2007 Annual Report - Morningstar, Inc.

Liang Huat Aluminium LimitedAddress: Blk 8, #08-05Liang Huat Industrial Complex51 Benoi Road, Singapore 629908Tel (Main): 065-6862 2228Fax: 065-6862 4962www.lianghuatgroup.com.sg

2007 Annual Report

Global Reports LLC

CONTENTSGroup Structure

Board of Directors

Company Profi le

Corporate Milestones

Directors Profi le

Key Management Profi le

Chairman’s Message

Corporate Information

Financial Highlights

Corporate Governance Report

Report of the Directors

Statement by Directors

Auditors’ Report

Balance Sheets

Consolidated Income Statement

Statement of Changes in Equity

Consolidated Cash Flow Statements

Notes to Financial Statements

Analysis of Shareholdings

Notice of Annual General Meeting

Proxy Form

Professionally Runa vertically integrated,

group of companies

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LIANG HUAT ALUMINIUM INDUSTRIES

PTE LTD

DURAWALL TECHNOLOGY

PTE LTD

GROUP STRUCTURE

DURABEAUINDUSTRIES

PTE LTD

ALMEX TECHNOLOGY

PTE LTD

100% 100%100%100%

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(From left)

Mr. Phoon Wui NyenLead Independent Director

Mr. Tan Hai Peng MichealExecutive Director

Mr. Tan Yong KeeChairman, Group Managing Director and CEO

Mr. Tan Hai Seng BenjaminExecutive Director

Mr. Bob Low Siew SieIndependent Director

Mr. Chng Hee KokIndependent Director

BOARD OF DIRECTORS

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The Sail@Marina Bay

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Liang Huat Group was founded in 1978. In line with the

economic growth path of Singapore, the Group has grown

into one of the largest integrated aluminium groups in the

region. In 1994, Liang Huat Group became the fi rst aluminium

manufacturing group listed on the Main Board of Singapore

Exchange Securities Trading Limited.

The core business and experience of the Group includes

design, fabrication and installation of building façade and

interior wall such as curtain walling system, cladding system,

high quality doors and windows and other aluminium

engineering and industrial products. Over the years, Liang

Huat Group had business and market presence in the Asia

Pacifi c region which includes Hong Kong, China, Vietnam,

Thailand, Malaysia as well as India.

Liang Huat Group’s technical expertise and track record

accumulated over the years, as well as its large manufacturing

and fabrication facilities, enabled the Group to register with

the highest grading (L6) with the Singapore Building and

Construction Authority. This unlimited contract value tender

qualifi cation allows the Group to become a key player in

the industry, particularly in the currently robust building

construction market.

The Group completed its corporate restructuring exercise on

30 August 2007. The healthier balance sheet and adequate

working capital as well as lower cost structure will provide

the Group with competitiveness to leverage on the current

strong market demand for building façade and its related

products.

The Group has completed internal façade work for Singapore

Changi Airport – Terminal 3 in 2007. Currently, the Group is

undertaking fabrication of aluminium membrane system for

Orchard Central, unitized curtain wall systems for The Sail

@ Marina Bay, The Capella@Sentosa, as well as HDB Kallang

Whampoa Redevelopment Contract 31.

联发集团成立于1978年，配合新加坡的经济发展趋

势，集团快速的发展和成长，成为新加坡铝加工业

的龙头企业，于1994年成为新加坡证交所主板的第

一家上市铝加工业集团。

集团的核心业务包括建筑物的铝质和玻璃外装和铝

型材生产，集团累积了30年的设计制造和安装经和

能力，以及优良的质量保证和信誉，不但促使集团

多年来荣获并继续拥有铝质玻璃幕墙和门窗的设计

制造和安装的第一级 (L6) 资质，同时也促使集团业

务扩展到亚太区域国家，包括香港，中国，越南，

泰国，马来西亚和印度，集团在这些区域国家都有

大型工程项目记录。

集团于2007年八月份成功的完成其资本重组。全新

的财务基础和充足的营运资金使集团更能在蓬勃的

建筑业市场，大展宏图，再现光辉。

集团刚于去年完成樟宜机场第三大厦的铝板墙内，

目前正在施工的铝框玻璃幕墙和门窗工程项目包括

The Sail@Marina Bay, The Capella@Sentosa and Kallang

Whampoa RC 31, 以及集团刚颁获的Orchard Central外

墙和内部装饰。

COMPANY PROFILE 联发集团简介：联发集团简介：

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The Group was co-founded by our Chairman,

Mr. Tan Yong Kee as a partnership, Liang

Huat Aluminium Contractor to carry out the

fabrication of aluminium architectural and

engineering products

The partnership was awarded its fi rst

condominium project for aluminium

fabrication work – St. Patrick View – with a

contract sum of about $200,000

The partnership secured its fi rst HDB project

for the supply, fabrication and installation

of aluminium glazed doors and windows to

various HDB estates with a total contract sum

of about $3 million

The Company was incorporated as a private

limited company, Liang Huat Aluminium Pte Ltd

Acquired fabrication facility relocated to No. 69

Tuas Avenue 1 with an area of approximately

3,000 sqm

Awarded SISIR Licence Mark

The subsidiary, Durabeau Industries Pte Ltd

was incorporated to expand the Group’s

product range to include the fabrication of

aluminium window grilles for HDB fl at and

shower screens

Liang Huat (Hong Kong) Limited was set up

Awarded fi rst project in Hong Kong with

contract value of HK$3.6 million

COMPANY MILESTONE

YEAR EVENT

1978

1982

1983

1986

1987

1988

Trading Division was set up to carry out

aluminium extrusion and metal hardware

trading and retailing

New factory at No. 20 Tuas Avenue 6 was

completed with an area of approximately

5,500 sqm – new factory facilities and

corporate headquarters

Secured Central Plaza Pinklao project in

Bangkok, Thailand through associated

company, Durabeau (Thailand) Co., Ltd

Joint venture company, Nanhai Hua Lian

Aluminium Co., Ltd was set up

The Company was converted into a public

limited company and listed on the Mainboard

of then Stock Exchange of Singapore Limited

(now known as Singapore Exchange Securities

Trading Limited)

Secured fi rst projects in Ho Chi Minh City,

Vietnam and Johor Bahru, Malaysia

Awarded SISIR ISO 9002 Quality Control

certifi cation

Obtained L6 registration with the Construction

Industry Development Board (now known

as Building Construction Authority) for

doors and windows louvre glazing works

and curtain walling systems and aluminium

cladding works

YEAR EVENT

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Completion of integrated aluminium extrusion

plant in Nanhai, Guangdong Province, China,

with a land area of 55,300 sqm

Raised $50 million through the issue of Bonds

cum Warrants

Secured fi rst project in Bangalore, India

Completion of glass processing plant in

Seremban, Malaysia

Turnover exceeded $100 million for the fi rst

time

Completion of Liang Huat Industrial Complex

– new corporate headquarters

The Company’s project and trading

activities were transferred to subsidiaries

and the Company was restructured into an

investment-holding company

Commenced restructuring exercise

Completed restructuring of banking facilities

from UOB Group and Maybank. Issued

Secured Convertible Floating Rate Bonds of

$30 million in Principal Amount with Maturity

Date in October 2008 to the banks.

Disposed non-core assets – factory building

at No. 20 Tuas Avenue 6

The Group’s wholly-owned subsidiary,

Glaspec (M) Sdn Bhd completed restructuring

of banking facilities with Maybank (Malaysia)

COMPANY MILESTONE

YEAR EVENT

1995

1996

1997

2000

2003

Appointed KPMG Business Advisory Pte Ltd as

the Group’s Special Consultant

Proposed Scheme of Arrangement to convert

the Company’s bank borrowings into equity

Scheme of Arrangement approved by

creditors

Disposal of Corporate Headquarters at Benoi

Road

Entered into Investment Agreement with Ho

Lee Group Pte Ltd which will result in the

Investor becoming a 70% majority shareholder

of the Company

Modifi ed Schemes approved by Scheme

Creditors

Secured new projects under new business

model of contract manufacturing services –

The Sail @ Marina Bay and The Capella @ Sentosa

Commenced liquidation of non-core

subsidiaries

Completion of Investment Agreement,

Modifi ed Schemes and Placement Agreement

on 30 August 2007

Secured fi rst major project – Orchard Central,

after completion of restructuring exercise in

2007

YEAR EVENT

2004

2005

2006

2007

2008

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TAN YONG KEEChairman, Group Managing Director and CEO

Mr. Tan is the Chairman, Group Managing Director, CEO and co-founder of the Group and has been a member of the Board since September 1982. Mr. Tan has more than 30 years experience in the aluminium fabrication business. He is responsible for the strategic direction, business planning and development, and is overseeing the overall business activities of the Group.

TAN HAI SENG BENJAMINExecutive Director

Mr. Tan is the Executive Director of the Company and appointed on 17 September 2007. He is responsible for the marketing activities of the Group. He is the Managing Director of Ho Lee group of companies which deals primarily in construction, rental and trading of construction equipment and heavy machinery and property development. He is also the 2nd Vice President of the Singapore Contractors Association Council of Management since 2005. Mr. Tan has 16 years experience in the construction industry. He obtained his degree in Bachelor of Science in Business Administration from the University of Central Florida, USA in 1993.

TAN HAI PENG MICHEALExecutive Director

Mr. Tan is the Executive Director of the Company and appointed on 17 September 2007. He is responsible for the business development activities of the Group. He is also an Executive Director of Ho Lee group of companies which deals primarily in construction, rental and trading of construction equipment and heavy machinery and property development. He obtained his Master of Business Administration (For Senior Executive) degree from the National University of Singapore in 2004 and the Bachelor of Science in Computer Engineering with Highest Honour from the Florida Institute of Technology, USA in 1990.

PHOON WUI NYENLead Independent Director

Mr. Phoon is the Lead Independent Director of the Company and appointed on 25 June 2007. He is Chairman of the Remuneration Committee and Nominating Committee as well as member of the Audit Committee. He joined Baring Private Equity BVI in 1997 and is currently a partner. Mr. Phoon obtained his Master of International Political Economy from the University of Vienna in 1993. He is a member of the CFA Institute since 1996.

BOB LOW SIEW SIEIndependent Director

Mr. Low is the Independent Director and appointed on 30 November 2005. He is Chairman of the Audit Committee as well as member of the Remuneration Committee and Nominating Committee. A member of the Institute of Certifi ed Public Accountants of Singapore (“ICPAS”) and the Australian Certifi ed Public Accountants, Mr. Low is founder and Principal Consultant of Bob Low & Co., Certifi ed Public Accountants. Experienced in corporate recovery and advisory work, he is presently, inter alia, judicial manager of SGX-ST Main Board listed L&M Group Investments Ltd. He is also an Independent Director of China Hongcheng Holdings Ltd and a director of Water Tek Treatment Systems Singapore Pte Ltd. Mr. Low holds a Bachelor of Law (Honours) degree from the University of London, as well as Chartered Certifi ed Accountant (CCA) (UK) qualifi cations. A member of the Singapore Academy of Law, the Chartered Institute of Arbitrators (HK/UK), he has served as panel member of the Inquiry Committee of the Public Accountants Board. His past appointments include being member of various sub-committees of ICPAS including the Auditing Practices Committee, as well as serving as council member of the Singapore Institute of Arbitrators.

CHNG HEE KOKIndependent Director

Mr. Chng is the Independent Director of the Company and appointed on 24 October 2007. He is a member of the Audit Committee, Remuneration Committee and Nominating Committee. Mr Chng was a Member of Parliament from 1984 to 2001. He had also served on the Sentosa Development Corporation board and was a past Director of the Governing Council of the Singapore Institute of Directors. Mr Chng is a Director of a number of public listed companies including People’s Food Holdings Ltd, Pacifi c Century Regional Developments Ltd, Full Apex Holdings Ltd and CHT Holdings Ltd. He obtained the Master of Business Administration degree and the Bachelor of Engineering (Mechanical), First Class Honours degree from the National University of Singapore in 1984 and 1972 respectively.

DIRECTORS PROFILE

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JENNY LIMGroup Financial Controller

Ms. Lim joined our Group on 1 September 2006 as our Group Financial Controller. She is responsible for our Group’s fi nancial reporting and compliance processes. From 2005 to 2006, she was the Group Financial Controller of China Unitek Group Limited based in Shenzhen, China. She also worked in KPMG Huazhen, Shanghai Branch as an audit manager between March 2004 and February 2005. She joined LTC & Associates, Singapore, as an audit assistant in November 1996 and left as an audit principal in February 2004. She obtained her Bachelor of Accountancy degree from Nanyang Technological University and a Masters of Business Administration from University of Birmingham, UK in 1996 and 2001 respectively. Ms. Lim is a member of the Institute of Certifi ed Public Accountants of Singapore.

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KEY MANAGEMENT PROFILE

PETER CHONG MENG CHEEAssistant General Manager

Mr. Chong is our Assistant General Manager and he joined our Group on 1 July 2007 as our Factory Manager. He is responsible for the overall operational effi ciency of our Group, which include tendering, technical support and product development, factory operations, project management, quality assurance, after sales services as well as budget cost control. Prior to joining our Group, he was an operations manager with Mero Asia Pacifi c Pte Ltd, manufacturing manager with Wah Heng Glass Holdings Pte Ltd and senior production engineer with Diethelm Keller Engineering Pte Ltd, which are all in the architectural façade industry, during the last 10 years. Mr. Chong obtained his Diploma in Electrical Engineering from City and Guild of London Institute in 1975 and Diploma in Industrial Engineering from the National Productivity Board (now known as PSB Academy) in 1987.

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On behalf of the Board of Directors of Liang Huat Aluminium Limited, I am pleased to present the fi nancial performance of the Group for the fi nancial year ended 31 December 2007.

COMPLETION OF CORPORATE RESTRUCTURING

On 30 August 2007, the Group satisfactorily completed its corporate restructuring exercise which commenced since August 2004. This completion of the Investment Agreement, the Modifi ed Schemes and the Placement Agreement had enabled the balance sheet of the Group and the Company to be rationalized into a positive equity position. The fi nancial eff ects of the restructuring are as follows:

(i) Shareholders’ equity : $11.5 million;(ii) Net current assets : $10.8 million;(iii) Cash and cash equivalents : $9.7 million;(iv) Borrowings : $0.2 million; (v) Net profi t turnaround to $142.7 million.

The improved balance sheet and adequate working capital will enhance the Group’s ability to secure bigger projects to add value to our shareholders.

OPERATING RESULT

On 29 February 2008, the Group reported a net profi t turnaround to $142.7 million for FY2007. The turnaround is due mainly to the following:

(i) a one-off gain of $142.3 million as a result of the satisfactory completion of the corporate restructuring exercise on 30 August 2007;

(ii) the Group recorded turnaround in gross profi t to $1.6 million which is contributed by high profi t margins projects and the eff ects of the continuous eff ort on cost control / cutting measures in operating expenses enabled the Group to turnaround to achieve profi t from operations of $0.5 million in FY2007; and

(iii) the Group’s revenue grew by 3.4 times to $9.2 million.

The growth in revenue of the Group’s principal operations is due to contributions from contract manufacturing projects of high-end developments such as The Sail @ Marina Bay and The Capella @ Sentosa which amounted to $4.4 million.

BUSINESS AND OPERATIONS

The construction industry in Singapore is expected to remain robust. Although construction material costs have been rising, the transformed business model, the improved fi nancial position and our adequate working capital, coupled with the Group’s strong track record and technical expertise in the building façade industry accumulated over the last 30 years, have enhanced our competitiveness, thus enabling the Group to compete for larger and high-end development projects in the buoyant construction industry to add value to our shareholders. We will also consider development into other new businesses when the opportunity arises.

In early 2007, we are fortunate and proud to be selected as the curtain wall façade fabricator for the prestigious The Sail @ Marina Bay by Dragages Singapore Pte Ltd. The sophisticated façade design and stringent quality requirement for this project are attestation and endorsement of our fabrication capability and expertise. This is an important launch pad from which we plan to reassert our market presence in the building façade industry.

On 11 February 2008, the Group announced that its fabrication division has been awarded 3 nominated sub-contracts with a total contract value of $19 million by Far East Organization to design, supply and install aluminium membrane system and louvers to the building external façade, together with LED lighting and video system, as well as internal façade works for Orchard Central.

The awards bear testament to the confi dence in Liang Huat Group’s technical expertise and track record. Aluminium membrane system integrated with LED lighting and video system is a new trend for commercial building facades. Orchard Central is the fi rst building in Singapore incorporated with such an aluminium membrane system. The Group is honoured to be appointed to lead this new trend for building façade which will provide the Group with more opportunities to secure similar kind of projects in future.

The Group’s gross order book for fabrication projects and contract manufacturing orders presently stands at approximately $22.6 million, of which majority is expected to be completed in 2008, hence will have positive contribution to the Group’s fi nancial performance for FY2008.

DIVIDEND AND ANNUAL GENERAL MEETING

Although we reported a profi t for FY2007, I regret to inform our shareholders that there will be no dividends for the current year as we will be retaining the profi ts for our operation’s working capital requirement. I welcome our shareholders to participate in our forthcoming Annual General Meeting, which will be held on 28 April 2008 at Blk 8, Level 1, Liang Huat Industrial Complex, 51 Benoi Road, Singapore 629908.

APPRECIATION

Finally I would like to take this opportunity to thank our shareholders, our customers, suppliers, subcontractors and especially our bankers, for their continuous support and confi dence as well as my fellow directors for their contributions, and all our managers and staff for their dedication and hard work, in the Liang Huat Group.

Peter Tan Yong KeeChairman

CHAIRMAN’S MESSAGE

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Dear Shareholders

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2007 Annual Report

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敬爱的股东们：敬爱的股东们：

我谨代表集团董事会在此向各位股东报告集团于二〇〇七财年度我谨代表集团董事会在此向各位股东报告集团于二〇〇七财年度取得的各项成果。取得的各项成果。

资本重组的完满落实资本重组的完满落实

集团于去年八月三十日，成功地完成其长达三年多的企业重组，集团于去年八月三十日，成功地完成其长达三年多的企业重组，资产重组，资本重组以及集资计划和方案。这一系列计划和方案资产重组，资本重组以及集资计划和方案。这一系列计划和方案的完满落实，促使集团脱胎换骨，这些成果很显著的体现在以下的完满落实，促使集团脱胎换骨，这些成果很显著的体现在以下几项财务数据：几项财务数据：

（一）股东基金：新币一千一百五十万（一）股东基金：新币一千一百五十万（二）净流动资产：新币一千七十七万（二）净流动资产：新币一千七十七万（三）营运现金：新币九百七十万（三）营运现金：新币九百七十万（四）集团负债：接近于零（四）集团负债：接近于零（五）集团转亏为盈而取得高达新币一亿四千三百万元的盈利（五）集团转亏为盈而取得高达新币一亿四千三百万元的盈利

集团目前健全的财务状况将有利于集团扩展核心业务和创造股东集团目前健全的财务状况将有利于集团扩展核心业务和创造股东效益。效益。

核心业务的增长和业绩成果核心业务的增长和业绩成果

集团于二月底宣布二〇〇七财年度取得了高达新币一亿四千三百集团于二月底宣布二〇〇七财年度取得了高达新币一亿四千三百万元的税后净盈利，集团转亏为盈的业绩主要归功予以下几项：万元的税后净盈利，集团转亏为盈的业绩主要归功予以下几项：

（一）由于资本和债务重组的成功完成而取得了高达新币一亿（一）由于资本和债务重组的成功完成而取得了高达新币一亿四千二百三十万元的一次性盈利。四千二百三十万元的一次性盈利。（二）由于集团核心业务的快速增长和持续性的成本控制使集（二）由于集团核心业务的快速增长和持续性的成本控制使集团取得了新币一百六十万元的营业毛利和约新币五十万团取得了新币一百六十万元的营业毛利和约新币五十万元的营业净盈利。元的营业净盈利。（三）集团核心业务的营业收入猛增3.4倍达新币九百二十元。（三）集团核心业务的营业收入猛增3.4倍达新币九百二十元。

集团核心业务的迅速增长是受惠于集团营业模式的转型，使集集团核心业务的迅速增长是受惠于集团营业模式的转型，使集团予二〇〇七年初很荣幸地颁获大型高档次的铝质玻璃幕墙的团予二〇〇七年初很荣幸地颁获大型高档次的铝质玻璃幕墙的代工和加工合同，包括 The Sail@MarinaBay 和 The Capella@ 代工和加工合同，包括 The Sail@MarinaBay 和 The Capella@ Sentosa 使集团取得了高达新币四百四十万元的代工收入。Sentosa 使集团取得了高达新币四百四十万元的代工收入。

核心业务的展望核心业务的展望

集团已经成功的转型，目前集团健全的财务状况和充足的流动资集团已经成功的转型，目前集团健全的财务状况和充足的流动资金促使集团以精装上阵的快速扩展我们的核心业务,同时也探讨金促使集团以精装上阵的快速扩展我们的核心业务,同时也探讨发展其他相关业务的商机。发展其他相关业务的商机。

我国的建筑业市场将继续强劲地增长，建筑成本的快速提高也促我国的建筑业市场将继续强劲地增长，建筑成本的快速提高也促

使各种配套建材单价的水涨船高。集团充裕的流动资金配合集团使各种配套建材单价的水涨船高。集团充裕的流动资金配合集团三十年来在铝合金生产和铝质玻璃幕墙的设计生产和施工行业所三十年来在铝合金生产和铝质玻璃幕墙的设计生产和施工行业所累积的经验和工程记录将加强集团的竞争优势和动力，使集团更累积的经验和工程记录将加强集团的竞争优势和动力，使集团更有竞争性地取得大型和高档次工程项目给股东们创造效益。有竞争性地取得大型和高档次工程项目给股东们创造效益。

二〇〇七年初，集团很荣幸地被The Sail @ Marina Bay 的总包二〇〇七年初，集团很荣幸地被The Sail @ Marina Bay 的总包商Dragages Singapore Pte Ltd 录选并颁获为这两栋摩天公寓大商Dragages Singapore Pte Ltd 录选并颁获为这两栋摩天公寓大楼的特别造型铝质玻璃幕墙的加工制造承包商。这一项目的荣誉楼的特别造型铝质玻璃幕墙的加工制造承包商。这一项目的荣誉是市场对集团的工艺和技术能力的鉴证，使集团在市场的竞争地是市场对集团的工艺和技术能力的鉴证，使集团在市场的竞争地位将更具优势。位将更具优势。

集团于二〇〇八年二月十一日宣布，集团的加工部荣获远东机构集团于二〇〇八年二月十一日宣布，集团的加工部荣获远东机构的三项指定分包项目，替在建中的乌节中心设计，制造和安装大的三项指定分包项目，替在建中的乌节中心设计，制造和安装大厦的外墙和内部装饰-包括装置二极发光管的铝架幕墙，铝板幕墙厦的外墙和内部装饰-包括装置二极发光管的铝架幕墙，铝板幕墙和内部玻璃装饰；这三项工程总值约新币一千九百万元。和内部玻璃装饰；这三项工程总值约新币一千九百万元。

乌节中心是新加坡第一座于外墙装置配套了二极发光管组成大型乌节中心是新加坡第一座于外墙装置配套了二极发光管组成大型影视银幕的现代化时尚购物中心。铝架幕墙，装置配套二极发光影视银幕的现代化时尚购物中心。铝架幕墙，装置配套二极发光管的商业大厦外墙装饰是新一代建筑设计的潮流趋势，尤其是新管的商业大厦外墙装饰是新一代建筑设计的潮流趋势，尤其是新一代的大型商业大厦。集团很荣幸的成为这种新潮流外墙装饰项一代的大型商业大厦。集团很荣幸的成为这种新潮流外墙装饰项目的领先主导承包商，不但是业主对集团的设计，制造和安装能目的领先主导承包商，不但是业主对集团的设计，制造和安装能力的信任，也间接给予集团在这行业的新商机。力的信任，也间接给予集团在这行业的新商机。

集团现有订单合同达新币两千三百三十万元，大部份工程将于今集团现有订单合同达新币两千三百三十万元，大部份工程将于今年底完成。这对集团二〇〇八财年的收益将有正面的贡献。同年底完成。这对集团二〇〇八财年的收益将有正面的贡献。同时，集团目前也积极地参与多项大型工程项目的投标。时，集团目前也积极地参与多项大型工程项目的投标。

股息和常年股东大会股息和常年股东大会

集团虽然于二〇〇七财年取得盈利，但是为了配合集团快速扩展集团虽然于二〇〇七财年取得盈利，但是为了配合集团快速扩展核心业务所需要的资金流量，董事会没有建议派发股息，在此请核心业务所需要的资金流量，董事会没有建议派发股息，在此请各位股东们谅解。集团将于二〇〇八年四月二十八日在联发工业各位股东们谅解。集团将于二〇〇八年四月二十八日在联发工业城召开常年股东大会，并向各位股东们报告和致歉，同时也希望城召开常年股东大会，并向各位股东们报告和致歉，同时也希望各位继续对集团的支持。各位继续对集团的支持。

致谢致谢

我谨代表董事会向所有支持集团的股东们以及客户，供应商，银我谨代表董事会向所有支持集团的股东们以及客户，供应商，银行和商界好友致谢。谢谢你们一直以来对联发集团的爱护，信心行和商界好友致谢。谢谢你们一直以来对联发集团的爱护，信心和支持。和支持。

陈荣枝陈荣枝集团董事长集团董事长

董事长刊词董事长刊词

Global Reports LLC

CORPORATE INFORMATION

BOARD OF DIRECTORS

Mr. Tan Yong KeeChairmanGroup Managing Director and Chief Executive Offi cer

Mr. Tan Hai Seng BenjaminExecutive Director

Mr. Tan Hai Peng MichealExecutive Director

Mr. Phoon Wui Nyen Lead Independent Director

Mr. Bob Low Siew SieIndependent Director

Mr. Chng Hee KokIndependent Director

EXECUTIVE COMMITTEE

Mr. Tan Yong KeeChairman

Mr. Tan Hai Seng Benjamin

Mr. Tan Hai Peng Micheal

AUDIT COMMITTEE

Mr. Bob Low Siew SieChairman

Mr. Phoon Wui Nyen

Mr. Chng Hee Kok

NOMINATING COMMITTEE

Mr. Phoon Wui NyenChairman

Mr. Bob Low Siew Sie

Mr. Chng Hee Kok

REMUNERATION COMMITTEE

Mr. Phoon Wui NyenChairman

Mr. Bob Low Siew Sie

Mr. Chng Hee Kok

REGISTERED OFFICE

Blk 8, #08-05Liang Huat Industrial Complex 51 Benoi Road Singapore 629908 Website: www.lianghuatgroup.com.sg REGISTRAR AND SHARE TRANSFER OFFICE

B.A.C.S Private Limited 63 Cantonment RoadSingapore 089758

PRINCIPAL BANKERS

Malayan Banking Berhad

THE AUDITORS

LTC & AssociatesCertifi ed Public Accountants1 Raffl es Place,#20-02 OUB CentreSingapore 048616

PARTNER-IN-CHARGE

Tsang Siu For Thomas(appointed since fi nancial year ended 31 December 2005)

COMPANY SECRETARY

Ms. Liew Meng Ling

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*As of 3 April 2008

2007 FINANCIAL HIGHLIGHTS

MillionsNET TANGIBLE ASSETS

$11.5

MillionsWORKING CAPITAL

$10.8Millions

GROUP REVENUE$9.2

MillionsGROSS PROFIT

$1.6

MillionsNET PROFIT

$142.7

MillionsMARKET CAPITALISATION*

$94.7

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The Board of Directors (the “Board”) is committed to ensuring that the highest standards of corporate governance are practised throughout Liang Huat Aluminium Limited (the “Company”) and its subsidiaries (the “Group”), as a fundamental part of its responsibilities to protect and enhance shareholder value and the financial performance of the Group.

This report describes the Group’s corporate governance practices and structures that were in place during the financial year ended 31 December 2007, with specific reference to the principles and guidelines of the revised Code of Corporate Governance (the “2005 Code”) issued by the Singapore Council on Corporate Disclosure and Governance and where applicable, the Listing Manual of the Singapore Exchange Securities Trading Limited (“SGX-ST”) and the Singapore Companies Act.

BOARD MATTERS

Board’s Conduct of its Affairs

Principle 1: Every company should be headed by an effective Board to lead and control the company. The Board is collectively responsible for the success of the Company. The Board works with Management to achieve this and the Management remains accountable to the Board.

The Board at the date of this report comprises:-

Mr. Tan Yong Kee (Chairman, Group Managing Director and CEO)

Mr. Tan Hai Seng Benjamin (Executive Director) (Appointed on 17 September 2007)

Mr. Tan Hai Peng Micheal (Executive Director) (Appointed on 17 September 2007)

Mr. Phoon Wui Nyen (Lead Independent Director) (Appointed on 25 June 2007)

Mr. Bob Low Siew Sie (Independent Director)

Mr. Chng Hee Kok (Independent Director) (Appointed on 24 October 2007)

The principal functions of the Board include:-

(i) determine and approve the Group’s key business strategies and financial objectives of the Company, including the review of annual budgets, major investments/divestments, and funding proposals;

(ii) oversee the processes for evaluating the adequacy of internal controls, risk management, financial reporting and compliance;

(iii) review management performance; and

(iv) approve nominations of board directors, committee members and key personnel.

Certain matters specifically reserved for the decision by the Board are those related to approval of announcements of financial results, approval of annual reports and financial statements, convening shareholders’ meetings, disposal of assets and other corporate matters.

To assist in the execution of its responsibilities, the Board has established a number of Board Committees including an Executive Committee (“EC”), an Audit Committee (“AC”), a Nominating Committee (“NC”) and a Remuneration Committee (“RC”). These committees function within the clearly defined terms of references, which are reviewed on a regular basis by the Board. The effectiveness of each committee is also constantly reviewed by the Board.

The attendance of the Directors at Board and Board Committee meetings in financial year 2007, as well as the frequency of such meetings, is disclosed in the table below. Notwithstanding such disclosure, the Board is of the view that the contribution of each Director should not be focused only on his attendance at Board and/or Board Committee meetings. A Director’s contribution may also extend beyond the confines of formal environment of Board meetings, through the sharing of views, advice, experience and strategic networking relationships which would further the interests of the Company.

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Corporate Governance

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Board Audit CommitteeRemuneration

CommitteeNominating Committee

No. of meetings held 7 4 1 2

No. of meetings attended:

Tan Yong Kee 7 4 1 2Tan Hai Seng Benjamin 2 – – –Tan Hai Peng Micheal 2 – – –

Tan Cheng Nguan(Retired on 27 April 2007) – – – –Phoon Wui Nyen 5 1 1 1Bob Low Siew Sie 6 3 1 2Chng Hee Kok 1 – – –

Shirley Lee Lai Ngoh(Resigned on 25 September 2007) 3 2 – –

Board Composition and Balance

Principle 2: There should be a strong and independent element on the Board, which is able to exercise objective judgement on corporate affairs independently, in particular, from Management. No individual or small group of individuals should be allowed to dominate the Board’s decision making.

The Board comprises six (6) directors of which three (3) are independent directors. This composition complies with the Code’s requirement that at least one-third of the Board should be made up of independent directors. Details of the qualification and major appointment of the Directors are provided under the “Board of Directors” section of this Annual Report.

The independence of each director is reviewed annually by the NC. The NC is of the view that the current Board has an independent element ensuring objectivity in the exercise of judgement on corporate affairs independently from the management.

The Board is of the view that the present Board size is appropriate taking into account the scope and nature of the operations of the Group.

Chairman and Group Managing Director

Principle 3: There should be a clear division of responsibilities at the top of the company – the working of the Board and the executive responsibility of the company’s business – which will ensure a balance of power and authority, such that no one individual represents a considerable concentration of power.

The Board is of the view that, given the scope and nature of the operation of the Group and the strong element of independence on the Board, it is not necessary to separate the function of the Chairman and Group Managing Director. The Board will however review this matter periodically if the situation warrants.

As Chairman, Mr. Tan Yong Kee bears the responsibility for the workings of the Board. The Executive Chairman ensures that the board meetings are held when necessary and set the board meeting agenda in consultation with the Executive Directors. The Executive Chairman and Executive Directors review the board papers, prior to presenting them to the Board. The Executive Chairman and Executive Directors ensure that Board members are provided with complete, adequate and timely information on a regular basis to enable them to be fully appraised of the affairs of the Group. Board papers incorporating sufficient information from management are forwarded to the Board Members in advance of a Board meeting to enable each member to be adequately prepared.

Mr. Phoon Wui Nyen has been appointed as the lead Independent Director by the Company. As the lead Independent Director, he is the contact person for shareholders in situations where there are concerns or issues which communications with the Chairman or Management has failed to resolve or where such communications is inappropriate.

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NOMINATING COMMITTEE (“NC”)

Board Membership and Performance

Principle 4: There should be a formal and transparent process for the appointment of new directors to the Board.

Principle 5: There should be a formal assessment of the effectiveness of the Board as a whole and the contribution by each director to the effectiveness of the Board.

The Nominating Committee comprises three (3) members, all of whom are independent directors. The Nominating Committee is chaired by an independent non-executive director and as at the date of this Report, the NC members are:

Mr. Phoon Wui Nyen (Chairman) (Appointed on 24 October 2007)

Mdm. Shirley Lee Lai Ngoh (Chairman) (Resigned on 25 September 2007)

Mr. Bob Low Siew Sie (Member)

Mr. Tan Yong Kee (Member) (Resigned as member on 24 October 2007)

Mr. Chng Hee Kok (Member) (Appointed on 24 October 2007)

The main role of the Committee is to determine the criteria for identifying candidates and review nominations for the appointment of directors to the Board, and also to decide how the Board’s performance may be evaluated and to propose objective performance criteria for the Board’s approval.

The terms of reference of the Committee are:-

• Re-nomination of directors, having regard to the director’s contribution and performance (e.g., attendance, preparedness, participation and candour);

• Determine on an annual basis whether a director is independent;

• Decide whether a director is able to and has been adequately carrying out his duties as a director of the Company, particularly where the director has multiple representations;

• Decide how the Board’s performance may be evaluated and propose objective performance criteria to assess effectiveness of the Board;

• Assess the contribution of each individual director to the effectiveness of the Board; and

• Identify gaps in the mix of skills, experience and other qualities required in an effective Board so as to better nominate or recommend suitable candidates to fill the gaps.

The NC will determine the criteria for the appointment of new Directors and will set up a process for the selection and appointment of such Directors, taking into consideration the expertise and experience of each candidate.

In determining the independence of Directors annually, the NC has reviewed and is of the view that Mr. Bob Low Siew Sie, Mr. Phoon Wui Nyen and Mr. Chng Hee Kok are independent.

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The dates of initial appointment and last re-election of each Director, together with their directorships in other listed companies are set out below:

NameDate of initial appointment

Date of lastre-election

Present directorshipin other listed companies

Past directorship in other listed companies

in preceding 3 years

Tan Yong Kee 4 September 1982 – – –

Tan Hai Seng Benjamin 17 September 2007 – – –

Tan Hai Peng Micheal 17 September 2007 – – –

Bob Low Siew Sie 30 November 2005 – China Hongcheng Holdings Ltd –

Phoon Wui Nyen 25 June 2007 – – –

Chng Hee Kok 24 October 2007 – CHT (Holdings) LtdFull Apex (Holdings) Ltd

Joinn Holdings LtdLuxking Group Holdings Ltd

Pacific Century Regional Developments Ltd

People’s Food Holdings LtdSamudera Shipping Line Ltd

Sunray Holdings Ltd

–

All the Directors, except for Mr. Bob Low Siew Sie, will retire at the Company’s forthcoming annual general meeting (“AGM”) and will be eligible for re-election.

There was no formal assessment of the Board and individual Directors for FY 2007 as the full Board was only constituted on 24 October 2007. The NC will initiate a performance evaluation to assess the effectiveness of the Board as a whole and contribution by each Director for the current financial year.

Access to Information

Principle 6: In order to fulfill their responsibilities, Board members should be provided with complete, adequate and timely information prior to Board meetings and on an on-going basis.

All Directors have unrestricted access to the Company’s records and information. From time to time, they are furnished with detailed information concerning the Group to enable them to be fully cognisant of the decisions and actions of the Group’s executive management.

The agenda for Board meeting is prepared in consultation with the Executive Directors. As a general rule, detailed Board papers are prepared for each meeting and are normally circulated in advance of each meeting. The Board papers include sufficient background explanatory information from the Management on financial, business and corporate issues to enable the Directors to be properly briefed on issues to be considered at Board meetings.

All Board members have separate and independent access to the advice and services of the Company Secretary, who is responsible to the Board for ensuring that board procedures are followed and that applicable rules and regulations are complied with. All Board members also have separate and independent access to the senior management of the Company and the Group at all times in carrying out their duties.

Board members are aware that they, whether as a group or individually, in the furtherance of their duties, can take independent professional advice, if necessary, at the Company’s expense.

The Company Secretary attends all meetings of the Board and the Board committees of the Company and ensures that Board procedures are followed and that applicable rules and regulations are complied with.

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REMUNERATION COMMITTEE

Procedures for Developing Remuneration Policies

Principle 7: There should be a formal and transparent procedure for fixing the remuneration packages of individual directors. No director should be involved in deciding his own remuneration.

The Remuneration Committee (“RC”) comprises three (3) members, all of whom, including the Chairman, are independent directors. As at the date of this Report, the RC members are:

Mr. Phoon Wui Nyen (Chairman) (Appointed on 24 October 2007)

Mr. Bob Low Siew Sie (Member)


Mdm. Shirley Lee Lai Ngoh (Member) (Resigned on 25 September 2007)

Mr. Tan Yong Kee (Member) (Resigned as a member on 24 October 2007)

The principal functions of the RC are as follows:

a) recommending to the Board a framework of remuneration for the Board and key executives with the aim of building capable and committed Board and management team through competitive compensation and focused management and progressive policies;

b) determining specific remuneration package and terms of employment for each executive director; and

c) reviewing and recommending directors’ fees for non-executive directors, taking into account factors such as their effort and time spent, and their responsibilities.

If required, the RC will seek expert advice inside or outside the Company on remuneration of all Directors.

No director is involved in deciding his own remuneration, except for providing information and documents specifically requested by the RC to assist in its deliberations.

Level and Mix of Remuneration

Principle 8: The level of remuneration should be appropriate to attract, retain and motivate the directors needed to run the company successfully but companies should avoid paying more for this purpose. A significant proportion of the executive directors’ remuneration should be structured so as to link rewards to corporate and individual performance.

The remuneration of the Executive Directors is based on service agreements.

The independent directors are paid a director’s fee for their efforts and time spent, responsibilities and contribution to the Board, subject to approval by shareholders at the Annual General Meeting.

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Disclosure on Remuneration

Principle 9: Each company should provide clear disclosure of its remuneration policy, level and mix of remuneration, and the procedure for setting remuneration, in the company’s annual report. It should provide disclosure in relation to its remuneration policies to enable investors to understand the link between remuneration paid to directors and key executives, and performance.

The breakdown of remuneration of the Directors of the Company by % for the financial year ended 31 December 2007 is set out below:

Remuneration Band and Name of Directors Salary Directors’ fees

Variable or Performance

Related Income/Bonus Total

Below $250,000

Tan Yong Kee 100% – – 100%

Tan Hai Seng Benjamin – 100% – 100%

Tan Hai Peng Micheal – 100% – 100%

Tan Cheng Nguan – 100% – 100%

Bob Low Siew Sie – 100% – 100%

Phoon Wui Nyen – 100% – 100%

Chng Hee Kok – 100% – 100%

Shirley Lee Lai Ngoh – 100% – 100%

The Executive Directors, Mr. Tan Hai Seng Benjamin and Mr. Tan Hai Peng Micheal, are brothers and the sons of a substantial shareholder, Mr. Tan Thuan Teck. As the remuneration of the Executive Directors, which are based on service agreements are currently under review, the RC proposed directors’ fees for their efforts and time spent, responsibilities and contribution to the Board, subject to approval by shareholders at the AGM. Mr Tan Cheng Nguan is the brother of Mr Tan Yong Kee.

There was no employees of the Group who are immediate family members of a Director, the CEO or a substantial shareholder and whose remuneration exceeds $150,000 during the financial year ended 31 December 2007.

KEY EXECUTIVES

The gross remuneration received by each of the top 3 executives (excluding Directors) for the financial year ended 31 December 2007 are as follows:

Range Number of Executives

Below $250,000 3

The annual reviews of the compensation of Directors and key executives are carried out by the RC to ensure that their remuneration commensurate with their performance, giving due regard to the financial and commercial health and business needs of the Group. The performance of the CEO together with other key executives is reviewed periodically by the RC and the Board.

ACCOUNTABILITY

Principle 10: The Board should present a balanced and understandable assessment of the company’s performance, position and prospects.

The Board provides to the shareholders, a balanced and understandable assessment of the Company’s performance, position and prospects through the presentation of the annual financial statements and results announcements on a half-yearly basis.

The management currently provides the Board with appropriately detailed management accounts of the Group’s performance, position and prospects on a timely basis in order for the Board to discharge its duties effectively.

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AUDIT COMMITTEE

Principle 11: The Board should establish an Audit Committee with written terms of reference which clearly set out its authority and duties.

The Audit Committee comprises three (3) members, all of whom are independent directors.

Mr. Bob Low Siew Sie (Chairman)

Mr. Phoon Wui Nyen (Member) (Appointed on 24 October 2007)


Mdm. Shirley Lee Lai Ngoh (Member) (Resigned on 25 September 2007)

Mr. Tan Yong Kee (Member) (Resigned as a member on 24 October 2007)

The AC is established to assist the Board with discharging its responsibility to safeguard the Company’s assets, maintain adequate accounting records and develop and maintain effective systems of internal control. The Board is of the opinion that the members of the AC possess the necessary qualifications and experience in discharging their duties. The details of the Board member’s qualifications and experience are presented in this Annual Report under the section “Board of Directors”.

The terms of reference of the AC are, inter alia, as follows:-

(i) review with our external auditors their audit plans, their audit report, their management letter, if any, and their management’s response;

(ii) review the co-operation given by our officers to the external auditors;

(iii) review the independence and objectivity of the extenal auditors annually;

(iv) nominate the external auditors for re-appointment;

(v) review the audited financial statements including half-year and full-year results and the respective announcements before submission to the Board of Directors; and

(vi) review interested persons transactions in accordance with Chapter 9 of the SGX-ST’s Listing Manual;

The AC has full access to and cooperation by Management and has full discretion to invite any executive director or executive officer to attend its meetings.

Annually, the AC meets with the external auditors separately, at least once a year, without the presence of the Management.

The AC has reviewed the non-audit related work carried out by the external auditors during the current financial year, which comprised tax services and is satisfied that their independence and objectivity has not been impaired by the provision of those services.

The AC has recommended to the Board the re-appointment of LTC & Associates as the external auditor at the forthcoming AGM.

The Management has, with the approval of the AC, put in place a whistle blowing policy and programme, where the employees of the Company may, in confidence, raise concerns about possible corporate improprieties in matters of financial reporting or other matters.

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Internal Controls

Principle 12: The Board should ensure that the Management maintains a sound system of internal controls to safeguard the shareholders’ investments and the company’s assets.

The Board acknowledges that it is responsible for maintaining a sound system of internal controls to safeguard shareholders’ interests and maintain accountability of its assets. While no cost-effective internal control system can provide absolute assurance against loss or misstatement, the Group’s internal controls and systems have been designed to provide reasonable assurance that assets are safeguarded, operational controls are in place, business risks are suitably protected, proper accounting records are maintained and financial information used within the business and for publication, are reasonable and accurate.

Internal Audits

Principle 13: The company should establish an internal audit function that is independent of the activities it audits.

The Company’s internal audit function is out-sourced to an independent third party accounting firm (the “Internal Auditor”) for the current financial year. The AC’s oversight and supervision of the Group’s internal controls are complemented by the work of the Internal Auditor, whose role is to assist the AC to ensure that the Group maintains a sound system of internal controls by regular monitoring of key controls and procedures and ensuring their effectiveness, undertaking investigations as directed by the AC, and conducting regular in-depth audits of high risk areas.

In order to allow for a more open discussion on any issue of concern, the AC meets the Internal Auditor separately without the presence of management or any executive.

The Internal Auditor’s primary line of reporting is to the Chairman of AC, although the Internal Auditor also reports administratively to the CEO of the Company.

The AC reviews and approves the internal audit plans.

COMMUNICATION WITH SHAREHOLDERS

Communication with Shareholders

Principle 14: Companies should engage in regular, effective and fair communication with shareholders.

Greater Shareholder Participation

Principle 15: Companies should encourage greater shareholder participation at AGMs, and allow shareholders the opportunity to communicate their views on various matters affecting the company.

The Board believes in regular and timely communication with our shareholders. In line with continuous obligations of the Company pursuant to the Corporate Disclosure Policy of SGX-ST, the Board’s policy is that all shareholders should be equally informed of all major developments impacting the Group.

Information is communicated to our shareholders on a timely basis and made through:

• SGXNET announcements and news releases on major developments of the Group;

• financial statements containing a summary of the financial information and affairs of the Group for the half-year and full-year via SGXNET;

• annual reports that are prepared and issued to all shareholders. The Board makes every effort to ensure that the annual report includes all information about the Group, including future developments and other disclosures required by the Companies Act, and Singapore Financial Reporting Standards; and

• the Group’s website at www.lianghuatgroup.com.sg from which shareholders can access information on the Group.

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Shareholders are encouraged to attend AGM/EGM to ensure high level of accountability and to stay appraised of the Group’s strategies and goals. Notice of the meeting will be advertised in newspapers and announced on SGXNET.

The Annual General Meeting is the principal forum for dialogue with shareholders. There is an open question and answer session at which shareholders may raise questions or share their views regarding the proposed resolutions and the Company’s businesses and affairs. The Chairman of the Board, AC, NC and RC and the external auditors are in attendance at the Annual General Meeting.

INTERESTED PERSON TRANSACTIONS

The Company has established internal control policies to ensure that transactions with interested persons are properly reviewed and approved and conducted at arm’s length basis.

The Company seeks annual renewal of general mandate from its shareholders for those recurrent transactions of revenue of trading nature or those necessary for its day-to-day operations.

The aggregate values of interested person transactions for the financial year ended 31 December 2007 are as follows:

Nature of transaction and name of Interested Person

Aggregate value of all interested person transactions conducted under shareholders’ mandate

pursuant to Rule 920 (excluding transactions less than $100,000)

Aggregate value of all interested person transactions conducted under shareholders’ mandate

pursuant to Rule 920 (including transactions less than $100,000)

$’000 $’000

Khai Wah Development Pte Ltd

- rental of factory and office premises 324 324

Ho Lee Construction Pte Ltd

- purchase of materials – 35

- contract income from project fabrication 305 305

MATERIAL CONTRACTS

There were no material contracts entered into by the Company or its subsidiaries involving the interest of the Chairman, Managing Director, any director, or controlling shareholders subsisted at the end of the financial year.

DEALINGS IN SECURITIES OF THE COMPANY – BEST PRACTICES

The Company has adopted a set of code of conduct to provide guidance to its officers regarding dealings in the Company’s securities, in compliance with Rule 1207(18) of the SGX-ST Listing Manual.

The Company has issued notices to its Directors, officers and employees to state that there must be no dealings in the Company’s shares whilst they are in possession of unpublished material price sensitive information and during the period commencing two weeks before the announcement of the Company’s financial statements for each of the first three quarters of its financial year, or one month before half year or full financial year, as the case may be, and ending on the date of announcement of such financial results.

RISK MANAGEMENT

The Company regularly reviews and improves its business and operation activities to take into account the risk management perspective. The Company seeks to identify areas of significant business risks as well as take appropriate measures to control and mitigate these risks. The Company reviews all significant control policies and procedures and highlights all significant matters to the Audit Committee.

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The directors submit this annual report to the members together with the audited financial statements of the Group for the financial year ended 31 December 2007 and the balance sheet of the Company as at 31 December 2007.

Directors

The directors in office at the date of this report are:

Mr. Tan Yong Kee (Chairman, Group Managing Director and CEO)

Mr. Tan Hai Seng Benjamin (Executive Director) (Appointed on 17 September 2007)

Mr. Tan Hai Peng Micheal (Executive Director) (Appointed on 17 September 2007)

Mr. Phoon Wui Nyen (Lead Independent Director) (Appointed on 25 June 2007)

Mr. Bob Low Siew Sie (Independent Director)

Mr. Chng Hee Kok (Independent Director) (Appointed on 24 October 2007)

Arrangements to enable Directors to acquire shares or debentures

Neither at the end of nor at any time during the year was the Company a party to any arrangement whose object is to enable the directors of the Company to acquire benefits by means of the acquisition of shares in, or debentures of, the Company or any other body corporate.

Directors’ interest in shares or debentures

According to the Register of Directors’ shareholdings kept by the Company under Section 164 of the Singapore Companies Act, Cap 50, the following directors who held office at the end of the financial year were interested in shares of the Company and related corporations as follows:

Shares registered in the name of director

Shares in which director is deemed to have an interest

As at1.1.2007

or date of appointment

As at31.12.2007

As at 21.1.2008

As at1.1.2007

or date of appointment

As at31.12.2007

As at21.1.2008

Number of ordinary shares

The Company – Liang Huat Aluminium LimitedTan Yong Kee 39,359,400 1,058,140 1,058,140 410,476,320 25,762,943 225,762,943

Tan Hai Seng Benjamin – – – 1,600,045,267 1,600,045,267 1,600,045,267

The ultimate holding company

Teck Lee Holdings Pte LtdTan Hai Seng BenjaminTan Hai Peng Micheal

4,000,0003,400,000

4,000,0003,400,000

4,000,0003,400,000

––

––

––

Mr. Tan Hai Seng Benjamin, by virtue of the provisions of Section 7 of the Companies Act, Cap. 50, is deemed to be interested in all the related corporations of the Group.

Directors’ contractual benefits

Since the end of the previous financial year, no director has received or become entitled to receive a benefit by reason of a contract made by the Company or a related corporation with the director or with a firm of which he is a member or with a company in which he has a substantial financial interest, except as disclosed in the accompanying financial statements, and except that Mr. Tan Yong Kee has a service agreement with the Company, and has received remuneration and other performance bonus under the provisions of the service agreement.

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Global Reports LLC

Options to take up unissued shares

During the financial year, no option to take up unissued shares of the company or any corporation in the Group was granted. During the financial year, it was determined that the Liang Huat Aluminium Limited Executives’ Share Option Scheme had lapsed consequent to the lodgement of copies of the Orders of Court sanctioning the Schemes of Arrangement with Accounting & Corporate Regulatory Authority of Singapore on 27 April 2005.

Share options exercised

During the financial year, there were no shares of the Company or any corporation in the Group issued by virtue of the exercise of an option to take up unissued shares.

Unissued shares under option

At the end of the financial year, there were no unissued shares of the Company or any corporation in the Group under option.

Audit committee

The Audit Committee comprises the following members:

Mr. Bob Low Siew Sie (Chairman)

Mr. Phoon Wui Nyen (Member)

Mr. Chng Hee Kok (Member)

The Audit Committee performs the functions set out in Section 201(B) of the Companies Act, Cap. 50. In performing its functions, the Audit Committee reviewed the overall scope of the external audits and the assistance given by the Company’s officers to the external auditors. It met with the Company’s external auditors to discuss the results of their examinations and their evaluation of the Company’s system of internal accounting controls. The Committee also reviewed the financial statements of the Company and the consolidated financial statements of the Group for the financial year ended 31 December 2007 as well as the auditor’s report thereon.

The Committee recommends to the Board the nomination of LTC & Associates for re-appointment as external auditors at the forthcoming Annual General Meeting of the Company.

External auditors

The external auditors, LTC & Associates, Certified Public Accountants, have expressed their willingness to accept re-appointment.

On behalf of the Directors

TAN YONG KEE TAN HAI PENG MICHEAL

Singapore, 3 April 2008

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Global Reports LLC

In the opinion of the directors,

(a) the accompanying balance sheet of the Company and the consolidated financial statements of the Group are drawn up so as to give a true and fair view of the state of affairs of the Company and of the Group as at 31 December 2007 and of the results of the business, changes in equity and cash flows of the Group for the financial year then ended; and

(b) at the date of this statement, there are reasonable grounds to believe that the Company will be able to pay its debts as and when they fall due.

The board of directors authorised these financial statements for issue on 3 April 2008.

On behalf of the Directors

TAN YONG KEE TAN HAI PENG MICHEAL


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Statement by Directors

Global Reports LLC

We have audited the accompanying financial statements of Liang Huat Aluminium Limited (the “Company”) and its subsidiaries (the “Group”) set out on pages 27 to 60, which comprise the balance sheet of the Company and the consolidated balance sheet of the Group as at 31 December 2007, and the consolidated income statement, the consolidated statement of changes in equity and the consolidated cash flow statement of the Group for the financial year ended 31 December 2007, and a summary of significant accounting policies and other explanatory notes.

Management’s Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these financial statements in accordance with the provisions of the Singapore Companies Act, Cap. 50 (the “Act”) and Singapore Financial Reporting Standards. This responsibility includes:

(a) devising and maintaining a system of internal accounting controls sufficient to provide a reasonable assurance that assets are safeguarded against loss from unauthorised use or disposition; and transactions are properly authorised and that they are recorded as necessary to permit the preparation of true and fair profit and loss accounts and balance sheets and to maintain accountability of assets;

(b) selecting and applying appropriate accounting policies; and

(c) making accounting estimates that are reasonable in the circumstances.

Auditors’ Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Singapore Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance as to whether the financial statements are free from material misstatement.

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

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

Opinion

In our opinion,

a) the balance sheet of the Company and the consolidated financial statements of the Group are properly drawn up in accordance with the provisions of the Act and Singapore Financial Reporting Standards so as to give a true and fair view of the state of affairs of the Company and of the Group as at 31 December 2007, and the results, changes in equity and cash flows of the Group for the financial year ended on that date; and

b) the accounting and other records required by the Act to be kept by the Company and by those subsidiaries incorporated in Singapore of which we are the auditors have been properly kept in accordance with the provisions of the Act.

LTC & AssociatesCertified Public Accountants


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Independent Auditors’ Report to the Members ofLiang Huat Aluminium LimitedFor the financial year ended 31 December 2007

Global Reports LLC

The Company The Group

2007 2006 2007 2006

NOTE $’000 $’000 $’000 $’000

ASSETS

Non-Current Assets

Property, plant and equipment 5 601 142 686 248

Subsidiaries 6 600 600 – –

1,201 742 686 248

Current Assets

Inventories 7 – – 669 705

Due from customers for contract work-in-progress 8(a) – – 254 233

Trade receivables 9 675 38 3,479 2,696

Other receivables 10 2,373 44 727 149

Financial assets, at fair value through profit or loss 11 – – 10 4

Cash and cash equivalents 12 9,407 20 9,699 540

12,455 102 14,838 4,327

Total assets 13,656 844 15,524 4,575

EQUITY AND LIABILITIES

Capital and Reserves

Share capital 13 40,303 45,630 40,303 45,630

Reserves (27,599) (183,563) (28,846) (191,852)

Shareholders’ equity/(Capital deficiency) 12,704 (137,933) 11,457 (146,222)

Non-Current Liabilities

Borrowings 14 – 57,198 – 57,198

Current Liabilities

Trade payables 15 411 1,787 2,293 7,560

Other payables 16 333 3,100 1,034 4,119

Due to customers for contract work-in-progress 8(b) – – 532 1,865

Borrowings 14 208 76,692 208 80,055

952 81,579 4,067 93,599

Total shareholders’ equity/(capital deficiency) and liabilities 13,656 844 15,524 4,575

The annexed notes form an integral part of and should be read in conjunction with these financial statements

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Balance SheetsAs at 31 December 2007

Global Reports LLC

2007 2006

NOTE $’000 $’000

Turnover 4 9,161 2,709

Cost of sales (7,606) (3,313)

Gross profit/(loss) 1,555 (604)

Other operating income 17 1,310 20,543

Scheme liabilities compromised and written back on Completion 142,320 –

Other operating expenses (2,025) (2,043)

Other items 18 (372) (28,188)

Finance costs 20 (13) (6,188)

Profit/(Loss) before taxation 19 142,775 (16,480)

Taxation 21 (54) 398

Net profit/(loss) attributable to equity holders of the Company 142,721 (16,082)

Earnings/(Losses) per share 25

– Basic (cents) 12.7 (1.40)

– Diluted (cents) 12.7 (1.40)


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Consolidated Income Statement For the financial year ended 31 December 2007

Global Reports LLC

Share capital

Share premium

Revaluation reserve

Exchange fluctuation

reserveAccumulated

lossesOther

reserve Total

$’000 $’000 $’000 $’000 $’000 $’000 $’000

The Group

Balance at 1.1.2007 45,630 – – – (191,852) – (146,222)

Issue of shares pursuant to Modified Schemes and Creditors’ Claims 1,119 – – – – – 1,119

Issue of shares pursuant to Investment Agreement 3,000 – – – – – 3,000

Issue of shares pursuant to Placement Agreement 12,600 – – – – – 12,600

Capital reduction (22,046) – – – 22,046 – –

Share issue expenses – – – – – (1,761) (1,761)

Net profit for the year – – – – 142,721 – 142,721

Balance at 31.12.2007 40,303 – – – (27,085) (1,761) 11,457

Balance at 1.1.2006 22,213 19,428 2,855 (12) (175,770) 4,205 (127,081)

Transfer from share premium and other reserve to share capital 23,417 (19,428) – – – (3,989) –

De-consolidation of subsidiaries – – (2,855) 12 – (216) (3,059)

Net loss for the year – – – – (16,082) – (16,082)

Balance at 31.12.2006 45,630 – – – (191,852) – (146,222)


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Consolidated Statement of Changes in Equity For the financial year ended 31 December 2007

Global Reports LLC

The Group

2007 2006

Note $’000 $’000

Cash Flow from Operating Activities

Profit/(Loss) before taxation 142,775 (16,480)

Adjustments for:

Bad trade debts recovered (16) (12)

Bank interest charged by Scheme Creditors written back (11,077) –

Depreciation of property, plant and equipment 118 142

Gain on de-consolidation of subsidiaries – (9,991)

Gain on disposal of property, plant and equipment (194) (946)

Scheme liabilities compromised and written back on Completion (131,243) –

Changes in fair value of financial assets, at fair value through profit or loss 7 –

Impairment on investments – 2,755

Interest expense 12 6,188

Interest income (117) –

Plant and equipment written off – 10,861

Reversal of impairment in quoted shares (5) –

Operating profit/(loss) before working capital changes 260 (7,483)

Changes in inventories and contract work-in-progress (1,318) 2,102

Changes in receivables (1,223) (2,771)

Changes in payables (300) (2,866)

Cash used in operations (2,581) (11,018)

Interest income 117 –

Interest expense (12) (15)

Overdraft interest charged by Scheme Creditors written back 3,213 –

Income tax (paid)/refunded (192) 405

Net cash generated from/(used in) operating activities 545 (10,628)

Cash Flows from Investing Activities

Acquisition of plant and equipment (628) (128)

Net cash disposed from de-consolidation of subsidiaries – (2)

Proceeds from disposal of property, plant and equipment 266 14,680

Proceed from disposal of investment in quoted shares 8 –

Net cash (used in)/generated from investing activities (354) 14,550

Cash Flows from Financing Activities

Loan from Investor (i) – 1,706

Increase in bank borrowings 207 –

Increase in bank borrowings included in Modified Schemes – 5,557

Fixed deposits pledged with bank (3,000) –

Proceeds from issuance of ordinary shares pursuant to Investment Agreement (i) 1,373 –

Proceeds from issuance of ordinary shares pursuant to Placement Agreement, net 10,839 –

Repayment of bank borrowings – (11,746)

Repayment of obligations under finance leases (237) (40)

Net cash generated from/(used in) financing activities 9,182 (4,523)

Settlement of bank overdraft through Modified Schemes 36,355 –

Net increase/(decrease) in cash and cash equivalents 45,728 (601)

Cash and cash equivalents at the beginning of the year 12 (39,029) (38,428)

Cash and cash equivalent at the end of the year 12 6,699 (39,029)


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Consolidated Cash Flow StatementFor the financial year ended 31 December 2007

Global Reports LLC

The details of net assets of subsidiaries de-consolidated are as follows:

The Group

2007 2006

$’000 $’000

De-consolidation of subsidiaries

Net assets disposed:

Cash and cash equivalents – 2

Trade receivables – 2

Other receivables – 25

Other payables – (470)

– (441)

Total cash proceed – –

Cash disposed – (2)

Net cash disposed from de-consolidation of subsidaries – (2)

Note: (i) During the financial year, the Group issued 2,000,000,000 ordinary shares at $0.0015 each for a total sum of $3,000,000 pursuant to the Investment Agreement of which $1,627,000 was injected into the Group as Loan from Investor in the financial year ended 31 December 2006. This loan from Investor was capitalised as share capital during the financial year ended 31 December 2007.


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Consolidated Income Statement (continued)For the financial year ended 31 December 2007

Global Reports LLC

These notes form an integral part of and should be read in conjunction with the accompanying financial statements.

Capitalised terms not defined herein shall have the same meanings ascribed to them in the Company’s Circular to Shareholders dated 30 June 2007.

1 General information

Liang Huat Aluminium Limited (the “Company”) is listed on the Singapore Exchange Securities Trading Limited and incorporated as a limited liability company and domiciled in the Republic of Singapore. The registered office is located at Block 8, #08-05, Liang Huat Industrial Complex, 51 Benoi Road, Singapore 629908.

The principal activity of the Company is that of investment holding. The principal activities of the subsidiaries are stated in Note 6.

The consolidated financial statements of the Group for the financial year ended 31 December 2007 and the balance sheet of the Company as at that date were authorised for issue in accordance with a resolution of the directors on the date of the Statement By Directors.

On 30 August 2007, the Company announced that completion under the Investment Agreement, the Modified Schemes and the Placement Agreement took place (“Completion Date”).

Pursuant to the Modified Debt Restructuring Plan and based on the proofs of debt received by the Scheme Adviser and Manager, the Company allotted and issued 7,460,798,528 Scheme Shares, representing approximately 23.63% of the enlarged share capital, to the Scheme Creditors (including the Debenture Holders), the LHAI Scheme Creditors and the Creditors on a pro rata basis, at the issue price of $0.00015 per Scheme Share to fully discharge each of their Scheme Claims, LHAI Scheme Claims and Creditors’ Claims on Completion Date.

Durabeau has paid to each of the Durabeau Scheme Creditors in accordance with the terms and conditions of the Modified Durabeau Scheme, a cash equivalent of 15.0% of their respective Durabeau Scheme Claims on 14 September 2007 to fully discharge each of their Durabeau Scheme Claims.

Accordingly, the Company, LHAI and Durabeau have fully discharged their respective obligations under the Modified Scheme, the Modified LHAI Scheme and the Modified Durabeau Scheme.

2 Summary of significant accounting policies

Basis of preparation

These financial statements have been prepared in accordance with Singapore Financial Reporting Standards (“FRS”). The financial statements have been prepared under the historical cost convention, except as disclosed in the accounting policies below.

The preparation of financial statements in conformity with FRS requires management to exercise its judgement in the process of applying the Group’s accounting policies. It also requires the use of certain critical accounting estimates and assumptions. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements, are disclosed in Note 3.

On 1 January 2007, the Group adopted the new or amended FRS and Interpretations of FRS (“INT FRS”) that are mandatory for application from that date. Changes to the Group’s accounting policies have been made as required, in accordance with the transitional provisions in the respective FRS and INT FRS.

The following are the new or amended FRS and INT FRS that are relevant to the Group:

Amendments to FRS 1 Presentation of Financial Statements – Capital Disclosures

FRS 107 Financial Instruments: Disclosures

The adoption of the above FRS or INT FRS did not result in any substantial changes to the Group’s accounting policies nor any significant impact on these financial statements.

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Notes to the Financial StatementsFor the financial year ended 31 December 2007

Global Reports LLC

Revenue recognition

Revenue comprises the fair value of the consideration received or receivable for the sale of goods and rendering of services in the ordinary course of the Group’s activities. Revenue is presented, net of goods and services tax, rebates and discounts, and after eliminating sales within the Group.

Revenue from construction contracts

Please refer to the paragraph “Construction contracts” for the accounting policy for revenue from construction contracts.

Sale of goods

Revenue from sales is recognised when a Group entity has delivered the goods to location specified by its customers, the customers have accepted the goods in accordance with the sales contract and the collectability of the related receivable is reasonably assured.

Interest income

Interest income is recognised using the effective interest method.

Dividend income

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

Rental income

Rental income from operating leases (net of any incentive given to the lessee) is recognised on a straight-line basis over the lease term.

Group accounting

Subsidiaries

Subsidiaries are entities over which the Group has power to govern the financial and operating policies, generally accompanied by a shareholding giving rise to the majority of the voting rights. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the Group controls another entity.

The purchase method of accounting is used to account for the acquisition of subsidiaries. The cost of an acquisition is measured as the fair value of the assets given, equity instruments issued or liabilities incurred or assumed at the dates of exchange, plus costs directly attributable to the acquisition. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair value on the date of acquisition, irrespective of the extent of minority interest.

Subsidiaries are consolidated from the date on which control is transferred to the Group. They are de-consolidated from the date on which control ceases.

In preparing the consolidated financial statements, transactions, balances and unrealised gains on transactions between group entities are eliminated. Unrealised losses are also eliminated but are considered an impairment indicator of the asset transferred. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group.

Please refer to the paragraph “Investments in subsidiaries” for the accounting policy on investments in subsidiaries in the separate financial statements of the Company.

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Global Reports LLC

Property, plant and equipment

(a) Measurement

(i) Land and buildings

Land and buildings are initially recognised at cost. Freehold land is subsequently carried at the revalued amount less accumulated impairment losses. Buildings and leasehold land are subsequently carried at the revalued amounts less accumulated depreciation and accumulated impairment losses.

Land and buildings are revalued by independent professional valuers on a triennial basis and whenever their carrying amounts are likely to differ materially from their revalued amounts. When an asset is revalued, any accumulated depreciation at the date of revaluation is eliminated against the gross carrying amount of the asset. The net amount is then restated to the revalued amount of the asset.

Increases in carrying amounts arising from revaluation including currency translation differences are recognised in an asset revaluation reserve, unless they offset previous decreases in the carrying amounts of the same asset, in which case, they are recognised in the income statement. Decreases in carrying amounts that offset previous increases of the same asset are recognised against the asset revaluation reserve. All other decreases in carrying amounts are recognised in the income statement.

(ii) Other property, plant and equipment

All other items of property, plant and equipment are initially recognised at cost and subsequently carried at cost less accumulated depreciation and accumulated impairment losses.

(iii) Components of costs

The cost of an item of property, plant and equipment initially recognised includes its purchase price and any cost that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management, including borrowing costs incurred for the property under development.

(b) Depreciation

Freehold land and property under development are not depreciated. Depreciation on other items of property, plant and equipment is calculated using the straight-line method to allocate their depreciable amounts over their estimated useful lives as follows:

Useful lives

Freehold buildings 50 years

Land use rights 50 years

Leasehold buildings 30 to 50 years

Plant and equipment 1 to 10 years

Motor vehicles 6 years

Leasehold improvements 8 years

The residual values, estimated useful lives and depreciation method of property, plant and equipment are reviewed, and adjusted as appropriate, at each balance sheet date. The effects of any revision are recognised in the income statement when the changes arise.

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(c) Subsequent expenditure

Subsequent expenditure relating to property, plant and equipment that has already been recognised is added to the carrying amount of the asset only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. All other repair and maintenance expense is recognised in the income statement when incurred.

(d) Disposal

On disposal of an item of property, plant and equipment, the difference between the disposal proceeds and its carrying amount is recognised in the income statement. Any amount in revaluation reserve relating to that asset is transferred to retained earnings directly.

Borrowing costs

Borrowing costs are recognised in the income statement using the effective interest method.

Construction contracts

When the outcome of a construction contract can be estimated reliably, contract revenue and contract costs are recognised as revenue and expenses respectively by reference to the stage of completion of the contract activity at the balance sheet date (“percentage-of-completion method”). When the outcome of a construction contract cannot be estimated reliably, contract revenue is recognised to the extent of contract costs incurred that are likely to be recoverable. When it is probable that total contract costs will exceed total contract revenue, the expected loss is recognised as an expense immediately.

Contact revenue comprises the initial amount of revenue agreed in the contract or variations in the contract work and claims that can be measured reliably. A variation or a claim is recognised as contract revenue when it is probable that the customer will approve the variation or negotiations have reached an advanced stage such that it is probable that the customer will accept the claim.

The stage of completion is measured by reference to the value of work done to date to the estimated total revenue for the contract.

Work-in-progress is stated at aggregated costs incurred plus recognised profit less progress billings. Where aggregated costs incurred plus recognised profits (less recognised losses) exceed progress billings, the balance is shown as an asset. Where progress billings exceed aggregated costs incurred plus recognised profits (less recognised losses), the balance is shown as a liability.

Progress billings not yet paid by customers and retentions are included within “trade receivables”. Advances received are included within “trade payables”.

Investments in subsidiaries

Investments in subsidiaries are carried at cost less accumulated impairment losses in the Company’s balance sheet. On disposal of investments in subsidiaries, the difference between disposal proceeds and the carrying amounts of the investments are recognised in the income statement.

Impairment of non-financial assets

Property, plant and equipmentInvestments in subsidiaries

Property, plant and equipment and investments in subsidiaries are tested for impairment whenever there is any objective evidence or indication that these assets may be impaired.

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Global Reports LLC

For the purpose of impairment testing, the recoverable amount (i.e. the higher of the fair value less cost to sell and the value-in-use) is determined on an individual asset basis unless the asset does not generate cash flows that are largely independent of those from other assets. If this is the case, the recoverable amount is determined for the cash-generating-units (“CGU”) to which the asset belongs.

If the recoverable amount of the asset (or CGU) is estimated to be less than its carrying amount, the carrying amount of the asset (or CGU) is reduced to its recoverable amount.

The difference between the carrying amount and recoverable amount is recognised as an impairment loss in the income statement, unless the asset is carried at revalued amount, in which case, such impairment loss is treated as a revaluation decrease. Please refer to the paragraph “Property, plant and equipment” for the treatment of revaluation decrease.

An impairment loss for an asset is reversed if, and only if, there has been a change in the estimates used to determine the asset’s recoverable amount since the last impairment loss was recognised. The carrying amount of an asset is increased to its revised recoverable amount, provided that this amount does not exceed the carrying amount that would have been determined (net of any accumulated amortisation or depreciation) had no impairment loss been recognised for the asset in prior years.

A reversal of impairment loss for an asset is recognised in the income statement, unless the asset is carried at revalued amount, in which case, such reversal is treated as a revaluation increase. However, to the extent that an impairment loss on the same revalued asset was previously recognised in the income statement, a reversal of that impairment is also recognised in the income statement.

Financial assets

(a) Classification

The Group classifies its financial assets in the following categories: at fair value through profit or loss and loans and receivables. The classification depends on the purpose for which the assets were acquired. Management determines the classification of its financial assets at initial recognition. The designation of financial assets at fair value through profit or loss is irrevocable.

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

This category has two sub-categories: financial assets held for trading, and those designated at fair value through profit or loss at inception. A financial asset is classified as held for trading if it is acquired principally for the purpose of selling in the short term. Financial assets designated as at fair value through profit or loss at inception are those that are managed and their performances are evaluated on a fair value basis, in accordance with a documented Group investment strategy. Derivatives are also categorised as held for trading unless they are designated as hedges. Assets in this category are presented as current assets if they are either held for trading or are expected to be realised within 12 months after the balance sheet date.

(ii) Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They are presented as current assets, except for those maturing later than 12 months after the balance sheet date which are presented as non-current assets.

Loans and receivables are presented as “trade and other receivables” and “cash and cash equivalents” on the balance sheet.

(b) Recognition and derecognition

Regular way purchases and sales of financial assets are recognised on trade-date – the date on which the Group commits to purchase or sell the asset.

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Global Reports LLC

Financial assets are derecognised when the rights to receive cash flows from the financial assets have expired or have been transferred and the Group has transferred substantially all risks and rewards of ownership. On disposal of a financial asset, the difference between the carrying amount and the sale proceeds is recognised in the income statement. Any amount in the fair value reserve relating to that asset is transferred to the income statement.

Trade receivables that are factored out to banks and other financial institutions with recourse to the Group are not derecognised until the recourse period has expired and the risks and rewards of the receivables have been fully transferred. The corresponding cash received from the financial institutions is recorded as borrowings.

(c) Initial measurement

Financial assets are initially recognised at fair value plus transaction costs except for financial assets at fair value through profit or loss, which are recognised at fair value. Transaction costs for financial assets at fair value through profit or loss are recognised immediately in the income statement.

(d) Subsequent measurement

Financial assets, at fair value through profit or loss are subsequently carried at fair value. Loans and receivables are subsequently carried at amortised cost using the effective interest method.

Changes in the fair values of financial assets, at fair value through profit or loss including the effects of currency translation, interest and dividend, are recognised in the income statement when the changes arise.

(e) Impairment

The Group assesses at each balance sheet date whether there is objective evidence that a financial asset or a group of financial assets is impaired and recognises an allowance for impairment when such evidence exists.

(i) Loans and receivables

Significant financial difficulties of the debtor, probability that the debtor will enter bankruptcy, and default or significant delay in payments are objective evidence that these financial assets are impaired.

The carrying amount of these assets is reduced through the use of an impairment allowance account which is calculated as the difference between the carrying amount and the present value of estimated future cash flows, discounted at the original effective interest rate. When the asset becomes uncollectible, it is written off against the allowance account. Subsequent recoveries of amounts previously written off are recognised against the same line item in the income statement.

The allowance for impairment loss account is reduced through the income statement in a subsequent period when the amount of impairment loss decreases and the related decrease can be objectively measured. The carrying amount of the asset previously impaired is increased to the extent that the new carrying amount does not exceed the amortised cost had no impairment been recognised in prior periods.

Borrowings

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

Borrowings are initially recognised at fair value (net of transaction costs) and subsequently carried at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption value is recognised in the income statement over the period of the borrowings using the effective interest method.

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Global Reports LLC

Trade and other payables

Trade and other payables are initially recognised at fair value, and subsequently carried at amortised cost using the effective interest method.

Fair value estimation of financial assets and liabilities

The fair values of financial instruments traded in active markets (such as exchange-traded and over-the-counter securities and derivatives) are based on quoted market prices at the balance sheet date. The quoted market prices used for financial assets are the current bid prices; the appropriate quoted market prices for financial liabilities are the current asking prices.

The fair values of financial instruments that are not traded in an active market are determined by using valuation techniques. The Group uses a variety of methods and makes assumptions that are based on market conditions existing at each balance sheet date. Where appropriate, quoted market prices or dealer quotes for similar instruments are used. Valuation techniques, such as discounted cash flow analyses, are also used to determine the fair values of the financial instruments.

The fair values of current financial assets and liabilities carried at amortised cost approximate their carrying amounts.

Leases – when the Group is the lessee

Operating leases

Leases of factories and offices where substantially all risks and rewards incidental to ownership are retained by the lessors are classified as operating leases. Payments made under operating leases (net of any incentives received from the lessors) are recognised in the income statement on a straight-line basis over the period of the lease.

Inventories

Inventories are stated at the lower of cost and net realisable value. Cost is determined on a weighted average basis and includes freight and handling charges. The cost of work in progress and finished goods comprises raw materials, direct labour, other direct costs and related production overheads (based on normal operating capacity) but excludes borrowing costs. Net realisable value is the estimated selling price in the ordinary course of business, less applicable variable selling expenses.

Income taxes

Current income tax for current and prior periods is recognised at the amount expected to be paid to or recovered from the tax authorities, using the tax rates and tax laws that have been enacted or substantively enacted by the balance sheet date.

Deferred income tax is recognised for all temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements except when the deferred income tax arises from the initial recognition of goodwill or an asset or liability in a transaction that is not a business combination and affects neither accounting nor taxable profit or loss at the time of the transaction.

A deferred income tax liability is recognised on temporary differences arising on investments in subsidiaries, except where the Group is able to control the timing of the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future.

A deferred income tax asset is recognised to the extent that it is probable that future taxable profit will be available against which the deductible temporary differences and tax losses can be utilised.

Deferred income tax is measured:

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(i) at the tax rates that are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled, based on tax rates and tax laws that have been enacted or substantively enacted by the balance sheet date; and

(ii) based on the tax consequence that will follow from the manner in which the Group expects, at the balance sheet date, to recover or settle the carrying amounts of its assets and liabilities.

Current and deferred income taxes are recognised as income or expense in the income statement, except to the extent that the tax arises from a business combination or a transaction which is recognised directly in equity. Deferred tax arising from a business combination is adjusted against goodwill on acquisition.

Provisions

Provisions for warranty, restructuring costs and legal claims are recognised when the Group has a present legal or constructive obligation as a result of past events, it is more likely than not that an outflow of resources will be required to settle the obligation and the amount has been reliably estimated. Restructuring provisions comprise lease termination penalties and employee termination payments. Provisions are not recognised for future operating losses.

The Group recognises the estimated liability to repair or replace products still under warranty at the balance sheet date. This provision is calculated based on historical experience of the level of repairs and replacements.

Other provisions are measured at the present value of the expenditure expected to be required to settle the obligation using a pre-tax discount rate that reflects the current market assessment of the time value of money and the risks specific to the obligation. The increase in the provision due to the passage of time is recognised in the income statement as finance expense.

Changes in the estimated timing or amount of the expenditure or discount rate are recognised in the income statement when the changes arise.

Employee benefits

Defined contribution plan

Defined contribution plans are post-employment benefit plans under which the Group pays fixed contributions into separate entities such as the Central Provident Fund on a mandatory, contractual or voluntary basis. The Group has no further payment obligations once the contributions have been paid. The Group’s contributions are recognised as employee compensation expense when they are due, unless they can be capitalised as an asset.

Employee leave entitlements

Employee entitlements to annual leave are recognised when they accrue to employees. A provision is made for the estimated liability for annual leave as a result of services rendered by employees up to the balance sheet date.

Currency translation

(a) Functional and presentation currency

Items included in the financial statements of each entity in the Group are measured using the currency of the primary economic environment in which the entity operates (“functional currency”). The financial statements are presented in Singapore Dollar.

(b) Transactions and balances

Transactions in a currency other than the functional currency (“foreign currency”) are translated into the functional currency using the exchange rates at the dates of the transactions. Currency translation differences from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies at the closing rates at the balance sheet date are recognised in the income statement, unless they arise from borrowings in foreign currencies, other currency instruments

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designated and qualifying as net investment hedges and net investment in foreign operations. Those currency translation differences are recognised in the currency translation reserve in the consolidated financial statements and transferred to the income statement as part of the gain or loss on disposal of the foreign operation.

Non-monetary items measured at fair values in foreign currencies are translated using the exchange rates at the date when the fair values are determined.

Segment reporting

A business segment is a distinguishable component of the Group engaged in providing products or services that are subject to risks and returns that are different from those of other business segments. A geographical segment is a distinguishable component of the Group engaged in providing products or services within a particular economic environment that is subject to risks and returns that are different from those of segments operating in other economic environments.

Cash and cash equivalents

For the purpose of presentation in the consolidated cash flow statement, cash and cash equivalents include cash on hand, deposits with financial institutions and bank overdrafts. Bank overdrafts are presented as current borrowings on the balance sheet.

Share capital

Ordinary shares are classified as equity. Incremental costs directly attributable to the issuance of new ordinary shares are recognised as other reserves.

Financial instruments

Financial instruments carried on the balance sheet include cash and cash equivalents, financial asset, at fair value through profit or loss (excluding subsidiaries), trade receivables and payables, other receivables and payables, and borrowings. The particular recognition methods adopted are disclosed in the individual policy statements associated with each item. These instruments are recognised when contracted for.

Disclosures on financial risk management are provided in Note 30.

3 Critical accounting estimates, assumptions and judgements

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

Key sources of estimation uncertainty

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

• Income taxes

The Group has exposure to income taxes in Singapore. In determining the income tax liabilities, management is required to estimate the amount of capital allowances and the deductibility of certain expenses (“uncertain tax positions”).

The Group has open tax assessments with the tax authority at the reporting date. As management believes that the tax positions are sustainable, the Group has not recognised any additional tax liability on these uncertain tax positions. Where the final tax outcome of these matters is different from the amounts that were initially recognised, such differences will impact the income tax and deferred tax provisions in the period in which such determination is made.

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• Construction contracts and revenue recognition

The Group uses the percentage-of-completion method to account for its contract revenue. The stage of completion is measured by reference to the value of work done to date compared to the estimated total revenue for the contract.

Significant assumptions are required to estimate the value of work done to date and the recoverable variation works that will affect the stage of completion and the contract costs respectively. Estimation of total contract revenue also includes an estimation of the variation works that are recoverable from the customers. In making these estimates, management has relied on past experience and/or the work of relevant professionals. Included in contract work in-progress (progress billings) are variation works totalling $649,000, out of which revenue of approximately $247,000 and profit of $247,000 are recognised on such variations works. The Group will suffer an estimated decrease of $247,000 in its 2008 income statements if the variation works are not recoverable.

Estimated total contract cost for construction contract comprises direct costs attributable to the construction of each project. In estimating the total budgeted costs for construction contracts, management makes reference to information such as current offers from contractors and suppliers, recent offers agreed with contractors and suppliers, and professional estimation on construction and material costs as well as its past experience.

In particular, the Group is exposed to fluctuations in the prices of aluminium ingots. Any significant increase/decrease in the prices of aluminium ingots would result in a corresponding increase/decrease in the costs incurred by the Group to complete its existing and ongoing projects.

4 Revenue

Significant categories of revenue, excluding inter-company transactions and applicable goods and services tax, are detailed as follows:

The Group

2007 2006

$’000 $’000

Contract income 8,542 2,466

Trading income (net of returns and discounts) 619 239

Rental and other income – 4

9,161 2,709

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5 Property, plant and equipment

The CompanyLeasehold properties

Plant and equipment

Motor vehicles

Leasehold improvements Total

$’000 $’000 $’000 $’000 $’000

Cost or valuation At 1 January 2006

Valuation 37,541 – – – 37,541

Cost – 4,322 257 301 4,880

37,541 4,322 257 301 42,421

Additions – 32 – – 32

Disposals (37,541) (836) – (301) (38,678)

Written off – (1,854) (33) – (1,887)

At 31 December 2006 – 1,664 224 – 1,888

Additions – 371 256 – 627

Disposals – (658) (210) – (868)

At 31 December 2007 – 1,377 270 – 1,647

Representing:

Cost

At 31 December 2007 – 1,377 270 – 1,647

At 31 December 2006 – 1,664 224 – 1,888

Accumulated depreciation

At 1 January 2006 23,918 4,223 117 193 28,451

Depreciation for the year – 50 41 3 94

Disposals (23,918) (834) – (196) (24,948)

Written off – (1,818) (33) – (1,851)

At 31 December 2006 – 1,621 125 – 1,746

Depreciation for the year – 62 36 – 98

Disposals – (658) (140) – (798)

At 31 December 2007 – 1,025 21 – 1,046

Net book value

At 31 December 2007 – 352 249 – 601

At 31 December 2006 – 43 99 – 142

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The GroupFreehold building

$’000

Leasehold building in

progress$’000

Land use rights$’000

Leasehold building

$’000

Plant and equipment

$’000

Motor vehicles

$’000

Leasehold improvements

$’000Total$’000

Cost or valuation

At 1 January 2006

Valuation 628 – – 40,937 – – – 41,565

Cost – 4,111 4,256 – 27,643 1,038 457 37,505

628 4,111 4,256 40,937 27,643 1,038 457 79,070

Additions – – – – 116 – 12 128

Disposal – – – (37,541) (2,995) – (301) (40,837)

Written off (628) (4,111) (4,256) (3,396) (20,433) (526) (156) (33,506)

At 31 December 2006 – – – – 4,331 512 12 4,855

Additions – – – – 372 256 – 628

Disposal – – – – (663) (210) – (873)

At 31 December 2007 – – – – 4,040 558 12 4,610

Representing:

Cost At 31 December

2007 – – – – 4,040 558 12 4,610

At 31 December 2006 – – – – 4,331 512 12 4,855

Accumulated depreciation

At 1 January 2006 628 – 890 25,257 23,351 872 324 51,322

Depreciation for the year – – – – 78 52 12 142

Disposal – – – (23,917) (2,989) – (197) (27,103)

Written off (628) – (890) (1,340) (16,246) (511) (139) (19,754)

At 31 December 2006 – – – – 4,194 413 – 4,607

Depreciation for the year – – – – 80 36 2 118

Disposal – – – – (661) (140) – (801)

At 31 December 2007 – – – – 3,613 309 2 3,924

Net book value

At 31 December 2007 – – – – 427 249 10 686

At 31 December 2006 – – – – 137 99 12 248

The net book value of plant and equipment and motor vehicles under finance lease for the Company and the Group amounted to approximately $nil (2006: $99,000) and $nil (2006: $99,000) respectively.

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6 SUBSIDIARIES

The Company

2007 2006

$’000 $’000

Unquoted equity shares, at cost 84,759 84,759

Impairment losses (84,159) (84,159)

600 600

The movement in allowance for impairment losses in subsidiaries is as follows:

The Company

2007 2006

$’000 $’000

Balance at beginning of year 84,159 17,713

Allowance made – 78,220

Allowance written off – (11,774)

Balance at end of year 84,159 84,159

The subsidiaries are:

Name

Country of incorporation/

principal place of business Cost of investment

Percentage of equity held Principal activities

2007 2006 2007 2006

$’000 $’000 % %

Almex Technology Pte Ltd

Singapore 2,277 2,277 100 100 Design, fabrication and manufacturing of aluminium and other metal parts and components

Durabeau Industries Pte Ltd

Singapore 13,577 13,577 100 100 Manufacturer of aluminium grilles, windows and doors

Durawall Technology Pte Ltd

Singapore 343 343 100 100 Design and consultancy services

Liang Huat Aluminium Industries Pte Ltd

Singapore 68,562 68,562 100 100 Design, fabrication and manufacturing of aluminium and other metal parts and components

84,759 84,759

The subsidiaries incorporated in Singapore are audited by LTC & Associates.

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7 Inventories

The Group

2007 2006

$’000 $’000

At cost:

Raw materials 327 291

Consumable stocks 534 420

Work-in-progress 89 217

Goods in transit 139 37

1,089 965

Allowance for slow-moving inventories (420) (260)

669 705

The movement in allowance for slow-moving inventories is as follows:

Balance at beginning of year 260 –

Allowance made 160 260

Balance at end of year 420 260

The cost of inventories recognised as an expense and included in cost of sales amounts to approximately $1,985,000 (2006: $1,534,000) for the Group.

8 Contract work-in-progress

The Group

2007 2006

$’000 $’000

Included as current assets

(a) Cost in excess of progress billings:

Cost incurred and recognised profits/(losses) 4,749 602

Progress billings (4,495) (369)

Due from customers for contract work-in-progress 254 233

Included as current liabilities

(b) Progress billings in excess of costs:

Cost incurred and recognised profits/(losses) 5,990 2,378

Progress billings (6,522) (4,243)

Due to customers for contract work-in-progress (532) (1,865)

Included in contract work-in-progress is the following:

Depreciation of plant and equipment 16 8

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9 Trade receivables


2007 2006 2007 2006

$’000 $’000 $’000 $’000

Third parties – 1,584 2,752 4,853

Subsidiaries 675 – – –

Related parties – – 282 –

Retention receivable – related parties – – 39 –

Retention receivable – third parties – – 1,130 –

675 1,584 4,203 4,853

Allowance for doubtful debts – third parties – (1,546) (724) (2,157)

675 38 3,479 2,696

The movement in allowance for doubtful debts (third parties) is as follows:

Balance at beginning of year 1,546 1,526 2,157 1,671

Allowance made – 53 212 528

Allowance reversed (1,546) (33) (1,645) (42)

Balance at end of year – 1,546 724 2,157

The carrying amounts of trade receivables are denominated in Singapore Dollar.

10 Other receivables


2007 2006 2007 2006

$’000 $’000 $’000 $’000

Subsidiaries 1,814 – – –

Deposits – – 137 88

Prepayments 40 41 51 43

Sundry debtors 519 3 539 18

2,373 44 727 149

The movement in allowance for doubtful debts (subsidiaries) is as follows:

The Company

2007 2006

$’000 $’000

Balance at beginning of year – 52,710

Allowance made – –

Allowance reversed – (52,710)

Balance at end of year – –

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The carrying amounts of other receivables for the Company and the Group are denominated in the following currencies:


2007 2006 2007 2006

$’000 $’000 $’000 $’000

Singapore Dollar 2,373 44 679 149

United States Dollar – – 48 –

2,373 44 727 149

11 Financial assets, at fair value through profit or loss


2007 2006 2007 2006

$’000 $’000 $’000 $’000

Held for trading

Listed equity securities - Singapore – – 10 4

12 Cash and cash equivalents


2007 2006 2007 2006

$’000 $’000 $’000 $’000

Cash and bank balances 342 20 634 540

Fixed deposits with bank 9,065 – 9,065 –

9,407 20 9,699 540

For the purpose of the consolidated cash flow statement, the year end cash and cash equivalents comprise the following:

The Group

2007 2006

$’000 $’000

Cash and cash equivalents 9,699 540

Less: Fixed deposits pledged (3,000) –

Less: Bank overdrafts (Note 14.2) – (39,569)

6,699 (39,029)

The carrying amounts of cash and cash equivalents are denominated in the following currencies:


2007 2006 2007 2006

$’000 $’000 $’000 $’000

Singapore Dollar 9,404 18 9,697 538

Indian Rupee 3 2 2 2

9,407 20 9,699 540

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Fixed deposits bear average effective interest rate between 2.13% to 2.56% (2006: nil%) per annum. Fixed deposits totalling $3,000,000 (2006: $nil) maturing in 255 days from the financial year end are pledged to the bank as security for banking facilities totalling $3,000,000 (Note 14.2). The fixed deposits which are not pledged to the bank are maturing in 15 to 71 days from the financial year end.

13 Share capital

The Company The Company

2007 2006 2007 2006

Number of ordinary shares $’000 $’000

Balance at beginning of financial year 1,110,630,000 1,110,630,000 45,630 22,213

Transfer from share premium and other reserve – – – 23,417

Issue of ordinary shares pursuant to Modified Schemes and Creditors Claims 7,460,798,538 – 1,119 –

Issued share capital before share consolidation 8,571,428,538 1,110,630,000 46,749 45,630

Share consolidation (7,714,285,699) – – –

Issued share capital after share consolidation 857,142,839 1,110,630,000 46,749 45,630

Issue of ordinary shares pursuant to Investment Agreement 2,000,000,000 – 3,000 –

Issue of ordinary shares pursuant to Placement Agreement 300,000,000 – 12,600 –

Capital reduction – – (22,046) –

Balance at end of financial year 3,157,142,839 1,110,630,000 40,303 45,630

On 30 August 2007, Completion had taken place and pursuant thereto:

(a) 7,302,715,638 Schemes Shares were allotted and issued for account of the Scheme Creditors in full and final discharge of the Scheme Claims;

(b) 104,617,866 Scheme Shares were allotted and issued for account of the LHAI Scheme Creditors in full and final discharge of the LHAI Scheme Claims;

(c) 53,465,034 Creditors’ Shares were allotted and issued for account of the Creditors in full and complete satisfaction of each of their respective Creditors Claims;

(d) following the allotment and issuance of the Scheme Shares and the Creditors’ Shares and the implementation of the Share Consolidation, but prior to the allotment and issuance of the Investor Shares, 8,571,428,538 Shares were consolidated into 857,142,839 Shares;

(e) 1,800,000,000 Investor Shares were allotted and issued for account of the Investor; and

(f ) 200,000,000 Investor Shares were allotted and issued for account of the Co-Investor.

On 30 August 2007, the Company had also announced that 300,000,000 Mandate Placement Shares were allotted and issued for account of the placees in connection with the completion of the placement agreement dated 23 July 2007. The proceeds from the Investment Agreement and the Mandate Placement Shares are for working capital purposes.

All issued shares are fully paid. The Company has one class of ordinary shares which carry one vote per share without restriction. The holders of the ordinary shares are entitled to receive dividends as and when declared by the Company. The newly issued shares rank pari passu in all respects with the previously issued shares.

During the financial year, the issued and paid-up share capital of the Company was reduced by $22,046,005 by cancelling the issued and paid-up share capital of the Company which has been lost or is unrepresented by available assets. An amount equal to $22,046,005 being the credit arising from the cancellation of the issued and paid-up share capital was applied to write-off an equivalent amount from the accumulated looses of the Company as at 31 December 2006.

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14 Borrowings


2007 2006 2007 2006

$’000 $’000 $’000 $’000

Non-current

Obligations under finance lease (Note 14.1) – 49 – 49

Bank borrowings (Note 14.2) – 57,149 – 57,149

– 57,198 – 57,198

Current

Obligations under finance lease (Note 14.1) 1 503 1 2,362

Bank borrowings (Note 14.2) 207 76,189 207 77,693

208 76,692 208 80,055

Total borrowings 208 133,890 208 137,253

The carrying amounts of borrowings are denominated in the following currencies:

Singapore Dollar 208 122,564 208 125,927

United States Dollar – 1,535 – 1,535

Hong Kong Dollar – 2,597 – 2,597

Malaysian Ringgit – 7,194 – 7,194

208 133,890 208 137,253

14.1 Obligations under finance leases


2007 2006 2007 2006

$’000 $’000 $’000 $’000

Minimum lease payment payable:

Due not later than one year 1 509 1 2,369

Due later than one year and not later than

five years – 57 – 57

1 566 1 2,426

Finance charges allocated to future periods – (14) – (15)

Present value of minimum lease payments 1 552 1 2,411

Present value of minimum lease payments:

Due not later than one year (Note 14) 1 503 1 2,362

Due later than one year and not later than

five years (Note 14) – 49 – 49

1 552 1 2,411

The effective rate of interest is 3.5% (2006: 2.7% to 7%) per annum.

Finance lease payables totalling approximately $472,000 (2006: $472,000) and $2,323,000 (2006: $2,323,000) for the Company and the Group respectively had been compromised and fully discharged through the Modified Schemes on Completion Date (Note 1).

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14.2 Bank borrowings


2007 2006 2007 2006

$’000 $’000 $’000 $’000

Bills payable 207 8,904 207 9,117

Bank overdrafts (Note 12) – 38,278 – 39,569

Short-term loan – 11,546 – 11,546

Term loans – 30,853 – 30,853

Floating rate secured convertible bonds due 2008

– 34,046 – 34,046

Bank loans – secured – 9,711 – 9,711

207 133,338 207 134,842

Current portion (Note 14) (207) (76,189) (207) (77,693)

Non-current portion (Note 14) – 57,149 – 57,149

In 2007, the Company obtained trade financing facilities totalling $3,000,000. The bank borrowings of the Company and the Group obtained in 2007 are secured over certain bank deposits (Note 12).

On Completion Date, bank borrowings totalling approximately $133,338,000 (2006: $133,338,000) and $134,842,000 (2006: $134,842,000) for the Company and the Group respectively had been compromised and fully discharged according to the Modified Schemes (Note 1).

Effective interest on the above borrowings is at 5.25% per annum (2006: 2.7% to 11%).

15 Trade payables


2007 2006 2007 2006

$’000 $’000 $’000 $’000

Third parties 409 1,782 1,682 7,310

Related parties 2 5 432 58

Provision for warranty – – 164 177

Retention payable to third parties – – 15 15

411 1,787 2,293 7,560

The Group gives ten-year warranties on certain products and undertake to repair or replace items that fail to perform satisfactorily. A provision is recognised at the balance sheet date for expected warranty claims based on past experience of the level of repairs.

The movement in the provision for warranty account is as follows:

Balance at beginning of year – – 177 235

Provision made – – 22 9

Provision utilised – – (35) (67)

Balance at end of year – – 164 177

Trade payables totalling approximately $1,295,000 (2006: $1,295,000) and $5,425,000 (2006: $5,425,000) for the Company and the Group respectively had been compromised and fully discharged according to the Modified Schemes on Completion Date (Note 1).

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15 Trade payables (Cont’d)

The carrying amounts of trade payables are denominated in the following currencies:


2007 2006 2007 2006

$’000 $’000 $’000 $’000

Singapore Dollar 411 1,787 2,183 7,490

Hong Kong Dollar – – 9 70

United States Dollar – – 101 –

411 1,787 2,293 7,560

16 Other payables


2007 2006 2007 2006

$’000 $’000 $’000 $’000

Accruals 293 1,436 955 2,164

Sundry creditors 3 – 42 202

Deposits received 37 37 37 37

Loan from Investor – 1,627 – 1,706

Related party – – – 10

333 3,100 1,034 4,119

Other payables totalling approximately $650,000 (2006: $650,000) and $920,000 (2006: $920,000) for the Company and the Group respectively had been compromised and fully discharged according to the Modified Schemes on Completion Date (Note 1).

The loan from Investor is unsecured and free of interest. During the financial year, an amount of approximately $1,627,000 due by the Company had been converted into share capital upon completion of the Investment Agreement.

The carrying amounts of other payables are denominated in Singapore Dollar.

17 Other operating income

The Group

2007 2006

$’000 $’000

Bad trade debts recovered 32 73

Gain on de-consolidation of subsidiaries – 9,991

Gain on disposal of property, plant and equipment 194 946

Gain on foreign exchange 2 328

Interest income 117 –

Rental income 52 16

Reversal of impairment in quoted shares 5 –

Reversal of accrued expenses and costs overprovided in prior years – 8,878

Reclassification of restructuring expenses 692 –

Sundry income 216 311

1,310 20,543

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18 Other items

The Group

2007 2006

$’000 $’000

Bad debts written off (trade and non-trade) – 3,917

Diminution in value of investments in unquoted shares – 908

Financial guarantees recognised – 5,557

Inventories written off – 3,466

Investment in subsidiary written off – 1,847

Professional costs pursuant to Investment Agreement – 662

Property, plant and equipment written off – 10,861

Provision for doubtful trade debts 212 528

Provision for slow-moving inventories 160 260

Others – 182

372 28,188

19 Profit/(Loss) before taxation

The Group

2007 2006

$’000 $’000

Profit/(Loss) before taxation has been arrived at after charging/(crediting):

Bad trade debts recovered (32) (73)

Depreciation and amortisation 118 142

Directors’ fees

– directors of the Company 133 76

– under provision in prior years 2 4

Directors’ remuneration

directors of the company

– salaries and related cost 200 272

– CPF contributions 5 5

205 277

Non-audit fees paid to auditors of the Company 14 58

Foreign exchange gain (net) (2) (328)

Gain on de-consolidation of subsidiaries – (9,991)

Gain on disposal of property, plant and equipment (194) (946)

Operating lease expenses 778 443

Provision for warranty 23 9

Reversal of accrued expenses and costs overprovided in prior years – (8,878)

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20 Finance costs

The Group

2007 2006

$’000 $’000

Hire-purchase interest 13 491

Bank overdraft interest – 996

Term loan interest – 3,162

Convertible bond interest – 1,537

Others – 2

13 6,188

21 Taxation

The Group

2007 2006

$’000 $’000

Under/(Over) provision in respect of prior years 54 (398)

The tax expense on the results of the financial year varies from the amount of income tax determined by applying the Singapore statutory rate of income tax on the Group’s profit/(loss) as a result of the following:

The Group

2007 2006

$’000 $’000


Tax expenses/(benefits) at statutory rate of 18% (2006: 20%) 25,700 (3,296)

Tax effect on non-deductible expenses 12 3,484

Tax effect on non-taxable income (24,482) –

Deferred tax assets on temporary differences not recognised 21 324

Utilisation of tax losses previously not recognised (1,251) –

Under/(Over)provision in respect of prior years 54 (398)

Other items – (512)

54 (398)

The Group

Subject to agreement with the relevant tax authorities, the Group has estimated unabsorbed capital allowances and tax losses of approximately $6,902,000 (2006: $8,638,000) and $90,697,000 (2006: $94,987,000) respectively available for offset against future taxable profits provided that the provisions of the relevant countries’ tax legislations are complied with. The unutilised tax benefits of approximately $17,568,000 (2006: $18,653,000) have not been recognised in the financial statements as there is no reasonable certainty of their realisation in future periods.

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22 Staff cost

The Group

2007 2006

$’000 $’000

Wages and salaries 2,382 1,596

Employers’ contribution to Central Provident Fund 133 93

Foreign workers’ levy 163 52

2,678 1,741

23 Disclosure of directors’ remuneration

As required by the Listing Manual of the SGX-ST, the remuneration of directors of the Company are disclosed in bands as follows:

Number of directors

2007 2006

$500,000 and above – –

$250,000 to below $499,999 – –

Below $250,000 8 4

Total 8 4

24 Employee benefits

During the financial year, it was determined that the Liang Huat Aluminium Limited Executives’ Share Option Scheme had lapsed consequent to the lodgement of copies of the Orders of Court sanctioning the Schemes of Arrangement with Accounting & Corporate Regulatory Authority of Singapore on 27 April 2005.

Movements of share options vested:

Date of grant of option

Number of options vested

on 1.1.2007

Number of options granted

in 2007

Number of options

cancelled/lapsed in 2007

Number of options vested on 31.12.2007

30.12.2002 396,000 – (396,000) –

23.12.2003 396,000 – (396,000) –

792,000 – (792,000) –

25 Earnings/(Losses) per share

The Group

The basic and diluted earnings/(losses) per share is calculated based on the consolidated net profit/(loss) attributable to members of the Company of $142,721,000 (2006: $16,082,000) and divided by the weighted average number of shares in issue of 1,126,422,946 (2006: 1,110,630,000) shares during the financial year.

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26 Contingent liabilities


2007 2006 2007 2006

$’000 $’000 $’000 $’000

Security bonds (unsecured) – – 459 266

Letters of credit (secured) – – 141 –

– – 600 266

The details of the securities are disclosed in Note 14.2.

27 Related party transactions

On 30 August 2007, completion under the Investment Agreement between the Company and Ho Lee Group Pte Ltd (“HLG”) took place and on the same day, 1,800,000,000 ordinary shares of the Company were allotted and issued for account of HLG. Consequently, as at 30 August 2007 and 31 December 2007, HLG controls approximately 57% of the enlarged share capital of the Company, and accordingly, HLG and Teck Holdings Pte Ltd, the holding company of HLG, became the Company’s immediate holding company and ultimate holding company of the Company respectively. Both companies are incorporated in the Republic of Singapore.

Consequent to the above, Liang Huat Holdings Pte Ltd (In liquidation) ceased to be the Company’s ultimate holding company from that date.

Related companies in these financial statements refer to members of the ultimate holding company’s group of companies. Related parties are entities with common direct or indirect shareholders and or directors.

Some of the Group’s transactions and arrangements are between related parties and the effect of these on the basis determined between the parties are reflected in these financial statements. The balances with these parties are unsecured and repayable on demand unless stated otherwise.

In addition to the related party information disclosed elsewhere in the financial statements, the aggregate value of interested person transactions for the financial year ended 31 December 2007 is as follows:

The GroupNature of transaction and name of Interested Person

Aggregate value of all interested person transactions conducted under

shareholders’ mandate pursuant to Rule 920 (excluding transactions less

than $100,000)

Aggregate value of all interested person transactions conducted under

shareholders’ mandate pursuant to Rule 920 (including transactions less

than $100,000)

$’000 $’000

Khai Wah Development Pte Ltd

- rental of factory and office premises 324 324

Ho Lee Construction Pte Ltd

- purchase of materials – 35

- contract income from project fabrication 305 305

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Key management personnel compensation:

The Group

2007 2006

$’000 $’000

Wages and salaries 473 456

Directors’ fees 23 –

Employers’ contribution to Central Provident Fund 27 21

523 477

28 Operating lease commitments (non-cancellable)

The Group leases factories and offices from related parties under the non-cancellable operating lease agreements. The leases have varying terms, escalation clauses and renewal rights.

At the balance sheet date, the Company and the Group were committed to make the following rental payments in respect of operating leases with an original term of more than one year:


2007 2006 2007 2006

$’000 $’000 $’000 $’000

Not later than one year 14 27 355 584

Later than one year and not later than five years – 14 – 292

14 41 355 876

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29 Statement of operations by segments

Business segment

Project fabrication

and contract manufacturing Trading Others Elimination Consolidated

2007$’000

2006$’000

2007$’000

2006$’000

2007$’000

2006$’000

2007$’000

2006$’000

2007$’000

2006$’000

TURNOVER

External sales 8,783 2,466 378 239 – 4 – – 9,161 2,709

Inter-segment sales – – 250 – 535 288 (785) (288) – –

Total turnover 8,783 2,466 628 239 535 292 (785) (288) 9,161 2,709

Segment result 447 (3,893) (20) (32) 157 (6,292) (116) (75) 468 (10,292)

Scheme liabilities compromised and written back on Completion 142,320 –

Finance costs (13) (6,188)


Taxation (54) 398

Net profit/(loss) 142,721 (16,082)

Segment assets 5,843 4,575 124 – 3,481 – (2,914) – 6,534 4,575

Add:

Unallocated assets 9,000 –

15,534 4,575

Segment liabilities (i) 6,388 150,797 233 – 370 – (2,914) – 4,077 150,797

Add: Taxation – –

4,077 150,797

OTHER INFORMATION

Capital expenditure 372 128 – – 256 – – – 628 128

Depreciation and amortisation 82 101 – – 41 – – – 118 142

Note: (i) This includes liabilities totalling $nil (2006: 143,510,000) for the Group which had been compromised and fully discharged according to the Modified Schemes on Completion Date (Note 1).

Geographical segment

The Group’s revenue and profit is entirely derived from Singapore. Accordingly, no segmental analysis by geographical segment is provided.

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30 Financial risk management

30.1 Financial risk factors

The Group does not have any written financial risk management policies and guidelines.

The main risks arising from the Group’s financial instruments are price risk, liquidity risk, credit risk and foreign currency risk. The board reviews and agrees policies for managing each of these risks and they are summarised below.

30.2 Price risk

30.2.1 Currency risk

The Group transacts primarily in Singapore dollar which is the functional currency. It is exposed to foreign exchange risk arising largely from sales and purchases denominated in foreign currencies. Such risks, if any, is minimised, as such transactions do not represent a significant part of the Group’s activities.

30.2.2 Interest rate risk

The Group’s exposure to movements in market interest rates relates primarily to its debt borrowings with financial institutions. The Group has no policy to hedge against its interest rate risk. The Group is in a net interest expense position during the current financial year.

30.3 Credit risk

Credit risk is the risk that companies and other parties will be unable to meet their obligations to the Group resulting in financial loss to the Group. Resulting from its operating activities, the Group has a concentration of credit risk with respect to customers in the construction industry. To minimise this credit concentration risk, the Group monitors its exposure to credit risk arising from billings to customers on an ongoing basis. The Group places its cash and cash equivalents with creditworthy institutions.

The carrying amounts of cash and cash equivalents, trade and other receivables represent the Group’s maximum exposure to credit risk.

30.4 Liquidity risk

The Group monitors its liquidity risk and maintains a level of cash and cash equivalents deemed adequate by management to finance the Group’s operations and to mitigate the effects of fluctuations in cash flows. At the balance sheet date, there is no significant liquidity risk exposed by the Group.

30.5 Market risk

Market risk is the risk that changes in market prices, such as interest rates and foreign exchange rates will affect the Group’s income. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return on risk.

30.6 Capital risk

The Group’s policy is to maintain an adequate capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business.

The management monitors the return on capital, which the Group defines as net operating income divided by total shareholders’ equity. The Group funds its operations and growth through a mix of equity and debts. This includes the maintenance of adequate lines of credit and assessing the need to raise additional equity where required.

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The gearing ratio is calculated as net debt divided by total capital. Net debt is calculated as borrowings plus trade and other payables less cash and cash equivalents. Total capital is calculated as equity plus net debt.


2007 2006 2007 2006

$’000 $’000 $’000 $’000

Net (cash)/debt (8,455) 138,757 (6,164) 148,392

Total equity 12,704 (137,933) 11,457 (146,222)

Total capital 12,704 824 11,457 2,170

Gearing ratio N.m. 168 N.m. 68

N.m.: Not meaningful

For the financial year ended 31 December 2006, the Company and the Group were in breach of certain covenants stipulated by the principal bankers. The related borrowings were included in the Modified Schemes which were completed on 30 August 2007. Consequent to the Completion, these debts are fully discharged (Note 1).

Subsequent to 30 August 2007, the Company and the Group are in compliance with all borrowing covenants for borrowings obtained in 2007 for the financial year ended 31 December 2007.

31 Financial instruments

31.1 Fair values

Fair value is defined as the amount at which the instrument could be exchanged in a current transaction between knowledgeable willing parties in an arm’s length transaction, other than a forced or liquidation sale. Fair values are obtained from quoted market prices and discounted cash flow models as appropriate.

31.2 The following methods and assumptions are used to estimate the fair value of each class of financial instruments:

31.2.1 Other current receivables

The carrying amount approximates fair value due to the relatively short-term maturity of these financial instruments.

31.2.2 Other current payables

The carrying amount approximates fair value due to the relatively short-term maturity of these financial instruments.

31.2.3 Quoted investments

The fair value of quoted investment is estimated based on quoted market price for this investment.

31.2.4 Long-term borrowing/finance lease creditors

The carrying amount of the long-tem loan approximates fair value as the term loan bears current rates of interest.

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32 New accounting standards and interpretations not yet adopted

The Group has not applied the following accounting standards and interpretations that have been issued as of the balance sheet date but are not yet effective:

• FRS 23 Borrowing Costs

• FRS 108 Operating Segments

• INT FRS 111 FRS 102 Group and Treasury Share Transactions

• INT FRS 112 Service Concession Arrangements

FRS 23 will become effective for financial statements for the year ending 31 December 2009. FRS 23 removes the option to expense borrowing costs and requires an entity to capitalise borrowing costs directly attributable to the acquisition, construction or production of a qualifying asset as part of the cost of that asset.

FRS 108 will become effective for financial statements for the year ending 31 December 2009. FRS 108, which replaces FRS 14 Segment Reporting, requires identification and reporting of operating segments based on internal reports that are regularly reviewed by the Group’s chief operating decision maker in order to allocate resources to the segment and to assess its performance.

The adoption of FRS 108 will not result in a significant difference in segment reporting by the Group.

Other than the change in disclosures relating to FRS 108, the initial application of these standards (and its consequential amendments) and interpretations is not expected to have any material impact on the Group’s financial statements. The Group has not considered the impact of accounting standards issued after the balance sheet date.

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CLASS OF SHARES : ORDINARY SHARES

VOTING RIGHTS : 1 VOTE PER SHARE

SIZE OF NO. OF

SHAREHOLDINGS SHAREHOLDERS % NO. OF SHARES %

1 - 999 4,692 32.04 2,027,332 0.06

1,000 - 10,000 6,850 46.77 23,856,972 0.76

10,001 - 1,000,000 3,055 20.86 277,882,891 8.80

1,000,001 & ABOVE 48 0.33 2,853,375,644 90.38

TOTAL 14,645 100.00 3,157,142,839 100.00

TOP TWENTY SHAREHOLDERS AS AT 31 MARCH 2008

NAME NO. OF SHARES %

HO LEE GROUP PTE LTD 1,600,000,000 50.68

MAYBAN NOMINEES (S) PTE LTD 409,062,182 12.96

UNITED OVERSEAS BANK NOMINEES (PTE) LTD 216,799,790 6.87

LION CAPITAL GROUP LIMITED 200,000,000 6.33

TAN YONG KEE 200,000,000 6.33

OVERSEA CHINESE BANK NOMINEES PTE LTD 29,113,349 0.92

OCBC SECURITIES PRIVATE LTD 25,873,500 0.82

KIM ENG SECURITIES PTE. LTD. 22,721,995 0.72

LIM CHYE HUAT @ BOBBY LIM CHYE HUAT 20,625,000 0.65

DBS NOMINEES PTE LTD 16,156,954 0.51

CIMB-GK SECURITIES PTE. LTD. 15,992,600 0.51

LIM ENG HOE 9,873,000 0.31

PHILLIP SECURITIES PTE LTD 6,278,400 0.20

FOO SECK HUAT 5,000,000 0.16

TAN BUCK SOONG 4,843,000 0.15

OCBC NOMINEES SINGAPORE PTE LTD 4,581,800 0.15

NGIN CHOON KAY 4,378,000 0.14

LEONG WING KEE 4,000,000 0.13

GOH BEE LEE 3,391,000 0.11

THE MANAGEMENT CORPORATION STRATA TITLE PLAN NO.1933 3,265,903 0.10

2,801,956,473 88.75

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Analysis of ShareholdingsAs at 31 March 2008

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SUBSTANTIAL SHAREHOLDERS AS AT 31 MARCH 2008

No. of Shares No. of Shares

Direct Interest % Deemed Interest %

HO LEE GROUP PTE LTD 1,600,000,000 50.68 45,267 0.00

MALAYAN BANKING BERHAD 382,864,750 12.13 - -

UNITED OVERSEAS BANK LIMITED - - 206,145,890 6.53

LION CAPITAL GROUP LIMITED 200,000,000 6.33 - -

TAN YONG KEE 201,058,140 6.37 225,762,943 7.15

TAN THUAN TECK - - 1,600,045,267 50.68

TAN HAI SENG BENJAMIN - - 1,600,045,267 50.68

TECK LEE HOLDINGS PTE LTD - - 1,600,045,267 50.68

17.14% of the Company's issued paid-up capital is in the hands of the public. Rule 723 of the SGX-ST Listing Rule has been complied with.

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Analysis of ShareholdingsAs at 31 March 2008

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LIANG HUAT ALUMINIUM LIMITED(Co. Reg. No. 198203779D)

(Incorporated in the Republic of Singapore)

NOTICE IS HEREBY GIVEN that the Annual General Meeting of the Company will be held at Blk 8, 1st Floor Liang Huat Industrial Complex, 51 Benoi Road, Singapore 629908 on Monday, 28th April 2008 at 3.00 p.m. to transact the following business: -

AS ORDINARY BUSINESS

1. To receive and adopt the Audited Financial Statements of the Company for the financial year ended 31 December 2007 and the Directors’ Report and the Auditors’ Report thereon.

(Resolution 1)

2. To approve the Directors’ fees of $135,333/- for the financial year ended 31 December 2007 (31 December 2006: $76,000/-).

(Resolution 2)

3. (i) To re-elect Mr Phoon Wui Nyen who retires in accordance with Article 88 of the Company’s Articles of Association and who, being eligible, offers himself for re-election. Mr Phoon Wui Nyen will, upon re-election as a Director of the Company, remain as Chairman of the Remuneration Committee and Nominating Committee and a member of the Audit Committee. He will be considered to be independent for the purpose of Rule 704(8) of the Listing Manual of the Singapore Exchange Securities Trading Limited (“SGX-ST”).

(Resolution 3i)

(ii) To re-elect Mr. Tan Hai Seng Benjamin who retires in accordance with Article 88 of the Company’s Articles of Association and who, being eligible, offers himself for re-election.

(Resolution 3ii)

(iii) To re-elect Mr. Tan Hai Ping Micheal who retires in accordance with Article 88 of the Company’s Articles of Association and who, being eligible, offers himself for re-election.

(Resolution 3iii)

(iv) To re-elect Mr Chng Hee Kok who retires in accordance with Article 88 of the Company’s Articles of Association and who, being eligible, offers himself for re-election. Mr Chng Hee Kok will, upon re-election as a Director of the Company, remain as a member of the Audit Committee, Remuneration Committee and Nominating Committee. He will be considered to be independent for the purpose of Rule 704(8) of the Listing Manual of the SGX-ST.

(Resolution 3iv)

(v) To re-elect Mr Tan Yong Kee, who retires in accordance with Article 89 of the Company’s Articles of Association and who, being eligible, offers himself for re-election.

(Resolution 3v)

4. To re-appoint Messrs LTC & Associates as auditors of the Company and to authorise the Directors to fix their remuneration.

(Resolution 4)

5. To transact any other business that may be properly transacted at an Annual General Meeting.

AS SPECIAL BUSINESS

To consider and, if thought fit, pass the following ordinary resolutions with or without modifications: -

6. Authority to allot and issue shares

“That pursuant to Section 161 of the Companies Act, Chapter 50 and the listing rules of the Singapore Exchange Securities Trading Limited, authority be and is hereby given to the Directors of the Company to:-

(Resolution 5)

(a) (i) issue shares in the capital of the Company (referred to in this Resolution as “shares”) whether by way of rights, bonus or otherwise;

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(ii) make or grant offers, agreements or options that might or would require shares to be issued or other transferable rights to subscribe for or purchase shares (collectively, “Instruments”) including but not limited to the creation and issue of warrants, debentures or other Instruments convertible into shares;

(iii) issue additional Instruments arising from adjustments made to the number of Instruments previously issued in the event of rights, bonus or capitalisation issues; and

(b) (notwithstanding the authority conferred by this Resolution may have ceased to be in force) issue shares in pursuance of any Instrument made or granted by the Directors while this Resolution was in force,

provided that:-

(1) the aggregate number of shares to be issued pursuant to this Resolution (including shares to be issued in pursuance of Instruments made or granted pursuant to this Resolution) does not exceed 50 per cent. of the total number of issued shares (excluding treasury shares) of the Company (as calculated in accordance with sub-paragraph (2) below), of which the aggregate number of shares to be issued other than on a pro-rata basis to members of the Company (including shares to be issued in pursuance of Instruments made or granted pursuant to this Resolution) does not exceed 20 per cent. of the total number of issued shares (excluding treasury shares) of the Company (as calculated in accordance with sub-paragraph (2) below);

(2) for the purposes of determining the aggregate number of shares that may be issued under sub-paragraph (1) above the percentage of issued shares shall be based on the total number of issued shares (excluding treasury shares) at the time that this Resolution is passed, after adjusting for:-

(i) new shares arising upon the conversion or exercise of any convertible securities or share options or vesting of share awards which are outstanding or subsisting at the time that this Resolution is passed; and

(ii) any subsequent bonus issues, consolidation or subdivision of shares;

(c) in exercising the authority conferred by this Resolution, the Company shall comply with the provisions of the Listing Manual of the Singapore Exchange Securities Trading Limited for the time being in force (unless such compliance is waived by the Singapore Exchange Securities Trading Limited) and the Company’s Articles of Association;

(d) unless previously revoked or varied by the Company in General Meeting, such authority to issue shares does not continue beyond the conclusion of the next Annual General Meeting of the Company following the passing of this Resolution or the date by which such Annual General Meeting is required by law to be held, or the expiration of such other period as may be prescribed by the Companies Act, Cap. 50 (whichever is the earliest).”

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7. Renewal of Shareholders’ Mandate for Interested Person Transactions (Resolution 6)

“That :-

(1) approval be and is hereby given for the purposes of Chapter 9 of the Listing Manual of the Singapore Exchange Securities Trading Limited, for the Company, its subsidiaries, its target associated companies and corporations which become the Company’s subsidiaries or target associated companies (the “Group”) or any of them to enter into any of the transactions falling within the types of Interested Person Transactions as described in the Appendix with any party who is of the class of Interested Persons as described in the Appendix provided that such transactions are made on an arm’s length basis and on normal commercial terms and in accordance with the review procedures for such Interested Person Transactions as set out in the Appendix (the “Shareholders’ Mandate”);

(2) the Shareholders’ Mandate shall, unless revoked or varied by the Company in general meeting, continue in force until the conclusion of the next Annual General Meeting of the Company; and

(3) the Directors of the Company be and are hereby authorised to complete and do all such acts and things (including executing all such documents as may be required) as they may consider expedient or necessary or in the interests of the Company to give effect to the Shareholders’ Mandate and/or this Resolution.”

Dated this 10th day of April 2008

BY ORDER OF THE BOARD

Liew Meng LingCompany Secretary

Singapore

Notes:

1) A member of the Company entitled to attend and vote at the Meeting is entitled to appoint a proxy in his stead.

2) A proxy need not be a member of the Company.

3) If the appointor is a corporation, the proxy must be executed under seal or the hand of its duly authorised officer or attorney.

4) The instrument appointing a proxy must be deposited at the registered office of the Company at Blk 8, #08-05 Liang Huat Industrial Complex, 51 Benoi Road, Singapore 629908 not later than 48 hours before the time appointed for the Meeting.

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Explanatory Notes to:-

Resolution 6: The ordinary resolution proposed in item 6 above, if passed, is to enable the Directors to issue further shares in the Company up to an amount not exceeding 50 per cent. of the issued shares of the Company (excluding treasury shares) of which the aggregate number of shares to be issued other than on a pro-rata basis to existing shareholders, does not exceed 20 per cent. of the Company’s issued shares (excluding treasury shares). For the purpose of determining the aggregate number of shares that may be issued, the percentage of issued shares shall be based on the number of issued shares (excluding treasury shares) of the Company at the time this Resolution is passed, after adjusting for (1) new shares arising from the conversion or exercise of any convertible securities or employee share options that are outstanding when this Resolution is passed; and (2) any subsequent bonus issues, consolidation or sub-division of shares. This authority will, unless revoked or varied at a General Meeting, expire at the next Annual General Meeting of the Company.

Resolution 7: The ordinary resolution proposed in item 7 above, if passed, will renew the mandate given by Shareholders on 23 July 2007 allowing the Company, its subsidiaries and associated companies that are entities at risk (as that term is used in Chapter 9 of the Listing Manual of the Singapore Exchange Securities Trading Limited) or any of them, to enter into transactions with interested persons as defined in Chapter 9 of the Listing Manual of the Singapore Exchange Securities Trading Limited. Please refer to the Appendix to this Notice of Annual General Meeting for details.

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LIANG HUAT ALUMINIUM LIMITED(Incorporated in the Republic of Singapore)Company Registration Number: 198203779D

PROXY FORM

IMPORTANT

1. For investors who have used their CPF monies to buy Liang Huat Aluminium Limited shares, the Annual Report is forward-ed to them at the request of their CPF Approved Nominees and is sent FOR INFORMATION ONLY.

2. This Proxy Form is not valid for use by CPF investors and shall be ineffective for all intents and purposes if used or purported to be used by them.

*I/We

of

being *a member/members of Liang Huat Aluminium Limited (the “Company”), hereby appoint:

Name Address NRIC/Passport No.

Proportion of shareholdings to be represented by proxy (%)

*and/or

as *my/our *proxy/proxies to vote for *me/us on *my/our behalf and, if necessary, to demand a poll, at the Annual General Meeting of the Company to be held at Blk 8, 1st Floor Liang Huat Industrial Complex, 51 Benoi Road, Singapore 629908 on Monday, 28th April 2008 at 3.00 p.m. and at any adjournment thereof.

*I/We direct *my/our *proxy/proxies to vote for or against the Ordinary Resolutions to be proposed at the Annual General Meeting as indicated with an “X” in the spaces provided hereunder. If no specified directions as to voting are given, the *proxy/proxies will vote or abstain from voting at *his/their discretion.

No. Ordinary Resolutions For Against

1. To receive and adopt the Audited Financial Statements of the Company for the financial year ended 31 December 2007 and the Directors’ Report and the Auditors’ Report thereon.

2. To approve the Directors’ fees for the financial year ended 31 December 2007.

3. (i) To re-elect Mr Phoon Wui Nyen, a director retiring in accordance with Article 88 of the Company’s Articles of Association.

(ii) To re-elect Mr Tan Hai Seng Benjamin, a director retiring in accordance with Article 88 of the Company’s Articles of Association.

(iii) To re-elect Mr Tan Hai Peng Micheal, a director retiring in accordance with Article 88 of the Company’s Articles of Association.

(iv) To re-elect Mr Chng Hee Kok, a director retiring in accordance with Article 88 of the Company’s Articles of Association.

(v) To re-elect Mr Tan Yong Kee, a director retiring by rotation under Article 89 of the Company’s Articles of Association.

4. To re-appoint LTC & Associates as auditors of the Company and to authorise the Directors to fix their remuneration.

5. To authorise Directors to issue shares pursuant to Section 161 of the Companies Act and the listing rules of the Singapore Exchange Securities Trading Limited.

6. Renewal of Shareholders’ Mandate.

Dated this day of 2008

Total Number of Shares Held

Signature(s) of Member(s)/Common Seal* Delete accordingly

IMPORTANT. Please read notes overleaf

Global Reports LLC

Notes:-

1. A member of the Company entitled to attend and vote at the Annual General Meeting is entitled to appoint not more than two proxies to attend and vote in his stead. Such proxy need not be a member of the Company.

2. Where a member of the Company appoints two proxies, he shall specify the proportion of his shareholding (expressed as a percentage of the whole) to be represented by each such proxy.

3. The instrument appointing a proxy or proxies must be under the hand of the appointor or his attorney duly authorised in writing. Where the instrument appointing a proxy or proxies is executed by a corporation, it must be executed under its common seal or under the hand of its attorney or duly authorised officer.

4. A corporation which is a member of the Company may authorise by resolution of its directors or other governing body such person as it thinks fit to act as its representative at the Annual General Meeting, in accordance with its Articles of Association and Section 179 of the Companies Act, Chapter 50 of Singapore.

5. The instrument appointing proxy or proxies, together with the power of attorney or other authority (if any) under which it is signed, or notarially certified copy thereof, must be deposited at the registered office of the Company at Blk 8, #08-05 Liang Huat Industrial Complex, 51 Benoi Road, Singapore 629908 not later than 48 hours before the time set for the Annual General Meeting.

6. A member should insert the total number of shares held. If the member has shares entered against his name in the Depository Register (as defined in Section 130A of the Companies Act, Chapter 50 of Singapore), he should insert that number of shares. If the member has shares registered in his name in the Register of Members of the Company, he should insert the number of shares. If the member has shares entered against his name in the Depository Register and shares registered in his name in the Register of Members of the Company, he should insert the aggregate number of shares. If no number is inserted, this form of proxy will be deemed to relate to all the shares held by the member of the Company.

7. The Company shall be entitled to reject the instrument appointing a proxy or proxies if it is incomplete, improperly completed or illegible or where the true intentions of the appointor are not ascertainable from the instructions of the appointor specified in the instrument appointing a proxy or proxies. In addition, in the case of members of the Company whose shares are entered against their names in the Depository Register, the Company may reject any instrument appointing a proxy or proxies lodged if such members are not shown to have shares entered against their names in the Depository Register 48 hours before the time appointed for holding the Annual General Meeting as certified by The Central Depository (Pte) Limited to the Company.

8. A Depositor shall not be regarded as a member of the Company entitled to attend the Annual General Meeting and to speak and vote thereat unless his name appears on the Depository Register 48 hours before the time set for the Annual General Meeting.

The Company SecretaryLIANG HUAT ALUMINIUM LIMITED

Blk 8, #08-05 Liang Huat Industrial Complex51 Benoi Road

Singapore 629908

AFFIXSTAMP

Global Reports LLC

Liang Huat Aluminium LimitedAddress: Blk 8, #08-05Liang Huat Industrial Complex51 Benoi Road, Singapore 629908Tel (Main): 065-6862 2228Fax: 065-6862 4962www.lianghuatgroup.com.sg

2007 Annual Report

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2007 Annual Report - Morningstar, Inc.

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