Professional Logistics the one you can rely on...transportation management, airport cargo terminal...

Registered Offi ce333 North Bridge Road

#08-00 KH KEA Building

Singapore 188721

Tel. 65 6837 2133

Fax. 65 6339 0218

Hong Kong HeadquartersSky One Logistics Centre, 7A Ho Tung Garden,

Ho Tung Bridge, Kwu Tun, Sheung Shui, N.T. Hong Kong

Tel. 852 3511 8120

Fax. 852 2244 5095

Email. [email protected]

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Professional Logistics the

one you can rely on

Annual Report 2010SKY ONE HOLDINGS LIMITED

CONTENTS

1 Corporate Profi le 8 Business & Operations Review

2 CEO’s Message 10 Financial Review

4 Board of Directors 12 Corporate Information

6 Key Executives 13 Corporate Governance Report

7 Corporate Structure

Th is document has been prepared by the Company and its contents have been reviewed by the Company’s sponsor (“Sponsor”),

Asian Corporate Advisors Pte. Ltd. for compliance with the relevant rules of the Singapore Exchange Securities Trading Limited

(“Exchange”). Th e Company’s Sponsor has not independently verifi ed the contents of this document including the correctness of any

of the fi gures used, statements or opinions made.

Th is document has not been examined or approved by the Exchange and the Exchange assumes no responsibility for the contents of

this document including the correctness of any of the statements or opinions made or reports contained in this document.

Th e contact person for the Sponsor is Mr Liau H.K.

Telephone number: 6221 0271

Sky One Holdings Limited Annual Report 2010 1

Sky One Holdings Limited (“Sky One” or

the “Company”) is a total logistics solutions provider.

Th e Group is based in Hong Kong and specialises in

courier and other logistics services between Hong Kong

and Mainland China.

Th e Group is principally engaged in the provision of

integrated logistics services, customized solutions,

delivery of goods from the airport terminal, seaports

or distribution centers to the consignees’ or customers’

premises and vice versa. Its services include the

provision of door-to-door, door-to-port and port-to-

port transportation of air and sea cargo, freight and

express courier services. Ancillary services include bulk

breaking, sorting, labeling and packaging of goods, pick-

up and delivery of letter and parcel sized items, goods

and bulk goods from Hong Kong to mainland China and

customs tax clearance. Other related services include

transportation management, airport cargo terminal

handling, customized logistics services and other value-

added services.

Sky One was listed on the SGX-Catalist on 28 January

2008 following the successful Reverse Takeover (RTO) of

Semitech Electronics Limited.

CORPORATE PROFILE

2 Sky One Holdings Limited Annual Report 2010

“We expect an even better showing

in the coming fi nancial year.”

Dicky SuenChief Executive Offi cer

FY2010 continued to be a tough year for Sky One as

the global financial crisis continued to depress trade

worldwide. Th is was not unexpected and the Group had

made a strategic decision to weather the downturn by

ensuring adequate liquidity from its operations.

Concerted efforts were made to further tighten

our revenue and collection cycle and to defer non-

essential spending. Despite the belt-tightening, we did

not rationalise staff pay in order to retain talent and

infrastructure to take advantage of the eventual pick-

up in the economy. However, I myself and the Chief

Operating Officer had both taken an 8% cut in our

salaries followed by the Chief Financial Offi cer with a 6%

cut. Our Board of Directors had also volunteered a cut of

10% in directors’ fee in FY2010.

We also sought to mitigate liquidity risks by ensuring

adequate credit lines from our bankers. To that end, we

were successful in obtaining a working capital facility

of up to HK$7.0 million during the year. Th e facility

was instrumental in fi nancing the rapid growth in our

airfreight business during the year. Nevertheless, our

overall gearing ratio remained low at 0.10 (FY2009: 0.11).

CEO’S MESSAGE


Growth in Airfreight

Despite the difficult economic environment, I am

pleased to report that we successfully strengthened our

Airfreight Division with the addition of a fresh team

and new customers. Revenue from airfreight increased

from HK$5.0 million in FY2009 to HK$76.9 million in

FY2010, and gross profi t increased from HK$0.8 million

to HK$9.3 million. We expect an even better showing in

the coming fi nancial year.

Acquisitions

Our proposal to acquire a 50.1% stake in China Jet

Express Group Limited and Jet International Courier

Ltd (collectively known as ‘JET International Group’)

did not materialise due to a number of issues raised by

our professional team in due diligence. Our assessment

was that going ahead with the acquisition would not

have been in the best interests of the Company nor its

shareholders. In any case, we recuperated HK$2.0 million

out of HK$2.7 million of acquisition related expenses

from the vendor of JET International Group.

Going Forward

As the business scope of Sky One International Freight

Limited, a wholly-owned subsidiary of the Company, is

becoming increasingly internationalised, we had increased

its paid-up capital from HK$10,000 to HK$5,000,000

so as to allow it to fulfill the financial criteria for

accreditation by international transport associations

and for membership into local transport organizations.

Participation in these organisations will further enhance

our industry recognition and fi nancial credibility as a

premier total logistics provider.

With an eye to future opportunities, we had also

incorporated two (2) new wholly-owned subsidiaries

subsequent to the fi nancial year, Sky One Logistics (HK)

Limited (“SOLL”) and Sky One Investment (China)

Limited (“SOI(C)L”). Using a modest investment, SOLL

is exploring business opportunity in warehousing and re-

packaging services. Th e Company plans to use SOI(C)

L as the holding company for future Mainland China

ventures.

Th e Company also entered into a subscription and share

lending agreement (the “Subscription Agreement”) with

various investors (the “Investors”) to issue 40,000,000

new ordinary shares to the Investors, together with

options to subscribe to a further 40,000,000 new ordinary

shares. If we obtain the necessary regulatory approvals

and approval of the Company’s shareholders at a general

meeting, we plan to utilise about S$500,000 of the initial

proceeds of S$1,200,000 for commercial feasibility studies

and legal due diligence on potential projects. However, I

wish to remind readers that the potential projects, if any,

are at preliminary assessment stages and such exploratory

works may or may not result in the Company investing in

the potential projects or any of them. Th e balance will be

used as working capital.

Acknowledgement

I am grateful to our shareholders, customers, business

associates, for your continued support during these

diffi cult times. I extend a warm welcome to our new

colleagues in the Airfreight Division and would like to

thank management and staff for their dedication and hard

work. As always, the guidance of my fellow directors has

been invaluable.

Dicky Suen

Chief Executive Offi cer


Mr Teo Chew Seng @ Peter Chang(Chairman and Non-Executive Director)

Appointed 28 January 2008

Mr Peter Chang is primarily responsible for the working

of the Board and reviewing the effectiveness of the

governance process of the Board. He is responsible for

representing the Board to shareholders, overseeing the

overall business strategy and expansion of our Group.

Mr Peter Chang is presently the Deputy Chairman of

Pacifi c International Lines (Pte) Ltd (“PIL”) in Singapore.

He has been with the company since 1974. PIL, known

as the largest private shipping company in Singapore

operates a fl eet of about 122 ships with an annual turnover

of US$ 1.3 billion for the fi nancial year ended December

2009. Th e PIL Group is also involved in real estate such

as offi ce building, cargo distribution depot, logistics hub,

shipping agencies, travel agents, manufacturing of dry

containers, housing container, reefer containers and tank

containers in China.

Top Row (left to right) : Mr Wong Shun Cheong, Mr Kung Seah Lim and Mr Lim Chee San

Bottom Row (left to right): Mr Dicky Suen Yiu Chung, Mr Teo Chew Seng @ Peter Chang and Mr Lau Hon Kit

BOARD OF DIRECTORS


With over 36 years of experience, Mr Peter Chang’s area of

expertise also covers ship-management, ship-operations,

ship-fi nance, project cargo and fuel oil trading.

Mr Dicky Suen Yiu Chung (Chief Executive Offi cer and Executive Director)


Mr Dicky Suen is also the Chairman of the Executive

Committee and member of the Nominating Committee.

He is responsible for setting strategy for the Group

and the future growth of the Group. He is involved in

developing and implementing the corporate direction and

day-to-day general management of the Group’s business

operations. He has approximately 20 years’ experience in

the logistics industry. Together with Mr Lau Hon Kit, Mr

Dicky Suen established Sky One’s business in 1999, and

has developed and expanded it’s network of clients and

delivery routes within Hong Kong and into mainland

China.

Mr Lau Hon Kit(Chief Operations Offi cer and Executive Director)


Mr Lau Hon Kit is also a member of the Executive

Committee. He is responsible for the management of the

day-to-day operations of the Group. He is responsible

for developing new streams of revenue and providing

the strategy for the Group jointly with Mr Dicky Suen,

as well as maximising the profitability through cost

control and effi cient use of resources within the Group.

He has approximately 20 years’ experience in the

logistics industry. Together with Mr Dicky Suen, Mr Lau

established Sky One’s business in 1999.

Mr Kung Seah Lim (Independent Director)


Mr Kung Seah Lim is the Chairman of the Audit

Committee and a member of the Nominating Committee.

Mr Kung started his career as an audit assistant with

Chua Swee Ming & Co from 1978 to 1982. He was a

junior partner with Chua Swee Ming & Co from 1982 to

1988. He has been the sole proprietor of Kung Seah Lim

& Co since 1988. He has been a member of the Institute

of Certifi ed Public Accountants of Singapore since 1982.

He obtained his Bachelor in Commerce in 1978 from

Nanyang University.

Mr Wong Shun Cheong (Independent Director)


Mr Wong Shun Cheong is the Chairman of the

Nominating Committee and is a member of the

Remuneration Committee. He started his career as an

auditor with Price Waterhouse (CPA) in 1978. In 1980

he joined Novel Enterprise Limited as an accountant.

From 1983 to 2006 he was the Financial Controller of

Fabricators International Limited. From 1995 to 2006

he was the director of Fabricators International Limited

and International Components Corporation Limited. In

2007 he joined Metro Capital Property Investment Fund,

L.P. as the Chief Financial Offi cer. From 2008 to 2010

he was the Chief Financial Offi cer of Superior Fastening

Technology Ltd.

Mr Wong is a member of the Chartered Institute of

Management Accountants (UK) and the Hong Kong

Institute of Certifi ed Public Accountants.

Mr Lim Chee San (Independent Director)


Mr Lim Chee San is the Chairman of the Remuneration

Committee and is a member of Audit Committee. He has

been an accountant, a banker and a lawyer at diff erent

times during the last 27 years. He has his own law fi rm,

TanLim Partnership, now. Before he started his current

law practice, he was the Head of Banking Operations in a

large regional bank. He also has many years of experience

as an auditor in large international accounting fi rms. He

is a barrister-at-law, a chartered certifi ed accountant, and

a chartered information technology practitioner. He was

among the top candidates in his accountancy and law

examinations.


KEY EXECUTIVES

Mr Khoo Yee Yen(Chief Financial Offi cer)

Mr Khoo is responsible for all financial and fiscal

management aspects of the operations of the Group, and

leading and coordinating its administrative, business

planning, accounting and budgeting eff orts. Mr Khoo

began his career in a Big Four accounting fi rm in Kuala

Lumpur, Malaysia from 1999 to 2005. Subsequently, he

was the fi nancial controller of a public company listed on

the Australian Stock Exchange before joining Sky One. Mr

Khoo is a Fellow of the Association of Chartered Certifi ed

Accountants and has a Bachelor of Economic and Social

Studies in Accounting and Economics from the University

of Wales (Cardiff , United Kingdom).

Mr Simon Wong Kai Chi(Executive Vice President)

Mr Simon Wong is responsible for business development

of the Group and is also involved in implementing its

marketing strategies as well as management of daily

operations. He has over 12 years of experience in

the logistics industry and holds a master’s degree in

business administration (MBA) and bachelor degrees in

engineering (BEng) and laws (LLB). His knowledge and

understanding in the fi eld is a positive force for driving

the Group’s growth and development.

Mr Au Kit Bun, Banny(Administration and I.T. Manager)

Mr Banny Au is responsible for the management and

maintenance of the information technology systems of the

Group, as well as upgrading and streamlining its systems

processes. Mr Au has over 10 years in the I.T. fi eld and

obtained his Bachelor of Engineering (Honours) in

Electrical Engineering from the Hong Kong Polytechnic

University.


CORPORATE STRUCTURE

Sky One Express (HK)

Limited

(Hong Kong)

Sky One Network

(Holding) Ltd

(BVI)

Sky One Holdings

Limited

(Singapore)

Sky One International

Freight Limited

(Hong Kong)

Sky One Logistics

(HK) Limited

(Hong Kong)Incoporated in April 2010

Sky One Investment

(China) Limited

(Hong Kong)Incoporated in April 2010

100% 100% 100% 100%

100%


The first half of FY2010 between April 2009 and September 2009

(“1H2010”) was a diffi cult period as the Group continued to weather

the eff ect of global downturn in the region. Focus was set on cash

management and liquidity with a combination of stringent credit

control and austerity measures. We are pleased to report that cash fl ows

from operating activities remained positive for FY2010. Th e Group

experienced an improvement in business in the second half of FY2010

between October 2009 and March 2010 (“2H2010”) owing to better

economic conditions during the same period.

2H2010 1H2010 2H2009 1H2009

6 months 6 months 6 months 6 months

ended ended ended ended

31.3.10 30.9.09 31.3.09 30.9.08

Revenue by division HK$’000 HK$’000 HK$’000 HK$’000

Express Land Transport 43,551 41,271 39,807 62,137

Airfreight 55,903 21,024 2,358 2,681

Total Revenue 99,454 62,295 42,165 64,818

Express Land Transport Division

The Express Land Transport Division is largely dependent on the

general economy of the Greater China region, specializing in trucking

and clearing customs for imports of fi nished and semi-fi nished goods

as well as raw materials into Mainland China. In 2H2009 and 1H2010

(corresponding to the period between October 2008 and September

BUSINESS & OPERATIONS REVIEW


2009), revenue dipped signifi cantly as the Group’s customers, who are

manufacturers and traders exporting to Mainland China, scaled down

amid the global fi nancial crisis. However, signs of gradual pick-up in

2H2010 is encouraging and the Group will be well prepared to grasp the

opportunity for higher revenue as the economy further recovers.

Airfreight Division

Th e Group welcomed a new team of professionals to its Airfreight

Division in August 2009. Th e new team increased airfreight revenue

by approximately 15 times as compared to the previous fi nancial year,

bringing in many new customers. Based in Hong Kong, the Group’s

airfreight division mainly services multinational import and export

consignments to North America and Europe.

Forward outlook

Despite pick-up in the third quarter of FY2010 and encouraging signs

of improvement in the general economy, the next 12 months will

remain challenging for the Group. Revenues from the newly expanded

Airfreight Division are expected to grow stronger as the current year

revenue represents only 8 months of business from the new team and

new found customers.

Th e Group wishes to reiterate that the above expectations are based on

continuing signs of a gradual improvement in current business activity,

and on expectation that the improving global economies, especially in

the Greater China region, will sustain the trend.


2H2010 1H2010 2H2009 1H2009 6 Months 6 Months 6 Months 6 Months Ended Ended Ended Ended 31.3.2010 30.9.2009 31.3.2009 30.9.2008 HK$’000 HK$’000 HK$’000 HK$’000

Revenue 99,454 62,295 42,165 64,818

Cost of sales (79,999) (48,266) (29,854) (40,141)

Gross profi t 19,455 14,029 12,311 24,677

Other income 285 555 – 1,035

Selling and distribution expenses (6,159) (2,971) (3,289) (2,622)

Administrative expenses (11,542) (12,859) (13,821) (16,071)

Finance costs (124) (79) (102) (61)

Profi t before taxation 1,915 (1,325) (4,901) 6,958

Taxation (645) 99 391 (1,362)

PROFIT AFTER TAXATION 1,270 (1,226) (4,510) 5,596

Executive Summary of Results

Th e global fi nancial crisis began to aff ect the Group in the second half of FY2009 (“2H2009”), lowering the overall volume of trade in the regional economy on which the Group depends. Th e eff ect had continued into the fi rst half of FY2010 (“1H2010”), leading to losses in the 2H2009 and 1H2010 periods. Since the end of 1H2010, the Greater China region showed a slight pick-up in trade volume and the Group was able to generate profi ts to recoup losses incurred earlier in 1H2010. A combination of a strong performance from the Airfreight division and austerity measures also helped to recoup the losses in 1H2010.

Revenue

FY2010 FY2009 VarianceRevenue by division HK$’000 % HK$’000 % HK$’000 %

Express Land Transport 84,822 52.44 101,944 95.29 (17,122) (16.79)

Airfreight 76,927 47.56 5,039 4.71 71,888 >100.00

Total 161,749 100.00 106,983 100.00 54,766 51.19

Total revenue increased by HK$54.77 million to HK$161.75 million this year mainly due to increased business activities from the Airfreight division. In August 2009, the Group had strengthened its Airfreight division with additional staff force, new and larger customers were gained, resulting in an HK$71.89 million increase in revenue from airfreight. Barring unforeseen circumstances, the Group sees potential in this sector and will continue to further develop its freight and logistics businesses.

Revenue from the Express Land Transport division was lower compared to the previous year as the eff ects of the global fi nancial crisis continued to aff ect the Group. Total volume of goods moved in FY2010 was 7.1 million kilograms compared to 9.0 million kilograms in FY2009, a 21.11% drop. In 2H2009, the slowing of the global economy, including the Mainland Chinese economy, due to the fi nancial crisis, had caused many manufacturing and trading customers of the Group to cease or decrease production and trading, resulting in a drop in demand for the Group’s services. Th e eff ects continued into 1H2010 resulting in a period of loss. However, the regional economy had picked up in 2H2010 and the Group was able to trade profi tably to cover against earlier losses recorded in 1H2010.

Cost of Sales

FY2010 FY2009 VarianceCost of sales by nature HK$’000 % HK$’000 % HK$’000 %

Express Land Transport:

Customs declaration and 38,967 30.38 42,120 60.18 (3,153) (7.49) handling costs

Transportation costs 21,543 16.79 23,439 33.49 (1,896) (8.08)

Packing materials 164 0.13 192 0.27 (28) (14.58)

Total Express Land Transport 60,674 47.30 65,751 93.94 (5,077) (7.72)

FINANCIAL REVIEW


FY2010 FY2009 VarianceCost of sales by nature HK$’000 % HK$’000 % HK$’000 %

Airfreight:

Transportation costs 67,591 52.70 4,244 6.06 63,347 >100.00

Total Airfreight 67,591 52.70 4,244 6.06 63,347 >100.00

TOTAL 128,265 100.00 69,995 100.00 58,270 83.25

Due to substantial increase of business activities and revenue from the Airfreight division, airfreight transport costs have also increased signifi cantly from HK$4.24 million in FY2009 to HK$67.59 million in FY2010, contributing to 52.70% of total cost of sales compared to only 6.06% last year.

Express Land Transport costs have decreased slightly due to the drop of volume of goods moved. However, unit costs were higher as the goods moved were of higher tax value resulted in more customs tax paid and also lack of economy of scale due to on lower volume moved. Hence, percentage decrease in costs were less than percentage decrease in revenue.

Gross Profi t

FY2010 FY2009 VarianceGross Profi t by division HK$’000 % HK$’000 % HK$’000 %

Express Land Transport 24,148 72.12 36,193 97.85 (12,045) (33.28)

Airfreight 9,336 27.88 795 2.15 8,541 >100.00

Total 33,484 100.00 36,988 100.00 (3,504) (9.47)

FY2010 FY2009 VarianceGross Margin by division % % %

Express Land Transport 28.47 35.50 (7.03)

Airfreight 12.14 15.78 (3.64)

Total 20.70 34.57 (13.87)

Gross profi t from the Express Land Transport division has decreased by HK$12.04 million mainly due to a fall in gross margin by 7.03 percentage points arising from higher unit costs for goods moved during the year. Gross profi t from the Airfreight division has increased by HK$8.54 million arising from the increase in airfreight revenue from new customers secured since August 2009. Th ese customers had high volume but at lower margins hence, despite an increase in gross profi t, margin dropped by 3.64 percentage points in FY2010.

Selling, Distribution and Administrative Expenses

Th e Group had engaged new experienced staff to boost the Airfreight division; bringing in and servicing more businesses. Th is has led to a HK$3.22 million increase in selling and distribution expenses. However, administrative expenses decreased by 18.37% due to a combination of overall austerity measures implemented during the period and unrealised foreign exchange retranslation gains on HK$ denominated liabilities payable by the Company.

Taxation

Th e eff ective tax rate is high on a group basis owing to operating losses suff ered by the Company which are not deductible against the profi ts of the subsidiaries. Tax expenses arise solely from the Group’s Hong Kong subsidiaries’ taxable profi ts.

Cash and Liquidity Management

Th e Group continues to focus on cash collections and prudent credit management policies resulting in positive cash fl ows from operating activities of HK$3.96 million (FY2009: HK$1.86 million). New bank loans totaling HK$2.90 million were obtained during the year (FY2009: HK$3.0 million) to give some leverage to operations as well as to build up the Group’s access to credit facilities. Total undrawn bank facilities as at 31 March 2010 was HK$5.0 million.

Proposed Share Issue

In the course of a Proposed Share Issue, a deposit of S$1,200,000 (a Hong Kong dollar equivalent of HK$6,662,000) was received by the Company during the fi nancial year from investors. Th e deposit is treated as a liability until the Company receives the necessary approvals to issue new shares to the investors. Further details of the Proposed Share Issue can be found in Note 26(b) to the Financial Statements.


Full Company Name

Sky One Holdings Limited

Incorporated in

SINGAPORE

Stock Exchange

Singapore Exchange Limited

Stock Counter

Sky One

Stock Code

5MM

ISIN Code

SG1W50939246

Registered Offi ce

333 North Bridge Road


Singapore 188721

Telephone

65 6837 2133

Fax

65 6339 0218

Board of Directors

Peter Chang

Chairman and Non-Executive Director

Dicky Suen Yiu Chung

Director and Chief Executive Offi cer

Lau Hon Kit

Director and Chief Operations Offi cer

Lim Chee San

Independent Director

Kung Seah Lim


Wong Shun Cheong


Company Secretary

Foo Soon Soo

Share Registrar

Boardroom Corporate & Advisory Services Pte Ltd

50 Raffl es Place

Singapore Land Tower #32-01

Singapore 048623

Auditors

Mazars LLP

133 Cecil Street

#15-02 Keck Seng Tower

Singapore 069535

Tel 65 6224 4022

Fax 65 6225 3974

CORPORATE INFORMATION

CORPORATE GOVERNANCE REPORT


Th e Company is committed to maintain high standards of corporate governance and has adopted the corporate governance practices contained in the Code of Corporate Governance 2005 (“Code”).

BOARD MATTERS

Board’s Conduct of its Aff airs

Principle 1: Every company should be headed by an eff ective Board to lead and control the company. Th e Board is collectively responsible for the success of the Group. Th e Board works with the Management to achieve this and the Management remains accountable to the Board.

Th e Board has overall responsibility for the corporate governance of the Company including promoting long-term shareholder value and taking decisions in interests of company objectively. Apart from its statutory responsibilities, the Board is responsible for:-

(1) reviewing the fi nancial performance and condition of the Group;

(2) approving the Group’s strategic plans, key operational initiatives, major investment and funding decisions;

(3) identifying principal risks of the Group’s business and implementing systems to manage the risks; and

(4) the Board sets the tone of management via example and leadership, thereby communicating standards of corporate responsibility and objective decision making.

Th e Board will hold at least two formal meetings every year, with additional meetings for particular matters convened when necessary.

Th e offi ce of the Non-Executive Chairman of the Company is held by Mr Teo Chew Seng @ Peter Chang (“Peter Chang”).

As the Non-Executive Chairman, Mr Peter Chang will bear responsibility for the working of the Board and reviewing the eff ectiveness of the governance process of the Board. He will be responsible for representing the Board to the Shareholders.

Th e offi ce of the Chief Executive Offi cer (“CEO”) is held by Mr Dicky Suen Yiu Chung (“Dicky Suen”). As the CEO, Mr Dicky Suen’s responsibilities include the charting and reviewing of corporate directions and strategies, which cover areas of marketing and strategic alliances. He is responsible for providing the Company with strong leadership and vision.

Th e Board is assisted by an Executive Committee in addition to the Audit Committee, the Nominating Committee and the Remuneration Committee. Information on these Board Committees is set out below.



Th e attendance of the Directors at meetings of the Board and the Board Committees, as well as the frequency of such meetings for the fi nancial year ended 31 March 2010 is disclosed as follows:-

DIRECTORS' ATTENDANCE AT BOARD AND BOARD COMMITTEE MEETINGS

Board Meeting Audit CommitteeMeeting

Nominating Committee Meeting

Remuneration Committee Meeting

Name of Director

No. of meetings

held Attended

No. of meetings

held Attended

No. of meeting

held Attended

No. of meeting

held Attended

Teo Chew Seng @ Peter Chang 2 1 2 1 – – 1 1

Dicky Suen Yiu Chung 2 2 – – 1 1 – –

Lau Hon Kit 2 1 – – – – – –

Wong Shun Cheong 2 2 – – 1 1 1 1

Kung Seah Lim 2 2 2 2 1 1 – –

Lim Chee San 2 2 2 2 – – 1 1

In principle, all matters that are not related to the day-to-day operations of the Group are subject to approval by the Board, including but not limited to, acquisitions and disposals of businesses and Group entities, changes in capital structure, and other corporate actions as defi ned by the SGX-ST from time to time.

All directors are required to have attended the course for “Listed Companies’ Director Responsibilities and Corporate Governance” and are then invited to tour the Group’s main facilities in Hong Kong.

Board Composition and Balance

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

Th e Board has six members comprising two executive directors, one non-executive director cum Chairman and three independent directors with a wide range of skills and experience in the fi elds of operations management, legal, fi nance and accounting. Each member of the Board who (except for Mr Dicky Suen Yiu Chung, an Executive Director and Chief Executive Offi cer who is holding an equivalent appointment as a Managing Director ) holds offi ce pursuant to the provisions of the Articles of Association and thereaft er, shall be eligible for re-election unless disqualifi ed from holding offi ce.

Name of Director Board membershipExecutive

CommitteeAudit

CommitteeNominatingCommittee

RemunerationCommittee

Teo Chew Seng @ Peter Chang Non-Executive Chairman – Member – Member

Dicky Suen Yiu Chung Chief Executive Offi cer Chairman – Member –

Lau Hon Kit Chief Operations Offi cer Member – – –

Wong Shun Cheong Independent Director – – Chairman Member

Kung Seah Lim Independent Director – Chairman Member –

Lim Chee San Independent Director – Member – Chairman



The Independent Directors provide, amongst other things, strategic guidance to the Company based on their professional knowledge, in particular, assisting to constructively challenge and develop proposals on strategy. Th e Independent Directors also help review the performance of management in meeting agreed goals and objectives and monitor the reporting of performance. Non-executive directors are encouraged to meet regularly without management present.

Profi les of the directors are set out on pages 4 to 5 of this Annual Report.

Chairman and Chief Executive Offi cer

Principle 3: Th ere 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.

Th ere is a distinct separation of responsibilities between the non-executive Chairman and the CEO. Th is is to ensure balance of power and authority at the top of the Company. Th e posts of Chairman and CEO are held by Mr Peter Chang and Mr Dicky Suen respectively.

Th e Chairman schedules Board meetings and ensures the eff ective execution of Board decisions; leads the Board to ensure its eff ectiveness on all aspects of its role and set its agenda; ensures that the directors receive accurate, timely and clear information; ensures eff ective communication with shareholders; encourages constructive relations between the Board and Management; facilitates the eff ective contribution of non-executive directors in particular; encourages constructive relations between executive directors and nonexecutive directors; and promotes high standards of corporate governance.

Th e CEO bears the executive responsibility of the Group’s business. Th e CEO oversees day-to-day operations and is responsible for executing strategies and policies.

Th e Chairman and CEO of the Company are not related to each other.

Th e Board is assisted by the Executive Committee (the “Exco”) comprising Mr Dicky Suen and Mr Lau Hon Kit. Mr Dicky Suen is the appointed Chairman of the Exco. Th e Board will delegate to the Exco certain discretionary limits and authority for business development, investment and divestment activities, capital expenditure, fi nance and treasury function, budgeting and human resource management. Senior management is delegated the responsibility for drawing up the Group’s annual budget and business plan for Board’s approval, carrying through business strategies as approved in the annual budget and business plan, implementing appropriate systems of internal accounting and other controls, instituting a risk management framework and monitoring for compliance, adopting suitably competitive human resource practices and compensation policies, and ensuring that the Group operates within budget.

Board MembershipBoard Performance

Principle 4: Th ere should be a formal and transparent process for the appointment of new directors to the Board. As a principle of good corporate governance, all directors should be required to submit themselves for re-nomination and re-election at regular intervals.

Principle 5: Th ere should be a formal assessment of the eff ectiveness of the Board as a whole and the contribution by each director to the eff ectiveness of the Board.

Th e Nominating Committee (“NC”) of the Company is chaired by Mr Wong Shun Cheong. Th e other members of the NC are Mr Dicky Suen and Mr Kung Seah Lim.



Th e NC will meet at least once a year or when necessary. Its focus will be guided by the terms and reference adopted from the Corporate Governance Code. Th e NC’s duties and functions include (i) making recommendations to the Board on all board appointments and re-nomination having regard to the director’s contribution and performance; (ii) ensuring that all members of the Board submit themselves for re-nomination and re-election at regular intervals and at least once in every three years; (iii) determining annually whether a director is independent, guided by guidelines in the Corporate Governance Code; (iv) deciding if a director is able and has adequately carried out his duties as a director of the Company where he has multiple board representations; and (v) deciding how the Board’s performance may be evaluated and propose objective performance criteria.

Board Membership

Review qualifi cations required of new Board member

(a) Th e NC will conduct an annual review of the composition of the Board in terms of the size and mix of skills and qualifi cations of Board members. It may, if it deems appropriate, recommend the appointment of additional directors to strengthen the composition of the Board.

(b) Th e NC may recommend the appointment of a new director to fi ll a casual vacancy in the Board.

(c) Th e NC will deliberate and propose the background, skills, qualifi cation and experience of the candidate it deems appropriate. Th e factors taken into consideration by the NC could include among other things, the new director to add to or complement the mix of skills and qualifi cations in the existing Board, relevance of his experience and contributions to the business of the Company and the depth and breadth he could bring to Board’s discussion.

Selection Process

(d) Th e NC will accept nominations and review the resumes of candidates for shortlisting. It will arrange to conduct, meet and talk to the shortlisted candidates to assess their suitability and fi t to the Company as well as to assess their interest to take up directorships in the Company. It will narrow its search to two or three most suitable candidates and submit their names to the Board.

(e) Th e Board will review the credentials of the candidates submitted to them and the recommendations of the NC and make a fi nal decision on an appointee.

In addition, a newly appointed Director will re-submit himself for retirement and re-election at the AGM immediately following his appointment. Th ereaft er, he will be subjected to the one-third rotation rule.

Under the Articles of Association of the Company, one-third of the directors shall retire by rotation. All retiring directors (except for Mr Dicky Suen Yiu Chung, an Executive Director and Chief Executive Offi cer who is holding an equivalent appointment as a Managing Director ) are eligible for re-election.

Board Performance

On an annual and formal basis, the NC assesses the eff ectiveness of the Board as a whole and the contribution by each director to the eff ectiveness of the Board.

Th e NC considers a number of factors, including the discharge of the Board’s functions, access to information, participation at board meetings and communication and guidance given by the Board to top management. Th e NC’s assessment of the Board may take into account fi nancial indicators set out in the Code, only where they are appropriate. At present, share price performance has not been used as the Group has eff ectively less than 5 years’ performance in the market and such performance to date has been skewed by the global fi nancial crisis aff ecting the market in general. In addition, although there are a number of logistics companies listed on the SGX-ST, the NC considers these to be inappropriate benchmarks due to diff erences in regional characteristics.



Access to information

Principle 6: In order to fulfi l their responsibilities, Board members should be provided with complete, adequate and timely information prior to board meetings and on an ongoing basis.

Th e Company fully recognises that the continual fl ow of relevant information on an accurate and timely basis is critical for the Board to be eff ective in the discharges of its duties. Management provides the Board members with regular updates on the fi nancial position of the Company. Half-yearly reviews of the Company’s activities are also provided to the Board while other key information, such as business investment plans, corporate actions and other information on request, is forwarded to the Directors on an on-going basis. Th e Directors have separate and independent access to senior management and the Company Secretary.

Th e Company Secretary, together with the senior management, is also responsible for ensuring the Company’s compliance regulations adhere to the relevant statutes and regulations. Th e appointment and the removal of the Company Secretary is a matter for the Board as a whole.

Th e Board will have access to professional advice where such services are required. Th e cost of such professional advice will be borne by the Company.

REMUNERATION MATTERS

Procedures for Developing Remuneration PoliciesLevel and Mix of RemunerationDisclosure on Remuneration

Principle 7: Th ere should be a formal and transparent procedure for fi xing the remuneration packages of individual directors. No director should be involved in deciding his own remuneration. Principle 8: Th e 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 signifi cant proportion of the remuneration, especially that of executive directors, should be linked to performance.

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.

Th e Remuneration Committee (“RC”) of the Company is chaired by Mr Lim Chee San. Th e other members of the RC are Mr Peter Chang and Mr Wong Shun Cheong.

Th e role of the RC is to review and approve the remuneration package and terms of employment of the Company’s directors and key executives. Th e RC will meet at least once a year with all members of the committee in attendance.

In its review and approval of the recommendations on remuneration policies and packages for the Company’s directors, the RC will cover all aspects of remuneration including but not limited to directors’ fees, salaries, allowances, bonuses, share options and benefi ts-in-kind. Th e RC’s recommendations will be made in consultation with the CEO and submitted for endorsement by the entire Board. Payments of directors’ fees are subject to Shareholders’ approval at the AGM. Th e remuneration of non-executive directors is appropriate to level of contribution. However, the directors’ fee would not compromise independence as it is very small compared to the total income of the non-executive directors who themselves have full-time occupations/businesses in other unrelated companies.

Remuneration of senior management staff will be reviewed by the Company’s human resource department in consultation with the CEO and the senior management. Th e review will take into consideration the value-add and the extent of contribution of the staff towards the fi nancial health and business needs of the Company. Th e Company will off er competitive remuneration packages to recruit, motivate and retain valuable staff . Th e RC will also administer any share option schemes of the Company. If necessary, the RC will seek expert advice inside and/or outside the Company on remuneration of all directors and senior management staff . Th e expenses for such advice is borne by the Group.



Th e RC members shall abstain from deliberations in respect of their own remuneration and the RC shall also be empowered to review human resource management policies of the Group.

Th e remuneration policy of the Group seeks, inter alia, to align the interests of employees within the Group, to reward and encourage performance based on its core values and to ensure that remuneration is commercially competitive to attract and retain talent. Remuneration packages are initially discussed with the prospective employee to obtain his/her requirements. Such requirements are then considered and adjusted in light of current employee remuneration levels, company resources as well as market data, where available. Th e typical remuneration package consists of fi xed and variable components, with the base salary making up the fi xed component. Th e variable component can be in the form of a performance bonus, share options, performance shares and/or other long-term incentives. Proposed directors’ fees will be submitted as a lump sum for Shareholders’ approval in general meeting and the sum is divided amongst the directors with those having additional responsibilities as chairman or members of board committees receiving a higher portion of the approved sum.

Th e compensation paid or payable to the members of the Board (including directors’ fees) and key executives of the Group (including salary, bonus, CPF contribution, benefi ts-in-kind and deferred compensation accrued in the fi nancial year in question and payable at a later date) are as follows:-

Th e details of remuneration paid to each member of the Board and the key executives of the Group are as follows:-

Name of Directors/Key ExecutiveBase/fi xed

salary Bonus

ProvidentFund

contributionDirectors’

fees

Allowances and other benefi ts Total

Below S$250,000Dicky Suen Yiu Chung 86% 11% 2% 1% 0% 100%Lau Hon Kit 87% 11% 2% 0% 0% 100%Teo Chew Seng @ Peter Chang 0% 0% 0% 100% 0% 100%Wong Shun Cheong 0% 0% 0% 100% 0% 100%Kung Seah Lim 0% 0% 0% 100% 0% 100%Lim Chee San 0% 0% 0% 100% 0% 100%Key Management of the GroupBelow S$250,000Khoo Yee Yen 67% 12% 3% 0% 18% 100%Simon Wong Kai Chi 80% 18% 2% 0% 0% 100%Banny Au Kit Bun 86% 8% 4% 0% 2% 100%

Th e salaries are reviewed at the discretion of the Board of Directors in consultation with the RC.

Th e service contracts of Mr Dicky Suen and Mr Lau Hon Kit are for an initial term of three (3) years from 28 January 2008. Upon the expiry of the initial period of three (3) years, their employment shall automatically be renewed for successive terms of one (1) year each. Th e Board has reviewed the terms of their service contracts and the Board is of the opinion that their service contracts are appropriate. Th ere are no fi xed terms of service agreements for the other directors.

Director’s fees are set in accordance with a remuneration framework, which will be subjected to approval at the Annual General Meeting (“AGM”).

Th e key management of the Company is entitled to a discretionary and variable performance bonus linked to their performance.



All employees are entitled to a fi xed and variable component of their remuneration. Th e fi xed component is in the form of a base salary and variable component as linked to the employees’ performance. Th ere are no employees who are immediate family members of a director or the CEO and whose remuneration exceed $150,000 during the fi nancial year ended 31 March 2010.

A Sky One Holdings Limited Employee Share Option Scheme (“the Scheme”) and a Sky One Holdings Limited Performance Share Plan (“the Plan”) were approved by the Shareholders at an Extraordinary General Meeting held on7 May 2010. Further details of the Scheme and the Plan are disclosed in the Report of the Directors.

Accountability and AuditAudit CommitteeInternal Controls

Principle 10: Th e Board is accountable to the shareholders while the Management is accountable to the Board. Th e Board provides shareholders with annual fi nancial reports and announces promptly half yearly and yearly fi nancial results. It is the aim of the Board to include analyses in these reports of suffi cient detail to provide a balanced and understandable assessment of the Company’s performance, position and prospects.

A consolidated analysis is provided to the Board on a half yearly basis. However, detailed management accounts and analysis are made available to the Board on specifi c request.

Principle 11: Th e Board should establish an Audit Committee (“AC”) with written terms of reference which clearly set out its authority and duties. Principe 12: Th e Board ensures that the Management maintains a sound system of internal controls to safeguard the shareholders’ investments and the company’s assets.

Th e AC of the Company comprises three directors, the majority of whom, including the Chairman, are independent. Th e AC is chaired by Mr Kung Seah Lim. Th e other members of the AC are Mr Peter Chang and Mr Lim Chee San.

Th e overall objective of the AC is to ensure that management has created and maintained an eff ective control environment in the Company. Th e AC has explicit authority to investigate any matter within its terms of reference; full access to and co-operation by management; full discretion to invite any director or executive offi cer to attend its meeting; and reasonable resources to enable it to discharge its functions properly.

Th e AC will perform the following functions:-

(1) review with the external auditors the audit plan, their evaluation of the system of internal accounting controls, their audit report, their management letter and the management’s response;

(2) review the half-yearly and annual fi nancial statements before submission to the Board for approval, focusing on changes in accounting policies and practices, major risk areas, signifi cant adjustments resulting from the audit, the going concern statement, compliance with applicable accounting standards and stock exchange and statutory/ regulatory requirements;

(3) ensure the co-ordination between the external auditors and the management, review the assistance given by management to the auditors and discuss problems and concerns, if any, arising from the interim and fi nal audits, and any matters which the auditors may wish to discuss (in the absence of management where necessary);

(4) review and discuss with the external auditors any suspected fraud or irregularity, or suspected infringement of any relevant laws, rules or regulations, which has or is likely to have a material impact on the Company’s operating results or fi nancial position, and the management’s response;

(5) consider the appointment or re-appointment of the external auditors, the audit fee, and matters relating to the resignation or dismissal of the auditors;



(6) review any interested person transactions;

(7) undertake such other reviews and projects as may be requested by the Board and report to the Board its fi ndings from time to time on matters arising and requiring the attention of the AC; and

(8) generally undertake such other functions and duties as may be required by statute or the Listing Manual, and by such amendments made thereto from time to time.

In addition, the AC will have the discretion to direct an independent review of the risk management procedures and the frequency of such review.

Th e AC will also meet separately with the external auditors and also meet among themselves in the absence of management when necessary at least annually, so as to be able to react to potential concerns when they are identifi ed. Th e AC revises the independence of the external auditors annually.

Th ere were no signifi cant items requiring comments by the Board on the adequacy of the internal controls, including fi nancial, operational and compliance controls, and risk management systems this year.

Internal audit

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

An internal audit is conducted annually on the Group’s major subsidiaries by a third party service provider for the purposes of maintaining the Group’s certifi cation for ISO9001:2008. Th e audit covers processes for overall management, service provision, warehouse management, equipment and infrastructure management, and document and data control. Having considered various factors, including the scale of the Group’s operations, the fact that its business is primarily in Hong Kong, the Audit Committee is of the opinion that the current arrangement is suitable to the needs of good governance over the operations of the Group. Th e Audit Committee will review this (including the scope of internal audit) if circumstances change. Meetings are arranged as required.

Communication with ShareholdersPromoting Greater Participation by Shareholders

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

Principle 15: Companies should encourage greater shareholder participation at AGMs, and allow shareholders the opportunity to communicate their views on various matters aff ecting the company. Announcement of Company’s half year and full year results will be done via SGXNET. All information on the Company’s new developments will be communicated to shareholders on a timely basis via SGXNET. Shareholders can have access to the Company’s fi nancial information as well as the developments of the Company through its web-site at www.skyone-china.com.

Th e Company communicates with its investors on a timely basis, through annual reports, fi nancial statements announcement, notice of and explanatory memorandum for AGM and extraordinary general meetings, press releases and disclosures to the SGX-ST.

At AGMs and extraordinary general meetings, shareholders are given the opportunity to communicate their views on various matters aff ecting the Company. Th is serves as a good platform for them to meet with the Board and senior management to clarify concerns relating to the Company’s performance and direction. Shareholders are encouraged to articulate their views on matters relating to the Company or question the Board on issues pertaining to the resolutions proposed at the event.



Th e Company’s Articles of Association allow a shareholder entitled to attend and vote to appoint a maximum of two proxies who need not be a shareholder of the Company to attend and vote on behalf at general meetings. Th e Company proposes separate resolutions on each substantially separate issue. Voting in absentia by mail, email or fax is currently not permitted under the Company’s Articles of Association until security, integrity and other pertinent issues are satisfactorily resolved.

When present, Board members and the chairpersons of the Audit, Board Risk, Nominations and Compensation Committees will address shareholders’ questions at general meetings. If a specifi c member of the Board to whom a question is addressed is not present, another member of the Board or an Offi cer of the Company who is present will address the question. Th e Company’s external auditors are also present to address shareholders’ queries relating to the conduct of audit and the preparation and content of the auditors’ report. Where deemed appropriate, the Board may call upon other professional service providers to address queries.

INTERESTED PERSON TRANSACTIONS

Th e Company has an internal policy in respect of any transactions with interested persons and has in place a process to review and approve any interested person transaction. For this fi nancial year, there were no interested person transactions pursuant to Rule 920 (excluding transactions less than S$100,000).

DEALINGS IN SECURITIES

In line with Rule 1204(18) of the Section B: Rules of Catalist of the SGX-ST Listing Manual on Dealing in Securities, the Company has devised and adopted its own internal compliance code to provide guidance to its offi cers with regards to dealing by the listed issuer and its offi cers in its securities by issuing circulars to its directors and employees, to remind them that (1) they should not deal in shares of the Company on short-term considerations or if they are in possession of unpublished material price-sensitive information; and (2) they are required to report on their dealings in shares of the Company. Th e directors and employees are also reminded of the prohibition in dealing in shares of the Company one month before the release of the half year and year-end fi nancial results and ending on the date of the announcement of the relevant results.

MATERIAL CONTRACTS

Except as disclosed in the accompanying fi nancial statements, there were no material contracts entered into by the Company or any of its subsidiaries involving the interest of the Chairman, the Chief Executive Offi cer, any Director, or controlling shareholder.

RISK MANAGEMENT POLICIES AND PROCESSES

Details of risk management policies and processes can be found in Note 25 to the accompanying fi nancial statements.

NON-AUDIT FEES

(a) Th e amount of non-audit fees paid to auditors of the Company is HK$47,000 (2009: HK$12,000); and

(b) Th e audit committee confi rms that it has undertaken a review of all non-audit services provided by the auditors and they would not, in the audit committee’s opinion, aff ect the independence of the auditors.

NON-SPONSORSHIP FEES

Th e amount of non-sponsor fees paid to the sponsor is HK$272,000 (2009: Nil).

23 REPORT OF THE DIRECTORS

26 STATEMENT BY THE DIRECTORS

27 REPORT OF THE INDEPENDENT AUDITORS

29 CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

30 STATEMENTS OF FINANCIAL POSITION

31 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

32 CONSOLIDATED STATEMENT OF CASH FLOWS

33 NOTES TO THE FINANCIAL STATEMENTS

63 STATISTICS OF SHAREHOLDINGS

65 NOTICE OF ANNUAL GENERAL MEETING

FINANCIAL CONTENTS

REPORT OF THE DIRECTORS


We are pleased to submit this annual report to the members of the Company, together with the audited fi nancial statements for the fi nancial year ended 31 March 2010.

Directors

Th e directors in offi ce at the date of this report are as follows:-

Teo Chew Seng @ Peter Chang Dicky Suen Yiu Chung Lau Hon Kit Lim Chee San Kung Seah Lim Wong Shun Cheong

Directors’ Interests

According to the register kept by the Company for the purposes of Section 164 of the Singapore Companies Act, Chapter 50 (the “Act”), particulars of interests of directors (including those held by their spouses and infant children) who held offi ce at the end of the fi nancial year in shares of the Company are as follows:-

Name of director and Companyin which interests are held

Holdings at the end of the year

Holdings at thebeginning of the year

Ordinary shares

Dicky Suen Yiu ChungSky One Holdings Limited – direct interests held 30,859,812 54,659,812 – deemed interests held 54,659,812 54,659,812

Lau Hon KitSky One Holdings Limited – direct interests held 13,220,492 23,420,492 – deemed interests held 23,328,492 23,328,492

Teo Chew Seng @ Peter ChangSky One Holdings Limited – direct interests held 2,886,665 2,886,665

By virtue of Section 7 of the Act, Dicky Suen Yiu Chung and Lau Hon Kit are deemed to have interests in all the ordinary shares of the Company’s wholly-owned subsidiaries.

Th ere were no changes in any of the above mentioned interests in the Company between the end of the fi nancial year and 21 April 2010.

Except as disclosed in this report, no director who held offi ce at the end of the fi nancial year had interests in shares, debentures, warrants or share options of the Company, or of related corporations, either at the beginning or at the end of the fi nancial year.

Neither at the end of, nor at any time during the fi nancial year, was the Company a party to any arrangement whose objects are, or one of whose objects is, to enable the directors of the Company to acquire benefi ts by means of the acquisition of shares in or debentures of the Company or any other body corporate.



Directors’ Interests (Cont’d)

Since the end of the last fi nancial year, no director has received or become entitled to receive, a benefi t by reason of a contract made by the Company or a related corporation with the director, or with a fi rm of which he is a member, or with a company in which he has a substantial fi nancial interest except for the directors’ remuneration and fee as disclosed in the accompanying fi nancial statements.

Sky One Holdings Limited Employee Share Option Scheme (“the Scheme”) and the Sky One Holdings Limited Performance Share Plan (“the Plan”)

Th e Scheme and the Plan were approved by the Shareholders at an Extraordinary General Meeting held on 7 May 2010. Th e Scheme and the Plan are administered by the Remuneration Committee comprising Mr Lim Chee San, Mr Peter Chang and Mr Wong Shun Cheong. Since the approval of the Scheme and the Plan by Shareholders and up to the date of this report, no director or employee of the Company and its subsidiaries have been granted shares in the Company or its subsidiaries nor options over shares in the Company or its subsidiaries in accordance with the Scheme and the Plan.

Audit Committee

Th e members of the Audit Committee during the year and at the date of this report are:- Chairman Kung Seah Lim Members Teo Chew Seng @ Peter Chang Lim Chee San

Th e Audit Committee carries out its functions in accordance with Section 201B(5) of the Singapore Companies Act, the Listing Manual and the Code of Corporate Governance and performs the following:-

(a) reviews with the external auditors the audit plan, their evaluation of the system of internal accounting controls, their letter to management and the management’s response;

(b) reviews the half-year and full year announcements and annual fi nancial statements and statement of fi nancial positions and statement of comprehensive income before submission to the Board for approval, focusing in particular on changes in accounting policies and practices, major risk areas, signifi cant adjustments resulting from the audit, compliance with accounting standards and compliance with the SGX-ST Listing Manual and any other relevant statutory or regulatory requirements;

(c) reviews the internal control procedures and ensure co-ordination between the external auditors and the management, and reviews the assistance given by the management to the auditors, and discusses problems and concerns, if any, arising from the interim and fi nal audits, and any matters which the auditors may wish to discuss in the absence of the management;

(d) reviews and discusses with the external auditors any suspected fraud or irregularity, or suspected infringement of any relevant laws, rules or regulations, which has or is likely to have a material impact on the Group’s operating results or fi nancial position and the management’s response;

(e) considers the appointment or re-appointment of the external auditors, the level of audit and non-audit fees and matters relating to the resignation or dismissal of the auditors;



Audit Committee (Cont’d)

(f) reviews interested person transactions (if any) falling within the scope of Chapter 9 of the SGX-ST Listing Manual;

(g) reviews potential confl icts of interest, if any;

(h) undertakes such other reviews and projects as may be requested by the Board and reports to the Board its fi ndings from time to time on matters arising and requiring the attention of the Audit Committee; and

(i) generally undertakes such other functions and duties as may be required by statute or the SGX-ST Listing Manual, or by such amendments as may be made thereto from time to time.

Th e Audit Committee has full access to management and is given the resources required for it to discharge its functions. It has full authority and the discretion to invite any director or executive offi cer to attend its meetings.

Th e Audit Committee has reviewed all the non-audit services provided by the external auditors and is satisfi ed with their independence and objectivity and has recommended to the Board of Directors that the auditors, Mazars LLP, be nominated for re-appointment as auditors at the forthcoming Annual General Meeting of the Company.

Auditors

Mazars LLP, Public Accountants and Certifi ed Public Accountants, has expressed their willingness to accept re-appointment.

On behalf of the Board of Directors

Dicky Suen Yiu Chung Lau Hon KitDirector Director

Date: 30 June 2010

STATEMENT BY THE DIRECTORS


In our opinion,

(a) the accompanying statements of fi nancial position, consolidated statement of comprehensive income, statements of changes in equity and consolidated statement of cash fl ows together with the notes thereon are drawn up so as to give a true and fair view of the state of aff airs of the Group and of the Company as at 31 March 2010 and of the results of business, changes in equity and cash fl ows of the Group for the year ended on that date in accordance with the provisions of the Singapore Companies Act, Chapter 50, and Singapore Financial Reporting Standards; and

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

On behalf of the Board of Directors

Dicky Suen Yiu Chung Lau Hon KitDirector Director

Date: 30 June 2010

To the Members of Sky One Holdings Limited

REPORT OF THE INDEPENDENT AUDITORS


We have audited the accompanying fi nancial statements of SKY ONE HOLDINGS LIMITED (the Company) and its subsidiaries (the Group), which comprise the statements of fi nancial position of the Group and the Company as at 31 March 2010, the statement of comprehensive income, statement of changes in equity and statement of cash fl ows of the Group for the year then ended, and a summary of signifi cant accounting policies and other explanatory notes, as set out on pages 29 to 62.

Management’s responsibility

Management is responsible for the preparation and fair presentation of these fi nancial statements in accordance with the provisions of the Singapore Companies Act, Cap. 50 (the “Act”), and Singapore Financial Reporting Standards. Th is responsibility includes: devising and maintaining a system of internal accounting controls suffi cient 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 consolidated profi t and loss accounts and balance sheets and to maintain accountability of assets; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances.

Auditors’ responsibility

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

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the fi nancial statements. Th e procedures selected depend on the auditors’ judgement, including the assessment of the risks of material misstatement of the fi nancial statements, whether due to fraud or error. In making those risk assessments, the auditors consider internal controls relevant to the entity’s preparation and fair presentation of the fi nancial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the eff ectiveness of the entity’s internal controls.

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 fi nancial statements.

To the Members of Sky One Holdings Limited

REPORT OF THE INDEPENDENT AUDITORS


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

In our opinion,

(a) the consolidated fi nancial statements of the Group and the statement of fi nancial position of the Company 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 aff airs of the Group and of the Company as at 31 March 2010 and of the results, changes in equity and cash fl ows of the Group for the year ended on that date; and

(b) the accounting and other records required by the Act to be kept by the Company have been properly kept in accordance with the provisions of the Act.

…………………………………………………… MAZARS LLP PUBLIC ACCOUNTANTS AND CERTIFIED PUBLIC ACCOUNTANTS

Partner in charge : Choo Chai Leong Date of appointment : 12 February 2008

Singapore

Date: 30 June 2010

For the Year Ended 31 March 2010

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME


Th e accompanying notes form an integral part of these fi nancial statements

GroupNote 2010 2009

HK$’000 HK$’000

Revenue 3 161,749 106,983

Cost of sales 4 (128,265) (69,995)

Gross profi t 33,484 36,988

Other income 5 840 1,035

Distribution and selling expenses (9,130) (5,911)

Administrative expenses (24,401) (29,892)

Finance costs 6 (203) (163)

Profi t before taxation 7 590 2,057

Income tax expenses 8 (546) (971)

PROFIT AFTER TAXATION 44 1,086

Other comprehensive (loss)/income:Currency translation diff erences (933) 734

TOTAL COMPREHENSIVE (LOSS)/INCOME (889) 1,820

Profi t attributable to:Shareholders of the Company 44 1,086

Total comprehensive (loss)/income attributable to:Shareholders of the Company (889) 1,820

Earnings per share (HK cents):

Basic 9 0.02 0.45

Diluted 9 0.02 0.45

As at 31 March 2010

STATEMENTS OF FINANCIAL POSITION



Group CompanyNote 31–Mar–10 31–Mar–09 31–Mar–10 31–Mar–09

HK$’000 HK$’000 HK$’000 HK$’000

Non-current assetsProperty, plant and equipment 10 8,234 9,232 – –Intangible assets 11 22,493 22,493 – –Investments in subsidiaries 12 – – 77,740 217,740

30,727 31,725 77,740 217,740

Current assetsTrade and other receivables 13 39,884 40,529 87 1,573Income tax recoverable 98 599 – –Pledged bank deposit 17 600 – – –Cash and cash equivalents 14 17,412 6,514 5,760 87

57,994 47,642 5,847 1,660

Total assets 88,721 79,367 83,587 219,400

Equity attributable to equity holders of the Company

Share capital 15 298,323 298,323 298,323 298,323Reserves 16 (282,178) (281,245) (208) 725Accumulated profi ts/(losses) 47,897 47,853 (233,471) (91,268)

Total equity 64,042 64,931 64,644 207,780

Non-current liabilitiesFinancial liabilities 17 509 861 – –Deferred tax liabilities 18 149 295 – –

658 1,156 – –

Current liabilitiesTrade and other payables 19 13,458 11,650 1,266 4,012Investor deposit pending new

share issue 26(b) 6,662 – 6,662 –Financial liabilities 17 3,901 1,630 – –Amounts owing to subsidiaries 20 – – 11,015 7,608

24,021 13,280 18,943 11,620

Total liabilities 24,679 14,436 18,943 11,620

Total equity and liabilities 88,721 79,367 83,587 219,400


CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

31Sky One Holdings Limited Annual Report 2010 31


NoteShare

capitalCapitalreserve

Currencytranslation

reserveAccumulated

profi tsTotal

equityGroup HK$’000 HK$’000 HK$’000 HK$’000 HK$’000

At 1 April 2008 298,323 (281,970) (9) 48,557 64,901

Total comprehensive income for the year – – 734 1,086 1,820

Dividends 23 – – – (1,790) (1,790)

At 1 April 2009 298,323 (281,970) 725 47,853 64,931

Total comprehensive (loss)/income for the year – – (933) 44 (889)

At 31 March 2010 298,323 (281,970) (208) 47,897 64,042


CONSOLIDATED STATEMENT OF CASH FLOWS



2010 2009Note HK$’000 HK$’000

Operating activitiesProfi t before taxation 590 2,057

Adjustments for:Interest expenses 203 163Depreciation of property, plant and equipment 2,587 2,595Bad trade receivables written-off 18 160Gain on disposal of property, plant and equipment (420) (756)Unrealised exchange (gain)/loss (734) 487

Operating profi t before working capital changes 2,244 4,706

Changes in working capital:Trade and other receivables 729 6,788Trade and other payables 1,381 (119)

Cash generated from operations 4,354 11,375Interest paid (203) (163)Income taxes paid (190) (9,356)

Net cash generated from operating activities 3,961 1,856

Investing activities Proceeds from sale of property, plant and equipment 420 1,208Purchases of property, plant and equipment (564) (1,969)

Net cash used in investing activities (144) (761)

Financing activities Investor deposit pending new share issue 26(b) 6,662 –Dividends paid – (1,790)Pledged bank balance (600) –Payment of capital element of fi nance lease liabilities (418) (426)Repayment of bank loans (1,589) (960)Proceeds from bank loans 2,900 3,000

Net cash generated from/(used in) fi nancing activities 6,955 (176)

Net increase in cash and cash equivalents 10,772 919

Cash and cash equivalents at beginning of year 6,514 5,593

Eff ect of exchange rate changes on cash and cash equivalents 126 2

Cash and cash equivalents at end of year 14 17,412 6,514

Non-cash transaction

During the fi nancial year, the Group acquired plant and equipment with an aggregate cost of HK$1,589,000 (2009: HK$2,113,000) of which HK$1,025,000 (2009: HK$144,000) was acquired by means of fi nance lease. Cash payment of HK$564,000 (2009: HK$1,969,000) were made to purchase plant and equipment.

31 March 2010

NOTES TO THE FINANCIAL STATEMENTS


Th ese notes form an integral part of the fi nancial statements.

1. General

SKY ONE HOLDINGS LIMITED (“the Company”) is a limited liability company incorporated in the Republic of Singapore and has its registered offi ce at 333 North Bridge Road #08-00, KH KEA Building, Singapore 188721. Th e principal place of business is at Sky One Logistic Centre, 7A Ho Tung Garden, Ho Tung Bridge, Kwu Tung, Sheung Shui, Hong Kong.

Th e principal activity of the Company is investment holding. Th e principal activities of its subsidiaries are disclosed in Note 12.

Th e consolidated fi nancial statements relate to the Company and its subsidiaries (“the Group”).

2. Summary of Signifi cant Accounting Policies

2.1 Basis of preparation

Th e fi nancial statements are prepared in accordance with Singapore Financial Reporting Standards (FRS).

Th e fi nancial statements have been prepared on the historical cost basis except as disclosed in the accounting policies below.

Th e fi nancial statements are presented in Hong Kong dollars (“HK$”) which is also the functional currency of the subsidiaries. Th e Company’s functional currency is in Singapore dollars and in line with the Group’s presentation currency, the Company’s fi nancial statements are therefore presented in HK$. All fi nancial information presented in HK$ have been rounded to the nearest thousand, unless otherwise stated.

Th e preparation of fi nancial statements requires management to make judgements, estimates and assumptions that aff ect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may diff er from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised and in any future periods aff ected. Th e key accounting estimates and critical accounting judgements are disclosed in Note 29 to the fi nancial statements.

Th e estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised, if the revision aff ects only that period, or in the period of the revision and future periods, if the revision aff ects both current and future periods.

During the fi nancial year, the Group adopted all the new and revised FRSs that are mandatory and relevant to its operations, and eff ective for annual periods beginning on or aft er April 2009.

Th e following are the FRS that are relevant to the Group:-

FRS 1 (revised 2008) Presentation of fi nancial statements which became eff ective as of 1 January 2009 requires an entity to present, in a statement of changes in equity, all owner changes in equity. All non-owner changes in equity (i.e. statement of comprehensive income) are required to be presented in one statement of comprehensive income or in two statements (a separate income statement and a statement of comprehensive income). Components of comprehensive income are not permitted to be presented in the statement of changes in equity. Comparative information has been re-presented so that it also is in conformity with the revised standard. Th e Group and the Company has adopted the single statement of comprehensive income for its presentation. Th ere is no impact on earnings per share as the change in accounting policy only impacts presentation aspects.

31 March 2010



2. Summary of Signifi cant Accounting Policies (Cont’d)

2.1 Basis of preparation (Cont’d)

FRS 107 (amendment) Improving disclosures about fi nancial instruments which became eff ective as of 1 January 2009 requires enhanced disclosures about fair value measurement and liquidity risk. In particular, the amendment requires disclosure of fair value measurements by level of a fair value measurement hierarchy. Th ere is no impact on the accounting policies and measurement on the fi nancial statements as the adoption of the amendment results only in additional disclosures.

FRS 108 Operating segments which became eff ective as of 1 January 2009 requires segment reporting to be made on the basis of internal reports that are regularly reviewed by the entity’s chief operating decision maker in order to allocate resources to the segment and assess its performance. Previously FRS 14 defi ned segment revenue, segment expense, segment result, segment assets and segment liabilities. Th e new FRS does not defi ne these terms, but requires an explanation of how segment profi t or loss, segment assets and segment liabilities are measured for each reportable segment. Comparative segment information has been re-presented in conformity with the transitional requirements of such standard. Th ere is no impact on earnings per share as the change in accounting policy only impacts presentation and disclosure aspects.

Th e adoption of these new/revised FRSs does not result in changes to the Group’s accounting policies and has no material eff ect on the amounts reported for the current or prior years.

2.2 Consolidation

Subsidiaries are companies controlled by the Company. Control exists when the Company has the power, directly or indirectly, to govern the fi nancial and operating policies of a company so as to obtain benefi ts from its activities. In assessing control, potential voting rights that presently are exercisable are taken into account. Th e fi nancial statements of subsidiaries are included in the consolidated fi nancial statements from the date that control commences until the date that control ceases.

Investments in subsidiaries are stated in the Company’s statement of fi nancial position at cost less accumulated impairment losses, if any.

Business combinations are accounted for under the purchase method. Th e cost of an acquisition is measured at the fair value of the assets given, equity instruments issued and liabilities incurred or assumed at the date of exchange, plus costs directly attributable to the acquisition. Th e excess of the Group’s interest in the net fair value of the identifi able assets, liabilities and contingent liabilities over the cost of acquisition is credited to the statement of comprehensive income in the period of the acquisition.

Transactions eliminated on consolidation

Intra-group balances, and any unrealised income or expenses arising from intra-group transactions, are eliminated in preparing the consolidated fi nancial statements. Unrealised gains arising from transactions with equity accounted investees are eliminated against the investment to the extent of the Group’s interest in the investee. Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of impairment.

31 March 2010




2.3 Foreign currencies

Foreign currency transactions

Transactions in foreign currencies are translated to the respective functional currencies of Group entities at the exchange rates at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies at the reporting date are translated to the functional currency at the exchange rate ruling at the reporting date. Non-monetary assets and liabilities denominated in foreign currencies that are measured at fair value are translated to the functional currency at the exchange rate at the date on which the fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated.

Foreign currency diff erences arising on translation are recognised in the consolidated statement of comprehensive income, except for diff erences arising on the translation of monetary items that in substance form part of the Group’s net investment in a foreign operation.

Translation of functional currency to presentation currency

For the purpose of presenting consolidated fi nancial statements, the assets and liabilities of the Company are translated to HK$ at exchange rates prevailing at the reporting date. Th e income and expenses of the Company are translated to HK$ at exchange rates prevailing at the average exchange rates for the period, unless exchange rates fl uctuated signifi cantly during that period, in which are the exchange rates at the dates of the transactions are used. All resulting foreign currency diff erences are recognised in the foreign currency translation reserve.

2.4 Property, plant and equipment

Property, plant and equipment are stated at cost less accumulated depreciation and impairment losses, if any. Th e cost of an asset comprises its purchase price and any directly attributable costs of bringing the asset to its working conditions for its intended use.

Property, plant and equipment acquired through fi nance leases are capitalised at the lower of its fair value and the present value of the minimum lease payments at the inception of the lease, less accumulated depreciation and impairment losses. Lease payments are apportioned between fi nance charges and reductions of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are charged directly against the consolidated statement of comprehensive income. Capitalised leased assets are depreciated over the shorter of the economic useful life of the asset and the lease term.

Depreciation is provided on a straight-line basis so as to write off items of property, plant and equipment over their estimated useful lives at the following annual rates:-

Leasehold building and improvement 13.4% - 20% Furniture, fi xtures and equipment 20% Motor vehicles 30%

Fully depreciated assets still in use are retained in the consolidated fi nancial statements until they are no longer in use.

Depreciation methods, useful lives and residual values are reviewed, and adjusted as appropriate at the end of each reporting date.

An item of property, plant and equipment is derecognised upon disposal or when no future economic benefi ts are expected from its use or disposal. Any gain or loss on derecognition of the assets is included in the consolidated statement of comprehensive income in the year the asset is derecognised.

31 March 2010




2.5 Intangible assets

Goodwill

Goodwill in a business combination represents the excess of the cost of acquisition over the fair value of the Group’s share of the identifi able net assets acquired. Goodwill is stated at cost less any accumulated impairment losses.

Goodwill is tested for impairment on an annual basis as described in Note 2.11.

On disposal of a subsidiary, the attributable amount of goodwill is included in determining the gain or loss on disposal.

2.6 Financial assets

Financial assets within the scope of FRS 39 are classifi ed as either fi nancial assets at fair value through profi t or loss, loans and receivables, held-to-maturity investments, or available-for-sale fi nancial assets, as appropriate. Financial assets are recognised on the statements of fi nancial positions when, and only when, the Group becomes a party to the contractual provisions of the fi nancial instrument.

When fi nancial assets are recognised initially, they are measured at fair value, plus, in the case of fi nancial assets not at fair value through profi t or loss, directly attributable transaction costs. Th e Group determines the classifi cation of its fi nancial assets aft er initial recognition and, where allowed and appropriate, re-evaluates this designation at each year-end.

All regular way purchases and sales of fi nancial assets are recognised on the trade date i.e. the date that the Group commits to purchase the asset or sell the asset. Regular way purchases or sales are purchases or sales of fi nancial assets that require delivery of assets within the period generally established by regulation or convention in the market place concerned.

Loans and receivables

Non-derivative fi nancial assets with fi xed or determinable payments that are not quoted in an active market are classifi ed as loans and receivables. Such assets are carried at amortised cost using the eff ective interest method. Gains and losses are recognised in the consolidated statement of comprehensive income when the loans and receivables are derecognised or impaired, as well as through the amortisation process.

2.7 Financial liabilities

Financial liabilities are recognised on the statements of fi nancial positions when, and only when, the Group becomes a party to the contractual provisions of the fi nancial instrument.

Financial liabilities are recognised initially at fair value, plus, directly attributable transaction costs.

Subsequent to initial recognition, all fi nancial liabilities are measured at amortised cost using the eff ective interest method.

A fi nancial liability is derecognised when the obligation under the liability is extinguished. Gains and losses are recognised in the consolidated statement of comprehensive income when the liabilities are derecognised, and through the amortisation process.

31 March 2010




2.8 Non-derivative fi nancial instruments

Non-derivative fi nancial instruments comprise investments in equity, trade and other receivables, cash and cash equivalents, fi nancial liabilities, and trade and other payables.

Non-derivative fi nancial instruments such as receivables and payables are recognised initially at fair value. Subsequent to initial recognition, they are measured at amortised cost using the eff ective interest method, less any impairment losses.

A fi nancial instrument is recognised if the Group becomes a party to the contractual provisions of the instrument. Financial assets are derecognised if the Group’s contractual rights to the cash fl ows from the fi nancial assets expire or if the Group transfers the fi nancial asset to another party without retaining control or transfers substantially all the risks and rewards of the asset. Regular way purchases and sales of fi nancial assets are accounted for at trade date, i.e., the date that the Group commits itself to purchase or sell the asset. Financial liabilities are derecognised if the Group’s obligations specifi ed in the contract expire or are discharged or cancelled.

2.9 Cash and cash equivalents

Cash and cash equivalents excluding pledged bank deposits comprise cash on hand, demand deposits and short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignifi cant risk of changes in value.

2.10 Share capital

Ordinary shares are classifi ed as equity. Incremental costs directly attributable to the issuance of new ordinary shares are deducted against share capital account.

2.11 Impairment

Impairment of fi nancial assets

A fi nancial asset is considered to be impaired if objective evidence indicates that one or more events have had a negative eff ect on the estimated future cash fl ows of that asset.

An impairment loss in respect of a fi nancial asset measured at amortised cost is calculated as the diff erence between its carrying amount, and the present value of the estimated future cash fl ows discounted at the original eff ective interest rate. Th e carrying amount of the asset is reduced through the use of an allowance account.

Individually signifi cant fi nancial assets are tested for impairment on an individual basis. Th e remaining fi nancial assets are assessed collectively in groups that share similar credit risk characteristics.

All impairment losses are recognised in the consolidated statement of comprehensive income.

Impairment of non-fi nancial assets

Th e carrying amounts of the Group’s non-fi nancial assets are reviewed at the end of each reporting date to determine whether there is any indication of impairment. If any such indication exists, the assets’ recoverable amounts are estimated. An impairment loss is recognised whenever the carrying amount of an asset or its cash-generating unit exceeds its recoverable amount. Th e impairment loss is charged to the consolidated statement of comprehensive income unless it reverses a previous revaluation, taken to other comprehensive income, in which case it is recognised in other comprehensive income up to the amount of any revaluation.

31 March 2010




2.11 Impairment (Cont’d)

Impairment of non-fi nancial assets (Cont’d)

Goodwill is tested for impairment annually and as and when indicators of impairment are identifi ed.

Impairment losses recognised in respect of cash-generating units are allocated fi rst to reduce the carrying amount of any goodwill allocated to cash-generating units (group of units) and then, to reduce the carrying amount of the other assets in the unit (group of units) on a pro rata basis.

Calculation of recoverable amount

Th e recoverable amount of other assets is the greater of their net selling price and value in use. In assessing value in use, the estimated future cash fl ows are discounted to their present value using a pre-tax discount rate that refl ects current market assessments of the time value of money and the risks specifi c to the asset. For an asset that does not generate largely independent cash infl ows, the recoverable amount is determined for the cash-generating unit to which the asset belongs.

Reversals of impairment

An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. However, an impairment loss in respect of goodwill is not reversed.

An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of accumulated depreciation or amortisation, if no impairment loss had been recognised.

2.12 Employee benefi ts

Defi ned contribution plans

Obligations for contributions to defi ned contribution plans are recognised as an expense in the consolidated statement of comprehensive income in the period in which the related service is performed.

Short-term benefi ts

Short-term employee benefi t obligations are measured on an undiscounted basis and are expensed as the related service is provided.

A provision is recognised for the amount expected to be paid under short-term cash bonus or profi t-sharing plans if the Group has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably.

2.13 Income taxes

Current income tax liabilities (and assets) for current and prior periods are recognised in the consolidated statement of comprehensive income for the period at the amounts expected to be paid to (or recovered from) the tax authorities, using the tax rates (and tax laws) that have been enacted or substantially enacted at the reporting date.

31 March 2010




2.13 Income taxes (Cont’d)

Deferred tax is provided in full, using the liability method, on temporary diff erences arising between the tax bases of assets and liabilities and their carrying amounts in the fi nancial statements. Temporary diff erences are not recognised for goodwill not deductible for tax purposes and for the initial recognition of assets or liabilities that aff ect neither accounting nor taxable profi t. Th e amount of deferred tax provided is based on the expected manner of realisation or settlement of the carrying amount of assets and liabilities, using tax rates enacted or substantively enacted at the reporting date.

A deferred tax asset is recognised to the extent that it is probable that future taxable profi t will be available against which the temporary diff erences can be utilised. Deferred tax is provided on temporary diff erences arising on investments in subsidiaries, associates and joint ventures, except where the timing of the reversal of the temporary diff erence can be controlled and it is probable that the temporary diff erence will not be reversed in the foreseeable future.

2.14 Revenue recognition

Revenue is recognised at the fair value of the consideration received or receivable. Revenue is recognised when it is probable that the economic benefi ts will fl ow to the Group and when the revenue can be measured reliably, on the following basis:-

Services rendered

Service revenue is recognised when the services are rendered and accepted by customers.

2.15 Operating leases

Where the Group has the use of assets under operating leases, payments made under the leases are recognised in the consolidated statement of comprehensive income on a straight-line basis over the term of the lease. Lease incentives received are recognised in the consolidated statement of comprehensive income as an integral part of the total lease payments made.

2.16 Finance expenses

Finance expenses comprise interest expense on borrowings and fi nance lease which are recognised in the consolidated statement of comprehensive income using the eff ective interest method.

2.17 Related parties

A party is related to the Group if:-

(a) directly, or indirectly through one or more intermediaries, the party controls, is controlled by, or is under common control with, the Group; or has an interest in the Group that gives it signifi cant infl uence over the Group; or has joint control over the Group;

(b) the party is an associate of the Group;

(c) the party is a joint venture in which the Group is a venturer;

31 March 2010




2.17 Related parties (Cont’d)

(d) the party is a member of the key management personnel of the Group or its parent;

(e) the party is a close member of the family of any individual referred to in (a) or (d);

(f) the party is an entity that is controlled, jointly controlled or signifi cantly infl uenced by or for which signifi cant voting power in such entity resides with, directly or indirectly, any individual referred to in (d) or (e); or

(g) the party is a post-employment benefi t plan for the benefi ts of employees of the Group, or of any entity that is a related party of the Group.

Key management personnel

Key management personnel are those persons having the authority and responsibility for planning, directing and controlling the activities of the Group.

2.18 Segment reporting

Operating segment are reported in a manner consistent with the internal reporting provided to the executive committee whose members are responsible for allocating and assessing performance of the operating segments.

2.19 Contingencies

A contingent asset or liability is a possible asset or obligation that arises from past events and whose existence will be confi rmed only by the occurrence or non-occurrence of uncertain future events not wholly within the control of the Group. Contingent assets and liabilities are not recognised in the fi nancial statements.

3. Revenue

Group2010 2009

HK$’000 HK$’000

Services rendered for provision of logistics services 161,749 106,983

4. Cost of Sales

Group2010 2009

HK$’000 HK$’000

Customs declaration and handling costs 38,967 42,120Transportation costs 89,134 27,683Packing materials 164 192

128,265 69,995

31 March 2010



5. Other Income

Group2010 2009

HK$’000 HK$’000

Gain on disposal of property, plant and equipment 420 756Sundry income 420 279

840 1,035

6. Finance Costs

Group2010 2009

HK$’000 HK$’000

Interest expenses:– banks 148 105– fi nance lease liabilities 55 58

203 163

7. Profi t Before Taxation

Th e following items have been included in arriving at profi t before taxation:-

GroupNote 2010 2009

HK$’000 HK$’000

Gain on disposal of property, plant and equipment (420) (756)Non-audit fees to auditors of the Company 47 12Bad trade receivables written-off 18 160Depreciation of property, plant and equipment 2,587 2,595Directors’ remuneration 7(a) 2,087 2,270Foreign exchange adjustment (gain)/loss (609) 617Rental of offi ce premises 1,468 1,621Staff costs 7(a) 19,243 18,441

31 March 2010



7. Profi t Before Taxation (Cont’d)

(a) Salaries and Wages

GroupNote 2010 2009

HK$’000 HK$’000

Staff costsSalaries and allowances 17,121 16,702Defi ned contribution plans 399 696Staff welfare and training 230 382Other key management personnel 7(b) 1,493 661

Total Staff costs 19,243 18,441

Directors’ remuneration – Directors’ of the Company – Directors’ fees 543 751

543 751

– Directors’ of subsidiaries – Salaries and allowance 1,520 1,495 – Defi ned contribution plans 24 24

1,544 1,519

Total Directors’ remuneration 2,087 2,270

(b) Other key management personnel

Key Management Personnel Compensation other than directors included in Staff Costs are as follows:-

Group2010 2009

HK$’000 HK$’000

Salaries and allowances 1,458 649Contributions to defi ned contribution plans 35 12

1,493 661

31 March 2010



8. Income tax expenses

GroupNote 2010 2009

HK$’000 HK$’000

Current tax expenseCurrent year 692 1,064Surcharge – 40Overprovided in prior years – (49)

692 1,055

Deferred tax expenseOrigination and reversal of temporary diff erences 18 (146) (84)

Total tax expenses 546 971

Reconciliation of eff ective tax rate:-

Group2010 2009

HK$’000 HK$’000

Profi t before taxation 590 2,057

Income tax using Hong Kong tax rates of 16.5% 97 339Expenses not deductible for tax purposes 449 641Surcharge – 40Overprovided in prior years – (49)

Total tax expenses 546 971

9. Earnings Per Share

Basic Earnings Per Share

Group2010 2009

HK$’000 HK$’000

Basic earnings per share is based on:Profi t for the year attributable to ordinary shareholders 44 1,086

No. ofShares

No. ofshares

(’000) (’000)

Weighted average number of ordinary shares 243,200 243,200

Th ere were no movements in the number of ordinary shares during each of the fi nancial years.

31 March 2010



9. Earnings Per Share (Cont’d)

Diluted Earnings Per Share

Th ere were no potential dilutive ordinary shares existing during each of the fi nancial years.

Diluted earnings per share is calculated as equal to basic earnings per share for both the year ended 31 March 2010 and the year ended 31 March 2009 as there were no outstanding share options as at the reporting dates.

10. Property, Plant and Equipment

Leasehold building &

improvement

Furniture, fi xture &

equipment Motorvehicles

Total Group HK$’000 HK$’000 HK$’000 HK$’000

CostAt 1/4/2009 7,666 3,851 3,803 15,320Additions – 389 1,200 1,589Disposals – – (641) (641)At 31/3/2010 7,666 4,240 4,362 16,268

Accumulated depreciationAt 1/4/2009 1,950 1,962 2,176 6,088Charge for the year 1,008 624 955 2,587Disposals – – (641) (641)

At 31/3/2010 2,958 2,586 2,490 8,034

Carrying amountsAt 31/3/2010 4,708 1,654 1,872 8,234

CostAt 1/4/2008 7,334 3,561 4,193 15,088Additions 332 290 1,491 2,113Disposals – – (1,881) (1,881)

At 31/3/2009 7,666 3,851 3,803 15,320

Accumulated depreciationAt 1/4/2008 964 1,334 2,624 4,922Charge for the year 986 628 981 2,595Disposals – – (1,429) (1,429)

At 31/3/2009 1,950 1,962 2,176 6,088

Carrying amountsAt 31/3/2009 5,716 1,889 1,627 9,232

During the year, additions to motor vehicles fi nanced by new fi nance leases were HK$1,025,000 (2009: Nil). At the reporting date, the carrying amount of motor vehicles includes an amount of HK$902,000 (2009: HK$316,000) held under fi nance leases.

31 March 2010



10. Property, Plant and Equipment (Cont’d)

During the year, additions to furniture, fi xture and equipment fi nanced by new fi nance leases were HK$Nil (2009: HK$144,000). At the reporting date, the carrying amount of furniture, fi xture and equipment includes an amount of HK$382,000 (2009: HK$516,000) held under fi nance leases.

Th e leasehold building is located at 7A, Ho Tung Garden, Ho Tung Bridge, Kwu Tung, Sheung Shui, New Territories, Hong Kong. Th e lease expires on 30 September 2014.

11. Intangible Assets

Group31-Mar-10 31-Mar-09HK$’000 HK$’000

Goodwill, at cost 22,493 22,493

Th e above goodwill arose from the reverse business acquisition on 28 January 2008. For the purpose of impairment testing of this goodwill, the recoverable amount of the cash generating unit relating to the Company’s subsidiaries is determined based on value in use using cash fl ows projections from fi nancial budgets approved by management covering a 5-year period.

Th e pre-tax discount rate applied to the cash fl ow projections is 6% (2009: 6%).

Th e calculations of value in use are most sensitive to assumptions including budgeted gross margins based on past experience or external sources, growth rates and pre-tax discount rates.

As at 31 March 2010, no impairment loss was recognised.

12. Investments in Subsidiaries

Company31-Mar-10 31-Mar-09HK$’000 HK$’000

Unquoted equity investments, at cost 217,740 217,740Less: Impairment loss (140,000) –

77,740 217,740

As a result of a review of the recoverable amount of its cost of investment in subsidiaries at the Company level, an impairment loss of HK$140 million representing the write-down of these investments to the recoverable amount was recognised in the profi t and loss of the Company for the fi nancial year ended 31 March 2010. Th e recoverable amount has been estimated aft er taking into consideration the net assets of the subsidiaries and their value in use which is based on the estimated future cash fl ows expected to be generated by the subsidiaries.

Th e adjustment has no eff ect on the Group’s statement of fi nancial position as at 31 March 2010, the consolidated statement of comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash fl ows of the Group for the fi nancial year ended 31 March 2010 as the above impairment is reversed for the purpose of the preparation of the consolidated fi nancial statements of the Group.

31 March 2010



12. Investments in Subsidiaries (Cont’d)

Name of subsidiary

Country of incorporation/operation Principal activities

Eff ective equityheld by the Group

31-Mar-10 31-Mar-09% %

Held by the Company1 Sky One Network (Holding) Ltd British Virgin Islands Investment holding 100 100

Held by subsidiary Company2 Sky One Express (HK) Limited Hong Kong Provision of total logistics

services (including freight and inland transportation of air and sea cargo, and warehousing)

100 100

2 Sky One International Freight Limited

Hong Kong Provision of total logistics services (including freight and inland transportation of air and sea cargo, and warehousing)

100 100

1 Audited by Mazars LLP, Singapore for consolidation purposes. 2 Audited by Dominic K.F. Chan & Co., Certifi ed Public Accountants, Hong Kong and reviewed by Mazars LLP for consolidation

purposes.

13. Trade and Other Receivables

Group Company31-Mar-10 31-Mar-09 31-Mar-10 31-Mar-09HK$’000 HK$’000 HK$’000 HK$’000

Trade receivables 26,632 22,224 – –Less: Bad debts written off (18) (160) – –

Net receivables 26,614 22,064 – –Deposits 11,485 12,032 1 –Prepayments 183 1,564 86 1,573Advances to suppliers – 4,199 – –Other receivables 1,602 670 – –

39,884 40,529 87 1,573

Trade receivables are non-interest bearing and are generally on 15 to 180 days term for credit payments. Th e deposits are placed with a business associate in the ordinary course of business.

31 March 2010



13. Trade and Other Receivables (Cont’d)

Trade and other receivables at the reporting date are denominated in the following currencies:-


Trade receivablesUS dollars 5,384 – – –Euro 25 – – –Hong Kong dollars 21,205 22,064 – –

26,614 22,064 – –

DepositsSingapore dollars 1 – 1 –Hong Kong dollars 11,484 12,032 – –

11,485 12,032 1 –

PrepaymentsSingapore dollars 86 1,564 86 1,573Hong Kong dollars 97 – – –

183 1,564 86 1,573

Advances to suppliersHong Kong dollars – 4,199 – –

– 4,199 – –

Other receivablesHong Kong dollars 1,602 670 – –

1,602 670 – –

Impairment losses

Th e aging of trade receivables at the reporting date is as follows:-

Group31-Mar-10 31-Mar-09HK$’000 HK$’000

Not past due 13,957 5,369Past due 1 – 30 days 7,613 3,842Past due 31 – 90 days 4,850 3,594Past due 91 – 180 days 175 2,992Past due 180 days – 1 year 19 3,704Over 1 year – 2,563

Total 26,614 22,064

Known bad debts are written-off . Management believes that no impairment allowance is necessary in respect of the remaining trade receivables that are past due based on the historical experience with these customers. Th ese receivables are not secured by any collateral or credit enhancements.

31 March 2010



14. Cash and Cash Equivalents


Cash at bank and in hand 17,412 6,514 5,760 87

Cash and cash equivalents in the cash fl ow statement 17,412 6,514 5,760 87

Cash at bank and in hand are non interest-bearing.

Cash and bank balances at the reporting date are denominated in the following currencies:-


Singapore dollar 5,833 258 5,760 87US Dollar 86 124 – –Euro 18 – – –Australian Dollar 6 – – –Hong Kong Dollar 11,469 6,132 – –

17,412 6,514 5,760 87

15. Share Capital

Movements in shares and share capital is as follows:-

Group and Company2010 2009 2010 2009

No. of ordinary shares HK$’000 HK$’000

Issued and paid up, with no par valueAt beginning of year 243,199,998 243,199,998 298,323 298,323

At end of year 243,199,998 243,199,998 298,323 298,323

Th ere were no movements in the number of ordinary shares during each of the fi nancial years.

Th e holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at meetings of the Company. All shares rank equally with regard to the Company’s residential assets.

Th ere were no outstanding share options as at the reporting date.

31 March 2010



16. Reserves

Th e capital reserve arises from the accounting for reverse acquisition on 28 January 2008. Th e amount recognised as issued equity instruments in the consolidated fi nancial statements is the issued equity of the Acquired Group immediately before the acquisition plus the costs of the acquisition calculated from the perspective of the Company. However, the equity structure appearing on the consolidated fi nancial statements (i.e. the number and type of equity instruments issued) refl ect the equity structure of the Company, including the equity instruments issued by the Company to refl ect the combination; and accordingly, a capital reserve of HK$281,970,000 (debit balance) was created in the shareholders equity of the Group in the accounting for the reverse acquisition.

Th e currency translation reserve comprised foreign exchange diff erences arising from the translation of the fi nancial statements of the Company whose functional currencies are diff erent from that of the Group’s presentation currency.

17. Financial Liabilities

Group31-Mar-10 31-Mar-09HK $’000 HK $’000

Non-current liabilitiesSecured bank loans – 661Finance lease liabilities 509 200

509 861

Current liabilitiesSecured bank loans 3,351 1,379Finance lease liabilities 550 251

3,901 1,630

Total fi nancial liabilities 4,410 2,491

Maturity of liabilities (excluding fi nance lease liabilities)

Group31-Mar-10 31-Mar-09HK $’000 HK $’000

Within 1 year 3,351 1,379Aft er 1 year but within 2 years – 661

Total borrowings 3,351 2,040

An outstanding bank loan of HK$581,000 (2009: HK$2,040,000) is secured by a corporate guarantee given by a subsidiary. Interest is charged at 1% per annum over the HKD prime rate. Th e loan is for a 2-year term repayable in monthly equal instalments with the last instalment ending in July 2010. Th e eff ective interest rate charged for the year is 6.2% per annum.

An outstanding bank loan of HK$770,000 (2009: HK$Nil) is secured by personal guarantees given by the directors of a subsidiary. Interest is charged at 1% per annum below the HKD prime rate. Th e loan is for a 1-year term repayable in monthly equal instalments with the last instalment ending in February 2011. Th e eff ective interest rate charged for the year is 4.2% per annum.

31 March 2010



17. Financial Liabilities (Cont’d)

Maturity of liabilities (excluding fi nance lease liabilities) (Cont’d)

An outstanding bank loan of HK$2,000,000 (2009: Nil) is secured by a corporate guarantee given by the Company and a cash pledge of HK$600,000 held in a savings account with the lender bank. Interest is charged at 0.5% per annum over the HKD prime rate. Th e loan is on a revolving basis for a 90-day term repayable at the end of the term. Th e eff ective interest rate charged for the year is 5.5% per annum. Th e limit of this facility is HK$7,000,000 (2009: HK$Nil) which may be drawndown anytime up to August 2010, aft er which the facility would be subject to review by the lender bank.

Finance lease liabilities

At 31 March 2010, the Group has obligations under fi nance leases that are payable as follows:-

Group31-Mar-10 31-Mar-09

Principal Interest Payments Principal Interest PaymentsHK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000

Repayable within 1 year 550 57 607 251 33 284Repayable aft er 1 year

but within 5 years 509 40 549 200 8 208

Total 1,059 97 1,156 451 41 492

Finance lease liabilities bear interests at eff ective rate of approximately 7.3% (2009: 10.0%) per annum.

18. Deferred Tax Liabilities

Movements in deferred tax assets and liabilities during the year are as follows:-

At1 April

2009

Credited toStatement of

Comprehensive Income(Note 8)

At31 March

2010Group HK$’000 HK$’000 HK$’000

Deferred tax liabilitiesProperty, plant and equipment 295 (146) 149

At1 April

2008

Credited toStatement of

Comprehensive Income(Note 8)

At31 March

2009Group HK$’000 HK$’000 HK$’000

Deferred tax liabilitiesProperty, plant and equipment 379 (84) 295

31 March 2010



19. Trade and Other Payables


Trade payables 9,993 7,069 489 1,669Other payables 3,465 4,581 777 2,343

13,458 11,650 1,266 4,012

Trade and other payables at the reporting date are denominated in the following currencies:-


Trade payablesSingapore dollars 489 1,669 489 1,669US dollars 406 8 – –Euro 142 – – –Australian dollars 1 6 – –British pound 63 31 – –Hong Kong dollars 8,892 5,355 – –

9,993 7,069 489 1,669

Other payablesSingapore dollars 777 2,343 777 2,343Hong Kong dollars 2,688 2,238 – –

3,465 4,581 777 2,343

Trade payables have normal credit terms of 30 days (2009: 30 days) but generally repaid within 24 days (2009: 32 days).

20. Amounts Owing to Subsidiaries

Th e amounts are non-trade in nature, unsecured, interest-free and are repayable on demand.

Th e directors of the Company consider that the fair values of these fi nancial liabilities approximate the corresponding carrying amounts.

21. Segment Reporting

Segment information is presented in respect of the Group’s business and geographical segments. Th e primary format – business segments is based on the Group’s management and internal reporting structure.

Segment results, assets and liabilities include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. Unallocated items mainly comprise corporate assets and expenses, interest income, interest expenses and related assets and liabilities.

31 March 2010



21. Segment Reporting (Cont’d)

Th e Group comprises the following main business segments:-

Express Land Transport: Provision of land transportation, freight and courier services.

Airfreight: Provision of air transportation and freight services.

Both the Express Land Transport and Airfreight segments are managed and operated in Hong Kong.

Business segments

Express LandTransport

Airfreight Corporate TOTAL

FY2010 FY2009 FY2010 FY2009 FY2010 FY2009 FY2010 FY2009HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000

Revenue 84,822 101,944 76,927 5,039 – – 161,749 106,983

Results: Segment results 24,148 36,193 9,336 795 – 33,484 36,988Other income 839 1,035 1 – – 840 1,035Selling and Distribution

expenses (5,500) (5,911) (3,630) – – (9,130) (5,911)Administrative expenses (21,335) (25,846) (737) – (2,329) (4,046) (24,401) (29,892)Finance costs (168) (163) (35) – – – (203) (163)Taxation1 (546) (971)

Profi t attributable to shareholders 44 1,086

Assets: Segment assets 36,201 47,403 11,830 785 87 1,574 48,118 49,762Unallocated assets2 40,603 29,605

Total assets 88,721 79,367

Liabilities: Segment liabilities 4,801 7,406 8,451 685 7,927 4,012 21,179 12,103Unallocated liabilities2 3,500 2,333

Total liabilities 24,679 14,436

Other information:Capital expenditure 1,309 2,113 280 – – – 1,589 2,113

Depreciation and amortisation 2,568 2,595 19 – – – 2,587 2,595

1 Tax is not allocated to individual segments as management reviews segmental information on a pre-tax basis.

2 Th e Group is unable to allocate these assets and liabilities to the respective business segments as the same assets and liabilities were used/incurred in the services rendered. Th e main components of unallocated assets and liabilities are cash, cash equivalents and general bank borrowings, which the Group considers as pooled resources, and goodwill, which is associated with the Group as a whole. Accordingly, these assets and liabilities including other segment information were not allocated to the respective segments of the Group.

31 March 2010



21. Segment Reporting (Cont’d)

Geographical segments

All the Group’s assets and liabilities are substantially located in Hong Kong and all of the activities and customers of the Group are substantially based in Hong Kong. Accordingly, no geographical segment information is presented.

22. Commitments

Capital commitments

Th ere are no capital commitments as at 31 March 2010 and as at 31 March 2009.

Operating lease commitments

At 31 March 2010, the Group has commitments for future minimum lease payments under non-cancellable operating leases for land as follows:-

Group Company31-Mar-10 31-Mar-09 31-Mar-10 31-Mar-09HK$’000 HK $’000 HK $’000 HK $’000

Within 1 year 676 1,404 – –Aft er 1 year but within 5 years 324 1,662 – –Aft er 5 years – 30 – –

1,000 3,096 – –

Leases are negotiated for an average term of 6 years with no renewable options included in the contracts.

23. Dividends

Dividends on ordinary shares paid in respect of fi nancial year 2008 as follows:-

Group and Company2010 2009

HK $’000 HK $’000

Final tax exempt dividend of HK$0.78 cents per share – 1,790

Th e directors do not propose the payment of dividends for the current fi nancial year. No dividends were proposed for the prior year.

24. Signifi cant Related Party Transactions

Other than disclosed elsewhere in the fi nancial statements, there were no transactions with related parties during the fi nancial year.

31 March 2010



25. Financial Risk Management Objectives and Policies

Risk management is integral to the whole business of the Group. Th e Group has a system of controls in place to create an acceptable balance between the cost of risks occurring and the cost of managing the risks. Th e management continually monitors the Group’s risk management process to ensure that an appropriate balance between risk and control is achieved.

Credit risk

Credit risk is the potential fi nancial loss resulting from the failure of a customer or a counterparty to settle its fi nancial and contractual obligations to the Group, as and when they fall due.

Th e Group has established credit limits for customers and monitors their balances. Cash and fi xed deposits are placed with banks and fi nancial institutions which are regulated.

As at the reporting date, the Group has concentration of credit risk exposure to two unrelated business associates which accounted for 17% (2009: 37%) and 20% (2009: Nil) of the total trade receivables. Other than the foregoing, there is no signifi cant concentration of credit risk. Th e Group’s customers are engaged in a wide spectrum of manufacturing and distribution activities and sell in a variety of end markets. Th e maximum exposure to credit risk is represented by the carrying amount of each fi nancial asset in the statement of fi nancial positions.

Company2010 2009

HK $’000 HK $’000

Trade and other receivables 39,701 36,330Cash and bank balances 18,012 6,514

57,713 42,844

Liquidity risk

Th e Group monitors its liquidity risk and maintains a level of cash and cash equivalents deemed adequate by management to fi nance the Group’s operations and to mitigate the eff ects of fl uctuations in cash fl ows.

Besides, the Group has access to lines of credit from funding through a bank as follows:-

Group and Company2010 2009

HK $’000 HK $’000

Unutilised loan limit – secured loan 5,000 –

31 March 2010



25. Financial Risk Management Objectives and Policies (Cont’d)

Liquidity risk (Cont’d)

Th e following table details the remaining contractual maturities at the end of the reporting period of the Group’s liabilities, which are based on contractual undiscounted cash fl ows (including interest payments computed using contractual rates) and the earliest date the Group can be required to pay:-

Carryingamounts

Total contractualundiscounted

cash fl ow

Within1 year or

on demand

More than1 year butless than5 years

HK$’000 HK$’000 HK$’000 HK$’000

2010Trade payables 9,993 9,993 9,993 –Other payables 10,127 10,127 10,127 –Secured bank loans 3,351 3,406 3,406 –Obligations under fi nance leases 1,059 1,156 607 549

24,530 24,682 24,133 549

2009Trade payables 7,069 7,069 7,069 –Other payables 4,581 4,581 4,581 –Secured bank loans 2,040 2,129 1,596 533Obligations under fi nance leases 451 492 284 208

14,141 14,271 13,530 741

Interest rate risk

Th e Group’s exposure to interest rate risk is mainly on its interest-bearing borrowings with the banks. It is a common practice in Hong Kong to have fl oating rate borrowings with the banks.

In order to manage the interest rate risk, the Company will repay the corresponding borrowings when it has surplus funds.

Sensitivity analysis

At 31 March 2010, it is estimated that a general increase/decrease of 100 basis points in interest rates, with all other variables held constant, would decrease/increase the Group’s profi t aft er tax and equity by approximately HK$34,000 (2009: HK$20,000).

Th e sensitivity analysis above has been determined assuming that the change in interest rate had occurred at the reporting date and had been applied to the exposure to interest rate risk for interest-bearing fi nancial liabilities in existence at that date. Th e 100 basis point increase or decrease represents management’s assessment of a reasonably possible change in interest rates over the period until the next annual reporting date.

31 March 2010




Foreign currency risk

Th e Group is primarily exposed to foreign currency risk on transportation costs that are measured in Chinese Renminbi and expenses that are incurred in Singapore dollars. Th ere is also a notable growth in US dollar, Euro and British pound receipts and expenses. Th e Group currently does not have a foreign currency hedging policy. However, the management monitors foreign exchange exposures and will consider hedging signifi cant foreign currency exposures should the need arises.

Sensitivity analysis

At 31 March 2010, if the foreign currencies weakened 1% against the Hong Kong dollars with all other variables held constant, the Group’s post-tax profi t for the year would have been HK$96,000 lower (2009: HK$21,000 higher) mainly as a result of foreign exchange gains/losses on translation of foreign currency denominated fi nancial instruments such as trade and other receivables, trade and other payables and cash and bank balances into Hong Kong dollars. A 1% strengthening against Hong Kong dollars would have had the equal but opposite eff ect.

Fair values

Th e fair values of fi nancial assets and liabilities, together with the carrying amounts shown in the statement of fi nancial positions are as follows:-

2010 2009Carryingamounts

Fairvalues

Carryingamounts

Fairvalues

HK$’000 HK$’000 HK$’000 HK$’000

GroupTrade and other receivables 39,884 39,884 40,529 40,529Income tax recoverable 98 98 599 599Pledged bank deposit 600 600 – –Cash and cash equivalents 17,412 17,412 6,514 6,514Trade and other payables 13,458 13,458 11,650 11,650Investor deposit pending new share issue 6,662 6,662 – –Secured bank loans 3,351 3,351 2,040 2,011Finance lease liabilities 1,059 1,059 451 451

CompanyTrade and other receivables 87 87 1,573 1,573Cash and cash equivalents 5,760 5,760 87 87Trade and other payables 1,266 1,266 4,012 4,012Amount owing to subsidiaries 11,015 11,015 7,608 7,608Investor deposit pending new share issue 6,662 6,662 – –

Basis of determining fair value

Th e carrying amount of trade and other receivables, cash and bank balances, trade and other payable and amount owing to subsidiaries approximates their fair values due to short period to maturity. Finance lease liabilities are discounted to determine the fair value.

31 March 2010




Capital management

Th e Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern in order to provide returns for shareholders and benefi ts for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital.

Th e Group monitors its capital structure via gearing ratio, which is calculated as net debt divided by total capital. Net debt is total bank loans plus trade payable and other payable and income tax payables less cash and cash equivalent. Total capital is defi ned as total equity plus net debts.

During the fi nancial year ended 31 March 2010, the Group’s strategy, which was unchanged from 31 March 2009, was to maintain a gearing ratio of less than one (1). Th e gearing ratios as at 31 March 2010 and 31 March 2009 were as follows:-

Group2010 2009

HK$’000 HK’000

Total borrowings 24,530 14,141Less: Cash and cash equivalent (17,412) (6,514)

Net debts 7,118 7,627Total equity 64,042 64,931

Total capital 71,160 72,558

Gearing ratio 0.10 0.11

Th e Group is not subject to any externally imposed capital requirements.

26. Signifi cant Events

(a) JET Acquisitions

Th e Company had entered into a sale and purchase agreement dated 31 October 2008 with Mr Johnson Hsieh (the “Vendor”) to acquire from the Vendor shareholding interest in China Jet Express Group Limited (亨達航空貨運集團有限公司) and 亨達航空貨運承攬股份有限公司 (the “JET Acquisitions”). Th e sale and purchase agreement dated 31 October 2008 was amended, supplemented and/or varied by a supplemental agreement dated 30 December 2008 and was further amended, supplemented and/or varied by a second supplemental agreement dated 30 March 2009 (collectively, the “Agreements”).

Th e Company had subsequently on 15 September 2009 issued a letter to the Vendor, giving notice of its intention not to proceed with the completion of the JET Acquisitions due to, inter alia, breach or default by the Vendor of various warranties, representations and undertakings and the non-fulfi llment of certain conditions precedent under the Agreements, and accordingly, the Agreements were terminated.

31 March 2010



26. Signifi cant Events (Cont’d)

(a) JET Acquisitions (Cont’d)

In relation to the Agreements, the Company had on 18 December 2009 issued a Writ of Summons against the Vendor to claim a total cost of approximately HK$2.3 million on a claim for indemnity which provides for, inter alia, costs indemnifi cation from the Vendor in the event of non-fulfi llment of pre-stipulated profi ts or qualifi cations to audited accounts or unsatisfactory fi ndings in the due diligence exercise in relation to the JET Acquisitions.

Th e Vendor had agreed to provide a deed of undertaking dated 10 February 2010 (the “Deed”) to the Company in settlement of the Company’s claims against him. Payment by the Vendor in accordance with the terms of the Deed was received on 12 February 2010 and the properly executed documents of the Deed, as agreed between the parties, was received on 1 March 2010.

Accordingly, the Company had given instructions to its solicitors to fi le a Notice of Discontinuance to withdraw the suit on 1 March 2010. Th e aggregate reimbursement of expenses by the Vendor to the Company is HK$2,000,000. Th e net amount of expense incurred is approximately HK$686,000, which amount is included as administrative expenses in the consolidated statement of comprehensive income for the fi nancial year ended 31 March 2010.

(b) Proposed Share Issue

The Company had entered into a subscription and share lending agreement (the “Subscription Agreement”) dated 15 January 2010 with various investors (the “Investors”), pursuant to which, inter alia:-

(i) the Investors have agreed to subscribe for 40,000,000 new Shares (the “Subscription Shares”) at an issue price of S$0.03 per Subscription Share; and

(ii) the Company will grant to the Investors options to subscribe for up to a further 40,000,000 Shares (the “Option Shares”) at an option exercise price of S$0.06 per Option Share.

(the “Proposed Share Issue”)

On 25 January 2010 in accordance with the terms of the Subscription Agreement, the Investors had paid a Deposit of S$1,200,000 (a Hong Kong dollar equivalent of HK$6,662,000) to the Company. Th e deposits are treated as a liability until the Company receives the necessary approvals to issue new shares to the investors in accordance with the Subscription Agreement.

Th e Proposed Share Issue is conditional upon, in principal approval for the listing and quotation of the Subscription Shares and of the Option Shares on SGX-Catalist being received from SGX-ST and such approval not having been revoked or amended, and if the approval is granted subject to conditions, such conditions being satisfi ed or waived by the SGX-ST and the SGX-ST not having made any ruling the eff ect of which is to restrict or impede the listing and quotation of the Subscription Shares.

Lodgment with and acceptance of an Off er Information Statement on Catalodge by SGX-ST and approvals for the issue and allotment of the Subscription Shares and of the Option Shares being received from Shareholders at an extraordinary general meeting.

In the event all conditions precedent are not fulfi lled on or before 31 July 2010, the Subscription Agreement shall automatically terminate and be of no further eff ect, and upon the fi ft h business day aft er 31 July 2010:-

(A) the Company will refund the Deposit to the Investors; and

31 March 2010



26. Signifi cant Events (Cont’d)

(b) Proposed Share Issue (Cont’d)

(B) each Investor will, at the Investor's discretion, refund or return to Mr Dicky Suen Yiu Chung and Mr Lau Hon Kit (the “Majority Shareholders”):-

(i) such number of Shares of the same quantity of the Loan Shares he borrowed from the Majority Shareholders; or

(ii) the monetary equivalent of the Loan Shares he borrowed from the Majority Shareholders, such monetary equivalent being calculated based on S$0.03 for each Loan Share,

No new shares have yet been issued in relation to the Subscription Agreement at the date of this report.

27. Subsequent Events

(a) Incorporation of subsidiaries

In April 2010, Sky One Network (Holding) Ltd (“SON(H)L”), a wholly-owned subsidiary of the Company, had incorporated two (2) wholly owned subsidiaries under the names of Sky One Logistics (HK) Limited (“SOLL”) and Sky One Investment (China) Limited (“SOI(C)L”). Both subsidiaries are incorporated in Hong Kong and each has a paid-up and issued share capital of HK$10,000. Th e principal activities of SOLL are those of warehousing and re-packaging services. SOI(C)L is currently dormant and the Company plans to use SOI(C)L as the holding company for future Mainland China ventures.

(b) Sky One Holdings Limited Employee Share Option Scheme (“the Scheme”) and the Sky One Holdings Limited Performance Share Plan (“the Plan”)

Th e Scheme and the Plan were approved by the Shareholders at an Extraordinary General Meeting held on 7 May 2010. Since the approval of the Scheme and the Plan by Shareholders and up to the date of this report, no director or employee of the Company and its subsidiaries have been granted shares in the Company or its subsidiaries nor options over shares in the Company or its subsidiaries in accordance with the Scheme and the Plan.

28. Contingent Liabilities

(a) Sinoway System Limited

Company’s subsidiary, Sky One Express (HK) Limited was served a Writ of Summons (“Sinoway Writ of Summons”) which was issued in the High Court of the Hong Kong Special Administrative Region, Court of First Instance by Sinoway System Limited (“Sinoway”) on 6 October 2008 for a sum of HK$1,017,600 for an alleged breach of Carriage Contract and/or its duties under a Bailment.

An amount of HK$650,000 was agreed upon and paid to Sinoway in settlement of the above claim and consequently, Sinoway has fi led a Notice of Discontinuance with the Court on 12 April 2010.

Th e settlement amount of HK$650,000 is included as administrative expenses in the consolidated statement of comprehensive income for the fi nancial year ended 31 March 2010.

31 March 2010



28. Contingent Liabilities (Cont’d)

(b) Heng Sin (HK) International Limited

On 5 September 2008, a Writ of Summons issued in the District Court of the Hong Kong Special Administrative Region, was served on a subsidiary of the Company, Sky One Express (HK) Limited, by Heng Sin (HK) International Limited (“Heng Xin”).

Under the Writ, Heng Xin has claimed, inter alia, the sum of HK$242,000 for an alleged breach of Carriage Contract and/or its duties under a Bailment.

Th e directors see no merit of the claims and intend to enter an appearance and defend such claims vigorously. Accordingly, no provision has been made in the fi nancial statements as of 31 March 2010.

29. Key Accounting Estimates and Critical Accounting Judgements

Estimates and judgments are currently evaluated and are based on historical experience and other factors including expectations of future events that are believed to be reasonable under the circumstances. Apart from information disclosed elsewhere in these fi nancial statements, the following summarises signifi cant judgments made in the process of applying the Company’s accounting policies.

– Estimation of useful lives of property, plant and equipment

Management determines the useful lives of property, plant and equipment and reviews the amortisation period on an annual basis. Th is requires an estimation of the number of years that future economic benefi ts can be generated by the property, plant and equipment taking into account the expected changes in the market demand for the products or services output from the property, plant and equipment and the expected actions by competitors or potential competitors. Refer to Note 10.

– Impairment of investment in subsidiaries

Determining whether investments in subsidiaries are impaired requires an estimation of the value in use of the investments and the cash-generating units to which the investments have been allocated. Th e value in use calculation requires the entity to estimate the future cash fl ows expected to arise from the assets or cash generating unit and a suitable discount rate in order to calculate present value. Th e details of impairment in respect of investments in subsidiaries are given in Note 12.

– Provision for income tax

Th e Group is exposed to income taxes in Hong Kong. Th e Group estimates the potential tax exposure as at year end based on management’s best estimates from the past queries and assessments by the tax authority. Th e Group reviews its position at the end of every reporting period for any updates from the tax authority. Refer to Notes 8 and 18. Th e tax recoverable as at 31 March 2010 is HK$98,000 (2009: HK$599,000).

– Allowance for bad and doubtful trade receivables

Th e provisioning policy for bad and doubtful debts is based on the evaluation of collectability and ageing analysis of the accounts receivables and on management judgment. A considerable amount of judgment is required in assessing the ultimate realisation of these receivables, including the current credit worthiness and the past collection history of each customer. If the fi nancial condition of these customers were to deteriorate, resulting in an impairment of their ability to make payment, allowance will be required. Refer to Note 13.

31 March 2010



29. Key Accounting Estimates and Critical Accounting Judgements (Cont’d)

– Impairment of goodwill

In determining whether goodwill is impaired, it requires an estimation of the value in use of these assets. Th e value in use calculation requires the Group to estimate the future cash fl ows expected to arise from these assets and a suitable discount rate in order to calculate present value. Actual transactions will take place at a later date which may diff er from the estimates made by the Group. Further details of the key assumptions applied in the impairment assessment of goodwill are set out in Note 11 to the fi nancial statements.

30. Directors’ Remuneration

Th e remuneration band of the Company’s directors receiving remuneration from the Group is as follows:-

Number of directors2010 2009

Remuneration of:S$500,000 and above – –S$250,000 to below $S500,000 – –Below S$250,000 6 6

6 6

31. Future changes in FRS

Th e Group has not adopted the followings FRSs and INT FRSs that have been issued but not yet eff ective as follows:-

FRS No. Title

Eff ective date for the period beginning on

or aft er

FRS 24 Related Party Disclosures 1.1.2011FRS 27 (Amendments) Consolidated and Separate Financial Statements 1.7.2009FRS 39 (Amendments) Financial Instruments: Recognition and Measurement –

Eligible Hedged Item1.7.2009

FRS 102 (Amendments) Group Cash-settled Share-based Payment transactions 1.1.2010FRS 103 (Revised) Business Combinations 1.7.2009INT FRS 114 Prepayment of a Minimum Funding Requirement 1.1.2011INT FRS 117 Distributions of Non-cash Assets to Owners 1.7.2009INT FRS 119 Extinguishing Financial Liabilities with Equity Instruments 1.7.2010

31 March 2010



31. Future changes in FRS (Cont’d)

FRS No. Title

Eff ective date for the period beginning on

or aft er

General amendments Improvements to FRSsFRS 38 Intangible Assets 1.7.2009INT FRS 109 Reassessment of Embedded Derivatives 1.7.2009INT FRS 116 Hedges of a Net Investment in a Foreign Operation 1.7.2009FRS 1 Presentation of Financial Statements 1.1.2010FRS 7 Statement of Cash Flows 1.1.2010FRS 17 Leases 1.1.2010FRS 32 Classifi cation of Rights Issues 1.2.2010FRS 36 Impairment of Assets 1.1.2010FRS 39 Financial Instruments: Recognition and Measurement 1.1.2010FRS 105 Non-current Assets Held for Sale and Discontinued

Operations1.1.2010

FRS 108 Operating Segments 1.1.2010

Th e directors of the Company anticipate that the application of these Standards or Interpretations will have no material impact on the fi nancial statements of the Group and Company.

32. Authorisation of Financial Statements for Issue

Th e fi nancial statements for the year ended 31 March 2010 were authorised for issue in accordance with a resolution of the directors on 30 June 2010.

As at 16 June 2010

STATISTICS OF SHAREHOLDINGS


SHARE CAPITAL INFORMATION

Issued and fully paid-up capital : S$55,445,692

Number of Shares : 243,199,998Class of shares : Ordinary SharesVoting rights : One vote per shareTreasury Shares : Nil

DISTRIBUTION OF SHAREHOLDINGS

SIZE OF SHAREHOLDINGSNO. OF

SHAREHOLDERS % NO. OF SHARES %

1 – 999 191 13.90 77,838 0.031,000 – 10,000 687 50.00 2,957,030 1.2210,001 – 1,000,000 474 34.50 34,219,857 14.071,000,001 AND ABOVE 22 1.60 205,945,273 84.68

TOTAL 1,374 100.00 243,199,998 100.00

TWENTY LARGEST SHAREHOLDERS

NO. NAME NO. OF SHARES %

1 HSBC (SINGAPORE) NOMINEES PTE LTD 125,605,608 51.652 CIMB NOMINEES (S) PTE LTD 11,708,750 4.813 LIM CHYE HUAT @ BOBBY LIM CHYE HUAT 8,975,000 3.694 HO KOK FI JOHN 8,200,000 3.375 NEO KIAN CHYE 7,568,000 3.116 LEE SENG KIONG 7,501,250 3.087 FOO SECK HUAT 6,800,000 2.808 PHILLIP SECURITIES PTE LTD 3,906,000 1.619 TEO CHEW SENG @ CHANG PETER 2,886,665 1.1910 CHOW YEW WAI 2,760,750 1.1411 LAI LI MUI CHUN 2,750,000 1.1312 NORMAN LAI WAI CHI 2,750,000 1.1313 CHIANG LONG CHIANG 2,100,000 0.8614 GUI KIM YOUNG @ GUI KIM GAN 2,100,000 0.8615 SOH ENG CHYE 1,465,000 0.6016 DBS VICKERS SECURITIES (S) PTE LTD 1,399,000 0.5817 LIM THIAM HIONG 1,345,000 0.5518 CITIBANK NOMINEES SINGAPORE PTE LTD 1,292,250 0.5319 OCBC SECURITIES PRIVATE LTD 1,285,750 0.5320 NRA CAPITAL PTE LTD 1,216,250 0.50

TOTAL 203,615,273 83.72

As at 16 June 2010

STATISTICS OF SHAREHOLDINGS


SUBSTANTIAL SHAREHOLDERS AS AT 16 JUNE 2010

Direct Interest Deemed InterestName of Substantial Shareholders Number of Shares % Number of Shares %

Dicky Suen Yiu Chung 30,859,812 (1) 12.69 54,659,812 (3) 22.48

Lau Hon Kit 13,220,492 (2) 5.44 23,328,492 (4) 9.59

Smart Easy International Limited 54,659,812 (3) (5) 22.48 – –

Timely Chance International Limited 23,328,492 (4) (6) 9.59 – –

(1) 30,859,812 shares held in the name of HSBC (Singapore) Nominees Pte Ltd.


(3) Mr Dicky Suen Yiu Chung is a 100% shareholder of Smart Easy International Limited. He is deemed to be interested in the shares in the Company held by Smart Easy International Limited by virtue of Section 7 of the Companies Act.

(4) Mr Lau Hon Kit is a 100% shareholder of Timely Chance International Limited. He is deemed to be interested in the shares in the Company held by Timely Chance International Limited by virtue of Section 7 of the Companies Act.



PUBLIC FLOAT

Based on information available to the Company as at 16 June 2010, approximately 48.62% of the issued ordinary shares of the Company is held by the public, and therefore, Rule 723 of Section B: Rules of Catalist of the SGX-ST Listing Manual issued by the Singapore Exchange Securities Trading Limited is complied with.

NOTICE OF ANNUAL GENERAL MEETING


SKY ONE HOLDINGS LIMITED(Incorporated in the Republic of Singapore)

Company Registration No. 198602949M(the “Company”)

NOTICE IS HEREBY GIVEN that the Annual General Meeting of the Company will be held at Novotel Singapore Clarke Quay, Mace Room, Level 5, 177A River Valley Road, Singapore 179031, on Wednesday, 28 July 2010 at 9 a.m. to transact the following business:-

AS ORDINARY BUSINESS

1. To receive and adopt the Audited Financial Statements of the Company for the fi nancial year ended 31 March 2010 and the Reports of the Directors and Auditors thereon. (Resolution 1)

2. To approve the Directors’ fee of S$111,000 for the fi nancial year ending 31 March 2011. (Resolution 2)

3. To re-elect Mr Lim Chee San, a Director retiring pursuant to Article 104 of the Articles of Association. (Resolution 3) Mr Lim Chee San will, upon re-election as a Director of the Company, remain as the member of the Audit

Committee. He will be considered independent for the purpose of Rule 704(7) of Section B: Rules of Catalist of the SGX-ST Listing Manual (the “Catalist Rules”), He will continue to remain as the Chairman of the Remuneration Committee.

4. To re-appoint Mazars LLP as Auditors of the Company and to authorise the Directors to fi x their remuneration. (Resolution 4)

AS SPECIAL BUSINESS

To consider and if thought fi t, pass the following resolutions, with or without modifi cations:-

Authority to allot and issue shares (the “Proposed New Share Issue Mandate”)

5. “Th at pursuant to Section 161 of the Companies Act, Chapter 50 and the Rules of Catalist of the Singapore Exchange Securities Trading Ltd (“SGX-ST”), authority be and is hereby given to the Directors of the Company at any time and upon such terms and conditions and for such purposes and to such persons as the Directors may in their absolute discretion deem fi t to:-

(a) (i) issue shares in the capital of the Company (“Shares”) whether by way of rights, bonus or otherwise; and/or

(ii) make or grant off ers, agreements or options (collectively, “Instruments”) that might or would

require Shares to be issued, including but not limited to the creation and issue of (as well as adjustments to) options, warrants, debentures or other instruments convertible into Shares,

at any time and upon such terms and conditions and for such purposes and to such persons as the Directors may in their absolute discretion deem fi t; and



(b) (notwithstanding that 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:-

(i) 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 100% of the total number of issued shares (excluding treasury shares), of which the aggregate number of Shares and convertible securities to be issued other than on a pro rata basis to existing shareholders of the Company does not exceed 50% of the total number of issued Shares excluding treasury shares, and for the purpose of determining the aggregate number of Shares and Instruments that may be issued under this resolution, the percentage of the total number of issued Shares excluding treasury shares shall be based on the Company’s total number of issued Shares excluding treasury shares at the time this resolution is passed, aft er adjusting for:-

(1) new Shares arising from the conversion or exercise of any convertible securities;

(2) new Shares arising from exercise of share options or vesting of share awards outstanding or subsisting at the time this resolution is passed, provided the options or awards were granted in compliance with Part VIII of Chapter 8 of the Rules of Catalist of the SGX-ST; and

(3) any subsequent bonus issue, consolidation or subdivision of Shares;

(ii) in exercising the authority conferred by this resolution, the Company shall comply with the provisions of the Rules of Catalist of the SGX-ST for the time being in force (unless such compliance has been waived by the SGX-ST) and the Articles of Association for the time being of the Company; and

(iii) such authority shall, unless revoked or varied by the Company at a general meeting, continue in force until the conclusion of the next annual general meeting of the Company or the date by which the next annual general meeting of the Company is required by law to be held, whichever is the earlier; and

(c) the Directors be and are hereby authorised to do any and all acts which they deem necessary and expedient in connection with paragraphs (a) and (b) above.”

[See Explanatory Note 1] (Resolution 5)

ANY OTHER BUSINESS

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

BY ORDER OF THE BOARD

Foo Soon Soo (Ms)Company Secretary

9 July 2010

SINGAPORE



Explanatory Notes:-

1. Th e ordinary resolution in item 5, if passed, will empower the Directors of the Company from the date of the above Meeting until the date of the next Annual General Meeting to issue shares and convertible securities in the Company up to an amount not exceeding in aggregate 100% of the total number of issued Shares excluding treasury shares of the Company, of which the total number of Shares and convertible securities issued other than on a pro rata basis to existing shareholders shall not exceed 50% of the total number of issued Shares excluding treasury shares of the Company, at the time the resolution is passed, for such purposes as they consider would be in the interests of the Company. Rule 806(2)(a) of the Rules of Catalist currently provides that for the purpose of determining the aggregate number of Shares and Instruments that may be issued under this resolution, the percentage of the total number of issued Shares excluding treasury shares shall be based on the Company’s total number of issued Shares excluding treasury shares at the time this resolution is passed, aft er adjusting for new Shares arising from the conversion of convertible securities or exercise of share options or vesting of share awards outstanding or subsisting at the time this resolution is passed and any subsequent bonus issue, consolidation or subdivision of the Company’s Shares). Th is authority will, unless revoked or varied at a general meeting, expire at the next annual general meeting of the Company.

Notes:-

1. A member of the Company entitled to attend and vote at the meeting is entitled to appoint a proxy and vote on 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 offi cer or attorney.

4. Th e instrument appointing a proxy must be deposited at the Company’s registered offi ce at 333 North Bridge Road, #08-00 KH KEA Building, Singapore 188721 not later than forty-eight hours before the time appointed for the meeting.

5. Th is notice has been prepared by the Company and its contents have been reviewed by the Company’s sponsor (“Sponsor”), Asian Corporate Advisors Pte. Ltd., for compliance with the relevant rules of the SGX-ST. Th e Sponsor has not independently verifi ed the contents of this notice including the correctness of any of the fi gures used, statements or opinions made.

Th is notice has not been examined or approved by the SGX-ST and the SGX-ST assumes no responsibility for the contents of this notice including the correctness of any of the statements or opinions made or reports contained in this notice.

Th e contact person for the Sponsor is Mr Liau H.K. Telephone number: 6221 0271.

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PROXY FORMSKY ONE HOLDINGS LIMITED(Incorporated in the Republic of Singapore)Registration No: 198602949M

I/We (Name)

of (Address)

being *a member/members of SKY ONE HOLDINGS LIMITED. (the “Company”), hereby appoint:-

Name Address NRIC/PassportNumber

Proportion of Shareholdings

No. of Shares %

*and/or

as *my/our *proxy/proxies, to vote for *me/us and on *my/our behalf and, if necessary, to demand a poll at the Annual General Meeting of the Company to be held at Novotel Singapore Clarke Quay, Mace Room, Level 5, 177A River Valley Road, Singapore 179031 on Wednesday, 28 July 2010 at 9 a.m. and at any adjournment thereof.

*I/We direct *my/our *proxy/proxies to vote for or against the Resolutions proposed at the Meeting as indicated with a tick (√) in the spaces provided hereunder. If no specifi ed directions as to voting are given, the *proxy/proxies will vote or abstain from voting at *his/their discretion.

No. Ordinary ResolutionsTo be used on

a show of handsTo be used in

the event of a pollFor** Against** For*** Against***

1. To receive and adopt the Audited Financial Statements of the Company for the fi nancial year ended 31 March 2010 and the Reports of the Directors and Auditors thereon.

2. To approve the Directors’ fee of S$111,000 for the fi nancial year ending 31 March 2011.

3. To re-elect Mr Lim Chee San, a Director retiring pursuant to Article 104 of the Articles of Association.

4. To re-appoint Mazars LLP as Auditors of the Company and to authorise the Directors to fi x their remuneration.

5. To authorise Directors to issue shares pursuant to Section 161 of the Companies Act, Cap. 50.

** Please indicate your vote “For” or “Against” with a tick (√) within the box provided.*** If you wish to exercise all your votes “For” or “Against”, please tick (√) within the box provided. Alternatively, please indicate the number of votes

as appropriate.

Dated this day of 2010

Signature(s) of Member(s)/Common Seal

*Delete accordingly

Total Number of Shares Held

IMPORTANT1. For investors who have used their CPF monies to buy SKY ONE HOLDINGS

LIMITED’s shares, this Report is forwarded to them at the request of their CPF Approved Nominees, and is sent solely FOR INFORMATION ONLY.

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

3. CPF investors who wish to vote should contact their CPF approved Nominees.

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 on 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. Th is 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 offi cer.

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 fi t 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. Th e instrument appointing proxy or proxies, together with the power of attorney or other authority (if any) under which it is signed, or notarially certifi ed copy thereof, must be deposited at the registered offi ce of the Company at 333 North Bridge Road #08-00 KH KEA Building, Singapore 188721 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 defi ned 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 of shares is inserted, this form of proxy will be deemed to relate to all the shares held by the member of the Company.

7. Th e 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 specifi ed 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 certifi ed by Th e 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.

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Registered Offi ce333 North Bridge Road


Singapore 188721

Tel. 65 6837 2133

Fax. 65 6339 0218

Hong Kong HeadquartersSky One Logistics Centre, 7A Ho Tung Garden,

Ho Tung Bridge, Kwu Tun, Sheung Shui, N.T. Hong Kong

Tel. 852 3511 8120

Fax. 852 2244 5095

Email. [email protected]

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Professional Logistics the

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Annual Report 2010

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