Annual Report 2010 - Leeden Limited

Annual Report 2010WeldingGasSafety

A StrongerSince our establishment in 1964, Leeden has grown from strengthto strength. We have established a strong brand equity through ourtechnical expertise and extensive range of products in the areas ofWelding, Gas and Safety. More essentially, we have ventured beyondSingapore and made progressive growth in the Asian region.Today, we have strong presence in Malaysia, Thailand, Indonesia,Vietnam, Philippines and China. We are well-positioned at theepicentre of the most dynamic and fastest growing region in theworld, committed to serve our customers from a wide range ofindustries. This is a strong testament to our vision and commitmentto executing our strategy in strengthening our foothold in Asia.CONTENTS01 Corporate Profile02 Business Divisions03 Regional Network04 Chairman’s Statement06 Board of Directors08 Regional Expansion10 Operations Review16 Financial Highlights17 Financial Review18 Corporate Social Responsibility18 Corporate Welfare19 46 th Anniversary Celebration19 Risk Management20 Property Listing21 Management Team22 Corporate Information23 Corporate Governance Report30 Directors’ Report35 Statement by Directors36 Independent Auditors’ Report37 Consolidated Income Statement38 Consolidated Statement of Comprehensive Income39 Balance Sheets40 Statements of Changes in Equity42 Consolidated Cash Flow Statement43 Notes to the Financial Statements106 Statistics of Shareholdings108 Notice of Annual General MeetingProxy Form

Leeden Limited Annual Report 2010CorporateProfileOUR VISION• To be accepted as Asia’s foremost integration specialist in Welding, Gas and SafetyOUR MISSION• Achieve market leadership in Asia’s Marine, Oil & Gas Industries• Ensure customer value by providing integrated services & solutions for Welding, Gas and Safety• Build a company of repute to attract and nurture people of high performanceASIA’S INTEGRATIONSPECIALISTEXTENSIVE REGIONALPRESENCEGROWING INEVERY WAYIncorporated in 1964 and listedon the Mainboard of SingaporeExchange Limited since 1975,Leeden Limited (“Leeden” or“Group”) has built an extensivedistribution network as well asmanufacturing capabilities overthe last 5 years in the provisionof total integrated solutions forwelding, gas and safety acrossSoutheast Asia. The Group currentlyrepresents a comprehensive rangeof internationally renowned brands inthe supply of Welding, Gas and Safetyproducts.Headquartered in Singapore withstrategic presence in Malaysia,Indonesia, Thailand, Vietnam,Philippines and China, the Grouphas regional offices, showrooms,training and manufacturing facilitieslocated in close proximity to ourvalued customers in the Marine,Oil & Gas, Aviation, Automotive,Electronics, Infrastructure andMetal Fabrication Industries.Apart from being the establisheddistributor of internationally renownedagency products, Leeden alsopossesses manufacturing capabilitiesin Welding, Gas and Safety products.To cater to the increasing demands,the Group has expanded andupgraded its sales and manufacturingfacilities. Investing in land, equipmentand warehousing facilities acrossSoutheast Asia to boost sales andproduction capacities.0

A Stronger Leeden in Asia.BusinessDivisionsWELDINGGASSAFETYA market leader in total weldingsolutions, Leeden is well-equipped tocater to all your welding needs.Leeden’s Welding Division is themarket leader in the region today,providing total welding solutionswith a comprehensive range of weldingproducts and services.A comprehensive selection ofproducts ranging from Welding PowerSource Equipment, Welding & CuttingEquipment, Accessories, CNC CuttingSystems, Pipe-Related Equipment,Welding Consumables and Abrasives& Tools to specialized devices for theOil & Gas Industries. We also providerental of specialized welding, cuttingand pipe-handling equipment foroffshore and pipeline activities. Asthe one-stop solutions provider for allwelding requirements, we have a teamof technical specialists to provideconsultancy services to value-add toour customers spanning the Marine,Offshore, Oil & Gas, Oil Rigs, Platformand Jacket Fabricators, FPSO, Shipyards,Metal Fabrication, Pipeline Weldingand Joining, Construction and HeavyIndustries.We are one of the leading andlargest downstream industrial gasmanufacturers and distributors in theregion.Operated through the NIG Group,Leeden’s Gas business is one ofthe leading and largest downstreamindustrial gas manufacturer anddistributor in Singapore, Malaysia andIndonesia (Batam).The NIG Group manufactures andsupplies a full range of industrial, pure,component mixture gases, medicalspecialty gases and cryogenic liquidswith stringent high-purity specificationsto match any application. The NIG Groupalso supplies gas-related productsand provides other services includingmaintenance, customized engineeringand consultancy services.NIG Group has gas refilling facilitiesstrategically located across the region.Its extensive distribution networkensures responsiveness to the diverseindustrial operational requirements fora wide spectrum of industries includingthe Marine, Oil & Gas, Construction,Petrochemical, Power and PipelineFabrication Industries.Equipped with strong technicalexpertise, we are able to delivercustomized and effective safetysolutions to our customers.Leeden’s Safety Division is ableto provide innovative technologysolutions – a crucial element inimproving health and safety in thework place. We take pride in beingan effective and foremost provider ofsafety equipment and solutions with acomplete range of Personal Protection,Fall Protection, Emergency Responseand Environmental ProtectionSolutions. We are the preferredpartner of internationally renownedsafety brands and manufacturerof firefighting equipment. We haveextensive experience and qualificationsin providing value-added services toour customers with customized proactiveand reactive engineering effortsto develop customized solutions.From pre-consultation of work-sitesto maintenance of large capitalequipment, we offer a complete hostof engineering solutions for turnkeyprojects. Our Safety Division serves awide spectrum of industries, includingthe Marine, Offshore, Oil & Gas, OilRigs, Platform and Jacket Fabricators,FPSO, Shipyards, Aviation, Automotiveand Electronics Sectors.0

Leeden Limited Annual Report 2010RegionalNetworkSingaporeWest Malaysia• Johor Bahru• Kuantan• Kuala Lumpur• Ipoh• Malacca• Nilai• PenangEast MalaysiaBruneiIndonesia• Batam• Bintan• JakartaThailand• ChonburiVietnam• Ho Chi Minh CityPhilippines• ManilaChina• Jiangyan• Lianyungang• ShanghaiLianyungangJiangyanCHINAShanghaiTHAILANDChonburiManilaPHILIPPINESVIETNAMHo Chin Minh CityWEST MALAYSIABRUNEISINGAPOREHQBintanBatamEAST MALAYSIAINDONESIAJakartaSales By Industrial SegmentWelding49%GAS23%Safety28%• Increase in revenue contribution from Malaysia and Indonesia• Awarded increased territorial rights with the expansion into theregion• Attained new agencies to enhance product offerings• Increased manufacturing plants and refilling stations to meetincreasing demands• Invested in gravimetric system to improve product quality andachieve cost and production efficiencies• Launched new marketing initiatives for new market segments• Attained new agency for the distribution of gas detectionsystems• Invested in training and development as well as equipmentfor the Technical Service Department for contract servicingprojects0

A Stronger Leeden in Asia.Chairman’sStatementDear Shareholders,The year 2010 has been a challenging year for companies inthe oil and gas industries. Despite the uncertain environment,I am pleased to report that the Group’s turnover grew by2.9% to S$191.5 million for FY2010. Net profit attributableto shareholders, however, declined by 14.4% to S$7.6million mainly due to lower contribution from the Propertydivision and increase in operating expenses as the Groupexpands its regional footprints.The Group has attained consecutive record revenue everyyear with no exception in 2010. Registering a compoundannual growth rate in revenue of 21.3% over the past 10years was made possible with good management foresightto focus on the Group’s core business in Welding, Gas andSafety then. Going forward, we will be consolidating ourpresence in the region and expand our product offerings tocapture more market share.Regional MarketSingapore has been the traditional market of the Group. TheGroup has focused on growing its regional businesses overthe past 5 years and has to date, established presence inThailand, Vietnam, Indonesia, China and the Philippines. Ourgeographical expansion efforts has paid off with revenuecontribution from Malaysia exceeding that of Singapore forthe first time in FY2010. Turnover from Malaysia improvedfrom 38% to 43% of total revenue for FY2010, which wasmarginally higher than the 42% revenue contribution fromSingapore. We have also witnessed increasing revenuecontribution from Indonesia.Increase Product OfferingWe intend to work more closely with our principals toextend our product offerings to our customers in the region.Many of our principals have indicated that they will supportus in our regional growth. In 2010, the Group receivednumerous awards and accolades from our principals forLeeden’s Group Sales turnover over the last 10 years (S$’000)200,000157,239186,148191,585150,000100,00073,30786,066102,89250,00033,80827,75328,58839,935002001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Leeden Limited Annual Report 2010outstanding sales performances. Awards include CRC-Evans - 32 Years of Association, E.H. Wachs – 30 Years ofSuperior Performance, ITW Group – Outstanding Distributorfor 25 Years, Nederman – 30 Years of Success, Red WingShoe Company – 2010 Distributor of the Year/32 Yearsof Progressive Partnership, Thermadyne – 2010 SalesAchievement Award, UVEX - Platinum Partner Southeast Asiaand Wescol – 30 Years of Co-operation and Friendship.During the year, we have also gained many importantnew agencies to expand our product range to support ourcustomers in the provision of total integrated welding, gasand safety solutions. We were offered the agencies of EGAMaster, Snap-On Tools, Stanley Proto, Western Enterprises,GfG and Louisville Ladder.In the countries where we are not agents for the products,we introduced our own brand “Auweld”, with the slogan of“All You Need For Welding”. This completes the productofferings to our customers.Expand Manufacturing CapabilitiesRevenue contribution from our manufacturing arm hasexceeded 45% of the Group’s revenue in FY2010. To bettercater to the needs of our customers, we are expandingour manufacturing capabilities and infrastructure so as toenhance capacity and product offerings. Construction ofthe Group’s third welding consumables factory in Malacca,Malaysia is expected to be completed this year and willcommence production by the 3rd quarter of 2011. Withthe Eversafe factory in Malaysia running at full capacity,we have expanded into Jiangyan, China to set up a newplant for the manufacturing of fire-fighting equipment. Theplant was completed in 2010 and is presently undergoingproduct testing to obtain certifications to qualify for exportsto various countries.The Group entered into a joint venture with Wescol, a UKcompany with over 30 years of track record in oxy/fuelcutting, welding and heating products, to manufacturegas-cutting apparatus in 2010. Wescol will be marketingthe end products in the European market while we will bemarketing under our “Auweld” brand in Asia market.Build “Leeden” BrandThe Group continues to consolidate its brand equity tocreate long-term sustainable growth. The Group completedits rebranding exercise in 2010 with the consolidationof its Welding and Safety business under the “Leeden”umbrella by transferring the trading activities of the weldingdivision under American Dynamics to Leeden DistributionPte Ltd. The Industrial Gas business, on the other hand,will continue to be operated under the NIG brand. This is abig step towards building a stronger brand identity as theGroup’s advertising and promotional collaterals can now bemarketed as one “Leeden” brand.Business School, Department of Accounting, supervisedby Assoc Prof Mak Yuen Teen. This project has identifiedareas of improvement for the Group to further enhance ourcorporate governance standard.Risk ManagementA Risk Management Committee was formed in April 2010for the purpose of identifying and mitigating risk for theGroup. The Committee will assess and evaluate risks atboth macro and operational level.Both the COO and myself had attended courses in bizSAFEand obtained certification in Level 1 for Leeden Limited,Leeden Distribution Pte Ltd and National Industrial GasesPte Ltd. Following this, the Group has successfully attainedLevel 2 of the bizSAFE certification in February 2011. Weare working towards obtaining bizSAFE certification Level 3for the Group.Social ResponsibilityCorporate Social Responsibility is increasingly being seenas an important and integral part of normal businessoperations. At Leeden, we embrace the socially responsiblebusiness practices and fair operations by giving back to thesociety. We were involved in voluntary activities at SunshineWelfare Action Mission (“SWAMI”) in April 2010. To initiatea healthy living and work-life balance for our employees,we kick-started the Healthy Lifestyle Program in January2011.Build Leeden TalentFor succession planning and to support our regional growth,the Group pays considerable attention to Human ResourceManagement. Apart from upgrading the skills of existingtalent pool through our in-house training facility, we alsowelcome new “blood” to join the Group at all levels. TheGroup continues with its university recruitment programboth in Singapore and Malaysia and has recruited severalnew graduates with excellent potential.AppreciationIn appreciation of the support of the shareholders, theBoard has recommended a final dividend of 0.50 Singaporecent per share, subject to shareholders approval, which isin addition to the interim dividend of 1.0 Singapore centper share declared and paid on 2 September 2010. Thismarks the highest level of dividend paid by the Companyin the past 10 years with a record dividend payout ratio of34.3%.Last but not least, I would like to convey my appreciationand thanks to our shareholders, business associates,customers, suppliers, our board of directors and staff fortheir support to the management and to Leeden.Corporate GovernanceAs a listed company, we need to continuously work onupgrading our standard of corporate governance. In 2010,we embarked on a governance review project with a teamof students from the National University of SingaporeSteven ThamChairman & Chief Executive Officer15 March 20110

A Stronger Leeden in Asia.Board ofDirectors1 23 41.2.3.4.5.6.Mr Steven ThamMr Kelvin LeeMr Leslie StruysMr Philip Hong Peng WaiMr Loh Weng WhyeMr Hendra Harjadi5 60

Leeden Limited Annual Report 2010Mr Steven Tham, appointed on the Board on30 June 2000, has been the Group’s Executive Chairmanand Chief Executive Officer since 27 March 2001.He was last re-elected on 23 April 2009. Mr Tham hasover 35 years of working experience in the industrial,banking, trading, retail and property industries. He holdsa BBA (Hons) and M. Sc (Real Estate) degree from theUniversity of Singapore. He is also a member of theChartered Institute of Management Accountants and theSingapore Institute of Directors (MSID). In 2009, Mr Thamwas conferred the Outstanding Entrepreneurship Awardat the Asia Pacific Awards 2009 (APEA 2009) – AsiaPacific’s most prestigious award for entrepreneurs.In 2010, Mr Tham was appointed as the SeniorEconomic Advisor for Jiangyan Economic DevelopmentBoard by the Jiangyan Municipal Government, JiangsuProvince, China.Mr Kelvin Lee, was appointed as Executive Director on12 August 2004 and has held the position of ManagingDirector & Chief Operating Officer since 1 October 2007.He was last re-elected on 25 April 2008. Mr Lee has over35 years of experience in the chemical, metallurgy, weldingand industrial gases industries. He is currently appointedas a council member of the board of the Singapore WeldingSociety and a committee member of the Asian IndustrialGases Association and the Industrial Gases Association ofSingapore. He is also a member of the Singapore Instituteof Directors (MSID). Mr Lee holds a Bachelor of Sciencedegree from University of London. In 2010, Mr Lee wasappointed as the Senior Economic Advisor for JiangyanEconomic Development Board by the Jiangyan MunicipalGovernment, Jiangsu Province, China.Mr Leslie Struys has served on the Board as anIndependent Director since 30 June 1993. Mr Struys wasappointed as the Lead Independent Director on 1 January2006. He was last re-elected onto the Board on 23 April2009. He is the Chairman of the Remuneration Committeeand a member of the both the Audit and NominatingCommittees. Mr Struys graduated from the Universityof Malaya in 1960 with a Bachelor of Arts Degree inEconomics. He also sits on the Board of Fraser & NeaveHoldings Bhd, a Malaysian Company listed on the BursaMalaysia Securities Berhad, as the Senior IndependentDirector.Mr Philip Hong Peng Wai joined the Board as anIndependent Director and a member of the Audit Committeeon 8 August 2009. He was appointed the Chairman ofthe Audit Committee and a member of the RemunerationCommittee on 8 March 2010. He was last re-elected on23 April 2010. Mr Hong had graduated with a Bachelorof Business Administration degree from the University ofSingapore in 1974. Mr Hong is a banker with more than 35years of working experience and has held senior positionsin various international banks. Currently, Mr Hong holdsthe position of General Manager of CIMB Bank Berhad,Singapore Branch and is also a Director of CIMB BankNominees (S) Sdn Bhd. He is currently a member of theSingapore Institute of Directors (MSID).Mr Loh Weng Whye was appointed as anIndependent Director on 7 February 2005 and was lastre-elected on 23 April 2010. He is the Chairman of theNominating Committee and a member of both the Auditand Remuneration Committees. Mr Loh is a veteran ininfrastructure development and energy businesses inSingapore and the region, with over 35 years of experiencein senior appointments with the civil service, governmentlinkedcompanies and the private sector. Under the PublicUtilities Board, he headed Generation Projects responsiblefor the management and commissioning of power projectsworth more than S$3 billion. He was also the foundingGeneral Manager (Projects) of Tuas Power Ltd. Mr Lohwas formerly President of ST Energy and SembCorp EnergyPte Ltd. He was appointed Advisor to Green Dot Capital,an investment and holding company under Temasek Holdings.He was the Senior Advisor to YTL Power International inthe S$3.8 billion acquisition of PowerSeraya Ltd. Currently,Mr Loh sits on the boards of local and overseas corporations,including several SGX mainboard-listed companies.He also holds advisory appointments in external councilsand charity organisations. He served on the mechanicalengineering advisory/consultative panels of NUS and NTUfor many years. Holding MSc.(Ind. Engg.) and BEng.(Mech.)degrees, he is a Professional Engineer (Er.), Member of theSingapore Institute of Directors (MSID), and was elected aFellow of the Institution of Engineers, Singapore in 1995.Mr Hendra Harjadi was appointed a Non-ExecutiveDirector on 3 May 2004. He was last re-elected on 23April 2009. Mr Harjadi is the Managing Director ofvarious companies in Indonesia and has over 35 yearsof experience managing companies in the oil and gasand retail industries. Mr Harjadi holds a Bachelor of Artsdegree from the Universitas Methodist Indonesia.0

A Stronger Leeden in Asia.RegionalExpansionIn recent years, Leeden has been expanding robustly,increasing market share and expanding our regionalpresence through geographical diversification. TheGroup has sales and distribution offices, agenciesand manufacturing facilities spanning across7 countries in Southeast Asia.Headquartered in the western part of Singaporeat 1 Shipyard Road, the 6-acre site houses ourcorporate offices, sales operation and showroom,central logistics, gas refilling stations and aDissolved Acetylene (“DA”) plant.MalaysiaOver the years, we have established a strong salesdistribution network across the Western part of Malaysia.With the opening of a new sales office and a new gasrefilling plant in Kuantan, we extended our footprints acrossthe eastern part of Peninsula Malaysia and completed ourcoverage across the major states of Selangor, Terengganu,Pahang, Kedah and Perak to Johor.The new establishment in Kuantan under NIG Timur Sdn Bhdhas a total land area of 2.48 acres. This site includes a 2-storey office building, warehouse and industrial gas refillingplant with 28,000 square feet set aside for additionalproduction facilities in the near future.The Group has also added a new DA Plant under NIG UtaraSdn Bhd in Penang. The fully operational plant, is now thelargest DA manufacturing facility in the northern region ofMalaysia.0

Leeden Limited Annual Report 2010Thailand & IndonesiaFollowing our foray into Thailand in 2009 with our salesdistribution office and warehouse located in Chonburi, theGroup continues to expand regionally with the establishmentof PT Leeden Indonesia in Jakarta in 2010. We are nowin closer proximity to our dealers and customers in theOil & Gas industry who has base offices in Jakarta. Thismove enables the Group to serve our customers in a moreefficient manner.new plant is set to doublethe current productioncapacity of the existingplant in Malaysia andwill cater to the existingglobal market forEversafe’s range of firefighting equipment.The Group has partnered Wescol Holdings Pte Ltd to establisha joint venture company – Imperial Gas Control Equipment(Jiangyan) Co Ltd (“IGCE”) in China. IGCE is primarily involvedin the assembly and testing of gas cutting and gas controlequipment – a complementary fit to the industrial Weldingand Gas Division.Vietnam & PhilippinesThe Group has also increased our physical presence acrossSoutheast Asia with the opening of distribution offices inHo Chin Minh City, Vietnam and most recently in Taguig City,Philippines. Leeden’s wholly owned subsidary in Philippines- Leeden Philippines Inc was incorporated on 15 Nov 2010with an initial investment of USD 200,000.“Fastest Growing Internationalising Companies”ChinaAside from our sales distribution office in Shanghai, theGroup has expanded operations in China with the openingof a new fire extinguisher manufacturing plant - JiangyanEversafe Fire Equipment Co Ltd (“JEF”) in May 2010. ThisOur continuous efforts to extend our geographicalfoothold regionally has earned Leeden the distinctiverecognition as one of the Top 10 “Fastest GrowingInternationalising Companies” awarded by DPInformation Group and supported by Ernst and YoungSolutions LLP , IE Singapore, IDA Singapore, SPRINGSingapore and The Business Times.0

A Stronger Leeden in Asia.OperationsReviewProviding Total Welding SolutionsThe Group’s Welding Division is the market leader in the provision oftotal welding solutions. Offering a comprehensive range of WeldingConsumables, Welding Power Sources & Equipment and WeldingAccessories, the Group represents some of the most distinguishedwelding brands in the industry.WeldingDivisionWelding ConsumablesWe offer a complete range of Welding Consumables covering the fullspectrum of manual, semi-auto and automated welding processes.From renown brands such as HOBART, McKAY, TRI-MARK, FSH WeldingGroup, Special Metals for premium welding filler metals including stickelectrodes, solid and tubular (flux cored and metal cored) wires to highnickel, high performance alloys in standard mill forms or sheet, stripand tubing.Welding EquipmentBeing the foremost provider of integrated welding solutions, our range ofWelding Equipment & Automation extends from Welding Power Sources,Plasma Cutting, Spot Welding and Cladding Systems to Orbital Weldingand Robotic Arc Welding. We have been key agents for internationallyrenowned brands such as OTC, Miller, WACHS, CRC-Evans, Hyperthermand many others. We also have equipment specializing inthe production of SubSea Cutting, machining, beveling andcold cutting of pipes.Strategic Acuity -makes the difference. AtLeeden, we go further thanevolving and developingbusiness strategies -we drive them towardsimplementation andrealization, to ensure thatwe are constantly movingalongside an ever-changingeconomic landscape.10

Leeden Limited Annual Report 2010Welding AccessoriesWe are the agent for internationally-leading brands forWelding & Cutting Accessories, offering our users top quality,durable and safe-to-use products. Our products range fromcutting nozzles, regulators, welding torches, welding gauges,electrode ovens to welding safety equipment.Rental Services and Customized SolutionsBesides distributing a broad product spectrum frominternationally renowned agencies and under our ownin-house brands, the Group also provides rental ofspecialized welding, cutting and pipe-handling equipmentfor offshore and pipeline activities. With our expertise, theGroup is able to provide value-added services like weldingprocedural specifications, evaluation and recommendation ofwelding consumables and equipment requirements, producttraining and on-site technical assistance management forour clients. Our technicalexpertise and hardwarecapabilities allow us todeliver synergistic solutionsto diverse industries suchas the Marine, Oil & Gas,Metal Fabrication, PipelineWelding, Construction andHeavy Industries.Increased Territorial Rights and Agency LinesOur growth and expertise has been recognized by clientsand partners alike. Existing principals have conferred uswith awards and accolades in recognition of our efforts andoutstanding performance.The Group’s consistent efforts have paid off and principalshave granted us more territorial rights as we expand ourgeographical footprint in the region.This is testament to the Group’sstrong commitment and diligenceto product and service excellence.During the past year, we have beenawarded six new agency rights,all of which are renowned brandsin the welding industry includingWestern Enterprises, Snap-on Tools,Louisville Ladder, Stanley Proto,Huntingdon Fusion and EGA Master.These new agency lines are our principals’ votes ofconfidence in Leeden’s growth potential and capabilities,and it has served to expand our product offerings,cementing our reputation as a major regional player in theindustry.Manufacturing ExpansionsOther than being the preferred agent to some of the world’srenowned principals, Leeden had developed manufacturingcapabilities over the years.The Group manufactures a wide range of consumablesfrom electrodes, MIG, SAW to TIG wires under Power WeldSdn Bhd (“Power Weld”). Power Weld is one of the leadingmanufacturers of welding consumables in Malaysia. PowerWeld is currently constructing its third factory in Malacca,Malaysia. This new premise will house a fully-equippedlaboratory to facilitate close monitoring of the productquality in all 3 factories.Complementing the Group’s Industrial Business throughthe joint venture partnership with Wescol Holdings PteLtd, the Group through Imperial Gas Cutting Equipment(Jiangyan) Co Ltd (“IGCE”) manufactures high qualityindustrial oxy-fuel equipment approved to ISO and Europeanstandards. The factory in Jiangyan, China is fitted with thelatest technology imported fromEurope and the US. In the 2H2010,it commenced production of 300bar approved pressure regulators,manual cutting torches and variousancillary items for the export marketin Asia and Europe.11

A Stronger Leeden in Asia.OperationsReviewProviding Total Gas SolutionsLeeden’s Gas Division, operated under the NIG Group - is one of theleading and largest downstream industrial gas manufacturer anddistributors in Singapore, Malaysia and Indonesia (Batam).GasDivisionThe NIG Group, with its manufacturing plants, regional offices andextensive distribution network located across Singapore, Malaysia andIndonesia (Batam) strives to be “The Trusted Partner” for Total GasSolutions across a wide spectrum of industries, including the Marine, Oil& Gas, Construction, Petrochemical and Pipeline Fabrication sectors.Operational Efficiency -propels growth. By buildingupon and fully maximisingour manufacturing andoperational capabilities,we are able to harnessLeeden’s full potentialto exhibit strength andgrowth.12

Leeden Limited Annual Report 2010Gas Products & ServicesThe NIG Group manufactures and supplies a full range ofgases including industrial gases, specialty gases, divinggases, medical gases and cryogenic liquids with stringenthigh purity specifications to match any application.Customized Engineering & Consultancy ServicesOur engineering and consultancy projects have alsoachieved recognition in the industry. From the installationof customized systems for the Nitrogen Mobile ChargingTrolley for compartments of airplanes, to the provision ofCylinder Rack Control Systems for purging activities onboardvessels where the control system was specially designed toallow a flow rate of up to 2,000m 3 /hr.Industrial GasesMedical Gases– Acetylene, Argon, Carbon Dioxide, Helium,Hydrogen, Nitrogen, Oxygen, Propane– Carbon Dioxide, Nitrogen, OxygenSpecialty Gases – Calibration Gases, Ultra-Pure Gases,Component Mixture GasesOther Gases – Refrigerants, Balloon Gases, Diving Gases,LPG, Dry IceCryogenic Liquids – Carbon Dioxide, Argon, Oxygen, NitrogenOur gas manufacturing centres are equipped with in-houselaboratories, online gas analyzers and quality controlsystems to ensure quality and consistency for every batchof gas produced. We have the capability to issue Certificateof Conformity and Certificate of Analysis as requested byour customers, asour online gasanalyzers allow usto analyze the fullspecifications andcomposition of ourgases.Gas-Related Products & ServicesBesides the provision of the most comprehensive rangeof gas products, the Group also offers gas relatedproducts including GasEquipment & Gas ControlApparatus Systems, aswell as engineering andconsultancy services.New Technology For Increased ProductivityIn November 2010, the Groupinvested in a gravimetricrefilling facility in Singapore.This facility enables us toachieve higher accuracy andproductivity for our refilling ofmixture gases.The system comprises of 3 main parts, namely theweighing scales, mixing panel and refilling stand. A higherlevel of accuracy can be achieved as the process is lessaffected by temperature variations. Eventually translatinginto less re-works and reduced gas wastages arising fromgas quality reject. This procedure enables the Singaporeteam to produce a variety of mixture gas requirements withdiversified product range while at the same time achievinga higher quality of gas mixture..13

A Stronger Leeden in Asia.OperationsReviewProviding Total Safety SolutionsThe Group’s Safety Division places strongemphasis on the importance of creating asafe, clean and healthy work environmentwith the provision of equipment and solutionscovering the areas of Personal Protection, FallProtection, Emergency Response, EnvironmentProtection and Water Treatment.Fall Protection EquipmentPersonal Protection EquipmentPersonal Protection Equipment(“PPE”) is an indispensiblepart of workplace safety. Ourhead-to-toe concept range ofPPE is from internationallyrenowned brands like Red WingShoes and uvex. We serve adiverse customer base from theMarine, Chemical & Processing,Construction, Welding, upstreamand downstream Oil & Gasindustries.Leeden’s Safety Division offers the broadest range of Fall Protectionand Rescue Equipment (“FPE”) in the market. Our products includeAnchorages, Body Supports, Connectors, Descent / Rescue Systemsand Engineered Solutions. These are advanced engineered systems forfall restrain, fall arrest, work positioning and rescue applications. To topit off, we are the agents for top notch FPE brands such as DBI-SALAand SkyClimber.Environmental Protection EquipmentOur Environmental Protection Equipment (“EPE”) range keeps workspacesclean, safe and efficient. Representing the global leader in vacuumtechnologies - Nederman, our expert sales & technical personnel are wellacquainted with national and international requirements for extractionapplications in all environments including explosive ones, to providecustomizable solutions for all industries.SafetyDivisionTrust and Assurance -is the force behindcustomer loyalty. Throughconsistent delivery ofquality products andservices, Leeden has builtstrong relationships withour clients, offering themthe trust and assurancethey require.14

Leeden Limited Annual Report 2010The team offers a full suite of services – from pre-studies andproject work to installation, operational start-up and service.New Marketing InitiativesBesides EPE, we also provide water treatment solutions asa value-added service to the Marine, Oil & Gas industries.We design and manufacture membrane filtration systemsfor consumer and industrial markets that will provide costeffectivesolutions in seawater and waste water treatmentwith the help of the latest membrane technology.Emergency Response EquipmentWe carry an extensive range of Emergency ResponseEquipment (“ERE”) from well-known brands like Haws,EVAC+CHAIR, AFT, GfG, Harvik, NOVOTEX ISOMAT andEVERSAFE, which help customers to respond swiftly toworkplace injuries and minimize damage to equipment andmachineries in all emergency situations. These productsinclude: Rescue & Descent Systems, Evacuation RescueEquipment, Gas Detectors, Emergency Showers & Eyewash,Fire Fighting Systems and Firemen Protective Equipment.Increased Manufacturing CapabilitiesBesides representing the best brands in the Safety arena,the Group’s manufacturing of firefighting equipment underthe Eversafe brand has increased with the new productionplant in Jiangyan, China. With the plant’s close proximity toraw materials such as steel and relatively lower labour costs,the Group is able to reap maximum cost savings.The Group’s Safety business has embarked on newmarketing initiatives to expand our product scope andmarket reach. Weparticipated in JECComposites Asia Show2010 to further exploreand develop newmarket segments forour range of compositedust solutions.In addition, we organized technical seminars to betterengage our customers through lively interaction andsharing of knowledge and expertise. We conducted ourfirst seminar “Safetyin Welding Processes& Environments” inpartnership with theSingapore Welding Societyreaching out to audiencesfrom the industries dealingwith welding fumes anddust.Our joint technical seminar with UVEX Safety Group on“Experiencing Safety Through Innovation” has alsogarnered much favourable responses from participants.These successful seminars allowed us to strengthenour brand equity and further consolidate our positionas Asia’s integration specialist for Welding, Gas andSafety solutions.15

A Stronger Leeden in Asia.FinancialHighlightsFigures in S$‘000 unless otherwise stated2006 2007 2008 2009 2010(Restated)Turnover 86,066 102,892 157,239 186,148 191,470Profit Before Taxation 3,152 8,736 17,530 17,228 15,083Profit After Taxation 1,888 6,603 14,537 13,894 11,839Profit Attributable to Equity Holders 1,890 6,549 11,715 8,898 7,621Total Assets 76,988 82,596 186,146 200,311 207,916Total Liabilities 38,626 36,759 98,949 102,539 100,237Total Shareholders’ Equity 38,064 45,469 62,361 70,296 75,536Earnings Per Share (cents) 1.35 4.51 6.82 5.12 4.37Dividend Per Share (cents) 0.36 0.50 1.00 1.00 1.50NAV Per Share (cents) 27.10 31.10 36.10 40.40 43.20Sales Turnover (S$’000)Profit Before and After Tax (S$’000)180,000180,000120,00096,706140,549168,998177,06620,00016,00012,00017,53014,53717,22813,89415,08311,83990,00060,00069,2778,0008,7366,60330,00016,7896,18616,69017,15014,4044,0003,1521,88802006 2007 2008 2009 2010 2006 2007 2008 2009 20100Industrial Property & others Profit Before Taxation Profit After Taxation16

Leeden Limited Annual Report 2010FinancialReviewIncome StatementEmerging from a difficult operating environment in 2009,the Group reported a satisfactory 2.9% growth in revenue toS$191.5 million for the financial year ended 31 December2010 (“FY2010”) from S$186.1 million in FY2009.Revenue from Industrial Business grew 4.8% to S$177.1million, primarily driven by improvement in the Weldingdivision under Industrial Business. Property and OtherSegments, however, saw a decline in revenue by 16.0%to S$14.4 million due to near completion of the PatersonLinc project.Gross profit declined 3.0% to S$52.4 million in FY2010as compared to S$54.0 million in FY2009, while grossprofit margin reduced marginally to 27.4% in FY2010 from29.0% in FY2009. The reduction was mainly attributableto a lower contribution from the Property Segment and theGroup’s efforts in maintaining market share in midst ofkeen competition during the year.To fuel the Group’s expansion into the region, investmentsin human capital were made during the year, therebyincreasing the distribution costs and administrativecosts to S$26.7 million and S$11.9 million respectivelyin FY2010. Notably, the aggregate operating expenses(including distribution costs and administrative costs)remained constant at approximately 20% of total revenuefor both FY2009 and FY2010.Dedicated efforts in inventory and working capitalmanagement resulted in lower provisions required forstock obsolescence and doubtful debts, hence other costsdecreased 62.4% to S$1.3 million in FY2010.Finance costs trimmed down by 4.7% to S$1.9 million inFY2010, which was in line with management’s intentionto shift from short-term loans to trade financing in fundingworking capital.To sum it up, the Group registered S$15.1 million of profitbefore taxation and S$7.6 million of net profit attributableto shareholders, with a basic earnings per share of 4.37Singapore cents in FY2010 (FY2009: 5.12 Singaporecents).Balance SheetNon-current assets increased S$10.2 million to S$83.8million as at 31 December 2010, mainly due to theGroup’s facility expansion plans in relation to the IndustrialBusiness in Malaysia.Total current assets decreased S$2.6 million to S$124.1million as at 31 December 2010, largely due to theincrease in inventory partially offset by reduction in tradedebtors. Trade debtors was reduced by S$5.8 millionwhich is consistent with the management’s efforts intightening receivables collection while trade debtors’turnover improved from 108 days in 2009 to 95 days as at31 December 2010. The Group procured more stocks tomeet increasing sales during the year and hence increasedstock level as at 31 December 2010 to S$43.0 million.Correspondingly, stock turnover increased to 127 days inFY2010 as compared to 115 days in 2009.Total liabilities decreased S$2.3 million to S$100.2 millionas at 31 December 2010, represented by S$3.5 millionreduction in current liabilities and S$1.2 million increasein non-current liabilities. Lower level of current liabilitiesarose due to management’s plans to utilize trust receiptsfacilities effectively to repay trade creditors during theyear as well as repayment of short-term loans. The Grouphas drawn down more term loan facilities to fund capitalexpenditure and business expansions in 2010 and therebygiving rise to a higher long term borrowing balance ofS$13.6 million as at 31 December 2010.The Group’s leverage ratio has improved from 0.47 timeas at 31 December 2009 to 0.40 time as at 31 December2010.Shareholders’ equity grew S$5.2 million to S$75.5million while total equity strengthened by S$9.9 million toS$107.7 million as at 31 December 2010. As a result, netasset value per share rose to 43.2 Singapore cents as at31 December 2010 from 40.4 Singapore cents as at 31December 2009.17

A Stronger Leeden in Asia.LeedenSupporting ourCommunitiesWe aspire to build a reputable company so as to attractand nurture capable people who believe in contributingpositively back to the community.Our visit to Sunshine Welfare Action Mission (“SWAMI”)Home is one of the community engagement programmesthe Group undertook in 2010. SWAMI provides residentialnursing care facilities, dementia day care and “drop-in/respite day care” for the aged and aged sick. Apart fromcash contributions, an Israel shower trolley was flown inespecially for SWAMI to aid the nurses while showeringbedridden patients.About 40 employees, together with their family members,spent a meaningful afternoon with the residents,entertaining them with games, karaoke and yummy hi-teasnacks.Leeden was indeed honored to have such opportunity tomake positive contributions back to society and will lookforward to many more of such events in the near future.EmployeeWellnessAs part of the overall employee wellness initiatives,Leeden launched our debut health promotion programmeswith the support from the Health Promotion Board. Theprogrammes kicked off with a nutrition survey performedby canteen management and a qualified nutritionist toassess the food quality and serving in the company’scanteen. Quizzes and games are also scheduled toeducate our employees on healthy selection of food formaximum daily nutrition intake. This programme aims tobring across the positive message of “Eating Right, StayHealthy” and to achieve such objective, wellness talks,fruits festival, sports and sweat activities were also linedup for our employees.18

Leeden Limited Annual Report 2010Leeden marked46 th yearwith a carnivalcelebrationEstablished in 1946 and listed on SGX-Mainboard since 1975, we are hailed as one of the mostenduring entities in Singapore. We celebrated our 46 th anniversary with 850 distinguished guests,of which more than 300 flew in from all parts of the world including Japan and United States. Wewould like to propose a toast to our principals, partners and customers for their support and vote ofconfidence in Leeden Limited and to our employees for their dedicated efforts. Exciting prospectsline ahead and we are definitely looking forward to a brighter future and more celebrations!Leeden believes in responsible business and valuesWorkplace Safety and Health (“WSH”) as much as itdoes for profitability. Hence the Group embarked on thebizSAFE program, an initiative by the Singapore WorkplaceSafety and Health Council (“SWSHC”), in 2010 to build acomprehensive foundation in Risk Management.The bizSAFE program is a five-step program that wasconceived by the SWSHC to help companies build WSHcapabilities through a step-by-step approach. With definedgoals and targets at each step, companies are guidedtowards building good Risk Management capabilitiesand to put in place proper Workplace Safety and HealthManagement Systems. In the process, participatingcompanies gain recognition and benefits of having acomprehensive WSH system in place.Leedenembarks onbizSAFEProgramIn January 2011, both Mr Steven Tham, CEO, and Mr KelvinLee, COO, attended the bizSAFE level 1 training. With ourtop management taking active approach in attending thistraining, we are pleased to report that Leeden Limited,Leeden Distribution Pte Ltd and National Industrial GasesPte Ltd have fulfilled the requirements for attaining thebizSAFE Level 2 certification. Moving forward, Leeden willbe implementing plans to work towards achieving Level 3of the bizSAFE program.19

A Stronger Leeden in Asia.PropertyListingLOCATION Country LAND AREA (SQM) TENURE USAGENo. 1 Shipyard Road, Singapore Private Lots A366B,A366B(A), A366B(B) AND A366B(C)Lot PT 5074 & 5075 Jalan Jangur 28/43, Seksyen 28,Hicom Industrial Estate, 40400 Shah Alam, Selangor DarulEhsanH.S (D) 118709, NO. P.T 5138, Mukim Damansara,Daerah Petaling Negeri SelangorSub Lot 295, 296, 304 & 305 Bandar IndustriGebeng Jaya, KuantanLot . 12823, Mukim 14, Daerah Seberang Perai TengahPulau Pinang, MalaysiaNo.2249, Jalan IKS Bukit Minyak 1, Taman IKS BukitMinyak, S.P.T.,14000 Bukit Mertajam, Penang,West MalaysiaNo. 642 Mezzanine Floor, Taman Siantan Seksyen 1,Tengkera, 75200 MelakaSingapore 24,764 Leasehold Office and IndustrialMalaysia 10,712 Freehold OfficeMalaysia 6,070 Freehold IndustrialMalaysia 10,045 Leasehold Office and IndustrialMalaysia 10,238 Leasehold IndustrialMalaysia 6,758 Freehold Office and IndustrialMalaysia 8,133 Leasehold Industrial168 Kawasan Perindustrian Ayer Keroh 75450 Melaka Malaysia 4,158 Leasehold Office and IndustrialPajakan Mukim No. PM 78 Lot 2345 Mukim Bukit Katil,Daerah Melaka Tengah, Negeri Melaka Together WithFactory Building Built Thereon Bearing The Address Lot 61,Jalan Usaha 9, Air Keroh Industrial Estate 75450 MelakaLot No. 878, Jalan Subang 9, Taman PerindustrianSubang 47500 Subang Jaya, Selangor (H.S. (M) 935 PT9300,Mukim Damansara, Kampung Sungai Penaga, DaerahPetaling, State of Selangor)Geran 128874, Lot No. 10682, Mukim Setul, DaerahSeremban, Negeri Sembilan/ Lot 118, P.T. 16761 JalanPermata 2 Arab Malayan Insuatrial Park 71800Nilai Negeri SembilanJalan Brigjen Katamso, Kawasan Bintang Industri II -Lot No. 1 & Lot No. 3 Tanjung Uncang, Pulau Batam 29422IndonesiaJalan Brigjen Katamso, Kwasan Bintang Industri II -Lot No. 20 Tanjung Uncang, Pulau Batam 29422 IndonesiaJalan Hang Jebat Nomor 8, Kijang, Kabupatan Bintan,Provinsi Kepulauan RiauMalaysia 12,855 Leasehold IndustrialMalaysia 11,509 Leasehold Office and IndustrialMalaysia 11,045 Freehold Office and IndustrialIndonesia 10,870 Leasehold LeaseholdIndonesia 3,587 Leasehold Office and IndustrialIndonesia 19,999 Leasehold Industrial20

Leeden Limited Annual Report 2010ManagementTeamMr Edwin Chow joined the Group in January 2008 as GeneralManager in charge of the welding business in Singaporeas well as in the Asia region. Mr Chow holds a Diploma inMarketing and also a Diploma in Marine Engineering. He hasover 20 years of experience in marketing welding equipmentand consumables in the shipbuilding and oil & gas relatedindustries.Mr Robert Goh has been with the Group since 1978 andis the General Manager of National Industrial Gases Pte Ltd,heading the gas business in Singapore and Batam. In January2011, Mr Goh was tasked with the additional role of headingthe Auweld Safety Division. Mr Goh has over 30 years ofoperations and sales experience in the oil and gas relatedindustries.Mr Philip Chan is the General Manager in charge of thesafety business in Singapore as well as in the Asia region.He has been with the Group since 1990. Mr Chan holdsa Master of Business Administration from the Universityof Birmingham. Mr Chan has over 20 years of experiencein marketing equipment and solutions covering the areas ofpersonal protection, fall protection, emergency response andenvironmental protection.Mr Alex Ong joined the Company in February 2008 as Headof Welding Consumables, Market Development Division. MrOng holds a Bachelor of Science in Business Administrationdegree from TUE, Philippines. He has more than 25 years ofregional sales and marketing experience and is responsiblefor developing the Asia market for welding consumables.Mr Ong Beng Tiong joined the Company in 2009 as Headof Welding Equipment. Mr Ong holds a Bachelor of Engineering(Hons) degree from the University of Birmingham, UnitedKingdom. He has more than 16 years of regional sales andmarketing experience and is responsible for developing theAsia market for welding equipment.Mr Anthony Goh is the Head of Offshore Sales and hasbeen with the Group since 1986. Mr Goh has more than 25years of sales experience and is responsible for increasing thesales and profi tability of the offshore business in the region.Mr Adrian Hong joined the Company in 2009 as SalesManager and assumed the role of Deputy Head, WeldingAccessories in January 2011. Mr Hong holds a Bachelorof Science in Business Administration degree from HawaiiPacifi c University and possessed more than 15 years of salesexperience.Mr Tan Kean Hooi has been the General Manager of NIGGases Sdn Bhd since 1993 and is responsible for the gasbusiness in the central region of Malaysia. He holds a Bachelorof Architecture degree from the University of Strathclyde, anda Housing Building Planning degree from University ScienceMalaysia (USM).Mr Cheang Fook Sam is the General Manager of HerculesMachinery Gases Sdn Bhd and NIG Utara Sdn Bhd. With morethan 30 years of industrial sales experience, he is responsiblefor the gas and equipment sales activities in the northernregion of Malaysia.Mr Tan Lian Khar is the Managing Director and one of theco-founders of Eversafe Extinguisher Sdn Bhd. Mr Tan hasmore than 30 years of experience in the manufacturing andmarketing of fi refi ghting equipment in the region.Mr Chow Teow Wai is the Executive Director and one of theco-founders of Eversafe Extinguisher Sdn Bhd. Mr Chow is alsothe Managing Director of Jiangyan Eversafe Fire EquipmentCo Ltd. He has more than 30 years of experience in themanufacturing of fi refi ghting equipment. He is responsiblefor the overall setup and operation of Jiangyan Eversafe FireEquipment Co Ltd.Mr Dennis Teo is the Operations Director of Power WeldSdn Bhd and has more than 20 years of experience in themanufacturing and marketing of welding electrodes andconsumables in Malaysia.Ms Iris Yap is the Senior Manager, Corporate Services andthe Company Secretary of the Group. Ms Yap has been withthe Group for over 20 years and oversees the corporatesecretarial, legal and general administration of the Group.Ms Yap holds a Bachelor in Business Administration degreefrom La Trobe University, Australia. She is a Fellow of theInstitute of Chartered Secretaries and Administrators (ICSA)and a member of the Singapore Association of the Institute ofChartered Secretaries and Administrators (SAICSA).Mr Koh Chee Han joined the Company in November 2007and assumed the role of Group Financial Controller in January2011. Mr Koh holds a Bachelor of Accountancy degree fromthe Singapore Nanyang Technological University and has morethan 5 years of audit experience before joining the Group.Mr. Koh oversees the local and regional fi nance group andis responsible for the full spectrum of financial operations,budgeting, internal controls and risk management.21

A Stronger Leeden in Asia.CorporateInformationBoard of DirectorsSteven Tham Weng CheongChairman & CEOKelvin Lee Chee FattManaging Director & COOLeslie StruysLead Independent DirectorPhilip Hong Peng WaiIndependent DirectorLoh Weng WhyeIndependent DirectorHendra HarjadiNon-Executive DirectorAudit CommitteePhilip Hong Peng Wai (Chairman)Leslie StruysLoh Weng WhyeRemuneration CommitteeLeslie Struys (Chairman)Loh Weng WhyePhilip Hong Peng WaiNominating CommitteeLoh Weng Whye (Chairman)Leslie StruysSteven Tham Weng CheongRisk Management CommitteeSteven Tham Weng Cheong (Chairman)Kelvin Lee Chee FattKoh Chee HanIris YapEileen TeeRegistered Office1 Shipyard RoadSingapore 628128Telephone : (65) 6266 4868Facsimile : (65) 6266 2026Email : enquiry@leedenlimited.comWebsite : www.leedenlimited.comAuditorsErnst & Young LLPCertifi ed Public AccountantsPartner-in-charge : Terry Wee(Appointed during fi nancial year 2010)Share RegistrarBoardroom Corporate & Advisory Services Pte Ltd50 Raffl es Place, #32-01Singapore Land TowerSingapore 048623Telephone : (65) 6536 5355Facsimile : (65) 6536 1360Principal BankersANZ SingaporeBangkok Bank Public Company LimitedCIMB Bank BerhadCitibank, NADBS Bank LimitedHSBC Bank Malaysia BerhadKBC Bank N.V.Malayan Banking BerhadMizuho Corporate Bank, LtdOversea-Chinese Banking Corporation LimitedRHB Bank BerhadStandard Chartered BankCompany SecretaryIris Yap Yin Yin, FCIS22

Corporate Governance ReportLeeden Limited Annual Report 2010Leeden Limited (the “Company” or “Leeden” or “Group”) continues to be committed to developing and upholding the standardsof corporate governance, guided by the principles and guidelines of the Singapore Code of Corporate Governance 2005 (the“Code”).This Corporate Governance Report describes the Company’s corporate governance practices and activities that were in place forthe financial year 2010. In line with the Code, the Board of Directors (the “Board”) hereby confirms that the Company has adheredto the Code and all deviations from the Code are disclosed and explained.BOARD OF DIRECTORSPrinciple 1: Board’s Conduct of its AffairsThe Board of Directors (the “Board”) conducts regular scheduled meetings on a quarterly basis. Ad-hoc meetings are convenedas and when necessary. During the year, the Board met four times.The principal roles of our Board are as follows:-♦♦♦♦♦♦♦♦Formulating and approving the Group’s policies, strategies and financial objectives;Approving annual budgets, major funding proposals, investment and divestment proposals;Overseeing the processes for evaluating the adequacy of risk management, internal controls, financial reporting andcompliance;Reviewing and approving any interested person transactions;Approving the nomination of board members and the appointment of key executives;Reviewing and endorsing the recommended framework of remuneration for the Board and key executives;Setting values and standards of the Company and ensuring that obligations to shareholders are understood; andAssuming responsibilities for compliance with Corporate Governance.The Board is obliged to act in good faith and will consider at all times, the interest of the Company. The Company has adopted aset of Approving Authority & Limit, setting out the level of authorization required for specified transactions, including those thatrequire Board’s approval.To assist the Board in executing its responsibilities, the Board is supported by the Audit Committee, Nominating Committee andRemuneration Committee. In April 2010, the Board formed the Risk Management Committee to assist the Board in reviewing riskin the areas of operational and strategic risk, financial risk (including IT support), regulatory and compliance risk and also humanresource management risk.These Committees function within clear defined terms of reference, which are reviewed on a regular basis, to ensure effectivenessof each Committee.Upon appointment of a director, orientation program is organized for the newly appointed director to ensure that incoming directoris familiar with the Company’s business activities and directions of the Group. On an ongoing basis, the Company will considerrelevant training for the directors, from time to time. Relevant courses include seminars conducted by the Singapore Institute ofDirectors, Singapore Stock Exchange or other training institutes. To enhance the Directors’ knowledge of the business operationof the Group, visits to the various business locations including Malaysia, Thailand, Indonesia and China are arranged from timeto time.A formal letter is provided to each newly-appointed Director, explaining their statutory and other duties and responsibilities as adirector.23

A Stronger Leeden in Asia.Corporate Governance ReportThe attendances of the Directors at the meetings of the Board and the Board Committees, as well as the frequency of suchmeetings for FY2010 are as follows:Name of DirectorsBoardAuditCommitteeNominatingCommitteeRemunerationCommitteeRiskManagementCommittee #Number of Meetings held 4 4 1 4 6Number of Meetings attendedSteven Tham 4 4 1 – 6Kelvin Lee 4 4 – – 6Leslie Struys 4 4 1 4 –Philip Hong 4 4 – 3* –Loh Weng Whye 4 4 1 4 –Hendra Harjadi 3 – – – –Tony Chan** 1 1 1 1 –Lim How Boon*** 1 – – – –* Philip Hong was appointed a member of Remuneration Committee on 8 March 2010** Tony Chan resigned as a Director on 8 March 2010*** Lim How Boon retired as a Director on 23 April 2010#The Risk Management Committee was formed on 23 April 2010Principle 2: Board Composition and BalancePresently, the Board comprises six directors, three of whom are independent directors. The Board is of the view that the currentboard size is appropriate, taking into account the nature and scope of the Company’s operations. The Board is able to exerciseobjective judgment on corporate and business affairs independently, in particular, from the Management of the Company.The Board members as at the date of this Report are:Steven Tham Weng Cheong (Chairman & CEO)Kelvin Lee Chee Fatt (Managing Director & COO)Leslie Struys (Lead Independent Director)Philip Hong Peng Wai (Independent Director)Loh Weng Whye (Independent Director)Hendra Harjadi (Non-Executive Director)The Non-Executive Directors are involved in reviewing the corporate strategies, business operations and practices of the Group aswell as reviewing the performance of the Management in ensuring that set goals and objectives are met.The Nominating Committee has reviewed the independence of the Directors for the financial year ended 31 December 2010 inaccordance with the Code’s definition of independence and is of the view that three of the Directors are independent directorswithin the meaning of the Code.Principle 3: Role of Chairman and Chief Executive Officer (“CEO”)The Board is of the view that at the current stage of development of the Group, it is in the best interest of the Group to adopt asingle leadership structure, whereby the CEO and Chairman of the Board is the same person, so as to ensure that the decisionmakingprocess of the Group would not be unnecessarily hindered or delayed. Mr Steven Tham continues to be the Chairmanand CEO of the Group. The Board is of the opinion that sufficient checks and safeguards are in place to ensure that theprocess of decision-making is independent and based on collective decisions without any individual exercising any considerablepower or influence. As the Chairman, Mr Tham is responsible for the workings of the Board and ensuring compliance with theGroup’s guidelines on corporate governance. He facilitates effective contributions of the Non-Executive Directors and encouragesconstructive relationships between Executive Directors and Non-Executive Directors. As the CEO, Mr Tham plays a pivotal role inthe development and execution of policies and strategies and the day-to-day management of the Group.With the appointment of Mr Leslie Struys as the Company’s lead independent director, shareholders will have an alternativeavenue to raise their concerns, especially when contacts through the normal channels of the Chairman/CEO have failed or whensuch contact is inappropriate.24

Corporate Governance ReportLeeden Limited Annual Report 2010BOARD COMMITTEESPrinciple 4: Board MembershipNominating CommitteeThe Nominating Committee (“NC”) comprises three Directors, majority of whom are independent. In addition, the Chairman of theNC is not, and not directly associated with, a substantial shareholder.The members of the NC as at the date of this report are:-Mr Loh Weng Whye Chairman (Independent)Mr Leslie Struys(Independent)Mr Steven Tham(Executive)The NC met once during the financial year to evaluate Board’s performance/effectiveness as guided by the Terms of Reference.The principal duties and responsibilities include:♦♦♦♦♦Making recommendations to the Board on the appointment of new executive and non-executive Directors;Determining annually whether or not a Director is independent as well as put in place plans for succession, in particularfor the Chairman and Chief Executive Officer;Recommending Directors who are retiring by rotation to be put forward for re-election;Deciding whether or not a Director is able to and has been adequately carrying out his duties as a Director of the Company;andEvaluating the performance and effectiveness of each individual Director as well as the Board as a whole.In accordance with the Company’s Articles of Association, all Directors, including the CEO, submit themselves for re-nomination andre-election at regular intervals of at least once every three years. Pursuant to Article 93 of the Company’s Article of Association,one-third of the Board is subject to re-election annually. For this forthcoming Annual General Meeting, Mr Kelvin Lee Chee Fattand Mr Hendra Harjadi will retire by rotation. Mr Leslie Struys will retire pursuant to S153(6) of the Companies Act, Cap. 50. TheNC has recommended, Mr Kelvin Lee Chee Fatt, Mr Hendra Harjadi and Mr Leslie Struys for re-election at the forthcoming AnnualGeneral Meeting.Having considered their performance and contributions, the Board accepted the NC’s recommendation and accordingly, Mr KelvinLee Chee Fatt, Mr Hendra Harjadi and Mr Leslie Struys will be offering themselves for re-election and re-appointment at theforthcoming Annual General Meeting.When the need for a new director arises, the NC, in consultation with the Board, determines the selection criteria and identifiescandidates with the appropriate expertise, skills and experience for nomination to the Board.The profiles of the Directors are set out on pages 06 to 07 of this Annual Report.Principle 5: Board PerformanceThe NC, in considering the re-appointment of any Director, evaluates the performance of the Director. The NC has established areview process to assess the performance and effectiveness of the Board as a whole as well as to access the contribution ofindividual Directors. The assessment parameters include attendance record at meetings of the Board and Board Committees,participation at meetings and contributions. Review of Board’s performance is undertaken by the NC on an annual basis and thefindings reported to the Board.The NC has conducted annual review and assessment on the performance and effectiveness of the Board as a whole and onthe effectiveness and contribution of each individual director for FY2010. The NC is satisfied that the current Board comprisesdirectors with a wide range of skills, experience and expertise in operational, management, financial, banking, engineering,economics and real estate, whose collective and vast experience ensure that the Board is equipped to deal with a wide rangeof issues to meet the Company’s objectives and major issues. Also, no individual or a group of individuals dominate the Board.The NC formed the view and reported to the Board that the Board as a whole and individual Directors are capable to and haveadequately and effectively carried out their duties.25

A Stronger Leeden in Asia.Corporate Governance ReportPrinciple 6: Access to InformationDirectors are provided with quarterly financial reports and are furnished with relevant information from time to time on materialtransactions to enable them to make informed decision. Board papers are circulated for meetings of the Board and Committeesin advance, to enable the Directors to review the information and obtain further explanations, where necessary.Directors, either as a group or individually, in the furtherance of their duties as directors, has access to independent professionaladvice, if necessary, at the Company’s expenses.The Directors have separate and independent access to the Company Secretary and senior management of the Company at alltimes. The Company Secretary attends the board meetings and assists the Board in ensuring that established Board proceduresare followed and all relevant statutes and regulations that are applicable to the Company are complied with.The Board is accountable to the shareholders and oversees the management of the business and affairs of the Group.Principle 7 : Procedures for Developing Remuneration PoliciesPrinciple 8 : Level of Mix of RemunerationPrinciple 9 : Disclosure on RemunerationRemuneration CommitteeThe Remuneration Committee (“RC”) is regulated by a set of written terms of reference endorsed by the Board setting out theirduties and responsibilities. The RC comprises three Directors, all of whom are Independent Directors.Mr Leslie Struys Chairman (Independent)Mr Loh Weng Whye(Independent)Mr Philip Hong Peng Wai(Independent)According to its terms of reference, the responsibilities of the RC include to review and approve recommendations on remunerationincluding but not limited to directors’ fees, salaries, allowances, bonuses, share options and benefits-in-kind. The RC met 4 timeslast year. The RC does possess broad knowledge in this area and have access to professional advice both from the internalhuman resource personnel and external remuneration professionals. The RC does not participate in any decisions concerningtheir own remuneration package.RC has adopted a framework for reviewing the remuneration of non-executive Directors. It consists of a base fee, membership feefor Board Committee as well as fees for being the chairman of a Board Committee. Amount of time and level of responsibilitiesare taken into account when reviewing the remuneration. Fees for non-executive Directors are subject to shareholders’ approvalat the Company’s Annual General Meeting. Executive Directors are not entitled to base fees or fees for membership of BoardCommittee.During the year, the RC has engaged Aon Hewitt, one of the world’s premier human capital consulting firm, to review thecompensation packages and design incentive compensation for the Chief Executive Officer, Chief Operating Officer and seniormanagers. The remuneration packages for Chief Executive Officer and Chief Operating Officer consist of a performance bonusbased on the Group’s profitability. The RC also ensures that the remuneration of the Chief Executive Officer and Chief OperatingOfficer is on par with the industrial standards and comparable companies.The RC’s principal functions are to:♦♦♦♦Review and recommend to the Board in consultation with the Chairman and CEO a remuneration framework so as todetermine a specific remuneration package and employment terms for each of the executive directors and key managementexecutives of the Group;Recommend to the Board in consultation with the Chairman and CEO a share option scheme or long term incentiveschemes from time to time;Ensure that all aspects of remunerations are covered which include directors’ fee, salaries, allowances, bonuses, shareoptions and benefits-in-kind; andCompare the remuneration packages of directors within the industry and comparable companies so as to find a meaningfulway of assessing the performance of individual executive directors. The remuneration packages shall include a performancerelatedelement.The RC administers the Ace Dynamics Share Option Scheme and Leeden Share Option Scheme 2007, which were approved byshareholders on 19 February 2000 and 8 August 2007, respectively.26

Corporate Governance ReportLeeden Limited Annual Report 2010Level and Mix of Remuneration of DirectorsThe following table shows a breakdown (in percentage) of each Director’s remuneration paid in the year ended 31 December2010.Name of Directors Salary Bonus Benefits Fees Total% % % % %$1,000,001 to $1,250,000Steven Tham 36 62 2 0 100$500,001 to $750,000Kelvin Lee 36 61 3 0 100Below $250,0000Lim How Boon (Retired on 23 April 2010) 49 49 2 0 100Philip Hong – – – 100 100Leslie Struys – – – 100 100Loh Weng Whye – – – 100 100Hendra Harjadi – – – 100 100Tony Chan (Resigned on 8 March 2010) – – – 100 100The top five executives of the Group (who are not directors) are Yip Sook Fun, Chow Seow Woon Edwin, Goh Eng Huat Robert, ChanKwai Sin Philip and Yap Yin Yin Iris. For the financial period under review, the remuneration of Chan Kwai Sin Philip falls under theS$250,000 to S$500,000 band. The other four executives’ remuneration are below the S$250,000 band.For the financial year ended 31 December 2010, there were no employees in the Group who are immediate family members of aDirector and whose remuneration exceeds S$150,000.Principal 10 : Accountability and AuditPrinciple 11 : Audit CommitteePrinciple 12 : Internal ControlsAudit CommitteeAs at the date of this report, the Audit Committee (“AC”) comprises the following members:Mr Philip Hong Peng Wai Chairman (Independent)Mr Leslie Struys(Independent)Mr Loh Weng Whye(Independent)The AC members have had many years of experience in senior management positions in both the financial and industrial sectors.All members are financially literate and have accounting or related financial management expertise or experience. The AC membersare all Independent Directors.The role of the AC is regulated in its Terms of Reference which has been approved by the Board. The Terms of Reference definesthe purpose, authority and responsibilities of the AC. The AC is authorized to investigate any matters specified in the Terms ofReference.During the financial year, the AC met four times and performed the following key functions:♦♦♦♦♦♦♦Reviews with the internal auditors, the scope and the results of internal audit procedures and their evaluation of theoverall internal control systems and any significant findings;Reviews with the external auditors, their audit plan, risk assessment, findings for the external audit process and any otherrelevant matters;Reviews significant financial reporting issues and judgments to ensure the integrity of the financial statements and anyformal announcements in relation to financial performance;Reviews the interim and annual financial statements before submission to the Board for release to SGX-ST;Reviews and makes recommendations to the Board on the appointment of external auditors;Reviews interested person transactions, if any, as set out in the Listing Rules of SGX-ST; andReviews all non-audit services provided by the firm of external auditors, if any, to determine if the provision of such serviceswould affect the independence of the external auditors.27

A Stronger Leeden in Asia.Corporate Governance ReportThe AC has the express power to conduct or authorize investigations into any matters within its terms of reference, has full accessto and co-operation by the Management and full discretion to invite any Director or executive officer to attend its meetings. Allmajor findings and recommendations are brought to the attention of the Board of Directors.In performing its functions, the AC also meets with external auditors without the presence of the Company’s management at leastonce annually. Such meetings allow for a more open discussion on any issues of concerns.During the year, AC has reviewed the effectiveness of the Group’s material internal controls, including financial and operationalcompliance controls, and risk management. The processes used by the AC to review the effectiveness of the system of internalcontrol and risk management include discussions with management and auditors on the risks identified and the review ofsignificant issues arising there from.For the year under review, no non-audit service was provided by the external auditors to the Group.The Directors are of the opinion that, in the absence of any evidence to the contrary, the system of internal controls providesreasonable, but not absolute, assurance that the Group will not be adversely affected by any event that could reasonably beforeseen as it strives to achieve its business objectives.Whistle Blowing PolicyThe Company has adopted a Policy and Procedure on Whistle Blowing. The Company has provided employees with well-definedand accessible channels within the Group to raise concerns about possible improprieties in matters of financial reporting such asfraud, corruption or other matters. Upon receipt of such complaint, the AC would exercise discretion on how to proceed with theinvestigation, thereafter recommend necessary actions to be taken.The AC has received no complaint as at the date of this report.Principle 13: Internal AuditThe Company has outsourced its internal audit function to a certified public accounting firm. The internal auditors plan its internalaudit schedules in consultation with, but independent of the Management. The audit plan is submitted to the AC for approval priorto the commencement of the internal audit. With the assistance of the AC, the Board reviews the effectiveness of the Company’sinternal control on an on-going basis, provides its perspective on management control and ensures appropriate actions whenrequired.The internal auditors comply with the Standards for the Professional Practice of Internal Auditing developed by the Institute ofInternal Auditors.COMMUNICATION WITH SHAREHOLDERSPrinciple 14 : Communication with ShareholdersPrinciple 15 : Promoting Greater Participation by ShareholdersIn complying with the Code:-♦♦♦♦♦♦All information as required under the Singapore Exchange’s disclosure policy is disseminated to shareholders through theSGXNET on a timely basis and the Company does not practice selective disclosure;Price sensitive announcements including interim and full-year results are released through SGXNET within the mandatoryperiods;The Annual Report is sent to all shareholders of the Company at least 14 days before the meeting and the Notice of AnnualGeneral Meeting (“AGM”) is made available on SGX-ST’s website;Members of the Board and various Board committees together with the External Auditor are present and available toaddress questions at the AGM;Members of the Company are encouraged to attend the AGM and in the event that the member cannot attend the AGM,the Articles of Association of the Company allow a member to appoint one or two proxies to attend and vote on behalf ofthe member. At the AGM, shareholders are given the opportunity to voice their constructive views and direct questionsregarding the Group to the Management or the Directors, including the chairmen of the Audit Committee, RemunerationCommittee and Nominating Committee; andAll the resolutions at the AGM are single item resolutions.28

Corporate Governance ReportLeeden Limited Annual Report 2010In preparation for the annual general meeting, shareholders are encouraged to refer to SGX’s investor guides, namely ‘An Investor’sGuide To Reading Annual Reports’ and ‘An Investor’s Guide To Preparing For Annual General Meetings’. The guides, in both Englishand Chinese versions are available at the SGX website via this link :http://www.sgx.com/wps/portal/marketplace/mp-en/investor_centre/investor_guideDEALING WITH SECURITIES[SGX-ST Listing Rule 1207 (18)]The Company has adopted an internal code to provide guidance with regards to dealing in the Company’s securities by Directorsand senior officers of the Group.The guideline sets out window periods where trading in the Company’s securities are not allowed. Directors and senior officers arealso expected to observe insiders trading laws at all times even when dealing in securities outside the window periods. They arealso discouraged from dealing in the Company’s share on short-term considerations. Directors and senior officers are required toreport to the Company Secretary whenever they deal in the Company’s shares.RISK MANAGEMENTIn April 2010, as part of the effort to further strengthen the Group’s risk management processes, a Risk Management Committeewas formed to assist the Board to review risk management in the areas of operational and strategic risk, financial risk (includingIT support), regulatory and compliance risk and also human resource management risk. The Risk Management Committee (RMC)comprises the following members:Mr Steven Tham Chairman (Executive)Mr Kelvin Lee(Executive)Ms Iris YapMr Koh Chee HanMs Eileen TeeDuring the financial year, the RMC met six times and performed the following key functions:♦♦♦to review with Management, and, where needed, with external consultants on areas of risk that may affect the viabilityand smooth operations of the Company, as well as Management’s risk mitigation efforts, with the view of safeguardingshareholder’s interest and Group assets;to direct and work with Management to develop and review policies and processes to address and manage identified areasof risk in a systematic and structured manner; andto make recommendations to the Board in relation to business risks that may affect the Company, as and when these mayarise.The Group’s financial risk management is discussed under Note 37 to the Notes to the Financial Statements on pages 92 to98.MATERIAL CONTRACTS[SGX-ST Listing Rule 1207 (8)]No material contracts were entered into between the Company or any of its subsidiaries involving the interest of the CEO or anydirector or controlling shareholder of the Company or their associates, either still subsisting by end of the financial year or if notthen subsisting, entered into since the end of the previous financial year.INTERESTED PERSON TRANSACTIONSThe Company has adopted an internal policy governing procedures for the identification, approval and monitoring of transactionswith interested persons. All interested person transaction is subject to review by the AC.During the financial year, there was no interested person transaction entered into by the Group.29

A Stronger Leeden in Asia.Directors' ReportThe Directors are pleased to present their report to the members together with the audited consolidated financial statements ofLeeden Limited (the “Company”) and its subsidiary companies (collectively, the “Group”) and the balance sheet and statement ofchanges in equity of the Company for the financial year ended 31 December 2010.DirectorsThe Directors of the Company in office at the date of this report are:Steven Tham Weng Cheong – Chairman & CEOKelvin Lee Chee Fatt – Managing Director & COOLeslie StruysLoh Weng WhyeHendra HarjadiPhilip Hong Peng WaiArrangements to enable Directors to acquire shares and debenturesOther than Leeden Share Option Scheme 2007 and Ace Dynamics Share Option Scheme, neither at the end of nor at any timeduring the financial year, was the Company a party to any arrangement whose objects are, or one of whose object is, to enablethe Directors of the Company to acquire benefits by means of the acquisition of shares in or debentures of the Company or anyother body corporate.Directors’ interests in shares and debenturesThe following Directors, who held office at the end of the financial year, had, according to the register of directors’ shareholdingsrequired to be kept under Section 164 of the Singapore Companies Act, Cap. 50, an interest in shares and share options of theCompany and related corporations (other than wholly-owned subsidiary companies) as stated below:Direct interestDeemed interestName of DirectorAt1.1.2010At31.12.2010At21.1.2011At1.1.2010At31.12.2010At21.1.2011The CompanyNumber of ordinary sharesSteven Tham Weng Cheong 6,370,000 8,112,000 9,312,000 32,000,000 32,000,000 32,000,000Kelvin Lee Chee Fatt – – 500,000 22,047,000 22,747,000 22,747,000Leslie Struys – – – 2,842,000 2,842,000 2,842,000Loh Weng Whye 601,600 601,600 601,600 – – –Hendra Harjadi – – – 10,598,000 11,837,000 12,062,000Philip Hong Peng Wai – – – – – –Option to subscribe forordinary sharesSteven Tham Weng Cheong 3,390,000 3,390,000 2,190,000 – – –Kelvin Lee Chee Fatt 2,500,000 2,500,000 2,000,000 – – –Leslie Struys 420,000 420,000 620,000 – – –Loh Weng Whye 400,000 400,000 600,000 – – –Hendra Harjadi 400,000 400,000 600,000 – – –Philip Hong Peng Wai – – 200,000 – – –Except as disclosed in this report, no director who held office at the end of the financial year had interests in shares, shareoptions, warrants or debentures of the Company, or of related corporations, either at the beginning of the financial year, or dateof appointment if later, or at the end of the financial year.30

Directors' ReportLeeden Limited Annual Report 2010Share options(a)At the Extraordinary General Meeting held on 19 February 2000 and 8 August 2007, shareholders approved theadoption of the Ace Dynamics Share Option Scheme (“Scheme I”) and Leeden Share Option Scheme 2007 (“Scheme II”)respectively.Scheme IOptions may be granted to selected employees of the Group including employees of its associated companies, executiveand non-executive directors. Controlling shareholders and their associated companies are not eligible to participate in thescheme. Further details are set out in the circular to shareholders dated 28 January 2000 (“Circular I”).Under the rules of the scheme as set out in Circular I, the duration of the scheme is subject to a maximum of 5 financialyears commencing with the financial year in which the first option was granted under the scheme. As the first option wasgranted during the financial year 2000, the scheme has ceased operation in the financial year ended 31 December 2004(the “Period of the Scheme”). However, all outstanding options under the scheme shall continue to be valid subject tothe rules of the scheme. The share options granted in 2000 in connection with the scheme were issued at a discount of$0.05 per share.Scheme IIAt an Extraordinary General Meeting held on 8 August 2007, shareholders approved the Leeden Share Option Scheme2007 for the granting of options to eligible confirmed Group employees, including employees of associated companies,executive and non-executive directors and controlling shareholder. Further details are set out in the circular to shareholdersdated 17 July 2007.Three tranches of options were granted pursuant to the scheme. Tranche 1 and 3 have vesting period of 2 years whileTranche 2 has vesting periods between 2 to 4 years. Details of the options granted are as follows:Discountper share($)Exerciseprice($) Number of optionsTranche Date of grantDuration(years) Expiry date1 28 September 2007 10 27 September 2017 0.09 0.40 2,000,0002 28 September 2007 10 27 September 2017 0.07 0.42 2,190,0003A 23 October 2007 10 22 October 2017 0.11 0.48 4,360,0003B 23 October 2007 5 22 October 2012 0.11 0.48 820,0003C 05 August 2009 10 4 August 2019 0.08 0.28 5,720,0003D 05 August 2009 5 4 August 2014 0.08 0.28 800,000The Remuneration Committee administering the schemes comprises Leslie Struys, Philip Hong Peng Wai and Loh WengWhye.(b)Details of share options to Directors to subscribe for ordinary shares under the schemes are as follows:Scheme IName of DirectorOptions grantedduring thefinancial yearAggregate optionsgranted sincecommencement ofthe Scheme to theend of financialyearAggregateoptions lapsed/exercised sincecommencement ofthe Scheme to theend of financialyearAggregate optionsoutstanding as atend of financialyearSteven Tham Weng Cheong – 1,200,000 – 1,200,000Kelvin Lee Chee Fatt – 500,000 – 500,00031

A Stronger Leeden in Asia.Directors' ReportScheme IIName of DirectorOptions grantedduring thefinancial yearAggregate optionsgranted sincecommencement ofthe Scheme to theend of financialyearAggregateoptions lapsed/exercised sincecommencement ofthe Scheme to theend of financialyearAggregate optionsoutstanding as atend of financialyearSteven Tham Weng Cheong – 2,190,000 – 2,190,000Kelvin Lee Chee Fatt – 2,000,000 – 2,000,000Leslie Struys – 420,000 – 420,000Loh Weng Whye – 400,000 – 400,000Hendra Harjadi – 400,000 – 400,000(c)Details of share options to employees to subscribe for ordinary shares under the schemes are as follows:Scheme IAggregate optionsgranted sincecommencement ofthe Scheme to theend of financialyearAggregateoptions lapsed/exercised sincecommencement ofthe Scheme to theend of financialyearAggregate optionsoutstanding as atend of financialyearOptions grantedduring theName of participantfinancial yearOthers below 5% individually – 1,355,000 640,000 715,000Scheme IIName of participantOptions grantedduring thefinancial yearAggregate optionsgranted sincecommencement ofthe Scheme to theend of financialyearAggregateoptions lapsed/exercised sincecommencement ofthe Scheme to theend of financialyearAggregate optionsoutstanding as atend of financialyearGranted 5% or more of the total options under the planSteven Tham Weng Cheong – 2,190,000 – 2,190,000Kelvin Lee Chee Fatt – 2,000,000 – 2,000,000Others below 5% individually – 11,700,000 1,980,000 9,720,000Steven Tham Weng Cheong is a controlling shareholder of the Company.(d)During the financial year, options that lapsed are as follows:Scheme IIOptions granted inNumber of options lapsed2007 140,00032

Leeden Limited Annual Report 2010Directors' Report(e)At the end of the financial year, unissued shares under option comprise the following:Scheme IPrice per share payableNumber ofOptions granted in in full upon applicationExercise periodordinary shares2004 $0.20 24.08.2005 to 23.08.2011 2,415,000Scheme IIOptions granted inPrice per share payablein full upon applicationExercise periodNumber ofordinary shares2007 $0.42 28.09.2009 to 27.09.2017 730,0002007 $0.42 28.09.2010 to 27.09.2017 730,0002007 $0.42 28.09.2011 to 27.09.2017 730,0002007 $0.40 28.09.2009 to 27.09.2017 2,000,0002007 $0.48 23.10.2009 to 22.10.2017 2,430,0002007 $0.48 23.10.2009 to 22.10.2012 820,0002009 $0.28 05.08.2011 to 04.08.2019 5,670,0002009 $0.28 05.08.2011 to 04.08.2014 800,000No other options were granted during the financial year.Bonus WarrantsOn 16 February 2007 and 6 March 2007, the Company announced a bonus issue of warrants (the “Bonus Warrants”) to itsshareholders on the basis of one Bonus Warrant for every five existing ordinary shares in the capital of the Company held by theentitled shareholders as at the books closure date. Each Bonus Warrant shall confer on the holder the right to subscribe, in cash,for one new ordinary share (the “New Share”) at an exercise price of $0.25 for each New Share and expiring on the date fallingtwenty-four months after the date of listing of the Bonus Warrants.The date of listing of the Bonus Warrants is 17 April 2007. In 2009, 3,680,163 Bonus Warrants were exercised and the balanceof 2,891,687 Bonus Warrants lapsed, leaving no Bonus Warrants outstanding as at 31 December 2009.Directors’ contractual benefitsExcept as disclosed in the financial statements, since the end of the previous financial year, no Director of the Company hasreceived or become entitled to receive a benefit by reason of a contract made by the Company or a related corporation with theDirector, or with a firm of which the Director is a member, or with a company in which the Director has a substantial financialinterest.Audit CommitteeThe Audit Committee at the date of this report comprises the following members who, are independent Directors:Philip Hong Peng Wai (Chairman)Leslie StruysLoh Weng WhyeThe Audit Committee (“AC”) carried out its functions in accordance with Section 201B(5) of the Singapore Companies Act, Cap.50, including the following:• Reviews the audit plans of the internal and external auditors of the Company and reviews the internal auditors’ evaluationof the adequacy of the Company’s system of internal accounting controls and the assistance given by the Company’smanagement to the external and internal auditors;• Reviews the interim and annual financial statements and the auditors’ report on the annual financial statements of theCompany before their submission to the Board of Directors;33

A Stronger Leeden in Asia.Directors' Report• Reviews effectiveness of the Company’s material internal controls, including financial, operational and compliance controlsand risk management via reviews carried out by the internal auditors;• Meets with the external auditors, other committees, and management in separate executive sessions to discuss anymatters that these groups believe should be discussed privately with the AC;• Reviews legal and regulatory matters that may have a material impact on the financial statements, related compliancepolicies and programmes and any reports received from regulators;• Reviews the cost effectiveness and the independence and objectivity of the external auditors;• Reviews the nature and extent of non-audit services provided by the external auditors;• Recommends to the board of directors the external auditors to be nominated, approves the compensation of the externalauditors, and reviews the scope and results of the audit;• Reports actions and minutes of the AC to the board of directors with such recommendations as the AC considersappropriate; and• Reviews interested person transactions in accordance with the requirements of the Singapore Exchange Securities TradingLimited (“SGX-ST”)’s Listing Manual.For the year under review, no non-audit service was provided by the external auditors to the Group. The AC has also conducted areview of interested person transactions.The AC convened four meetings during the year. The AC has also met with internal and external auditors, without the presence ofthe Company’s management, at least once a year.Further details regarding the AC are disclosed in the Report on Corporate Governance.AuditorsErnst & Young LLP have expressed their willingness to accept re-appointment as auditors.On behalf of the Board of Directors,Steven Tham Weng CheongDirectorKelvin Lee Chee FattDirectorSingapore15 March 201134

Leeden Limited Annual Report 2010Statement by Directors Pursuant to Section 201(15)We, Steven Tham Weng Cheong and Kelvin Lee Chee Fatt, being two of the Directors of Leeden Limited, do hereby state that, inthe opinion of the Directors:(i)(ii)the accompanying balance sheets, consolidated income statement, consolidated statement of comprehensive income,statements of changes in equity, and consolidated cash flow statement together with notes thereto are drawn up so as togive a true and fair view of the state of affairs of the Group and of the Company as at 31 December 2010 and the resultsof the business, changes in equity and cash flows of the Group and the changes in equity of the Company for the yearended on that date, andat the date of this statement, there are reasonable grounds to believe that the Company will be able to pay its debts asand when they fall due.On behalf of the Board of Directors,Steven Tham Weng CheongDirectorKelvin Lee Chee FattDirectorSingapore15 March 201135

in a stockless cash crop system under Norwegian conditions. Please contactrandi.seljaasen@bioforsk.no for further information and publications from the study.Animal research facilitiesOrganically managed herds on research farmsOrganically managed herds on research farms. YOC is defined as the first year the herdwas managed according to organic standards.Institution, location Type of herd Feeding YOC Contact personNO19. Norwegian University of 18 dairy cows Individual 1995 trygve.skjevdal@umb.noLife Sciences, Ås (UMB)NO20. Bioforsk, Tjøtta 70 adult sheep Group 1997 vibeke.lind@bioforsk.noUMB, organic herdsMost organic dairy farmers in Norway have spring calving dairy cows and pasture basedmilk production, often due to the general poor quality of silage used for winter feeding.Hence, there is a need to increase the organic milk production in late autumn and winter.Recently revised organic standards require that all feedstuffs to dairy cows should beorganically produced, which also enhance the focus on improving the quality of on-farmproduced roughages. The UMB has conducted the project “Milk production and quality andN use efficiency by dairy cows offered white or red clover silages” to compare white andred clover silages with and without concentrate supplementation, and the effects on milkproduction and quality, and N use efficiency. The experiment was carried out during thewinter 2004/2005 and will be repeated in 2005/2006. In addition to DM intake and milkyield, the treatments effects on milk quality, including the content and composition of fattyacids and phyto-oestrogens, will be evaluated. The herd is otherwise managed accordingto organic standards. The herd is kept in loose housing, and fodder consumption isrecorded continuously for each animal. The milk yield is recorder individually 14 times perweek, and body weight is recorded at each milk yield.A farm unit at UMB has been organically managed since 1991. The farm consists of 15 hain rotation and 6 ha used for pasture and a dairy herd with 18 dairy cows. Due to a feedingexperiment with dairy cows, the area and herd was temporarily expanded in 2002.Research farmsThere is not any farm that satisfies these criteriaOn-farm studiesNO21. On-farm study: Organic dairy farm, Bioforsk Organic Food and Farming Division,TingvollThe farmland belonging to the Norwegian Centre for Ecological Agriculture (NORSØK),where Bioforsk Organic Food and Farming Division (BOFF) is located, is managed as adairy farm with a herd of 13 dairy cows, 15 adult sheep and ca 30 laying hens. 18 hacultivated land and 8 ha pastures have been organically managed since 1995, by tenantswho own the livestock. Plots for research studies are rented from the tenants. For thecommercial dairy farm, BOFF researchers conduct annual registrations of yields, inaddition to regular soil sampling and estimation of nutrient budgets. A climatic loggerstation measures the local temperature and precipitation during the growing season. InAnalysis of facilities in OFF research in participating countries of CORE Organic.Arja Nykänen and Stefano Canali38

Consolidated Income Statementfor the Financial Year ended 31 December 2010Leeden Limited Annual Report 2010Note2010$’0002009$’000Turnover 4 191,470 186,148Cost of sales (139,101) (132,177)Gross profit 52,369 53,971Other income 5 4,272 4,349Distribution costs (26,694) (24,885)Administrative costs (11,879) (11,073)Other costs 5 (1,255) (3,336)Profit from operating activities 6 16,813 19,026Finance costs 7 (1,921) (2,016)Share of profit in associated companies 212 218Share of loss in joint venture company (21) –Profit before taxation 15,083 17,228Taxation 8 (3,244) (3,334)Profit after taxation 11,839 13,894Attributable to:Owners of the parent 7,621 8,898Non-controlling interests 4,218 4,99611,839 13,894Basic earnings per share (in cents) 9 4.37 5.12Diluted earnings per share (in cents) 9 4.31 5.05The accompanying accounting policies and explanatory notes form an integral part of the financial statements.37

Balance Sheetsas at 31 December 2010Leeden Limited Annual Report 2010GroupCompanyNote 2010 2009 2010 2009$’000 $’000 $’000 $’000Non-current assetsProperty, plant and equipment 10 68,051 59,217 462 555Subsidiary companies 11 – – 57,624 58,073Associated companies 12 10,085 8,803 – –Joint venture company 13 65 – – –Other investments 14 404 267 – –Intangible assets 15 5,030 5,179 – –Goodwill 16 176 176 – –83,811 73,642 58,086 58,628Current assetsDevelopment property 17 2,361 9,316 – –Amounts due from subsidiary companies 18 – – 3,755 7,835Amounts due from related parties 19 1,124 1,409 308 170Stocks 20 43,038 38,708 3,231 3,418Trade debtors 21 46,872 52,687 4,400 2,918Other debtors 22 6,771 1,298 97 158Prepayments 2,246 2,410 85 63Fixed deposits 24 325 308 – –Cash and bank balances 24 21,368 20,533 6,892 4,686124,105 126,669 18,768 19,248Current liabilitiesAmounts due to bankers 25 47,324 51,450 11,255 14,629Trade creditors 13,713 15,928 4,241 2,237Other creditors and accruals 26 8,990 7,951 1,485 1,453Hire purchase creditors 27 1,271 1,593 41 59Amounts due to related parties 19 3,682 2,380 – –Provision for taxation 1,566 740 14 1Derivatives 23 208 167 – –76,754 80,209 17,036 18,379Net current assets 47,351 46,460 1,732 869Non-current liabilitiesLong-term loans 28 13,594 11,254 2,922 5,999Hire purchase creditors 27 2,053 1,788 65 127Amounts due to a related party 29 – 967 – –Deferred tax liabilities 30 7,836 8,321 5 5(23,483) (22,330) (2,992) (6,131)Net assets 107,679 97,772 56,826 53,366Equity attributable to owners of the parentShare capital 31 53,979 53,822 53,979 53,822Treasury shares 31 (2,022) (2,022) (2,022) (2,022)Asset revaluation reserve 32 2,070 2,070 – –Capital reserve 32 890 857 297 264Employee share option reserve 32 2,213 1,782 2,213 1,782Accumulated profit/(losses) 19,782 15,471 2,359 (480)Foreign currency translation reserve 32 (1,376) (1,684) – –75,536 70,296 56,826 53,366Non-controlling interests 32,143 27,476 – –Total equity 107,679 97,772 56,826 53,366The accompanying accounting policies and explanatory notes form an integral part of the financial statements.39

A Stronger Leeden in Asia.Statements of Changes in Equityfor the Financial Year ended 31 December 2010SharecapitalTreasurysharesAccumulatedprofitAttributable to owners of the parentAssetrevaluationreserveCapitalreserveForeigncurrencytranslationreserveEmployeeshare optionreserveEquityattributableto owners ofthe parentNon-controllinginterests$’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000TotalequityGroupBalance at 1 January 2009: 52,900 (1,217) 8,315 2,070 763 (1,561) 1,091 62,361 24,836 87,197Net profit for the year – – 8,898 – – – – 8,898 4,996 13,894Other comprehensive income:- Foreign currency translation – – – – – (123) – (123) – (123)Total comprehensive income for the year – – 8,898 – – (123) – 8,775 4,996 13,771Dividends (Note 41) – – (1,742) – – – – (1,742) (2,356) (4,098)Exercise of employee share options 2 – – – – – – 2 – 2Expiry of employee share options – – – – 94 – (94) – – –Exercise of bonus warrants 920 – – – – – – 920 – 920Expenses of share-based payments – – – – – – 785 785 – 785Purchase of treasury shares – (805) – – – – – (805) – (805)Balance at 31 December 2009 53,822 (2,022) 15,471 2,070 857 (1,684) 1,782 70,296 27,476 97,772Balance at 1 January 2010 53,822 (2,022) 15,471 2,070 857 (1,684) 1,782 70,296 27,476 97,772Net profit for the year – – 7,621 – – – – 7,621 4,218 11,839Other comprehensive income:- Foreign currency translation – – – – 308 – 308 (964) (656)Total comprehensive income for the year – – 7,621 – – 308 – 7,929 3,254 11,183Dividends (Note 41) – – (1,749) – – – – (1,749) (148) (1,897)Change in ownership interest in subsidiarythat does not result in a loss of control – – (1,561) – – – – (1,561) 1,561 –Exercise of employee share options 157 – – – – – (29) 128 – 128Expiry of employee share options – – – – 33 – (33) – – –Expenses of share-based payments – – – – – – 493 493 – 493Balance at 31 December 2010 53,979 (2,022) 19,782 2,070 890 (1,376) 2,213 75,536 32,143 107,679The accompanying accounting policies and explanatory notes form an integral part of the financial statements.40

Statements of Changes in Equityfor the Financial Year ended 31 December 2010Leeden Limited Annual Report 2010SharecapitalTreasurysharesAccumulated(losses)/profitCapitalreserveEmployee shareoption reserveTotalequity$’000 $’000 $’000 $’000 $’000 $’000CompanyBalance at 1 January 2009 52,900 (1,217) (1,599) 170 1,091 51,345Net profit for the year – – 2,861 – – 2,861Other comprehensive income – – – – – –Total comprehensive income for the year – – 2,861 – – 2,861Dividends (Note 41) – – (1,742) – – (1,742)Exercise of employee share options 2 – – – – 2Expiry of employee share options – – – 94 (94) –Exercise of bonus warrants 920 – – – – 920Expenses of share-based payments – – – – 785 785Purchase of treasury shares – (805) – – – (805)Balance at 31 December 2009 and 1 January 2010 53,822 (2,022) (480) 264 1,782 53,366Net profit for the year – – 4,588 – – 4,588Other comprehensive income – – – – – –Total comprehensive income for the year – – 4,588 – – 4,588Dividends (Note 41) – – (1,749) – – (1,749)Exercise of employee share options 157 – – – (29) 128Expiry of employee share options – – – 33 (33) –Expenses of share-based payments – – – – 493 493Balance at 31 December 2010 53,979 (2,022) 2,359 297 2,213 56,826The accompanying accounting policies and explanatory notes form an integral part of the financial statements.41

A Stronger Leeden in Asia.Consolidated Cash Flow Statementfor the Financial Year ended 31 December 2010Note2010$’0002009$’000Cash flow from operating activities:Profit before taxation 15,083 17,228Adjustments for:Share of profit in associated companies (212) (218)Share of loss in joint venture company 21 –Depreciation of property, plant and equipment 6,662 6,160Amortisation of intangible assets 176 176Gain on disposal of property, plant and equipment (529) (1,231)(Gain)/loss on disposal of other investment (13) 60Write-off of property, plant and equipment 5 –Allowance for doubtful debts 544 1,962Allowance for doubtful debts written back (1,034) –Allowance for stock obsolescence 692 1,547Allowance for stock obsolescence written back (33) –Interest income (976) (858)Interest expense 1,921 2,016Expenses on share-based payment 464 785Fair value gain on other investments (79) –Fair value loss/(gain) on derivatives 41 (576)Translation adjustments arising on consolidation (1,326) 148Operating profit before working capital changes 21,407 27,199Changes in working capital:Decrease/(increase) in debtors and prepayments 5,802 (4,153)(Increase)/decrease in stocks (4,989) 6,024Decrease in creditors (1,176) (6,267)Decrease in amounts due to related parties, net (2,361) (1,280)Progress billings received from development property 12,543 3,419Increase in costs of development property (10,987) (8,107)Fixed deposits released from collateral 308 524Cash generated from operations 20,547 17,359Interest received 976 858Interest paid (1,921) (2,016)Income tax paid (2,903) (3,647)Net cash provided by operating activities 16,699 12,554Cash flow from investing activities:Purchase of property, plant and equipment (15,360) (10,781)Proceeds from disposal of property, plant and equipment 834 1,476Purchase of club membership (23) –Proceeds from disposal of other investment 38 8Investment in a joint venture company (70) –Net cash outflow from acquisition of a subsidiary company 11 – (17)Decrease in amounts due to related party (967) –Increase in amounts due from joint venture company, net (16) –Decrease/(increase) in amounts due from associated companies, net 3,608 (5,317)Net cash used in investing activities (11,956) (14,631)Cash flow from financing activities:Dividends paid to shareholders (1,749) (1,742)Dividends paid to non-controlling interests (148) (2,356)Proceeds from issuance of ordinary shares 157 922Proceeds from additional loans 50,970 33,262Repayments of loans and amounts due to bankers (excluding bank overdrafts) (52,913) (22,355)Net (decrease)/increase in hire purchase creditors (57) 86Purchase of treasury shares – (805)Net cash (used in)/provided by financing activities (3,740) 7,012Net increase in cash and cash equivalents 1,003 4,935Cash and cash equivalents at beginning of year 24 20,510 15,575Cash and cash equivalents at end of year 24 21,513 20,510The accompanying accounting policies and explanatory notes form an integral part of the financial statements.42

Leeden Limited Annual Report 2010Notes to the Financial Statementsfor the Financial Year ended 31 December 20101. Corporate informationLeeden Limited (the “Company”) is a limited liability company, which is domiciled and incorporated in the Republic ofSingapore and is listed on the Singapore Exchange Securities Trading Limited (“SGX-ST”). The registered office andprincipal place of business of the Company is located at 1 Shipyard Road, Singapore 628128.The principal activities of the Company are those of an investment holding company, the provision of management andadministrative services to the Group and distribution of safety products.The subsidiary companies, associated companies and joint venture company as at 31 December are:Name of company(Country of incorporation)Principal activities(place of business)CostPercentage of equityheld by the Group2010 2009 2010 2009$’000 $’000 % %Subsidiary companies:Held by the CompanyaLeeden Investment Pte Ltd(Singapore)Investment holding and leasingof property(Singapore)9,400 9,400 100 100aLeeden International Pte Ltd(Singapore)Provision of management services(Singapore)6,290 6,290 100 100nLeeden International Limited(Hong Kong)Investment holding(Hong Kong)2 2 100 10015,692 15,692Name of company(Country of incorporation)Principal activities(place of business)Percentage of equityheld by the Group2010 2009% %Held through subsidiary companiesby Leeden International LimitedlLeeden China Co., Ltd(People’s Republic of China)Distribution of industrial equipment and hardware(People’s Republic of China)100 100by Leeden International Pte LtdaAmerican Dynamics Pte Ltd(Singapore)Distribution of industrial equipment and hardware(Singapore)100 100Held through subsidiary companiesby Leeden International Pte LtdaAD Safety Pte Ltd(Singapore)Distribution of safety products(Singapore)100 100aBlue Power Corporation Pte Ltd(Singapore)Distribution of industrial products(Singapore)100 100aPowercut Machines Pte Ltd(Singapore)Rental of welding machines and equipment(Singapore)100 100aAuweld International Pte Ltd(Singapore)Distribution of industrial products(Singapore)100 10043

A Stronger Leeden in Asia.Notes to the Financial Statementsfor the Financial Year ended 31 December 20101. Corporate information (cont’d)Name of company(Country of incorporation)Principal activities(place of business)Percentage of equityheld by the Group2010 2009% %Held through subsidiary companiesby Leeden International Pte LtdbAuweld Sdn Bhd(Malaysia)Distribution of industrial products(Malaysia)100 100cLeeden Sdn Bhd(Malaysia)Distribution of safety products(Malaysia)100 100cLeeden Welding Sdn Bhd(Malaysia)Distribution of industrial products(Malaysia)100 100bEversafe Extinguisher Sdn Bhd(Malaysia)Trading of fire extinguishers, fire fighting appliances andaccessories(Malaysia)55 55aEversafe Extinguisher Pte Ltd(Singapore)Trading of fire extinguishers, fire fighting appliances andaccessories(Singapore)55 55dPower Weld Sdn Bhd(Malaysia)Manufacturing and trading of welding consumables(Malaysia)75 75mJiangyan Eversafe FireEquipment Co., Ltd(People’s Republic of China)Manufacturing and trading of fire fighting equipment(People’s Republic of China)– 100Held through subsidiary companiesby Leeden International Pte LtdfNIG Industrial Gases Sdn Bhd(Malaysia)Sale of gases and related products(Malaysia)51 51aNational Industrial Gases PteLtd(Singapore)Sale of gases and related products(Singapore)35 35pAuweld Product, Inc.(United States of America)Dormant(United States of America)100 100gPT Leeden Indonesia(Indonesia)Dormant(Indonesia)55 100by Leeden Investment Pte LtdaGreen Aces Development PteLtd(Singapore)Investment holding and provision of management services(Singapore)100 100aAceD Development Pte Ltd(Singapore)Provision of management services(Singapore)100 100by NIG Industrial Gases Sdn BhdfNIG Gases Sdn Bhd(Malaysia)Manufacturing and distribution of industrial products(Malaysia)57 5744

Notes to the Financial Statementsfor the Financial Year ended 31 December 2010Leeden Limited Annual Report 20101. Corporate information (cont’d)Name of company(Country of incorporation)Principal activities(place of business)Percentage of equityheld by the Group2010 2009% %by National Industrial Gases Pte LtdgPT National Industrial Gases(Indonesia)Manufacture and sale of gases and related products(Indonesia)100 100hMyanmar National IndustrialGases Ltd(Myanmar)Sale of gases and related products(Myanmar)100 100Held through subsidiary companiesby NIG Gases Sdn. Bhd.fNIG Filler Alloy Sdn. Bhd.(Malaysia)Distribution and sale of industrial products(Malaysia)75 75fNIG Timur Sdn. Bhd.(Malaysia)Distribution and sale of industrial products(Malaysia)100 100fNIG Utara Sdn. Bhd.(Malaysia)Manufacturing and sale of industrial products(Malaysia)100 100by NIG Utara Sdn BhdfHercules Machinery GasesSdn. Bhd.(Malaysia)Distribution and sale of industrial products(Malaysia)100 100Held through subsidiary companiesby Green Aces Development Pte LtdaLeeden Distribution Pte. Ltd.(Singapore)Distribution of waste water and water treatment products(Singapore)100 100aGreen Aces Paterson Pte Ltd(Singapore)Property development(Singapore)70 70by Eversafe Extinguisher Sdn BhdbEversafe System Sdn. Bhd.(Malaysia)Trading of fire extinguishers, fire fighting appliances andaccessories(Malaysia)88 88by Eversafe Extinguisher Pte LtdmJiangyan Eversafe FireEquipment Co., Ltd(People’s Republic of China)Manufacturing and trading of fire fighting equipment(People’s Republic of China)100 –45

A Stronger Leeden in Asia.Notes to the Financial Statementsfor the Financial Year ended 31 December 20101. Corporate information (cont’d)Name of company(Country of incorporation)Principal activities(place of business)Percentage of equityCost held by the Group2010 2009 2010 2009$’000 $’000 % %Associated companies:Held by Leeden International Pte LtdeBondflex Private Limited(Singapore)Trading of grinding discs(Singapore)– 1,865 – 50eHenglong Water Pte Ltd(Singapore)Investment holding and distribution ofwaste water treatment equipment(Singapore)1,600 1,600 50 50iLeeden Thailand Co., Ltd(Thailand)Distribution of industrial and safetyproducts(Thailand)46 46 49 48jHeld by Eversafe Extinguisher Sdn BhdEversafe Extinguisher AustraliaPty Ltd(Australia)Held by NIG Industrial Gases Sdn BhdTrading of fire extinguisher andmaintenance services(Australia)84 84 30 30kMega Mount Industrial GasesSdn Bhd(Malaysia)Manufacturing and distribution ofindustrial gases(Malaysia)731 731 28 28Held by Bondflex Private LimitedmJiangyan Sumeng GrindingWheel Co., Ltd(People’s Republic of China)Manufacturing of grinding wheels andabrasive products(People’s Republic of China)– – – 50mBondflex Abrasives (Jiangyan)Co., Ltd(People’s Republic of China)Manufacturing of welding products(People’s Republic of China)– – – 50Held by Henglong Water Pte LtdoLianyungang Henglong WaterCo., Ltd(People’s Republic of China)Distribution of waste water and watertreatment products(People’s Republic of China)– – 50 502,461 4,326Joint venture companyHeld by Leeden International Pte LtdmImperial Gas ControlEquipment (Jiangyan) Co., Ltd(People’s Republic of China)Assembly of industrial gas equipment(People’s Republic of China)70 – 50 –abcdeAudited by Ernst & Young LLP, Singapore.Audited by Ernst & Young, Chartered Accountants, Malaysia.Audited by Christopher Chooi & Co., Chartered Accountants, Malaysia.Audited by Horwath, Melaka, Chartered Accountants, Malaysia.Audited by Singapore Assurance PAC (formerly known as B L Ong & Co., Certified Public Accountants), Singapore.46

Leeden Limited Annual Report 2010Notes to the Financial Statementsfor the Financial Year ended 31 December 20101. Corporate information (cont’d)fghijklmnopAudited by Ong & Wong, Chartered Accountants, Malaysia.Audited by Riyanto, SE, AK., Indonesia.Audited by U Tin Win Group, Certified Public Accountants, Myanmar.Audited by N&S Audit Partner, Thailand.Audited by Hacketts, DFK, Australia.Audited by Huang Yan Teo & Co, Chartered Accountants, Malaysia.Audited by Shanghai Hui Hong, Certified Public Accountants, Co., Ltd.Audited by Taizhou Mingrui, Certified Public Accountants, Co., Ltd.Audited by World Link CPA Limited, Hong Kong.Audited by Lianyungang Tianzhou Lianhe, Certified Public Accountants, Co., Ltd.Not required to be audited under the law of country of incorporation.2. Summary of significant accounting policies2.1 Basis of preparationThe consolidated financial statements of the Group and the balance sheet and statement of changes in equity of theCompany have been prepared in accordance with Singapore Financial Reporting Standards (“FRS”).The financial statements have been prepared on the historical cost basis except as disclosed in the accounting policiesbelow.The financial statements are presented in Singapore Dollars (SGD or $) and all values in the tables are rounded to thenearest thousand ($’000) as indicated.2.2 Changes in accounting policiesThe accounting policies adopted are consistent with those of the previous financial year except in the current financialyear, the Group has adopted all the new and revised standards and Interpretations of FRS (INT FRS) that are effective forannual periods beginning on or after 1 January 2010. The adoption of these standards and interpretations did not haveany effect on the financial performance or position of the Group and the Company except as disclosed below:FRS 103 Business Combinations (revised) and FRS 27 Consolidated and Separate Financial Statements (revised)The revised FRS 103 Business Combinations and FRS 27 Consolidated and Separate Financial Statements are applicablefor annual periods beginning on or after 1 July 2009. As of 1 January 2010, the Group adopted both revised standards atthe same time in accordance with their transitional provisions.FRS 103 Business Combinations (revised)The revised FRS 103 introduces a number of changes to the accounting for business combinations that will impact theamount of goodwill recognised, the reported results in the period that an acquisition occurs, and future reported results.Changes in significant accounting policies resulting from the adoption of the revised FRS 103 include:– Transaction costs would no longer be capitalised as part of the cost of acquisition but will be expensedimmediately;– Consideration contingent on future events are recognised at fair value on the acquisition date and any changes inthe amount of consideration to be paid will no longer be adjusted against goodwill but recognised in profit or loss;– The Group elects for each acquisition of a business, to measure non-controlling interest at fair value, or at the noncontrollinginterest’s proportionate share of the acquiree’s identifiable net assets, and this impacts the amount ofgoodwill recognised; and– When a business is acquired in stages, the previously held equity interests in the acquiree is remeasured to fairvalue at the acquisition date with any corresponding gain or loss recognised in profit or loss, and this impacts theamount of goodwill recognised.47

A Stronger Leeden in Asia.Notes to the Financial Statementsfor the Financial Year ended 31 December 20102. Summary of significant accounting policies (cont’d)2.2 Changes in accounting policies (cont’d)48FRS 27 Consolidated and Separate Financial Statements (revised)Changes in significant accounting policies resulting from the adoption of the revised FRS 27 include:– A change in the ownership interest of a subsidiary that does not result in a loss of control is accounted for as anequity transaction. Therefore, such a change will have no impact on goodwill, nor will it give rise to a gain or lossrecognised in profit or loss;– Losses incurred by a subsidiary are allocated to the non-controlling interest even if the losses exceed the noncontrollinginterest in the subsidiary’s equity; and– When control over a subsidiary is lost, any interest retained is measured at fair value with the corresponding gainor loss recognised in profit or loss.According to its transitional provisions, the revised FRS 27 has been applied prospectively, and does not impact theGroup’s consolidated financial statements in respect of transactions with non-controlling interests, attribution of losses tonon-controlling interests and disposal of subsidiaries before 1 January 2010. The changes will affect future transactionswith non-controlling interests.2.3 Standards issued but not yet effectiveThe Group has not adopted the following standards and interpretations that have been issued but not yet effective:Effective for annualperiods beginning on orDescriptionafterAmendment to FRS 32 Financial Instruments: Presentation - Classification of Rights Issues 1 February 2010Amendment to FRS 101 Limited Exemption from comparative FRS 107 Disclosures for First-timeAdopters1 July 2010INT FRS 119 Extinguishing Financial Liabilities with Equity Instruments 1 July 2010Revised FRS 24 Related Party Disclosures 1 January 2011Amendments to INT FRS 114 Prepayments of a Minimum Funding Requirement 1 January 2011INT FRS 115 Agreements for the Construction of Real Estate 1 January 2011Amendments to FRS 107 Disclosures – Transfers of Financial Assets 1 July 2011Amendments to FRS 12 Deferred Tax – Recovery of Underlying Assets 1 January 2012Improvements to FRSs 20101 January 2011, unlessotherwise statedExcept for the revised FRS 24, the directors expect that the adoption of the other standards and interpretations abovewill have no material impact on the financial statements in the period of initial application. The nature of the impendingchanges in accounting policy on adoption of the revised FRS 24 is described below.Revised FRS 24 Related Party DisclosuresThe revised FRS 24 clarifies the definition of a related party to simplify the identification of such relationships and toeliminate inconsistencies in its application. The revised FRS 24 expands the definition of a related party and would treattwo entities as related to each other whenever a person (or a close member of that person’s family) or a third party hascontrol or joint control over the entity, or has significant influence over the entity. The revised standard also introducesa partial exemption of disclosure requirements for government-related entities. The Company is currently determiningthe impact of the changes to the definition of a related party has on the disclosure of related party transaction. As thisis a disclosure standard, it will have no impact on the financial position or financial performance of the Company whenimplemented in 2011.

Notes to the Financial Statementsfor the Financial Year ended 31 December 2010Leeden Limited Annual Report 20102. Summary of significant accounting policies (cont’d)2.4 Basis of consolidationBusiness combinations from 1 January 2010The consolidated financial statements comprise the financial statements of the Company and its subsidiaries as at theend of the reporting period. The financial statements of the subsidiaries used in the preparation of the consolidatedfinancial statements are prepared for the same reporting date as the Company. Consistent accounting policies are appliedto like transactions and events in similar circumstances.All intra-group balances, income and expenses and unrealised gains and losses resulting from intra-group transactions areeliminated in full.Subsidiaries are consolidated from the date of acquisition, being the date on which the Group obtains control, and continueto be consolidated until the date that such control ceases.Business combinations are accounted for by applying the acquisition method. Identifiable assets acquired and liabilitiesassumed in a business combination are measured initially at their fair values at the acquisition date. Acquisition-relatedcosts are recognised as expenses in the periods in which the costs are incurred and the services are received.When the Group acquires a business, it assesses the financial assets and liabilities assumed for appropriate classificationand designation in accordance with the contractual terms, economic circumstances and pertinent conditions as at theacquisition date. This includes the separation of embedded derivatives in host contracts by the acquiree.Any contingent consideration to be transferred by the acquirer will be recognised at fair value at the acquisition date.Subsequent changes to the fair value of the contingent consideration which is deemed to be an asset or liability, willbe recognised in accordance with FRS 39 either in profit or loss or as change to other comprehensive income. If thecontingent consideration is classified as equity, it is not be remeasured until it is finally settled within equity.In business combinations achieved in stages, previously held equity interests in the acquiree are remeasured to fair valueat the acquisition date and any corresponding gain or loss is recognised in profit or loss.The Group elects for each individual business combination, whether non-controlling interest in the acquiree (if any) isrecognised on the acquisition date at fair value, or at the non-controlling interest’s proportionate share of the acquireeidentifiable net assets.Any excess of the sum of the fair value of the consideration transferred in the business combination, the amount of noncontrollinginterest in the acquiree (if any), and the fair value of the Group’s previously held equity interest in the acquiree(if any), over the net fair value of the acquiree’s identifiable assets and liabilities is recorded as goodwill. The accountingpolicy for goodwill is set out in Note 2.11(a). In instances where the latter amount exceeds the former, the excess isrecognised as gain on bargain purchase in profit or loss on the acquisition date.Business combinations before 1 January 2010In comparison to the above mentioned requirements, the following differences applied:Business combinations are accounted for by applying the purchase method. Transaction costs directly attributable to theacquisition formed part of the acquisition costs. The non-controlling interest (formerly known as minority interest) wasmeasured at the proportionate share of the acquiree’s identifiable net assets.Business combinations achieved in stages were accounted for as separate steps. Adjustments to those fair values relatingto previously held interests are treated as a revaluation and recognised in equity.When the Group acquired a business, embedded derivatives separated from the host contract by the acquiree are notreassessed on acquisition unless the business combination results in a change in the terms of the contract that significantlymodifies the cash flows that would otherwise be required under the contract.Contingent consideration was recognised if, and only if, the Group had a present obligation, the economic outflow wasmore likely than not and a reliable estimate was determinable. Subsequent measurements to the contingent considerationaffected goodwill.49

A Stronger Leeden in Asia.Notes to the Financial Statementsfor the Financial Year ended 31 December 20102. Summary of significant accounting policies (cont’d)2.5 Transactions with non-controlling interestsNon-controlling interest represents the equity in subsidiaries not attributable, directly or indirectly, to owners of theCompany, and are presented separately in the consolidated statement of comprehensive income and within equity in theconsolidated balance sheet, separately from equity attributable to owners of the Company.Changes in the Company owners’ ownership interest in a subsidiary that do not result in a loss of control are accountedfor as equity transactions. In such circumstances, the carrying amounts of the controlling and non-controlling interests areadjusted to reflect the changes in their relative interests in the subsidiary. Any difference between the amount by which thenon-controlling interest is adjusted and the fair value of the consideration paid or received is recognised directly in equityand attributed to owners of the parent.2.6 Foreign currencyThe Group’s consolidated financial statements are presented in Singapore Dollars, which is also the parent company’sfunctional currency. Each entity in the Group determines its own functional currency and items included in the financialstatements of each entity are measured using that functional currency.(a)Transactions and balancesTransactions in foreign currencies are measured in the respective functional currencies of the Company andits subsidiary companies and are recorded on initial recognition in the functional currencies at exchange ratesapproximating those ruling at the transaction dates. Monetary assets and liabilities denominated in foreigncurrencies are translated at the rate of exchange ruling at the balance sheet date. Non-monetary items that aremeasured in terms of historical cost in a foreign currency are translated using the exchange rates as at the datesof the initial transactions. Non-monetary items measured at fair value in a foreign currency are translated using theexchange rates at the date when the fair value was determined.Exchange differences arising on the settlement of monetary items or on translating monetary items at the balancesheet date are recognised in profit or loss except for exchange differences arising on monetary items that form partof the Group’s net investment in foreign operations, which are recognised initially in other comprehensive incomeand accumulated under foreign currency translation reserve in equity. The foreign currency translation reserve isreclassified from equity to profit or loss of the Group on disposal of the foreign operation.(b)Group companiesThe assets and liabilities of foreign operations are translated into SGD at the rate of exchange ruling at the balancesheet date and their statements of comprehensive income are translated at the weighted average exchange ratesfor the year. The exchange differences arising on the translation are taken directly to other comprehensive income.On disposal of a foreign operation, the cumulative amount recognised in other comprehensive income relating tothat particular foreign operation is recognised in the profit or loss.In the case of a partial disposal without loss of control of a subsidiary that includes a foreign operation, theproportionate share of the cumulative amount of the exchange differences are re-attributed to non-controllinginterest and are not recognised in profit or loss. For partial disposals of associates or jointly controlled entities thatare foreign operations, the proportionate share of the accumulated exchange differences is reclassified to profit orloss.The Group has elected to recycle the accumulated exchange differences in the separate component of othercomprehensive income that arises from the direct method of consolidation, which is the method the Group uses tocomplete its consolidation.50

Notes to the Financial Statementsfor the Financial Year ended 31 December 2010Leeden Limited Annual Report 20102. Summary of significant accounting policies (cont’d)2.7 Property, plant and equipmentAll items of property, plant and equipment are initially recorded at cost. Such cost includes the cost of replacing part ofthe property, plant and equipment and borrowing costs that are directly attributable to the acquisition, construction orproduction of a qualifying property, plant and equipment. The accounting policy for borrowing costs is set out in Note 2.26.The cost of an item of property, plant and equipment is recognised as an asset if, and only if, it is probable that futureeconomic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably.Leasehold properties are subsequently stated at fair value, based on a one-off directors’ valuation in 1989, less subsequentdepreciation. These property, plant and equipment do not need to be revalued with sufficient regularity in accordance withparagraph 81(b) of FRS 16 (revised), Property, Plant and Equipment.Subsequent to recognition, property, plant and equipment are measured at cost or valuation less accumulated depreciationand accumulated impairment losses. When significant parts of property, plant and equipment are required to be replacedin intervals, the Group recognises such parts as individual assets with specific useful lives and depreciation, respectively.Likewise, when a major inspection is performed, its cost is recognised in the carrying amount of the plant and equipmentas a replacement if the recognition criteria are satisfied. All other repair and maintenance costs are recognised in profit orloss as incurred.Any revaluation surplus is recognised in other comprehensive income and accumulated in equity under the asset revaluationreserve, except to the extent that it reverses a revaluation decrease of the same asset previously recognised in profit orloss, in which case the increase is recognised in profit or loss. A revaluation deficit is recognised in profit or loss, exceptto the extent that it offsets an existing surplus on the same asset carried in the asset revaluation reserve.Any accumulated depreciation as at the revaluation date is eliminated against the gross carrying amount of the asset andthe net amount is restated to the revalued amount of the asset. The revaluation surplus included in the asset revaluationreserve in respect of an asset is transferred directly to retained earnings on retirement or disposal of the asset.Freehold land has an unlimited useful life and therefore is not depreciated.Depreciation is computed on a straight-line basis over the estimated useful lives of the assets as follows:Freehold property – 30 yearsLeasehold properties – over the term of the lease of 30 to 73½ yearsPlant and machinery – 6 months to 10 yearsOffice equipment, furniture and fittings – 3 to 10 yearsMotor vehicles – 5 to 8 yearsAssets under construction are not depreciated as these assets are not yet available for use.The carrying values of property, plant and equipment are reviewed for impairment when events or changes in circumstancesindicate that the carrying value may not be recoverable.The residual values, useful life and depreciation method are reviewed at each financial year-end to ensure that the amount,method and period of depreciation are consistent with previous estimates and the expected pattern of consumption of thefuture economic benefits embodied in the items of property, plant and equipment.An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expectedfrom its use or disposal. Any gain or loss arising on derecognition of the asset is included in the income statement in theyear the asset is derecognised.2.8 Subsidiary companyA subsidiary company is an entity over which the Group has the power to govern the financial and operating policies so asto obtain benefits from its activities.In the Company’s separate financial statements, investments in subsidiary companies are accounted for at cost less anyimpairment losses.51

A Stronger Leeden in Asia.Notes to the Financial Statementsfor the Financial Year ended 31 December 20102. Summary of significant accounting policies (cont’d)2.9 Associated companyAn associated company is an entity, not being a subsidiary company or a joint venture, in which the Group has significantinfluence. An associated company is equity accounted for from the date the Group obtains significant influence until thedate the Group ceases to have significant influence over the associated company.The Group’s investments in associated companies are accounted for using the equity method. Under the equity method,the investment in associated company is carried in the balance sheet at cost plus post-acquisition changes in the Group’sshare of net assets of the associated company and is neither amortised nor tested individually for impairment. Goodwillrelating to associated companies is included in the carrying amount of the investment. Any excess of the Group’s share ofthe net fair value of the associated company’s identifiable asset, liabilities and contingent liabilities over the cost of theinvestment is deducted from the carrying amount of the investment and is recognised as income as part of the Group’sshare of results of the associated company in the period in which the investment is acquired.The profit or loss reflects the share of the results of operations of the associates. Where there has been a changerecognised in other comprehensive income by the associates, the Group recognises its share of such changes in othercomprehensive income. Unrealised gains and losses resulting from transactions between the Group and the associate areeliminated to the extent of the interest in the associates.The Group’s share of the profit or loss of its associates is shown on the face of profit or loss after tax and non-controllinginterests in the subsidiaries of associates.When the Group’s share of losses in an associated company equals or exceeds its interest in the associated company, theGroup does not recognise further losses, unless it has incurred obligations or made payments on behalf of the associatedcompany.After application of the equity method, the Group determines whether it is necessary to recognise an additional impairmentloss on the Group’s investment in its associates. The Group determines at each balance sheet date whether there is anyobjective evidence that the investment in the associate is impaired. If this is the case, the Group calculates the amount ofimpairment as the difference between the recoverable amount of the associate and its carrying value and recognises theamount in profit and loss.The financial statements of the associated companies are prepared as of the same reporting date as the Company. Wherenecessary, adjustments are made to bring the accounting policies in line with those of the Group.Upon loss of significant influence over the associate, the Group measures any retained investment at its fair value.Any difference between the carrying amount of the associate upon loss of significant influence and the fair value of theaggregate of the retained investment and proceeds from disposal is recognised in profit or loss.2.10 Joint ventureA joint venture is a contractual arrangement whereby two or more parties undertake an economic activity that is subject tojoint control, where the strategic financial and operating decisions relating to the activity require the unanimous consentof the parties sharing control. The Group recognises its interest in the joint venture using the proportionate consolidationmethod. The Group combines its proportionate share of each of the assets, liabilities, income and expenses of the jointventure with the similar items, line by line, in its consolidated financial statements. The joint venture is proportionatelyconsolidated from the date the Group obtains joint control until the date the Group ceases to have joint control over thejoint venture.Adjustments are made in the Group’s consolidated financial statements to eliminate the Group’s share of intragroupbalances, income and expenses and unrealised gains and losses on transactions between the Group and its jointlycontrolled entity. Losses on transactions are recognised immediately if the loss provides evidence of a reduction in the netrealisable value of current assets or an impairment loss.The financial statements of the joint venture are prepared as of the same reporting date as the Company. Wherenecessary, adjustments are made to bring the accounting policies into line with those of the Group.Upon loss of joint control, the Group measures any retained investment at its fair value. Any difference between thecarrying amount of the former joint venture entity upon loss of joint venture control and the aggregate of the fair value ofthe retained investment and proceeds from disposal is recognised in profit or loss.52

Notes to the Financial Statementsfor the Financial Year ended 31 December 2010Leeden Limited Annual Report 20102. Summary of significant accounting policies (cont’d)2.11 Intangible assets(a)GoodwillGoodwill is initially measured at cost. Following initial recognition, goodwill is measured at cost less accumulatedimpairment losses.For the purpose of impairment testing, goodwill acquired is allocated to each of the Group’s cash-generating unitsthat are expected to benefit from the synergies of the combination.The cash-generating unit to which goodwill has been allocated is tested for impairment annually and wheneverthere is an indication that the cash-generating unit may be impaired, by comparing the carrying amount of the cashgeneratingunit, including the allocated goodwill, with the recoverable amount of the cash-generating unit. Where therecoverable amount of the cash-generating unit is less than the carrying amount, an impairment loss is recognisedin profit or loss. Impairment losses recognised for goodwill are not reversed in subsequent periods.Where goodwill forms part of a cash-generating unit and part of the operation within that cash-generating unitis disposed of, the goodwill associated with the operation disposed of is included in the carrying amount of theoperation when determining the gain or loss on disposal of the operation. Goodwill disposed of in this circumstanceis measured based on the relative fair values of the operations disposed of and the portion of the cash-generatingunit retained.Goodwill and fair value adjustments arising on the acquisition of foreign operations are treated as assets andliabilities of the foreign operations and are recorded in the functional currency of the foreign operations andtranslated in accordance with the accounting policy set out in Note 2.6.(b)Other intangible assetsIntangible assets acquired separately are measured initially at cost. The cost of intangible assets acquired in abusiness combination is their fair values as at the date of acquisition. Following initial acquisition, intangible assetsare measured at cost less any accumulated amortisation and accumulated impairment losses.Intangible assets with finite useful lives are amortised over the estimated useful lives and assessed for impairmentwhenever there is an indication that the intangible assets may be impaired. The amortisation period and theamortisation method are reviewed at least at each financial year-end. Changes in the expected useful life or theexpected pattern of consumption of future economic benefits embodied in the asset is accounted for by changingthe amortisation period or method, as appropriate, and are treated as changes in accounting estimates. Theamortisation expense on intangible assets with finite lives is recognised in profit or loss in the expense categoryconsistent with the function of the intangible asset.Intangible assets with indefinite useful lives or not yet available for use are tested for impairment annually, or morefrequently if the events and circumstances indicate that the carrying value may be impaired either individually orat the cash-generating unit level. Such intangible assets are not amortised. The useful life of an intangible assetwith an indefinite useful life is reviewed annually to determine whether the useful life assessment continues to besupportable. If not, the change in useful life from indefinite to finite is made on a prospective basis.Gains or losses arising from derecognition of an intangible asset are measured as the difference between the netdisposal proceeds and the carrying amount of the asset and are recognised in profit or loss when the asset isderecognised.(i)Trade namesThe trade names were acquired in business combinations. The useful lives of the trade names are estimatedto be indefinite because based on the current market share of the brands, management believes there isno foreseeable limit to the period over which the brands are expected to generate net cash inflows for theGroup.53

A Stronger Leeden in Asia.Notes to the Financial Statementsfor the Financial Year ended 31 December 20102. Summary of significant accounting policies (cont’d)2.11 Intangible assets(b)Other intangible assets(ii)Customer relationshipsCustomer relationships were acquired in business combinations. The useful lives of these intangible assetsare assessed to be 7 to 10 years based on average number of years the customers have been with theacquired companies and are amortised on a straight-line basis.(iii)Club membership2.12 Impairment of non-financial assetsClub membership was acquired separately and is amortised on a straight line basis over its finite useful lifeof 90 years.The Group assesses at each reporting date whether there is an indication that an asset may be impaired. If any suchindication exists, or when an annual impairment assessment for an asset is required, the Group makes an estimate of theasset’s recoverable amount.An asset’s recoverable amount is the higher of an asset’s or cash-generating unit’s fair value less costs to sell and itsvalue in use and is determined for an individual asset, unless the asset does not generate cash inflows that are largelyindependent of those from other assets. Where the carrying amount of an asset or cash-generating unit exceeds itsrecoverable amount, the asset is considered impaired and is written down to its recoverable amount. In assessing valuein use, the estimated future cash flows expected to be generated by the asset are discounted to their present valueusing a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specificto the asset. In determining fair value less costs to sell, an appropriate valuation model is used. These calculations arecorroborated by valuation multiples, quoted share prices for publicly traded subsidiary companies or other available fairvalue indicators.Impairment losses of continuing operations are recognised in profit or loss in those expense categories consistent withthe function of the impaired asset, except for assets that are previously revalued where the revaluation was taken to othercomprehensive income. In this case the impairment is also recognised in other comprehensive income up to the amountof any previous revaluation.For assets excluding goodwill, an assessment is made at each reporting date as to whether there is any indication thatpreviously recognised impairment losses may no longer exist or may have decreased. If such indication exists, theGroup estimates the asset’s or cash-generating unit’s recoverable amount. A previously recognised impairment loss isreversed only if there has been a change in the estimates used to determine the asset’s recoverable amount since thelast impairment loss was recognised. If that is the case, the carrying amount of the asset is increased to its recoverableamount. That increase cannot exceed the carrying amount that would have been determined, net of depreciation, had noimpairment loss been recognised previously. Such reversal is recognised in the profit or loss unless the asset is measuredat revalued amount, in which case the reversal is treated as a revaluation increase.2.13 Financial assetsFinancial assets are recognised on the balance sheet when, and only when, the Group becomes a party to the contractualprovisions of the financial instrument. The Group determines the classification of its financial assets at initialrecognition.When financial assets are recognised initially, they are measured at fair value, plus, in the case of financial assets not atfair value through profit or loss, directly attributable transaction costs.The subsequent measurement of financial assets depends on their classification as follows:54

Notes to the Financial Statementsfor the Financial Year ended 31 December 2010Leeden Limited Annual Report 20102. Summary of significant accounting policies (cont’d)2.13 Financial assets (cont’d)The subsequent measurement of financial assets depends on their classification as follows:(a)Financial assets at fair value through profit or lossFinancial assets at fair value through profit or loss include financial assets held for trading and financial assetsdesignated upon initial recognition at fair value through profit or loss. Financial assets are classified as held fortrading if they are acquired for the purpose of selling or repurchasing in the near term. This category includesderivative financial instruments entered into by the Group that are not designated as hedging instruments in hedgerelationships as defined by FRS 39. Derivatives, including separated embedded derivatives are also classified asheld for trading unless they are designated as effective hedging instruments.Subsequent to initial recognition, financial assets at fair value through profit or loss are measured at fair value.Any gains or losses arising from changes in fair value of the financial assets are recognised in profit or loss. Netgains or net losses on financial assets at fair value through profit or loss include exchange differences, interestand dividend income.Derivatives embedded in host contracts are accounted for as separate derivatives and recorded at fair value if theireconomic characteristics and risks are not closely related to those of the host contracts and the host contracts arenot held for trading or designated at fair value through profit or loss. These embedded derivatives are measured atfair value with changes in fair value recognised in profit or loss. Reassessment only occurs if there is a change inthe terms of the contract that significantly modifies the cash flows that would otherwise be required.(b)Loans and receivablesNon-derivative financial assets with fixed or determinable payments that are not quoted in an active market areclassified as loans and receivables. Subsequent to initial recognition, loans and receivables are measured atamortised cost using the effective interest method. Gains and losses are recognised in profit or loss when theloans and receivables are derecognised or impaired, and through the amortisation process.The Group classifies the following financial assets as loans and receivables:• cash and bank balances and fixed deposits;• trade and other debtors, including amounts due from subsidiary companies and related parties.(c)Available-for-sale financial assetsAvailable-for-sale financial assets include equity and debt securities. Equity investments classified as available-forsale are those, which are neither classified as held for trading nor designated at fair value through profit or loss.Debt securities in this category are those which are intended to be held for an indefinite period of time and whichmay be sold in response to needs for liquidity or in response to changes in the market conditions.After initial recognition, available-for-sale financial assets are subsequently measured at fair value. Any gains orlosses from changes in fair value of the financial asset are recognised in other comprehensive income, exceptthat impairment losses, foreign exchange gains and losses on monetary instruments and interest calculated usingthe effective interest method are recognised in profit or loss. The cumulative gain or loss previously recognised inother comprehensive income is reclassified from equity to profit or loss as a reclassification adjustment when thefinancial asset is derecognised.Investments in equity instruments whose fair value cannot be reliably measured are measured at cost lessimpairment loss.The Group does not have any held-to-maturity financial assets.A financial asset is derecognised where the contractual right to receive cash flows from the asset has expired. Onderecognition of a financial asset in its entirety, the difference between the carrying amount and the sum of theconsideration received and any cumulative gain or loss that has been recognised in other comprehensive incomeis recognised in profit or loss.55

A Stronger Leeden in Asia.Notes to the Financial Statementsfor the Financial Year ended 31 December 20102. Summary of significant accounting policies (cont’d)2.13 Financial assets (cont’d)(c)Available-for-sale financial assetsAll regular way purchases and sales of financial assets are recognised or derecognised on the trade date i.e., thedate that the Group commits to purchase or sell the asset. Regular way purchases or sales are purchases or salesof financial assets that require delivery of assets within the period generally established by regulation or conventionin the marketplace concerned.2.14 Impairment of financial assetsThe Group assesses at each end of the reporting date whether there is any objective evidence that a financial asset isimpaired.(a)Assets carried at amortised costFor financial assets carried at amortised cost, the Group first assesses individually whether objective evidence ofimpairment exists individually for financial assets that are individually significant, or collectively for financial assetsthat are not individually significant. If the Group determines that no objective evidence of impairment exists for anindividually assessed financial asset, whether significant or not, it includes the asset in a group of financial assetswith similar credit risk characteristics and collectively assesses them for impairment. Assets that are individuallyassessed for impairment and for which an impairment loss is, or continues to be recognised are not included in acollective assessment of impairment.If there is objective evidence that an impairment loss on financial assets carried at amortised cost has beenincurred, the amount of the loss is measured as the difference between the asset’s carrying amount and thepresent value of estimated future cash flows discounted at the financial asset’s original effective interest rate. Ifa loan has a variable interest rate, the discount rate for measuring any impairment loss is the current effectiveinterest rate. The carrying amount of the asset is reduced through the use of an allowance account. The impairmentloss is recognised in profit or loss.When the assets become uncollectible, the carrying amount of impaired financial assets is reduced directly or ifan amount was charged to the allowance account, the amounts charged to the allowance account are written offagainst the carrying value of the financial asset.To determine whether there is objective evidence that an impairment loss on financial assets has been incurred,the Group considers factors such as the probability of insolvency or significant financial difficulties of the debtorand default or significant delay in payments.If in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectivelyto an event occurring after the impairment was recognised, the previously recognised impairment loss is reversedto the extent that the carrying amount of the asset does not exceed its amortised cost at the reversal date. Theamount of reversal is recognised in profit or loss.(b)Assets carried at costIf there is objective evidence (such as significant adverse changes in the business environment where the issueroperates, probability of insolvency or significant financial difficulties of the issuer) that an impairment loss ismeasured as the difference between the asset’s carrying amount and the present value of estimated future cashflows discounted at the current market rate of return for a similar financial asset. Such impairment losses are notreversed in subsequent periods.56

Notes to the Financial Statementsfor the Financial Year ended 31 December 2010Leeden Limited Annual Report 20102. Summary of significant accounting policies (cont’d)2.14 Impairment of financial assets (cont’d)(c)Available-for-sale financial assetsIn the case of equity investments classified as available-for-sale, objective evidence of impairment include (i)significant financial difficulty of the issuer or obligor, (ii) information about significant changes with an adverse effectthat have taken place in the technological, market, economic or legal environment in which the issuer operates,and indicates that the cost of the investment in equity instrument may not be recovered; and (iii) a significant orprolonged decline in the fair value of the investment below its costs. Significant’ is to be evaluated against theoriginal cost of the investment and ‘prolonged’ against the period in which the fair value has been below its originalcost.Significant or prolonged decline in fair value below cost, significant financial difficulties of the issuer or obligor, andthe disappearance of an active trading market are considerations to determine whether there is objective evidencethat investment securities classified as available-for-sale financial assets are impaired.If an available-for-sale financial asset is impaired, an amount comprising the difference between its cost (net of anyprincipal payment and amortisation) and its current fair value, less any impairment loss previously recognised inprofit or loss, increase in their fair value after impairment are recognised directly in other comprehensive income.In the case of debt instruments classified as available-for-sale, impairment is assessed based on the same criteriaas financial assets carried at amortised cost. However, the amount recorded for impairment is the cumulative lossmeasured as the difference between the amortised cost and the current fair value, less any impairment loss onthat investment previously recognised in profit or loss. Future interest income continues to be accrued based onthe reduced carrying amount of the asset and is accrued using the rate of interest used to discount the future cashflows for the purpose of measuring the impairment loss. The interest income is recorded as part of finance income.If, in a subsequent year, the fair value of a debt instrument increases and the increases can be objectively relatedto an event occurring after the impairment loss was recognised in profit or loss, the impairment loss is reversed inprofit or loss.2.15 Development propertyDevelopment properties are properties held and developed for sale in the ordinary course of business. Developmentproperties are stated at the lower of cost and net realisable value. The costs are assigned by using specific identification.Net realisable value represents the estimated selling price less costs to be incurred in selling the property.Costs of properties under development include land acquisition costs, development expenditure, borrowing costs andother related expenditure. Borrowing costs payable on loans funding a development property are capitalised as cost ofthe development property until the date of its practical completion, which is taken to be the date of issue of the TemporaryOccupation Permit (“TOP”).Revenue and costs associated with the development property are recognised as revenue and expenses respectively, byreference to the stage of completion of the development property at the balance sheet date, when the outcome of theconstruction contract can be estimated reliably. The stage of completion is determined by reference to the proportion thatcontract costs incurred for work performed to date bear to the total estimated contract costs, costs in both cases excludeland and interest costs. When the outcome of a construction contract cannot be estimated reliably, revenue is recognisedto the extent of costs incurred that are likely to be recoverable and development costs are recognised as expense in theperiod which they are incurred.When it is probable that total development costs will exceed total revenue of the construction contract, provision forexpected loss is recognised as an expense immediately. Revenue of the construction contract comprise the amount ofrevenue agreed in the contract.The development property will be transferred to development property completed for sale when it has been completed, theTOP has been obtained and it is available for sale.57

A Stronger Leeden in Asia.Notes to the Financial Statementsfor the Financial Year ended 31 December 20102. Summary of significant accounting policies (cont’d)2.16 StocksStocks are stated at the lower of cost and net realisable value. Net realisable value is the estimated selling price in theordinary course of business, less estimated costs of completion and the estimated costs necessary to make the sale.Costs incurred in bringing the inventories to their present location and condition are accounted for as follows:– Raw materials: purchase costs on a first-in-first-out basis– Finished goods and work-in-progress for manufactured products: costs of direct materials and labour and aproportion of manufacturing overheads based on normal operating capacity. These costs are assigned on a first-infirst-out basis.– Finished goods for trading products: Purchase costs on a weighted average basisWhere necessary, allowance is provided for damaged, obsolete and slow moving items to adjust the carrying value ofinventories to the lower of cost and net realisable value.2.17 Cash and cash equivalentsCash and cash equivalents comprise cash at bank and on hand and fixed deposits. These also include bank overdraftsthat form an integral part of the Group’s cash management.2.18 ProvisionsProvisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it isprobable that an outflow of economic resources will be required to settle the obligation and the amount of the obligationcan be estimated reliably.Provisions are reviewed at each balance sheet date and adjusted to reflect the current best estimate. If it is no longerprobable that an outflow of economic resources will be required to settle the obligation, the provision is reversed. If theeffect of the time value of money is material, provisions are discounted using a current pre tax rate that reflects, whereappropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passageof time is recognised as a finance cost.2.19 Financial liabilitiesFinancial liabilities include trade creditors which are normally settled on 30-90 day terms, other creditors, amounts due torelated parties and interest-bearing loans and borrowings. Financial liabilities are recognised on the balance sheet when,and only when, the Group becomes a party to the contractual provisions of the financial instrument. The Group determinesthe classification of its financial liabilities at initial recognition.All financial liabilities are recognised initially at fair value plus, in the case of financial liabilities other than derivatives,directly attributable transaction costs.The measurement of financial liabilities depends on their classification as follows:Financial liabilities at fair value through profit or lossFinancial liabilities at fair value through profit or loss includes financial liabilities held for trading and financial liabilitiesdesignated upon initial recognition as at fair value. Financial liabilities are classified as held for trading if they are acquiredfor the purpose of selling in the near term. This category includes derivative financial instruments entered into by theGroup that are not designated as hedging instruments in hedge relationships. Separated embedded derivatives are alsoclassified as held for trading unless they are designated as effective hedging instruments.Subsequent to initial recognition, financial liabilities at fair value through profit or loss are measured at fair value. Any gainsor losses arising from changes in fair value of the financial liabilities are recognised in profit or loss.The Group has not designated any financial liabilities upon initial recognition at fair value through profit or loss.58

Notes to the Financial Statementsfor the Financial Year ended 31 December 2010Leeden Limited Annual Report 20102. Summary of significant accounting policies (cont’d)2.19 Financial liabilities (cont’d)Other financial liabilitiesAfter initial recognition, other financial liabilities are subsequently measured at amortised cost using the effective interestrate method. Gains and losses are recognised in profit or loss when the liabilities are derecognised, and through theamortisation process.A financial liability is derecognised when the obligation under the liability is discharged or cancelled or extinguished. Whenan existing financial liability is replaced by another from the same lender on substantially different terms, or the termsof an existing liability are substantially modified, such an exchange or modification is treated as a derecognition of theoriginal liability and the recognition of a new liability, and the difference in the respective carrying amounts is recognisedin the profit or loss.2.20 Financial guaranteeA financial guarantee contract is a contract that requires the issuer to make specified payments to reimburse the holderfor a loss it incurs because a specified debtor fails to make payment when due.Financial guarantees are recognised initially as a liability at fair value, adjusted for transaction costs that are directlyattributable to the issuance of the guarantee. Subsequent to initial recognition, financial guarantees are recognised asincome in profit or loss over the period of the guarantee. If it is probable that the liability will be higher than the amountinitially recognised less amortisation, the liability is recorded at the higher amount with the difference charged to profit orloss.2.21 LeasesThe determination of whether an arrangement is, or contains a lease is based on the substance of the arrangementat inception date: whether fulfilment of the arrangement is dependent on the use of a specific asset or assets or thearrangement conveys a right to use the asset. For arrangements entered into prior to 1 January 2005, the date of inceptionis deemed to be 1 January 2005 in accordance with the transitional requirements of INT FRS 104.(a)As lesseeFinance leases, which transfer to the Group substantially all the risks and rewards incidental to ownership of theleased item, are capitalised at the inception of the lease at the fair value of the leased asset or, if lower, at thepresent value of the minimum lease payments. Any initial direct costs are also added to the amount capitalised.Lease payments are apportioned between the finance charges and reduction of the lease liability so as to achievea constant rate of interest on the remaining balance of the liability. Finance charges are charged to profit or loss.Capitalised leased assets are depreciated over the shorter of the estimated useful life of the asset and the leaseterm, if there is no reasonable certainty that the Group will obtain ownership by the end of the lease term.Operating lease payments are recognised as an expense in profit or loss on a straight-line basis over the leaseterm. The aggregate benefit of incentives provided by the lessor is recognised as a reduction of rental expense overthe lease term on a straight-line basis.(b)As lessorLeases where the Group retains substantially all the risks and rewards of ownership of the asset are classified asoperating leases. Initial direct costs incurred in negotiating an operating lease are added to the carrying amount ofthe leased asset and recognised over the lease term on the same bases as rental income. The accounting policyfor rental income is set out in Note 2.24.2.22 Share capital and share issue expensesProceeds from issuance of ordinary shares are recognised as share capital in equity. Incremental costs directly attributableto the issuance of ordinary shares are deducted against share capital.59

A Stronger Leeden in Asia.Notes to the Financial Statementsfor the Financial Year ended 31 December 20102. Summary of significant accounting policies (cont’d)2.23 Treasury sharesThe Group’s own equity instruments, which are reacquired (treasury shares) are recognised at cost and deducted fromequity. No gain or loss is recognised in profit or loss on the purchase, sale, issue or cancellation of the Group’s own equityinstruments. Any difference between the carrying amount of treasury shares and the consideration received is recogniseddirectly in equity.2.24 RevenueRevenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenuecan be reliably measured. Revenue is measured at the fair value of consideration received or receivable, excludingdiscounts, rebates, and sales taxes or duty. The Group assesses its revenue arrangements to determine if it is acting asprincipal or agent. The Group has concluded that it is acting as a principal in all of its revenue arrangements.The following specific recognition criteria must also be met before revenue is recognised:• Revenue from goods is recognised upon the transfer of significant risk and rewards of ownership of the goodsto the customer which generally coincides with their delivery and acceptance. Revenue is not recognised to theextent where there are significant uncertainties regarding recovery of the consideration due, associated costs orthe possible return of goods.• Revenue from the provision of management services is recognised when the services are rendered (unlesscollectibility is in doubt).• Dividend income is recognised when the Group’s right to receive the payment is established.• Interest income is recognised using the effective interest method.• For development properties, it is recognised by reference to the stage of completion at the balance sheet date asstated in Note 2.15.• Rental income arising on welding machines and equipment is accounted for on a straight-line basis over the leaseterms.2.25 Employee benefits(a)Defined contribution plansThe Group participates in the national pension schemes as defined by the laws of the countries in which it hasoperations. In particular, the Singapore companies in the Group make contributions to the Central Provident Fundscheme in Singapore, a defined contribution pension scheme. Contributions to defined contribution pensionschemes are recognised as an expense in the period in which the related service is performed.(b)Employee leave entitlementEmployee entitlements to annual leave are recognised as a liability when they accrue to the employees. Theestimated liability for leave is recognised for services rendered by employees up to balance sheet date.(c)Employee share option plansEmployees of the Group receive remuneration in the form of share options as consideration for services rendered.The cost of these equity-settled transactions with employees for awards granted after 22 November 2002 ismeasured by reference to the fair value of the options at the date on which the share options are granted whichtakes into account market conditions and non-vesting conditions. This cost is recognised in profit or loss, with acorresponding increase in the employee share option reserve, over the vesting period. The cumulative expenserecognised at each reporting date until the vesting date reflects the extent to which the vesting period has expiredand the Group’s best estimate of the number of options that will ultimately vest. The charge or credit to profit orloss for a period represents the movement in cumulative expense recognised as at the beginning and end of thatperiod.60

Notes to the Financial Statementsfor the Financial Year ended 31 December 2010Leeden Limited Annual Report 20102. Summary of significant accounting policies (cont’d)2.25 Employee benefits (cont’d)(c)Employee share option plans2.26 Borrowing costsNo expense is recognised for options that do not ultimately vest, except for options where vesting is conditionalupon a market condition or non-vesting condition, which are treated as vested irrespective of whether or not themarket condition is satisfied, provided that all other performance and/or conditions are satisfied, provided that allother performance and/or service conditions are satisfied. In the case where the option does not vest as the resultof a failure to meet a non-vesting condition that is within the control of the Group or the employee, it is accounted foras a cancellation. In such case, the amount of the compensation cost that otherwise would be recognised over theremainder of the vesting period is recognised immediately in profit or loss upon cancellation. The employee shareoption reserve is transferred to retained earnings upon expiry of the options. When the options are exercised, theemployee share option reserve is transferred to share capital if new shares are issued, or to treasury shares if theoptions are satisfied by the reissuance of treasury shares.Borrowing costs are recognised in profit or loss as incurred except to the extent that they are capitalised. Borrowingcosts are capitalised if they are directly attributable to the acquisition, construction or production of a qualifying asset.Capitalisation of borrowing costs commences when the activities to prepare the asset for its intended use or sale are inprogress and the expenditures and borrowing costs are incurred. Borrowing costs are capitalised until the assets aresubstantially completed for their intended use or sale. All other borrowing costs are expensed in the period they occur.Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds.2.27 Income taxes(a)Current taxCurrent tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxationauthorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantivelyenacted by the balance sheet date, in the countries where the Group operates and generates taxable income.Current taxes are recognised in profit or loss except that the tax relating to items recognised outside profit or loss,either in other comprehensive income or directly in equity. Management periodically evaluates positions takenin the tax returns with respect to situations in which applicable tax regulations are subject to interpretation andestablishes provisions where appropriate.(b)Deferred taxDeferred income tax is provided using the liability method on temporary differences at the balance sheet datebetween the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.Deferred tax liabilities are recognised for all taxable temporary differences, except:• Where the deferred tax liability arises from the initial recognition of goodwill or of an asset or liability ina transaction that is not a business combination and, at the time of the transaction, affects neither theaccounting profit nor taxable profit or loss; and• In respect of taxable temporary differences associated with investments in subsidiary companies andassociated companies, where the timing of the reversal of the temporary differences can be controlled andit is probable that the temporary differences will not reverse in the foreseeable futures.61

A Stronger Leeden in Asia.Notes to the Financial Statementsfor the Financial Year ended 31 December 20102. Summary of significant accounting policies (cont’d)2.27 Income taxes (cont’d)(b)Deferred taxDeferred tax assets are recognised for all deductible temporary differences, carry forward of unused tax credits andunused tax losses, to the extent that it is probable that taxable profit will be available against which the deductibletemporary differences, and the carry forward of unused tax credits and unused tax losses can be utilised except:• where the deferred income tax asset relating to the deductible temporary difference arises from the initialrecognition of an asset or liability in a transaction that is not a business combination and, at the time of thetransaction, affects neither the accounting profit nor taxable profit or loss; and• in respect of deductible temporary differences associated with investments in subsidiary companies,associated companies and interests in joint ventures, deferred income tax assets are recognised only to theextent that it is probable that the temporary differences will reverse in the foreseeable future and taxableprofit will be available against which the temporary differences can be utilised.The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent thatit is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset tobe utilised. Unrecognised deferred tax assets are reassessed at each balance sheet date and are recognised tothe extent that it has become probable that future taxable profit will allow the deferred tax asset to be utilised.Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the year when theasset is realised or the liability is settled, based on tax rates and tax laws that have been enacted or substantivelyenacted at the balance sheet date.Deferred income tax relating to items recognised outside profit or loss is recognised outside profit or loss. Deferredtax items are recognised in correlation to the underlying transaction either in other comprehensive income or directlyin equity and deferred tax arising from a business combination is adjusted against goodwill on acquisition.Deferred income tax assets and deferred income tax liabilities are offset, if a legally enforceable right exists toset off current tax assets against current income tax liabilities and the deferred income taxes relate to the sametaxable entity and the same taxation authority.(c)Sales tax2.28 Segment reportingRevenues, expenses and assets are recognised net of the amount of sales tax except:• Where the sales tax incurred in a purchase of assets or services is not recoverable from the taxationauthority, in which case the sales tax is recognised as part of the cost of acquisition of the asset or as partof the expense item as applicable; and• Receivables and payables that are stated with the amount of sales tax included.The net amount of sales tax recoverable from, or payable to, the taxation authority is included as part of receivablesor payables in the balance sheet.For management purposes, the Group is organised into operating segments based on their products and services whichare independently managed by the respective segment managers responsible for the performance of the respectivesegments under their charge. The segment managers report directly to the management of the Company who regularlyreview the segment results in order to allocate resources to the segments and to assess the segment performance.Additional disclosures on each of these segments are shown in Note 40, including the factors used to identify thereportable segments and the measurement basis of segment information.62

Notes to the Financial Statementsfor the Financial Year ended 31 December 2010Leeden Limited Annual Report 20102. Summary of significant accounting policies (cont’d)2.29 ContingenciesA contingent liability is:(a)(b)a possible obligation that arises from past events and whose existence will be confirmed only by the occurrence ornon-occurrence of one or more uncertain future events not wholly within the control of the Group; ora present obligation that arises from past events but is not recognised because:(i)(ii)It is not probable that an outflow of resources embodying economic benefits will be required to settle theobligation; orThe amount of the obligation cannot be measured with sufficient reliability.2.30 Government grantsA contingent asset is a possible asset that arises from past events and whose existence will be confirmedonly by the occurrence or non-occurrence of one or more uncertain future events not wholly within the controlof the Group.Contingent liabilities and assets are not recognised on the balance sheet of the Group.Government grants are recognised at their fair values when there is reasonable assurance that the grant will be receivedand all attaching conditions will be compiled with. Grants in recognition of specific expenses are taken to income in thesame year as the relevant expenses.2.31 Related partiesA party is considered to be related to the Group if:(a)The party, directly or indirectly through one or more intermediaries,(i)(ii)(iii)controls, is controlled by, or is under common control with, the Group;has an interest in the Group that gives it significant influence over the Group; orhas joint control over the Group;(b)(c)(d)(e)(f)The party is an associate;The party is a jointly-controlled entity;The party is a member of the key management personnel of the Group or its parent;The party is a close member of the family of any individual referred to in (a) or (d); orThe party is an entity that is controlled, jointly controlled or significantly influenced by or for which significant votingpower in such entity resides with, directly or indirectly, any individual referred to in (d) or (e).63

A Stronger Leeden in Asia.Notes to the Financial Statementsfor the Financial Year ended 31 December 20103. Significant accounting judgements and estimatesThe preparation of the Group’s financial statement requires management to make judgements, estimates and assumptionsthat affect the reported amounts of revenues, expenses, assets and liabilities, and the disclosure of contingent liabilitiesat the reporting date. However, uncertainty about these assumptions and estimates could result in outcomes that couldrequire a material adjustment to the carrying amount of the asset or liability affected in the future.3.1 Key sources of estimation uncertaintyThe key assumptions concerning the future and other key sources of estimation uncertainty at the balance sheet date, thathave a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the nextfinancial year are discussed below.(i)Useful lives of property, plant and equipmentThe cost of property, plant and equipment for welding and other industrial applications, as well as for propertydevelopment and investment, is depreciated on a straight-line basis over the assets’ estimated economic usefullives. Management estimates the useful lives of these property, plant and equipment to be within 6 months to 73.5years. These are common life expectancies applied in the relevant industry. The carrying amount of the Group’sproperty, plant and equipment at 31 December 2010 was $68,051,000 (2009: $59,217,000). Changes in theexpected level of usage and technological developments could impact the economic useful lives and the residualvalues of these assets, therefore future depreciation charges could be revised.(ii)Impairment of non-financial assetsThe Group assesses whether there are any indicators of impairment for all non-financial assets at each reportingdate. Goodwill and other indefinite life intangibles are tested for impairment annually and at other times whensuch indicators exist. Other than intangibles, stocks are valued at the lower of cost and net realisable value. Netrealisable value is the estimated selling price in the ordinary course of business less estimated costs necessaryto make the sale. Other non-financial assets are tested for impairment when there are indicators that the carryingamounts may not be recoverable.When value in use calculations are undertaken, management must estimate the expected future cash flows fromthe asset or cash-generating unit and choose a suitable discount rate in order to calculate the present valueof those cash flows. Further details of the key assumptions are given in the respective notes to the financialstatements.(iii)Allowance for stock obsolescenceAllowance for stock obsolescence is estimated based on the best available facts and circumstances, including butnot limited to the stocks’ own physical conditions, their market selling prices and estimated costs to be incurredfor their sales. The allowances are re-evaluated and adjusted as additional information received affects the amountestimated. The carrying amount of the Company’s stocks as of 31 December 2010 was $43,038,000 (2009:$38,708,000).(iv)Impairment of loans and receivablesThe Group assesses at each balance sheet date whether there is any objective evidence that a financial assetis impaired. To determine whether there is objective evidence of impairment, the Group considers factors suchas the probability of insolvency or significant financial difficulties of the debtor and default or significant delay inpayments.Where there is objective evidence of impairment, the amount and timing of future cash flows are estimated basedon historical loss experience for assets with similar credit risk characteristics.The carrying amount of the Group’s loans and receivables at the balance sheet date is disclosed in Note 38 to thefinancial statements.64

Notes to the Financial Statementsfor the Financial Year ended 31 December 2010Leeden Limited Annual Report 20103. Significant accounting judgements and estimates (cont’d)3.1 Key sources of estimation uncertainty (cont’d)(v)Income taxesThe Group has exposure to income taxes in numerous jurisdictions. Significant judgement is involved in determiningthe Group-wide provision for income taxes. There are certain transactions and computations for which the ultimatetax determination is uncertain during the ordinary course of business. The Group recognises liabilities for expectedtax issues based on estimates of whether additional taxes will be due. Where the final tax outcome of thesematters is different from the amounts that were initially recognised, such differences will impact the income tax anddeferred tax provisions in the period in which such determination is made. The carrying amount of the Group’s taxpayables and deferred tax liabilities at 31 December 2010 was $1,566,000 (2009: $740,000) and $7,836,000(2009: $8,321,000) respectively.(vi)Revenue recognition – development propertyThe stage of completion of its development property is measured by reference to the proportion that contractcosts incurred for work performed to date vis-a-vis the estimated total contract costs. Significant assumptionsare required to estimate the total contract costs and the recoverable variation works that will affect the stage ofcompletion. The estimates are made based on past experience and knowledge of the project engineers. Wherethe final cost incurred by the Group is different from the amounts that were initially estimated, such differences willimpact the revenue recognised in the period in which such determination is made. The carrying amounts of assetsand liabilities arising from development property are disclosed in Note 17 to the financial statements.3.2 Judgements made in applying accounting policiesThe management has not made any significant judgements that affect the reported amounts of revenues, expenses,assets and liabilities, and the disclosure of contingent liabilities at the reporting date.4. TurnoverGroup2010 2009$’000 $’000Sale of goods 176,113 167,280Revenue recognised from development property 14,108 16,818Others 1,249 2,050191,470 186,14865

A Stronger Leeden in Asia.Notes to the Financial Statementsfor the Financial Year ended 31 December 20105. Other income/costsGroup2010 2009$’000 $’000Other income included the following:Grant income from job credit scheme 130 655Interest income 976 858Bad debts recovered 859 475Gain on disposal of property, plant and equipment 529 1,231Gain on disposal of other investments 13 –Repair and servicing 328 180Sales rebates 202 13Fair value gain on derivatives 90 576In 2008 the Singapore Finance Minister announced the introduction of a Jobs Credit Scheme (Scheme). Under thisScheme, the Group received a 12% cash grant on the first $2,500 of each month’s wages for each employee on theirCentral Provident Fund payroll. The Scheme is for one year, and the Group received its grant income of $130,000 (2009:$655,000) in four receipts in March, June, September and December 2009.The Scheme has been extended to June 2010 with payouts in March and June 2010 at stepped down rates of 6% and 3%respectively.Group2010 2009$’000 $’000Other costs included the following:Amortisation of intangible assets 176 176Allowance for stocks obsolescence 692 1,547Allowance for stock obsolescence written back (33) –Write-off of property, plant and equipment 5 –Allowance for doubtful debts 544 1,962Allowance for doubtful debts written back (1,034) –Loss on disposal of other investment – 60Fair value loss on derivatives 41 4566

Leeden Limited Annual Report 2010Notes to the Financial Statementsfor the Financial Year ended 31 December 20106. Profit from operating activitiesGroup2010 2009$’000 $’000Profit from operating activities is stated after charging/(crediting) the following:Depreciation of property, plant and equipment 6,662 6,160Salaries and related costs 23,574 22,478Defined contributions schemes 2,282 1,993Foreign currency exchange (gains)/losses- realised (735) (213)- unrealised (279) 251Expenses on share-based payment 464 785Operating lease expense 1,070 537Non-audit fees paid to auditors of the Company – 147. Finance costsGroup2010 2009$’000 $’000Interest expense:- bank overdrafts 7 71- hire purchase interest 230 231- trust receipts 316 332- revolving and term loans 1,368 1,381- others – 11,921 2,0168. TaxationMajor components of income tax expenseThe major components of income tax expense for the years ended 31 December 2010 and 2009 are:Group2010 2009$’000 $’000Statement of comprehensive income:Current income tax- Current income taxation 3,644 2,089- Over provision in respect of previous years (46) (117)3,598 1,972Deferred income tax- Origination and reversal of temporary differences 24 1,606- Effect of reduction in tax rate – (194)- Over provision in respect of previous years (378) (50)(354) 1,362Income tax expense recognised in the income statement 3,244 3,33467

A Stronger Leeden in Asia.Notes to the Financial Statementsfor the Financial Year ended 31 December 20108. Taxation (cont’d)Relationship between tax expense and accounting profitThe reconciliation between the tax expense and the product of accounting profit multiplied by the applicable corporate taxrate for years ended 31 December 2010 and 2009 are as follows:Group2010 2009$’000 $’000Profit before taxation 15,083 17,228Tax at domestic rates applicable to profits in the countries where the Group operates 3,736 5,130Adjustments:Non-deductible expenses 294 1,451Income not subject to taxation (265) (2,440)Utilisation of tax losses and capital allowances previously not recognised (85) (269)Effect of partial tax exemption and relief (432) (164)Deferred tax asset not recognised 124 15Effects of reduction in tax rate – (194)Over provision in respect of previous year (424) (167)Others 296 (28)Income tax expense recognised in the income statement 3,244 3,334At 31 December 2010, the Group has unutilised tax losses and unabsorbed capital allowances of approximately$6,923,000 and $371,000 (2009: $5,632,000 and $320,000) respectively, which are available for set off against futuretaxable income subject to the respective local tax provisions and regulations. No deferred tax asset is recognised in thefinancial statements for these unutilised tax losses due to uncertainty of its recoverability.The above reconciliation is prepared by aggregating separate reconciliations for each national jurisdiction.68

Leeden Limited Annual Report 2010Notes to the Financial Statementsfor the Financial Year ended 31 December 20109. Basic and diluted earnings per shareBasic earnings per share amounts are calculated by dividing profit for the year attributable to ordinary equity holders of theparent by the weighted average number of ordinary shares outstanding during the financial year.Diluted earnings per share amounts are calculated by dividing profit for the year attributable to ordinary equity holdersof the parent by the weighted average number of ordinary shares outstanding during the year plus the weighted averagenumber of ordinary shares that would be issued on the conversion of all dilutive potential ordinary shares into ordinaryshares.The following tables reflect the profit and loss and share data used in the computation of basic and diluted earnings pershare for the years ended 31 December:Group2010 2009$’000 $’000Profit net of tax attributable to ordinary equity holders for basic anddiluted earnings per share 7,621 8,8982010 2009‘000 ‘000Weighted average number of ordinary shares on issue applicable tobasic earnings per share 174,499 173,845Effects of dilution:- Share options 2,429 2,523Adjusted weighted average number of ordinary shares applicable todiluted earnings per share 176,928 176,3687,440,000 (2009: 7,580,000) of share options granted to employees under the existing employee share option planshave not been included in the calculation of diluted earnings per share because they are anti-dilutive.Since the end of the financial year, employees have exercised the options to acquire 640,000 (2009: 10,000) ordinaryshares. There have been no other transactions involving ordinary shares or potential ordinary shares since the reportingdate and before the completion of these financial statements.69

A Stronger Leeden in Asia.Notes to the Financial Statementsfor the Financial Year ended 31 December 201010. Property, plant and equipmentFreeholdlandFreeholdpropertyLeaseholdpropertiesPlant andmachineryOfficeequipment,furniture andfittingsMotorvehiclesConstructionin progressTotalGroup $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000Cost or valuationBalance at1 January 2009 -Valuation: – – 4,500 – – – – 4,500Cost 1,910 2,273 17,669 40,888 19,455 3,984 – 86,1791,910 2,273 22,169 40,888 19,455 3,984 – 90,679Additions 2,033 27 2,474 3,431 2,013 599 204 10,781Disposals – – – (416) (509) (146) – (1,071)Write-off – – – (1) (8) – – (9)Acquisition ofsubsidiary company – – – 11 26 57 – 94Exchange differences 22 (74) 64 1,296 (1,107) (146) – 55Balance at31 December 2009and 1 January 2010 3,965 2,226 24,707 45,209 19,870 4,348 204 100,529Additions – 16 8,326 3,327 1,288 529 1,874 15,360Disposals – – – (488) (424) (362) – (1,274)Write-off – – – (6) (9) – – (15)Exchange differences 91 51 (106) 464 149 20 (10) 659Balance at31 December 2010 4,056 2,293 32,927 48,506 20,874 4,535 2,068 115,259AccumulateddepreciationBalance at1 January 2009 – 227 7,870 17,661 8,601 1,619 – 35,978Charge for the year – 73 775 3,166 1,539 607 – 6,160Disposals – – – (229) (493) (104) – (826)Acquisition ofsubsidiary company – – – 5 10 16 – 31Write-off – – – (1) (8) – – (9)Exchange differences – (3) 251 706 (897) (79) – (22)Balance at 31December 2009 and 1January 2010 – 297 8,896 21,308 8,752 2,059 – 41,312Charge for the year – 77 821 3,538 1,638 588 – 6,662Disposals – – – (329) (408) (232) – (969)Write-off – – – (1) (9) – – (10)Exchange differences – 6 91 319 (187) (16) – 213Balance at31 December 2010 – 380 9,808 24,835 9,786 2,399 – 47,208Net carrying amount:At 31 December2010 4,056 1,913 23,119 23,671 11,088 2,136 2,068 68,051At 31 December2009 3,965 1,929 15,811 23,901 11,118 2,289 204 59,21770

Notes to the Financial Statementsfor the Financial Year ended 31 December 2010Leeden Limited Annual Report 201010. Property, plant and equipment (cont’d)Officeequipment,Plant andmachineryfurniture andfittings Motor vehicles Total$’000 $’000 $’000 $’000CompanyCostBalance at 1 January 2009 19 191 331 541Additions 36 226 17 279Disposals – (5) – (5)Balance at 31 December 2009 and 1 January 2010 55 412 348 815Additions 12 44 – 56Disposals – – (73) (73)Balance at 31 December 2010 67 456 275 798Accumulated depreciation and impairmentBalance at 1 January 2009 4 44 52 100Charge for the year 13 62 85 160Balance at 31 December 2009 and 1 January 2010 17 106 137 260Charge for the year 7 73 55 135Disposals – – (59) (59)Balance at 31 December 2010 24 179 133 336Net book valueAt 31 December 2010 43 277 142 462At 31 December 2009 38 306 211 555(a)The details of the Group’s revalued leasehold property is as follows:LocationSite area(sq. metres)TenureYear ofValuationDescriptionand usage1 Shipyard RoadSingapore 62812824,712 Leasehold, 30 yearscommencing1 November 19911989 Office andmanufacturingof gases(b) The revaluation of the Group’s leasehold property in Singapore was made by the Directors in 1989.If the leasehold property, that had been revalued, were measured using the cost model, the carrying amount at theend of the financial year would be $463,000 (2009: $519,000).71

A Stronger Leeden in Asia.Notes to the Financial Statementsfor the Financial Year ended 31 December 201010. Property, plant and equipment (cont’d)(c) During the year, the Group acquired motor vehicles and plant and machinery at an aggregate cost of $580,000(2009: $1,297,000) by means of finance leases. The net book value of motor vehicles and plant and machineryas at 31 December 2010 include assets held under hire purchase contracts arrangements of $1,569,000 (2009:$1,645,000) and $3,802,000 (2009: $3,101,000) respectively for the Group.(d)In addition to assets held under finance leases, the Group’s leasehold property and freehold land and propertywith a carrying amount of $4,816,000 (2009: $2,044,000) and $6,032,000 (2009: $5,894,000) respectively arepledged to secure the Group’s bank loans (Notes 25 and 28).11. Subsidiary companiesCompany2010 2009$’000 $’000Unquoted shares, at cost 15,692 15,692Due from subsidiary companies - non-trade 41,932 42,38157,624 58,073Amounts due from subsidiary companies are unsecured, interest free and are not expected to be repaid within the nexttwelve months. These amounts are to be settled in cash.Acquisition of a subsidiary company in 2009On 2 November 2009, Eversafe Extinguisher Sdn Bhd, an indirect 55% owned subsidiary company, contributed RM88,000(approximately S$36,000) for a 88% equity interest in the registered capital of Eversafe System Sdn. Bhd. (“ESSB”).The fair values of the identifiable assets of ESSB were as follows:Property, plant and equipment 63Trade and other debtors 529Stocks 63Cash and cash equivalents 19Trade and other creditors (638)Provisions (23)Net identifiable assets 13Less: Non-controlling interests (1)Goodwill arising from acquisition 24Consideration paid 36Less: Cash and cash equivalents acquired (19)Net cash outflow 17$’00072

Notes to the Financial Statementsfor the Financial Year ended 31 December 2010Leeden Limited Annual Report 201012. Associated companiesGroup2010 2009$’000 $’000Unquoted shares, at cost 2,461 4,326Share of post-acquisition reserves 937 (1,425)Due from associated companies - non-trade 6,687 10,99810,085 13,899Less:Impairment loss on investment – (418)Allowance for doubtful debts – (4,678)10,085 8,803Receivables that are impairedMovements in allowance accounts:Individually impaired2010 2009$’000 $’000At 1 January 4,678 3,478Charge for the year – 1,200Written back (4,678) –At 31 December – 4,678The amounts due from associated companies are unsecured, bear interest from 3.0 % to 8.0% (2009: 3.0% to 8.0%) perannum and are not expected to be repaid within the next twelve months. These amounts are to be settled in cash.In 2009, the Group carried out a review of the recoverable amount of its investment in an associated company that hadbeen making losses. From the review, no impairment losses were considered. The associated company had subsequentlybeen sold during the year.In 2009, the Group had not recognised losses relating to an associated company where its share of losses exceededthe Group’s interest in this associated company. The Group’s cumulative share of unrecognised losses on 31 December2009 was approximately $1,453,000; the Group had no obligation in respect of these losses. The Group disposed off theassociated company during the year.73

A Stronger Leeden in Asia.Notes to the Financial Statementsfor the Financial Year ended 31 December 201012. Associated companies (cont’d)The summarised financial information of the associated companies, not adjusted for the proportion of ownership interestheld by the Group is as follows:Group2010 2009$’000 $’000Assets and liabilities:Current assets 12,099 18,480Non-current assets 20,645 26,057Total assets 32,744 44,537Non-current liabilities (2,217) (7,241)Current liabilities (7,179) (29,310)Total liabilities (9,396) (36,551)Results:Revenue 13,791 15,953Profit/(loss) for the year 418 (1,981)13. Joint venture companyGroup2010 2009$’000 $’000Unquoted shares, at cost 70 –Share of post-acquisition reserves (21) –Due from joint venture company - non-trade 16 –65 –Amounts due from joint venture company are unsecured, interest free and are not expected to be repaid within the nexttwelve months. These amounts are to be settled in cash.74

Notes to the Financial Statementsfor the Financial Year ended 31 December 2010Leeden Limited Annual Report 201013. Joint venture company (cont’d)The aggregate amounts of each of current assets, non-current assets, current liabilities, non-current liabilities, income andexpenses related to the Group’s interest in the jointly-controlled entity is as follows:Group2010 2009$’000 $’000GroupAssets and liabilities:Current assets 363 –Non-current assets 84 –Total assets 447 –Current liabilities (356) –Non-current liabilities – –Total liabilities (356) –Results:Revenue 347 –Expenses (390) –Loss for the year (43) –14. Other investmentsGroup2010 2009$’000 $’000Quoted investments comprise:Shares in corporations 152 –Unquoted investments comprise:Shares in corporations 252 267404 267Quoted investments are stated at fair value by reference to published market prices at the balance sheet date.75

A Stronger Leeden in Asia.Notes to the Financial Statementsfor the Financial Year ended 31 December 201015. Intangible assetsTradenamesCustomerrelationshipsClubmembershipTotal$’000 $’000 $’000 $’000GroupCostBalance at 1 January 2009, 31 December 2009and 1 January 2010 3,663 1,666 128 5,457Additions – – 23 23Exchange differences – – 4 4Balance at 31 December 2010 3,663 1,666 155 5,484Accumulated depreciation and impairmentBalance at 1 January 2009 – 102 – 102Charge for the year – 176 – 176Balance at 31 December 2009 and1 January 2010 – 278 – 278Charge for the year – 176 – 176Balance at 31 December 2010 – 454 – 454Net book valueAt 31 December 2010 3,663 1,212 155 5,030At 31 December 2009 3,663 1,388 128 5,179Trade names and customer relationshipsTrade names and customer relationships relate to the “Eversafe” and “Power Weld” trade names that were acquired inbusiness combinations. Customer relationships relate to value of customer base with reference to recurring businessdealings. As mentioned in Note 2.11, the useful life of these trade names and customer relationships are estimated to beindefinite and 7 to 10 years respectively.Club membershipIn 2010 and 2009, the carrying amount of club membership approximates published market price at the balance sheetdate. Hence, no impairment loss is required to be recognised.There is no amortisation of club membership during the financial year as they are insignificant.Amortisation expenseThe amortisation of customer relationship is included in the “Other Costs” in the income statement.76

Notes to the Financial Statementsfor the Financial Year ended 31 December 2010Leeden Limited Annual Report 201015. Intangible assets (cont’d)Impairment testing of trade namesThe recoverable amounts have been determined based on value in use calculations using cash flow projections fromfinancial budgets approved by management covering a five year period. The pre-tax discount rate applied to the cash flowprojections and the forecasted growth rates used to extrapolate cash flows beyond the five year period are as follow:2010 2009$’000 $’000GroupGrowth rates 1% - 2% 1% - 2%Pre-tax discount rates 13.0% - 14.7% 13.0% - 14.7%The calculations of value in use are most sensitive to the following assumptions:Royalty rates – Royalty rates adopted are based on the analysis of market transactions in the relevant industry from RoyaltySource.Growth rates – The forecasted terminal growth rates are based on expectations that the industry will mature in the longrun.Pre-tax discount rates – Discount rates reflect management’s estimate of the risks specific to each entity. This is thebenchmark used by management to assess operating performance and to evaluate future investment proposals. Indetermining appropriate discount rate for each entity, regard has been given to the risk associated with the trademark toapply to the forecast royalty cashflow stream.Market share assumptions – These assumptions are important because, as well as using industry data for growth rates (asnoted above), management assess how the entity’s position, relative to its competitors, might change over the budgetedperiod. Management expects the Group’s share of the industrial market to be stable over the budget period.16. GoodwillGroup2010 2009$’000 $’000CostBalance at 1 January 176 152Acquisition of subsidiary companies – 24Balance at 31 December 176 17677

A Stronger Leeden in Asia.Notes to the Financial Statementsfor the Financial Year ended 31 December 201017. Development propertyGroup2010 2009$’000 $’000Development costs 2,361 53,188Less : Progress billings – (43,872)2,361 9,316Borrowing costs capitalised during the year 523 545In accordance with a Collaboration Agreement between the 20 existing owners of Paterson Lodge and a subsidiarycompany, the owners permitted the subsidiary company, at its own costs, to demolish the existing building on the landlocated at 20 Paterson Road, Singapore 238509, and to develop it into a new residential development comprising a newresidential building with 35 new units with certain communal facilities. The subsidiary company also undertook to delivervacant possession of 20 new units out of the 35 new units and the respective subsidiary Strata Certificates of Titles tothe respective 20 existing owners. The remaining 15 new units are transferred to the subsidiary company in considerationof the role and undertaking by the subsidiary company as stated above.A subsidiary company has provided corporate guarantees to banks for pre-existing loans obtained by certain existingowners of the development property (Note 35). These pre-existing loans are secured by the respective owners’ units. Theloans had been repaid during the year.TOP has been obtained during the year.The details of the development property are as follows:Location Site area (sq metres) Tenure of land20 Paterson RoadSingapore 2385091,077 FreeholdDevelopment costs include an amount of subsidiary company’s directors’ remuneration of $84,000 (2009: $99,000).International Financial Reporting Interpretations Committee (“IFRIC”) Interpretation and Recommended Accounting Practice(“RAP”)The International Accounting Standards Board issued IFRIC Interpretation 15 in July 2008 which becomes effective forfinancial years beginning on or after 1 January 2009. When adopted, the interpretation is to be applied retrospectively.It clarifies when and how revenue and related expenses from the sale of a real estate unit should be recognised if anagreement between a developer and a buyer is reached before construction of the real estate is completed. Furthermore,the interpretation provides guidance on how to determine whether an agreement is within the scope of FRS 11 (ConstructionContract) or FRS 18 (Revenue).RAP 11 Pre-Completion Contracts for the Sale of Development PropertyRAP 11 is still applicable in Singapore as IFRIC Interpretation 15 has not been adopted by the Accounting StandardsCouncil. It was issued by the Institute of Certified Public Accountants of Singapore in October 2005. In the RAP, it ismentioned that a property developer’s sales and purchase agreement is not a construction contract as defined in FRS11 (Construction Contract) and the percentage of completion (“POC”) method of recognising revenue, which is allowedunder FRS 11 for construction contract, may not be applicable for property developers. The relevant standard for revenuerecognition by property developers is FRS 18 (Revenue), which addresses revenue recognition generally for all types ofentities. However, there is no clear conclusion in FRS 18 whether the POC method or the completion of construction(“COC”) method is more appropriate for property developers.78

Leeden Limited Annual Report 2010Notes to the Financial Statementsfor the Financial Year ended 31 December 201017. Development property (cont’d)The Group uses the POC method for recognising revenues from partly completed residential projects which are held forsale. Had the COC method been adopted, the impact on the financial statements will be as follows:Group2010 2009$’000 $’000Increase/(decrease) in turnover recognised for the year 25,909 (17,277)Decrease in opening accumulated profit (8,237) (3,823)Increase/(decrease) in profit for the year 5,787 (6,306)Increase/(decrease) in carrying value of development property:At 1 January 32,037 19,244At 31 December (4,594) 32,037(Decrease)/increase in non-controlling interests:At 1 January (1,892) (1,635)Share of profit/(loss) for the year 1,736 (1,892)18. Amounts due from subsidiary companiesAmounts due from subsidiary companies are non-trade in nature, unsecured, non-interest bearing and repayable ondemand. These amounts are to be settled in cash.19. Amounts due from/(to) related partiesGroupCompany2010 2009 2010 2009$’000 $’000 $’000 $’000Amounts due from related partiesTrade – 504 301 170Non-trade 5,072 905 7 –Allowance for doubtful debts (3,948) – – –1,124 905 7 –1,124 1,409 308 170Amounts due to related partiesTrade 1,162 – – –Non-trade 2,520 2,380 – –3,682 2,380 – –Amounts due from/(to) related parties are unsecured, non-interest bearing and repayable on demand. These amounts areto be settled in cash.79

A Stronger Leeden in Asia.Notes to the Financial Statementsfor the Financial Year ended 31 December 201019. Amounts due from/(to) related parties (cont’d)Receivables that are impairedIndividually impaired2010 2009$’000 $’000Movements in allowance accounts:At 1 January – –Charge for the year 3,948 –Written back – –At 31 December 3,948 –20. StocksGroupCompany2010 2009 2010 2009$’000 $’000 $’000 $’000Balance sheetRaw materials 3,011 2,819 – –Work-in-progress 965 579 – –Finished goods 37,450 32,716 2,789 3,160Goods-in-transit 1,612 2,594 442 258Total inventories at lower of cost and netrealisable value 43,038 38,708 3,231 3,418Income statementGroup2010 2009$’000 $’000Stocks recognised as an expense in cost of sales 119,660 102,662Stocks recognised as an expense in other costs:Allowance for stocks obsolescence 692 1,547Allowance for stock obsolescence written back (33) –The write-back of stock obsolescence was made when the related stocks were sold above their carrying value in 2010.80

Leeden Limited Annual Report 2010Notes to the Financial Statementsfor the Financial Year ended 31 December 201021. Trade debtorsTrade debtors are non-interest bearing and are generally on 30 days’ terms. They are recognised at their original invoiceamounts which represent their fair values on initial recognition.Receivables that are past due but not impairedThe Group has trade debtors amounting to $30,317,000 (2009: $31,407,000) that are past due at the balance sheetdate but not impaired. These receivables are unsecured and the analysis of their ageing at the balance sheet date is asfollow:GroupCompany2010 2009 2010 2009$’000 $’000 $’000 $’000Trade debtors past due:Lesser than 30 days 10,521 15,687 1,375 1,00030 to 60 days 8,318 4,986 106 28661 to 90 days 3,945 4,387 99 164More than 90 days 7,533 6,347 383 –30,317 31,407 1,963 1,450Receivables that are impairedThe Group’s trade debtors that are impaired at the balance sheet date and the movement of the allowance accounts usedto record the impairment are as follows:GroupCollectively impairedIndividually impaired2010 2009 2010 2009$’000 $’000 $’000 $’000Trade debtors 9,686 7,880 616 938Less: Allowance for doubtful debts (1,595) (1,563) (616) (938)8,091 6,317 – –Movement in allowance accounts:At 1 January 1,563 1,255 938 1,240Exchange adjustment (135) (2) (11) –Charge for the year 303 589 241 –Written back (3) – (301) (302)Written off (133) (279) (251) –At 31 December 1,595 1,563 616 93881

A Stronger Leeden in Asia.Notes to the Financial Statementsfor the Financial Year ended 31 December 201021. Trade debtors (cont’d)CompanyIndividually impaired2010 2009$’000 $’000Trade debtors 5 6Less: Allowance for doubtful debts (5) (6)– –Movement in allowance accounts:At 1 January 6 35Reversal for the year (1) (29)At 31 December 5 6Trade debtors that are individually determined to be impaired at the balance sheet date relate to debtors that are insignificant financial difficulties and have defaulted on payments. These receivables are not secured by any collateral orcredit enhancements.22. Other debtorsGroupCompany2010 2009 2010 2009$’000 $’000 $’000 $’000Sundry deposits 708 816 91 102Other debtors 552 453 6 56Accrued receivables 5,399 – – –Tax recoverable 112 29 – –6,771 1,298 97 158Other debtors are non-trade in nature, unsecured, non-interest bearing and are repayable on demand.Accrued receivables relate to retention monies relating to the development property.Receivables that are impairedThe Group’s other debtors that are impaired at the balance sheet date are as follows:GroupIndividually impaired2010 2009$’000 $’000Other debtors – nominal amounts 1,036 1,036Less: Allowance for doubtful debts (1,036) (1,036)– –There is no movement in the allowance account that is used to record the doubtful debts.Other debtors that are individually determined to be impaired at the balance sheet date relate to debtors that are insignificant financial difficulties and have defaulted on payments.82

Leeden Limited Annual Report 2010Notes to the Financial Statementsfor the Financial Year ended 31 December 201023. DerivativesGroup2010Contract/NotionalAmount Assets Liabilities$’000 $’000 $’000Forward currency contracts 706 – (20)Interest rate swap- SGD 3,000 – (188)– (208)2009Interest rate swap- SGD 3,000 – (167)– (167)Forward currency contracts are used to hedge the Group’s purchases denominated in USD and AUD for which firmcommitments exist at the end of the reporting period, extending to 31 March 2011.The interest rate swap is used to hedge cash flow interest rate risk arising from floating rate SGD bank loans. This interestrate swap receives floating interest equal to 3 months SGD Swap Offer Rate (“SOR”) and pays a fixed rate of interest of3.45% (2009: 3.45%) per annum.24. Cash and cash equivalentsGroupCompany2010 2009 2010 2009$’000 $’000 $’000 $’000Fixed deposits 325 308 – –Cash and bank balances 21,368 20,533 6,892 4,68621,693 20,841 6,892 4,686Less: Fixed deposits pledged – (308) – –21,693 20,533 6,892 4,686Fixed deposits are made for varying periods of between 1 and 3 months depending on the immediate cash requirementsof the Group and earn interest from 1.50% to 3.10% (2009: 0.63% to 2.31%) per annum. Cash at bank earns interest atfloating rates based on daily bank deposit rates.Included in cash and cash equivalents of the Group is an amount of approximately $6,934,000 (2009: $5,223,000)denominated in United States Dollars.83

A Stronger Leeden in Asia.Notes to the Financial Statementsfor the Financial Year ended 31 December 201024. Cash and cash equivalents (cont’d)For the purpose of consolidated cash flow statement, cash and cash equivalents comprise the following at the balancesheet date:GroupNote 2010 2009$’000 $’000Fixed deposits 325 308Cash and bank balances 21,368 20,533Bank overdrafts 25 (180) (23)21,513 20,818Less: Fixed deposits pledged as collaterals – (308)21,513 20,510Certain fixed deposits were pledged as security for the Group’s property loan. The loan had been repaid during the year.Bank overdrafts are included in the determination of cash and cash equivalents in the consolidated cash flow statementbecause they form an integral part of the Group’s cash management.25. Amounts due to bankersGroupCompanyNote 2010 2009 2010 2009$’000 $’000 $’000 $’000Secured -Term loans 1,628 1,370 – –Revolving loans 7,625 6,870 – –Property loan – 1,300 – –Bank overdrafts 24 180 1,737 (a) – –Trust receipts and banker acceptance 1,889 983 – –Unsecured -Term loans 3,038 8,367 3,038 5,066Revolving loans 17,893 18,247 5,800 7,695Bills payable and trust receipts 15,071 12,576 2,417 1,86847,324 51,450 11,255 14,629(a)Included in the bank overdrafts was an amount of $1,714,000 in 2009 which has been drawn down for the purposeof financing the construction cost of the development property (Note 17) of the Group. This amount had not beenincluded as part of cash and cash equivalents (Note 24) as it does not form an integral part of the Group’s cashmanagement.Secured term loansThe secured term loans bear interest from 3.65% to 8.08% (2009: 2.30% to 8.50%) per annum and are secured by thefollowing:(a)(b)(c)legal charge over the freehold and leasehold land and property of the subsidiary companies;corporate guarantees by subsidiary companies;guarantee by directors of subsidiary companies;84

Notes to the Financial Statementsfor the Financial Year ended 31 December 2010Leeden Limited Annual Report 201025. Amounts due to bankers (cont’d)Secured term loans (cont’d)(d)(e)debenture over the fixed and floating charges over all present and future assets of the subsidiary company; anddebenture over certain gas tanks/storage tanks of a sub-subsidiary company.Secured revolving loans and trust receiptsThe revolving loans and trust receipts bear interest from 1.51% to 3.79% (2009: 1.51% to 3.25%) per annum and aresecured by the following:(a)(b)fixed and floating charge over all present and future assets of the subsidiary company; andcorporate guarantees by a subsidiary companySecured property loanThe property loan bore interest at 5.25% (2009: 5.25%) per annum and was secured by the following:(a)(b)a first legal mortgage over the development property; andcorporate guarantee from a subsidiary company and a related partyThe loan had been repaid during the year.Secured bank overdraftsThe bank overdrafts bear interest from 5.55% to 8.30% (2009: 5.55% to 8.75%) per annum and are secured by thefollowing:(a)(b)(c)(d)legal charge over the freehold land and properties of a subsidiary company;legal charge over certain leasehold land and property of a subsidiary company;corporate guarantees by certain subsidiary companies; anddebenture over the fixed and floating charge over all present and future assets of a subsidiary company.Secured banker acceptanceThe banker acceptance bears interest from 3.15% to 4.70% (2009: 3.11% to 4.98%) per annum and are secured by thefollowing:(a)(b)(c)(d)legal charge over the freehold land and properties of a subsidiary company;legal charge over certain leasehold land and property of a subsidiary company;corporate guarantees by certain subsidiary companies; anddebenture over the fixed and floating charge over all present and future assets of a subsidiary company.Unsecured term loansThe unsecured term loans bear interest from 2.30% to 5.00% (2009: 1.50% to 6.50%) per annum.Unsecured revolving loansThe unsecured revolving loans bear interest from 0.94% to 2.93% (2009: 2.35% to 4.85%) per annum.85

A Stronger Leeden in Asia.Notes to the Financial Statementsfor the Financial Year ended 31 December 201025. Amounts due to bankers (cont’d)Unsecured bills payable and trust receiptsThe unsecured bills payable and trust receipts bear interest from 1.62% to 1.98% (2009: 2.76% to 9.00%) per annum.26. Other creditors and accrualsGroupCompany2010 2009 2010 2009$’000 $’000 $’000 $’000Accruals 4,974 4,087 1,033 907Sundry creditors 2,558 2,803 314 504Downpayment from customers 1,458 1,061 138 428,990 7,951 1,485 1,453Sundry creditors are unsecured, non-interest bearing and are normally settled on 30 to 60 days terms.27. Hire purchase creditorsThe Group acquired certain plant and machinery under hire purchase arrangements over the next 1 to 7 years. Thediscount rates implicit in the leases are between 2.27% to 4.10% (2009: 2.26% to 4.10%) per annum. There are norestrictions placed upon the Group by entering into these leases. The future minimum lease payments together with thepresent value of the net minimum lease payments are as follows:MinimumpaymentsPresent value ofpaymentsGroupMinimumpaymentsPresent value ofpayments2010 2010 2009 2009$’000 $’000 $’000 $’000Within 1 year 1,421 1,271 1,357 1,593After 1 year but not more than 5 years 2,162 2,033 2,350 1,708After 5 years 21 20 139 802,183 2,053 2,489 1,788Total minimum lease payments 3,604 3,324 3,846 3,381Less: amounts representing finance charges (280) – (465) –Present value of lease payments 3,324 3,324 3,381 3,381MinimumpaymentsPresent value ofpaymentsCompanyMinimumpaymentsPresent value ofpayments2010 2010 2009 2009$’000 $’000 $’000 $’000Within 1 year 45 41 66 59After 1 year but not more than 5 years 68 65 134 127Total minimum lease payments 113 106 200 186Less: amounts representing finance charges (7) – (14) –Present value of lease payments 106 106 186 18686

Leeden Limited Annual Report 2010Notes to the Financial Statementsfor the Financial Year ended 31 December 201028. Long-term loansGroupCompany2010 2009 2010 2009$’000 $’000 $’000 $’000Secured- Term loans 10,672 5,131 – –Unsecured- Term loans 2,922 6,123 2,922 5,99913,594 11,254 2,922 5,999The secured term loans bear interest ranging from 3.65% to 8.08% (2009: 2.30% to 8.50%) per annum and is secured bya legal mortgage over certain leasehold properties.29. Amounts due to a related partyAmounts due to a related party were unsecured, and have an interest rate of 10% (2009: 10%) per annum. These amountshad been repaid during the year.30. Deferred tax liabilitiesGroupCompany2010 2009 2010 2009$’000 $’000 $’000 $’000Balance at beginning of year 8,321 7,144 5 5Exchange adjustment (111) (185) – –(Write-back)/provision for the year (374) 1,362 – –Balance at end of year 7,836 8,321 5 5Deferred taxes relate to the following:Differences in carrying values of property, plantand equipment for accounting and tax purposes 6,073 4,941 5 5Difference in carrying value of the revaluationreserve for accounting and tax purposes 91 1,461 – –Differences in carrying values of the developmentproperty for accounting and tax purposes 1,672 1,919 – –Net deferred tax liabilities 7,836 8,321 5 587

A Stronger Leeden in Asia.Notes to the Financial Statementsfor the Financial Year ended 31 December 201031. Share capital and treasury shares(a)Share capitalGroup and CompanyNo. of shares‘000 $’000Issued and fully paid ordinary shares:At 1 January 2009 176,050 52,900Exercise of employee share options 10 3Exercise of bonus warrants 3,680 919At 31 December 2009 and 1 January 2010 179,740 53,822Exercise of employee share options 640 157At 31 December 2010 180,380 53,979The holders of ordinary shares (except treasury shares) are entitled to receive dividends as and when declared bythe Company. All ordinary shares carry one vote per share without restrictions. The ordinary shares have no parvalue.Details of outstanding share options of the Company are set out in Note 33.Proceeds from the exercise of the bonus warrants are used as working capital in the Company.(b)Treasury sharesGroup and CompanyNo. of shares‘000 $’000At 1 January 2009 3,127 1,217Acquired during the financial year 2,387 805At 31 December 2009 and 1 January 2010 and 31 December 2010 5,514 2,022Treasury shares relate to ordinary shares of the Company that is held by the Company.In 2009, the Company acquired 2,387,000 shares in the Company through purchases on the Singapore Exchange.The total amount paid to acquire the shares was $805,000 and this was presented as a component withinshareholder’s equity. There are no such transactions in the current year.32. Asset revaluation reserve, capital reserve, employee share option reserve and foreign currency translationreserveAsset revaluation reserveThe asset revaluation reserve represents increases from the revaluation of the leasehold property in 1989 as mentionedin Note 10.Capital reserveThe capital reserve is not available for distribution as dividends and the Company’s assets.88

Notes to the Financial Statementsfor the Financial Year ended 31 December 2010Leeden Limited Annual Report 201032. Asset revaluation reserve, capital reserve, employee share option reserve and foreign currency translationreserve (cont’d)Foreign currency translation reserveThe foreign currency translation reserve represents exchange differences arising from the translation of the financialstatements of foreign operations whose functional currencies are different from that of the Group’s presentationcurrency.Employee share option reserveEmployee share option reserve represents the equity settled share options granted to employees. The reserve is made upof the cumulative value of services received from employees recorded over the vesting period commencing from the grantdate of equity-settled share options, and is reduced by the expiry or exercise of the share options.33. Equity compensation benefitsShare Option SchemesAce Dynamics Share Option Scheme (“Scheme I”)At the Extraordinary meeting held on 19 February 2000, shareholders approved the adoption of Scheme I. Under SchemeI, options may be granted to selected employees of the Group including employees of its associated companies, executiveand non-executive Directors. Controlling shareholders and their associated companies are not eligible to participate inScheme I. Further details of Scheme I are set out in the circular to shareholders dated 28 January 2000.Leeden Share Option Scheme 2007 (“Scheme II”)At the Extraordinary meeting held on 8 August 2007, shareholders approved the adoption of the Scheme. Under SchemeII, options may be granted to confirmed Group employees, including employees of associated companies, executive andnon-executive directors and controlling shareholders. Further details are set out in the circular to shareholders dated 17July 2007.Movements of share options:The following table illustrates the number (“No.”) and weighted average exercise prices (“WAEP”) of, and movements in,share options during the financial year:2010 2009No. of shares WAEP No. of shares WAEP‘000 $ ‘000 $Outstanding at 1 January 17,105 0.34 11,150 0.38- Granted – – 6,520 0.28- Exercised (640) 0.20 (10) 0.34- Expired (140) 0.48 (555) 0.44Outstanding at 31 December 16,325 0.34 17,105 0.34Exercisable at 31 December 9,855 0.38 9,175 0.36In 2009, the weighted average fair value of options granted was $0.28. There are no grants in the current year.The weighted average share price at the date of exercise of the options exercised during the financial year was $0.36(2009: $0.34).The range of exercise prices for options outstanding at the end of the year was $0.20 to $0.48 (2009: $0.20 to $0.48).The weighted average remaining contractual life for these options is 6.08 years (2009: 6.99 years).89

A Stronger Leeden in Asia.Notes to the Financial Statementsfor the Financial Year ended 31 December 201033. Equity compensation benefits (cont’d)Fair value of share options grantedThe fair value of share options as at the date of grant, is estimated by an external valuer using a binomial model, takinginto account the terms and conditions upon which the options were granted. The inputs to the model used for the yearended 31 December 2009 are shown below.Scheme IDividend yield (%) 1Expected volatility (%) 46.71Historical volatility (%) 46.71Risk-free interest rate (%) 2.25 to 2.81Expected life of option (years) 2.5Weighted average share price ($) 0.19Scheme IIDividend yield (%) 1.5 – 2.82Expected volatility (%) 41.46 – 46.00Historical volatility (%) 41.46 – 41.56Risk-free interest rate (%) 0.71 to 2.81Weighted average share price ($) 0.36 – 0.59The expected life of the options is based on historical data and is not necessarily indicative of exercise patterns that mayoccur. The expected volatility reflects the assumption that the historical volatility is indicative of future trends, which mayalso not necessarily be the actual outcome. No other features of the option grant were incorporated into the measurementof fair value.There is no grant of share options in 2010.2009200934. Commitments(a)Capital commitmentsCapital expenditure contracted for as at the balance sheet date but not recognised in the financial statements areas follows:2010 2009$’000 $’000GroupCapital commitments in respect of property, plant and equipment – 88390

Leeden Limited Annual Report 2010Notes to the Financial Statementsfor the Financial Year ended 31 December 201034. Commitments (cont’d)(b)Operating lease commitmentsThe Group has entered into leases on its leasehold property and retail shops. These non-cancellable leases haveremaining lease terms of 1 to 15 years. The lease on the Group’s leasehold property includes a clause to enableupward revision of the rental charge on an annual basis. The lease terms do not contain any restriction on theGroup’s activities concerning dividends, additional debt or further leasing. Future minimum lease payments undernon-cancellable operating leases at the balance sheet are as follows:Group2010 2009$’000 $’000Due within one year 1,991 2,035Due within two to five years 3,312 4,189Due after five years 2,123 2,2297,426 8,453Minimum lease payments recognised as an expense in profit or loss for the financial year ended 31 December2010 amounted to $1,070,000 (2009: $537,000).35. Contingent liabilitiesContingent liabilities not provided for in the financial statements for year ended 31 December comprised:GroupCompany2010 2009 2010 2009$’000 $’000 $’000 $’000Unsecured- Guarantees issued to banks for bank facilitiesgranted to associated companies 7,424 7,241 – –Secured- Guarantees issued to banks for bank facilitiesgranted to certain existing unit owners ofdevelopment property – 2,518 – –A subsidiary company has provided corporate guarantees to banks for pre-existing loans obtained by certain existingowners of the development property as mentioned in Note 17. These loans had been repaid during the year.91

A Stronger Leeden in Asia.Notes to the Financial Statementsfor the Financial Year ended 31 December 201036. Significant related party disclosuresIn addition to the related party information disclosed elsewhere in the financial statements, the following significanttransactions between the Group and related parties took place at terms agreed between the parties during the financialyear:Group2010 2009$’000 $’000Rental and service charges to a related party 898 861Rental fee charge to a related party 100 97Administrative fees charged to an associated company 58 62Purchases from associated companies 56 963Sales to associated companies 2,285 2,313Interest paid to a related company – 83Interest received from an associated company 723 512Purchase from related companies 9,571 8,630Sales to related companies 4,813 7,234Related companiesThese are associated companies and entities owned by the minority shareholders.Directors’ and key executives’ remunerationGroup2010 2009$’000 $’000Short-term employee benefits 3,187 3,117Central Provident Fund contributions 59 723,246 3,189Comprise amounts paid to:Directors of the Company 2,210 2,231Other key management personnel 1,036 9583,246 3,18937. Financial risk management objectives and policiesThe Group and the Company are exposed to financial risks arising from its operations and the use of financial instruments.The key financial risks include interest rate risk, foreign currency risk, credit risk, liquidity risk and market price risk. Theboard of directors reviews and agrees on policies and procedures for the management of these risks.The following sections provide details regarding the Group’s and Company’s exposure to the above-mentioned financialrisks and the objectives, policies and processes for the management of these risks.(a)Interest rate riskInterest rate risk is the risk that the fair value or future cash flows of the Group’s and the Company’s financialinstruments will fluctuate because of changes in market interest rates. The Group’s and the Company’s exposureto interest rate risk arises primarily from their loans and borrowings.92

Notes to the Financial Statementsfor the Financial Year ended 31 December 2010Leeden Limited Annual Report 201037. Financial risk management objectives and policies (cont’d)(a)Interest rate risk (cont’d)The Group’s exposure to changes in interest rates relates primarily to the Group’s bank borrowings and hirepurchase creditor. The Group’s policy is to obtain the most favourable interest rates available without increasing itsforeign currency exposure.To manage this risk, the Group also enters into interest rate swap to minimise the fluctuation of interest costs dueto floating rate debts. The Group manages interest costs in alignment with the market expectation of future ratesmovement. The Group does not enter into interest rate swap in a decreasing rate environment.Sensitivity analysis for interest rate riskAt the balance sheet date, if SGD and MYR interest rates had been 2 (2009: 31) and 75 (2009: 125) basis pointsrespectively lower/higher with all other variables held constant, the Group’s profit net of tax would have been$7,000 (2009: $114,000) and $97,000 (2009: $121,000) respectively higher/lower, arising mainly as a result oflower/higher interest expense on floating rate loans and borrowings. The assumed movement in basis points forinterest rate sensitivity analysis is based on the currently observable market environment, showing a significantlyhigher volatility as in prior years.Surplus funds are placed with major financial institutions.(b)Foreign currency riskThe Group has transactional currency exposures arising from sales or purchases that are denominated in acurrency other than the respective functional currencies of Group entities, primarily SGD and Malaysian Ringgit(MYR). The foreign currencies in which these transactions are denominated are mainly United States Dollars (USD).Approximately 18% (2009: 17%) of the Group’s sales are denominated in foreign currencies, whilst approximately41% (2009: 61%) of costs are denominated in the respective functional currencies of the Group entities. TheGroup enters into forward currency contracts to minimise the currency exposures.The Group seeks to maintain a natural hedge through the matching of liabilities against assets in the samecurrency. Where appropriate, the Group enters into short term forward contracts and foreign exchange derivativeinstruments to hedge against expected foreign currency exposure.The Group is also exposed to currency translation risk arising from its net investments in foreign operations,including Malaysia, People’s Republic of China (“PRC”) and Thailand. The Group’s net investments in Malaysia, PRCand Thailand are not hedged as currency positions in MYR, RMB and Thai Baht are considered to be long-term innature.Included in trade debtors of the Group are amounts of approximately $7,110,000 (2009: $4,629,000) denominatedin USD.Included in trade creditors of the Group are amounts of approximately $7,329,000 (2009: $6,397,000), $783,000(2009: $1,542,000) and $210,000 (2009: $410,000) denominated in USD, EUR and AUD respectively.The Group also holds cash and cash equivalent denominated in foreign currencies for working capital purposes. Atthe balance sheet date, such foreign currency balances (mainly in USD) amount to $6,934,000 (2009: $5,223,000)for the Group.93

A Stronger Leeden in Asia.Notes to the Financial Statementsfor the Financial Year ended 31 December 201037. Financial risk management objectives and policies (cont’d)(b)Foreign currency risk (cont’d)Sensitivity analysis for foreign currency riskThe following table demonstrates the sensitivity of the Group’s profit net of tax to a reasonably possible changein the USD, EUR and AUD exchange rates (against SGD), against the respective functional currencies of the Groupentities, with all other variables held constant.2010 2009Profit net of tax Profit net of tax$’000 $’000USD - strengthened 8% (2009: 3%) (92) 85- weakened 8% (2009: 3%) 92 (85)EUR - strengthened 15% (2009: 1%) (159) (13)- weakened 15% (2009: 1%) 159 13AUD - strengthened 4% (2009: 25%) (8) (85)- weakened 4% (2009: 25%) 8 85(c)Credit riskCredit risk is the risk of loss that may arise on outstanding financial instruments should a counterparty defaulton its obligations. The Group’s and the Company’s exposure to credit risk arises primarily from trade and otherreceivables.The Group trades only with recognised and creditworthy third parties. It is the Group’s policy that all customerswho wish to trade on credit terms are subject to credit verification procedures. In addition, receivable balances aremonitored on an ongoing basis with the result that the Group’s exposure to bad debts is not significant.With respect to credit risk arising from the other financial assets of the Group, which comprise trade and otherdebtors and cash and cash equivalents, the Group’s exposure to credit risk arises from the default of the counterparty, with a maximum exposure equal to the carrying amount of these instruments.The Group’s objective is to seek continual revenue growth while minimising losses incurred due to increased creditrisk exposure.Since the Group trades only with recognised and creditworthy third parties, there is no requirement for collateral.There are no significant concentrations of credit risk within the Group.Exposure to credit riskAt the balance sheet date, the Group’s and the Company’s maximum exposure to credit risk is represented bythe carrying amount of each class of financial assets recognised in the balance sheets, including derivatives withpositive fair values.Information regarding credit enhancements for trade and other debtors is disclosed in Notes 21 and 22.94

Notes to the Financial Statementsfor the Financial Year ended 31 December 2010Leeden Limited Annual Report 201037. Financial risk management objectives and policies (cont’d)(c)Credit risk (cont’d)Credit risk concentration profileThe Group determines concentrations of credit risk by monitoring the country and industry sector profile of itstrade receivables on an on-going basis. The credit risk concentration profile of the Group’s trade receivables at thebalance sheet date is as follows:Group2010 2009$’000 % of total $’000 % of totalBy country:Malaysia 16,852 36 15,438 29Singapore 18,567 40 18,129 35Indonesia 8,768 19 7,387 14Hong Kong/China – – 1,167 2Other countries 2,685 5 10,566 2046,872 100 52,687 100Group2010 2009$’000 % of total $’000 % of totalBy industry sectors:Reseller, dealer and trader 11,774 25 8,659 16Shipyard 3,710 8 5,257 10Engineering 3,023 6 6,500 12Oil and gas 6,381 14 3,370 6Property 29 – 12,625 24Water treatment 711 2 1,173 2Offshore 8,421 18 3,816 7Others 12,823 27 11,287 2346,872 100 52,687 100Financial assets that are neither past due nor impairedTrade and other debtors that are neither past due nor impaired are creditworthy debtors with good payment recordswith the Group. Cash and cash equivalents and other investments that are neither past due nor impaired are placedwith or entered into with reputable financial institutions or companies with high credit ratings and no history ofdefault.Financial assets that are either past due or impairedInformation regarding financial assets that are either past due or impaired is disclosed in Note 12 (Associatedcompanies), Note 21 (Trade debtors) and Note 22 (Other debtors).95

A Stronger Leeden in Asia.Notes to the Financial Statementsfor the Financial Year ended 31 December 201037. Financial risk management objectives and policies (cont’d)(d)Liquidity riskLiquidity risk is the risk that the Group or the Company will encounter difficulty in meeting financial obligations dueto shortage of funds. The Group’s and Company’s exposure to liquidity risk arises primarily from mismatches ofthe maturities of financial assets and liabilities. The Group’s and the Company’s objective is to maintain a balancebetween continuity of funding and flexibility through the use of stand-by credit facilities.The Group’s and the Company’s liquidity risk management policy is to maintain a minimum current ratio of 1.0 atall times and to maintain sufficient liquid financial assets and stand-by credit facilities.The table below summarises the maturity profile of the Group’s and the Company’s financial assets and liabilitiesat the balance sheet date based on contractual undiscounted repayment obligations.Group2010Financial assets:Less than1 year 1 to 5 years Over 5 years Total$’000 $’000 $’000 $’000Other investments – – 404 404Amounts due from related parties 1,124 – – 1,124Trade debtors 46,872 – – 46,872Other debtors 6,771 – – 6,771Fixed deposits 325 – – 325Cash and bank balances 21,368 – – 21,368Total undiscounted financial assets 76,460 – 404 76,864Financial liabilities:Amounts due to bankers and long-term loans 47,324 13,594 – 60,918Trade creditors 13,713 – – 13,713Other creditors and accruals 8,990 – – 8,990Amounts due to related parties 3,682 – – 3,682Hire purchase creditors 1,421 2,162 21 3,604Derivatives 208 – – 208Total undiscounted financial liabilities 75,338 15,756 21 91,115Total net undiscounted financialassets/(liabilities) 1,122 (15,756) 383 (14,251)96

Notes to the Financial Statementsfor the Financial Year ended 31 December 2010Leeden Limited Annual Report 201037. Financial risk management objectives and policies (cont’d)(d)Liquidity risk (cont’d)Less than1 year 1 to 5 years Over 5 years Total$’000 $’000 $’000 $’000Group2009Financial assets:Other investments – – 267 267Amounts due from related parties 1,409 – – 1,409Trade debtors 52,687 – – 52,687Other debtors 1,298 – – 1,298Fixed deposits 308 – – 308Cash and bank balances 20,533 – – 20,533Total undiscounted financial assets 76,235 – 267 76,502Financial liabilities:Amounts due to bankers and long-term loans 51,450 11,254 – 62,704Trade creditors 15,928 – – 15,928Other creditors and accruals 7,951 – – 7,951Amounts due to related parties 2,380 – 967 3,347Hire purchase creditors 1,357 2,350 139 3,846Derivatives 167 – – 167Total undiscounted financial liabilities 79,233 13,604 1,106 93,943Total net undiscounted financial liabilities (2,998) (13,604) (839) (17,441)Company2010Financial assets:Amounts due from subsidiary companies 3,755 – 41,932 45,687Amounts due from related parties 308 – – 308Trade debtors 4,400 – – 4,400Other debtors 97 – – 97Cash and bank balances 6,892 – – 6,892Total undiscounted financial assets 15,452 – 41,932 57,384Financial liabilities:Amounts due to bankers and long-term loans 11,255 2,922 – 14,177Trade creditors 4,241 – – 4,241Other creditors and accruals 1,485 – – 1,485Hire purchase creditors 45 68 – 113Total undiscounted financial liabilities 17,026 2,990 – 20,016Total net undiscounted financial(liabilities)/ assets (1,574) (2,990) 41,932 37,36897

A Stronger Leeden in Asia.Notes to the Financial Statementsfor the Financial Year ended 31 December 201037. Financial risk management objectives and policies (cont’d)(d)Liquidity risk (cont’d)Less than1 year 1 to 5 years Over 5 years Total$’000 $’000 $’000 $’000Company2009Financial assets:Amounts due from subsidiarycompanies 7,835 – 42,381 50,216Amounts due from related parties 170 – – 170Trade debtors 2,918 – – 2,918Other debtors 158 – – 158Cash and bank balances 4,686 – – 4,686Total undiscounted financial assets 15,767 – 42,381 58,148Financial liabilities:Amounts due to bankers and long-term loans 14,629 5,999 – 20,628Trade creditors 2,237 – – 2,237Other creditors and accruals 1,453 – – 1,453Hire purchase creditors 66 134 – 200Total undiscounted financialliabilities 18,385 6,133 – 24,518Total net undiscounted financial(liabilities)/assets (2,618) (6,133) 42,381 33,630(e)Market price riskMarket price risk is the risk that the fair value or future cash flows of the Group’s financial instruments will fluctuatebecause of changes in market prices (other than interest or exchange rates). The Group has minimal exposure toequity price risk arising from its investment in quoted equity instruments. These instruments are quoted on theSGX-ST in Singapore and are classified as other investments. The Group does not have exposure to commodityprice risk.98

Leeden Limited Annual Report 2010Notes to the Financial Statementsfor the Financial Year ended 31 December 201038. Financial instrumentsGroup2010AssetsLoans andreceivablesAvailable-forsalefinancialassetsFinancialliabilities atamortised costFair valuethrough profitand lossTotal$’000 $’000 $’000 $’000 $’000Other investments – 404 – – 404Amounts due from related parties 1,124 – – – 1,124Trade debtors 46,872 – – – 46,872Other debtors 6,771 – – – 6,771Fixed deposits 325 – – – 325Cash and bank balances 21,368 – – – 21,368Total financial assets 76,460 404 – – 76,864Total non-financial assets 131,052Total assets 207,916LiabilitiesAmounts due to bankers and longtermloans – – 60,918 – 60,918Trade creditors – – 13,713 – 13,713Other creditors and accruals – – 8,990 – 8,990Hire purchase creditors – – 3,324 – 3,324Amounts due to related parties – – 3,682 – 3,682Derivatives – – – 208 208Total financial liabilities – – 90,627 208 90,835Total non-financial liabilities 9,402Total liabilities 100,23799

A Stronger Leeden in Asia.Notes to the Financial Statementsfor the Financial Year ended 31 December 201038. Financial instruments (cont’d)Group2009AssetsLoans andreceivablesAvailable-forsalefinancialassetsFinancialliabilities atamortisedcostFair valuethrough profitand lossTotal$’000 $’000 $’000 $’000 $’000Other investments – 267 – – 267Amounts due from related parties 1,409 – – – 1,409Trade debtors 52,687 – – – 52,687Other debtors 1,298 – – – 1,298Fixed deposits 308 – – – 308Cash and bank balances 20,533 – – – 20,533Total financial assets 76,235 267 – – 76,502Total non-financial assets 123,809Total assets 200,311LiabilitiesAmounts due to bankers and long-term loans – – 62,704 – 62,704Trade creditors – – 15,928 – 15,928Other creditors and accruals – – 7,951 – 7,951Hire purchase creditors – – 3,381 – 3,381Amounts due to related parties – – 3,347 – 3,347Derivatives – – – 167 167Total financial liabilities – – 93,311 167 93,478Total non-financial liabilities 9,061Total liabilities 102,539100

Leeden Limited Annual Report 2010Notes to the Financial Statementsfor the Financial Year ended 31 December 201038. Financial instruments (cont’d)Company2010AssetsLoans andreceivablesFinancialliabilities atamortised costTotal$’000 $’000 $’000Amounts due from subsidiary companies 45,687 – 45,687Amounts due from related parties 308 – 308Trade debtors 4,400 – 4,400Other debtors 97 – 97Cash and bank balances 6,892 – 6,892Total financial assets 57,384 – 57,384Total non-financial assets 19,470Total assets 76,854LiabilitiesAmounts due to bankers and long-term loans – 14,177 14,177Trade creditors – 4,241 4,241Other creditors and accruals – 1,485 1,485Hire purchase creditors – 106 106Total financial liabilities – 20,009 20,009Total non-financial liabilities 19Total liabilities 20,028101

A Stronger Leeden in Asia.Notes to the Financial Statementsfor the Financial Year ended 31 December 201038. Financial instruments (cont’d)Company2009AssetsLoans andreceivablesFinancialliabilities atamortised costTotal$’000 $’000 $’000Amounts due from subsidiary companies 50,216 – 50,216Amounts due from related parties 170 – 170Trade debtors 2,918 – 2,918Other debtors 158 – 158Cash and bank balances 4,686 – 4,686Total financial assets 58,148 – 58,148Total non-financial assets 19,728Total assets 77,876LiabilitiesAmounts due to bankers and long-term loans – 20,628 20,628Trade creditors – 2,237 2,237Other creditors and accruals – 1,453 1,453Hire purchase creditors – 186 186Total financial liabilities – 24,504 24,504Total non-financial liabilities 6Total liabilities 24,510A. Fair value of financial instruments that are carried at fair valueAll financial instruments carried at fair value by the Group is carried at “significant other observable” (Level 2) fairvalue hierachy.These financial instruments are found in Other investments (Note 14) and Derivatives (Note 23).Fair value hierarchyThe Group classify fair value measurement according to the fair value hierarchy that reflects the significance of theinputs used in making the measurements. The fair value hierarchy have the following levels:• Level 1 – Quoted prices (unadjusted) in active markets for identical assets or liabilities,• Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability,either directly (i.e., as prices) or indirectly (i.e., derived from prices), and• Level 3 – Inputs for the asset or liability that are not based on observable market data (unobservableinputs)Quoted investments (Note 14): Fair value is determined by direct reference to their bid price quotations in an activemarket at the end of the reporting period.102

Notes to the Financial Statementsfor the Financial Year ended 31 December 2010Leeden Limited Annual Report 201038. Financial instruments (cont’d)A. Fair value of financial instruments that are carried at fair value (cont’d)Derivatives (Note 23): Forward currency contracts and interest rate swap contracts are valued using a valuationtechnique with market observable inputs. The most frequently applied valuation techniques include forward pricingand swap models, using present value calculations. The models incorporate various inputs including the creditquality of counterparties, foreign exchange spot and forward rates and interest rate curves.B. Fair value of financial instruments by classes that are not carried at fair value and whose carrying amounts arereasonable approximation of fair valueAmounts due from/(to) related parties (Note 19), Trade debtors (Note 21), Other debtors (Note 22), Amounts due tobankers (Note 25),Trade creditors, Other creditors and accruals (Note 26), Hire purchase creditors (Note 27) andLong-term loans (Note 28).The carrying amounts of these financial assets and liabilities are reasonable approximation of fair values, eitherdue to their short-term nature or that they are floating rate instruments that are re-priced to market interest rateson or near the balance sheet date.C. Fair value of financial instruments by classes that are not carried at fair value and whose carrying amounts are notreasonable approximation of fair valueUnquoted investments (Note 14): Fair value information has not been disclosed for the Group’s investments inequity instruments that are carried at cost because fair value cannot be measured reliably. These equity instrumentsrepresent ordinary shares in a company that is not quoted on any market and does not have any comparableindustry peer that is listed. The Group does not intend to dispose of this investment in the foreseeable future.39. Capital managementThe primary objective of the Group’s capital management is to ensure that it maintains a strong credit rating and healthycapital ratios in order to support its business and maximise shareholder value.The Group manages its capital structure and makes adjustments to it, in light of changes in economic conditions. Tomaintain or adjust the capital structure, the Group may adjust the dividend payments to shareholders, return capital toshareholders or issue new shares.The Group monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt. The Groupincludes within net debt, loans and borrowings, trade and other creditors, less cash and cash equivalents. Capital includesequity attributable to the equity holders of the parent.GroupNote 2010 2009$’000 $’000Loans and borrowings 64,242 66,085Trade and other creditors 22,703 23,879Amounts due to related parties 3,682 3,347Less: Cash and cash equivalents 24 (21,513) (20,510)Net debt 69,114 72,801Equity attributable to owners of the parent 75,536 70,296Capital and net debt 144,650 143,097Gearing ratio 48% 51%103

A Stronger Leeden in Asia.Notes to the Financial Statementsfor the Financial Year ended 31 December 201040. Segment informationReporting formatFor management purposes, the Group is organised into business units based on their products and services and isorganised into 2 main operating segments, namely:(a)(b)Manufacturing and distribution of welding, safety and gas products; andproperty investment/development and other operationsSegment results, assets and liabilities include items directly attributable to a segment as well as those that can beallocated on a reasonable basis. Except as indicated above, no operating segments have been aggregated to form theabove reportable operating segments.Management monitors the operating results of its business units separately for the purpose of making decisions aboutresource allocation and performance assessment. Segment performance is evaluated based on operating profit or losswhich in certain respects, as explained in the table below, is measured differently from operating profit or loss in theconsolidated financial statements. Group financing (including finance costs) and income taxes are managed on a groupbasis and are not allocated to operating segments.Transfer prices between operating segments are on an arm’s length basis in a manner similar to transactions with thirdparties.Distribution of welding,gas and safety products Property and others Consolidated2010 2009 2010 2009 2010 2009$’000 $’000 $’000 $’000 $’000 $’000Segment revenueSales to external customers 177,066 168,998 14,404 17,150 191,470 186,148Segment results 15,285 14,590 1,528 4,436 16,813 19,026Interest expenses (1,921) (2,016)Share of profit in associated and jointventure companies 191 218Profit before taxation 15,083 17,228Tax expense (3,244) (3,334)Net profit after taxation 11,839 13,894Segment assets 187,676 168,781 20,240 31,530 207,916 200,311Segment liabilities 97,206 96,670 3,031 5,869 100,237 102,539Other segment informationCapital expenditure 15,270 10,430 90 351 15,360 10,781Depreciation 5,931 5,451 731 709 6,662 6,160Amortisation of intangible assets 176 176 – – 176 176Other non-cash expenses 70 3,371 – – 70 3,371104

Notes to the Financial Statementsfor the Financial Year ended 31 December 2010Leeden Limited Annual Report 201040. Segment information (cont’d)Geographical informationSingapore Malaysia Others Consolidated2010 2009 2010 2009 2010 2009 2010 2009$’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000Segment revenueSales to externalcustomers 108,787 116,095 81,157 70,009 1,526 44 191,470 186,148Other geographicalinformationSegment assets 119,510 121,263 83,295 75,509 5,111 3,539 207,916 200,311Capital expenditure 1,602 3,854 12,606 6,225 1,152 702 15,360 10,781Notes Adjustments and eliminations have been included in each segment to arrive at amounts in the consolidated financialstatements.ABCInter-segment revenues are eliminated on consolidation.Other non-cash expenses consist of allowance for doubtful debts, stock obsolescence, expense on share-basedpayments, fair value loss/(gain) on derivatives and translation adjustments as presented in the respective notes tothe financial statements.Additions to non-current assets consist of additions to property, plant and equipment, other investments andintangible assets.41. DividendsThe Company declared and paid an interim dividend of 1.00 cents per ordinary share with one-tier tax exemption (2009:1.00 cents per ordinary share with one-tier tax exemption) amounting to $1,749,000 (2009: $1,742,000) for the financialyear ended 31 December 2010.42. Subsequent eventsIn February 2011, a subsidiary of the Company entered into an agreement to purchase leasehold land at a considerationof $500,000.In March 2011, a subsidiary of the Company incorporated a wholly-owned subsidiary in Australia with an initial investmentof AUD100,000.43. Authorisation of financial statements for issueThe financial statements of Leeden Limited for the year ended 31 December 2010 were authorised for issue in accordancewith a resolution of the Directors on 15 March 2011.105

A Stronger Leeden in Asia.Statistics of Shareholdingsas at 18 March 2011Number of Issued Shares (excluding Treasury Shares) : 177,040,346Number/Percentage of Treasury Shares : 5,514,000 (3.11%)Class of Shares: Ordinary ShareVoting Rights (excluding Treasury Shares): One Vote Per ShareDISTRIBUTION OF SHAREHOLDINGSSize of ShareholdingsNumber ofShareholders %Number ofShares %1 - 999 156 4.85 54,601 0.031,000 - 10,000 2,521 78.32 9,400,937 5.3110,001 - 1,000,000 516 16.02 27,574,350 15.581,000,001 and above 26 0.81 140,010,458 79.083,219 100.00 177,040,346 100.00TWENTY LARGEST SHAREHOLDERSNo Name of Shareholders Number of Shares %1. Hong Leong Finance Nominees Pte Ltd 18,357,100 10.372. United Overseas Bank Nominees Pte Ltd 13,322,000 7.523. Mayban Nominees (S) Pte Ltd 12,587,000 7.114. Amfraser Securities Pte. Ltd. 11,469,000 6.485. Tham Weng Cheong Steven 10,550,000 5.966. National Oxygen Pte Ltd 9,055,000 5.117. CIMB Nominees (S) Pte Ltd 7,897,800 4.468. Phillip Securities Pte Ltd 7,836,103 4.439. UOB Kay Hian Pte Ltd 7,105,920 4.0110. DBS Vickers Securities (S) Pte Ltd 7,101,000 4.0111. Kim Eng Securites Pte. Ltd. 4,181,200 2.3612. Citibank Nominees Singapore Pte Ltd 3,889,000 2.2013. Goh Li-Shing Arlene (Wu Lixin Arlene) 3,488,000 1.9714. Eber Geb Linden Marianne Doris 3,241,892 1.8315. HL Bank Nominees (S) Pte Ltd 2,842,000 1.6116. Esser Heinz Johann 2,337,289 1.3217. Lee Lai Ying 2,100,000 1.1918. Greenline Holdings Pte Ltd 1,981,000 1.1219. Tan Lian Khar or Lim Siew Hoo 1,750,000 0.9920. Chai Chee Keng 1,709,800 0.97Total : 132,801,104 75.02PUBLIC FLOATAs at 18 March 2011, approximately 38.52% of the Company’s shares are held in the hands of public. Accordingly, the Companyhas complied with Rule 723 of the Listing Manual of SGX-ST which requires that at least 10% of the equity securities (excludingpreference shares and convertible equity securities) in a class that is listed to be in the hands of the public.106

Leeden Limited Annual Report 2010Statistics of Shareholdingsas at 18 March 2011SUBSTANTIAL SHAREHOLDERS(As recorded in the Register of Substantial Shareholders)Direct InterestDeemed InterestIn Nominees’ NameOthersNo of shares % No of shares % No of shares %Tham Weng Cheong Steven 10,550,000 5.96 31,500,000 (1) 17.79 500,000 (2) 0.28Lee Chee Fatt 500,000 0.28 4,672,000 (3) 2.64 18,283,000 (3) 10.33Hendra Harjadi – – 12,062,000 (4) 6.81 – –Greenline Holdings Pte Ltd 1,981,000 1.12 16,302,000 (5) 9.21 – –Goh Khoon Lim – – – – 12,825,000 (6) 7.24National Oxygen Pte Ltd 9,055,000 5.11 – – – –Taiyo Nippon Sanso Corporation – – – – 9,055,000 (7) 5.11Notes:(1) Mr Tham Weng Cheong Steven is deemed to be interested in the shares held by the following nominees:a. Hong Leong Finance Nominees Pte. Ltd.: 8,000,000 sharesb. United Overseas Bank Nominees Pte. Ltd.: 9,000,000 sharesc. CIMB Nominees (S) Sdn Bhd: 5,000,000 sharesd. Citibank Nominees Singapore Private Limited: 3,000,000 sharese. Philip Securities Pte. Ltd.: 2,000,000 sharesf. Mayban Nominees (S) Pte Ltd: 4,500,000 shares(2) Held by spouse: Madam Tan Kee Tiang.(3) Mr Lee Chee Fatt is deemed to be interested in 4,672,000 shares held by Mayban Nominees (Singapore) Pte Ltd, Hong Leong FinanceNominees Pte Ltd and Philip Securities Pte Ltd. By virtue of Mr Lee Chee Fatt holding not less than 20% of the voting rights in GreenlineHoldings Pte Ltd (“Greenline”), he is deemed to be interested in 1,981,000 shares held by Greenline and 16,302,000 shares held by UOBKay Hian Pte. Ltd., Kim Eng Securities Pte Ltd, Philip Securities Pte Ltd, OCBC Securities Private Ltd and Mayban Nominees (Singapore) PteLtd as nominees for Greenline.(4) Mr Hendra Harjadi is deemed to be interested in the shares held by the following nominees:a. UOB Kay Hian Private Limited: 4,062,000 sharesb. Hong Leong Finance Nominees Pte. Ltd.: 6,000,000 sharesc. CIMB Nominees (S) Pte Ltd: 2,000,000 shares(5) Greenline Holdings Pte Ltd is deemed to be interested in the shares held by the following nominees:a. UOB Kay Hian Pte Ltd: 1,200,000 sharesb. Kim Eng Securities Pte Ltd: 3,658,000 sharesc. Philip Securities Pte Ltd: 5,204,000 sharesd. OCBC Securities Private Ltd: 240,000 sharese. Mayban Nominees (Singapore) Pte Ltd: 6,000,000 shares(6) By virtue of Goh Khoon Lim holding not less than 20% of the voting shares in 28 Holdings Pte Ltd (“28 Holdings”) and Avenue InvestmentPte Ltd (“Avenue Investment”), he is deemed to be interested in the shares held by 28 Holdings and Avenue Investment.(7) By virtue of Taiyo Nippon Sanso Corporation (“TNSC”) holding not less than 20% in National Oxygen Pte Ltd, TNSC is deemed to beinterested in the shares held by National Oxygen Pte Ltd in Leeden Limited.107

A Stronger Leeden in Asia.Notice of Annual General MeetingLEEDEN LIMITED(Company Registration No. 196400172G)(Incorporated in the Republic of Singapore)NOTICE IS HEREBY GIVEN that the 47th Annual General Meeting of LEEDEN LIMITED will be held at 1 Shipyard Road, Singapore628128 on Monday, 25 April 2011 at 10.30 a.m. for the following purposes:AS ORDINARY BUSINESS1. To receive and adopt the Directors’ Report and the Audited Accounts of the Company for the year ended 31 December2010. (Resolution 1)2. To declare a final dividend of S$0.005 (one-tier, tax-exempt) per ordinary share for the year ended 31 December 2010.(2009: NIL) (Resolution 2)3. To re-elect the following Directors retiring pursuant to Article 93 of the Company’s Articles of Association:-i) Mr Lee Chee Fatt (Resolution 3)ii) Mr Hendra Harjadi (Resolution 4)4. To re-appoint Mr Leslie Struys, a director of the Company retiring under Section 153(6) of the Companies Act, Cap. 50, tohold office from the date of this Annual General Meeting until the next Annual General Meeting of the Company.[See Explanatory Note (i)] (Resolution 5)Mr Leslie Struys will, upon re-appointment as a Director of the Company, remain as Chairman of the Remuneration Committeeand as member of the Audit Committee and Nominating Committee and will be considered independent.5. To approve Directors’ Fees of S$204,000 for the year ended 31 December 2010. (2009: S$190,500) (Resolution 6)6. To re-appoint Ernst & Young LLP as auditors and to authorise the directors to fix their remuneration. (Resolution 7)7. To transact any other business which may properly be transacted at an Annual General Meeting.AS SPECIAL BUSINESSTo consider and if thought fit, to pass the following resolutions as Ordinary Resolutions, with or without any modifications:8. Authority to issue sharesThat pursuant to Section 161 of the Companies Act, Cap. 50 and Rule 806 of the Listing Manual of the SingaporeExchange Securities Trading Limited, the Directors of the Company be authorised and empowered to:(a) (i) issue shares in the Company (“shares”) whether by way of rights, bonus or otherwise; and/or(ii)make or grant offers, agreements or options (collectively, “Instruments”) that might or would require sharesto be issued, including but not limited to the creation and issue of (as well as adjustments to) options,warrants, debentures or other instruments convertible into shares,at any time and upon such terms and conditions and for such purposes and to such persons as the Directors ofthe Company may in their absolute discretion deem fit; and(b)(notwithstanding the authority conferred by this Resolution may have ceased to be in force) issue shares inpursuance of any Instrument made or granted by the Directors of the Company while this Resolution was in force,108

Notice of Annual General MeetingLeeden Limited Annual Report 2010provided that:(1) the aggregate number of shares (including shares to be issued in pursuance of the Instruments, made or grantedpursuant to this Resolution) to be issued pursuant to this Resolution shall not exceed fifty per centum (50%) ofthe total number of issued shares (excluding treasury shares) in the capital of the Company (as calculated inaccordance with sub-paragraph (2) below), of which the aggregate number of shares and Instruments to be issuedother than on a pro rata basis to existing shareholders of the Company shall not exceed twenty per centum (20%)of the total number of issued shares (excluding treasury shares) in the capital of the Company (as calculated inaccordance with sub-paragraph (2) below);(2) (subject to such calculation as may be prescribed by the Singapore Exchange Securities Trading Limited) for thepurpose of determining the aggregate number of shares that may be issued under sub-paragraph (1) above, thetotal number of issued shares shall be based on the total number of issued shares (excluding treasury shares) inthe capital of the Company at the time of the passing of this Resolution, after adjusting for:(a)(b)(c)new shares arising from the conversion or exercise of any convertible securities;new shares arising from exercising share options or vesting of share awards which are outstanding orsubsisting at the time of the passing of this Resolution; andany subsequent bonus issue, consolidation or subdivision of shares;(3) in exercising the authority conferred by this Resolution, the Company shall comply with the provisions of the ListingManual of the Singapore Exchange Securities Trading Limited for the time being in force (unless such compliancehas been waived by the Singapore Exchange Securities Trading Limited) and the Articles of Association of theCompany; and(4) unless revoked or varied by the Company in a general meeting, such authority shall continue in force until theconclusion of the next Annual General Meeting of the Company or the date by which the next Annual GeneralMeeting of the Company is required by law to be held, whichever is earlier.[See Explanatory Note (ii)] (Resolution 8)9. Authority to issue shares under the Ace Dynamics Share Option SchemeThat approval be and is hereby given to the Directors to allot and issue from time to time such number of shares in thecapital of the Company as may be required to be issued pursuant to the exercise of options under the Ace Dynamics ShareOption Scheme.[See Explanatory Note (iii)] (Resolution 9)By Order of the BoardYap Yin Yin IrisCompany SecretarySingapore, 8 April 2011109

A Stronger Leeden in Asia.Notice of Annual General MeetingExplanatory Notes:(i)(ii)The effect of the Ordinary Resolution 5 proposed in item 4 above, is to re-appoint a director of the Company who is over 70 years of age.The Ordinary Resolution 8 in item 8 above, if passed, will empower the Directors of the Company to issue shares, make or grant instrumentsconvertible into shares and to issue shares pursuant to such instruments, up to a number not exceeding, in total, 50% of the total numberof issued shares (excluding treasury shares) in the capital of the Company, of which up to 20% may be issued other than on a pro-rata basisto shareholders.For determining the aggregate number of shares that may be issued, the total number of issued shares (excluding treasury shares) will becalculated based on the total number of issued shares (excluding treasury shares) in the capital of the Company at the time this OrdinaryResolution is passed after adjusting for new shares arising from the conversion or exercise of any convertible securities, or share optionsor the vesting of share awards which are outstanding or subsisting at the time when this Ordinary Resolution is passed and any subsequentbonus issue, consolidation or subdivision of shares.(iii)The Ordinary Resolution 9 in item 9 above, if passed, will empower the Directors of the Company, from the date of this Meeting until the nextAnnual General Meeting, or the date by which the next Annual General Meeting is required by law to be held or such authority is varied orrevoked by the Company in a general meeting, whichever is the earlier, to issue shares in the Company pursuant to the exercise of optionsgranted under the Ace Dynamics Share Option Scheme (the “Scheme”). Although the Scheme has ceased operation during the financialyear ended 31 December 2004, the outstanding options previously granted under the Scheme will remain valid until the expiry, cancellationor exercise of the options.Notes:1. A Member entitled to attend and vote at the Meeting is entitled to appoint a proxy to attend and vote in his/her stead. A proxy need notbe a Member of the Company.2. If the appointor is a corporation, the proxy must be executed under seal or the hand of its duly authorised officer or attorney.3. The instrument appointing a proxy must be deposited at the Registered Office of the Company at 1 Shipyard Road, Singapore 628128 notless than forty-eight (48) hours before the time for holding the meeting.110

LEEDEN LIMITED(Company Registration No. 196400172G)(Incorporated In the Republic of Singapore)PROXY FORM 47th Annual General Meeting(Please see notes overleaf before completing this Form)IMPORTANT:1. For investors who have used their CPF monies to buy shares in the capital ofLeeden Limited, this Report is forwarded to them at the request of the CPFApproved Nominees and is sent solely FOR INFORMATION ONLY.2. This Proxy Form is not valid for use by CPF investors and shall be ineffective for allintents and purposes if used or purported to be used by them.3. CPF investors who wish to attend the Meeting as an observer must submit theirrequests through their CPF Approved Nominees within the time frame specified.If they also wish to vote, they must submit their voting instructions to the CPFApproved Nominees within the time frame specified to enable them to vote on theirbehalf.I/We,ofbeing a member/members of LEEDEN LIMITED (the “Company”), hereby appoint:Name NRIC/Passport No. Proportion of ShareholdingsAddressNo. of Shares %and/or (delete as appropriate)Name NRIC/Passport No. Proportion of ShareholdingsAddressNo. of Shares %or failing, the person, or either or both of the persons, referred to above, the Chairman of the Meeting as my/our proxy/proxiesto vote for me/us on my/our behalf at the Annual General Meeting (the “Meeting”) of the Company to be held on Monday,25 April 2011 at 10.30 a.m. and at any adjournment thereof. I/We direct my/our proxy/proxies to vote for or against theResolutions proposed at the Meeting as indicated hereunder. If no specific direction as to voting is given or in the event of anyother matter arising at the Meeting and at any adjournment thereof, the proxy/proxies will vote or abstain from voting at his/herdiscretion. The authority herein includes the right to demand or to join in demanding a poll and to vote on a poll.(Please indicate your vote “For” or “Against” with a tick [√] within the box provided.)No. Resolutions relating to: For Against1 Directors’ Report and Audited Accounts for the year ended 31 December 20102 Payment of proposed final dividend3 Re-election of Mr Lee Chee Fatt as a Director4 Re-election of Mr Hendra Harjadi as a Director5 Re-appointment of Mr Leslie Struys as a Director6 Approval of Directors’ fees amounting to S$204,0007 Re-appointment of Ernst & Young LLP as Auditors8 Authority to issue shares9 Authority to issue shares under the Ace Dynamics Share Option SchemeDated this day of 2011Total number of Shares in:(a) CDP RegisterNo. of SharesSignature of Shareholder(s)or, Common Seal of Corporate Shareholder*Delete where inapplicable(b) Register of Members

Notes:1. Please insert the total number of Shares held by you. If you have Shares entered against your name in the Depository Register (as definedin Section 130A of the Companies Act, Chapter 50 of Singapore), you should insert that number of Shares. If you have Shares registeredin your name in the Register of Members, you should insert that number of Shares. If you have Shares entered against your name in theDepository Register and Shares registered in your name in the Register of Members, you should insert the aggregate number of Sharesentered against your name in the Depository Register and registered in your name in the Register of Members. If no number is inserted,the instrument appointing a proxy or proxies shall be deemed to relate to all the Shares held by you.2. A member of the Company entitled to attend and vote at a meeting of the Company is entitled to appoint one or two proxies to attend andvote in his/her stead. A proxy need not be a member of the Company.3. Where a member appoints two proxies, he/she shall specify the proportion of his/her shareholding (expressed as a percentage of thewhole) to be represented by each proxy. If no such proportion is specified, the first named proxy shall be treated as representing 100% ofthe shareholding and any second named proxy as an alternate to the first named proxy.4. Completion and return of this instrument appointing a proxy shall not preclude a member from attending and voting at the Meeting. Anyappointment of a proxy or proxies shall be deemed to be revoked if a member attends the meeting in person, and in such event, theCompany reserves the right to refuse to admit any person or persons appointed under the instrument of proxy to the Meeting.5. The instrument appointing a proxy or proxies must be deposited at the registered office of the Company at 1 Shipyard Road Singapore628128 not less than 48 hours before the time appointed for the Meeting.1st FoldAffi xPostageStampThe Company SecretaryLEEDEN LIMITED1 Shipyard RoadSingapore 6281282nd Fold6. 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 seal or under the hand of anofficer or attorney duly authorised. Where the instrument appointing a proxy or proxies is executed by an attorney on behalf of the appointor,the letter or power of attorney or a duly certified copy thereof must be lodged with the instrument.7. A corporation which is a member may authorise by resolution of its directors or other governing body such person as it thinks fit to act asits representative at the Meeting, in accordance with Section 179 of the Companies Act, Chapter 50 of Singapore.General:The Company shall be entitled to reject the instrument appointing a proxy or proxies if it is incomplete, improperly completed or illegible or wherethe true intentions of the appointor are not ascertainable from the instructions of the appointor specified in the instrument appointing a proxy orproxies. In addition, in the case of Shares entered in the Depository Register, the Company may reject any instrument appointing a proxy or proxieslodged if the member, being the appointor, is not shown to have Shares entered against his name in the Depository Register as at 48 hours beforethe time appointed for holding the Meeting, as certified by The Central Depository (Pte) Limited to the Company.

Leeden LimitedCompany Registration No. 196400172G1 Shipyard Road, Singapore 628128Tel : (65) 6266 4868 Fax : (65) 6266 2026enquiry@leedenlimited.comwww.leedenlimited.com