Trading Limited. The financial statements are expressed in Singaporedollars.The principal activities of the company consist of the business of operating restaurants, kiosks and cafes, trading, sushi processing andoperating as caterer and franchiser.The principal activities of its subsidiaries are described in Note 9 to the financial statements.The consolidated financial statements of the group and balance sheet and statement of changes in equity of the company for the financialyear ended December 31, 2006 were authorised for issue by the Board of Directors on March 12, 2007.2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESa) BASIS OF ACCOUNTING - The financial statements are prepared in accordance with the historical cost convention, except as disclosedin the accounting policies below, and are drawn up in accordance with the provisions of the Singapore Companies Act and SingaporeFinancial Reporting Standards (“FRS”).The group and the company have adopted all the applicable new/revised FRS and Interpretations of Financial Reporting Standards(“INT FRS”) issued by the Council on Corporate Disclosure and Governance that are relevant to its operations and effective for annualperiods beginning on January 1, 2006. The adoption of the new/revised FRS and INT FRS does not result in changes to the group’sand company’s accounting policies and has no material effect on the amounts reported for the current or prior periods.At the date of authorisation of these financial statements, the directors have considered and anticipated that the adoption of the FRSs,INT FRSs and amendments to FRS that were in issue, but not yet effective, will have no material impact on the financial statementsof the group and the company except that the application of FRS 107 – Financial Instruments: Disclosures and the consequentialamendments to other FRS will not affect any of the amounts recognised in the financial statements, but will change the disclosurespresently made in relation to the group and the company’s financial instruments and the objectives, policies and processes formanaging capital.b) BASIS OF CONSOLIDATION - The consolidated financial statements incorporate the financial statements of the company and entitiescontrolled by the company (its subsidiaries). Control is achieved where the company has the power to govern the financial andoperating policies of an entity so as to obtain benefits from its activities.The results of subsidiaries acquired or disposed of during the year are included in the consolidated profit and loss statement from theeffective date of acquisition or up to the effective date of disposal, as appropriate.Where necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies in line with thoseused by other members of the group.All intra-group transactions, balances, income and expenses are eliminated on consolidation.Annual Report 2006 • Leaping Forward • 35

Notes to the Financial Statements (cont’d)31 DECEMBER 20062 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)Minority interests in the net assets of consolidated subsidiaries are identified separately from the group’s equity therein. Minorityinterests consist of the amount of those interests at the date of the original business combination (see below) and the minority’s shareof changes in equity since the date of the combination. Losses applicable to the minority in excess of the minority’s interest in thesubsidiary’s equity are allocated against the interests of the group except to the extent that the minority has a binding obligation andis able to make an additional investment to cover its share of those losses.In the company’s financial statements, investments in subsidiaries are carried at cost less any impairment in net recoverable valuethat has been recognised in the profit and loss statement.c) BUSINESS COMBINATIONS - The acquisition of subsidiaries is accounted for using the purchase method. The cost of the acquisitionis measured at the aggregate of the fair values, at the date of exchange, of assets given, liabilities incurred or assumed, andequity instruments issued by the group in exchange for control of the acquiree, plus any costs directly attributable to the businesscombination. The acquiree’s identifiable assets, liabilities and contingent liabilities that meet the conditions for recognition under FRS103 Business Combinations are recognised at their fair values at the acquisition date, except for non-current assets (or disposalgroups) that are classified as held for sale in accordance with FRS 105 Non-Current Assets Held for Sale and Discontinued Operations,which are recognised and measured at fair value less costs to sell.Goodwill arising on acquisition is recognised as an asset and initially measured at cost, being the excess of the cost of the businesscombination over the group’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities recognised. If,after reassessment, the group’s interest in the net fair value of the acquiree’s identifiable assets, liabilities and contingent liabilitiesexceeds the cost of the business combination, the excess is recognised immediately in the consolidated profit and loss statement.The interest of minority shareholders in the acquiree is initially measured at the minority’s proportion of the net fair value of the assets,liabilities and contingent liabilities recognised.d) FINANCIAL INSTRUMENTS - Financial assets and financial liabilities are recognised on the group’s balance sheet when the groupbecomes a party to the contractual provisions of the instrument.Trade receivables and other receivablesTrade receivables and other receivables are measured at initial recognition at fair value, and are subsequently measured at amortisedcost using the effective interest rate method. Appropriate allowances for estimated irrecoverable amounts are recognised in theprofit and loss statement when there is objective evidence that the asset is impaired. The allowance recognised is measured asthe difference between the asset’s carrying amount and the present value of estimated future cash flows discounted at the effectiveinterest rate computed at initial recognition.Cash and cash equivalentsCash and bank balances comprise cash on hand and demand deposits, and are subject to an insignificant risk of changes in value.Financial liabilities and equityFinancial liabilities and equity instruments issued by the group are classified according to the substance of the contractual arrangementsentered into and the definitions of a financial liability and an equity instrument. An equity instrument is any contract that evidencesa residual interest in the assets of the group after deducting all of its liabilities. The accounting policies adopted for specific financialliabilities and equity instruments are set out below.36• Annual Report 2006 • Leaping Forward

Notes to the Financial Statements (cont’d)31 DECEMBER 20062 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)Trade payables and other payablesTrade payables and other payables are initially measured at fair value, and are subsequently measured at amortised cost, using theeffective interest rate method.Effective interest methodThe effective interest method is a method of calculating the amortised cost of a financial instrument and of allocating interest incomeor expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts orpayments through the expected life of the financial instrument, or where appropriate, a shorter period. Income is recognised onan effective interest rate basis for debt instruments other than those financial instruments “at fair value through profit and lossstatement”.Equity instrumentsEquity instruments issued by the company are recorded at the proceeds received, net of direct issue costs.e) LEASES - Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards ofownership to the lessee. All other leases are classified as operating leases.Assets held under finance leases are recognised as assets of the group at their fair value at the inception of the lease or, if lower, at thepresent value of the minimum lease payments. The corresponding liability to the lessor is included in the balance sheet as a financelease obligation. Lease payments are apportioned between finance charges and reduction of the lease obligation so as to achieve aconstant rate of interest on the remaining balance of the liability. Finance charges are charged directly to profit and loss statement.Contingent rentals are recognised as expenses in the periods in which they are incurred.Rentals payable under operating leases are charged to profit and loss statement on a straight-line basis over the term of the relevantlease unless another systematic basis is more representative of the time pattern in which economic benefits from the lease asset areconsumed. Contingent rentals arising under operating leases are recognised as an expense in the period in which they are incurred.In the event that lease incentives are received to enter into operating leases, such incentives are recognised as a liability. The aggregatebenefit of incentives is recognised as a reduction of rental expense on a straight-line basis, except where another systematic basis ismore representative of the time pattern in which economic benefits from the lease asset are consumed.f) INVENTORIES - Inventories comprising beverages and food supplies, are stated at the lower of cost (first-in first-out method) andnet realisable value. Cost comprises direct materials, and where applicable, direct labour costs and those overheads that have beenincurred in bringing the inventories to their present location and condition. Cost is calculated using the weighted average method. Netrealisable value represents the estimated selling price less all estimated costs to completion and costs to be incurred in marketing,selling and distribution.g) PROPERTY, PLANT AND EQUIPMENT – Property, plant and equipment are stated at cost less accumulated depreciation and anyaccumulated impairment losses.Annual Report 2006 • Leaping Forward • 37

Notes to the Financial Statements (cont’d)31 DECEMBER 20062 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)Depreciation is charged so as to write off the cost of assets, over their estimated useful lives, using the straight-line method, on thefollowing bases:Freehold building - 2%Restaurant equipment - 20%Renovation - 20%Furniture and fitting - 20%Computers - 20% to 100%Motor vehicles - 20%Office equipment - 20%Depreciation is not provided on freehold land.The estimated useful lives, residual values and depreciation method are reviewed at each year end, with the effect of any changes inestimate accounted for on a prospective basis.Assets held under finance leases are depreciated over their expected useful lives on the same basis as owned assets or, if there is nocertainty that the lessee will obtain ownership by the end of the lease term, the asset shall be fully depreciated over the shorter of thelease term and its useful life.Fully depreciated assets still in use are retained in the financial statements.The gain or loss arising on disposal or retirement of an item of property, plant and equipment is determined as the difference betweenthe sales proceeds and the carrying amounts of the asset and is recognised in the profit and loss statement.h) GOODWILL - Goodwill arising on the acquisition of a subsidiary represents the excess of the cost of acquisition over the group’sinterest in the net fair value of the identifiable assets, liabilities and contingent liabilities of the subsidiary or jointly controlled entityrecognised at the date of acquisition. Goodwill is initially recognised as an asset at cost and is subsequently measured at cost lessany accumulated impairment losses.For the purpose of impairment testing, goodwill is allocated to each of the group’s cash-generating units expected to benefit from thesynergies of the combination. Cash-generating units to which goodwill has been allocated are tested for impairment annually, or morefrequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is lessthan the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated tothe unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit. An impairmentloss recognised for goodwill is not reversed in a subsequent period.On disposal of a subsidiary, the attributable amount of goodwill is included in the determination of the profit or loss on disposal.i) INTANGIBLE ASSET - Franchise costs are capitalised and reported at cost less accumulated amortisation and accumulated impairmentlosses. Franchise cost are amortised on a straight-line basis over the period of their expected benefit of 5 years.j) IMPAIRMENT OF TANGIBLE AND INTANGIBLE ASSETS EXCLUDING GOODWILL - At each balance sheet date, the group reviews thecarrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered animpairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent ofthe impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the group estimatesthe recoverable amount of the cash-generating unit to which the asset belongs.38• Annual Report 2006 • Leaping Forward

Notes to the Financial Statements (cont’d)31 DECEMBER 20062 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)Intangible assets with indefinite useful lives and intangible assets not yet available for use are tested for impairment annually, andwhenever there is an indication that the asset may be impaired.Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cashflows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time valueof money and the risks specific to the asset.If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amountof the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in the profitand loss statement.Where an impairment loss subsequently reverses, the carrying amount of the asset (cash-generating unit) is increased to the revisedestimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that wouldhave been determined had no impairment loss been recognised for the asset (cash-generating unit) in prior years. A reversal of animpairment loss is recognised immediately in the profit and loss statement.k) PROVISIONS - Provisions are recognised when the group has a present obligation (legal or constructive) as a result of a past event,and it is probable that the group will be required to settle that obligation, and a reliable estimate can be made of the amount of theobligation.The amount recognized as a provision is the best estimate of the consideration required to settle the present obligation at the balancesheet date, taking into account the risks and uncertainties surrounding the obligation. Where a provision is measured using the cashflows estimated to settle the present obligation, its carrying amount is the present value of those cash flows.When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, the receivableis recognised as an asset if it is virtually certain that reimbursement will be received and the amount of the receivable can bemeasured reliably.l) GOVERNMENT GRANTS - Government grants are not recognised until there is reasonable assurance that the group will comply withthe conditions attaching to them and the grants will be received. Government grants whose primary condition is that the group shouldpurchase, construct, or otherwise acquire non-current assets are recognised as deferred income in the balance sheet and transferredto profit and loss statement on a systematic and rational basis over the useful lives of the related assets.Other government grants are recognised as income over the periods necessary to match them with the costs for which they areintended to compensate, on a systematic basis. Government grants that are receivable as compensation for expenses or lossesalready incurred or for the purpose of giving immediate financial support to the group with no future related costs are recognised inprofit and loss statement in the period in which they become receivable.m) REVENUE RECOGNITION - Revenue from the rendering of food and beverage services is recognised at the point of consumption orsale. Service charges are recognised when the services are completed.Revenue from sales of equipment and materials to franchisee is recognised when significant risks and rewards of ownership aretransferred to the buyer and the amount of revenue and the costs of the transaction can be measured reliably.Revenue from franchise fees is recognised when the right to receive payment has been established.Royalties is recognised based on certain percentages of the revenue generated by the franchisees.Annual Report 2006 • Leaping Forward • 39

Notes to the Financial Statements (cont’d)31 DECEMBER 20062 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable,which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset’s net carryingamount.n) RETIREMENT BENEFIT COSTS - Payments made to state-managed retirement benefit schemes, such as the Singapore CentralProvident Fund, are dealt with as payments to defined contribution plans where the group’s obligations under the plans are equivalentto those arising in a defined contribution retirement benefit plan.o) EMPLOYEE LEAVE ENTITLEMENT - Employee entitlements to annual leave are recognised when they accrue to employees. A provisionis made for the estimated liability for annual leave as a result of services rendered by employees up to the balance sheet date.p) INCOME TAX - Income tax expense represents the sum of the tax currently payable and deferred tax.The tax currently payable is based on taxable profit for the year. Taxable profit differs from profit as reported in the profit and lossstatement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes itemsthat are not taxable or tax deductible. The group’s liability for current tax is calculated using tax rates (and tax laws) that have beenenacted or substantively enacted in countries where the subsidiaries operate by the balance sheet date.Deferred tax is recognised on differences between the carrying amounts of assets and liabilities in the financial statements and thecorresponding tax bases used in the computation of taxable profit, and is accounted for using the balance sheet liability method.Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to theextent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Suchassets and liabilities are not recognised if the temporary difference arises from goodwill or from the initial recognition (other than in abusiness combination) of other assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit.Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries and associates, andinterests in joint ventures, except where the group is able to control the reversal of the temporary difference and it is probable that thetemporary difference will not reverse in the foreseeable future.Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset realisedbased on the tax rates (and tax laws) that have been enacted or substantively enacted by the balance sheet date. Deferred tax ischarged or credited to profit and loss statement, except when it relates to items charged or credited directly to equity, in which casethe deferred tax is also dealt with in equity.Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current taxliabilities and when they relate to income taxes levied by the same taxation authority and the group intends to settle its current taxassets and liabilities on a net basis.Current and deferred tax are recognised as an expense or income in profit and loss statement, except when they relate to itemscredited or debited directly to equity, in which case the tax is also recognised directly in equity, or where they arise from the intialaccounting for a business combination. In the case of a business combination, the tax effect is taken into account in calculatinggoodwill or determining the excess of the acquirer’s interest in the net fair value of the acquiree’s identifiable assets, liabilities andcontingent liabilities over cost.q) FOREIGN CURRENCY TRANSACTIONS AND TRANSLATION - The individual financial statements of each group entity are measuredand presented in the currency of the primary economic environment in which the entity operates (its functional currency). Theconsolidated financial statements of the group and the balance sheet of the company are presented in Singapore dollars, which is thefunctional currency of the company and the presentation currency for the consolidated financial statements.40• Annual Report 2006 • Leaping Forward

Notes to the Financial Statements (cont’d)31 DECEMBER 20062 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONT’D)In preparing the financial statements of the individual entities, transactions in currencies other than the entity’s functional currency arerecorded at the rates of exchange prevailing on the date of the transaction. At each balance sheet date, monetary items denominatedin foreign currencies are retranslated at the rates prevailing on the balance sheet date. Non-monetary items carried at fair value thatare denominated in foreign currencies are retranslated at the rates prevailing on the date when the fair value was determined. Nonmonetaryitems that are measured in terms of historical cost in a foreign currency are not retranslated.Exchange differences arising on the settlement of monetary items, and on retranslation of monetary items are included in profit or lossfor the period. Exchange differences arising on the retranslation of non-monetary items carried at fair value are included in profit orloss for the period except for differences arising on the retranslation of non-monetary items in respect of which gains and losses arerecognised directly in equity. For such non-monetary items, any exchange component of that gain or loss is also recognised directlyin equity.For the purpose of presenting consolidated financial statements, the assets and liabilities of the group’s foreign operations (includingcomparatives) are expressed in Singapore dollars using exchange rates prevailing on the balance sheet date. Income and expenseitems (including comparatives) are translated at the average exchange rates for the period, unless exchange rates fluctuatedsignificantly during that period, in which case the exchange rates at the dates of the transactions are used. Exchange differencesarising, if any, are classified as equity and transferred to the group’s translation reserve. Such translation differences are recognisedin profit or loss in the period in which the foreign operation is disposed of.On consolidation, exchange differences arising from the translation of the net investment in foreign entities (including monetary itemsthat, in substance, form part of the net investment in foreign entities), and of borrowings and other currency instruments designatedas hedges of such investments, are taken to the foreign currency translation reserve.3 CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTYi) Critical judgments in applying the entity’s accounting policiesIn the application of the group’s accounting policies, which are described in note 2, management is required to make judgements,estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. Theestimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actualresults may differ from these estimates.The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised inthe period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods ifthe revision affects both current and future periods.ii)Key sources of estimation uncertaintyThe group makes estimates and assumptions concerning the future. The estimates and assumptions that have a significant risk ofcausing a material adjustment to the carrying amounts of assets are discussed below:Impairment of property, plant and equipmentThe group assesses annually whether property, plant and equipment have any indication of impairment in accordance with theaccounting policy. The recoverable amounts of property, plant and equipment have been determined based on value-in-usecalculations. These calculations require the use of judgement and estimates.Annual Report 2006 • Leaping Forward • 41

Notes to the Financial Statements (cont’d)31 DECEMBER 20064 FINANCIAL RISKS AND MANAGEMENTThe group has documented risk management policies. These policies set out the group’s overall business strategies and its risk managementphilosophy. The group’s overall risk management programme seeks to minimise potential adverse effects of financial performance of thegroup. The Board of Directors provides written principles for overall risk management and written policies covering specific areas, such asforeign exchange risk, interest rate risk, credit risk, use of derivative financial instruments and investing excess cash. Such written policiesare reviewed annually by the Board of Directors and periodic reviews are undertaken to ensure that the group’s policy guidelines arecomplied with. Risk management is carried out by the Finance Department under the policies approved by the Board of Directors.The group’s activities expose it to a variety of financial risks, including the effects of: changes in debt and equity market prices, foreigncurrency exchange rates and interest rates. The group does not hold or issue derivative financial instruments for speculative purposes.i) Foreign currency riskForeign exchange risk arising from the change in foreign currency exchange rate has a financial effect on the group in the currentreporting period and in future years. The group has foreign exchange risk primarily due to bank balances and intercompany balancesdenominated in foreign currency, which are not hedged by any financial instruments. Foreign exchange risk is minimal as the grouptransacts mainly in Singapore dollars.ii)Interest rate riskInterest rate risk refers to the risk experienced by the group as a result of the fluctuation in interest rates. Interest rate risk is minimal,as the group does not have significant interest-bearing balances as at the end of the financial year.iii)Credit riskCredit risk refers to the risk that debtors will default on their obligations to repay the amounts owing to the group, resulting in a loss.The group deals mainly with customers that are of good reputation and strong financial backing and with retail customers who paywith cash and credit cards. In addition, monitoring of the payment made by the customers is done regularly and reviewed by themanagement.iv)Liquidity riskThe group is exposed to minimal liquidity risk as a substantial portion of its financial assets and financial liabilities are due within oneyear and it can finance its operations from existing shareholders’ funds.v) Fair values of financial assets and financial liabilitiesThe carrying amounts of cash and cash equivalents, trade and other current receivables and payables, provisions and other liabilitiesapproximate their respective fair values due to the relatively short-term maturity of these financial instruments. The fair values of otherclasses of financial assets and liabilities are disclosed in the respective notes to financial statements.5 RELATED PARTY TRANSACTIONSRelated parties are entities with common direct or indirect shareholders and/or directors. Parties are considered to be related if one partyhas the ability to control the other party or exercise significant influence over the other party in making financial and operating decisions.42• Annual Report 2006 • Leaping Forward

Notes to the Financial Statements (cont’d)31 DECEMBER 20065 RELATED PARTY TRANSACTIONS (CONT’D)Some of the company’s transactions and arrangements are with related parties and the effect of these on the basis determined between theparties are reflected in these financial statements. The balances are unsecured, interest-free and repayable on demand unless otherwisestated.Significant transactions with related parties:Group2006 2005$’000 $’000Transactions with director-related companiesPurchases of food 53 -Revenue – sales of food and beverages (13) (25)Rental expense - 186 CASH AND BANK BALANCESGroupCompany2006 2005 2006 2005$’000 $’000 $’000 $’000Cash at bank 3,915 5,082 2,850 4,375Fixed deposits 6,166 5,547 5,724 5,152Cash on hand 67 52 60 5110,148 10,681 8,634 9,578Bank balances and cash comprised cash held by the group and short-term deposits with an original maturity of three months or less. Thecarrying amounts of these assets approximate their fair values.Fixed deposits bear interest at an average rate of 0.72% to 8.37% (2005 : 0.8% to 6.13%) per annum and for a tenure of between one tothree months.7 TRADE RECEIVABLESGroupCompany2006 2005 2006 2005$’000 $’000 $’000 $’000Outside parties 1,319 1,056 1,288 1,048Less: Impairment allowance (132) (270) (132) (270)1,187 786 1,156 778Annual Report 2006 • Leaping Forward • 43

Notes to the Financial Statements (cont’d)31 DECEMBER 20067 TRADE RECEIVABLES (CONT’D)Movements in above impairment allowance:GroupCompany2006 2005 2006 2005$’000 $’000 $’000 $’000Balance at beginning of year 270 338 270 338Utilised (142) (141) (142) (141)Charge to profit and loss 4 73 4 73Balance at end of year 132 270 132 270The impairment allowance has been determined by reference to past default experience.The average credit period on sale of goods is 30 days (2005: 30 days).8 OTHER RECEIVABLES AND PREPAYMENTSGroupCompany2006 2005 2006 2005$’000 $’000 $’000 $’000Deposits 3,535 2,538 3,030 2,364Prepayments 382 206 183 195Other receivables 317 406 88 61Total 4,234 3,150 3,301 2,6209 INVESTMENT IN SUBSIDIARIESCompany2006 2005$’000 $’000Unquoted equity shares, at cost 354 354Less: Impairment loss (170) (170)Net 184 184Due from subsidiaries (non-trade) 3,671 2,241Less: Impairment allowance (418) (102)Net 3,253 2,13944• Annual Report 2006 • Leaping Forward

Notes to the Financial Statements (cont’d)31 DECEMBER 20069 INVESTMENT IN SUBSIDIARIES (CONT’D)The amount due from the subsidiaries is unsecured, interest-free and not expected to be repayable within one year.The amount due to subsidiaries is unsecured, interest free and repayable on demand.Details of the group’s subsidiaries are as follows:Effectiveequity interest Place ofCost of and voting incorporation/Subsidiaries investments power held operation Principal activities2006 2005 2006 2005$’000 $’000 % %Held by the companyApex-Pal Investment Pte. Ltd. (1) 100 100 100 100 Singapore Investment holdingPT Apex-Pal International (2) 254 254 100 100 Indonesia Operation of restaurants, kiosksand cafesHeld by subsidiary354 354Apex-Pal International (Beijing) - - 100 100 People’s Republic Provision of food and beverageLtd (3) of China consultancy and managementservicesApex-Pal Malaysia Sdn Bhd (4) - - 100 100 Malaysia Operation of restaurants, kiosksand cafesSakae Sushi (Hong Kong) Ltd. (5) - - 100 100 Hong Kong Operation of restaurants, kiosksand cafesShanghai Apex-Pal Co., Ltd (6) - - 100 100 People’s Republic Operation of restaurants, kiosksof Chinaand cafesApex-Pal (Shanghai) Co., Ltd (6) - - 100 - People’s Republic Operation of restaurants, kiosksof Chinaand cafesApex-Pal F&B (Beijing) Ltd (3) - - 100 - People’s Republic Operation of restaurants, kiosksof Chinaand cafesApex-Pal (USA), Inc (5) - - 100 - United States Operation of restaurants, kiosksof America and cafesAnnual Report 2006 • Leaping Forward • 45

Notes to the Financial Statements (cont’d)31 DECEMBER 20069 INVESTMENT IN SUBSIDIARIES (CONT’D)Notes on auditors(1)Audited by Deloitte & Touche, Singapore.(2)Audited by another firm of auditors, KAP Drs. Mitra Winata & Rekan.(3)Audited by another firm of auditors, Great Wall Certified Public Accountants Co., Ltd.(4)Audited by another firm of auditors, Lai Min Pin & Co.(5)Not audited as subsidiary has not started operation.(6)Audited by another firm of auditors, Shanghai Lingfang Certified Public Accountant.Each of the subsidiaries’ net tangible assets represent less than 20% of the group’s net tangible assets, and each of the subsidiaries’ pretaxprofits account for less than 20% of the group’s pre-tax profits.10 PROPERTY, PLANT AND EQUIPMENTGroupFreehold Freehold Restaurant Furniture Motor Officeland building equipment Renovation and fitting Computers vehicles equipment Total$’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000Cost:At January 1, 2005 - - 3,336 2,785 1,562 1,009 773 74 9,539Exchange differences - - 11 19 - - - - 30Additions - - 515 447 458 200 197 3 1,820Disposals - - (160) (363) (74) (2) (219) (1) (819)At December 31, 2005 - - 3,702 2,888 1,946 1,207 751 76 10,570Exchange differences - - (14) (19) - (2) - - (35)Additions 3,360 2,300 931 1,208 1,503 552 266 12 10,132Disposals - - (19) (117) (54) (197) (108) - (495)At December 31, 2006 3,360 2,300 4,600 3,960 3,395 1,560 909 88 20,172Accumulated depreciation:At January 1, 2005 - - 1,778 918 721 913 342 52 4,724Exchange differences - - 1 3 - - - - 4Depreciation - - 534 550 260 197 140 8 1,689Disposals - - (120) (135) (34) (3) (178) - (470)At December 31, 2005 - - 2,193 1,336 947 1,107 304 60 5,947Exchange differences - - (4) (4) - - - - (8)Depreciation - - 598 630 436 328 168 6 2,166Disposals - - (12) (47) (21) (197) (89) - (366)At December 31, 2006 - - 2,775 1,915 1,362 1,238 383 66 7,739Carrying amount:At December 31, 2005 - - 1,509 1,552 999 100 447 16 4,623At December 31, 2006 3,360 2,300 1,825 2,045 2,033 322 526 22 12,433No depreciation is charged on freehold building as it is in the process of renovation as at December 31, 2006.46• Annual Report 2006 • Leaping Forward

Notes to the Financial Statements (cont’d)31 DECEMBER 200610 PROPERTY, PLANT AND EQUIPMENTFreehold Freehold Restaurant Furniture Motor Officeland building equipment Renovation and fitting Computers vehicles equipment Total$’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000CompanyCost:At January 1, 2005 - - 3,122 2,401 1,562 1,000 773 66 8,924Additions - - 402 265 363 153 197 3 1,383Disposals - - (160) (175) (73) (2) (219) - (629)At December 31, 2005 - - 3,364 2,491 1,852 1,151 751 69 9,678Additions 3,360 2,300 608 796 1,363 422 239 8 9,096Disposals - - (19) (110) (50) (197) (108) - (484)At December 31, 2006 3,360 2,300 3,953 3,177 3,165 1,376 882 77 18,290Accumulated depreciation:At January 1, 2005 - - 1,757 872 721 911 342 52 4,655Depreciation - - 485 458 251 176 140 7 1,517Disposals - - (120) (82) (33) (2) (178) - (415)At December 31, 2005 - - 2,122 1,248 939 1,085 304 59 5,757Depreciation - - 503 498 401 275 164 4 1,845Disposals - - (12) (46) (21) (197) (89) - (365)At December 31, 2006 - - 2,613 1,700 1,319 1,163 379 63 7,237Carrying amount:At December 31, 2005 - - 1,242 1,243 913 66 447 10 3,921At December 31, 2006 3,360 2,300 1,340 1,477 1,846 213 503 14 11,053No depreciation is charged on freehold building as it is in the process of renovation as at December 31, 2006.11 INTANGIBLE ASSETGroup and Company2006 2005$’000 $’000Franchise costs:At beginning and end of year 70 70Accumulated amortisation:At beginning of year 66 52Amortisation for the year 4 14At end of year 70 66Carrying amount:At end of year - 4Annual Report 2006 • Leaping Forward • 47

Notes to the Financial Statements (cont’d)31 DECEMBER 200611 INTANGIBLE ASSETThe amortisation expense of $4,000 (2005: $14,000) has been included in the line item “administration expenses” in the profit and lossstatement.12 FINANCE LEASESGroupPresent valueMinimumof minimumlease paymentslease payments2006 2005 2006 2005$’000 $’000 $’000 $’000Amounts payable under finance leases:Within one year 9 - 8 -In the second to fifth year inclusive 10 - 10 -19 - 18 -Less : future finance charges (1) - NA NAPresent value of lease obligations 18 - 18 -Less : Amount due for settlementwithin 12 months (shown under current liabilities) (8) -Amount due for settlement after 12 months 10 -It is the group’s policy to lease motor vehicles under finance leases. The average lease term is 3 years. For the year ended December 31,2006, the average effective borrowing rate was 5.74% (2005: Nil%). Interest rates are fixed at the contract date, and thus expose the groupto fair value interest rate risk. All leases are on fixed repayment basis and no arrangements have been entered into for contingent rentalpayments. The carrying amount of the motor vehicles is $23,000 (2005 : $Nil).The fair value of the group’s lease obligations approximates their carrying amount.13 DEFERRED TAXATIONGroupCompany2006 2005 2006 2005$’000 $’000 $’000 $’000At beginning of year 289 301 280 301Charge (Credit) to profit and loss (Note 18) 122 (12) 120 (21)At end of year 411 289 400 280The balance comprises mainly the tax effect of the excess of tax depreciation over book depreciation of plant and equipment.48• Annual Report 2006 • Leaping Forward

Notes to the Financial Statements (cont’d)31 DECEMBER 200614 ISSUED CAPITALGroup and Company2006 2005 2006 2005’000 ’000 $’000 $’000Number ofordinary sharesIssued and paid up:At beginning of the year 106,500 106,500 4,260 4,260Bonus issue 21,300 - - -Issued for cash 14,200 - 3,620 -Transfer from share premium account - - 2,876 -During the current financial year, the company:142,000 106,500 10,736 4,260a) made a bonus share issue of 21,300,000 new ordinary shares each in the capital of the company on the basis of 1 bonus share tobe credited as fully paid for every 5 existing shares as at a book closure date was issued; andb) issued 14,200,000 new ordinary shares in the capital of the company to Novena Holdings Limited at an issue price of $0.256 foreach new share.The company has one class of ordinary shares which carry no right to fixed income.As a result of the Companies (Amendment) Act 2005 which came into effect on January 30, 2006, the concept of authorised share capitaland par value has been abolished. Any amount standing to the credit of the share premium account has been transferred to the company’sshare capital account on the effective date.15 REVENUEGroup2006 2005$’000 $’000Food and beverage sales 61,171 47,622Service charge 5,250 4,103Franchise fees 20 70Sales of equipment to franchisees 66 61Sales of materials to franchisees 26 43Royalties 112 6Total 66,645 51,905Annual Report 2006 • Leaping Forward • 49

Notes to the Financial Statements (cont’d)31 DECEMBER 200616 OTHER OPERATING INCOMEGroup2006 2005$’000 $’000Interest income 199 82Government grants 65 3Gain on sale of plant and equipment 8 -Foreign exchange gain 4 -Others 87 81Total 363 16617 PROFIT BEFORE INCOME TAX(a)This has been arrived after charging:Group2006 2005$’000 $’000Employee benefits expense (including directors’ remuneration) 21,617 16,207Cost of inventories 17,955 14,589Rental expenses 9,258 7,644Depreciation 2,166 1,689Cost of defined contribution retirement plans 1,223 1,029Directors’ remuneration 1,160 955Remuneration paid to immediate family members of the Chief Executive Officer 482 451Net loss on disposal of plant and machinery 85 263Directors’ fees 65 65Audit fees:Paid to auditors of the company 42 43Paid to other auditors 8 5Net foreign currency exchange adjustment loss 15 14Non-audit fees:Paid to auditors of the company - -Paid to other auditors 11 13Impairment allowance on trade receivables 4 73Amortisation of intangible asset 4 1450• Annual Report 2006 • Leaping Forward

Notes to the Financial Statements (cont’d)31 DECEMBER 200617 PROFIT BEFORE INCOME TAX (CONT’D)(b)Compensation of directors and key management personnelThe remuneration of directors and other members of key management during the year was as follows:Group2006 2005$’000 $’000Short-term benefits 2,040 1,687Post-employment benefits 73 124Total 2,113 1,811The remuneration of directors and key management is determined by the remuneration committee having regard to the performanceof individuals and market trends.18 INCOME TAX EXPENSEGroup2006 2005$’000 $’000Current 1,456 1,071Underprovision in prior year 38 -Deferred (Note 13) 122 (12)Total 1,616 1,059Domestic income tax expense is calculated at 20% (2005 : 20%) of the estimated assessable profit for the year. Taxation for otherjurisdictions is calculated at the rates prevailing in the relevant jurisdictions.Group2006 2005$’000 $’000Profit before income tax 6,697 4,743Tax at the domestic income tax rate of 20% 1,339 949Tax effect of expense that are not deductible in determining taxable profit 94 69Effect of different tax rates of subsidiaries operating in other jurisdictions 19 -Underprovision in prior year 38 -Others 126 411,616 1,059Effective tax rate 24.1% 22.3%Annual Report 2006 • Leaping Forward • 51

Notes to the Financial Statements (cont’d)31 DECEMBER 200619 BASIC EARNINGS PER SHAREGroup2006 2005Profit after income tax ($’000) 5,081 3,684Weighted average number of ordinary shares for the purposes of basic earnings per share (’000) 135,853 127,800#Basic earnings per share (cents) 3.74 2.88There is no dilution of earnings per share as no share options were granted.# The earnings per share for the financial year ended December 31, 2005 was adjusted retrospectively and computed based on theshare capital of 127,800,000 ordinary shares after taking into account the bonus share issue in 2006.20 DIVIDENDSa) In 2005, a dividend of $0.01 per ordinary share less tax of 20% amounting to $852,000 was paid to shareholders in respect of thefinancial year ended December 31, 2004.b) In 2006, a dividend of $0.01 per ordinary share less tax of 20% amounting to $1,022,000, a special dividend of $0.0018 per ordinaryshare less tax of 20% amounting to $184,000 and a special dividend of $0.0042 per ordinary share tax exempt (1 tier) amounting to$537,000 was paid to shareholders in respect of the financial year ended December 31, 2005.c) On February 16, 2007, the directors of the company proposed that the following dividends on 142,000,000 ordinary shares to bepaid to the shareholders in respect of the financial year as at December 31, 2006. These dividends are subject to the approval by theshareholders at the Annual General Meeting and, accordingly have not been included as a liability in these financial statements.GroupandCompany2006$’000Proposed dividend - $0.010 per share tax exempt (1-tier) 1,420Special dividend - $0.035 per share tax exempt (1-tier) 4,9706,39052• Annual Report 2006 • Leaping Forward

Notes to the Financial Statements (cont’d)31 DECEMBER 200621 OPERATING LEASE ARRANGEMENTSGroup2006 2005$’000 $’000Minimum lease payments under operating leases recognised as an expense in the year 9,258 7,644At the balance sheet dates, the group and company has outstanding commitments under non-cancellable operating leases, which fall dueas follows:GroupCompany2006 2005 2006 2005$’000 $’000 $’000 $’000Within one year 8,854 6,904 7,531 6,410In the second and fifth years inclusive 10,396 8,431 8,016 7,544Total 19,250 15,335 15,547 13,954Operating lease payments represent rentals payable by the group and company for certain of its office and shop premises. Leases arenegotiated for an average term of three years.22 CAPITAL COMMITMENTSGroup and Company2006 2005$’000 $’000Capital injection into a subsidiary - 200Property, plant and equipment - authorised but not contracted for 1,000 -23 SUBSEQUENT EVENTOn January 9, 2007, the company made an announcement that it intended to make a voluntary conditional offer (the “Offer”) for all theissued ordinary shares (the “TV Shares” or “Offer Shares”) in the share capital of Thai Village Holdings Ltd (“TV”), subject to certain preconditionsbeing fulfilled or waived. Relevant details of the Offer are as follows:(a) The Offer will be made to certain major shareholders of TV (the “TV Major Shareholders”) holding 78,551,676 TV Shares of 37.8%share capital of TV on the basis of 0.6 new ordinary share in the share capital of the company (the “Consideration Shares” or “ShareConsideration”) for each Offer Share. At the date of the announcement, TV Major Shareholders has given an irrevocable undertakingto the company to accept the Offer, if made, in respect of their entire shareholdings in TV.(b)For shareholders of TV not being a TV Major Shareholder, the Offer will be made on the following basis:(i)(ii)for each Offer Share, at 0.2 new ordinary share in the share capital of the company and $0.134 payable in cash (the “Share-Cash” Consideration”); orfor each Offer Share, at $0.201 payable in cash (the “Cash Consideration”).Annual Report 2006 • Leaping Forward • 53

Notes to the Financial Statements (cont’d)31 DECEMBER 200623 SUBSEQUENT EVENT (CONT’D)(c)(d)The Consideration Shares, the Share-Cash Consideration and the Cash Consideration value each Offer Share at $0.201. Thisrepresented a premium of approximately 97.86% above the audited net tangible asset value per TV Share as at September 2006.Pursuant to the Offer, the company will issue up to 74,384,810 new shares in the share capital of the company, representingapproximately 34.07% of the enlarged share capital of 215,483,810 shares of the company, assuming full acceptance of the Offerand full election of the Share Consideration.24 BUSINESS AND GEOGRAPICAL SEGMENTSBusiness segmentsFor management purposes, the group is currently organised into two operating divisions – Food and Beverages Business (“F&B Business”)and Food and Beverages Franchising (“F&B Franchising”). These divisions are the basis on which the group reports its primary segmentinformation.Principal activities are as follows:(a)(b)F&B Business - The group operates restaurants, kiosks and cafes. The group also operates clubhouses and food processing facility,and acts as a trader and caterer of foodstuff.F&B Franchising - The group acts as a franchiser for the brands ‘Sakae Sushi’ and ‘Crepes & Cream’. The group also sells equipmentsand materials to the franchisees.Segment revenue and expense : Segment revenue and expense are the operating revenue and expense reported in the group’s profit andloss statement that are directly attributable to a segment and the relevant portion of such revenue and expense that can be allocated on areasonable basis to a segment.Segment assets and liabilities : Segments assets include all operating assets used by a segment and consist principally of operatingreceivables, inventories and property, plant and equipment, net of allowances and provisions. Capital additions include the total costincurred to acquire property, plant and equipment, and intangible assets directly attributable to the segment. Segment liabilities includeall operating liabilities and consist principally of accounts payables and accruals. Unallocated items mainly comprise corporate assets andliabilities.F&B Business F&B Franchising Total$’000 $’000 $’0002006Revenue 66,421 224 66,645ResultsSegment results 6,359 140 6,499Interest expense (1)Interest income 199Profit before income tax 6,697Income tax expense (1,616)Net profit for the year 5,08154• Annual Report 2006 • Leaping Forward

Notes to the Financial Statements (cont’d)31 DECEMBER 200624 BUSINESS AND GEOGRAPICAL SEGMENTS (CONT’D)2006Other informationF&B Business F&B Franchising Total$’000 $’000 $’000Capital additions 10,132 - 10,132Depreciation 2,166 - 2,166Impairment allowance on trade receivables 4 - 4Amortisation of intangible asset - 4 42005Revenue 51,725 180 51,905ResultsSegment results 4,593 71 4,664Interest expense (3)Interest income 82Profit before income tax 4,743Income tax expense (1,059)Net profit for the year 3,684Other informationCapital additions 1,820 - 1,820Depreciation 1,689 - 1,689Impairment allowance on trade receivables 73 - 73Amortisation of intangible asset - 14 14Statement of Net Assets2006AssetsSegment assets 22,148 487 22,635Unallocated corporate assets 6,165Consolidated total assets 28,800LiabilitiesSegment liabilities 6,455 15 6,470Unallocated corporate liabilities 1,815Consolidated total liabilities 8,285Annual Report 2006 • Leaping Forward • 55

Notes to the Financial Statements (cont’d)31 DECEMBER 200624 BUSINESS AND GEOGRAPICAL SEGMENTS (CONT’D)2005F&B Business F&B Franchising Total$’000 $’000 $’000AssetsSegment assets 13,965 301 14,266Unallocated corporate assets 5,547Consolidated total assets 19,813LiabilitiesSegment liabilities 4,830 49 4,879Unallocated corporate liabilities 1,358Consolidated total liabilities 6,237Geographical segmentsIn line with the group’s business strategy, the group’s operations are located in Singapore, People’s Republic of China (“PRC”), Indonesiaand Malaysia. The segmental information for geographical regions is based on the locations of customers.2006CapitalRevenue Assets additions$’000 $’000 $’000Singapore 62,376 25,081 9,097PRC 1,474 1,543 643Indonesia - 98 -Malaysia 2,795 2,078 392Total 66,645 28,800 10,1322005Singapore 50,746 17,684 1,383PRC 546 941 88Indonesia - 90 -Malaysia 613 1,098 349Total 51,905 19,813 1,82056• Annual Report 2006 • Leaping Forward

Statement of DirectorsIn the opinion of the directors, the consolidated financial statements of the group and the balance sheet and statement of changes in equity ofthe company set out on pages 31 to 56 are drawn up so as to give a true and fair view of the state of affairs of the group and of the company asat December 31, 2006 and of the results, changes in equity and cash flows of the group and changes in equity of the company for the financialyear then ended and at the date of this statement there are reasonable grounds to believe that the company will be able to pay its debts as andwhen they fall due.ON BEHALF OF THE DIRECTORSDouglas Foo Peow YongFoo LilianMarch 12, 2007Annual Report 2006 • Leaping Forward • 57

Statistics of ShareholdingsAS AT 8 MARCH 2007DISTRIBUTION OF SHAREHOLDINGSNO. OFSIZE OF SHAREHOLDINGS SHAREHOLDERS % NO. OF SHARES %1 - 999 13 3.35 4,756 0.001,000 - 10,000 177 45.62 824,204 0.5810,001 - 1,000,000 189 48.71 13,421,600 9.451,000,001 AND ABOVE 9 2.32 127,749,440 89.97TOTAL 388 100.00 142,000,000 100.00TWENTY LARGEST SHAREHOLDERSNO. NAME NO. OF SHARES %1 FOO PEOW YONG DOUGLAS 91,484,640 64.432 HONG LEONG FINANCE NOMINEES PTE LTD 14,350,000 10.113 HSBC (SINGAPORE) NOMINEES PTE LTD 5,911,200 4.164 FRASER SECURITIES PTE LTD 5,560,000 3.925 UNITED OVERSEAS BANK NOMINEES PTE LTD 3,331,600 2.356 KIM ENG SECURITIES PTE. LTD. 2,745,000 1.937 NOVENA HOLDINGS LIMITED 1,717,000 1.218 LIM & TAN SECURITIES PTE LTD 1,625,000 1.149 YING SIEW KHAY 1,025,000 0.7210 STEFANSSON PAUL HAROLD 779,600 0.5511 ONG SIEW KWEE 717,400 0.5112 CIMB-GK SECURITIES PTE. LTD. 643,400 0.4513 LIEW BOON HUI 500,000 0.3514 PHILLIP SECURITIES PTE LTD 447,200 0.3115 LEE SEOW LUANG 400,000 0.2816 ONG PANG LIANG 400,000 0.2817 THAMMA PINSUKHANCHANA 336,000 0.2418 ALEXANDER THOMAS ZBORAY 324,000 0.2319 TENG KIM LUANG 323,000 0.2320 CHIA THIAN HEE HILARY 320,000 0.23TOTAL 132,940,040 93.6358• Annual Report 2006 • Leaping Forward

Issued and Paid-up Capital : S$10,736,283.00Number of shares : 142,000,000Class of shares : Ordinary sharesVoting rights : One vote per shareShareholders’ InformationAS AT 8 MARCH 2007SUBSTANTIAL SHAREHOLDERSSubstantial shareholders of the Company (as recorded in the Register of Substantial Shareholders) as at 8 March 2006No. of Ordinary sharesName Direct Interest % Deemed Interest %Douglas Foo Peow Yong 91,484,640 64.42 - -Novena Holdings Limited * 1,717,000 1.21 16,780,000 11.82Lee Kek Choo ** - - 18,497,000 13.03Toh Soon Huat *** - - 18,497,000 13.03Notes:* Novena Holdings Limited holds 16,780,000 shares through Nominee Companies.** Ms Lee Kek Choo is deemed interested by virtue of the fact that she is the spouse of Mr Toh Soon Huat, a director of Novena HoldingsLimited and she is also a substantial shareholder of Novena Holdings Limited.*** Mr Toh Soon Huat is deemed interested by virtue of the fact that he is a director and a substantial shareholder of Novena HoldingsLimited.FREE FLOATAs at 8 March 2006, approximately 22.03% of the issued share capital of the Company was held in the hands of the public (on the basis ofinformation available to the Company).Accordingly, the Company has complied with Rule 723 of the Listing Manual of the Singapore Exchange Securities Trading Limited.Annual Report 2006 • Leaping Forward • 59

Notice of Annual General MeetingNOTICE IS HEREBY GIVEN that the Annual General Meeting of Apex-Pal International Ltd. (the “Company”) will be held at61 Robinson Road, #17-03, Robinson Centre, Singapore 068893, on Monday, 16 April 2007 at 2.00 p.m. for the followingpurposes:Ordinary Business1. To receive and adopt the Directors’ Report and Audited Accounts of the Company for the financial year ended 31December 2006 together with the Auditors’ Report thereon.(Resolution 1)2. To declare dividends for the financial year ended 31 December 2006 as follows:(i)(ii)first and final tax exempt (1-tier) dividend of 1 cent per share; andspecial tax-exempt (1-tier) dividend of 3.5 cents per share(Resolution 2)3 To re-elect the following Directors retiring pursuant to Articles 91 of the Company’s Articles of Association:Mr Douglas Foo Peow YongMs Foo Lilian4. To approve the payment of Directors’ fees of S$65,000 (2005: S$65,000) for the financial year ended 31 December2006.5. To re-appoint Messrs Deloitte & Touche as the Company’s Auditors and to authorise the Directors to fix theirremuneration.(Resolution 3)(Resolution 4)(Resolution 5)(Resolution 6)6. To transact any other ordinary business which may properly be transacted at an Annual General Meeting.Special BusinessTo consider and, if thought fit, to pass the following resolutions as Ordinary Resolutions, with or without any modifications:7. Authority to allot and issue shares up to fifty per cent. (50%) of issued capital“That, pursuant to Section 161 of the Companies Act, Cap. 50 and Rule 806(2) of the Listing Manual of the SingaporeExchange Securities Trading Limited (the “Listing Manual”), authority be and is hereby given to the Directors to:-(a)(b)allot and issue shares in the Company; andissue convertible securities and any shares in the Company pursuant to convertible securities(whether by way of rights, bonus or otherwise) at any time and upon such terms and conditions and for such purposesand to such persons as the Directors shall in their absolute discretion deem fit, provided that the aggregate number ofshares (including any shares to be issued pursuant to the convertible securities) in the Company to be issued pursuantto such authority shall not exceed fifty per cent. (50%) of the issued share capital of the Company for the time being andthat the aggregate number of shares in the Company to be issued other than on a pro-rata basis to the then existingshareholders of the Company will not exceed twenty per cent. (20%) of the issued share capital of the Company for thetime being. Unless revoked or varied by the Company in general meeting, such authority shall continue in full force untilthe conclusion of the next Annual General Meeting of the Company or the date by which the next Annual General Meetingis required by law to be held, whichever is earlier, except that the Directors shall be authorised to allot and issue newshares pursuant to the convertible securities notwithstanding that such authority has ceased.60• Annual Report 2006 • Leaping Forward

Notice of Annual General Meeting (cont’d)For the purposes of this Resolution and Rule 806(3) of the Listing Manual, the percentage of issued share capital is based onthe issued share capital of the Company at the time this Resolution is passed after adjusting for:-(i)(ii)new shares arising from the conversion or exercise of convertible securities;new shares arising from exercising share options or vesting of share awards outstanding or subsisting at the time ofthe passing of this Resolution, provided the options or awards were granted in compliance with the rules of the ListingManual; and(iii) any subsequent consolidation or subdivision of shares.” [See Explanatory Note (i)](Resolution 7)8. Authority to grant options and issue shares under the Apex-Pal Employee Share Option Scheme“That pursuant to Section 161 of the Companies Act, Cap. 50, the Directors of the Company be and are hereby authorisedto offer and grant options in accordance with the Apex-Pal Employee Share Option Scheme (the “Scheme”) and to issuesuch shares as may be required to be issued pursuant to the exercise of the options granted under the Scheme providedalways that the aggregate number of shares to be issued pursuant to the Scheme shall not exceed fifteen per cent. (15%)of the issued share capital of the Company from time to time.” [See Explanatory Note (ii)](Resolution 8)By Order of the BoardPhyllis Phua Lee BoonCompany SecretarySingapore, 29 March 2007Explanatory Notes:(i)(ii)The Ordinary Resolution 7 proposed in item 7 above, if passed, will empower the Directors from the date of the above Meeting until the dateof the next Annual General Meeting, to allot and issue shares and convertible securities in the Company. The aggregate number of shares(including any shares issued pursuant to the convertible securities) which the Directors may allot and issue under this Resolution will notexceed fifty per cent. (50%) of the issued share capital (as defined in Resolution 7) of the Company. For issues of shares other than on apro rata basis to all shareholders, the aggregate number of shares to be issued will not exceed twenty per cent. (20%) of the issued sharecapital (as defined in Resolution 7) of the Company. This authority will, unless previously revoked or varied at a general meeting, expire atthe next Annual General Meeting of the Company or the date by which the next Annual General Meeting of the Company is required bylaw to be held, whichever is earlier. However, notwithstanding the cessation of this authority, the Directors are empowered to issue sharespursuant to any convertible securities issued under this authority.The Ordinary Resolution 8 proposed in item 8 above, if passed, will empower the Directors of the Company, to grant options and to allotand issue shares upon the exercise of such options in accordance with the Apex-Pal Employee Share Option Scheme.Annual Report 2006 • Leaping Forward • 61

Notice of Annual General Meeting (cont’d)Notes:1. A member entitled to attend and vote at the Meeting is entitled to appoint one or two proxies to attend and vote in his stead. A proxy neednot be a member of the Company.2. Where a member appoints more than one proxy, the appointments shall be invalid unless he specifies the proportion of his holding(expressed as a percentage of the whole) to be represented by each proxy.3. The instrument appointing a proxy or proxies must be under the hand of the appointor or of his attorney duly authorised in writing. Wherethe instrument appointing a proxy or proxies is executed by a corporation, it must be executed either under its common seal or under thehand of its attorney or a duly authorised officer.4. The instrument appointing a proxy or proxies must be deposited at the Company’s registered office at 10 Collyer Quay, #13-01/05 OceanBuilding, Singapore 049315, not less than 48 hours before the time set for the Annual General Meeting.62• Annual Report 2006 • Leaping Forward

APEX-PAL INTERNATIONAL LTD.Company Registration Number 199604816E(Incorporated in the Republic of Singapore)Proxy FormI/We ___________________________________________________________________________________________ (Name)of ___________________________________________________________________________________________ (Address)being a member/members of Apex-Pal International Ltd. (the “Company”) hereby appoint:Name Address NRIC/Passport NumberProportion ofShareholdings (%)and/or (delete as appropriate)Name Address NRIC/Passport NumberProportion ofShareholdings (%)or failing him/her, the Chairman of the Annual General Meeting of the Company (the “Meeting”) as my/our proxy/proxies to vote for me/us onmy/our behalf, at the Meeting to be held at 61 Robinson Road, #17-03, Robinson Centre, Singapore 068893, on Monday, 16 April 2007, at2.00 p.m. and at any adjournment thereof. I/We direct my/our proxy/proxies to vote for or against the Resolutions to be proposed at the Meetingas indicated hereunder. If no specific direction as to voting is given, the proxy/proxies will vote or abstain from voting at his/their discretion, ashe/they will on any matter arising at the Meeting.No. Resolutions Relating to: For Against1. Directors’ Report and Accounts for the financial year ended 31 December 20062. Payment of proposed dividends3. Re-election of Mr Douglas Foo Peow Yong4. Re-election of Ms Foo Lilian5. Approval for payment of Directors’ fees6. Re-appointment of Messrs Deloitte & Touche as Auditors7. Authority to issue and allot shares pursuant to Section 161 of the Companies Act, Cap. 508. Authority to grant options and issue shares under the Apex-Pal Employee Share Option SchemeDated this ____________ day of ____________ 2007.Total No. of SharesIn CDP RegisterIn Register of MembersNo. of Shares_________________________________Signature(s) of Member(s)or, Common Seal of Corporate MemberIMPORTANT: PLEASE READ NOTES OVERLEAF

NOTES1. A member entitled to attend and vote at the Meeting is entitled to appoint one or two proxies to attend and vote in his stead.2. Where a member appoints more than one proxy, the appointments shall be invalid unless he specifies the proportion of his holding(expressed as a percentage of the whole) to be represented by each proxy.3. A proxy need not be a member of the Company.4. A member should insert the total number of shares held. If the member has shares entered against his name in the Depository Register (asdefined in Section 130A of the Companies Act, Cap. 50 of Singapore), he should insert that number of shares. If the member has sharesregistered in his name in the Register of Members of the Company, he should insert that number of shares. If the member has sharesentered against his name in the Depository Register and registered in his name in the Register of Members, he should insert the aggregatenumber of shares. If no number is inserted, this form of proxy will be deemed to relate to all shares held by the member.5. The instrument appointing a proxy or proxies must be deposited at the Company’s registered office at 10 Collyer Quay, #13-01/05 OceanBuilding, Singapore 049315, not less than 48 hours before the time set for the Meeting.6. The instrument appointing a proxy or proxies must be under the hand of the appointor or of his attorney duly authorised in writing. Wherethe instrument appointing a proxy or proxies is executed by a corporation, it must be executed either under its common seal or under thehand of its attorney or a duly authorised officer.7. Where an instrument appointing a proxy is signed on behalf of the appointor by an attorney, the power of attorney or a duly certified copythereof must (failing previous registration with the Company) be lodged with the instrument of proxy, failing which the instrument may betreated as invalid.GENERAL:The Company shall be entitled to reject a proxy form which is incomplete, improperly completed, illegible or where the true intentions of theappointor are not ascertainable from the instructions of the appointor specified on the proxy form. In addition, in the case of shares entered inthe Depository Register, the Company may reject a proxy form if the member, being the appointor, is not shown to have shares entered againsthis name in the Depository Register as at 48 hours before the time appointed for holding the Meeting, as certified by The Central Depository(Pte) Limited to the Company.

www.sakaesushi.com.sgCentralCityLink Mall#B1-631 Raffles LinkTel: 6238 8396CPF Building#01-0580 Robinson RdTel: 6227 0323Funan Digitalife Mall#04-32No. 109 North Bridge RoadTel: 6334 9165Marina Square Shopping Mall#02-207No. 6 Raffles BoulevardTel: 6336 8201OUB Centre#B1-07/081 Raffles PlaceTel: 6438 6281Park Mall#01-15/15ANo. 9 Penang RoadTel: 6336 7006Suntec City#01-185/1873 Temasek BoulevardTel: 6334 9276The Atrium @ Orchard#01-1560B Orchard RdTel: 6238 8820The Heeren Shops#05-01260 Orchard RoadTel: 6235 9083Wheelock Place#02-13501 Orchard RoadTel: 6737 6281NorthCauseway Point#07-02No. 1 Woodlands SquareTel: 6892 9968Compass Point#04-06No. 1 Sengkang SquareTel: 6388 1442Heartland Mall#01-133Blk 205 Hougang St 21Tel: 6383 6127Hougang Point#01-15/16/17No. 1 Hougang Street 91Tel: 6312 1532Junction 8 Shopping Centre#B1-19/209 Bishan PlaceTel: 6259 0672Northpoint Shopping Centre#B2-04930 Yishun Ave 2Tel: 6755 3218Rivervale Mall# 02-10No. 11 Rivervalve CresentTel: 6384 3398Square 2#02-85/86/8910 Sinaran DriveTel: 6391 6107Toa Payoh Entertainment Centre#02-01450 Toa Payoh Lor 6Tel: 6354 9083SouthHarbourfront Centre#02-85/85A1 Maritime SquareTel: 6276 8804Sentosa#01-03No. 50 Siloso Beach WalkTel: 6276 5516EastBugis Junction#02-54230 Victoria StreetTel: 6334 9015Downtown East#01-01/021 Pasir Ris CloseTel: 6582 8467Century Square Shopping Centre#B1-02/032 Tampines Central 5Tel: 6787 3887Changi Airport North T2Viewing Mall#036-085Singapore Changi AirportTel: 6546 5383Changi Airport T1 Nexus Lounge(Kiosk)Changi AirportTel: 6542 8433Eastpoint Mall#04-113 Simei St 6Tel: 6781 6281Parkway Parade#B1-84C80 Marine Parade RoadTel: 6348 6218WestLot 1 Shoppers’ Mall#03-10No. 21 Choa Chu Kang Ave 4Tel: 6764 3678The Frontier Community Club#01-0560 Jurong West Central 3Tel: 6792 2806Tiong Bahru Plaza#02-K1/K6302 Tiong BahruTel: 6377 5249West Mall#03-021 Bukit Batok Central LinkTel: 6790 7012Sakae@CampusDunman High School Canteen53 Mt Sinai RoadSAKAE SUSHIOVERSEAS OUTLETSCHINABeijingB1 117&118, Twins MallNo.B12,Jianwai Street, ChaoyangDistrict, Beijing, China Tel: Tel:Tel: 86-10-5109 6009BeijingF1, Prime Tower,No.21 ChaowaiStreet, Chaoyang District,Beijing P.R.CTel: 86-10-6588-5111BeijingF2,Hualian DepartmentStore,Anzhen Xili, ChaoyangDistrict, Beijing P.R.CTel: 86-10-6443 6880 Ext 5246BeijingUnit 2-27&28 CapitalretailShopping Mall, No.33 NorthGuangshun Str, ChaoyangDistrict, Beijing City PRCTel: 86-10-8472 9810ShanghaiNo. 1486 Nanjing West RoadTel: 86-21-62473884ShanghaiNo. 49 Zendai, Thumb PlazaLane. 199 FangDian RoadTel: 86-21-68568127Shanghaic/o Parkson Shopping Centre,7th floor, No. 918 HuaihaiZhong RoadTel: 86-21-6415 9726INDONESIAJakartaMal Kelapa Gading Ext 3 #03Unit R JI Boulevard Raya Blok MJakarta UtaraTel: 021-45853665JakartaPondok Indah Mall, 2nd FloorUnit 214, JI Metro Pondok Indah,Jakarta 12310Tel: 021-75900673MALAYSIAKuala LumpurG45, Ground Floor, The CurveShopping Mall, No. 6, JalanPJU 7/3, Mutiara Damansara,47800 PJ, Selangor Darul Ehsan,MalaysiaTel: 603-77251172Kuala LumpurG27A Ground Floor, SubangParade No.5 Jln SS16/1 47600Subang Jaya Selangor, MalaysiaTel: 603-5631-2949Kuala Lumpur2F-27/28, 2 nd FloorBangsur Village II2, Jalan Telawi IBangsar Baru59100 Kuala LumpurTel: 603-22871535Penang2F-49 Queensbay Mall, 100,Persianran Bayan Indah, 11900Bayan Lepas, Pulau PinangTel: 604-6430015PHILIPPINESManila26th Street Crescent West ParkGlobal City, Fort Bonifacio, TaguigTel: 632-843-4891ManilaUnit 2145-2146 Main Mall, SMMall of Asia, CM Central BusinessPark, Bay City, Pasay City, MetroManilaTel: 632-556-0150THAILANDChiangmaiUnit No. G.02/2, Kad Suan KaewShopping Centre, Huay KaewRoad Tumbol Suthep, AmphurMuangChiangmai 50200Tel: 66-5389-4497OTHER BRANDSUMA UMA MENCapitol Building11 Stamford Road #01-01Tel: 6334 9237SHO-UThe Central6 Eu Tong Seng Street#03-85/102/108/109Tel: 6534 8066SAKAE TEPPANYAKICentury SquareShopping Centre2 Tampines Central 5#B1-29/30Tel: 6784 8089CREPES & CREAMManilaSM Mall of Asia Bay Blvd,Pasay City CT102 Main Mall,Metro Manila, PhilippinesTel: 632-556-0350ManilaSM Mall of Asia EntertainmentMall (Kiosk 171), Pasay City,Metro Manila, PhilippinesTel: 632-556-0350ManilaG/F The PodiumADB Avenue, Ortigas CenterTel: 632-633-7350Manila26th Street Crescent West ParkGlobal City, Fort BonifacioCenter Makati CityTel: 632-896-3951ManilaR1-K005 Powerplant RockwellCenter Makati CityTel: 632-896-3951NOUVELLEKA Foodlink Building171, Kampong Ampat#04-08 Tel: 6287 8768www.nouvellevents.com

10 Collyer Quay,#13-01/05 Ocean BuildingSingapore 049315Tel: (65) 6438 6629Fax: (65) 6438 6639www.apexpal.com