AUSSINO 2009 AR.pdf

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2 AUSSINO GROUP LTD And Its Subsidiaries ANNUAL REPORT 2009

Contents


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Mission

Chairman's Statement

Operations Review

Design Culture

Directors/Key Executive

Group Structure

Corporate Information

3

Financial Highlights

Corporate Governance

Financial Statements

Shareholding Statistics

Notice of Eighteenth Annual General Meeting

Proxy Form

1

4

6

15

16

18

20

23

24

36

93

95

98




Chairman's

StatementDear Shareholders,

FY2009 saw the world faced one of its mostchallenging downturn that affected almostall business globally. Against this backdrop, Iam pleased to report that our foresight inthe previous financial year to consolidate

our base and remain nimble, with theobjective of sharpening our competitiveedge amidst a changing retail landscape,has yielded a relatively soft landing for theGroup amidst the turbulent environment ascompared to many other businesses. Forthe financial year ended 30 June 2009, theGroup registered sales of $81.6 million withloss before tax limited to $3.7 million.

De

FYchallamth

ouobjea

GrcothGros

With the Group’s 19 years of business experience behind it, this temporary economicsituation does not in anyway dampen the strong business foundation it has accumulatedover the years and I am fully confident that the Group will ride through the waves with aneven stronger anchor.

Our China business remained vibrant with sales of $34.3 million. The demand for Aussinohome furnishing products was strong and this can only be an attestation to our brand valuewhich we had consciously built since we established the China market. We have opened 26Aussino standalone stores in Shanghai and Beijing and we continue to be on the look outto grow more stores.

Our businesses in Singapore, Malaysia, Korea and Hong Kong have also remained robustwith sales of $34.5 million. Like China, our brand recognition and value have once againcontributed to the long term sustainability of the business.

For the Group’s wholesale markets in USA and Australia, we have secured new customersto diversify our existing customer base. New products like curtains and drapes are alsobeing added onto our wide array of home fashion products to cater to customers’ demands.In Australia, we have also embarked on promoting the Aussino brand to certain customersand we expect to reap medium to long term sustainable brand value from this strategy toenhance our profitability.



AUSSINO GROUP LTD And Its Subsidiaries ANNUAL REPORT 2009 5

We have an international distributorship network that spreads across many countries. Ourmost successful distributor in Saudi Arabia has opened 7 stores and is still looking forlocations to open more stores. We have plans to grow the international distributorshipbusiness and are constantly on the look out for passionate partners to drive Aussino brandand products in their countries.

Along with other retailers, this year presented us with significant challenges. However, it alsogave us evidence that the Aussino brand remains resilient and powerful and that our

customers remain loyal and invested in our continued success. Although we expect marketconditions to remain challenging in the near term, its recovery will bring forth stronger andmore robust economies globally. Our business fundamentals are strong and this will fuelcontinued growth in the long term.

I remain passionate and enthusiastic about the Group’s future and the only way is up for theGroup’s business over the long term. As part of the Group’s succession planning and with thefull blessing of the Board, there is no other opportune time than now for me to handover thereins to Mr Jonathan Lim, who succeeds me as CEO of the Group, while I remain as Chairman.It is with my full support and confidence that Mr Jonathan Lim, who holds the position ofManaging Director of the Group for the past 13 years and successfully pioneered the Group’s

foray into the retail business, leads the Group to newer and even greater heights with his vastexperience and vision.

I am thankful for the commitment, dedication and team work of the management team andstaff during the past year. Without any doubt, I am certain that under Mr Jonathan Lim’sleadership, both management and staff will continue to deliver its commitment toshareholders for sustainable, long-term growth.

On behalf of my fellow directors, I would like to thank all our customers, bankers, businessassociates, suppliers and shareholders for their continuing support and belief in us. We look

forward to what lies ahead.

Dr. Anthony LimBA(Hons),ACIS,PhD

ChairmanAussino Group Ltd


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OperationsReview




OVERVIEW

AUSSINO is a global brand that is synonymous with soft home furnishings. An

internationally recognized brand, our merchandise is available through more than

8000 retail points of sales worldwide in the U.S.A., Europe, Canada, Australia, New

Zealand, China, Hong Kong, Korea, Singapore, Malaysia, Brunei, Saudi Arabia,

Thailand, Philippines, Vietnam, Mauritius, Myanmar, Maldives, etc. In addition to

soft home furnishing products, AUSSINO also distributes ladies’ fashion apparel

under the brand of SINO LONDON in China and Australia.




Retail

BusinessThe Group’s retail goal is to be the leading retailer and brand for soft home

furnishings in each of its target markets by offering well-designed and quality home

fashion products to customers under the AUSSINO brand and ladies fashion apparel

under the SINO LONDON brand.


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In China, Hong Kong, Korea, Singapore and Malaysia, there are a total of 554 points

of sales registering a combined turnover of $68.8 million in FY2009. In the lastfinancial year, 26 new stores were opened in China. Due to the recognition of the

Aussino brand in these countries, the Group has built a high degree of customer

loyalty. Aussino retail stores are typically located in high-traffic and high-visibility

locations. Because of the very wide range of products in the offering, the Group can

easily vary the size and layout of its stores located at both downtown and suburban

retail vicinity. The Group strives to expand its retail business and increase market

share by selectively opening additional stores and counters, continuing to offer

appealing products to customers sold through attractive sales and marketing

promotions.

appea ing pro ucts to custo

promot ons.




Wholesale

BusinessThe Group wholesales soft home furnishing products in U.S.A., Canada, Australiaand New Zealand to the major chain retailers.

For FY09, the wholesale business generated sales of $13.2 million. We have securednew customers to diversify our existing customer base. New products like curtainsand drapes are also being added onto our wide array of home fashion products tocater to customers’ demands. In Australia, we have also embarked on promoting theAussino brand to certain customers and we expect to reap medium to long termsustainable brand value from this strategy to enhance our profitability.

o certain customers an we expect to reap me ium to ong termd value from this strategy to enhance our profitability.



Australia also engages in wholesale of Sino London ladies fashion apparel aswell as imported labels like Nougat London from London, Sweaterhouse from

Spain and Sulu from Germany. It also operates 3 retail stores located in Sdyneyand Perth for the retailing of ladies fashion apparel.

In the countries of Saudi Arabia, Spain, Romania, Thailand, Philippines,Vietnam, Brunei, Myanmar, Mauritius, Maldives, the Group leverages on theexpertise of its local partners who possess in-depth market knowledge andaccess and share Aussino’s operating and business experience. Our distributorshave opened an impressive combined total of 47 stores and counters within ashort span of 4 years. The international distributorship is poised for long-termgrowth as we are confident of the acceptance of Aussino products in any new

market given the response received so far from the international distributors inour stable. We are always on the look out for passionate and energeticentrepreneurs across the world to represent us in their countries and to shareour design and quality of soft home fashion products with new customers. Withthe recovery in the global economy in the near and medium term, we arehopeful that this segment of the business will take off and fly on higher grounds,thereby launching the brand to a truly international global platform.

l asrom

ney

nes,theandtorsin aermnew

s ineticareithareds,


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Design CultureAUSSINO is a knowledge-based group that is involved in the design, product

development, marketing, distribution and retailing of AUSSINO home fashion

products and accessories and SINO LONDON ladies’ fashion apparel.

AUSSINO continues to keep abreast of fashion trends with an established

number of in-house designers. These fashion teams are based in New York,

London, Melbourne, Shanghai, Singapore and Malaysia. All new AUSSINO

and SINO LONDON collections are coordinated and manufactured in our

network of 38 factories. All AUSSINO products must meet our strict quality

criteria which are in-line with international standards.

AUSSINO GROUP LTD An Its Su si ia 15




Directors/

Key ExecutiveDIRECTORS

Dr Anthony Lim

Chairman

Appointed to the Board of Directors on 14 March 1991. Dr Anthony Lim is the Chairman of the Group and has

retired as Chief Executive Officer in August 2009. He is also a member of the Audit Committee and Remuneration

Committee.

Dr Anthony Lim has more than 18 years of experience in the retail, wholesale, export and import business. He

founded the Group in 1991 and has identified business opportunities for the Group. Dr Anthony Lim expanded the

Group’s businesses to markets in U.S.A., Australia, Canada, China, Singapore and Malaysia. He continues to

provide strategic direction and expertise to bring the Group forward to its next phase of expansion growth.

Dr Anthony Lim holds a Ph.D in Entrepreneurship awarded by Wisconsin International University, U.S.A. and a

Bachelor of Arts (Honours) in Business Administration from the University of East London, U.K. He was a

professional member of Certified General Accountants of Canada and Certified Management Accountants of

Canada. He is also an Associate Member of the Institute of Chartered Secretaries and Administrators of Singapore

and England.

Mr Jonathan Lim

Appointed to the Board of Directors on 6 December 1996. Mr Jonathan Lim is the Group’s Managing Director for

13 years and is appointed as Chief Executive Officer in August 2009. He is responsible for the overall management

of the Group’s operations and expansion. Mr Jonathan Lim has vast knowledge and experience in retail and

marketing and successfully launched Asia’s first Aussino stand-alone concept store in Singapore, Malaysia and

thereafter, transferred his expertise to China.

Mr Jonathan Lim holds a Bachelor of Commerce in Marketing and Asian Studies from the Murdoch University in

Western Australia.

Ms Helen Chow

Appointed to the Board of Directors on 17 February 2000. Ms Helen Chow is Financial Controller of Australia

operations, and she was the Group’s Chief Financial Officer since 1999 before stepping down in May 2009 to

concentrate on the Group’s business in Australia. Prior to joining the Group, Ms Helen Chow has extensive

experience in audit and corporate work. She has worked with KPMG and other international companies.

Ms Helen Chow holds a Bachelor of Accountancy from the National University of Singapore and is also a Fellow

Certified Public Accountant of the Institute of Certified Public Accountants of Singapore.



Mr Edward Chiu

Appointed to the Board of Directors on 12 March 2007. Mr Edward Chiu is the Group’s Independent and

Non-Executive Director. He is the Chairman of the Audit Committee and is also a member of the Remuneration

Committee.

Mr Edward Chiu is the Chief Financial Officer of Goodpack Limited and has many years of experience in financial

and general management. Prior to joining Goodpack Ltd, he was the General Manager of Times The Bookshop

Pte Ltd and Executive Director of Popular Holdings Ltd and Wywy Marketing Sdn Bhd. He has worked in KPMG

and Coopers & Lybrand in his earlier career.

Mr Edward Chiu holds a M.Sc. degree in Finance from the London School of Economics and Political Sciences and

is a fellow member of the Association of Chartered Certified Accountants (FCCA).

Mr Nandakumar Ponniya

Appointed to the Board of Directors on 1 April 2007. Mr Nandakumar Ponniya is the Group’s Independent andNon-Executive Director. He is the Chairman of the Remuneration Committee and is also a member of the Audit

Committee.

Mr Nandakumar Ponniya is an advocate and solicitor with Rajah & Tann and has extensive legal experience and

knowledge. He holds a Bachelor of Laws from the National University of Singapore and was admitted as an

advocate and solicitor of the Supreme Court of Singapore in 1996.

Mr Nandakumar Ponniya is also admitted as a solicitor of England and Wales and as an attorney-at-law in New

York State, U.S.A. He is a member of the Society of Construction Law in Singapore and a member of the Law

Society of Singapore’s Civil Practice Committee, in addition to being an accredited Associate Mediator of the

Singapore Mediation Centre.

KEY EXECUTIVE

Ms Joanne Chow

Ms Joanne Chow was the Head of Finance for 4 years handling the finance operations of the Group and various

subsidiaries, before being appointed as the Group's Chief Financial Officer in August 2009. She is responsible for

the Group's financial, secretarial and corporate work. Prior to joining the Group, Ms Joanne Chow has worked with

The Edge Publishing Pte Ltd and Allianz Insurance Company of Singapore Pte Ltd and other companies as

Accountant with vast experience in financial and secretarial work.

Ms Joanne Chow holds a Bachelor of Science in Accounting and Finance from the London School of Economics and

Political Science, University of London.



Group Structure



U.S.A.

Aussino (U.S.A.) Inc. 100%

Retro (U.S.A.) Inc. 100%

Canada

Aussino (Canada) Inc. 100%

U.K.

Aussino (Europe) Limited 100%Sino Fashions (London) Limited 100%

Australia

Aussino International Corporation Pty Ltd 100%Doppio Fashion Group Pty Ltd 75%Nuovo Uno Pty Ltd 75%Leo Fashion International Pty Ltd 75%Sino London Pty Ltd 75%Galleria Fashions International Pty Ltd 100%

China

Aussino Fashion Textiles (Shanghai) Co., Ltd 100%Aussino International Trade (Shanghai) Co., Ltd 100%

Aussino Food & Beverage China Corporation 100%Aussino China Inc 100%Aussino Home Fashions (Shanghai) Co., Ltd 100%Sino Fashion (Shanghai) Co., Ltd 100%Suhan International Trade Co., Ltd 100%

Singapore

Aussino Home Fashions Pte Ltd 100%Sino London Pte Ltd 100%www.Aussino.com Pte Ltd 100%

Malaysia

Aussino Malaysia Sdn. Bhd. 100%Aussino.com Malaysia Sdn. Bhd. 100%

Hong Kong

Aussino Fashions Group Limited 100%

Korea

Aussino Korea Inc. 100%


ASiS

Si

ASiw

M

AA

H

A

K

A



Group Turnover ($' million)

FinancialHighlights

33.0 37.1

41.9

57.3

93.3

112.7

116.7

0

20.0

40.0

60.0

80.0

100.0

120.0

140.0

FY00 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09




81.6

94.9

111.1

Group Profit Before Tax ($' million)

2.1

-3.7

7.6

6.67.1

9.0 9.4

10.3

11.411.5

0.0

2.0

4.0

6.0

8.0

10.0

12.0

Net Asset Backing Per Share (in Cents)

0

5.0

10.0

15.0

20.0

25.0

Earnings Per Share (in Cents)

-1.07

0.84

2.86

2.44 2.55

3.38

3.55

3.93

4.19

4.57

0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0

19.18

8.03

10.21

12.01

14.87

16.30

19.07

21.54

23.12

20.41

0

.

1.

1.5

.

2.5

.

3.5

4.

.

5.0




Code Principle 1 :

The Board’s Conduct

of its Affairs

Code Guideline 1.3:

Delegation of authority on

certain Board matters

Code Guideline 1.4:Meetings of the Board and

Board Committees

Code Guideline 1.4:

Meetings of the Board and

Board Committees

Code Guideline 1.5:

Matters requiring

board approval

Code Guideline 1.6:

Directors to receive

appropriate training

Code Guideline 1.7

Formal letter to beprovided to directors,

setting out duties and

obligations.

The Board’s primary role is to protect and enhance long term shareholder value. It

supervises the management of the business and affairs of the Group, approves the

Group’s corporate and strategic direction, appointment of directors, major fundingand investment proposals, key capital expenditure decisions, reviews the financial

performance of the Group and other matters. The Board is also responsible for the

overall corporate governance practices of the Group.

To facilitate effective management, certain functions have been delegated to the

Audit and Remuneration Committees, each of which has its own written terms of

reference and whose actions are reported to and monitored by the Board. Due to

its small board size, there was no necessity for a Nominating Committee to be

constituted as the functions of the Nominating Committee have been assumed by

the Board.

The Board meets regularly, at least on a half-yearly basis. Ad-hoc meetings areheld at such times, as and when required, to address any specific significant

matters that may arise. Details of the frequency of Board and Board Committee

meetings held during the last financial year ended 30 June 2009 (“FY2009”) as well

as the attendance of each Board member at these meetings, are disclosed below:

Board Audit RemunerationCommittee Committee

#No of Attendance #No of Attendance #No of AttendanceMeetings Meetings Meetings

Dr Anthony Lim

Mr Jonathan Lim

Ms Schnabel RudiantoMs Helen Chow

Mr Edward Chiu


Other than the above, the Independent Directors also convened additional informal

meetings as well as telephone discussions during the financial year to discuss

issues as and when required. In lieu of physical meetings for quarterly reportings,

written resolutions were circulated for approval by members of the Board and

Board Committees.

Board’s approval is required for matters likely to have a material impact on the

Group’s operations as well as matters other than in the ordinary course of

business.

New directors, upon appointment, will be briefed on the business and organization

structure of the Group to ensure that they are familiar with the Group structure, its

business and operations. The directors may participate in seminars and/or

discussion groups to keep abreast of the latest developments which are relevant to

the Group.

A formal letter is given to each director upon his appointment, setting out, among

other matters, the director’s duties and obligations.

Board matters

2

2

12

2

2

2

-

12

2

1

2

-

--

2

2

2

-

--

2

2

1

-

--

1

1

1

-

--

1

1

(1) resigned on 28 November 2008

# Number of meetings held whilst a Director

(1)



Code Principles 2 & 4 :

Board Members

Composition and Balance

Guideline 2.3: Appropriate

size of Board

Code Guideline 2.1:

Independent Directors tomake up at least one-third

of the Board

Code Guideline 2.5 and

2.6: Roles and meetings of

Non-executive Directors

Code Principle 3 :

Chairman and Chief

Executive Officer

The Board comprises 3 executive directors and 2 independent and non-executive

directors. The Board is of the view that the current size of the Board is

appropriate, taking into account the nature and scope of the Group’s operations.

The members of the Board are as follows:-

Executive Directors:

Dr Anthony Lim

Mr Jonathan Lim

Ms Helen Chow

Independent and Non-Executive Directors:

Mr Edward Chiu


The Board consists of high caliber members with a wealth of knowledge, expertise

and experience who contribute valuable direction and insight to the Company.

Collectively, they possess vast experience in matters relating to accounting,

finance, legal, business and general corporate matters that are necessary and

critical to meet the Group’s objectives.

Details of the directors’ backgrounds are set out on pages 16 and 17 of this

Annual Report.

There is an independent element on the Board, with independent directors

constituting at least one-third of the Board. The Board is able to exerciseobjective judgment on corporate affairs independently, in particular, from

management. No individual or small group of individuals is allowed to dominate

the Board's decision making. The Board is of the view that given current

structure, there is sufficiently strong independent element on the Board to enable

the independent exercise of objective judgment on corporate affairs of the Group

by members of the Board, taking into account factors such as the number of

Independent Directors on the Board, as well as the size and scope of the affairs

and operations of the Group.

Where warranted, the non-executive directors meet without the presence of

Management or executive directors to review any matters that must be raised

privately.

Dr Anthony Lim is both the Chairman and Chief Executive Officer (“CEO”) of the

Company until August 2009. As part of the Group’s succession planning, Dr

Anthony Lim retired as CEO in August 2009 with the appointment of Mr Jonathan

Lim as the succeeding CEO. Dr Anthony Lim remains as Chairman of the Group.

As founder of the Group, Dr Anthony Lim possesses in-depth experience in the

retail, wholesale, export and import business.

Mr Jonathan Lim holds the position of Managing Director of the Group for the past

13 years before being appointed as CEO in August 2009. He pioneered the retailbusiness for the Group and has the qualification, knowledge, experience and

vision to lead the Group to greater heights.

Board of Directors

Chairman and Chief Executive Officer




Board CommitteesNominating Committee

Code Guideline 4.1:

Nominating Committee to

comprise at least three

directors, majority of whom

independent; chairman not

associated with a

substantial shareholder

Code Principle 4:

Nominating Committee

Deviation

The Board supports Dr Anthony Lim and Mr Jonathan Lim in their roles as

Chairman and CEO respectively. All major decisions relating to the operations and

management of the Group are jointly and collectively made by the Board aftertaking into account the opinions of all directors. As such, there is a balance of

power and authority and no one individual controls or dominates the

decision-making process in the Group.

The Chairman is responsible for Board processes and ensures the integrity and

effectiveness of the governance process of the Board. He is also responsible for

representing the Board to shareholders, ensuring that Board meetings are held

when necessary, setting the Board meeting agenda in consultation with the Chief

Financial Officer and Company Secretary, acting as a facilitator at Board meetings

and maintaining regular dialogue with Management on all operational matters. The

Chairman reviews Board papers before they are presented to the Board and

ensures that Board members are provided with adequate and timely information.The Chairman also assists in ensuring compliance with the Company’s corporate

governance processes.

The Code recommends the setting up of a Nominating Committee (“NC”) to

undertake the responsibility of administering a formal and transparent process for

all Board appointments and re-appointments. The Board did not establish a NC as

the Board itself can fulfill the role of NC. Also, the size of the Board does not

warrant having a sub-committee for the stated purposes. It would be moreappropriate, efficient and effective that all Board appointments and

re-appointments be undertaken directly by the Board as follows:-

(i)

(ii)

(iii)

(iv)

(v)

(vi)

(vii)

To review the background, academic and professional qualifications of each

individual director;

To review and recommend the nomination of retiring directors for re-election

at each Annual General Meeting (“AGM”);

To review and determine annually the independence of each director, and

ensure that the Board comprises at least one-third independent directors;

To nominate and recommend all new appointments to the Board;

To assess the performance of the Board as a whole, as well as the

contribution of each director to the effectiveness of the Board;

To decide, where a director has multiple board representation, whether the

director is able to and has been adequately carrying out his duties as a

director of the Company; and

To review the Board structure, size and composition and make

recommendations to the Board with regards to any adjustments that are

deemed necessary.




Code Guideline 4.2:

Re-nomination and

re-election of Directors

Code Principle 4.3:

Independence of Directors

Code Guideline 4.4:

Multiple board

representations

Code Guideline 4.5 :

Description of process of

selection and appointment

of new directors

Code Principle 5:

Board Performance

Code Principle 6 :

Access to information

Code Guideline 6.1:Board members to be

provided with timely

information

Code Guideline 6.2:

To include background and

explanatory information

Code Guideline 6.3:

Role of Company Secretary

In accordance with the Company’s Articles of Association, one third, or if their

number is not a multiple of three, the number nearest to but not less than

one-third of the directors are required to retire from office by rotation at each

AGM, (provided that no director holding office as Managing or Joint Managing

Director shall be subject to retirement by rotation or be taken into account in

determining the number of directors to retire). All newly appointed directors willhave to retire at the next AGM following their appointments. The retiring directors

are eligible to offer themselves for re-election, but shall not be taken into account

in determining the number of Directors who are to retire by rotation at such

meeting. The Board had recommended the re-election of the following director

who will be retiring at the forthcoming AGM:

Ms Helen Chow (Article 91)

In reviewing the re-nomination of the Board members who are due for re-election

as a director of the Company, no member of the Board shall vote in respect of his

own re-nomination.

The Board has reviewed the independence of each director for FY2009 in

accordance with the Code’s definition of independence and is satisfied that

one-third of the Board comprised independent non-executive directors.

Notwithstanding that some of the Directors have multiple board representations,

the Board is satisfied that each Director is able to and has been adequately

carrying out his duties as a director of the Company.

The search and nomination process for new directors, if any, will be through

search companies, contacts and recommendations that go through the normal

selection process to select the right candidate.

Informal reviews of Board members’ performance are undertaken on a

continuous basis by the Board. The Directors’ contribution and performance at

Board meetings (including attendance, preparedness, participation and candor)

are taken into consideration. Renewals or replacement of Directors’ Board

membership do not necessarily reflect their contributions to-date, but may be

driven by the need to position or shape the Board to be in line with the

medium-term needs of the Company and its business.

The Board receives management accounts every quarterly and meets half yearly

to review the operations of the Company and approve the issue of the quarterly

announcements to the SGX-ST. Board members are provided with complete,

adequate and timely information so that they may better understand the mattersto be tabled before the Board meetings and discussion may be focused on these

matters. In addition to the regular reports, all relevant information on material

events and transactions complete with background and explanations are

circulated to the Directors as and when they arise.

The Company Secretary attends and prepares minutes of all Board and Board

Committee meetings. She assists the Chairman in ensuring that Board

procedures are followed and regularly reviewed to ensure effective functioning of

the Board, and that the Company’s Memorandum and Articles of Association and

relevant rules and regulations, including requirements of the SGX-ST, are

complied with. She also assists the Chairman and the Board in implementing and

strengthening corporate governance practices and processes with a view toenhancing long-term shareholder value. She is also the primary channel of

communication between the Company and the SGX-ST. The appointment and

removal of the Company Secretary is a matter for the Board as a whole.




Remuneration Committee

Code Guideline 6.5:

Procedure for board to take

independent professional

advice at company’s cost

Code Principle 7:

Remuneration Matters

Guideline 7.1 :

RC to consist entirely

NEDs; majority, including

RC chairman, must be

independent

Code Guideline 7.2:

Duties of Remuneration

Committee

Code Principle 8 :

Level and Mix of

Remuneration

The directors have separate and independent access to the Group’s senior

Management who, together with the Company Secretary, are responsible for

ensuring that Board procedures are followed and that applicable rules and

regulation are complied with. Any requests by Board members for further

explanation, briefings or informal discussions on any aspect of the Company’s

operations are always facilitated expeditiously. Subject to the approval of theChairman, directors, whether as a group or individually, may seek and obtain

independent professional advice to assist them in their duties, at the expense of

the Company.

The Remuneration Committee (“RC”) comprises a majority of non-executive and

independent directors. The Company is of the view that the size of the Group’s

present business and operations does not justify the appointment of a third

non-executive director for the purpose of reconstituting the RC to comprise solely

of non-executive directors. The members of the RC are as follows:-


Mr Nandakumar Ponniya (Chairman)

Mr Edward Chiu

Executive Director:

Dr Anthony Lim

The RC has access to expert advice on executive compensation, where

appropriate. In its written terms of reference, the responsibilities of RC are as

follows:-

(i)

(ii)

(iii)

As part of its review, the RC covers all aspects of remuneration, including but not

limited to directors’ fees, salaries, allowance, bonuses, options andbenefits-in-kind. The aim of the RC is to motivate and retain valued executives

and employees and ensure that the Group is able to attract and retain the best

talent in the market in order to maximize shareholders’ value.

The RC ensures that the remuneration packages of employees related to

executive directors and controlling shareholders of the Group are in line with the

Group’s staff remuneration guidelines and commensurate with their respective job

scopes and levels of responsibilities. No director is involved in the deliberation of

his or her own remuneration.

To review and recommend to the Board the remuneration packages andterms of employment of the executive and non-executive directors of the

Board and key executives of the Group including those employees related to

the executive directors and controlling shareholders of the Group;

To review and approve Executive Share Option Scheme when required; and

To carry out its duties in a manner that it deems expedient, subject always

to any regulations or restrictions that may be imposed upon the RC by the

Board from time to time.





Package should align

executive directors’

interests with shareholders’

interest


Remuneration to consider

contribution, effort, time

spent and responsibilities

Code Principle 9 :

Disclosure of Remuneration

In recommending the remuneration packages for the Executive Directors and

Independent Directors, the Company has also made a comparative study of the

remuneration packages in comparable size companies and comparable industries

and has taken into account, the performance of the Company and that of its

Directors. The RC’s recommendations are made in consultation with the Chairman

of the Board and submitted for approval by the majority of the Board.

Non-executive directors (“NEDs”) are remunerated under a framework of fixed

fees for serving on the board and board committees. Fees for NEDs are subject to

the approval of shareholders at the AGM. The executive directors are currently

remunerated based on the performance of the Group and the individual.

The remuneration of Directors during FY2009 are as follows:-

Breakdown of Remuneration in Percentage (%)

* resigned on 28 November 2008

During FY2009, none of the Directors had immediate family members not

disclosed above who were employees of the Company and whose annual

remuneration exceeded S$150,000

Directors of

the Company

Executive Directors

$500,000 and above

Anthony Lim

Below $250,000

Jonathan Lim

Schnabel Rudianto *

Helen Chow

Independent Directors

Below $250,000

Nandakumar Ponniya

Edward Chiu

Base

Salary

80%

-

100%

77%

-

-

Bonus

20%

-

-

23%

-

-

Other

Benefits

-

-

-

-

-

-

Director’s

Fees

-

-

-

-

100%

100%

Total

100%

-

100%

100%

100%

100%




Code Principle 10 :

Accountability and Audit

Code Principle 11 :

Audit Committee

Code Guideline 11.8:

Disclosure of Names of

Members of Audit

Committee and their

Activities

The Board is accountable to shareholders whilst Management is accountable to

the Board.

Management presents to the Audit Committee (“AC”) the quarterly and annual

results. The AC reviews the results and recommends them to the Board for

approval. The Board approves the results and authorizes the release of the

results, and makes disclosure of other relevant information on the Company to

SGX-ST and the public via SGXNET as required by the SGX-ST Listing Manual.

The Audit Committee (“AC”) comprises three members, the majority of whom,

including its Chairman, are independent for the purpose of Rule 704(8) of theSGX-ST Listing Manual. The Company considers that it is not necessary for the

time being, for all 3 members of the AC to be non-executive directors taking into

account the nature and scope of the Company’s operations and the additional

costs to be incurred in appointing an additional non-executive director. The

Company will review the need to appoint another non-executive and independent

director when necessary. The AC members are as follows:


Mr Edward Chiu (Chairman)


Executive Director:

Dr Anthony Lim

The Company has adopted and complied with the principles of corporate

governance under the Code in relation to the roles and responsibilities of the AC.

The AC meets regularly with the Group’s external auditors and Management to

review accounting, auditing and financial reporting matters, so as to ensure that

an effective control environment is maintained in the Group.

As a sub-committee of the Board, the AC assists the Board in discharging its

responsibilities to safeguard the Company’s assets, maintain adequate accounting

records and develop and maintain an effective system of internal controls.

The Board considers that the members of the AC are appropriately qualified,

having the necessary accounting or related financial management expertise and

experience to discharge their responsibilities.

The AC meets periodically to review the following:-

(i)

Accountability

Audit Committee

The scope of work of the external auditors, and their evaluation of the system

of internal accounting controls arising from the audit and audit reports and

matters which the external auditors wish to raise;




(ii)

(iii)

(iv)

(v)

(vi)

(vii)

The Company has in place a Whistle-Blowing policy in compliance with the

recommendation of the Code. This policy serves to provide a channel to all

employees of the Group to report in good faith and in confidence, without fear of

reprisals, concerns about possible improprieties in matters of financial reporting

or other matters via a confidential email address assigned to top management

and independent directors. All employees have been assured of confidentiality

and protection of identity unless it is absolutely necessary to facilitate further

investigation into the matter of concern. A monetary reward is also given to the

employee who raises a matter of concern that results in identification of an actual

impropriety after a full investigation is conducted by the Company.

In performing its functions, the AC:

(i)

(ii)

(iii)

(iv)

The AC has full access to and cooperation from the management. It has been

given the resources required to discharge its function properly. The executive

management of the Company attends all meetings of the AC on invitation.

Both the AC and the Board have reviewed the appointment of different auditors

for its local subsidiaries and/or significant associated companies and were

satisfied that the appointment of different auditors would not compromise the

standard and effectiveness of the audit of the Company.

The quarterly and full year announcements of the results and the financial

position of the Group before submission to the Board for approval;

The consolidated financial statements of the Group and the Auditors’ Report

before submission to the Board;

The adequacy of the assistance given by the Group’s officers to the external

auditors;

The requirements for approval and disclosure of interested person

transactions, and where necessary, review and seek approval for interested

person transactions;

The non-audit services provided by the external auditors and whether the

provision of such services affects their independence; and

The recommendation to the Board on the appointment or re-appointment of

external auditors and matters relating to the resignation or dismissal ofexternal auditors.

has met with the external auditors, without the presence of Management, at

least once a year;

has explicit authority to investigate any matter within its terms of reference;

has had full access to and cooperation from Management and has full

discretion to invite any director and executive officer to attend its meetings;

and

has been given reasonable resources to enable it to discharge its functionsproperly.




Risk and Management

Internal Controls and Internal Audit

Code Principle 12:

Internal Controls

Principle 13:

Internal Audit

Code Guideline 12.2:

Internal Controls, including

financial, operational and

compliance controls and

risk management

In addition to the fees paid for audit engagement, the Company has engaged the

Company's external auditors, Messrs Horwath First Trust LLP to perform turnover

certifications for its subsidiary Aussino Home Fashions Pte Ltd.The Company has

also engaged Messrs Horwath First Trust LLP to act as its tax agent, and for its

subsidiaries Aussino Home Fashions Pte Ltd, www.aussino.com Pte Ltd and Sino

London Pte Ltd. Save for the aforementioned, there were no other non-audit feespayable to the Company's external auditors, Messrs Horwath First Trust LLP. The

AC is of the opinion that there is no issue relating to the provision of non-audit

services that may affect their independence.

The Board is responsible for maintaining a system of internal controls to

safeguard shareholders’ interests and the Company’s business and assets. The

Board believes that in the absence of any evidence to the contrary and from due

enquiry, the system of internal controls that has been maintained by the

Management is adequate to meet the needs of the Group in its current businessenvironment.

The effectiveness of the internal control system and procedures are monitored by

Management and the internal audit function is undertaken by the Chief Executive

Officer and Chief Financial Officer who identifies any operating and financial risks

which the Company may face in its activities. Internal audits will be conducted by

designated staff according to their area of expertise and any findings will be

discussed with local Management for continuous improvement to the Group’s

operations. The Chief Financial Officer reports to the AC on any material

non-compliance and internal control weaknesses and oversees the

implementation of any improvement thereto. Based on the information provided

to the AC, nothing has come to the AC’s attention to cause the AC to believe that

the system of internal controls and risk management is inadequate.

The Company regularly reviews and improves its business and operational

activities to identify areas of significant business risks as well as take appropriate

measures to control and mitigate these risks. The Company reviews all significant

controls, policies and procedures and highlights all significant matters to the Audit

Committee and the Board. Details of the Group’s risk management policy are

outlined in Note 27 of the financial statements.




Dealings In Securities

Code Principle 14 :

Communication with

Shareholders

Code Principle 15:

Communication with

Shareholders

SGX-ST Listing Rule 1207,

Sub-Rule (18) on Dealings

in Securities.

In line with continuous disclosure obligations, the Company is committed to

regular and proactive communication with its shareholders. It is the Board’s policy

that shareholders be informed of all major developments within the Group.

The Company is in regular communication with shareholders. The Company has

invested in external and internal resources to ensure timely, fair and detailed

disclosure of information to the public in compliance with the SGX-ST’s guidelines.

Price-sensitive information and results are released to the public through SGXNET

on a timely basis in accordance with the requirements of SGX-ST. The Company

does not practice selective disclosure.

Notices of shareholders’ meeting are also advertised in a newspaper in Singapore

and are also made available on the SGX-ST’s website. All shareholders of the

Company receive the Annual Report of the Company and the Notice of AGMwithin the mandatory notice period. Shareholders are encouraged to participate

at the Company’s general meetings. The Board (including the Chairmen of the

respective Board Committees), Management, as well as the external auditor,

attend the Company’s AGM to address any questions that shareholders may

have. Shareholders are encouraged to attend the AGM to stay informed of the

Group's strategy and goals. The AGM is the principal forum for dialogue with

shareholders.

In line with Listing Rule 1207(18), the Company has issued an internal guideline

on dealings in securities by officers of the Company and its subsidiaries to provide

guidance to its officers on dealing in the Company’s shares. All directors and

officers of the Company and its subsidiaries who have access to “price sensitive”

information are required to observe this guideline.

All directors and officers have been informed not to deal in the Company’s shares

whilst in possession of “price sensitive” information during the periods

commencing two weeks prior to the announcement of the Company’s financial

statements for each of the first three quarters of its financial year and one month

before the announcement of the Company's full year results. In addition, all

employees are required to observe insider trading laws at all times and are

prohibited from trading whilst in possession of price-sensitive information.

Directors and officers are required to observe insider trading provisions under the

Securities and Futures Act (Chapter 289) at all times even when dealing in the

Company's securities within the permitted periods. Directors of the Company are

required to report all dealings to the Company Secretary.

Communication with Shareholders




Material Contracts

Interested Person Transactions

SGX-ST Listing Manual

Rulen 1207(8)

Interested Person

Transaction (Rule 907 of

the SGX – ST Listing

Manual)

There are no material contracts of the Company or any of its subsidiaries

involving the interests of the CEO or any Director or controlling shareholder

entered into during the financial year that is required to be disclosed under Rule1207(8) of the SGX-ST Listing Manual.

During the financial year, there were no interested person transactions entered

into by the Group, as defined under the Listing Manual.

Prior to entry by the Group into an interested person transaction, the Board and

the Audit Committee will review such a transaction to ensure that the relevant

rules under Chapter 9 of the SGX-ST Listing Manual are complied with.




Contents

37 Directors’ Report

39 Statement by Directors

40 Auditor’s Report

42 Balance Sheets

43 Consolidated Income Statement

44 Consolidated Statement of Changes in Equity

45 Consolidated Statement of Cash Flow46 Notes to the Financial Statements

96 Additional Information

97 Shareholding Statistics

99 Notice of Eighteenth Annual General Meeting

103 Proxy Form

AUSSINO GROUP LTD

AND ITS SUBSIDIARIESReports And

FinancialStatementsFinancial Year Ended 30 June 2009




The directors present their report to the members together with the audited financial statements of AussinoGroup Ltd (the “Company”) and its subsidiaries (the “Group”) for the financial year ended 30 June 2009 andthe balance sheet of the Company as at 30 June 2009.

1. Directors

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

Anthony Lim Jonathan Lim Helen Chow Edward Chiu Nandakumar Ponniya

2.

3. Directors' interests in shares or debentures

Ultimate holding

company

Foreswood Industrial

CorporationBearer shares of

USD1.00 each Anthony Lim

Alpha Omega Inc Ordinary Shares of USD1.00 each Anthony Lim

The Company Aussino Group Ltd Ordinary Shares Anthony Lim Jonathan Lim Helen Chow

Arrangements to enable directors to acquire benefits by means of the acquisition of sharesand debentures

Neither at the end of nor at any time during the financial year was the Company a party to anyarrangement whose object is to enable the Directors of the Company to acquire benefits by means of theacquisition of shares in or debentures of the Company or any other body corporate.

According to the register kept by the Company for the purposes of section 164 of the SingaporeCompanies Act, Cap 50, none of the directors holding office at the end of the financial year had anyinterest in the shares or debentures of the Company or its related corporations, except as follows:

By virtue of section 7 of the Singapore Companies Act, Cap 50, Anthony Lim is deemed to have interestsin all the subsidiaries of the Company.

* Held by body corporate in which the director has interest by virtue of section 7 of the Singapore Companies Act, Cap 50.

Shareholdings registered inname of director or nominee

Shareholdings in which a directoris deemed to have an interest

Directors’ Report

At 1 July 2009

or date of appointment,

if laterAt

30 June 2009At

21 July 2009

At 1 July 2009

or date of appointment,

if laterAt

30 June 2009At

21 July 2009

10

-

-750

600,000

-

-

4,383,000750

600,000

-

-

4,383,000750

600,000

-

-

134,952,000--

-

100*

165,624,500--

-

100*

165,624,500--



In the opinion of the directors, the balance sheet of the Company and the consolidated financial statements of

the Group as set out on pages 42 to 95 are drawn up so as to give a true and fair view of the state of affairs ofthe Company and of the Group as at 30 June 2009 and of the results, changes in equity and cash flows of theGroup for the financial year then ended, and at the date of this statement, there are reasonable grounds tobelieve that the Company will be able to pay its debts as and when they fall due.

On behalf of the Board of Directors

Anthony Lim Helen ChowDirector Director

Singapore19 October 2009

Statement by Directors




We have audited the accompanying financial statements of Aussino Group Ltd. (the “Company”) and itssubsidiaries (collectively, the “Group”) set out on pages 42 to 95, which comprise the balance sheets of theGroup and Company as at 30 June 2009, the consolidated income statement, consolidated statement of cashflows and consolidated statement of changes in equity of the Group for the financial year then ended, and asummary of significant accounting policies and other explanatory notes.

Management’s responsibility for the financial statements

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

(a)

(b)

(c)

Auditors’ responsibility

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

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in thefinancial statements. The procedures selected depend on the auditor’s judgment, including the assessment of

the risks of material misstatement of the financial statements, whether due to fraud or error. In making thoserisk assessments, the auditor considers internal control relevant to the entity’s preparation and fairpresentation of the financial statements in order to design audit procedures that are appropriate in thecircumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internalcontrol. An audit also includes evaluating the appropriateness of accounting policies used and thereasonableness of accounting estimates made by management, as well as evaluating the overall presentationof the financial statements.

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

The financial statements for the year ended 30 June 2008 were audited by another firm of certified publicaccountants whose report dated 18 September 2008 expressed an unqualified opinion on those financialstatements.

Independent Auditor’s Report to the Membersof Aussino Group Ltd

evising and maintaining a system of internal accounting controls sufficient to provide a reasonableassurance that assets are safeguarded against loss from unauthorised use or disposition; and transactionsare properly authorised and that they are recorded as necessary to permit the preparation of true and fair

profit and loss accounts and balance sheets and to maintain accountability of assets;

selecting and applying appropriate accounting policies; and

making accounting estimates that are reasonable in the circumstances




Opinion

In our opinion:

(a)

(b)

Horwath First Trust LLP

Public Accountants and

Certified Public Accountants

Singapore

19 October 2009

Independent Auditor’s Report to the Members ofAussino Group Ltd (Continued)

the balance sheet of the Company and the consolidated financial statements of the Group are properlydrawn up in accordance with the provisions of the Act and Singapore Financial Reporting Standards so asto give a true and fair view of the state of affairs of the Company and of the Group as at 30 June 2009, andthe results, changes in equity and cash flows of the Group for the financial year ended on that date.

the accounting and other records required by the Act to be kept by the Company and by those subsidiariesincorporated in Singapore of which we are the auditors have been properly kept in accordance with theprovisions of the Act.




Consolidated Income StatementFor the financial year ended 30 June 2009

Note

17

18

21

20

22

23

23

2009

$

81,639,280

(46,599,554)

35,039,726

5,678,781

(24,688,683)

(16,308,402)(3,131,853)

(3,410,431)

(315,287)

(3,725,718)

734,185

(2,991,533)

(2,574,823)

(416,710)

(2,991,533)

(1.07)

(1.07)

2008

$

Note 29

94,949,797

(52,665,024)

42,284,773

3,460,481

(23,287,344)

(19,345,149)(554,024)

2,558,737

(442,408)

2,116,329

(112,964)

2,003,365

2,004,801

(1,436)

2,003,365

0.84

0.84

Revenue

Cost of sales

Gross profit

Other income

Selling and distribution expenses

Administrative expensesOther expenses

(Loss)/Profit from operations

Finance costs

(Loss)/Profit before tax

Income tax credit/(expense)

(Loss)/Profit for the year

Attributable to:

Equity holders of the Company

Minority interests

(Loss)/Earnings per share (cents)

Basic

Diluted

The accompanying notes are an integral part of the financial statements.




Consolidated Statement of Changes in EquityFor the financial year ended 30 June 2009

S h a r e

c a p i t a l

$

1 6 , 6

6 5 , 9

2 2 -

1 6 , 6

6 5 , 9

2 2 -

1 6 , 6

6 5 , 9

2 2 - - -

1 6 , 6

6 5 , 9

2 2 - - -

1 6 , 6

6 5 , 9

2 2

1 6 , 6

6 5 , 9

2 2 -

1 6 , 6

6 5 , 9

2 2 -

1 6 , 6

6 5 , 9

2 2 -

1 6 , 6

6 5 , 9

2 2 - -

1 6 , 6

6 5 , 9

2 2

R e s t r i c t e

d

r e s e r v e $

1 , 2

4 5 , 3

4 5 -

1 , 2

4 5 , 3

4 5

( 1 4 , 8 3

8 )

1 , 2

3 0 , 5

0 7 - - -

1 , 2

3 0 , 5

0 7

2 6 4 , 2

4 6 - -

1 , 4

9 4 , 7

5 3

1 , 4

9 4 , 7

5 3 -

1 , 4

9 4 , 7

5 3

1 0 5 , 9

1 0

1 , 6

0 0 , 6

6 3 -

1 , 6

0 0 , 6

6 3

( 6

3 ) -

1 , 6

0 0 , 6

0 0

T r a n s l a t i o n

r e s e r v e

$

( 3 , 7

3 8 , 3

8 2 ) -

( 3 , 7

3 8 , 3

8 2 )

( 4 , 0

4 2 , 6

9 5 )

( 7 , 7

8 1 , 0

7 7 ) - - -

( 7 , 7

8 1 , 0

7 7 ) - - -

( 7 , 7

8 1 , 0

7 7 )

( 7 , 8

8 4 , 7

4 2 )

1 0 3 , 6

6 5

( 7 , 7

8 1 , 0

7 7 )

3 8 0 , 1

8 3

( 7 , 4

0 0 , 8

9 4 ) -

( 7 , 4

0 0 , 8

9 4 ) - -

( 7 , 4

0 0 , 8

9 4 )

F a i r v a l u e

r e s e r v e

$

( 1 , 0

6 2 , 3

7 1 ) -

( 1 , 0

6 2 , 3

7 1 ) -

( 1 , 0

6 2 , 3

7 1 ) - - -

( 1 , 0

6 2 , 3

7 1 ) - - -

( 1 , 0

6 2 , 3

7 1 )

( 1 , 0

6 2 , 3

7 1 ) -

( 1 , 0

6 2 , 3

7 1 ) -

( 1 , 0

6 2 , 3

7 1 ) -

( 1 , 0

6 2 , 3

7 1 ) - -

( 1 , 0

6 2 , 3

7 1 )

T o t a l

e q u i t y

$

5 5 , 4 9 4

, 0 8 4

( 1 , 4

6 5 , 3

0 5 )

5 4 , 0 2 8

, 7 7 9

( 4 , 0

5 7 , 5

4 2 )

4 9 , 9 7 1

, 2 3 7

1 , 9 2 5

, 7 3 3

7 7

, 6 3 2

2 , 0 0 3

, 3 6 5

5 1 , 9 7 4

, 6 0 2 -

2 6 2

( 3 , 0

0 0 , 0

0 0 )

4 8 , 9 7 4

, 8 6 4

5 0 , 2 5 8

, 8 7 2

( 1 , 2

8 4 , 0

0 8 )

4 8 , 9 7 4

, 8 6 4

4 5 7

, 8 5 8

4 9 , 4 3 2

, 7 2 2

( 2 , 9

9 1 , 5

3 3 )

4 6 , 4 4 1

, 1 8 9 -

( 4 0 8 , 0

0 0 )

4 6 , 0 3 3

, 1 8 9

R e t a i n e d

e a r n i n g s

$

4 2 , 3

8 3 , 5

7 0

( 1 , 4

6 5 , 3

0 5 )

4 0 , 9

1 8 , 2

6 5 -

4 0 , 9

1 8 , 2

6 5

1 , 9

2 7 , 1

6 9

7 7 , 6

3 2

2 , 0

0 4 , 8

0 1

4 2 , 9

2 3 , 0

6 6

( 2 6 4 , 2

4 6 )

-

( 3 , 0

0 0 , 0

0 0 )

3 9 , 6

5 8 , 8

2 0

4 1 , 0

4 6 , 4

9 3

( 1 , 3

8 7 , 6

7 3 )

3 9 , 6

5 8 , 8

2 0 -

3 9 , 6

5 8 , 8

2 0

( 2 , 5

7 4 , 8

2 3 )

3 7 , 0

8 3 , 9

9 7

6 3

( 4 0 8 , 0

0 0 )

3 6 , 6

7 6 , 0

6 0

M i n o r i t y

i n t e r e s t s

$

- - - ( 9 )

( 9 )

( 1 , 4

3 6 ) -

( 1 , 4

3 6 )

( 1 , 4

4 5 )

- 2 6 2

-

( 1 , 1

8 3 )

( 1 , 1

8 3 ) -

( 1 , 1

8 3 )

( 2 8 , 2

3 5 )

( 2 9 , 4

1 8 )

( 4 1 6 , 7

1 0 )

( 4 4 6 , 1

2 8 ) - -

( 4 4 6 , 1

2 8 )

B a l a n c

e a s a t 1 . 7 . 2 0 0 7

- a s p r e v i o u s l y r e p o r t e d

- p r i o r y e a r a d j u s t m e n t s ( N o t e 2 9 )

A s r e s t a t e d

C u r r e n c y t r a n s l a t i o n d i f f e r e n c e s

N e t i n c o m e ( e x p e n s e s ) r e c o g n i s e d d i r e c t l y i n e q u i t y

P r o f i t f o r t h e y e a r



R e s t a t e

d p r o f i t f o r t h e y e a r

T o t a l r e

c o g n i s e d i n c o m e a n d e x p e n s e s

T r a n s f e

r o f r e s t r i c t e d r e s e r v e

C a p i t a l c

o n t r i b u t i o n b y m i n o r i t y i n t e r e s t s

D i v i d e n

d s ( N o t e 2 4 )

B a l a n c

e a s a t 3 0 . 6 . 2 0 0 8

B a l a n c

e a s a t 1 . 7 . 2 0 0 8



A s r e s t a t e d

C u r r e n c y t r a n s l a t i o n d i f f e r e n c e s

N e t i n c o m e ( e x p e n s e s ) r e c o g n i s e d d i r e c t l y i n e q u i t y

L o s s f o r t h e y e a r

T o t a l r e

c o g n i s e d i n c o m e a n d e x p e n s e s

T r a n s f e

r o f r e s t r i c t e d r e s e r v e

D i v i d e n

d s ( N o t e 2 4 )

B a l a n c

e a s a t 3 0 . 6 . 2 0 0 9

A t t r i b u t a b l e

t o e q u i t y h o l d e r s o f t h e C o m p a n y

T h e a c c o m p a n y i n g n o t e s a r e a n i n t e g r a l p a r t o f t h e f i n a n c i a l s t a t e m e n t s .




Consolidated Statement of Cash FlowFor the financial year ended 30 June 2009

a

Cash flows from operating activities(Loss)/Profit before tax and minority interests

Adjustments: Amortisation of intangible assets

Bad trade debts written off Allowance for trade doubtful debts written back Allowance for trade doubtful debts Provision of expenses written back Depreciation of property, plant and equipment Gain on disposal of property, plant and equipment, net Property, plant and equipment written off Property, plant and equipment adjustment Impairment loss of property, plant and equipment

Interest expense Interest income

Operating profit before working capital changes Inventories Trade and other receivables Trade and other payables

Cash generated from operationsInterest paidInterest income receivedIncome taxes paid

Net cash generated from operating activities

Cash flows from investing activitiesProceeds from disposal of property, plant and equipmentAcquisition of a subsidiaryPurchase of property, plant and equipmentAcquisition of intangible assetsCapital contribution by minority interests

Net cash used in investing activities

Cash flows from financing activitiesDividends paidProceeds from borrowingRepayment of bank term loansRepayment of finance lease obligations

Net cash used in financing activities

Effects of exchange rate changes in cash and cash equivalents

Net decrease in cash and cash equivalentsCash and cash equivalents at beginning of year

Cash and cash equivalents at end of year

The accompanying notes are an integral part of the financial statements.

2009$

(3,725,718)

2,970368

-487,738

-3,021,975(45,339)233,702(60,541)409,787

315,287(74,622)

565,6074,383,023

(4,779,217)475,385

644,798(140,369)

74,622(267,248)

311,803

186,836-

(2,453,354)(26,192)

-

(2,292,710)

(408,000)2,000,000

(4,161,681)(568,680)

(3,138,361)

232,853

(4,886,415)15,257,347

10,370,932

Note

12

12

2008 $

Note 29

2,116,329

2,59526,226

(30,081)26,364

(377,859)3,277,256(302,500)

497,198(2,416)

-

442,408(426,222)

5,249,298(3,005,320)

5,089,5622,462,581

9,796,121(267,694)

426,222(646,651)

9,307,998

703,391(3,016,324)(3,315,243)

(157)262

(5,628,071)

(3,000,000)1,361,681

(2,800,000)(338,236)

(4,776,555)

(3,739,108)

(4,835,736)20,093,083

15,257,347




Notes to the Financial StatementsFor the financial year ended 30 June 2009

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

1. GENERAL INFORMATION

2. SIGNIFICANT ACCOUNTING POLICIES

Basis of preparation

The Company is a limited company incorporated and domiciled in Singapore and publicly traded on theSingapore Exchange Securities Trading Limited. The address of the Company's registered office andprincipal place of business is 1 Scotts Road, #24-05/07, Shaw Centre, Singapore 228208.

The Company's immediate and ultimate holding company is Foreswood Industrial Corporation, acompany incorporated in Samoa.

The principal activities of the Company are those of investment holding and the provision of managementservices to its subsidiaries. The principal activities of its subsidiaries are disclosed in Note 6 to thefinancial statements.

The consolidated financial statements and balance sheet of the Company for the financial year ended30 June 2009 were authorised for issue in accordance with a resolution of the Board of Directors on19 October 2009.

The financial statements are prepared in accordance with the historical cost convention, except asdisclosed in the accounting policies below and are drawn up in accordance with the provisions of theSingapore Companies Act, Cap 50 and the Singapore Financial Reporting Standards (“FRS”).

The financial statements are presented in Singapore dollars unless otherwise indicated.

The preparation of financial statements in conformity with FRS requires management to exercise its judgment in applying the Group’s accounting policies. It also requires the use of accounting estimatesand assumptions that affect the reported amounts of assets and liabilities at the date of the financialstatements, and the reported amounts of revenues and expenses during the financial year. Althoughthese estimates are based on management’s best knowledge of current events and actions, actualresults may ultimately differ from those estimates. Critical accounting estimates and assumptions usedthat are significant to the financial statements and areas involving a higher degree of judgment orcomplexity are disclosed below.

New accounting standards and FRS interpretations

Certain new standards, amendments and interpretations to existing standards have been published as of

the balance sheet date but are not yet effective and which the Group has not early adopted.

Effective forannual periodsbeginning on

or after

FRS 1 (Revised 2008)

FRS 1

FRS 23

FRS 27

FRS 32

1 January 2009

1 January 2009

1 January 2009

1 January 2009

1 January 2009

Presentation of financial statements

Presentation of Financial Statements– Amendments relating to Puttable Financial Instrumentsand Obligations Arising on Liquidation and Current /Non-current Classification of Derivatives

Borrowing Costs

Consolidated and Separate Financial Statements– Amendments relating to Cost of an Investment in a

Subsidiary, Jointly Controlled Entity or AssociateFinancial Instruments: Presentation– Amendments relating to Puttable Financial Instrumentsand Obligations Arising on Liquidation and Current /Non-current Classification of Derivatives




Notes to the Financial StatementsFor the financial year ended 30 June 2009 (Continued)

vv

2. SIGNIFICANT ACCOUNTING POLICIES (Continued)

New accounting standards and FRS interpretations (Continued)

The Group’s assessment of the impact of adopting these standards, amendments and interpretations thatare relevant to the Group is set out below:

FRS 1 (revised 2008) will become effective for the Group’s financial statements for the year ending 30June 2010. The revised standard requires an entity to present, in a statement of changes in equity, allowner changes in equity. All non-owner changes in equity (i.e. comprehensive income) are required to bepresented in one statement of comprehensive income or in two statements (a separate income statementand a statement of comprehensive income). Components of comprehensive income are not permitted tobe presented in the statement of changes in equity. In addition, a statement of financial position isrequired at the beginning of the earliest comparative period following a change in accounting policy, thecorrection of an error or the reclassification of items in the financial statements. FRS 1 (revised 2008)

does not have any impact on the Group’s financial position or results.

FRS 23 will become effective for the Group’s financial statements for the year ending 30 June 2010. FRS23 removes the option to expense borrowing costs and requires an entity to capitalise borrowing costsdirectly attributable to the acquisition, construction or production of a qualifying asset as part of the costof that asset. The Group’s current policy is consistent with the FRS 23 requirement to capitaliseborrowing costs.

Amendments to FRS 102 will become effective for the Group’s financial statements for the year ending30 June 2010. These amendments clarify the definition of vesting conditions and to prescribe theaccounting treatment of an award that is effectively cancelled because non-vesting condition is notsatisfied. The adoption of these amendments is not expected to have any impact on the financialposition or performance of the Group.

FRS 39

FRS 101

FRS 102

FRS 103

FRS 107

FRS 108

Improvements to FRSs 2008

Improvements to FRSs 2009

INT FRS 113

INT FRS 116

INT FRS 117

INT FRS 118

1 July 2009

1 January 2009

1 January 2009

1 July 2009

1 January 2009

1 January 2009

1 January 2009

1 July 2009

1 July 2008

1 October 2008

1 July 2009

1 July 2009

Financial Instruments: Recognition and Measurement- Amendments relating to Eligible Hedged Items

First Time Adoption of Financial Reporting Standards– Amendments relating to Cost of an Investment in aSubsidiary, Jointly Controlled Entity or Associate

Share-based Payment – Vesting Conditions and Cancellations

Business Combinations

Financial Instruments: Disclosures- Amendments to FRS 107 Financial Instruments:Disclosure – Improving Disclosures about FinancialInstruments

Operating Segments

Customer Loyalty Programmes

Hedges of a Net Investment in a Foreign Operation

Distributions of Non-cash Assets to Owners

Transfer of Assets from Customers

Effective forannual periodsbeginning on

or after






New accounting standards and FRS interpretations (Continued)

Basis of consolidation

FRS 108 will become effective for financial statements for the year ending 30 June 2010. FRS 108supersede FRS 14 - Segment Reporting and requires the Group to report the financial performance of itsoperating segments based on the information used internally by management for evaluating segmentperformance and deciding on allocation of resources. Such information may be different from theinformation included in the financial statements, and the basis of its preparation and reconciliation to theamounts recognised in the financial statements shall be disclosed. The Group will apply FRS 108 from1 July 2009 and provide comparative information that conforms to the requirements of FRS 108. Theimpact of this standard on the other segment disclosures is still to be determined. As this is a disclosurestandard, it will have no impact on the financial position or financial performance of the Group whenimplemented in financial year 2010.

Improvements to FRSs 2008 will become effective for the Group’s financial statements for the yearending 30 June 2010, except for the amendment to FRS 105 Non-current Assets Held for Sale andDiscontinued Operations which will become effective for the year ending 30 June 2011. Improvements toFRSs 2008 contain amendments to numerous accounting standards that result in accounting changes forpresentation, recognition or measurement purposes and terminology or editorial amendments. The Groupis in the process of assessing the impact of these amendments.

Improvements to FRSs 2009 will become effective for the Group’s financial statements for the financialyear ending 30 June 2010 for amendments relating to:

- FRS 102 Share-based payment - FRS 38 Intangible assets - INT FRS 109 Reassessment of embedded derivatives - INT FRS 116 Hedges of a net investment in a foreign operation

Improvements to FRSs 2009 will become effective for the Group’s financial statements for the financialyear ending 30 June 2011 for amendments relating to:

- FRS 1 Presentation of financial statements - FRS 7 Statement of cash flows - FRS 17 Leases - FRS 36 Impairment of assets - FRS 39 Financial Instruments: Recognition and measurement

- FRS 105 Non-current assets held for sale and discontinued operations - FRS 108 Operating segments

Improvements to FRSs 2009 contain certain amendments to numerous accounting standards that result

in accounting changes for presentation, recognition or measurement and disclosure purposes. The Groupis in the process of assessing the impact of these amendments.

Subsidiaries are entities (including special purpose entities) over which the Group has power to governthe financial and operating policies, generally accompanying a shareholding of more than one half of thevoting rights. The existence and effect of potential voting rights that are currently exercisable orconvertible are considered when assessing whether the Group controls another entity.

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






Intangible assets

Patents

Acquired patents are stated at cost less accumulated amortisation and any impairment in value.Amortisation is calculated using the straight-line method to allocate the cost of patents over 20 years,representing the period that benefits are expected to be received. The cost of renewing patents is treatedas an expense in the income statement.

Goodwill

Goodwill represents the excess of the cost of an acquisition of subsidiaries over the fair value of theGroup’s share of the identifiable assets, liabilities and contingent liabilities of the acquired subsidiaries at

the date of acquisition.

Goodwill on the acquisition of subsidiaries is recognised separately as intangible assets and carried atcost less accumulated impairment losses.

Impairment of non-financial assets

Goodwill

Goodwill is tested annually for impairment, as well as when there is any indication that the goodwill may beimpaired.

For the purpose of impairment testing of goodwill, goodwill is allocated to each of the Group'scash-generating-units (CGU) expected to benefit from synergies arising from the business combination.

An impairment loss is recognised in the income statement when the carrying amount of a CGU, including thegoodwill, exceeds the recoverable amount of the CGU. Recoverable amount of a CGU is the higher of theCGU's fair value less cost to sell and value-in-use.

The total impairment loss of a CGU is allocated first to reduce the carrying amount of goodwill allocated tothe CGU and then to the other assets of the CGU pro-rata on the basis of the carrying amount of each assetin the CGU.

An impairment loss on goodwill is recognised in the income statement and is not reversed in a subsequentperiod.

Intangibles assets, property, plant and equipment and investments in subsidiaries

Intangible assets, property, plant and equipment and investments in subsidiaries are reviewed forimpairment whenever there is any indication that these assets may be impaired. If any such indicationexists, the recoverable amount (i.e. the higher of the fair value less cost to sell and the value-in-use) of theasset is estimated to determine the amount of impairment loss.

For the purpose of impairment testing of these assets, recoverable amount is determined on an individualasset basis unless the asset does not generate cash flows that are largely independent of those from otherassets. If this is the case, recoverable amount is determined for the CGU to which the asset belongs.

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





An impairment loss for an asset other than goodwill is reversed if, and only if, there has been a change inthe estimates used to determine the asset's recoverable amount since the last impairment loss wasrecognised. The carrying amount of an asset other than goodwill is increased to its revised recoverableamount, provided that this amount does not exceed the carrying amount that would have beendetermined (net of amortisation or depreciation) had no impairment loss for an asset other than goodwillis recognised in the income statement, unless the asset is carried at revalued amount, in which case,such reversal is treated as a revaluation increase. However, to the extent that an impairment loss on thesame revalued asset was previously recognised in the income statement, a reversal of that impairmentloss is also recognised in the income statement.

The Group classifies its financial assets in the following categories, as applicable: financial assets at fairvalue through profit or loss, loans and receivables, held-to-maturity investments and available-for-salefinancial assets. The classification depends on the purpose for which the assets were acquired.Management determines the classification of its financial assets at initial recognition and re-evaluates thisdesignation at every reporting date, with the exception that the designation of financial assets at fairvalue through profit or loss is not revocable. As at the balance sheet date, the Group did not have anyfinancial assets in the category of held-to-maturity investments and fair value through profit and loss.

Investments are recognised on the date the Group commits to purchase the investments and are initially

measured at fair value plus directly attributable transaction costs. Financial assets are derecognised whenthe rights to receive cash flows from the financial assets have expired or have been transferred and theGroup has transferred substantially all the risks and rewards of ownership of these assets.

The fair values of quoted financial assets are based on current bid prices. If the market for a financialasset is not active, the Group establishes fair value by using appropriate valuation techniques.

Loans and receivables

These assets are non-derivative financial assets with fixed or determinable payments that are not quotedin an active market. They arise principally through the provision of goods and services to customers(trade debtors), but also incorporate other types of contractual monetary asset. Loans and receivablesare initially recognised at fair value plus transaction costs. They are subsequently carried at amortisedcost using the effective interest method. Loans and receivables include trade and other receivables on the

balance sheets.

Available-for-sale financial assets

These assets are non-derivative financial assets that are either designated in this category or notincluded in other categories of financial assets, and comprise the Group's strategic investments in entitiesnot qualifying as subsidiaries, associates or jointly controlled entities. After initial recognition at fair value,the financial assets are subsequently re-measured to fair value at each balance sheet date with all fairvalue changes, other than impairment in value, taken to equity. Where a decline in the fair value of anavailable-for-sale financial asset constitutes objective evidence of impairment, the amount of the loss isremoved from equity and recognised in the income statement.


Impairment of non-financial assets (Continued)

Intangibles assets, property, plant and equipment and investments in subsidiaries (Continued)

Financial assets and financial liabilities

Financial assets



The Group classifies its financial liabilities into one of the two categories, as applicable: fair value throughprofit or loss and other financial liabilities. “Fair value through profit or loss” category comprises onlyout-of-the-money derivatives which the Group did not have any as at the balance sheet date. “Otherfinancial liabilities” include trade and other payables and bank borrowings on the balance sheets.

Derivative financial instruments

The Group uses derivative financial instruments, primarily interest rate swaps, to manage its exposure tointerest rate risk arising from bank borrowings. The Group does not use derivative financial instruments

for speculative purposes. However, derivative financial instruments of the Group that do not qualify forhedge accounting are accounted for as trading instruments.

Derivatives are initially recognised at fair value on the date a derivative contract is entered into and aresubsequently re-measured at their fair value at each balance sheet date. Changes in the fair value ofderivative financial instruments that do not qualify for hedge accounting are recognised immediately inthe income statement.

Trade and other receivables

Trade and other receivables are recognised initially at fair value and are subsequently measured atamortised cost, where applicable, using the effective interest method, less allowance for impairment. Anallowance for impairment of trade receivables is established when there is objective evidence that theGroup will not be able to collect all amounts due according to the original terms of the receivables. The

amount of the allowance is the difference between the asset's carrying amount and the present value ofthe estimated future cash flows, discounted at the effective interest rate. The amount of the allowance isrecognised in the income statement.

Inventories

Inventories purchased for resale are stated at the lower of cost and net realisable value.

Cost is determined on the weighted average basis and includes all costs of purchase, costs of conversionand other costs incurred in bringing the inventories to their present location and condition.

Net realisable value is the estimated selling price at which the inventories can be realised in the normalcourse of business after allowing for the costs of realisation. Allowance is made for obsolete, slow-moving

and defective inventories.

Cash and cash equivalents

Cash consists of cash on hand and cash with banks (including unpledged fixed deposits). Cashequivalents are short-term, highly liquid investments that are readily convertible to known amounts ofcash which are subject to an insignificant risk of changes in value.

For the purpose of the consolidated statement of cash flow, cash and cash equivalents are presented netof bank overdraft which is repayable on demand and which forms an integral part of the Group’soperating cash cycle.




Financial assets and financial liabilities (Continued)

Financial liabilities






Trade and other payables

Trade and other payables are initially measured at fair value and are subsequently measured atamortised cost, where applicable, using the effective interest rate method.

Provisions

Provisions are recognised when the Group has a present obligation as a result of past events, and it isprobable that the Group will be required to settle the obligation. Provisions are measured at theDirectors’ best estimate of the expenditure required to settle the obligation at the balance sheet date,and are discounted to present value where the effect is significant.

Bank borrowings

Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings aresubsequently stated at amortised cost. Any difference between the proceeds (net of transaction costs)and the redemption value is taken to the income statement over the period of the borrowings using theeffective interest method.

Borrowings which are due to be settled within twelve months after the balance sheet date are included incurrent borrowings in the balance sheet even though the original term was for a period longer thantwelve months and an agreement to refinance, or to reschedule payments, on a long-term basis iscompleted after the balance sheet date and before the financial statements are authorised for issue.Other borrowings due to be settled more than twelve months after the balance sheet date are includedin non-current borrowings in the balance sheet.

Share capital

Ordinary shares are classified as equity. Incremental costs directly attributable to the issuance of newequity instruments are taken to equity as a deduction, net of tax, from the proceeds.

Revenue recognition

Sale of goods

Revenue is recognised when significant risks and rewards of ownership of the goods have beentransferred to the buyer, it is probable that the economic benefits associated with the transaction willflow to the Group and the revenue and costs, if applicable, can be measured reliably.

Interest income

Interest income is accrued on a time-apportionment basis using the effective interest method.

Dividend income

Dividend income is recognised in the income statement when the shareholder’s right to receive thepayment is established.

Management fee income

Management fee income is recognised when the services are rendered.






Income tax

Income tax for the financial year comprises current and deferred tax. Income tax is recognised in incomestatement except to the extent that it relates to items recognised directly in equity, in which case, suchtax is recognised in equity.

Current tax is the expected tax payable on the taxable income for the financial year, using tax ratesenacted at the balance sheet date, and any adjustment to tax payable in respect of previous financialyears.

Deferred tax is provided using the liability method, providing for temporary differences between the taxbases of assets and liabilities and their carrying amounts in the financial statements. The amount ofdeferred tax is provided based on the expected manner of realisation or settlement of the carrying

amount of assets and liabilities, using tax rates enacted at the balance sheet date.

A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will beavailable against which the asset can be utilised. Deferred tax assets are reduced to the extent that it isno longer probable that the related tax benefit will be realised.

Employees’ benefits

Defined contribution plans

Contributions to defined contribution plans are recognised as an expense in the income statement in thesame financial year as the employment that gives rise to the contributions.

Employees’ leave entitlement

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

Finance costs

Interest expenses and similar charges are expensed in the income statement in the financial year inwhich they are incurred.

Dividends

Interim dividends are recorded in the financial year in which they are declared payable. Final dividends

are recorded in the financial year in which the dividends are approved by the shareholders.






Leases

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risksand rewards of ownership of the related assets to the lessee. All other leases are classified as operatingleases.

Finance leases

Assets acquired through finance leases are capitalised at the lower of its fair value and the present valueof the minimum lease payments at the inception of the leases. The corresponding liability is included inthe balance sheet as a finance lease obligation. Lease payments are apportioned between financecharges and reduction of the lease obligation so as to achieve a constant rate of interest on theremaining balance of the liability. Finance charges are taken to the income statement.

Operating leases

Payments made under operating leases (net of any incentives received from the lessor) are taken to theincome statement on a straight-line basis over the period of the lease.

When an operating lease is terminated before the lease period has expired, any payment required to bemade to the lessor by way of penalty is recognised as an expense in the period in which terminationtakes place.

Foreign currencies

Functional and presentation currency

Items included in the financial statements of each entity in the Group are measured using the currencyof the primary economic environment in which the entity operates (the "functional currency"). Theconsolidated financial statements are presented in Singapore Dollars, which is the Company's functionaland presentation currency.

Transactions and balances

Foreign currency transactions are translated into the functional currency using the exchange ratesprevailing at the dates of the transactions. Foreign exchange gains and losses resulting from thesettlement of such transactions and from the translation at year-end exchange rates of monetary assetsand liabilities denominated in foreign currencies are recognised in the income statement.

Translation differences on non-monetary items, such as equities held at fair value through profit or loss,

are recognised in the income statement. Translation differences on non-monetary items, such as equitiesclassified as available-for-sale financial assets, are included in equity.

Translation of Group entities’ financial statements

The results and financial position of all subsidiaries (none of which has the currency of ahyperinflationary economy) that have a functional currency different from the presentation currency aretranslated into the presentation currency as follows:-

(i) assets and liabilities are translated at the closing rate at the balance sheet date;(ii) income and expenses are translated at average exchange rate; and(iii) all resulting exchange differences are taken to the foreign currency translation reserve within equity.






Segment reporting

3. CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS

For management purposes, the Group is organised on a world-wide basis into four main geographicalsegments. Geographical segments are used by the Group as its primary segment reporting format.

A geographical segment is a particular economic environment that an enterprise is engaged in providingproducts or services which is subject to risks and returns that are different from those of segmentsoperating in other economic environments. A business segment is a distinguishable component of anenterprise that is engaged in providing an individual product or service or a group of related products orservices and that is subject to risks and returns that are different from those of other business segments.

Segment revenue, expenses and results include transfers between business segments and geographicalsegments.

Related parties

Parties are considered to be related if one party has the ability, directly or indirectly, to control the otherparty, or exercise significant influence over the other party in making financial and operating decisions.Parties are also considered to be related if they are subject to common control or common significantinfluence. Related parties may be individuals or corporate entities.

Critical accounting estimates and judgments made at the balance sheet date that have a significant risk ofcausing a material adjustment to the carrying amounts of assets and liabilities within the next financial yearare discussed below.

Impairment of goodwill

Determining whether goodwill is impaired requires an estimation of the value in use of the cash-generatingunits to which goodwill has been allocated. The value in use calculation requires the entity to estimate thefuture cash flows expected to arise from the cash-generating unit and a suitable discount rate in order tocalculate present value.

Impairment of investments in subsidiaries

In assessing whether the investments in subsidiaries are impaired, the Company used value-in-usecalculations. These calculations are based on cash flow projections prepared using financial budgetscovering a three-year period. The management has considered and determined the factors applied in thefinancial budgets, which include budgeted gross margins and average growth rates. The budgeted grossmargins are based on past performance and the average growth rates and discount rates used are basedon management’s best estimate regarding the industry and sector performance, changes in consumertastes and trends and overall economic environment.

Depreciation of property, plant and equipment

The depreciable costs of assets are allocated on a straight-line basis over their estimated useful lives.Management estimates the useful lives of these assets to be within 3 to 50 years. The carrying amounts ofthe Group’s and the Company’s property, plant and equipment as at 30 June 2009 were approximately$13,575,000 (2008: $14,383,000) and $1,208,000 (2008: $1,407,000) respectively. Changes in theexpected level of usage and technological developments could impact the economic useful lives and theresidual values of these assets (Note 4).

Changes in the government regulations and industrial circumstances could also have an impact on the

requirement for provision for dismantlement, removal and restoration costs and the estimated amounts.





3. CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS (Continued)

Income taxes

The Group is subject to income taxes in numerous jurisdictions. Judgment is required in determining thecapital allowances and deductibility of certain expenses when estimating the provision for income taxes.There were transactions during the ordinary course of business for which the ultimate tax determinationis uncertain. The Group recognises liabilities for anticipated tax issues, if any, based on judgment ofwhether additional taxes will be due. Where the final tax outcome of these matters is different from theamounts that were initially recorded, such differences will impact the income tax and deferred taxprovisions in the period in which the outcome is known.

Impairment of trade and other receivables

The determination of whether these financial assets are impaired requires judgment to be exercised by

the management. The management has to consider factors, among others, financial position of the

customers and the performance of the industry and sector in which the customers are operating. These

factors affect the judgment made by the management in their assessment of impairment of the trade

and other receivables balances.

Impairment of available-for-sale financial asset

The Group follows the guidance of FRS 39 in determining when an available-for-sale financial asset is

considered impaired. This determination requires significant judgment. The Group evaluates, among

other factors, the duration and extent to which the fair value of a financial asset is less than its cost, the

financial health of and the near-term business outlook of the issuer of the instrument, including factors

such as industry and sector performance, changes in technology and operational and financing cashflow. The Group’s evaluation of financial asset is reflected in Note 7 and has been included in fair value

reserve.

Inventories

To determine whether there is impaired marketability of the inventories, the management has to

exercise judgment in assessing: (1) whether an event has occurred that may affect the inventory value;

and (2) whether the future business strategies will affect the marketability and estimated net realisable

value of the inventory. Changing the relevant assumptions and future business strategies of

management could materially affect the determination of the estimated net realisable values of the

inventories.

Inventories are stated at the lower of cost and net realisable value. The net realisable value is estimated

based on the estimated average realisable value of each category of inventory. The carrying amount of

the Group's inventories at 30 June 2009 was approximately $18,572,000 (2008: $22,955,000).





4. PROPERTY, PLANT AND EQUIPMENT

Group

Cost

As at 1.7.2007

Additions

Disposals

Transfer

Acquisition of subsidiaries

Currency translation differences

As at 30.6.2008

As at 1.7.2008

Additions

Adjustments

Disposals


As at 30.6.2009

Accumulated depreciationand impairment loss

As at 1.7.2007

Charge for the year

Disposals

Transfer


As at 30.6.2008

As at 1.7.2008

Charge for the year

Adjustments

DisposalsImpairment loss


As at 30.6.2009

Net book value

As at 1.7.2007

As at 30.6.2008

As at 30.6.2009

Freehold

land

$

1,214,694

-

-

(881,229)

-

-

333,465

333,465

-

-

-

-

333,465

891,755

-

-

(881,229)

(10,526)

-

-

-

-

--

-

-

322,939

333,465

333,465

Buildings and

leasehold

improvements

$

12,080,412

1,465,852

(432,258)

881,229

318,406

(135,973)

14,177,668

14,177,668

1,339,507

12,046

(219,203)

814,118

16,124,136

2,813,203

1,310,803

(60,566)

881,229

(28,604)

4,916,065

4,916,065

1,062,934

-

(43,037)409,787

309,043

6,654,792

9,267,209

9,261,603

9,469,344

Fixtures,

furniture,

fittings and

equipment

$

9,071,351

2,154,835

(1,061,330)

-

20,264

(444,090)

9,741,030

9,741,030

625,910

-

(244,511)

(13,853)

10,108,576

5,551,513

1,454,106

(539,168)

-

(236,188)

6,230,263

6,230,263

1,499,520

-

(167,949)-

(20,357)

7,541,477

3,519,838

3,510,767

2,567,099

Motor

vehicles

$

1,482,569

257,868

-

-

291,478

(14,138)

2,017,777

2,017,777

459,599

291,173

(325,730)

21,159

2,463,978

547,248

373,005

-

-

(4,586)

915,667

915,667

337,645

242,678

(203,260)-

47,502

1,340,232

935,321

1,102,110

1,123,746

Computer

equipment

$

1,360,369

115,757

(14,663)

-

-

(26,364)

1,435,099

1,435,099

28,339

-

(3,518)

495

1,460,415

1,155,980

139,342

(12,843)

-

(22,229)

1,260,250

1,260,250

121,876

-

(3,517)

-

298

1,378,907

204,389

174,849

81,508

Total

$

25,209,395

3,994,312

(1,508,251)

-

630,148

(620,565)

27,705,039

27,705,039

2,453,355

303,219

(792,962)

821,919

30,490,570

10,959,699

3,277,256

(612,577)

-

(302,133)

13,322,245

13,322,245

3,021,975

242,678

(417,763)

409,787

336,486

16,915,408

14,249,696

14,382,794

13,575,162



59


4. PROPERTY, PLANT AND EQUIPMENT (Continued)

As at 30 June 2009, the Group had motor vehicles with net book values of $79,788 (2008: $254,773)

and leasehold improvements of $89,212 (2008: $287,834) acquired under finance lease contracts.

The freehold land and building of the Group located at the business premises at 57-59 Wittenberg Drive,

Canning Vale, Perth, Australia, were pledged as security for the bank overdraft facility for the Australian

subsidiary (Note 14).

Company

Cost

As at 1.7.2007

Additions

Disposals

As at 30.6.2008

As at 1.7.2008

Additions

As at 30.6.2009

Accumulated depreciation

As at 1.7.2007

Charge for the year

Disposals

As at 30.6.2008

As at 1.7.2008

Charge for the year

As at 30.6.2009

Net book value

As at 1.7.2007

As at 30.6.2008

As at 30.6.2009

Freehold

land

$

333,465

-

-

333,465

333,465

-

333,465

-

-

-

-

-

-

-

333,465

333,465

333,465

Buildings

$

1,400,370

-

(432,258)

968,112

968,112

-

968,112

227,391

32,848

(60,566)

199,673

199,673

24,203

223,876

1,172,979

768,439

744,236

Fixtures,

furniture,

fittings andequipment

$

124,835

251,187

(19,700)

356,322

356,322

5,716

362,038

77,962

79,382

(4,440)

152,904

152,904

124,297

277,201

46,873

203,418

84,837

Computer

equipment

$

821,928

60,375

-

882,303

882,303

4,000

886,303

700,826

79,708

-

780,534

780,534

59,977

840,511

121,102

101,769

45,792

Total

$

2,680,598

311,562

(451,958)

2,540,202

2,540,202

9,716

2,549,918

1,006,179

191,938

(65,006)

1,133,111

1,133,111

208,477

1,341,588

1,674,419

1,407,091

1,208,330





5. INTANGIBLE ASSETS

Goodwill – Note 5(a)

Patents – Note 5(b)

(a) Goodwill

At beginning of financial year

Acquisition of subsidiaries during the financial year


At end of financial year

2009

$

2,051,810

59,614

2,111,424

2009

$

2,298,295

-

(246,485)

2,051,810

2008

$

2,298,295

36,409

2,334,704

2008

$

-

2,298,295

-

2,298,295

Goodwill represents the value of brand name, customer lists, sales channels acquired from the Australian

subsidiaries. Goodwill arise from the acquisition of the Australian subsidiaries which was the

cash-generating units for the purpose of impairment testing of the goodwill.

Impairment tests for goodwill

The recoverable amount of the goodwill was determined based on value-in-use calculations. Cash flow

projections used in these calculations were based on financial budgets approved by management covering a

three-year period. Assumptions for the budgets were based on past performance and expectations of the

market development.

Key assumptions used for value-in-use calculations:

Growth rate1 10.00% 10.00%

Discount rate2 9.37% 9.37%

1Growth rate used in the cash flow projections2Pre-tax discount rate applied to the pre-tax cash flow projections

Group

Group

2009 2008




5. INTANGIBLE ASSETS (Continued)

(b) Patents

Cost

Balance at beginning of financial year

Additions


Balance at end of financial year

Accumulated amortisation


Amortisation charge for the financial year


Net book value


Amortisation expense is included in “administrative expense” in the income statement.

6. INVESTMENTS IN SUBSIDIARIES

(a) Investments in subsidiaries comprise the following:-

Equity investment at cost

At beginning of financial year

Acquisition during the financial year

Allowance for impairment in value

At end of financial year


2009

$

52,052

26,192

(17)

78,227

15,643

2,970

18,613

59,614

2008

$

51,895

157

-

52,052

13,048

2,595

15,643

36,409

Group

2009

$

51,895

26,192

-

78,087

15,643

2,970

18,613

59,474

2008

$

51,895

-

-

51,895

13,048

2,595

15,643

36,252

Company

2009

$

16,183,102

100

16,183,202(1,174,879)

15,008,323

2008

$

15,182,341

1,000,761

16,183,102(174,879)

16,008,223

Company





Details of subsidiaries are included in Note 6(b).

The Company’s 75% owned subsidiary, Doppio Fashion Group Pty Ltd, has incorporated a new subsidiary Sino

London (Australia) Pty Ltd (”Sino London Australia”) on 4 July 2008. Sino London Australia is in the business of

wholesale and retail of fashion apparel.

The Company has also incorporated a wholly owned subsidiary in Australia, Galleria Fashions International Pty

Ltd (”Galleria Fashions”) on 29 January 2009. The paid up capital is AUD100 (SGD100) through cash

contribution. Galleria Fashions is in the business of wholesale and retail of fashion apparel.

During the financial year, a PRC subsidiary of the Group invested RMB2,500,000 for a 50% equity interest in

another PRC company. Subsequently, the entire investment of RMB2,500,000 was returned back to the

subsidiary. Accordingly, these transactions have not been reflected on the balance sheet of the Group.

6. INVESTMENTS IN SUBSIDIARIES (Continued)

(a) Investments in subsidiaries comprise the following:- (Continued)

Movement of allowance for impairment in value:-


Allowance made during the financial year


2009

$

174,879

1,000,000

1,174,879

2008

$

174,879

-

174,879

Company






(b) Details of the subsidiaries

Aussino Home FashionsPte Ltd

www.Aussino.comPte Ltd

Sino London Pte Ltd

Aussino Fashion Textiles(Shanghai) Co., Ltd

Aussino Home Fashions(Shanghai) Co., Ltd

Sino Fashion(Shanghai) Co., Ltd

Aussino China Inc

Aussino InternationalCorporation Pty Ltd

Doppio Fashion GroupPty Ltd

Galleria FashionsInternational Pty Ltd

Aussino Malaysia Sdn.Bhd.

Aussino (U.S.A.) Inc.

Retro (U.S.A.) Inc.

Suhan InternationalTrade Co., Ltd

Name of subsidiaries

Held by the Company

Country of

incorporation and

place of business

Effective

percentage

of equity

held by

the Group

Principal activities

Singapore

Singapore

Singapore

People’s Republicof China




Australia

Australia

Australia

Malaysia

United States ofAmerica

United States ofAmerica

Samoa

Wholesale and retail of lifestylehome fashion products

Provision of E-commerce servicesand IT support services to itsrelated companies

Retail of ladies’ fashion apparel


Dormant

Dormant

Dormant

Wholesale and distribution oflifestyle home fashion products

Investment holding

Wholesale and retail of fashionapparel


Dormant

Wholesale and distribution oflifestyle home fashion products

Export of lifestyle home fashionproducts

2009

%

100

100

100

100

100

100

100

100

75

100

100

100

100

100

2008

%

100

100

100

100

100

100

100

100

75

-

100

100

100

100

*(1)

*(1)

*(1)

*(2)

+

+

+

*(3)

*(6)

*(6)

*(4)

#@

#@

#@






(b) Details of the subsidiaries (Continued)

Aussino (Canada) Inc.

Aussino (Europe) Limited

Sino Fashions (London)Limited

Aussino Fashions GroupLimited

Aussino Korea Inc

Held by subsidiaries

Aussino.com MalaysiaSdn. Bhd.

Aussino InternationalTrade (Shanghai) Co Ltd

Aussino Food & BeverageChina Corporation

Nuovo Uno Pty Ltd

Leo Fashion InternationalPty Ltd

Sino London Pty Ltd

Name of Subsidiaries

Held by the Company

Country of

incorporation and

place of business

Effective

percentage

of equity

held by

the Group

Principal activities

Canada

United Kingdom

United Kingdom

Hong Kong

Korea

Malaysia



Australia

Australia

Australia

Dormant

Dormant

Dormant



Dormant

Trading, wholesale and retail oflifestyle home fashion products

Dormant




2009

%

100

100

100

100

100

100

100

100

75

75

75

2008

%

100

100

100

100

100

100

100

100

75

75

-

#

#

#

*(5)

#@

*(4)

*(2)

+

*(6)

*(6)

*(6)

*(1) Audited by Horwath First Trust LLP, Singapore

*(2) Audited by BDO China Shu Lun Pan CPA Co., Ltd for consolidation purposes

*(3) Audited by WHK Horwath Perth

*(4) Audited by Horwath Kuala Lumpur, Malaysia

*(5) Audited by CL Partners CPA Limited

*(6) Audited by W L Browne & Associates, Australia

@ Reviewed by Horwath First Trust LLP, Singapore

# Not required to be audited according to the laws in the country of incorporation

+ Not audited as there are no operations after incorporation





8. DEFERRED TAX ASSETS


Charge to income statement


The deferred tax assets arose as a result of:-

Unutilised tax losses

Provisions

The unrecognised deferred tax assets are as follows:

Other temporary differences

Unutilised tax losses

Unabsorbed capital allowances

2009

$

983,154

819,069

1,802,223

1,704,376

97,847

1,802,223

2009

$

(5,804)

14,911,959

490,98315,397,138

2008

$

539,842

443,312

983,154

953,896

29,258

983,154

2008

$

(83,869)

10,614,125

58,07010,588,326

Group

Group

Deferred income tax assets are recognised for tax losses carried forward to the extent that realisation of the

related tax benefits through future taxable profits is probable. The Group had unutilised tax losses and

unabsorbed capital allowances of approximately $14,600,000 and $430,000 (2008: $10,600,000 and $58,000)

respectively at the balance sheet date which can be carried forward and used to offset against future taxable

income subject to meeting certain statutory requirements by various companies in the Group relating to

unutilised tax losses and capital allowances in their respective countries of incorporation. The total unutilised tax

losses of a subsidiary of approximately $9,900,000 (2008: $8,500,000) can only be utilised for set-off against

its future taxable profits within 20 years from the date the tax loss was incurred.

Deferred tax liability amounting to approximately $9,600,000 (2008: $8,690,000) arising from undistributed

earnings of a subsidiary, Suhan International Trade Co., Ltd is not recognised as the Company controls the

rights to distribute these earnings and the Company has neither the need nor the intention to receive dividends

from this subsidiary in the foreseeable future.

7. AVAILABLE-FOR-SALE FINANCIAL ASSET

At balance sheet date, available-for-sale financial asset denominated in British pounds include:-

Listed securities:-

- Equity securities - United Kingdom

Unquoted investment

2009

$

-

367,742

367,742

2008

$

367,742

-

367,742

No impairment loss had been recognised during the financial year against the equity security in United

Kingdom. Management has assessed the carrying value to approximate fair value. There is no movement in

fair value as the company has since been delisted from the UK (London) Stock Exchange.



2009

$

4,599,821

8,581,972

12,840,556

2,004,699

1,355,219

69,831

124,608

15,721

29,592,427

2009

$

26,364487,738

(7,174)

21,101

528,029

2008

$

4,616,126

5,520,761

9,578,269

2,297,489

1,392,944

80,791

465,644

14,523

23,966,547

2008

$

30,02826,364

(30,271)

243

26,364

2009

$

1,590,520

2,257,352

5,817,995

8,847,938

1,891,783

1,158,810

325,542

-

21,889,940

2008

$

2,436,420

2,749,939

2,204,574

6,517,218

2,033,081

1,417,213

254,311

-

17,612,756


10. TRADE AND OTHER RECEIVABLES (Continued)

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

Singapore dollar

United States dollar

Australian dollar

Renminbi

Ringgit Malaysia

Korean Won

Hong Kong dollar

Others

Movements in allowance for doubtful trade receivables:-

Balance at beginning of financial year Allowance made during the financial year

Reversal of bad debt provision

Exchange translation difference



Company

Group

Group





11. FIXED DEPOSITS

12. CASH AND CASH EQUIVALENTS

Cash and bank balances

Fixed deposits

Bank overdraft (secured)

Cash and cash equivalents are denominated in the following currencies:-

Singapore dollar


Australian dollar Renminbi

Ringgit Malaysia

Korean Won

Hong Kong dollar

Others

2009

$

1,278,799

-

-

1,278,799

1,081,272

167,858

28,967-

-

-

-

702

1,278,799

2008

$

2,730,983

-

-

2,730,983

404,602

197,515

2,128,126-

-

-

-

740

2,730,983

Company

2009

$

11,315,125

-

(944,193)

10,370,932

4,590,851

1,384,079

1,620,9451,338,579

123,517

842,303

438,407

32,251

10,370,932

2008

$

13,668,161

1,589,186

-

15,257,347

2,976,939

3,286,046

4,672,1423,041,982

186,387

749,665

306,777

37,409

15,257,347

Group

Group

During the year, fixed deposits mature within an average maturity period of 7 days (2008: 7 days).

The interest rates are ranging from 3.2% to 4.0% (2008: 2.0% to 6.9%) per annum.




13. TRADE AND OTHER PAYABLES

Trade payables

- third parties (note a)

Non-trade payables

- subsidiaries (note b)

Other payables (note c)

Accrued expenses

Advances from customers

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

Singapore dollar


Australian dollar

Renminbi

Ringgit Malaysia

Korean Won

Hong Kong dollar

Others


2009

$

2,728,416

27,995,073

117

-

-

-

-

-

30,723,606

2008

$

1,134,227

23,149,080

-

-

-

-

-

-

24,283,307

Company

2009

$

1,030,098

4,462,015

1,452,205

11,745,572

1,396,354

161,470

36,553

-

20,284,267

2008

$

1,126,969

4,025,686

2,060,341

9,181,979

3,248,320

158,408

5,560

1,619

19,808,882

Group

(a)

(b)

(c)

The trade amount owing to third parties is repayable within the normal trade credit terms of 30 days

to 60 days (2008: 30 days to 60 days).

The non-trade amount due to subsidiaries comprises mainly advances which are unsecured,

interest-free and repayable on demand.

Other payables include loan of $751,526 from a shareholder for an Australian subsidiary which is

unsecured, interest-free and no fixed term of repayment.

2009

$

-

30,557,209

18,406

147,991

-30,723,606

2008

$

-

24,017,370

265,937

-

-24,283,307

Company

2009

$

12,647,842

-

5,400,807

1,283,236

952,38220,284,267

2008

$

13,373,081

-

4,768,038

1,269,092

398,67119,808,882

Group





14. INTEREST-BEARING LIABILITIES

Current

Bank loan (unsecured)

Bank loan (secured)

Bank overdraft (secured)

Finance leases

Non-current

Bank loan (secured)

Finance leases

Interest-bearing liabilities are denominated in the following currencies:-

Singapore dollar

Australian dollar

2009

$

-

-

-

-

-

-

-

-

-

2009

$

-

-

-

2008

$

2,800,000

-

-

-

2,800,000

-

-

-

2,800,000

2008

$

2,800,000

-

2,800,000

Company

2009

$

-

500,000

944,193

154,898

1,599,091

1,500,000

24,995

1,524,995

3,124,086

2009

$

2,006,840

1,117,246

3,124,086

2008

$

2,800,000

1,361,681

-

304,742

4,466,423

-

268,913

268,913

4,735,336

2008

$

2,811,705

1,923,631

4,735,336

Group

CompanyGroup




14. INTEREST-BEARING LIABILITIES (Continued)


2009

$

-

-

-

2009

%

5.00

6.13

Interest

$

(2,812)

(3,258)

(6,070)

(48,949)

(48,385)(97,334)

2008

$

2,800,000

-

2,800,000

2008

%

6.17

9.35

Present

value of

payments

$

24,995

154,898

179,893

268,913

304,742573,655

Company

2009

$

500,000

1,500,000

2,000,000

2008

$

4,161,681

-

4,161,681

Minimum

lease

payments

$

27,807

158,156

185,963

317,862

353,127670,989

Group

The $2,000,000 (2008: Nil) term loan of the Group is secured by a corporate guarantee from the

Company to the bank. This loan is repayable in equal instalments commencing from 1 July 2009 over 48

months and interest is payable at 5 % (2008: Nil) per annum.

The bank loan secured by corporate guarantee provided by the Company to the bank as at 30 June 2008

is $1,361,681. The minority shareholder has given a property pledge to the Company as his 25% share

of the guarantee issued by the Company to the bank. The loan has been fully paid during the current

financial year.

The bank overdraft is secured by a first mortgage over freehold land and building at 57 – 59 Wittenberg

Drive, Canning Vale, Perth, Australia, a mortgage debenture over the assets and uncalled capital of that

subsidiary and a guarantee from the Company.

Maturity of bank loan is as follows:-

Within one year

Within two to five years

Weighted-average effective interest rates per annum at the balance sheet date:-

Bank loan

Finance leases

Finance leases:-

Group

2009

Within 2 to 5 years

Not later than 1 year

2008

Within 2 to 5 years

Not later than 1 year





18. OTHER EXPENSES

Bad trade debts written off

Allowance for trade doubtful debts

Property, plant and equipment written off

Impairment loss of property, plant and equipment

Loss on disposal of property, plant and equipment

Foreign exchange loss

Debts written off and costs of administration

Inventories written off

Others

19. PERSONNEL EXPENSES

Salaries, bonuses and allowances

Provident fund and pension contributions

Other staff costs

The above personnel expenses include directors’ remuneration as disclosed in note 20.

2009$

368

487,738

233,702

409,787

-

1,470,304

298,682

279,555

(48,283)

3,131,853

2009

$

11,615,018

1,607,746

281,355

13,504,119

2008$

26,226

26,364

497,198

-

4,236

-

-

-

554,024

2008

$

13,880,819

950,107

303,553

15,134,479

Group

Group





20. (LOSS)/PROFIT BEOFRE TAX

This is determined after charging/(crediting) the following:

Allowance for trade doubtful debts

Amortisation of intangible assets

Bad trade debts written off

Allowance for trade doubtful debts written back

Depreciation of property, plant and equipment

Directors' remuneration

- directors of holding company

- directors of subsidiaries

Directors' fees

- directors of holding company

Foreign exchange loss/(gain) – net

Gain on disposal of property, plant and equipment, net

Impairment loss of property, plant and equipment

Non-audit fees

- auditors of the Company

- other auditors

Operating lease expenses Property, plant and equipment written off

Provision of expenses written back

Personnel expenses (Note 19)

21. FINANCE COSTS

Interest expense

- bank loan

- finance leases

- bank overdraft

2009

$

487,738

2,970

368

-

3,021,975

1,017,014

238,631

59,000

721,721

(45,339)

409,787

-

1,890

13,089,954233,702

-

13,504,119

2008

$

26,364

2,595

26,226

(30,081)

3,277,256

1,319,995

273,526

86,000

(2,311,258)

(302,500)

-

16,500

1,341

12,544,279497,198

(377,859)

15,134,479

Group

2009

$

80,719

174,918

59,650

315,287

2008

$

201,594

174,714

66,100

442,408

Group





22. INCOME TAX

Current tax

- current year

- under provision in preceding financial year

Deferred tax

- current year

Reconciliation of effective tax:

(Loss)/Profit before income tax

Tax at the applicable tax rate of 17% (2008: 18%)

Tax effect of:

- expenses that are not deductible in determining taxable profit - income tax not subject to tax

- deferred tax assets not recognised

- effect of different tax rates in other countries

- under provision in preceding financial year

- others

Income tax (credit)/expense

2009

$

-

101,970

(836,155)

(734,185)

2009

$

(3,725,718)

(633,372)

279,028(958,837)

1,391,216

(807,477)

101,970

(106,713)

(734,185)

2008

$

526,127

-

(413,163)

112,964

2008

$

2,116,329

380,939

114,595(1,107,293)

1,028,031

(456,136)

144,065

8,763

112,964

Group

Group




23. (LOSS)/EARNINGS PER SHARE (CENTS)

24. DIVIDENDS

No dividend has been recommended for the financial year ended 30 June 2009.


The calculations of (loss)/earnings per share are based on the (loss)/profits and numbers of shares shown

below.

(Loss)/Profit attributable to the equity holders of the Company

For basic (loss)/earnings per share

Basic earnings per share amounts as at 30 June 2009 and 30 June 2008 are calculated by dividing net (loss)/

profit for the year attributable to the equity holders of the Company by the number of ordinary shares

outstanding during the financial year.

There is no dilutive (loss)/earnings per share as there is no dilutive potential ordinary share in issue as at the

financial year ended 30 June 2009 and 30 June 2008.

Final tax exempt 1-tier dividend of 0.17 cents (2008: 0.75 cents) per

share paid in respect of financial year ended 30 June 2008 (30 June 2007)

Interim tax exempt 1-tier dividend of Nil (2008: 0.50 cents) per share

paid in respect of the current financial year

2009

$

408,000

-

408,000

2008

$

1,800,000

1,200,000

3,000,000

Company

2009

$

(2,574,823)

2008

$

2,004,801

Group

2009

240,000,000

2008

240,000,000

Number of ordinary shares




25. COMMITMENTS AND CONTINGENT LIABILITIES

(a) Operating lease commitments

As at the balance sheet date, there were future minimum lease payments under non-cancellable operating

leases for warehouse, retail outlets and office premises in subsequent accounting periods as follows:-

Future minimum lease payments

- not later than 1 year

- 1 year through 5 years

The above operating lease commitments are based on existing rental rates. The lease agreements provide

for periodic revision of such rates in the future. The leases have varying terms and some of these leases

contain options to extend the lease period and/or provisions for contingent rental.

(b) Other commitments

On 1 October 2007, the Singapore subsidiary entered into a copyright license agreement for the right to use

certain materials and trademarks for the period from 1 October 2007 to 31 December 2009. As at balance

sheet date, the minimum guaranteed copyright royalty payable amounted to $42,000 (2008: $84,000).

(c) Financial support to subsidiaries

The Company has committed to provide financial support to six of its subsidiaries to enable them to operate

as going concern and to meet their obligations for at least 12 months from the date of their respective

directors reports relating to the 30 June 2009 financial statements. The subsidiaries are www.Aussino.com

Pte Ltd, Aussino Malaysia Sdn. Bhd, Nuovo Uno Pty Limited, Galleria Fashions International Pty Ltd, Aussino

International Corporation Pty Limited and Aussino Home Fashions Pte Ltd.

(d) Contingent liabilities

The Company has given guarantee to a bank for the sum of $2,000,000 (2008: Nil) in connection with a

bank loan granted to a subsidiary.

2009

$

11,607,100

14,525,395

26,132,495

2008

$

7,530,025

14,889,443

22,419,468

Group




26. SIGNIFICANT RELTAED PARTY TRANSACTIONS

(a) Sale and purchase of goods and services

In addition to the related party information disclosed elsewhere in the financial statements, the following are

related party transactions during the financial year at terms and rates agreed between the parties:-

Management fees from subsidiaries

Dividend income from subsidiaries

b) Compensation of key management personnel

Included in the staff costs is key management personnel compensation as follows:-

Salaries, bonuses and allowances

Provident fund and pension contributions

Directors’ Fee

The remuneration of the directors is determined by Remuneration Committee having regard to the

performance of individuals and market trends.

2009

$

2,348,890

-

2008

$

3,313,667

2,152,105

Company

2009

$

1,236,928

18,717

59,000

1,314,645

2008

$

1,570,531

22,990

86,000

1,679,521

Group





27. FINANCIAL RISK MANAGEMENT

Objectives and policies

The Group is exposed to interest rate risk, liquidity risk, credit risk, market risk and foreign currency risk

arising in the normal course of business. The policies for managing each of these risks are summarised below:-

Foreign exchange risk

The Group is also exposed to foreign currency risk on transactions and balances that are denominated in a

currency other than Singapore dollars. The currencies giving rise to this risk are primarily United States

dollars, Australian dollars, PRC Renminbi (RMB) and Ringgit Malaysia. Exposure to foreign currency risk is

monitored on an ongoing basis to ensure that the net exposure is at an acceptable level.

The Group’s currency exposure is as follows:

2009

Financial assets

Cash and bank

balances and

available-for-sale

financial assetTrade and other

receivables


Interest-bearing

liabilities

Trade and other

payables

Finance leases

Net financial

assets/(liabilities)

Less: Net financial

liabilities/(assets)

denominated in the

respective entities’

functional currencies

Currency exposure on

financial assets andliabilities

SGD

$

4,590,851

1,423,631

6,014,482

(2,000,000)

(1,030,098)

(6,841)

(3,036,939)

2,977,543

(1,515,463)

1,462,080

USD

$

1,384,079

2,236,487

3,620,566

-

(4,462,015)

-

(4,462,015)

(841,449)

(691,277)

(1,532,726)

AUD

$

2,565,138

5,805,705

8,370,843

(944,193)

(1,452,205)

(173,052)

(2,569,450)

5,801,393

323,518

6,124,911

RMB

$

1,338,579

8,175,472

9,514,051

-

(11,745,572)

-

(11,745,572)

(2,231,521)

2,231,918

397

RM

$

123,517

1,238,936

1,362,453

-

(1,396,354)

-

(1,396,354)

(33,901)

33,901

-

Others

$

1,680,703

1,402,537

3,083,240

-

(198,023)

-

(198,023)

2,885,217

(2,485,224)

399,993

Total

$

11,682,867

20,282,768

31,965,635

(2,944,193)

(20,284,267)

(179,893)

(23,408,353)

8,557,282

(2,102,627)

6,454,655





27. FINANCIAL RISK MANAGEMENT (Continued)

Foreign exchange risk (Continued)

2008

Financial assets

Cash and bank

balances and

available-for-sale

financial asset

Trade and other

receivables


Interest-bearing

liabilities

Trade and other

payables

Finance leases

Net financial


Less: Net financial


denominated in the

respective entities’



financial assets and

liabilities

SGD

$

2,976,939

2,133,876

5,110,815

(2,800,000)

(1,126,969)

(11,705)

(3,938,674)

1,172,141

(1,076,529)

95,612

USD

$

3,286,046

2,749,939

6,035,985

-

(4,025,686)

-

(4,025,686)

2,010,299

(3,348,787)

(1,338,488)

AUD

$

4,672,142

1,938,262

6,610,404

(1,361,681)

(2,060,341)

(561,950)

(3,983,972)

2,626,432

(498,304)

2,128,128

RMB

$

3,041,982

6,155,806

9,197,788

-

(9,181,979)

-

(9,181,979)

15,809

(14,227)

1,582

RM

$

186,387

1,647,733

1,834,120

-

(3,248,320)

-

(3,248,320)

(1,414,200)

1,414,200

-

Others

$

1,461,593

1,517,102

2,978,695

-

(165,587)

-

(165,587)

2,813,108

(2,409,575)

403,533

Total

$

15,625,089

16,142,718

31,767,807

(4,161,681)

(19,808,882)

(573,655)

(24,544,218)

7,223,589

(5,933,222)

1,290,367







The Company’s currency exposure is as follows:

2009

Financial assets

Cash and bank

balances and

available-for-sale

financial asset

Trade and other

receivables


Interest-bearing

liabilities

Trade and other

payables

Net financial


Less: Net financial


denominated in the

entity’s




liabilities

SGD

$

1,081,272

4,599,821

5,681,093

-

(2,728,416)

(2,728,416)

2,952,677

(2,952,677)

-

USD

$

167,858

8,581,972

8,749,830

-

(27,995,073)

(27,995,073)

(19,245,243)

-

(19,245,243)

AUD

$

28,967

12,840,556

12,869,523

-

(117)

(117)

12,869,406

-

12,869,406

RMB

$

-

2,004,699

2,004,699

-

-

-

2,004,699

-

2,004,699

RM

$

-

1,355,219

1,355,219

-

-

-

1,355,219

-

1,355,219

Others

$

702

210,160

210,862

-

-

-

210,862

-

210,862

Total

$

1,278,799

29,592,427

30,871,226

-

(30,723,606)

(30,723,606)

147,620

(2,952,677)

(2,805,057)







The Company’s currency exposure is as follows:

2008

Financial assets

Cash and bank

balances and

available-for-sale

financial asset

Trade and other

receivables


Interest-bearing

liabilities

Trade and other

payables

Net financial


Less: Net financial


denominated in the

entity’s




liabilities

SGD

$

404,602

4,616,126

5,020,728

(2,800,000)

(1,134,227)

(3,934,227)

1,086,501

(1,086,501)

-

USD

$

197,515

5,520,761

5,718,276

-

(23,149,080)

(23,149,080)

(17,430,804)

-

(17,430,804)

AUD

$

2,128,126

9,578,269

11,706,395

-

-

-

11,706,395

-

11,706,395

RMB

$

-

2,297,489

2,297,489

-

-

-

2,297,489

-

2,297,489

RM

$

-

1,392,944

1,392,944

-

-

-

1,392,944

-

1,392,944

Others

$

368,482

560,958

929,440

-

-

-

929,440

-

929,440

Total

$

3,098,725

23,966,547

27,065,272

(2,800,000)

(24,283,307)

(27,083,307)

(18,035)

(1,086,501)

(1,104,536)





Profit after tax

$

(107,291)

107,291

673,740

(673,740)

(1,347,167)

1,347,167

1,415,635

(1,415,635)

Profit after tax

$

(147,234)

147,234

21,281

(21,281)

(1,917,388)

1,917,388

117,064

(117,064)



Foreign exchange risk sensitivity

The following table details the sensitivity to a percentage increase and decrease in the Singapore dollar

against the relevant foreign currencies. It indicates the sensitivity rate used when reporting foreign

currency risk internally to key management personnel and represents management’s assessment of the

possible change in foreign exchange rates. The sensitivity analysis includes only outstanding foreign

currency denominated monetary items and adjusts their translation at the period end for the percentage

change in foreign currency rates. The sensitivity analysis includes external loans as well as loans to

foreign operations within the Group where the denomination of the loan is in a currency other than the

currency of the lender or the borrower.

If the USD and AUD change against the SGD by 7% and 11% (2008: 11% and 1%) with all other

variables including tax rate being held constant, the effects arising from the net financial liability/asset

position will be as follows:

Group

USD against SGD- strengthened

- weakened

AUD against SGD

- strengthened

- weakened

Company

USD against SGD

- strengthened

- weakened

AUD against SGD

- strengthened

- weakened

In management’s opinion, the sensitivity analysis is unrepresentative of the inherent foreign exchange

risk as the year end exposure does not reflect the exposure during the year. US dollar denominated sales

are seasonal with lower sales volumes in the last quarter of the financial year, which results in a reduction

in US dollar receivables at year end.

Increase / (Decrease)

2009 2008





Less than 1

year

$

(1,444,193)

(20,284,267)

(154,898)

(21,883,358)

(4,161,681)

(19,808,882)

(304,742)

(24,275,305)

-

(30,723,606)

(30,723,606)

(2,800,000)

(24,283,307)

(27,083,307)

Within

2 to 5 years

$

(1,500,000)

-

(24,995)

(1,524,995)

-

-

(268,913)

(268,913)

-

-

-

-

-

-


Liquidity risk

The Group monitors and maintains a level of cash and cash equivalents deemed adequate by the

management to finance the Group’s operations and mitigate the effect of fluctuations in cash flows.

The table below analyses the maturity profile of the financial liabilities of the Group and Company based

on contractual undiscounted cash flows.

Group

2009

Interest-bearing liabilities


Finance leases

2008



Finance leases

Company

2009



2008








Interest rate risk

The Group is not exposed to interest rate risk arising from its leasing arrangements and bank borrowings.

Market risk

The Group is exposed to market risk. The Group maintains adequate policies to ensure that it does not

speculate in quoted securities which will subject the Group to excessive loss due to market fluctuations.

Credit risk

Credit risk is limited to the risk arising from the inability of a customer to make payments when due. It is

the Group’s policy to provide credit terms to creditworthy customers. These customers are continually

monitored and therefore, the Group does not expect to incur material credit losses.

The carrying amount of trade and other receivables, fixed deposits and cash and bank balances represent

the Group’s maximum exposure to credit risk. No other financial assets carry a significant exposure to

credit risk. The corporate guarantees provided to the bank on the loan of a subsidiary is $2,000,000.






Credit Risk (Continued)

The credit risk for trade receivables is as follows:

By Geographical areas

Australia

PRC

Singapore/Malaysia/HongKong/Korea

USA

By type of customers

Related parties

Non-related parties

The age analysis of trade receivables past due but not impaired is as follows:

Past due < 3 months

Past due 3 to 6 months

Past due over 6 months

2009

$

267,799

-

4,463,1525,448,085

10,179,036

10,179,036

-

10,179,036

2009

$

2,159,560

59,464

7,960,012

10,179,036

2008

$

301,206

-

2,620,185

5,042,128

7,963,519

7,963,519

-

7,963,519

2009

$

1,812,994

985,639

5,164,886

7,963,519

CompanyGroup

CompanyGroup

2009

$

984,264

2,014,897

474,9871,258,008

4,732,156

-

4,732,156

4,732,156

2009

$

3,101,518

956,795

673,843

4,732,156

2008

$

1,601,821

3,170,172

1,157,144

740,561

6,669,698

-

6,669,698

6,669,698

2009

$

3,776,487

1,886,766

1,006,445

6,669,698






Credit risk (Continued)

The carrying amount of trade receivables to be allowed for doubtful debts and the movement in the

related allowance are as follows:

Gross amount

Less: Allowance for doubtful trade receivables


Allowance made during the financial year

Reversal of bad debt provision

Exchange translation difference


Capital risk

The Group manages its capital to ensure the Group maintain an optimal capital structure so as to support

its business and maximise shareholder value. To achieve this objective, the Group may make adjustments

to its capital structure in view of changes in economic conditions, such as adjust the amount of dividend

payment, return capital to shareholders or issue new shares.

The Group manages its capital based on gearing ratio. The Group’s and Company’s strategies were

unchanged from 2008, and maintaining a gearing ratio within 19% to 21% for the Group, and 58% to

64% for the Company. The gearing ratio is calculated as net debt divided by total capital. Net debt is

calculated as borrowings plus trade and other payables less cash and cash equivalents. Total capital is

calculated as equity plus net debt.

Net debt

Equity attributable to equity holders

Less: restricted reserve

Total equity

Total capital

Gearing ratio

2009

$

10,179,036

-

10,179,036

-

-

-

-

-

2008

$

7,963,519

-

7,963,519

-

-

-

-

-

CompanyGroup

2009

$

5,260,185

(528,029)

4,732,156

26,364

487,738

(7,174)

21,101

528,029

2008

$

6,696,062

(26,364)

6,669,698

30,028

26,364

(30,271)

243

26,364

2009

$

29,444,807

16,791,491

-

16,791,491

46,236,298

64%

2008

$

24,352,324

17,433,531

-

17,433,531

41,785,855

58%

CompanyGroup

2009

$

12,093,228

46,479,317

(1,600,600)

44,878,717

56,971,945

21%

2008

$

10,876,057

48,976,047

(1,494,753)

47,481,294

58,357,351

19%






Capital risk

The Group manages its capital to ensure the Group maintain an optimal capital structure so as to support

its business and maximise shareholder value. To achieve this objective, the Group may make adjustments

to its capital structure in view of changes in economic conditions, such as adjust the amount of dividend

payment, return capital to shareholders or issue new shares.

The Group manages its capital based on gearing ratio. The Group’s and Company’s strategies were

unchanged from 2008, and maintaining a gearing ratio within 19% to 21% for the Group, and 58% to

64% for the Company. The gearing ratio is calculated as net debt divided by total capital. Net debt is

calculated as borrowings plus trade and other payables less cash and cash equivalents. Total capital is

calculated as equity plus net debt.

Net debt

Equity attributable to equity holders

Less: restricted reserve

Total equity

Total capital

Gearing ratio

2009

$

29,444,807

16,791,491

-

16,791,491

46,236,298

64%

2008

$

24,352,324

17,433,531

-

17,433,531

41,785,855

58%

CompanyGroup

2009

$

12,093,228

46,479,317

(1,600,600)

44,878,717

56,971,945

21%

2008

$

10,876,057

48,976,047

(1,494,753)

47,481,294

58,357,351

19%






Capital risk (Continued)

Fair values of financial assets and financial liabilities

Fair value is defined as the amount at which the financial instrument could be exchanged in a current

transaction between knowledgeable willing parties in an arm’s length transaction, other than in a forced or

liquidation sale.

As at 30 June 2009, the carrying amount of the financial assets and liabilities approximate their respective

fair values due to the relatively short-term maturity of these financial instruments, except for term loan

where the fair value is determined in accordance with generally accepted pricing models based on

discounted cash flow analysis, as disclosed below.

Bank loan, secured

Finance leases

The interest rates used to discount estimated cash flows, where applicable, are based on the following:

Bank loan, secured

Finance leases

The fair value of the corporate guarantee as disclosed in note 25 (d) are immaterial based on management

estimates.

2009

$

1,216,350

1,532

2009

%

5.38

6.13

2008

$

-

25,143

2008

%

-

9.35

Fair valuesCarrying amountsNote

14

14

2009

$

1,500,000

24,995

2008

$

-

268,913





28. SEGMENT REPORTING

(a) Geographical segments

The Group is organised on a worldwide basis into four main geographical segments, namely:-

- Australia

- People’s Republic of China (PRC)

- Singapore/Malaysia/Hong Kong/Korea

- United States of America (USA)

2009

Revenue

Results

Interest incomeInterest expense

Income tax

Net loss for the financial year

Segment assets

Unallocated assets

Total assets

Segment liabilities

Unallocated liabilities

Total liabilities

Capital expenditure

Depreciation and

amortisation

Singapore/

Malaysia/

Hong Kong/

Korea

$

34,448,747

(1,437,545)

58,132,578

50,350,154

372,125

1,223,310

USA

$

7,938,552

(641,794)

2,077,775

13,850,182

9,547

76,815

Eliminations

$

(300,925)

-

(83,846,136)

(69,160,019)

-

-

Total

$

81,639,280

(3,485,053)

74,622(315,287)

734,185

(2,991,533)

67,203,482

2,430,334

69,633,816

20,284,267

3,316,360

23,600,627

2,479,545

3,024,945

Australia

$

5,298,467

(2,297,663)

4,808,779

8,551,771

150,293

120,437

PRC

$

34,254,439

891,949

86,030,486

16,692,179

1,947,581

1,604,383





28. SEGMENT REPORTING (Continued)

(a) Geographical segments (Continued)

2008

Revenue

Results

Interest income

Interest expense

Income tax

Net profit for the financial year

Segment assets

Unallocated assets

Total assets

Segment liabilitiesUnallocated liabilities

Total liabilities

Capital expenditure

Depreciation and

amortisation

Singapore/

Malaysia/

Hong Kong/

Korea

$

37,225,524

(2,834,565)

59,835,658

45,117,745

1,739,515

1,362,161

USA

$

8,833,967

(1,210,593)

2,519,806

12,790,635

3,937

87,028

Eliminations

$

(469,094)

-

(77,333,290)

(59,577,313)

-

-

Total

$

94,949,797

2,132,515

426,222

(442,408)

(112,964)

2,003,365

71,186,846

2,706,875

73,893,721

19,808,8825,109,974

24,918,856

3,994,469

3,279,851

Australia

$

16,248,744

473,553

9,458,213

9,111,115

258,850

147,467

PRC

$

33,110,626

5,704,120

76,706,459

12,366,700

1,992,167

1,683,195





28. SEGMENT REPORTING (Continued)

29. COMPARATIVES

b) Business Segments

Revenue, assets and additions to property, plant and equipment are based on the two main operating

divisions regardless of where the goods are produced.

Ladies’ Apparels

Home Fashion

(a) Prior year adjustments

Prior year adjustments relate to the following:

Adjustment to revenue relates to adjustment in respect of bill and hold sales arrangements to be in linewith Group’s revenues recognition policy.

2008

$

838,475

3,155,994

3,994,469

2009

$

444,303

2,035,243

2,479,546

2008

$

10,811,901

63,081,820

73,893,721

2009

$

9,813,510

59,820,306

69,633,816

2008

$

12,108,475

82,841,322

94,949,797

2009

$

8,865,472

72,773,808

81,639,280

Turnover Assets Capital Expenditure





29. COMPARATIVES (Continued)

(a) Prior year adjustments (Continued)

The impact of the prior year adjustments on the various accounting captions of the Company are as follows:

Balance Sheet

Inventories


Income Statement

Revenue

Cost of sales

Retained profit, brought forward

Retained profit, carried forward

Statement of cash flow

Profit before tax

Cash flows from operating activities

Inventories


Net effect of exchange rate in consolidating subsidiaries

30 June 2008

balances as

previously reported

20,983,370

20,868,617

95,140,150

(52,933,009)

42,383,570

41,046,493

2,038,697

(2,854,313)

5,119,852

(3,842,773)

30 June 2008

balances as restated

22,955,224

17,612,756

94,949,797

(52,665,024)

40,918,265

39,658,820

2,116,329

(3,005,320)

5,089,562

(3,739,108)

Group



(b) Prior year comparatives

Prior year comparatives have been audited by another firm of certified public accountants, PKF-CAP LLP.

The following comparative figures have been reclassified to conform with the current year’s presentation.

Income Statement

Selling and distribution expenses

Administrative expenses

Other expenses

Finance costs

30 June 2008

balances as

previously reported

(5,804,106)

(15,134,479)

(22,249,056)

(441,284)

30 June 2008

balances as restated

(23,287,344)

(19,345,149)

(554,024)

(442,408)

Group



29. COMPARATIVES (Continued)

30. EVENT AFTER BALANCE SHEET DATE

31. ECONOMIC UNCERTAINTY

On 28 August 2009, Suhan International Trade Co., Ltd, a wholly owned subsidiary of the Company,

acquired 100% equity interest of First Prosper International Limited ("First Prosper"), a company

registered in British Virgin Islands with a consideration of USD100 (SGD144). First Prosper has a wholly

owned subsidiary, namely Relax Fashions International Corporation Pty Ltd ("Relax Fashions"). Relax

Fashions, a company registered in Australia, is in the business of wholesale and distribution of lifestyle

home fashions products.

Current global economic slowdown has affected and may continue to affect the Group’s operations,

financial conditions and cash flows. The ability to continue to achieve profitability and generate positiveoperating cash flows in the foreseeable future are dependent on the recovery of the global as well as the

domestic economies which are currently uncertain. The ultimate outcome of this matter cannot be

presently determined. The financial statements do not include any adjustments that might result from

such uncertainties. Related effects will be reported in the financial statements as and when they become

known and can be reasonably estimated.




Additional Information

Properties of the GroupThe properties of the Group as at 30 June 2009 are as follows:-

Country Location Existing Use Leasehold or Freehold

Australia 57-59 Wittenberg Drive Office cum Freehold

Canning Vale warehouse Western Australia

PRC Unit 05, 5th Level Leased out Leasehold Kuen Yang International Business Plaza No. 798 Zhao Jia Bang Road Xuhui District Shanghai People’s Republic of China

PRC Unit 09, 6th Level Office Leasehold

Office Tower 3 Beijing Henderson Centre 18 Jianguomennei Avenue Dongcheng District Beijing People’s Republic of China

PRC 368 Chun Zhong Road Office cum Leasehold Aussino Building warehouse Shanghai People’s Republic of China

PRC Unit 1020,10th Level Staff apartment Leasehold Beijing Henderson Centre 18 Jianguomennei Avenue Dongcheng District Beijing People’s Republic of China




Shareholding StatisticsAs at 26 October 2009

Class of shares: Ordinary shares

Voting rights: One vote per share

ANALYSIS OF SHAREHOLDERS BY SIZE OF SHAREHOLDINGS

Name of Shareholder

1 Foreswood Industrial Corporation

2 DB Nominees (S) Pte Ltd

3 Kim Eng Securities Pte. Ltd.

4 DBS Nominees Pte Ltd

5 Phillip Securities Pte Ltd6 OCBC Securities Private Ltd

7 United Overseas Bank Nominees Pte Ltd

8 Lim & Tan Securities Pte Ltd

9 Lim Mee Hwa

10 Citibank Nominees Singapore Pte Ltd

11 Lam Lai Cheng

12 Ramesh S/O Pritamdas Chandiramani

13 Yeo Seng Chong

14 CIMB-GK Securities Pte. Ltd.

15 Yang Khee Sing

16 Raffles Nominees (Pte) Ltd

17 Morgan Stanley Asia (Singapore) Securities Pte Ltd18 DBS Vickers Securities (Singapore) Pte Ltd

19 Chow Lai Kuen

20 Michael Vincent Ko Pozon

TOTAL

%

69.01

4.67

2.41

2.31

2.131.03

0.91

0.63

0.62

0.58

0.42

0.42

0.36

0.36

0.35

0.33

0.260.25

0.25

0.25

87.55

No. of Shares

165,624,500

11,201,000

5,788,150

5,535,750

5,111,2502,461,240

2,176,750

1,507,000

1,494,500

1,387,000

1,000,000

1,000,000

870,000

857,752

829,000

792,000

632,000600,750

600,000

600,000

210,068,642

Size of shareholdings

Total

1

1,000

10,001

-

-

-

999

10,000

1,000,000

No. Of

Shareholders

1,369

98

802

459

10

%

100.00

7.16

58.58

33.53

0.73

100.00

%

0.02

1.63

14.06

84.29

No. Of

Shares

240,000,000

40,298

3,922,074

33,750,488

202,287,140

TWENTY LARGEST SHAREHOLDERS AS AT 26 OCTOBER 2009

1,000,001 and above



Shareholding StatisticsAs at 26 October 2009

Substantial Shareholders

Name

Foreswood Industrial

Corporation (1)

Anthony Lim

Yeoman Capital

Management Pte Ltd

Yeo Seng Chong

Note:

1.

2.

3.

Compliance with Rule 723 of the SGX-ST Listing Manual

Based on information available and to the best knowledge of the Company as at 26 October 2009,

approximately 22.05% of the Company’s ordinary shares listed on the SGX-ST are held by public. The

Company is therefore in compliance with Rule 723 of the SGX-ST Listing Manual.

No. of shares

registered in

the name

of substantial

shareholder

or nominee

165,624,500

4,383,000

-

870,000

No. of shares

in which

substantial

shareholders are

deemed to be

interested

-

165,624,500 (2)

13,881,000

15,600,500 (3)

Total

165,624,500

170,007,500

13,881,000

16,470,500

Percentage

of issued

shares

69.01

70.84

5.78

6.86


Due to restructuring, Foreswood Industrial Corporation is wholly owned by Alpha Omega Inc from 13 March2009. Alpha Omega Inc is an investment holding company incorporated in Samoa, and is wholly owned by

Mirare Trust, a trust settlement executed by Mr Anthony Lim.

This represents Mr Anthony Lim’s deemed interest of 165,624,500 shares held by Foreswood Industrial

Corporation through Alpha Omega Inc.

This represents Mr Yeo Seng Chong’s deemed interest of 15,600,500 shares held in the name of the

following:-

(a) 13,881,000 shares held by Yeoman Capital Management Pte Ltd

(b) 1,719,500 shares held by Lim Mee Hwa (Spouse)




NOTICE IS HEREBY GIVEN that the Eighteenth Annual General Meeting of Aussino Group Ltd (the “Company”)

will be held at 1 Scotts Road #24-05/07, Shaw Centre, Singapore 228208 on Monday, 30 November 2009 at 3.00 p.m.for the following purposes:-

AS ORDINARY BUSINESS

1.

2.

3.

4.

5.

AS SPECIAL BUSINESS

To consider and if thought fit, to pass the following resolutions as Ordinary Resolutions, with or without any

modifications:

6. Authority to allot and issue shares

Notice of Eighteenth Annual General Meeting

(Resolution 1)

(Resolution 2)

(Resolution 3)

(Resolution 4)

“That pursuant to Section 161 of the Companies Act, Chapter 50 and the Listing Rules of the Singapore

Exchange Securities Trading Limited (“SGX-ST”), authority be and is hereby given to the directors to:-

(a) (i)

(ii)

(b)

issue shares in the capital of the Company (“shares”) whether by way of rights, bonus or otherwise,

and /or

make or grant offers, agreements or options (collectively “Instruments”) that might or would require

shares to be issued, including but not limited to the creation and issue of (as well as adjustments to)

warrants, debentures or other instruments convertible into shares,

(notwithstanding the authority conferred by this Resolution may have ceased to be in force) issue shares

in pursuance of any Instrument made or granted by the Directors while this Resolution was in force,

at any time and upon such terms and conditions and for such purposes and to such persons as the

Directors may in their absolute discretion deem fit; and

To receive and adopt the Audited Financial Statements for the financial year ended 30 June 2009 and the

Directors’ Report and Auditors’ Report thereon.

To re-elect Ms. Helen Chow (retiring pursuant to Article 91), Director retiring in accordance with the

Company’s Articles of Association.

To approve payment of Directors’ Fees of S$59,000 for the year ended 30 June 2009 [2008: S$86,000].

To appoint Messrs BDO Raffles as the Company's Auditors in place of the retiring Auditors, Messrs Horwath First

Trust LLP and to authorise the Directors to fix their remuneration. [See Explanatory Note (a)]

To transact any other routine business which may arise.




Notice of Eighteenth Annual General Meeting(Continued)

Provided that:

(a)

(b)

(c)

(d)

(e)

(Resolution 5)

the aggregate number of shares to be issued pursuant to this Resolution (including shares to be issued

pursuance of Instruments made or granted pursuant to this Resolution):

(i)

(ii)

(i)

(ii)

(iii)

the Renounceable Rights Issues and Other Share Issues shall not, in aggregate, exceed one hundred per

centum (100%) of the total number of issued shares in the capital of the Company excluding treasury shares

(as calculated in accordance with paragraph (c) below);

(subject to such manner of calculation as may be prescribed by the SGX-ST) for the purpose of determining

the aggregate number of shares that may be issued under sub-paragraph (a) above, the total number of

issued shares (excluding treasury shares) shall be based on the total number of issued shares (excludingtreasury shares) of the Company at the time this Resolution is passed, after adjusting for:-

in exercising the authority conferred by this Resolution, the Company shall comply with the provisions of the

Listing Manual 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

(unless revoked or varied by the Company in general meeting) the authority conferred by this Resolution shall

continue in force (i) 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;

or (ii) in the case of shares to be issued in pursuance of the Instruments, made or granted pursuant to this

Resolution, until the issuance of such shares in accordance with the terms of the Instruments.”

by way of renounceable rights issues on a pro rata basis to shareholders of the Company

("Renounceable Rights Issues") shall not exceed one hundred per centum (100%) of the total

number of issued shares in the capital of the Company excluding treasury shares (as calculated in

accordance with sub-paragraph (c) below); and

new shares arising from the conversion or exercise of any convertible securities;

new shares arising from exercising 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 the

provisions of the Listing Manual of the SGX-ST; and

any subsequent bonus issue, consolidation or subdivision of shares;

otherwise than by way of Renounceable Rights Issues ("Other Share Issues") shall not exceed fifty per

centum (50%) of the total number of issued shares (excluding treasury shares) of the Company (as

calculated in accordance with sub-paragraph (c) below), of which the aggregate number of shares to be

issued other than on a pro rata basis to shareholders of the Company (including shares to be issued

pursuance of Instruments made or granted pursuant to this Resolution) does not exceed twenty per

centum (20%) of the total number of issued shares (excluding treasury shares) of the Company (as

calculated in accordance with sub-paragraph (c) below);




7. Placement of Shares under the Share Issue Mandate at more than 10% Discount

By Order of the Board

Helen ChowCompany Secretary

Singapore, 13 November 2009

Explanatory Notes

(a)

(Resolution 6)

THAT notwithstanding Rule 811 of the Listing Manual, the Directors of the Company be and are hereby

authorised to issue shares and/or Instruments other than on a pro-rate basis pursuant to the aforesaid

general mandate at a discount not exceeding twenty percent (20%) to the weighted average price for trades

done on the SGX-ST for the full market day on which the placement or subscription agreement in relation to

such shares and/or Instruments is executed, provided that:-

(a)

(b)

in exercising the authority conferred by this Resolution, the Company shall comply with the provisions of

the Listing Manual 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

(unless revoked or varied by the Company in General Meeting) the authority conferred by this Resolution

shall continue in force until the conclusion of the next Annual General Meeting of the Company or the date

by which the next Annual General Meeting of the Company is required by law to be held, whichever is

earlier.


Detailed information relating to this Resolution is set out in the Circular dated 13 November 2009 to

Shareholders.





Statement Pursuant to Article 54 of the Company’s Articles of Association

The effect of the resolutions under the heading “Special Business” in this Notice of the Annual General

Meeting are:-

(i)

(ii)

1.

2.

3.

4.

The Ordinary Resolution 5 proposed in item 6 above, if passed, will empower the Directors from the

date of this Meeting until the date of the next Annual General Meeting, or the date by which the next

Annual General Meeting is required by law to be held or when varied or revoked by the Company in

general meeting, whichever is the earlier, to issue shares in the capital of the Company and to make

or grant instruments (such as warrants or debentures) convertible into shares, and to issue shares in

pursuance of such instruments, up to a number not exceeding (i) 100% for Renounceable Rights

Issues and (ii) 50% for Other Share Issues, of which up to 20% may be issued other than on a pro

rata basis to shareholders, provided that the total number of shares which may be issued pursuant to

(i) and (ii) shall not exceed 100% of the issued shares in the capital of the Company excluding

treasury shares. The aggregate number of shares which may be issued shall be based on the total

number of issued shares in the capital of the Company (excluding treasury shares) at the time that

Ordinary Resolution 5 is passed, after adjusting for (a) new shares arising from the conversion or

exercise of any convertible securities or share options or vesting of share awards which are

outstanding or subsisting at the time that Ordinary Resolution 5 is passed, and (b) any subsequent

bonus issue or consolidation or subdivision of shares.

The authority for 100% Renounceable Rights Issues is proposed pursuant to the SGX news release of

19 February 2009 which introduced further measures to accelerate and facilitate listed issuers' fund

raising efforts ("SGX News Release").

Resolution 6 is to authorize the Directors to issue new shares to subscribers or placees at a discount

of not more than 20% to the weighted average price for trades done on the SGX-ST for the full

market day on which the placement or subscription agreement is signed.

The maximum pricing discount of 20% is proposed pursuant to the SGX-ST’s news release of 19

February 2009 which introduce further measures to accelerate and facilitate the fund raising efforts

of listed issuers.

Notes:

A member of the Company entitled to attend and vote at a Meeting is entitled to appoint one or two

proxies to attend and vote in his stead.

A proxy need not be a member of the Company.

If the appointer is a corporation, the proxy must be executed under seal or the hand of its duly

authorised officer or attorney.

The instrument appointing a proxy must be deposited at the registered office of the Company at 1

Scotts Road, #24-05/07, Shaw Centre, Singapore 228208 not less than 48 hours before the time

appointed for the Meeting.




Proxy FormAnnual General Meeting

AUSSINO GROUP LTD(Registration No. 199100323H)

(Incorporate in the Republic of Singapore)

IMPORTANT.

1.

2.

3.

For investors who have used their CPF monies to buy Aussino Group Ltd shares, thisAnnual Report 2009 is forwarded to them at the request of their CPF ApprovedNominees and is sent solely FOR INFORMATION ONLY.

This proxy Form is not valid for use by CPF investors and shall be ineffective for allintents and purposes if used or purported to be used by them.

CPF Investors who wish to vote should contact their CPF Approved Nominees.

Name

No. For AgainstResolutions relating to:

Ordinary Business

1.

2.

3.

4.

5.

6.

Address NRIC/Passport No.

Proportion of shareholdings (%)

Name Address NRIC/Passport No.

Proportion of shareholdings (%)

I/We

of

being a member/members of AUSSINO GROUP LTD, hereby appoint:

and/or (delete as appropriate)

or failing whom, the Chairman of the Meeting, as my/our proxy/proxies to vote for me/us on my/ourbehalf and if necessary to demand a poll at the Eighteenth Annual General Meeting of the Company tobe held at 1 Scotts Road #24-05/07, Shaw Centre, Singapore 228208 on Monday, 30 November 2009 at3.00 p.m. and at any adjournment thereof in the manner indicated below:

(Please indicate with a tick (√) in the spaces provided whether you wish your vote to be cast for oragainst the resolutions as set out in the Notice of the Meeting. In the absence of specific directions,your proxy may vote or abstain as he/she thinks fit.)

Dated this day of 2009

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

To receive and adopt the Audited Financial Statements for thefinancial year ended 30 June 2009 and the Reports of the Directorsand Auditors thereon.

To re-elect Ms Helen Chow as a Director (Retiring pursuant to Article 91).

To approve Directors’ Fees of S$59,000 for the year ended 30 June2009 (2008: S$86,000).

To appoint Messrs BDO Raffles as the Company's Auditors in place ofthe retiring Auditors, Messrs Horwath First Trust LLP as Auditors andto authorise the Directors to fix their remuneration.

Special Business

To authorise the Directors to allot and issue shares pursuant toSection 161 of the Companies Act, Chapter 50 and the Listing Manualof the SGX-ST.

To approve placement of Shares under the Share Issue Mandate atmore than 10% Discount.

(Resolution 1)

(Resolution 2)

(Resolution 3)

(Resolution 4)

(Resolution 5)

(Resolution 6)

Total number of Shares Held

IMPORTANTPLEASE READ NOTES OVERLEAF




Proxy FormAnnual General Meeting (Continued)

NOTES:

1.

2.

3.

4.

5.

6.

General:

The Company shall be entitled to reject the instrument appointing a proxy or proxies if it is incomplete,

improperly completed or illegible or where the true intentions of the appointor are not ascertainable from

the instructions of the appointor specified in the instrument appointing a proxy or proxies. In addition, in

the case of Shares entered in the Depository Register, the Company may reject any instrument

appointing a proxy or proxies lodged if the member, being the appointor, is not shown to have Shares

entered against his name in the Depository Register as at 48 hours before the time appointed for holding

the Annual General Meeting, as certified by The Central Depository (Pte) Limited to the Company.

Please insert the total number of Shares held by you. If you have Shares entered against your name

in the Depository Register (as defined in Section 130A of the Singapore Companies Act, Chapter 50

of Singapore), you should insert that number of Shares. If you have Shares registered in your name

in the Register of Members, you should insert that number of Shares. If you have Shares entered

against your name in the Depository Register and Shares registered in your name in the Register of

Members, you should insert the aggregate number of Shares entered against your name in the

Depository Register and registered in your name in the Register of Members. If no number is

inserted, this instrument appointing a proxy or proxies shall be deemed to relate to all the Shares

held by you.

A member of the Company entitled to attend and vote at a meeting of the Company is entitled to

appoint one or two proxies to attend and vote instead of him. A proxy need not be a member of the

Company.

Where a member appoints more than one proxy, the appointment shall be invalid unless he/she

specifies the proportion of his shareholding (expressed as a percentage of the whole) to be

represented by each proxy.

The instrument appointing a proxy or proxies must be deposited at the Registered Office of the

Company at 1 Scotts Road #24-05/07, Shaw Centre, Singapore 228208, not less than 48 hours

before the time appointed for the Annual General Meeting.

The instrument appointing a proxy or proxies must be under the hand of the appointor or hisattorney duly authorised in writing. Where the instrument appointing a proxy or proxies is executed

by a corporation, it must be executed either under its seal or under the hand of an officer or attorney

duly authorised. Where the instrument appointing a proxy or proxies is executed by an attorney on

behalf of the appointor, the letter or power of attorney or a duly certified copy thereof must be lodged

with the instrument.

A corporation which is a member may authorise by resolution of its directors or other governing body

such person as it thinks fit to act as its representative at the Annual General Meeting, in accordance

with Section 179 of the Singapore Companies Act, Chapter 50 of Singapore.

AUSSINO 2009 AR.pdf

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