japan food ar 2012

1 Who We Are

2 Our Brands

4 At A Glance

6 Where We Are

8 Chairman’s Message

10 Financial Highlights

12 Operating and Financial Review

16 Board of Directors

17 Group Structure & Corporate Information

18 Corporate Governance Report

35 Directors’ Report

38 Statement by Directors

39 Independent Auditor’s Report

41 Financial Statements

83 Statistics of Shareholdings

85 Notice of Annual General Meeting

This document has been reviewed by the Company’s sponsor, CIMB Bank Berhad, Singapore Branch (“Sponsor”) for compliance with the Singapore Exchange Securities Trading Limited (“SGX-ST”) Listing Manual Section B: Rules of Catalist. The Sponsor has not independently verified the contents of this document. This document has not been examined or approved by the SGX-ST. The Sponsor and the SGX-ST assume no responsibility for the contents of this document, including the correctness of any of the statements or opinions made or reports contained in this document. The contact person for the Sponsor is Ms Tan Cher Ting, Director, Corporate Finance, CIMB Bank Berhad, Singapore Branch, at 50 Raffles Place, #09-01 Singapore Land Tower, Singapore 048623, Telephone +65 6337 5114.

Contents

Japan Foods Holding Ltd. Annual Report 2012 1

Established in 1997, Japan Foods Holding Ltd. and its subsidiaries (the “Group”) is one of the

leading food and beverage (“F&B”) groups in Singapore specialising in quality and authentic Japanese cuisine.

The Group operates a chain of restaurants in Singapore serving authentic Japanese fare under various brands

such as “Ajisen Ramen”, “Aoba”, “Botejyu” and “Kazokutei”, as well as concept stalls under the

“Botejyu Yatai” and “Ajisen Ramen” brands in selected food courts in Singapore.

Focused on innovation, the Group continuously refreshes the dining experience of its customers and

has developed its own F&B brands such as “Aji Tei”, “Fruit Paradise”, “Osaka Town” and

“Japanese Gourmet Town”.

Besides operating its own restaurants, the Group also sub-franchises the “Ajisen Ramen” brand to operators

in Indonesia, Malaysia and Vietnam, and franchises its own “Aji Tei” brand to an operator in Indonesia.

As at 31 March 2012, the Group, together with its sub-franchisees and franchisee, operate a total of 55 restaurants

and food court outlets under various brands in Singapore, Malaysia, Indonesia and Vietnam.

The Group has its own noodle production facility located at its central kitchen in Kampong Ampat, Singapore.

Who We Are

Our Brands9 Franchise Brands from Japan

6 Self-Developed Brands

2 Japan Foods Holding Ltd. Annual Report 2012

Our Brands

FRANCHISE BRANDSIn FY2012, the Group continued to build upon the success of its popular franchised brands and also launched three new brands, including an award winning ramen brand from Japan.

AJISEN RAMEN The word “Ajisen” means a thousand tastes in Japanese. Founded in 1968, the “Ajisen Ramen” brand has its origins in Kumamoto, Japan. It is a strong and internationally recognised brand with presence in numerous countries across the world, including Japan, China, Hong Kong and the USA. “Ajisen Ramen” is the flagship brand of Japan Foods.

AJINo CHANpoN“Ajino Chanpon” is Singapore’s first chanpon specialty restaurant. Chanpon is a unique combination of fresh vegetables, seafood and meat cooked in a thick broth using noodles that are thicker than most ramen noodles. “Ajino Chanpon” is the sister brand of “Senno Chanpon” which was established in Kumamoto, Japan in 2007.

AoBAEstablished since 1947, “Aoba” first started out as a noodle stand in Asahikawa, Hokkaido, and gradually expanded to 15 stalls in Japan. For more than 60 years, the owner of “Aoba” guarded his recipes carefully. Japan Foods is the first and only company to serve “Aoba” ramen outside of Japan.

BotEJyu“Bote” means the action of flipping over an okonomiyaki (a type of Japanese pan-fried batter cake with various ingredients) with a spatula. “Jyu” depicts the sound of the okonomiyaki sizzling on the teppan grill. The “Botejyu” brand originates from Osaka, Japan, and has a history that dates back to 1946. Singapore is the only country outside of Japan where “Botejyu” okonomiyaki is available.

BotEJyu yAtAI [NEw!]An extension of the “Botejyu” brand, “Botejyu Yatai”, which was launched in September 2011, is a new concept that offers the signature “Botejyu” okonomiyaki and other Osaka street food specialties at five selected food courts across Singapore.

BotEJyu SAN [NEw!] Another spin-off of the “Botejyu” brand, “Botejyu San” provides a comfortable teppan-dining experience serving okonomiyaki, teppan-yaki and other grilled items. “Botejyu San” opened its first restaurant at Plaza Singapura in December 2011.

MENyA MuSASHI [NEw!] An award winning and highly popular ramen brand in Japan, the Group launched its first restaurant at Raffles City Shopping Centre in April 2012. Famous for its signature white, red and black ramen, this samurai-themed restaurant has received positive media reviews and enthusiastic response from customers since its opening.



KAzoKutEI Established since 1947, “Kazokutei” is one of Osaka’s most well-known udon brands with over 200 outlets in Japan. Japan Foods imports udon and dashi (soup stock) directly from Japan to maintain consistency in taste with its Japanese counterpart.

yoNEHACHI Set up in Tokyo in 1977, “Yonehachi” is a traditional restaurant with more than 150 outlets all over Japan. Serving traditional Okawa rice, “Yonehachi” uses top-quality rice from northern Japan such as Iwate and Akita.

SElF-DEvElopED BRANDS

AJI tEI The word “Aji Tei” means “a restaurant of tastes” in Japanese. This brand was developed to offer a wide variety of specialty dishes and desserts from different parts of Japan, ranging from Kyoto-style desserts to seafood from Hokkaido.

FRuIt pARADISE “Fruit Paradise” is a Japanese-themed dessert shop offering freshly made fruit tarts such as Chocolate Banana, Orange, Blueberry and Grapefruit.

JApANESE GouRMEt towN Launched in October 2008, “Japanese Gourmet Town” restaurants allow customers to savour different varieties of Japanese cuisine through a mix-and-match of the Group’s various F&B brands in a single restaurant setting.

AJISEN GouRMEt towN A similar concept as the “Japanese Gourmet Town”, “Ajisen Gourmet Town” features several of Japan Foods’ most popular brands including “Ajisen Ramen”, “Aji Tei” and “Botejyu”.

oSAKA towN Developed by the Group in 2010, “Osaka Town” is a mixed-concept restaurant which houses the “Botejyu” and “Ajino Chanpon” brands under one roof, allowing customers to enjoy both authentic okonomiyaki and chanpon noodles.

toKyo wAlKER Located on level 4 of Plaza Singapura, the Group’s new “Tokyo Walker” concept was launched in October 2010. A Japanese “food street” dining concept, “Tokyo Walker” boasts the widest selection of Japanese noodle specialty shops at a single location, stretching over 7,000 square feet with close to 400 seats.

“Tokyo Walker” houses 4 Japanese food and beverage brands – “Ajisen Ramen”, “Botejyu”, “Kazokutei” and the Group’s self-developed brand ”Fruit Paradise”.



At a Glance

Self-Operated Restaurants - Ajisen Ramen - Aoba - Kazokutei - Botejyu - Fruit Paradise - Japanese Gourmet Town - Osaka Town - Yonehachi

Self-Operated Food Court Outlets - Ajisen Ramen - Botejyu Yatai

Sub-Franchise & Franchise - Ajisen Ramen • Malaysia • Indonesia • Vietnam - Aji Tei • Indonesia

ouR BuSINESS

ouR StRAtEGy

• Launch new brands• Develop new concepts

such as food court concept stalls

• Sub-franchising and franchising

model• Strategic

joint ventures

• Grow network

prudently• Close or convert

underperforming restaurants / outlets

• Cost control through central kitchen, bulk purchase and economies of scale

• Production of noodles to control supply, quality and cost


DIvIDENDS pER SHARE SHAREHolDERS’ EquIty

SHARE pRICE pERFoRMANCE (oNE yEAR)

ouR FoCuS oN SHAREHolDERS’ vAluE

The Group is focused on growing long-term shareholders’ value. While the Company does not have a fixed dividend policy, it has consistently been rewarding shareholders with cash dividends since FY2009.

The Board will aim to continue to recommend or declare dividends to reward shareholders, after taking into consideration, inter alia, the Group’s profits, financial position and projected capital requirements for business growth.

In FY2012, the Company also completed a one-for-five bonus issue of new ordinary shares in the capital of the Company to reward shareholders, with an aim of increasing the liquidity and trading of its shares and broadening its shareholder base.

FY2009 FY2010 FY2011 FY2012

Singapore cents

0.0

0.2

0.4

0.6

0.8

1.0

1.2

0.2

0.6

0.8

1.05

FY2008 FY2009 FY2010 FY2011 FY2012

5.0

9.3

13.4

17.5

20.5

0

5

10

15

20

25S$’m

Source : Shareinvestor.com

Aug Sep Oct Nov Dec Feb Mar May Jun Jul

0.21

0.22

0.23

0.24

0.25

0.26

0.27

0.28

0.29

0.30

0.31

0.32

0.33

Apr4 18 15 19 17 14 19 16 19 16 21 18132012

0.34

S$


SINGApoRE

AJISEN RAMEN • Bugis Junction

• Causeway Point Shopping Centre

• Changi Airport Terminal 3

• Changi City Point Mall

• City Square

• Clementi Mall

• Compass Point Shopping Centre

• Hougang Mall

• IMM Building

• Junction 8 Shopping Centre

• Jurong Point Shopping Centre

• Lot 1 Shoppers’ Mall

• Marina Bay Sands Shoppes Premium Food Precinct

• nex Shopping Mall

• Parkway Parade

• Plaza Singapura

• Sembawang Shopping Centre

• Square 2

• Takashimaya Shopping Centre

• Tampines Mall

• Tiong Bahru Plaza

AoBA

• ION Orchard

• VivoCity

BotEJyu

• Liang Court Shopping Centre

• Plaza Singapura

BotEJyu yAtAI

• Food Junction, Bugis Junction

• Food Junction, Great World City

• Food Junction, Junction 8

• Food Junction, Raffles City

FRuIt pARADISE• Raffles City Shopping Centre• VivoCity• Plaza Singapura

MENyA MuSASHI • Raffles City Shopping Centre

Where We Are

As at 30 June 2012



SINGApoRE

JApANESE GouRMEt towN• VivoCity• IMM Building

KAzoKutEI• Bugis Junction• Causeway Point• Junction 8• Plaza Singapura

oSAKA towN• Raffles City Shopping Centre

yoNECHACHI• Takashimaya Shopping Centre

MAlAySIA

AJISEN RAMEN • Jusco 1 Utama Shopping Centre, Selangor• Sunway Pyramid, Selangor• Sutera Mall, Johore• Aeon2, Malacca• Boulevard Commercial Centre Miri, Sarawak

INDoNESIA

AJISEN RAMEN • Living World Alam Sutera, Tangerang• Kelapa Gading Mall 3, Jakarta• Pluit Village, Jakarta• Puri Indah Mall, Jakarta• Taman Anggrek Mall, Jakarta• Summarecon Mal Serpong II, Tangerang

AJI tEI• Pacific Place, Jakarta

vIEtNAM

AJISEN RAMEN • Nguyen Dinh Chiew Street, Da Kao, District 1,

Ho Chi Minh City



Chairman’s Message

Dear Shareholders

yEAR IN REvIEw

It gives me great pleasure to report on a good year for the Group. We wrapped up the financial year ended 31 March (“Fy”) 2012 by recording a 50% increase in net profits to S$3.7 million as compared to S$2.5 million in FY2011.

The F&B industry in Singapore continues to be very competitive and challenging and FY2012 was no exception. Although there are consistently new entrants entering the scene, we note that just as many players leave the industry annually. This demonstrates the need for us to continually manage our expenses, increase our productivity and regularly review the performance of our portfolio of restaurants, as well as explore opportunities to grow our restaurant business both locally and overseas.

I am proud to report that the Group had achieved a good measure of success in the above-mentioned

areas and this had enabled us to increase our revenue by S$5.7 million or 11%, from S$50.4 million in FY2011 to S$56.1 million in FY2012.

Buoyed by the new restaurant at Changi City Point and also the full year contributions from the restaurants located at nex Shopping Mall and Clementi Mall, which were opened during FY2011, our flagship brand “Ajisen Ramen”, continued to be our biggest revenue contributor at S$30.7 million in FY2012, which represented a S$1.9 million increase from FY2011.

The restaurants operating under our other brands also generated combined revenue of S$25.4 million in FY2012, representing a S$3.8 million increase from the preceding year. The Group’s gross profit also grew by 12% to S$43.9 million in FY2012.

During FY2012, the Group continued to strengthen its portfolio of restaurants by eliminating non-performing brands and expanding and diversifying more popular ones through brand extensions. One example of how the Group had extended its existing brands was the launch of “Botejyu Yatai”, which is an extension of the Group’s franchised “Botejyu” brand that was adapted for the mass market food court segment. Besides “Botejyu Yatai” outlets located in several food courts in Singapore, we also launched an “Ajisen Ramen” outlet at the Marina Bay Sands Shoppes’ Premium Food Precinct.

Due to underperformance, the Group decided to cease the operations of some brands including “Let’s Sweets”, “Manpuku”, “Tokyo Deli Café”, “Kura Ramen” and “Ajino Chanpon” during FY2012. Some of the premises vacated by these restaurants have been converted for use by other brands within our portfolio, such as “Kazokutei”.

During FY2012, we also made some headway in our overseas expansion plans with the opening of the first “Ajisen Ramen” restaurant in Ho Chi Minh City, Vietnam, in August 2011, as well as two more “Ajisen Ramen” restaurants in Indonesia in May and November last year, by our sub-franchisees.

Overall, the Group’s earnings per share in FY2012 was 3.22 Singapore cents (based on the weighted average number of 115,404,000 ordinary shares), compared to 2.24 Singapore cents in FY2011 (based on the weighted average number of 110,669,753 ordinary shares). As at 31 March 2012, the Group’s net asset value per share was 17.73 cents, up from 15.14 cents as at 31 March 2011.



Based on the year’s performance, the Board is pleased to propose a final tax-exempt cash dividend of 0.7 Singapore cents per share in respect of FY2012, bringing the total dividend for FY2012 to 1.05 Singapore cents, which represents a 31% increase as compared to FY2011.

FutuRE GRowtH

Going into FY2013, the Group has already achieved several milestones, the most significant of which was the establishment of our own noodle production facility at our central kitchen facility at Kampong Ampat in April 2012. Established at a cost of about S$450,000, the main objective of the noodle production facility is to enable the Group to manage its costs better, reduce its reliance on suppliers and also to improve the freshness, quality and consistency of the noodles used at the Group’s various restaurants.

The facility has a production capacity of about 2.5 million units(1) of noodles. It currently produces ramen for use at the Group’s “Ajisen Ramen” restaurants but will eventually produce various types of noodles for all our other brands.

In April 2012, we also launched a new addition to our family of brands – the award winning “Menya Musashi”, which now occupies the premises vacated by “Tokyo Deli Café” at Raffles City Shopping Centre. “Menya Musashi” is a very popular brand in Japan where it has more than 10 outlets. We are very pleased to note that since the restaurant’s opening, it has drawn quite a following with long queues of diners waiting for seats at mealtimes. Reviews from the media have also been very positive and we are optimistic that the restaurant will continue to pull in the crowds.

The Group has also been actively looking for opportunities to expand its presence in South-East Asia, Hong Kong and China via franchising or strategic joint ventures. To this end, the Group had on 14 June 2012 entered into an acquisition and shareholders’ agreement with Ajisen Investments (International) Limited, an indirect wholly-owned subsidiary of Ajisen (China) Holdings Limited, Shigemitsu Industry Co., Ltd. and ACJF Holding Limited (“ACJF BvI”), in relation to, inter alia, the proposed joint development of a Japanese restaurant business under the “Menya Musashi” brand in Hong Kong by ACJF BVI and its subsidiary.

All these developments are part of our ongoing strategies to grow our top and bottom lines through

brand diversification, network expansion and consolidation, tightening of cost controls and overseas ventures. We believe that these strategies, which have been in place since our listing, remain relevant as businesses continue to grapple with rising costs and the increasingly competitive operating environment. We will also continue to constantly review and renew our brand portfolio in order to maximise the performance of the Group and achieve greater returns.

ACKNowlEDGEMENtS

I would like to take this opportunity to thank Mr Yeo Guat Kwang who has been the Lead Independent Director on our Board since 2008. The Group has benefitted greatly from his experience and guidance and we wish him all the best in his future pursuits.

At the same time, I would like to welcome Mdm Constance Lee Sok Koon, who joined the Board as an Independent Director on 1 September 2011. She has over 20 years of experience dealing with the financial and corporate affairs of public–listed companies including Lum Chang Holdings Limited and L.C. Development Ltd.

On behalf of the Board, I want to express my sincere gratitude to the management and staff of Japan Foods, whose hard work has made it possible for us to achieve such good results in FY2012. I also want to express my appreciation to my fellow directors for their guidance, advice and foresight to steer the Group towards greater success.

Special thanks also to our customers and business partners – your loyalty and support has enabled us to achieve our goals as a company.

To our shareholders, thank you for believing in us. We will continue to strive towards stronger growth and to

achieve higher returns on your investment in us.

tAKAHASHI KENICHIExECUTIVE CHAIRMAN AND CEO

(1) Estimated based on one 8-hour shift per day, 5 working days per week and

52 weeks per year.


Financial Highlights

Fy2008 Fy2009 Fy2010 Fy2011 Fy2012

FINANCIAl RESultS

Revenue 26.8 33.5 43.7 50.4 56.1

Gross profit 18.5 24.8 34.1 39.1 43.9

Profit before tax 3.5 3.4 5.6 3.1 4.5

Net profit 2.9 2.7 4.6 2.5 3.7

CASH Flow StAtEMENt

Net cash provided by operating activities 7.6 5.4 6.2 6.7 8.4

Net cash used in investing activities (2.4) (8.1) (3.3) (7.2) (2.9)

Net cash (used in) / provided by financing activities (3.5) 2.4 0.1 (0.3) (2.1)

Cash and cash equivalents at end of financial year(1) 4.2 3.8 6.8 5.9 9.3

BAlANCE SHEEt

Current assets 7.1 7.1 11.4 11.4 15.5

Non-current assets 4.2 11.7 12.2 14.0 12.8

Total assets 11.3 18.8 23.6 25.4 28.3

Current liabilities 6.0 8.8 8.1 6.8 7.3

Non-current liabilities 0.4 0.8 2.1 1.1 0.5

Total liabilities 6.4 9.6 10.2 7.9 7.8

Share capital 0.4 6.6 6.6 8.8 8.8

Reserves 4.6 2.7 6.8 8.7 11.7

Total shareholders’ equity 5.0 9.3 13.4 17.5 20.5

FINANCIAl RAtIoS

Gross profit margin (%) 69.0 73.9 77.9 77.5 78.3

Earnings per share (Singapore cents)(2) 3.82 3.57 5.18 2.24 3.22

Net asset value per share (Singapore cents)(2) 6.65 10.55 15.23 15.14 17.73

Return on assets (%) 25.1 14.4 19.3 9.8 13.1

Return on equity (%) 57.4 29.2 34.0 14.2 18.2

Net debt to equity ratio Net Cash Net Cash Net Cash Net Cash Net Cash

Notes:

(1) This excludes bank deposits pledged as security for bank facilities granted by financial institution(s) to the Group.

(2) Earnings per share for FY2011 and net asset value per share as at 31 March 2011 have been adjusted to take into account the issuance of the 19,234,000

new shares on 21 December 2011 pursuant to a bonus issue.

S$’ million


0

10

20

30

40

50

60

Revenue

FY2008 FY2009 FY2010 FY2011 FY2012 FY2008 FY2009 FY2010 FY2011 FY2012

FY2008 FY2009 FY2010 FY2011 FY2012

18.5

24.8

34.1

39.1

43.9

26.8

33.5

43.7

50.456.1

Gross Profit and Gross Profit Margin

Revenue Breakdown

FY2011 FY2012

0

5

10

15

20

25

30

35

Revenue Mix by Brands

AjisenRamen

1.4 0.0

28.830.7

0.3

4.3

0.9 0.53.0 3.93.7

Aji Tei Botejyu Kazokutei Manpuku JapaneseGourmet

Town

4.5 3.8

Aoba

3.23.8

0.3 0.2

4.26.8

FruitParadise

SubFranchise

Others

FY2011 FY2012S$’m

2.3

S$’m

Sub Franchise, 0.4%

Ajisen Ramen54.8%

Japanese Gourmet Town, 6.6 %

Manpuku, 4.0%

Fruit Paradise, 6.8%

Aoba, 6.7%

Kazokutei, 7.7%

Botejyu, 0.9%

Others, 12.0%

Sub Franchise, 0.5%

Ajisen Ramen57.1%

Aji Tei, 2.8%

Japanese GourmetTown, 7.7 %

Manpuku, 5.9%

Fruit Paradise, 6.4%

Aoba, 8.9%

Kazokutei, 0.6%

Others, 8.3%Botejyu, 1.8%

0

10

20

30

40

50

S$’m

69.0%73.9% 77.9% 77.5% 78.3%

0

1

2

3

4

5

2.9 2.7

4.6

2.5

3.7

Net Profit

S$’m

CAGR: 24.8%

CAGR: 44.9%

CAGR: 22.5%


Revenue

The Group’s revenue increased by S$5.7 million or 11.2%, from S$50.4 million in FY2011 to S$56.1 million in FY2012. The net increase in the Group’s revenue was a result of the following:

(i) an increase in revenue of S$1.9 million from restaurants operating under the “Ajisen Ramen” brand

The Group’s revenue from its “Ajisen Ramen” restaurants increased in FY2012 mainly due to (i) the contribution from the new restaurant located at Changi City Point which commenced operations in November 2011; (ii) the full year contribution of revenue from the restaurants located at nex Shopping Mall (under the name “Ajisen Gourmet Town”) and Clementi Mall which had commenced operations in December 2010 and February 2011 respectively. This increase in revenue was however partially offset by a decrease in sales from certain existing “Ajisen Ramen” restaurants.

(ii) a net increase in revenue of S$3.8 million from the Group’s restaurants operating under other brands

The Group’s restaurants operating under other brands, namely the “Fruit Paradise”, “Tokyo Deli Café”, “Osaka Town”, “Kura”, ”Kazokutei”, “Yonehachi” and “Botejyu Yatai” brands recorded an increase in revenue of S$8.4 million in aggregate in FY2012 as compared to FY2011.

The increase was offset by (i) the decrease in revenue from the restaurants operating under the “Boteyju”, “Aoba” and “Japanese Gourmet Town” brands; and (ii) the closure of the “Manpuku” food court in March 2012 and the closure of the “Let’s Sweets” restaurants at Junction 8 and Bugis Junction in July 2011 and August 2011 respectively, all of which amounted to S$4.6 million in aggregate.

Operating and Financial Review

REvIEw oF tHE FINANCIAl pERFoRMANCE FoR Fy2012


As at 31 March 2012, the Group had a total of 36 restaurants and 6 food court outlets in operation in Singapore. Below is a snapshot of the Group’s restaurants and food court outlets as at 31 March 2012, compared to as at 31 March 2011.

Restaurants in SingaporeNo. of Restaurants

As at 31 March 2011

No. of Restaurants As at 31 March

2012

Ajisen Ramen• Opened Changi City Point restaurant in November 2011

19 20

Aoba 2 2

Botejyu• Closed Orchard Central restaurant in June 2011• Opened “Botejyu-San” restaurant in Plaza Singapura in December

2011 (converted from “Kazokutei” restaurant)

2 2

Fruit paradise 4 4

Japanese Gourmet town 2 2

Manpuku • Closed Tampines 1 food court in March 2012

1 –

osaka town 1 1

tokyo Deli Café• Closed Raffles City restaurant in March 2012

1 –

let’s Sweets• Closed Bugis Junction restaurant in August 2011• Closed Junction 8 restaurant in July 2011

2 –

Ajino Chanpon• Closed Plaza Singapura restaurant in November 2011

(space taken over by “Kazokutei”)

1 –

Kura Ramen• Closed Plaza Singapura restaurant in March 2012

1 –

yonehachi 1 1

Kazokutei• Opened Bugis Junction restaurant in September 2011 (converted from

“Let’s Sweets” )• Opened Junction 8 restaurant in July 2011 (converted from “Let’s Sweets”)• Opened Causeway Point restaurant in October 2011

1 4

Food Court outletsNo. of outlets As at 31 March

2011

No. of outlets As at 31 March

2012

Ajisen Ramen• Opened at Marina Bay Sands Shoppes’ Premium Food Precinct in

February 2012

– 1

Botejyu yatai• Opened at Food Junction, Bugis Junction in September 2011• Opened at Food Junction, United Square in September 2011• Opened at Food Junction, Great World City in November 2011• Opened at Food Junction, Junction 8 in November 2011• Opened at Food Junction, Raffles City in December 2011

– 5

totAl 38 42


Gross profit

The Group’s gross profit increased by S$4.8 million or 12.3%, from S$39.1 million in FY2011 to $43.9 million in FY2012, in line with the increase in the Group’s revenue.

The Group’s overall gross profit margin increased from 77.5% in FY2011 to 78.3% in FY2012, primarily due to better control of raw material costs, elimination of non-performing brands and the appreciation of the Singapore dollar against the Japanese yen and the Hong Kong dollar.

Expenses

The Group recorded higher expenses in FY2012 as compared to FY2011, in tandem with the expansion of its network of restaurants. The table below gives an overview of the various expenses incurred by the Group in FY2012 as compared to FY2011.


type of expense

Amount incurred in

Fy2011 (S$)

Amount incurred in

Fy2012 (S$)

Increase / (Decrease)

(S$)

Increase / (Decrease)

(%) Reasons for increase / decrease

Selling and distribution expenses

31.7 million 36.7 million 5.0 million 15.9 • Increase in the number of restaurants and food court outlets operating during the year

• Rise in rental rates and tightening of labour supply, which resulted in an increase in manpower and related expenses, rental, depreciation and utility expenses

Administrative expenses

2.2 million 2.2 million – – • No change

Other operating expenses and other gains / (losses) – net

2.5 million 1.2 million (1.3 million) (51.4) • Absence of the one-time impairment charge on plant and equipment of S$1.6 million for the Group’s “Manpuku” food court in FY2011

• Offset by increase in royalty fees paid and plant and equipment written off upon closure and conversion of certain outlets in FY2012

Finance expenses

132,000 51,000 (81,000) (61.4) • Mainly due to lower loan balance in FY2012

Income tax expenses

0.7 million 0.8 million 0.1 million 14.1 • Increase in profit

Net profit

As a result of the reasons mentioned above, the Group’s net profit attributable to equity holders of the Company increased by S$1.2 million or 49.7%, from S$2.5 million in FY2011 to S$3.7 million in FY2012.

REvIEw oF FINANCIAl poSItIoN oF tHE GRoup AS At 31 MARCH 2012

Current Assets

The Group’s total current assets increased by S$4.1 million, from S$11.4 million as at 31 March 2011 to S$15.5 million as at 31 March 2012.

This was mainly a result of (i) an increase in cash and cash equivalents of S$3.6 million due to cash flows generated from operations less capital expenditure and repayment of borrowings; (ii) an increase in trade and other receivables of S$0.4 million in aggregate due to higher revenue generated and sales proceeds from six food court stalls for the month of March 2012 to be received in the following month; and (iii) additional rental deposits of S$0.3 million for new restaurants. The aforementioned increases in current assets were however partially offset by a decrease in inventories of S$0.2 million.

Non-current Assets

The Group’s total non-current assets decreased by S$1.2 million, from S$14.0 million as at 31 March 2011 to S$12.8 million as at 31 March 2012.

The decrease in non-current assets was a result of a decrease in net book value of plant and equipment of S$1.6 million partially offset by the increase in long term security deposits placed with lessors in respect of the Group’s leases (which are recoverable upon expiry of the lease tenure) of S$0.4 million. The decrease in net book value of plant and equipment was a result of depreciation amounting to S$4.0 million and disposal and write-off amounting to S$0.5 million, which was offset by renovation works and equipment acquired for the Group’s new and existing restaurants of S$2.9 million.

Current liabilities

The Group’s total current liabilities increased by

S$0.5 million, from S$6.8 million as at 31 March 2011 to S$7.3 million as at 31 March 2012.

This was mainly due to higher trade and other payables resulting from more operating restaurants and food court outlets as at 31 March 2012 and higher current year tax provision, which amounted to S$1.3 million in aggregate. This was partially offset by a decrease in bank borrowings of S$0.8 million.

Non-current liabilities

The Group’s total non-current liabilities decreased by S$0.5 million from approximately S$1.0 million as at 31 March 2011 to S$0.5 million as at 31 March 2012, mainly due to a decrease in bank borrowings of S$0.3 million and deferred income tax liabilities of S$0.2 million.

Shareholders’ Equity

The Group’s shareholders’ equity increased by S$3.0 million, from S$17.5 million as at 31 March 2011 to S$20.5 million as at 31 March 2012.

This was mainly a result of the net profit achieved by the Group of S$3.7 million in FY2012, partially offset by the distribution of dividends S$0.7 million.

REvIEw oF CASH Flow StAtEMENt FoR Fy2012

The Group’s net cash provided by operating activities in FY2012 was S$8.4 million. This was mainly due to operating profit before working capital changes of S$9.0 million, partially offset by working capital outflows of S$0.1 million and payment of income tax of S$0.5 million.

The Group’s net cash used in investing activities in FY2012 was S$2.9 million, mainly due to the renovation cost and purchase of equipment for the Group’s new restaurants and renovation cost of certain existing restaurants.

The Group’s net cash used in financing activities in FY2012 was S$2.1 million, mainly due to a repayment of borrowings of S$1.2 million, interest paid and bank deposits pledged of S$0.2 million and dividend payment of S$0.7 million.


takahashi Kenichi Executive Chairman and CEO

Takahashi Kenichi is the founder, Executive Chairman and CEO of our Company. He is instrumental in the establishment, development and expansion of our Group’s business and is responsible for our Group’s entire operations, strategic planning, major decision making, as well as developing the business and vision of our Group.

Mr Takahashi has 15 years of experience in the F&B industry in Singapore. Prior to founding our Group in 1997, Mr Takahashi practised as a professional engineer in the research and development division of Pioneer Asia Singapore from April 1978 to March 1997. He was involved in the establishment of the research and development and quality control department of Pioneer Asia Singapore. In March 1997, he left his engineering profession and set up our business.

Mr Takahashi graduated from Sophia University with a Certificate of Mechanical and Engineering.

Shigemitsu Katsuaki Non-Executive Director

Shigemitsu Katsuaki was appointed as a Non-executive Director of our Company on 24 November 2008. He is a shareholder and director of Shigemitsu Industry Co., Ltd. (“Shigemitsu Industry”), our main franchisor. He has over 20 years of experience in the F&B industry.

He joined Shigemitsu Industry in 1990 and commenced work as a branch manager in a restaurant under the “Ajisen Ramen” brand in Japan upon his graduation. Following several senior management positions in Shigemitsu Industry, he was appointed as its vice-chairman in 1995. In 1997, he was appointed as its president and CEO. Shigemitsu Katsuaki is also a non-executive director of Ajisen (China) Holdings Limited listed on the Hong Kong Stock Exchange.

Mr Shigemitsu graduated from the Kumamoto Institute of Technology (now known as SOJO University) with a degree in structural engineering in 1991.

Eugene wong Hin Sun Non-Executive Director

Eugene Wong Hin Sun was appointed as a Non-executive Director of our Company on 24 November 2008. He founded Sirius Venture, a venture capital investment company, in September 2002. He is currently the managing director of Sirius Venture and its group of companies.

Mr Wong serves as a non-executive director of Ajisen (China) Holdings Limited, a company listed on the Hong Kong Stock Exchange, as well as an independent director of Q & M Dental Group (Singapore) Limited and

Board of Directors

a non-executive director of Jason Marine Group Limited, companies which are listed on the Singapore Exchange Securities Trading Limited (“SGx-ST”). He also serves on the board of the Agri-Food and Veterinary Authority of Singapore and International Enterprise Singapore (“IE Singapore”) and is the chairman of Crimsonlogic Pte Ltd, a subsidiary of IE Singapore.

Mr Wong graduated from the National University of Singapore with a Bachelor of Business Administration (First Class Honours) in 1992 and obtained a Masters in Business Administration from the Imperial College, London in 1998. He also attended the Harvard Business School Owner/President Management Programme. A chartered financial analyst since 2001, Mr Wong is a member of the Institute of Directors in Singapore and the United Kingdom.

tan lye Huat Lead Independent Director

Tan Lye Huat was appointed as the Lead Independent Director of our company on 1 September 2011. Prior to this, he was an Independent Director since 24 November 2008. He has an active career in the profession of directorship and governance. In 2003, he founded HIM Governance Pte. Ltd., a company offering governance solutions and services in Singapore and around the region.

Mr Tan is a member of various governance-related institutions such as the Institute of Directors (UK), the International Policy Governance Association (USA) and the Australian Institute of Company Directors.

He has been a fellow of the Association of Chartered Certified Accountants since 1980, a member of the Institute of Certified Public Accountants of Singapore since 1989 and a Chartered Director (UK) since 2001.

lee Sok Koon, Constance Independent Director

Lee Sok Koon, Constance was appointed as an Independent Director of our Company on 1 September 2011.

Mdm Lee was an Executive director of Lum Chang Holdings Limited and L.C. Development Ltd from June 2001 and May 2006 respectively until 31 December 2010, where she was responsible for the financial and corporate affairs of the two groups, both of which are listed on SGx-ST. Mdm Lee currently holds the position of Director (Operations) in the Development Office of National University of Singapore. She is also a director on the Board of Singapore Arts School Ltd.

Mdm Lee holds a Bachelor of Accountancy (Second Class Honours) from the University of Singapore and is a Fellow of the Institute of Certified Public Accountants in Singapore. She is also a Member of the Singapore Institute of Directors.



Group Structure & Corporate Information

BOARD OF DIRECTORSTakahashi Kenichi (Executive Chairman and CEO)Shigemitsu Katsuaki (Non-executive Director)Eugene Wong Hin Sun (Non-executive Director)Tan Lye Huat (Lead Independent Director)Constance Lee Sok Koon (Independent Director)

AUDIT COMMITTEETan Lye Huat (Chairperson)Constance Lee Sok Koon Eugene Wong Hin Sun

NOMINATING COMMITTEEConstance Lee Sok Koon (Chairperson)Tan Lye HuatEugene Wong Hin Sun

REMUNERATION COMMITTEEConstance Lee Sok Koon (Chairperson)Tan Lye HuatEugene Wong Hin Sun

COMPANY SECRETARYEsther Au Siew Peng (ACIS)

REGISTERED OFFICE420 North Bridge Road#02-01 North Bridge CentreSingapore 188727Tel: (65) 6333 9781Fax: (65) 6333 9782

SHARE REGISTRARB.A.C.S. Private Limited63 Cantonment RoadSingapore 089758

AUDITORSNexia TS Public Accounting Corporation100 Beach Road #30-00 Shaw Tower Singapore 189702Director-in-charge: Christine Lee Look Ling (a member of the ICPAS) Appointed since financial year ended 31 March 2012

PRINCIPAL BANKERUnited Overseas Bank Limited80 Raffles PlaceUOB Plaza 1Singapore 049513

100% BACHMANN ENTERPRISES

PTE LTD

100% BACHMANN JAPANESE

RESTAURANT PTE LTD

100% JAPAN FOODS ENTERPRISES

PTE. LTD.

100% BACHMANN JAPANESE

RESTAURANT SDN. BHD.

25% ACJF

HOLDINGLIMITED

JAPAN FOODS HOLDING LTD.


Corporate Governance Report

INTRODUCTION

The board of directors (“Board”) and the management of Japan Foods Holding Ltd. (the “Company”) are committed to achieving a high standard of corporate governance within the Company and its subsidiaries (the “Group”). Underlying this commitment is the belief that good corporate governance will help to enhance corporate performance and protect the interests of the Company’s shareholders (“Shareholders”). In this respect, the Company adopts the practices based on the Singapore Code of Corporate Governance 2005 (the “Code”).

The following report sets out the Company’s corporate governance practices and activities in respect of the financial year ended 31 March 2012 (“FY2012”) in relation to each of the principles of the Code, and deviations from any guidelines of the Code are explained.

BOARD MATTERS

THE BOARD’S CONDUCT OF ITS AFFAIRSPrinciple 1: Effective Board to Lead and Control the Company

Guideline 1.1 & Guideline 1.2Roles of Board and Objective Decision MakingThe Board aims to preserve and enhance long-term Shareholders’ value. To this end, each director of the Company (“Director”) endeavours to objectively take decisions in the interests of the Company. Apart from its statutory duties and responsibilities, the Board also:

(a) decides on matters in relation to the Group’s activities which are of significant nature, including decisions on strategic directions and guidelines and approvals of annual budget, major funding investment and divestment proposals;

(b) oversees risk management and internal control processes, financial reporting and compliance, including the release of financial results and announcements of material transactions;

(c) approves the nominations to the Board and appointments to the various Board committees;

(d) approves the framework of remuneration for the Board and key executives as recommended by the Remuneration Committee (as defined hereinafter); and

(e) provides oversight in the proper conduct of the Group’s business and assume responsibility for corporate governance.

Guideline 1.3Delegation of Authority to Board CommitteesTo facilitate effective management, the Board has delegated certain functions to the Board committees, namely, the audit committee (“Audit Committee”), the remuneration committee (“Remuneration Committee”) and the nominating committee (“Nominating Committee”), to ensure that there are appropriate checks and balances. These Board committees operate within clearly defined terms of reference which are reviewed from time to time. As at 31 March 2012, the Audit Committee, the Remuneration Committee and the Nominating Committee each comprised entirely of non-executive Directors.

Guideline 1.4Meetings of Board and Board CommitteesThe articles of association of the Company (“Articles”) provide for the Directors to participate in Board meetings by teleconference or videoconference means.


The number of Board and Board committees’ meetings held in FY2012 and the attendance of each Director is set out below:

Guideline 1.5Internal Guidelines on Matters Requiring Board ApprovalThe Group has in place financial authorisation and approval limits for, amongst others, operating and capital budgets, procurement of goods and services, bank borrowings and operation of the Group’s various bank accounts and the approval of the Board are required for these matters.

Guideline 1.6Continuous Training and Development of DirectorsDuring FY2012, the management has kept the Directors up-to-date on pertinent developments in the business of the Group during Board and/or Board committee meetings to facilitate the discharge of their duties.

Guideline 1.7 & Guideline 1.8Appointment and Training for First-time DirectorsEach of the Directors, upon their appointment to the Board, has furnished a letter stating that they are aware and have been informed of their duties and obligations as Directors. A formal letter will be sent to newly appointed Directors upon their appointment explaining, among other matters, their roles, duties and responsibilities as members of the Board. Directors are encouraged to attend training and seminars to familiarise themselves with the latest relevant laws and regulations in connection with the discharge of their duties. The Board is also regularly updated on the activities and developments of the Group. The Company will arrange for new Directors with no prior experience of serving as a director in a listed company to attend appropriate courses, conferences or seminars, including programmes or courses organised by the Singapore Institute of Directors or other training institutions. During FY2012, Mdm Lee Sok Koon was appointed as a Director with effect from 1 September 2011. Mdm Lee has prior experience of serving as a director in a listed company, having served on the board of directors of Lum Chang Holdings Limited and L.C. Development Ltd, companies which are listed on the Main Board of the Singapore Exchange Securities Trading Limited (“SGX-ST”).

Name of Director

Board AuditCommittee

Nominating Committee

Remuneration Committee

No. of meetings held during tenure on Board

No. of meetings attended







Takahashi Kenichi 3 3 4 - 1 - 3 -

Shigemitsu Katsuaki 3 2 4 - 1 - 3 -

Eugene Wong Hin Sun 3 3 4 4 1 1 3 3

Yeo Guat Kwang (1) 1 - 2 2 1 1 2 2

Lee Sok Koon (2) 2 2 2 2 - - 1 1

Tan Lye Huat 3 3 4 4 1 1 3 3

Notes:(1) Mr Yeo Guat Kwang resigned as a Director with effect from 1 September 2011. Following his resignation, Mr Yeo also relinquished his position

as Lead Independent Director, the Chairperson of the Nominating Committee and the Remuneration Committee and a member of the Audit Committee.

(2) Mdm Lee Sok Koon was appointed as a Director with effect from 1 September 2011. Mdm Lee was also appointed as the Chairperson of the Nominating Committee and the Remuneration Committee and a member of the Audit Committee with effect from the same date.



BOARD COMPOSITION AND BALANCE Principle 2: Strong and Independent Element on the Board

Guideline 2.1Composition and Independent Element of the Board

The Board at the beginning of FY2012 comprised five members as follows:

Mr Takahashi Kenichi Executive Chairman and Chief Executive OfficerMr Shigemitsu Katsuaki Non-executive DirectorMr Eugene Wong Hin Sun Non-executive DirectorMr Yeo Guat Kwang Lead Independent Director Mr Tan Lye Huat Independent Director

With effect from 1 September 2011, Mdm Lee Sok Koon was appointed as a Director and Mr Yeo Guat Kwang resigned as a Director. With effect from the same date, Mr Tan Lye Huat was appointed as the Lead Independent Director of the Company.

Following the above-mentioned appointment and resignation of Directors, the Board currently has five members, comprising two independent Directors, two non-executive Directors and one executive Director. As at the date of this report, the Board comprises the following members:

Mr Takahashi Kenichi Executive Chairman and Chief Executive OfficerMr Shigemitsu Katsuaki Non-executive DirectorMr Eugene Wong Hin Sun Non-executive DirectorMr Tan Lye Huat Lead Independent Director Mdm Lee Sok Koon Independent Director

Guideline 2.2Independence of DirectorsThe Nominating Committee deliberates annually to determine the independence of a Director bearing in mind the salient factors set out under this guideline in the Code as well as all other relevant circumstances and facts.

Guideline 2.3Composition and Size of the BoardThe Board is of the opinion that its current size and composition is appropriate for decision making, taking into account the scope and nature of the operations of the Group. With two out of five members of the Board being independent, the Company maintains a satisfactory independent element on the Board. The Nominating Committee is of the opinion that the current Board composition represents a well balanced mix of expertise and experience comprising accounting, finance, business experience as well as industry knowledge to provide core competencies necessary to meet the requirements of the Company and the Group and which facilitates effective decision making.

Guideline 2.4Competency of the BoardDuring FY2012, the Directors have updated their Board of Directors Competency Matrix Form by providing additional information (if any) in their areas of specialisation and expertise. The Nominating Committee, having reviewed the returns, is satisfied that members of the Board possess the relevant core competencies in areas of accounting and finance, business and management experience, and strategic planning. In particular, the non-executive Directors, who are mostly professionals in their selected fields, are able to take a broader view of the Group’s activities, contribute their valuable experience and provide independent judgement during the Board’s deliberation on Group’s matters.



Guideline 2.5 & Guideline 2.6Non-Executive DirectorsThe Board has four non-executive Directors (including the independent Directors) who endeavour to constructively challenge and help develop proposals on strategy and to review the performance of management in meeting goals and objectives. To facilitate a more effective check on management, the non-executive Directors may meet without the presence of management. Where necessary, the Company would co-ordinate informal sessions for individual Directors to meet without the presence of the management.

ROLE OF CHAIRMAN AND CHIEF EXECUTIVE OFFICER Principle 3: Clear Division of Responsibilities and Balance of Power and Authority

Guideline 3.1Common Role of Chairman and CEOMr Takahashi Kenichi is both the chairman of the Board (“Chairman”) and the chief executive officer (“CEO”) of the Company. The Board is of the view that it is not necessary to separate the role of the Chairman and the CEO after taking into consideration the size, scope and the nature of the operations of the Group. Mr Takahashi Kenichi is the founder of the Group and has played an instrumental role in developing the business since its establishment. He has considerable industry experience and business network and has also provided the Group with strong leadership and vision. The Board is of the view that it is in the interest of the Group to adopt a single leadership structure.

Guideline 3.2Roles and Responsibilities of ChairmanThe Chairman, who is also the CEO, seeks to, amongst others, lead the Board to ensure its effectiveness, ensure that the Directors receive accurate, timely and clear information, ensure effective communication with Shareholders, encourage constructive relations between the Board and the management, as well as facilitate the effective contribution of non-executive Directors.

Guideline 3.3Lead Independent DirectorThe Nominating Committee, Remuneration Committee and Audit Committee are all chaired by independent Directors and Mr Tan Lye Huat has been appointed to replace Mr Yeo Guat Kwang as the Company’s Lead Independent Director with effect from 1 September 2011. The Board is of the view that there are sufficient safeguards and checks in place to ensure that the process of decision-making by the Directors is independent and based on collective decision-making without the Chairman and CEO being able to exercise considerable concentration of power or influence.

BOARD MEMBERSHIPPrinciple 4: Formal and Transparent Process for the Appointment of Directors to the Board

Guideline 4.1 Membership of the Nominating CommitteeThe Nominating Committee at the beginning of FY2012 comprised the following members, the majority of whom, including the chairperson of the committee, were independent non-executive Directors:

Mr Yeo Guat Kwang, Chairperson Independent and non-ExecutiveMr Tan Lye Huat Independent and non-ExecutiveMr Eugene Wong Hin Sun Non-independent and non-Executive



The Nominating Committee was reconstituted during FY2012 following the resignation of Mr Yeo Guat Kwang as a Director and the appointment of Mdm Lee Sok Koon as a Director. As at the date of this report, the Nominating Committee comprises the following members, the majority of whom are independent non-executive Directors:

Mdm Lee Sok Koon, Chairperson Independent and non-ExecutiveMr Tan Lye Huat Independent and non-ExecutiveMr Eugene Wong Hin Sun Non-independent and non-Executive

During FY2012, the Nominating Committee held 1 scheduled meeting, which all members attended.

The principal functions of the Nominating Committee include:

(a) recommending to the Board on all new Board appointments;

(b) making recommendations on re-nomination of Directors, having regard to the Director’s past contribution and performance;

(c) evaluating the independence of each Director annually; and

(d) evaluating the effectiveness of the Board as a whole and the contribution of each individual Director towards the effectiveness of the Board.

Guideline 4.2 & Guideline 4.3Roles and Responsibilities of the Nominating CommitteeBoard renewal must be an on-going process to ensure good governance and to maintain relevance to the changing needs of the Group. No Director stays in office for more than three years without being re-elected by Shareholders. The Articles provide that at least one-third of the Directors, except the CEO, shall retire from office by rotation at every annual general meeting of the Company (“AGM”) and Directors appointed during the course of the year will be subjected to re-election at the next AGM following his appointment. At the forthcoming AGM, Mr Tan Lye Huat and Mdm Lee Sok Koon are due for re-election pursuant to Article 98 and Article 102 of the Articles respectively. The Nominating Committee has recommended and the Board has agreed for Mr Tan Lye Huat and Mdm Lee Sok Koon to retire and seek re-election at the forthcoming AGM.

The Nominating Committee deliberates annually to determine the independence of a Director bearing in mind the salient factors set out in the Code as well as all other relevant circumstances and facts. No member of the Nominating Committee should participate in the deliberation in respect of his own status as an independent Director.

Guideline 4.4Commitment of Directors Sitting on Multiple BoardsIn assisting the Nominating Committee to determine whether the Directors who have multiple board representations are able to adequately carry out their duties and commitments towards the Company, the Directors have adopted a form of internal guidelines for Directors serving on multiple boards. The Nominating Committee, after reviewing the completed forms that were returned by all Directors together with the respective list of directorships held by each Director as well as their attendance, is satisfied that all the Directors who sit on multiple boards are able to devote adequate time and attention to the affairs of the Company and to fulfil their duties as Directors.



Guideline 4.5Process for Selecting and Appointment of New Directors In the event that a vacancy on the Board arises, the Nominating Committee may identify suitable candidates for appointment as new Directors through the business network of the Board members or engage independent professional advisers to assist in the search for suitable candidates. The Nominating Committee will generally identify suitable candidates skilled in core competencies such as accounting or finance, business or management expertise, or industry knowledge. If the Nominating Committee decides that the candidate is suitable, the Nominating Committee then recommends its choice to the Board. Meetings with such candidates may be arranged to facilitate open discussion. Upon appointment, arrangements will be made for the new Director to attend various briefings with the management team.

Guideline 4.6Information on DirectorsKey information on the Directors, including their academic and professional qualifications and their shareholdings in the Company, are found on page 16 of this annual report.

BOARD PERFORMANCEPrinciple 5: Assessment of the Effectiveness of the Board

Guideline 5.1Board PerformanceThe Board has in place a process to assess its effectiveness as a whole as well as its ability to discharge its responsibilities in providing stewardship, corporate governance and overseeing of management’s performance.

Guideline 5.2Board EvaluationThe Board’s performance is a function of the experience and expertise that each of the Directors bring with them. The Nominating Committee assesses the Board’s effectiveness as a whole by completing a Board Evaluation Questionnaire. The results of the exercise are collated by the company secretary for review by the Nominating Committee before submitting to the Board for reviewing and determining the areas for improvement. In assessing the effectiveness of the Board as a whole, the Nominating Committee takes into consideration a number of factors such as the size and composition of the Board, the Board’s access to information, participation in Board proceedings and the communications and guidance given by the Board to the management.

Guideline 5.3, Guideline 5.4 & Guideline 5.5Performance Criteria and Evaluation of Individual DirectorAn individual self-assessment is performed by each Director in the form of a Board of Directors Competency Matrix and the results of the self-assessment are discussed with the Nominating Committee. Among the factors considered in the individual self-assessment are the Directors’ knowledge or experience as directors, experience of being in board committees, in sector experience and functional experience.

The criteria for evaluation of the performance of individual Directors include the level of participation, attendance at Board and Board committees’ meetings and the individual Director’s functional expertise.

The Board has taken the view that the Company’s share price performance and financial indicators set out in the Code as a guide for the evaluation of the Board and its Directors, may not be appropriate as a performance measurement for the Board but more of a measurement of management performance.



ACCESS TO INFORMATION Principle 6: Board Members Provided with Complete, Adequate and Timely Information

Guideline 6.1 & Guideline 6.2Board’s Access to Information On a timely basis before each meeting, Directors are provided with information by management pertaining to relevant matters to be brought before the Board for its decision as well as ongoing reports, explanations and updates relating to the operational and financial performance of the Group.

Guideline 6.3Board’s Access to the Company SecretaryBoard members have separate and independent access to the Company’s senior management and the company secretary. The company secretary attends all meetings of the Board and Board committees and is responsible for ensuring, amongst other things, that Board procedures are followed and that all applicable rules and regulations are complied with.

Guideline 6.4Appointment and Removal of Company SecretaryThe appointment and removal of the company secretary is a matter for consideration by the Board as a whole.

Guideline 6.5Board’s Access to Independent Professional AdviceWhere necessary and to enable the Directors to discharge their duties, the Directors, whether as a group or individually, may seek independent professional advice at the Company’s expense and after consultation with the Chairman.

REMUNERATION MATTERS

PROCEDURES FOR DEVELOPING REMUNERATION POLICIESPrinciple 7: Formal and Transparent Procedure for Developing Policy on Executives’

Remuneration and Fixing the Remuneration Packages of Individual Directors

Guideline 7.1Remuneration CommitteeThe Remuneration Committee at the beginning of FY2012 comprised the following members, the majority of whom, including the chairperson of the committee, were independent non-executive Directors:

Mr Yeo Guat Kwang, Chairperson Independent and non-ExecutiveMr Tan Lye Huat Independent and non-ExecutiveMr Eugene Wong Hin Sun Non-independent and non-Executive

The Remuneration Committee was reconstituted during FY2012 following the resignation of Mr Yeo Guat Kwang as a Director and the appointment of Mdm Lee Sok Koon as a Director. As at the date of this report, the Remuneration Committee comprises the following members, the majority of whom are independent non-executive Directors:

Mdm Lee Sok Koon, Chairperson Independent and non-ExecutiveMr Tan Lye Huat Independent and non-ExecutiveMr Eugene Wong Hin Sun Non-independent and non-Executive



During the year, the Remuneration Committee held 3 scheduled meetings, which all members attended.

Guideline 7.2Functions of the Remuneration Committee and Remuneration FrameworkThe principal functions of the Remuneration Committee include:

(a) reviewing and recommending to the Board the structure of the compensation policies and recruitment strategies of the Group so as to align compensation with Shareholders’ interests;

(b) reviewing and recommending to the Board the framework of remuneration for the executive Directors and key executives of the Group and to determine appropriate adjustments;

(c) reviewing and recommending to the Board on endorsement guidelines for directors’ fees of non-executive Directors;

(d) reviewing and approving succession plans for key positions; and

(e) administering and approving long-term incentive schemes which are approved by Shareholders (including the Japan Foods Employee Share Option Scheme as further described hereinafter).

No Director will be involved in deciding his own remuneration, except in providing information and documents if specifically requested by the Remuneration Committee to assist in its deliberations.

The Remuneration Committee’s review covers all aspects of remuneration, including salaries, fees, allowances, bonuses and benefits-in-kind. The Remuneration Committee’s recommendations are submitted for endorsement by the entire Board.

Guideline 7.3Remuneration Committee’s Access to Advice on Remuneration MattersThe Remuneration Committee may seek expert advice on the remuneration of all Directors, if required.

LEVEL AND MIX OF REMUNERATIONPrinciple 8: Level of Remuneration of Directors to be Appropriate and Not Excessive

Guideline 8.1 & Guideline 8.5Remuneration of Executive DirectorsThe Company adopts an overall remuneration policy for employees, comprising a fixed component in the form of a base salary, and a variable component in the form of a bonus that is linked to the performance of the Group, the individual, the industry and the economy. In reviewing its remuneration policy, the Company generally takes into account compensation and employment conditions within the industry and in comparable companies.

Guideline 8.3 & Guideline 8.6Service AgreementThe CEO had entered into a service agreement with the Company which took effect on 23 February 2009 (being the date of admission of the Company to Catalist). As the initial effective period of the service agreement of three years has since passed, the service agreement has been renewed for another year on the same terms and may be terminated at any time by either party giving the other party three months’ prior written notice of such termination. The Remuneration Committee has reviewed the key terms of the service agreement. The CEO’s remuneration comprises performance-related element designed to align his interests with those of Shareholders. The CEO does not receive directors’ fees.



Guideline 8.2Remuneration of Non-Executive DirectorsThe non-executive Directors receive directors’ fees in accordance with their level of contributions, taking into account factors such as responsibilities, effort and time spent for serving on the Board and Board committees. The Directors’ fees are recommended by the Board and are subject to the approval of Shareholders at the AGM.

Guideline 8.4Long-term Incentive SchemeThe Company has adopted the Japan Foods Employee Share Option Scheme, further details of which are set out herein. As the CEO is also the controlling Shareholder of the Company, he is not eligible to participate in the Japan Foods Employee Share Option Scheme.

DISCLOSURE ON REMUNERATIONPrinciple 9: Clear Disclosure of Remuneration Policy, Level and Mix of Remuneration and Procedure for Setting Remuneration

Guideline 9.1 & Guideline 9.2Remuneration of Directors and Top Key ExecutivesThe breakdown of the annual remuneration (including all forms of remuneration from the Company and any of its subsidiaries) for each Director for FY2012 is set out below:

Remuneration band and name of Director

Director’s fees(%)

Salary (%)

Incentive bonus and other benefits

(%)Total (%)

S$525,000 to S$550,000Takahashi Kenichi - 48 52 100

S$25,000 to S$50,000Tan Lye HuatEugene Wong Hin Sun

100100

- -

- -

100 100

Below S$25,000Shigemitsu KatsuakiYeo Guat Kwang (1)

Lee Sok Koon (2)

100100100

---

---

100100100

Notes:(1) Mr Yeo Guat Kwang resigned as a Director with effect from 1 September 2011. The disclosure above was based on Mr Yeo’s actual remuneration

from 1 April 2011 to 1 September 2011.

(2) Mdm Lee Sok Koon was appointed as a Director with effect from 1 September 2011. The disclosure above was based on Mdm Lee’s actual remuneration from 1 September 2011 to 31 March 2012.

The Company had, on 19 December 2008, entered into a service agreement with Mr Takahashi Kenichi, in relation to his appointment as the Chairman and CEO. The service agreement took effect from the date of the Company’s admission to Catalist, being 23 February 2009, for an initial period of three years, and shall be renewable automatically on a yearly basis thereafter.




To maintain confidentiality of staff remuneration and to prevent poaching of key executives within the highly competitive food and beverage industry in which the Group operates in, the names and individual remuneration of the top five executives have not been disclosed in this report. Of the top five executives of the Group, one executive received remuneration of between S$125,000 to S$250,000 in FY2012 while the other four executives were paid remuneration of less than S$125,000 in FY2012.

Guideline 9.3Employee Related to a DirectorDuring FY2012, there was one key executive of the Group, who is a deemed associate of Mr Takahashi Kenichi, the Chairman and CEO, whose annual remuneration was below S$125,000. The remuneration includes fixed salary and bonus.

Guideline 9.4Employee Share Option Scheme

The Japan Foods Employee Share Option Scheme (the “Scheme”)The Company has adopted the Scheme which was approved on 20 January 2009 by the Company’s then Shareholder. The Scheme is administered by the Remuneration Committee currently comprising Mdm Lee Sok Koon, Mr Tan Lye Huat and Mr Eugene Wong Hin Sun.

The Scheme provides an opportunity for employees of the Group who have contributed to the growth and performance of the Group (including executive and non-executive Directors) and who satisfy the eligibility criteria as set out under the rules of the Scheme, to participate in the equity of the Company. Controlling shareholders of the Company and their associates shall not be eligible to participate in the Scheme.

The total number of shares in the capital of the Company (“Shares”) over which the Remuneration Committee may grant options under the Scheme (“Options”) on any date, when added to the number of Shares issued and issuable in respect of all Options, shall not exceed 15% of the number of the issued Shares on the day immediately preceding the date on which the Options shall be granted.

Under the rules of the Scheme, the Options that are granted may have exercise prices that are, at the Remuneration Committee’s discretion, set at the price (“Market Price”) equal to the average of the last dealt prices for the Shares on Catalist for the five consecutive market days immediately preceding the relevant date of grant of the relevant Option, or (provided that Shareholders’ approval is obtained in a separate resolution) at a discount to the Market Price (subject to a maximum discount of 20%). Options which are fixed at the Market Price may be exercisable at any time by the participant after the first anniversary of the date of grant of that Option while Options granted at a discount to the Market Price may only be exercised after the second anniversary from the date of grant of the Option. Options granted under the Scheme will have a life span of ten years. The Options may be exercisable in full or in part only in respect of 1,000 Shares or multiple thereof, on payment of the exercise price.

No Options has been granted by the Company since the date of approval of the Scheme. Accordingly, the disclosure requirements under Rule 851(1)(b), (c) and (d) of the SGX-ST Listing Manual Section B: Rules of Catalist (“Catalist Rules”) are not applicable.

ACCOUNTABILITY AND AUDITPrinciple 10: Presentation of a Balanced and Understandable Assessment of the Company’s Performance, Position and Prospects

The Board recognises the importance of providing accurate and relevant information on a timely basis. In this respect, the Audit Committee reviews all of the Group’s financial statements and recommends them to the Board for approval. In addition, the Audit Committee ensures that the Group maintains a sound system of internal controls to safeguard Shareholders’ interests and the Group’s assets as well as to manage potential risks.


Guideline 10.1Accountability for Accurate InformationIn discharging its responsibility of providing accurate and relevant information on a timely basis, the Board ensures the timely release of the Company’s annual reports and public announcements of financial results on a half yearly and yearly basis and disclosure of other relevant information of the Group such that the information provides a balanced and understandable assessment of the Group’s performance, position and prospects.

To assist the Board in discharging its responsibility, the Company has established a system whereby the management of the Company would furnish an overall representation to the Audit Committee and the Board confirming, inter alia, the integrity of the Group’s financial statements.

On half-yearly basis, the management of the Company issues a representation letter to the Audit Committee confirming that the Group’s financial processes and controls are in place, highlighting material financial risks and impacts and providing updates on status of significant financial issues of the Group. In accordance with Rule 705(5) of the Catalist Rules, the Board provides confirmation in its half-yearly financial results announcements that to the best of its knowledge, nothing had come to the attention of the Board which might render the financial statements to be false or misleading in any material aspect.

Guideline 10.2Management AccountsThe management of the Company provides the Board with regular updates on the Group’s business activities and financial performance by providing balanced and understandable management accounts of the Company’s performance, position and prospects on a quarterly basis. Such reports compare the Group’s actual performance against the approved budget and where appropriate, against forecast. They also highlight key business indicators and major issues that are relevant to the Group’s performance.

AUDIT COMMITTEEPrinciple 11: Establishment of Audit Committee with Written Terms of Reference

Guideline 11.1 and 11.8Membership of the Audit CommitteeAt the beginning of FY2012, the Audit Committee comprised the following members, the majority of whom, including the Chairperson, were independent non-executive Directors:

Mr Tan Lye Huat, Chairperson Independent and non-ExecutiveMr Yeo Guat Kwang Independent and non-ExecutiveMr Eugene Wong Hin Sun Non-independent and non-Executive

During FY2012, following the resignation of Mr Yeo Guat Kwang as a Director and the appointment of Mdm Lee Sok Koon as a Director, the Audit Committee was reconstituted. As at the date of this report, the Audit Committee comprises the following members, the majority of whom, including the Chairperson, are independent non-executive Directors:

Mr Tan Lye Huat, Chairperson Independent and non-ExecutiveMdm Lee Sok Koon Independent and non-ExecutiveMr Eugene Wong Hin Sun Non-independent and non-Executive

During the year, the Audit Committee held 4 scheduled meetings, which all members attended.



Guideline 11.2Expertise of Members of the Audit CommitteeThe Board is satisfied that all the members of the Audit Committee, having the necessary accounting and/or related financial management expertise, were appropriately qualified to discharge their responsibilities.

Guideline 11.3 and Guideline 11.4Roles and Responsibilities of the Audit CommitteeThe Audit Committee is guided by its Terms of Reference and meets periodically to undertake the following principal functions:

(a) reviewing the annual audit plan, scope and results of the audit undertaken by the External Auditors, including non-audit services performed by them to ensure that there is a balance between maintenance of their objectivity and cost effectiveness;

(b) reviewing the effectiveness and adequacy of the internal audit function, which is outsourced to a professional services firm;

(c) reviewing with the internal auditors the scope and procedures of the audit plans, the results and adequacy of the Group’s material internal controls and with Management the adequacy of financial, operational and compliance risk management;

(d) reviewing the financial statements and other relevant announcements to shareholders and the SGX-ST, prior to submission to the Board;

(e) assessing the independence and objectivity of the External Auditors and recommending to the Board the appointment/re-appointment/removal of External Auditors;

(f) reviewing the assistance given by the Company’s officers to the External/Internal Auditors; and

(g) reviewing and recommending for the Board’s approval the interested person transactions as specified under Chapter 9 of the Catalist Rules and/or the procedures set out in the general mandate approved by Shareholders.

The Audit Committee has explicit authority to investigate any matter within its Terms of Reference. It has full access to, and the co-operation of management. It also has direct and independent access to the Internal/External Auditors and full discretion to invite any Director or any member of the management to attend its meetings.

Guideline 11.5 and Guideline 11.6External and Internal AuditorsDuring FY2012, the aggregate amount of fees paid to the External Auditors, Nexia TS Public Accounting Corporation, amounted to approximately S$75,400, comprising S$60,000 paid for the provision of audit services and S$15,400 paid for the provision of non-audit services.

The Audit Committee has reviewed the non-audit services provided by the External Auditors as part of the Audit Committee’s assessment of the External Auditor’s independence. The Audit Committee is of the view that the fee of S$15,400 paid for the non-audit services (being tax advisory) provided by the External Auditors in FY2012 will not prejudice their objectivity and independence and has recommended to the Board that Nexia TS Public Accounting Corporation be nominated for re-appointment as the External Auditors of the Company at the forthcoming AGM.

The Company complies with Rules 712 and 715 of the Catalist Rules in relation to the appointment of Nexia TS Public Accounting Corporation as its external auditors.



The Company’s Internal and External Auditors were invited to make presentations to the Audit Committee during the year to facilitate the Audit Committee’s review of the work performed by and the findings of the Internal and External Auditors as well as to keep the Audit Committee abreast of changes to accounting standards and issues which may have a direct impact on financial statements. The Internal and External Auditors have also met separately with the Audit Committee without the presence of management during FY2012.

Guideline 11.7Whistle Blowing PolicyTo encourage proper work ethics and eradicate any internal improprieties, unethical acts, malpractices, fraudulent acts, corruption and/or criminal activities in the Group, the Company has put in place a whistle blowing policy (“Policy”). The Policy stipulates the mechanism by which concerns about possible improprieties in matters of financial reporting or other matters may be raised by employees of the Group and a Whistle-Blowing Committee (“WBC”) has been established for this purpose. In addition, a dedicated and secured e-mail address also allows whistle blowers to contact the WBC and members of the Audit Committee directly.

Assisted by the WBC, the Audit Committee addresses issues/concerns raised and arranges for investigation and/or follow-up of appropriate action. The Audit Committee reports to the Board on any issues/concerns received by it and the WBC, at the ensuing Board meeting. Should the Audit Committee or WBC receive reports relating to serious offences, and/or criminal activities in the Group, the Audit Committee and the Board have access to the appropriate external advice where necessary. Where appropriate or required, a report shall be made to the relevant governmental authorities for further investigation/action.

The WBC consists of the CEO, the Head (Operations) and the Chief Financial Officer of the Company. The WBC is empowered to:

(a) investigate all issues/concerns relating to the Group (except for issues/concerns that are directed specifically or affecting any member of the WBC, which shall be dealt with by the Audit Committee);

(b) make the necessary reports and recommendations to the Audit Committee or the Board for their review and further action, if deemed required by them; and

(c) access the appropriate external advice where necessary and, where appropriate or required, report to the relevant government authorities for further investigations/actions.

The Group takes concerns with the integrity and honesty of its employees seriously. A copy of the Policy has been disseminated to all staff to encourage the report of any behaviour or action that anyone reasonably believes might be suspicious, against any rules/regulations/accounting standards as well as internal policies. The whistle blowers could also contact the Chairperson of the Audit Committee directly via email and in confidence and his/her identity is protected from reprisals within the limits of the law.

INTERNAL CONTROLPrinciple 12: Sound System of Internal Controls

Guideline 12.1Internal Controls SystemThe Board recognises the importance of maintaining a sound system of internal controls to safeguard the shareholders’ investments and the Group’s assets. The Audit Committee is responsible for ensuring that such a system has been appropriately implemented and monitored.



During FY2012, the Audit Committee has reviewed the reports submitted by the External Auditors and the Internal Auditors relating to the effectiveness of the Group’s internal controls, including the adequacy of the Group’s internal financial controls, operational and compliance controls, as well as risk management policies and systems established by the management of the Company.

RISK MANAGEMENT

The Management has put in place a Risk Management Policy to assist the Board in identifying, evaluating, monitoring and managing potential risks. The CEO and senior management of the Company assume the responsibilities of the risk management function. They regularly assess and review the Group’s business and operational environment in order to identify areas of significant business and financial risks, such as credit risks, foreign exchange risks, liquidity risks and interest rates risk, as well as adopt appropriate measures to control and mitigate the risks that may affect the Group’s achievement of its business objectives or assets.

Guideline 12.2Adequacy of Internal ControlsThe system of internal controls and risk management policies established by the Group is designed to manage, rather than eliminate, the risk of failure in achieving the Group’s strategic objectives. It should be recognised that such systems are designed to provide reasonable assurance, but not an absolute guarantee, against material misstatement or loss.

Based on the internal controls established and maintained by the Group, work performed by the Internal and External Auditors, and reviews performed by management, various Board Committees and the Board as well as the assurances from the CEO and the Chief Financial Officer of the Company, the Board, with the concurrence of the Audit Committee, is of the opinion that the Group’s internal controls in addressing financial, operational and compliance risks, were adequate as at 31 March 2012.

INTERNAL AUDITPrinciple 13: Independent Internal Audit Function

Guideline 13.1Internal AuditorsThe Audit Committee’s responsibilities over the Group’s internal controls and risk management are complemented by the work of the Internal Auditors (“IA”).

An internal audit function that is independent of the activities it audits has been established and the IA’s primary line of reporting is to the Chairperson of the Audit Committee.

Guideline 13.2 and Guideline 13.3Internal Audit FunctionThe Company has outsourced its internal audit function to Yang Lee and Associates, which is a member of the Institute of Internal Auditors, Singapore. The IA is guided by the International Standards for the Professional Practice of Internal Auditing (IIA Standards) issued by the Institute of Internal Auditors.

An annual audit plan which entails the review of the effectiveness of the Company’s material internal controls has been developed by the IA. The Audit Committee has discussed with the IA its resource deployment plan and is satisfied that the Company’s internal audit function is adequately resourced to perform the job for the Group.



Guideline 13.4Adequacy of the Internal Audit FunctionThe Audit Committee reviews annually the adequacy of the internal function to ensure that the internal audits are performed effectively. The Audit Committee reviews and approves the annual internal audit plan to ensure that there is sufficient coverage of the Group’s activities over a cycle. It also oversees the implementation of the internal audit plan and ensures that the management of the Company provides the necessary co-operation to enable the IA to perform its function.

COMMUNICATION WITH SHAREHOLDERSPrinciple 14: Regular, Effective and Fair Communication with ShareholdersPrinciple 15: Shareholders’ Participation at General Meetings

Guideline 14.1 and Guideline 14.2Communication and Information Available to ShareholdersThe Company endeavours to maintain full and adequate disclosure, in a timely manner, of material events and matters concerning its business. All the necessary disclosures required by the Catalist Rules will be made in public announcements, press releases and annual reports to Shareholders.

Guideline 15.1Shareholders’ ParticipationThe AGM provides a principal forum for dialogue and interaction with Shareholders. As the authentication of Shareholder’s identity information and other related integrity issues still remain a concern, the Company has decided, for the time being, not to implement voting in absentia by mail, e-mail or facsimile. In addition to the AGM, the Company also maintains regular dialogue with Shareholders and prospective investors through results briefings.

Guideline 15.2Proceedings of General MeetingIssues or matters requiring Shareholders’ approval will be tabled in the form of separate and distinct resolutions at the AGMs.

Guideline 15.3Questions Raised at General MeetingsThe Chairman of the Board and the Board committees attend all AGMs to address issues raised by Shareholders. The Company’s External Auditors are also present to address questions raised by Shareholders at AGMs.

Guideline 15.4Limit on Number of Proxies for Nominee Companies The Articles allows a Shareholder to appoint up to two proxies to attend and vote at general meetings. The Company also allows investors who hold Shares through nominees such as the Central Provident Fund and custodian banks, to attend AGMs as observers without being constrained by the two-proxy rule, subject to availability of seats.

Guideline 15.5Minutes of General MeetingsThe company secretary will prepare minutes of general meetings held which will be made available to Shareholders upon request.




DEALING IN SECURITIES

The Company has adopted an internal code on dealings in securities to govern dealings in the Shares by the Directors and the key executives of the Group. The Directors, management and officers of the Group, who have access to price-sensitive, financial or confidential information are not allowed to deal in the Shares during the period commencing one month before the announcement of the Group’s half-year and full-year results and ending on the date of announcement of such results, and when in possession of unpublished price-sensitive information. In addition, the officers of the Company are advised not to deal in the Shares for short term considerations and are expected to observe the insider trading laws at all times even when dealing in securities within the permitted trading periods.

INTERESTED PERSON TRANSACTIONS

The Company has established procedures to ensure that all transactions with interested persons are reported in a timely manner to the AC and that the transactions are on an arm’s length basis.

The Company has obtained a general mandate for recurring transactions with Shigemitsu Industry Co., Ltd. (“Shareholders’ Mandate”), which will be put forth to Shareholders for renewal at the forthcoming AGM.

The aggregate value of all interested person transactions entered into during FY2012 (including transactions of less than S$100,000 each) is as follows:

Name of interested person

Aggregate value of all interested person transactions during FY2012 (excluding transactions conducted

under shareholders’ mandate pursuant to Rule 920 of the Catalist Rules)

(S$’000)

Aggregate value of all interested person transactions conducted

during FY2012 under shareholders’ mandate pursuant to Rule 920

of the Catalist Rules (S$’000)

Shigemitsu Industry Co., Ltd. (1):

• Royalty and franchise fees paid 402 (2) -

• Purchase of food ingredients 20 (3) 1,181 (4)

Notes:(1) Shigemitsu Katsuaki, the Company’s Non-executive Director, is the president, chief executive officer and major shareholder of Shigemitsu Industry

Co., Ltd (“Shigemitsu Industry”). Accordingly, transactions between the Group and Shigemitsu Industry are interested person transactions within the ambit of Chapter 9 of the Catalist Rules.

(2) The royalty and franchise fees in FY2012 comprise fees paid for the use of the “Ajisen Ramen” brand amounting to S$378,000 and the “Sen No Chanpon” and “Aji No Chanpon” brands amounting to S$24,000.

The royalty and franchise fees relating to the “Ajisen Ramen” brand are deemed to have been specifically approved by the Shareholders at the time of the Company’s initial public offering in February 2009 and are not subject to Rule 905 and Rule 906 of the Catalist Rules to the extent that there is no variation or amendment to the terms of the relevant franchise agreement.

(3) This amount relates to the Group’s purchases of ingredients for the “Sen No Chanpon” and “Aji No Chanpon” business from Shigemitsu Industry. The Company had on 1 February 2011 entered into a franchise agreement (the “Agreement”) with Shigemitsu Industry pursuant to which the Company was granted the exclusive franchise rights to use the “Sen No Chanpon” and “Aji No Chanpon” trademarks (collectively, the “Trademarks”) in Singapore for a period of three (3) years from the date of the Agreement. Under the Agreement, the Company is obliged to, inter alia, purchase from Shigemitsu Industry four (4) ingredients as specified by Shigemitsu Industry for the operation of shops under the Trademarks. The aggregate value of all purchases from Shigemitsu Industry for this purpose amounted to approximately S$20,000 (i.e. less than S$100,000) in FY2012.

(4) The Shareholders had, at the last AGM of the Company held on 28 July 2011, approved the renewal of the Shareholders’ Mandate in respect of its purchases of soup base and such other ingredients necessary for the “Ajisen Ramen” business from Shigemitsu Industry. The aggregate value of all purchases (including transactions less than S$100,000 each) from Shigemitsu Industry for this purpose amounted to approximately S$1,181,000 in FY2012. The Shareholders’ Mandate is subject to annual renewal and will expire at the forthcoming AGM. The Company will be seeking Shareholders’ approval for the renewal of the Shareholders’ Mandate at the forthcoming AGM.


Save as disclosed below and in this report, there are no other material contracts or loans entered into by the Company or any of its subsidiaries involving the interests of any Director or controlling Shareholder of the Company, either still subsisting at the end of FY2012 or if not subsisting, were entered into since 31 March 2012:

(i) The Company had on 3 April 2012 entered into a production licence agreement (the “Licence Agreement”) with Shigemitsu Industry in relation to the provision by Shigemitsu Industry to the Group of the techniques (the “Know-How”) for production of noodles (the “Products”) to be used at the restaurants operated by the Group under trademarks owned by Shigemitsu Industry. Under the Licence Agreement, Shigemitsu Industry also granted the Company the exclusive licence (together with the Know-How, the “Licence”) to produce and sell the Products in Singapore, Indonesia, Malaysia and Vietnam. Commencing from 1 April 2012, the Group will pay Shigemitsu Industry an annual licence fee computed based on the quantity of noodles produced at the Group’s noodle production facility in reliance of the Licence.

(ii) The Company had also on 14 June 2012, entered into an acquisition and shareholders’ agreement (the “JV Agreement”) with Ajisen Investments (International) Limited (“Ajisen Investments”), Shigemitsu Industry and ACJF Holding Limited (“ACJF”) to jointly develop and operate restaurants under the “Menya Musashi” trademark (“Brand”) in Hong Kong (“Business”). Under the JV Agreement, the Company and Shigemitsu Industry have agreed to acquire from Ajisen Investments, 12,500 and 5,000 ordinary shares of US$1.00 each in the capital of ACJF (“ACJF Shares”), for a purchase consideration of HK$97,500 and HK$39,000 respectively, which was arrived at based on the par value of the ACJF Shares.

Upon the completion of the acquisition, Ajisen Investments, the Company and Shigemitsu Industry shall, in proportion to their respective shareholdings in ACJF, provide funding to ACJF by way of shareholders’ loans (“Shareholders’ Loans”) in the amounts of HK$3,900,000, HK$1,500,000 and HK$600,000 respectively for the purpose of enabling ACJF and its subsidiary (“ACJF Group”) to, inter alia, pay the membership fee and the royalties payable by the ACJF Group to the Group in connection with the grant of the sub-franchise and sub-licence in relation to the Business and the Brand by the Group to the ACJF Group and as working capital of ACJF. The Shareholders’ Loans shall be unsecured, interest free and with no fixed repayment terms.

In the event the ACJF Group requires further funding for its working capital or other requirements in relation to its business and such funding requirements are not financed by loans or credit facilities from banks, financial institutions or other third party, such funding requirements shall be met by advances from the shareholders of ACJF to the ACJF Group by way of interest-free shareholders’ loans on a pro-rata basis in proportion to their respective shareholdings in ACJF provided that a business plan and explanation for the requirement for such additional funding has been set out by the management and approved by the board of directors of ACJF.

The Company’s entry into the JV Agreement and the Shareholder’s Loans will fall within the exceptions under Rule 916(2) and Rule 916(3) of the Catalist Rules.

SPONSOR

No fees relating to non-sponsorship activities or services were paid to the Company’s sponsor, CIMB Bank Berhad, Singapore Branch, during FY2012.



The directors present their report to the members together with the audited financial statements of the Group for the financial year ended 31 March 2012 and the balance sheet of the Company as at 31 March 2012.

Directors

The directors of the Company (“Directors”) in office at the date of this report are as follows:

Takahashi KenichiShigemitsu Katsuaki Tan Lye Huat Eugene Wong Hin Sun Lee Sok Koon (Appointed on 1 September 2011)

Arrangements to enable Directors to acquire shares and debentures

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

Directors’ interests in shares or debentures

According to the register of Directors’ shareholdings, none of the Directors holding office at the end of the financial year had any interest in the shares or debentures of the Company or its related corporations, except as follows:

Directors’ Report for the financial year ended 31 March 2012

Holdings registered in the name of a Director or his nominee

Holdings in which Director isdeemed to have an interest

Company(No. of ordinary shares)

As at 21 April 2012

As at 31 March 2012

As at 1 April 2011

As at 21 April 2012

As at 31 March 2012

As at 1 April 2011

Takahashi Kenichi 76,543,200 76,543,200 63,786,000 5,400,000 5,400,000 4,500,000

Shigemitsu Katsuaki 2,240,400 2,240,400 1,867,000 2,240,400 2,240,400 1,867,000

Eugene Wong Hin Sun - - - 4,777,200 4,777,200 3,981,000

By virtue of Section 7 of the Singapore Companies Act (Cap. 50) (the “Act”), Takahashi Kenichi is deemed to have an interest in the shares of all the Company’s subsidiaries at the beginning and at the end of the financial year.

The Company undertook a bonus issue on the basis of 1 new share for every 5 existing shares in December 2011. The Directors’ interests in the ordinary shares of the Company increased between 1 April 2011 and 31 March 2012 due to the aforementioned bonus issue.

The Directors’ interests in the ordinary shares of the Company as at 21 April 2012 were the same as those as at 31 March 2012.



Directors’ contractual benefits

Since the end of the previous financial year, no Director has received or become entitled to receive a benefit by reason of a contract made by the Company or a related corporation with the Director or with a firm of which he is a member or with a Company in which he has a substantial financial interest, except as disclosed in the accompanying financial statements and in this report.

Share options

There were no options granted during the financial year to subscribe for unissued shares in the Company or its subsidiaries.

No shares have been issued during the financial year by virtue of the exercise of any option to take up unissued shares of the Company or its subsidiaries.

There were no unissued shares of the Company under option at the end of the financial year.

Audit Committee

The members of the audit committee of the Company (“Audit Committee”) at the end of the financial year were as follows:

Tan Lye Huat (Chairperson, Lead Independent Director)Lee Sok Koon (Member, Independent Director)Eugene Wong Hin Sun (Member, Non-independent and Non-executive Director)

The Audit Committee carried out its function in accordance with Section 201B (5) of the Act. It undertakes to perform inter alia the following:

(a) reviewing the audit plan of the Company’s independent auditor and its report on the effectiveness of material internal controls, including financial, operational and compliance controls and risk management;

(b) reviewing the internal audit plans, the scope and results of internal audit procedures;

(c) reviewing the balance sheet of the Company, the consolidated financial statements of the Group for the financial year ended 31 March 2012 and other announcements to shareholders and the Singapore Exchange Securities Trading Limited before their submission to the Board of Directors, as well as the independent auditor’s report on the balance sheets of the Company and the consolidated financial statements of the Group;

(d) conducting investigation into any matter within the Audit Committee’s scope of responsibility and review any significant findings of investigations;

(e) assessing the independence and objectivity of the independent auditors;

(f) recommending to the Board of Directors on the appointment or re-appointment of independent auditor;

(g) reviewing the assistance given by the Company’s management to the independent auditor; and

(h) reviewing transactions falling within the scope of Chapter 9 of the Catalist Rules.


Audit Committee (Cont’d)

The Audit Committee has conducted an annual review of the non-audit services provided by the independent auditor. During the financial year ended 31 March 2012, the fees charged by the independent auditor for the provision of non-audit services amounted to $15,400. The Audit Committee is of the opinion that such fees charged by the independent auditor for non-audit services were insignificant and would not prejudice the independence of the independent auditor. Accordingly, the Audit Committee has recommended that Nexia TS Public Accounting Corporation be nominated for re-appointment as the independent auditor of the Company at the forthcoming Annual General Meeting.

Independent auditor

The independent auditor, Nexia TS Public Accounting Corporation, has expressed its willingness to accept re-appointment.

On behalf of the Directors

…………………………………….. Takahashi Kenichi

Director

……………………………………Eugene Wong Hin Sun

Director

Singapore

26 June 2012



In the opinion of the Directors,

(a) the balance sheet of the Company and the consolidated financial statements of the Group as set out on pages 41 to 82 are drawn up so as to give a true and fair view of the state of affairs of the Company and of the Group as at 31 March 2012 and of the results of the business, changes in equity and cash flows of the Group for the financial year then ended; and

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

On behalf of the Directors

…………………………………….. Takahashi Kenichi

Director

……………………………………Eugene Wong Hin Sun

Director

Singapore

26 June 2012

Statement by Directors for the financial year ended 31 March 2012


Report on the Financial Statements

We have audited the accompanying financial statements of Japan Foods Holding Ltd. (the “Company”) and its subsidiaries (the “Group”) set out on pages 41 to 82, which comprise the consolidated balance sheet of the Group and the balance sheet of the Company as at 31 March 2012, the consolidated statement of comprehensive income, statement of changes in equity and statement of cash flows of the Group for the financial year then ended, and a summary of significant accounting policies and other explanatory information.

Management’s Responsibility for the Financial Statements

Management is responsible for the preparation of financial statements that give a true and fair view in accordance with the provisions of the Singapore Companies Act (the “Act”) and Singapore Financial Reporting Standards, and for devising and maintaining a system of internal accounting controls sufficient to provide a reasonable assurance that assets are safeguarded against loss from unauthorised use or disposition, and transactions are properly authorised and that they are recorded as necessary to permit the preparation of true and fair profit and loss accounts and balance sheets and to maintain accountability of assets.

Auditor’s Responsibility

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

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

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

Independent Auditor’s Report to the Members of Japan Foods Holding Ltd.


Opinion

In our opinion, the consolidated financial statements of the Group and the balance sheet of the Company are properly drawn up in accordance with the provisions of the Act and Singapore Financial Reporting Standards so as to give a true and fair view of the state of affairs of the Group and of the Company as at 31 March 2012, and the results, changes in equity and cash flows of the Group for the financial year ended on that date.

Report on Other Legal and Regulatory Requirements

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

Nexia TS Public Accounting Corporation Public Accountants and Certified Public Accountants

Director-in-charge: Christine Lee Look LingAppointed since financial year ended 31 March 2012

Singapore

26 June 2012

Independent Auditor’s Report to the Members of Japan Foods Holding Ltd.


Consolidated Statement of Comprehensive Income for the financial year ended 31 March 2012

2012 2011Note $’000 $’000

Revenue 4 56,116 50,447

Cost of sales (12,195) (11,348)

Gross profit 43,921 39,099

Other income 5 694 527

Other (losses)/gains - net 6 (5) 99

Expenses

- Selling and distribution (36,747) (31,706)- Administrative (2,128) (2,153)- Other operating (1,212) (2,589)- Finance 7 (51) (132)

Profit before income tax 4,472 3,145

Income tax expense 10 (753) (660)

Net profit 3,719 2,485

Other comprehensive income

Currency translation differences arising from consolidation 25 6 9

Total comprehensive income 3,725 2,494

Net profit attributable to equity holders of the Company 3,725 2,485

Total comprehensive income attributable to equity holders of the Company

3,725 2,494

Earnings per share attributable to equity holders of the Company (cents per share)

- Basic and diluted 11 3.22 2.24

The accompanying notes form an integral part of the financial statements


Balance Sheets as at 31 March 2012

Group Company

2012 2011 2012 2011

Note $’000 $’000 $’000 $’000

ASSETS

Current assets

Cash and cash equivalents 12 11,148 7,570 754 244

Trade and other receivables 13 982 596 5,478 4,582

Inventories 14 809 955 - -

Other current assets 15 2,594 2,235 469 3215,533 11,356 6,701 4,858

Non-current assets

Investment in subsidiaries 16 - - 5,178 5,178

Property, plant and equipment 17 10,200 11,756 - -

Intangible assets 18 150 178 - -

Long-term security deposits 19 2,431 2,066 - -

12,781 14,000 5,178 5,178

Total assets 28,314 25,356 11,879 10,036

LIABILITIES

Current liabilities

Trade and other payables 20 5,780 4,890 1,301 755

Borrowings 21 317 1,154 - -

Current income tax liabilities 10 1,233 772 31 31

7,330 6,816 1,332 786

Non-current liabilities

Borrowings 21 - 317 - -

Deferred income tax liabilities 23 521 746 - -

521 1,063 - -

Total liabilities 7,851 7,879 1,332 786

NET ASSETS 20,463 17,477 10,547 9,250

EQUITY

Share capital 24 8,791 8,809 8,791 8,809

Currency translation reserve 25 8 2 - -

Retained profits 26 11,664 8,666 1,756 441

TOTAL EQUITY 20,463 17,477 10,547 9,250



Consolidated Statement of Changes in Equity for the financial year ended 31 March 2012

Share capital

Currency translation

reserveRetained

profitsTotal

equity

Note $’000 $’000 $’000 $’000

Group

2012

Beginning of financial year 8,809 2 8,666 17,477

Share issue expenses (18) - - (18)

Dividends paid 27 - - (721) (721)

Total comprehensive income for the year

- 6 3,719 3,725

End of financial year 8,791 8 11,664 20,463

2011

Beginning of financial year 6,603 (7) 6,830 13,426

Issue of new shares 2,280 - - 2,280

Share issue expenses (74) - - (74)

Dividends paid 27 - - (649) (649)

Total comprehensive income for the year

- 9 2,485 2,494

End of financial year 8,809 2 8,666 17,477



Consolidated Statement of Cash Flows for the financial year ended 31 March 2012

Group2012 2011

Note $’000 $’000Cash flow from operating activitiesNet profit 3,719 2,485Adjustment for:- Income tax expense 753 660- Depreciation of property, plant and equipment 3,959 3,557- Amortisation of intangible assets 28 36- Written off of property, plant and equipment 441 300- Loss on disposal of property, plant and equipment 45 -- Impairment of property, plant and equipment - 1,555- Impairment of intangible assets - 44- Unrealised currency translation gains 8 10- Interest expense 51 132- Interest income (17) (22)

8,987 8,757Change in working capital - Inventories 146 (349)- Trade and other receivables (386) 307- Other current assets (359) (704)- Long-term security deposits (365) (51)- Trade and other payables 890 (821)

Cash generated from operations 8,913 7,139

Income tax paid (517) (486)Interest received 17 22Net cash provided by operating activities 8,413 6,675

Cash flow from investing activitiesAdditions to intangible assets - (31)Additions to property, plant and equipment (2,892) (7,223)Proceeds from disposal of property, plant and equipment 3 -Net cash used in investing activities (2,889) (7,254)

Cash flow from financing activitiesProceeds from issuance of ordinary shares (net) (18) 2,206Interest paid (51) (132)Bank deposits pledged (197) (33)Repayment of borrowings (1,128) (1,642)Repayment of finance lease liabilities (26) (27)Dividend paid to equity holders of the Company (721) (649)Net cash used in financing activities (2,141) (277)

Net increase/(decrease) in cash and cash equivalents 3,383 (856)Cash and cash equivalents at beginning of financial year 5,941 6,798Effects of currency translation on cash and cash equivalents (1) (1)Cash and cash equivalents at end of financial year 12 9,323 5,941



Notes to the Financial Statementsfor the financial year ended 31 March 2012

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

1. Corporate information

Japan Foods Holding Ltd. (the “Company”) was incorporated in the Republic of Singapore with its registered office and principal place of business at 420 North Bridge Road, #02-01, North Bridge Centre, Singapore 188727. The Company is listed on the Catalist Board of the Singapore Exchange Securities Trading Limited. The principal activity of the Company is relating to investment holding.

The principal activities of the subsidiaries are disclosed in Note 16 to the financial statements.

2. Significant accounting policies

2.1 Basis of preparation

These financial statements have been prepared in accordance with Singapore Financial Reporting Standards (“FRS”). The financial statements have been prepared under the historical cost convention, except as disclosed in the accounting policies below. The financial statements are presented in Singapore Dollars and have been rounded to the nearest thousand, unless otherwise stated.

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

Interpretations and amendments to published standards effective in 2011

On 1 April 2011, the Group adopted the new or amended FRS and Interpretations to FRS (“INT FRS”) that are mandatory for application from that date. Changes to the Group’s accounting policies have been made as required, in accordance with the transitional provisions in the respective FRS and INT FRS.

The adoption of these new or amended FRS and INT FRS did not result in substantial changes to the Group’s and the Company’s accounting policies and had no material effect on the amounts reported for the current or prior financial years.

2.2 Group accounting

(a) Consolidation

Subsidiaries are entities over which the Group has power to govern the financial and operating policies so as to obtain benefits from its activities, generally accompanied by a shareholding giving rise to a majority of the voting rights. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the Group controls another entity. Subsidiaries are consolidated from the date on which control is transferred to the Group. They are de-consolidated from the date on which control ceases.


2. Significant accounting policies (Cont’d)

2.2 Group accounting (Cont’d)

(a) Consolidation (Cont’d)

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

Non-controlling interests are that part of the net results of operations and of net assets of a subsidiary attributable to the interests which are not owned directly or indirectly by the equity holders of the Company. They are shown separately in the consolidated statement of comprehensive income, statement of changes in equity and balance sheet. Total comprehensive income is attributed to the non-controlling interests based on their respective interests in a subsidiary, even if this results in the non-controlling interests having a deficit balance.

(b) Acquisitions

The acquisition method of accounting is used to account for business combinations by the Group.

The consideration transferred for the acquisition of a subsidiary or business comprises the fair value of the assets transferred, the liabilities incurred and the equity interests issued by the Group. The consideration transferred also includes the fair value of any contingent consideration arrangement and the fair value of any pre-existing equity interest in the subsidiary.

Acquisition-related costs are expensed as incurred.

Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are, with limited exceptions, measured initially at their fair values at the acquisition date.

On an acquisition-by-acquisition basis, the Group recognises any non-controlling interest in the acquiree at the date of acquisition either at fair value or at the non-controlling interest’s proportionate share of the acquiree’s net identifiable assets.

The excess of the consideration transferred, the amount of any non-controlling interest in the acquiree and the acquisition-date fair value of any previous equity interest in the acquiree over the fair value of the net identifiable assets acquired is recorded as goodwill.

(c) Disposals

When a change in the Group ownership interest in a subsidiary results in a loss of control over the subsidiary, the assets and liabilities of the subsidiary including any goodwill are derecognised. Amounts previously recognised in other comprehensive income in respect of that entity are also reclassified to profit or loss or transferred directly to retained earnings if required by a specific Standard.

Any retained equity interest in the entity is remeasured at fair value. The difference between the carrying amount of the retained interest at the date when control is lost and its fair value is recognised in profit or loss.




2.2 Group accounting (Cont’d)

(c) Disposals (Cont’d)

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

2.3 Property, plant and equipment

(a) Measurement

Property, plant and equipment are initially recognised at cost and subsequently carried at cost less accumulated depreciation and accumulated impairment losses. The cost of an item of property, plant and equipment initially recognised includes its purchase price and any cost that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.

(b) Depreciation

Depreciation is calculated using the straight-line method to allocate their depreciable amounts over their estimated useful lives as follows:

Furniture and fittings - 5 yearsKitchen equipment - 5 yearsRenovation - 3 - 5 yearsMotor vehicles - 5 yearsComputer and office equipment - 5 years

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

Fully depreciated assets are retained in the financial statements until they are no longer in use and no further change for depreciation is made in respect of these assets.

(c) Subsequent expenditure

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

(d) Disposal

On disposal of an item of property, plant and equipment, the difference between the disposal proceeds and its carrying amount is recognised in profit or loss within ”Other (losses)/gains - net”.




2.4 Intangible assets

Trademark

Trademark acquired are initially recognised at cost and subsequently carried at cost less accumulated amortisation and accumulated impairment losses. Intangible assets with finite useful life are amortised on a straight-line basis over 6 years. Intangible assets with indefinite useful life are reviewed annually to determine whether the useful life assessments continue to be supportable. If not, the change in useful life from indefinite to finite is made on a prospective basis.

2.5 Borrowing costs

Borrowing costs are recognised in profit or loss using the effective interest method.

2.6 Impairment of non-financial assets

Investment in subsidiariesProperty, plant and equipment Intangible assets

Investment in subsidiaries, property, plant and equipment and intangible assets with finite useful life are tested for impairment whenever there is any objective evidence or indication that these assets may be impaired. Intangible assets with indefinite useful life are tested for impairment annually and whenever there is indication that the intangible assets may be impaired.

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

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

The difference between the carrying amount and recoverable amount is recognised as an impairment loss in profit or loss.

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

2.7 Investments in subsidiaries

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





2.8 Cash and cash equivalents

For the purpose of presentation in the consolidated statement of cash flows, cash and cash equivalents include cash on hand, bank balances and fixed deposits with financial institutions which are subject to an insignificant risk of changes in value.

2.9 Financial assets

(a) Classification

The Group classifies its financial assets into loans and receivables. The classification depends on the nature of the asset and the purpose for which the assets were acquired. Management determines the classification of its financial assets at initial recognition.

Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They are presented as current assets, except for those expected to be realised later than 12 months after the balance sheet date which are presented as non-current assets. Loans and receivables are presented as “trade and other receivables” (Note 13) and “cash and cash equivalents” (Note 12) on the balance sheet.

(b) Recognition and derecognition

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

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

(c) Initial measurement

Financial assets are initially recognised at fair value plus transaction costs.

(d) Subsequent measurement

Loans and receivables are subsequently carried at amortised cost using the effective interest method.

(e) Impairment

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



2.9 Financial assets (Cont’d)

(e) Impairment (Cont’d)

Loans and receivables

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

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

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

2.10 Inventories

Inventories comprising raw materials and sundry consumables are stated at the lower of cost and net realisable value.

Cost is determined using the first-in, first-out method and includes all costs of purchase in bringing the inventories to their present location and condition.

Net realisable value is the estimated selling price in the ordinary course of business, less the applicable variable selling expenses. Allowance is made for obsolete, slow-moving and defective inventories.

2.11 Trade and other payables Trade and other payables represent liabilities for goods and services provided to the Group prior to the end of financial year which are unpaid. They are classified as current liabilities if payment is due within one year or less (or in the normal operating cycle of the business if longer). If not, they are presented as non-current liabilities.

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

2.12 Financial guarantees

The Company has issued corporate guarantees to banks for borrowings of one of its subsidiaries. These guarantees are financial guarantees as they require the Company to reimburse the banks if the subsidiary fails to make principal or interest payments when due in accordance with the terms of their borrowings.

Financial guarantee are initially recognised at their fair values plus transaction costs in the Company’s balance sheet.





2.12 Financial guarantees (Cont’d)

Financial guarantees are subsequently amortised to profit or loss over the period of the subsidiary’s borrowings, unless it is probable that the Company will reimburse the bank for an amount higher than the unamortised amount. In this case, the financial guarantees shall be carried at the expected amount payable to the bank in the Company’s balance sheet.

Intra-group transactions are eliminated on consolidation.

2.13 Borrowings

Borrowings are presented as current liabilities unless the Group has an unconditional right to defer settlement for at least 12 months after the balance sheet date, in which case they are presented as non-current liabilities.

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

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

The Group recognises revenue when the amount of revenue and related cost can be reliably measured, it is probable that collectability of the related receivables is reasonably assured and when the specific criteria for each of the Group’s activities are met as follows:

(a) Restaurant sales

Restaurant sales represent the invoiced value of food and beverages, net of discounts and goods and services tax.

(b) Sub-franchisees sales

Sub-franchisees sales represent the invoiced value of raw materials and sundry consumables, net of discounts and goods and services tax.

(c) Franchise income

Initial franchise income is recognised upon the grant of rights, completion of the designated phases of the franchise set-up and transfer of know-how to the franchisee in accordance with the terms stated in the franchise agreement. Recurring franchise income is recognised on a pre-determined amount in accordance with terms as stated in the franchise agreements.



2.14 Revenue Recognition (Cont’d)

(d) Interest income

Interest income is recognised as interest accrues (using the effective interest method) unless collectability is in doubt.

(e) Royalty income

Royalty income is recognised on an accrual basis in accordance with the substance of the relevant agreements.

(f) Membership fees income

Revenue from the sale of membership cards is recognised when the members obtain the right to have access to the membership.

(g) Rental income

Rental income from operating lease is recognised on a straight-line basis over the lease term.

2.15 Employee compensation

Employee benefits are recognised as an expense, unless the cost qualifies to be capitalised as an asset.

Defined contribution plans Defined contribution plans are post-employment benefit plans under which the Group pays fixed contributions into separate entities such as Central Provident Fund on a mandatory, contractual or voluntary basis. The Group has no further payment obligations once the contributions have been paid.

Employee leave entitlement

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

Profit sharing and bonus plan

The Group recognises a liability and an expense for bonuses and profit-sharing, based on a formula that takes into consideration the profit attributable to the Company’s shareholder after certain adjustments. The Group recognises a provision when contractually obliged to pay or when there is a past practice that has created a constructive obligation to pay.





2.16 Provisions

Provisions are recognised when the Group has a present legal or constructive obligation as a result of a past event, it is more likely than not that an outflow of resources will be required to settle the obligation and the amount has been reliably estimated.

2.17 Currency translation

(a) Functional and presentation currency

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

(b) Transactions and balances

Transactions in a currency other than the functional currency (“foreign currency”) are translated into the functional currency using the exchange rates at the dates of transactions. Currency translation differences resulting from settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies at the closing rates at the balance sheet date are recognised in the profit or loss.

Foreign exchange gains or losses that relate to borrowings are presented in the income statement within “finance cost”. All other foreign exchange gains and losses impacting profit or loss are presented in the income statement within “other (losses)/gains – net”.

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

(c) Translation of Group entities’ financial statements The results and financial position of all the Group entities (none of which has the currency of a hyperinflationary economy) that have a functional currency different from the presentation currency are translated into the presentation currency as follows:

(i) Assets and liabilities are translated at the closing exchange rates at the reporting date;

(ii) Income and expenses are translated at average exchange rates (unless the average is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated using the exchange rates at the dates of transactions); and

(iii) All resulting currency translation differences are recognised in the currency translation reserve.



2.18 Income taxes

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

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

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

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

Deferred income tax is measured:

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

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

Current and deferred income taxes are recognised as income or expense in the profit or loss.

2.19 Leases

(a) When the Group is the lessee:

The Group leases motor vehicles under finance leases and restaurant premises under operating leases from non-related parties.

(i) Lessee - Finance leases

Leases where the Group assumes substantially all risks and rewards incidental to ownership of the leased assets are classified as finance leases.

The leased assets and the corresponding lease liabilities (net of finance charges) under finance leases are recognised on the balance sheet as plant and equipment and borrowings respectively, at the inception of the leases based on the lower of the fair value of the leased assets and the present value of the minimum lease payments.





2.19 Leases (Cont’d)

(a) When the Group is the lessee: (Cont’d)

(i) Lessee - Finance leases (Cont’d)

Each lease payment is apportioned between the finance expense and the reduction of the outstanding lease liability. The finance expense is recognised in the profit or loss on a basis that reflects a constant periodic rate of interest on the finance lease liability.

(ii) Lessee - Operating leases

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

When an operating lease is terminated before the lease period expires, any payment required to be made to the lessor by way of penalty is recognised as an expense in the financial year in which termination takes place.

(b) Where the Group is the lessor:

The Group leases restaurant premises under operating leases to non-related parties.

(i) Lessor – Operating leases

Lease of premises where the Group retains substantially all risks and rewards incidental to ownership is classified as an operating lease. Rental income from operating lease (net of any incentives given to the lessee) is recognised in profit or loss on a straight-line basis over the lease term.

Initial direct costs incurred by the Group in negotiating and arranging operating lease is added to the carrying amount of the leased asset and recognised as an expense in profit or loss over the lease term on the same basis as the lease income .

2.20 Share capital

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

2.21 Dividends to Company’s shareholders

Dividends to Company’s shareholders are recognised when the dividends are approved for payment.



2.22 Fair value estimation of financial assets and liabilities

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

2.23 Segment reporting

Operating segments are reported in a manner consistent with the internal reporting provided to the Board of Directors. All operating segments’ results are reviewed regularly by the Group’s Chief Executive Officer to make decisions for allocating resources and assessing performance of the operating segments.

2.24 Government grants

Grants from the government are recognised as a receivable at their fair value when there is reasonable assurance that the grant will be received and the Group will comply with all the attached conditions.

Government grants receivable are recognised as income over the periods necessary to match them with the related costs which they are intended to compensate, on a systematic basis. Government grants relating to expenses are shown separately as other income.

3. Critical accounting estimates, assumptions and judgements

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

Intangible assets with indefinite useful lives are tested for impairment annually and whenever there is indication that the intangible assets may be impaired. Intangible assets with definite useful lives, property, plant and equipment and investment in subsidiaries are tested for impairment whenever there is any objective evidence or indication that these assets may be impaired.

The recoverable amounts of these assets and where applicable, cash-generating units, have been determined based on value-in-use calculations. These calculations require the use of judgement and estimates (Note 17).

There is no impairment charge on the intangible asset of the Group which has an indefinite useful life for the financial year ended 31 March 2012. If management’s estimated revenue from FY2013 to FY2015 is lowered by 10%, there is no impairment charge on the intangible asset as the recoverable amount for the intangible asset is above its carrying amount.




Group2012 2011

$’000 $’000

Royalty income 268 210

Franchise income 34 29

Interest income from bank deposits 17 22

Rental income 133 119

Membership card sales 83 51

Government grant 5 24

Marketing grant 90 20

Other 64 52

694 527

5. Other income

4. Revenue Group2012 2011

$’000 $’000

Restaurant sales 55,867 50,182

Sub-franchisees sales 249 265

56,116 50,447

6. Other (losses)/gains - net

7. Finance expenses

Group2012 2011

$’000 $’000

Currency translation gains - net 40 99

Loss on disposal of property, plant and equipment (45) -

(5) 99

Group2012 2011

$’000 $’000

Interest expense: 1 2

- Finance lease liabilities 50 130

- Bank borrowings 51 132


9. Employee compensation


8. Expenses by nature

Group2012 2011$’000 $’000

Purchases of inventories 11,945 11,548Amortisation of intangible assets (Note 18) 28 36Depreciation of property, plant and equipment (Note 17) 3,959 3,557Impairment of intangible assets (Note 18) - 44Impairment of property, plant and equipment (Note 17) - 1,555Consumables 549 622Credit card commission 393 336Fees on audit services paid/payable to:- Auditor of the Company 59 83- Other auditor 1 1Fees on non-audit services paid/payable to:- Auditor of the Company 18 20- Other auditor 1 1Employee compensation (Note 9) 14,058 11,985Property, plant and equipment written off 441 300Loss on disposal of property, plant and equipment (Note 17) 45 -Rental 15,309 12,760Repair and maintenance 507 444Royalty fee 744 653Sub-contractors 393 677Utilities 2,241 1,820Other 1,445 1,703Changes in inventories 146 (349)

Total cost of sales, selling and distribution, administrative and other operating expenses 52,282 47,796

Group2012 2011$’000 $’000

Wages and salaries 12,370 9,803Directors’ fees 100 100Employer’s contribution to Central Provident Fund 628 564Other short-term benefits 960 1,518

14,058 11,985



10. Income tax expense

(a) Income tax expense

The tax on the Group’s profit before tax differs from the theoretical amount that would arise using the Singapore standard rate of income tax is as follows:

Deferred income tax assets are recognised for tax losses and capital allowances carried forward to the extent that realisation of the related tax benefits through future taxable profits are probable. A subsidiary of the Company has losses before tax at the balance sheet date which cannot be carried forward and used to offset against future taxable income as the losses has not met the statutory requirements.

(b) Movement in current income tax liabilities

Group2012 2011

$’000 $’000Tax expense attributable to profit is made up of:- Current income tax 1,019 903- Deferred income tax (Note 23) (225) 146

794 1,049Over provision in prior financial years- Current income tax (41) (389)

753 660

Group2012 2011

$’000 $’000

Profit before income tax 4,472 3,145

Tax calculated at a tax rate of 17% (2011: 17%) 760 535Effects of:- Expenses not deductible for tax purposes 86 555- Statutory tax exemption (56) (51)- Deferred tax asset not recognised 3 8- Others 1 2Tax charge 794 1,049

Group Company2012 2011 2012 2011$’000 $’000 $’000 $’000

Beginning of financial year 772 744 31 31Income tax paid (517) (486) (4) (3)Income tax expense 1,019 903 3 3(Over)/under provision in prior financial years (41) (389) 1 -End of financial year 1,233 772 31 31



11. Earnings per share

Basic earnings per share is calculated by dividing the net profit attributable to equity holders of the Company by the weighted average number of ordinary share outstanding during the financial year.

The comparative figure of weighted average number of ordinary shares outstanding has been adjusted to take into account the issuance of the 19,234,000 bonus shares on 21 December 2011.

There were no dilutive potential ordinary shares during the financial year.

12. Cash and cash equivalents

For the purpose of presenting the consolidated statement of cash flows, the consolidated cash and cash equivalents comprise the following:

Short-term bank deposits amounting to $1,825,000 (2011:$1,629,000) have been pledged to a financial institution as security for performance guarantee.

Group Company2012 2011 2012 2011$’000 $’000 $’000 $’000

Cash at bank and on hand 6,053 5,776 254 244Short-term bank deposits 5,095 1,794 500 -

11,148 7,570 754 244

Group2012 2011$’000 $’000

Net profit attributable to equity holders of the Company ($’000) 3,719 2,485

Weighted average number of ordinary shares outstanding for basic earnings per share (’000) 115,404 110,670

Basic and diluted earnings per share (cents per share) 3.22 2.24

Group Company2012 2011 2012 2011$’000 $’000 $’000 $’000

Cash and cash equivalents 11,148 7,570 754 244Less: Bank deposits pledged (1,825) (1,629) - -

9,323 5,941 754 244



13. Trade and other receivables

The non-trade amounts due from subsidiaries are unsecured, interest free and are repayable on demand.

14. Inventories

The cost of inventories recognised as an expense and included in “cost of sales” amounted to $12,091,000 (2011: $11,199,000).

15. Other current assets

Group Company2012 2011 2012 2011$’000 $’000 $’000 $’000

Raw materials and consumables 809 955 - -

Group Company2012 2011 2012 2011$’000 $’000 $’000 $’000

Deposits 1,957 2,015 - -Prepayments 637 220 469 32

2,594 2,235 469 32

Group Company2012 2011 2012 2011$’000 $’000 $’000 $’000

Trade receivables - Subsidiaries - - 2,895 1,345- Non-related parties 862 586 - -

862 586 2,895 1,345Non-trade receivables- Subsidiaries - - 2,583 3,237- Non-related parties 120 10 - -

120 10 2,583 3,237

982 596 5,478 4,582



16. Investments in subsidiaries

The details of subsidiaries are:

(a) Audited by Nexia TS Public Accounting Corporation, Singapore. (b) Audited by SSY Partners, Malaysia, an independent member firm of Nexia International

Company2012 2011

$’000 $’000

Equity investment at costBeginning of financial year 5,237 5,037Additional investment in a subsidiary - 200

5,237 5,237Less: Allowance for impairment loss (59) (59)End of financial year 5,178 5,178

Name of subsidiaries Principal activitiesCountry of business/

incorporation

Equity holding 2012 2011

% %

Bachmann Enterprises Pte Ltd (a) Trading and management of franchisees and sub-franchisees

Singapore 19 July 1997

100 100

Bachmann Japanese Restaurant Pte Ltd (a) Operating restaurants

Singapore 20 October 1997

100 100

Japan Foods Enterprises Pte. Ltd. (Formerly known as Ajisen Parco Japanese Restaurant Pte. Ltd.) (a)

Operating restaurants- Currently dormant

Singapore6 May 2005 100 100

Bachmann Japanese Restaurant Sdn. Bhd.(b)

Operating restaurants- Currently dormant

Malaysia21 April 2008

100 100


Furniture and

fittingsKitchen

equipment RenovationMotor

vehicles

Computer and office

equipment Total$’000 $’000 $’000 $’000 $’000 $’000

Group 2012CostBeginning of financial year 1,946 5,471 14,727 185 723 23,052Additions 27 1,045 1,729 - 91 2,892Written off (100) (141) (3,709) - (4) (3,954)Disposals - (125) - - - (125)End of financial year 1,873 6,250 12,747 185 810 21,865

Accumulated depreciation and impairment lossesBeginning of financial year 632 2,861 7,382 121 300 11,296Depreciation charge 238 891 2,670 26 134 3,959Written off (46) (142) (3,321) - (4) (3,513)Disposals - (77) - - - (77)End of financial year 824 3,533 6,731 147 430 11,665

Net book valueEnd of financial year 1,049 2,717 6,016 38 380 10,200


17. Property, plant and equipment

Group 2011CostBeginning of financial year 1,262 4,155 11,388 185 512 17,502Additions 714 1,418 4,880 - 211 7,223Written off (30) (102) (1,541) - - (1,673)End of financial year 1,946 5,471 14,727 185 723 23,052

Accumulated depreciation and impairment lossesBeginning of financial year 460 2,133 4,671 95 198 7,557Depreciation charge 200 724 2,505 26 102 3,557Impairment loss - 90 1,465 - - 1,555Written off (28) (86) (1,259) - - (1,373)End of financial year 632 2,861 7,382 121 300 11,296

Net book valueEnd of financial year 1,314 2,610 7,345 64 423 11,756


17. Property, plant and equipment (Cont’d)

a) Assets held under finance lease

The carrying amounts of motor vehicles held under finance leases amounted to $28,000 (2011: $48,000) at the balance sheet date (Note 21).

b) Write-off of property, plant and equipment

During the current financial year, the Group ceased the operations of certain restaurants. This has caused the Group to write-off the cost of furniture and fittings, kitchen equipment and renovation in these restaurants which was previously capitalised. In addition, the Group has also written-off the cost of some furniture and fittings, kitchen equipment and renovation which are deemed to be unusable by the Management in the current financial year. The carrying amount of the property, plant and equipment written-off amounts to approximately $441,000 (2011: $300,000).

18. Intangible assets

The cost of intangible assets included a trademark under the name “Aoba” which has an indefinite useful life by virtue that, in accordance to the terms of agreement with the franchisor, the period in which the Group has the right to use the trademark is for perpetuity. The carrying amount of this trademark as at 31 March 2012 was $65,000 (2011:$65,000).


Group Company2012 2011 2012 2011$’000 $’000 $’000 $’000

TrademarkCostBeginning of financial year 308 277 - -Additions - 31 - -

End of financial year 308 308 - -

Accumulated amortisation and impairment lossBeginning of financial year 130 50 - -Amortisation charge (Note 8) 28 36 - -Impairment loss (Note 8) - 44 - -End of financial year 158 130 - -

Net book value 150 178 - -



18. Intangible assets (Cont’d)

Impairment testing of intangible asset with indefinite useful life

The recoverable amount for the intangible asset with indefinite useful life is determined based on a value-in-use calculation using cash flow projections based on financial budgets by management covering a three-year period. The following describes each key assumption in which management has based its cash flow projections to undertake impairment testing of the intangible asset:

• Forecastedsalesofapproximately$2,200,000eachyearfromFY2013toFY2015;• Forecastedcostofsalesofapproximately25%oftheforecastedsaleseachyearfromFY2013toFY2015;• Forecasteddirectcostofapproximately$1,200,000eachyearfromFY2013toFY2015;and• Weightedaveragecostsofcapitalofapproximately5%.

19. Long-term security deposits

These are mainly deposits placed with the landlords. Management is of the opinion that these deposits have been placed with counterparties who are creditworthy and accordingly, no allowance for impairment is required.

At the balance sheet date, the fair values of long-term security deposits amounted to $2,205,000 (2011: $1,849,000). The fair values of long-term security deposits are computed based on cash flow analyses, discounted at market borrowing rates of an equivalent instrument at the balance sheet date which the directors expect to be available to the Group. The discounted rate used is 5% (2011: 5%).

Group Company2012 2011 2012 2011$’000 $’000 $’000 $’000

Refundable security deposits 2,431 2,066 - -


20. Trade and other payables

The non-trade amounts due to subsidiaries are unsecured, interest-free and are repayable on demand.

21. Borrowings


Group Company2012 2011 2012 2011$’000 $’000 $’000 $’000

Trade payables - Non-related parties 1,701 1,584 - -

Non-trade payables- Subsidiaries - - 909 409- Non-related parties 866 610 57 59

866 610 966 468

Accrued operating expenses 3,138 2,621 335 287Franchise deposit 75 75 - -

5,780 4,890 1,301 755

Group Company2012 2011 2012 2011$’000 $’000 $’000 $’000

CurrentBank borrowings 307 1,128 - -Finance lease liabilities (Note 22) 10 26 - -

317 1,154 - -

Non-currentBank borrowings - 307 - -Finance lease liabilities (Note 22) - 10 - -

- 317 - -

Total borrowings 317 1,471 - -



21. Borrowings (Cont’d)

The exposure of the borrowings of the Group and of the Company to interest rate changes and the contractual repricing dates at the balance sheet dates are as follows:

(a) Security granted

Bank borrowings are secured by corporate guarantees given by the Company (Note 28) and personal guarantees by a director. Finance lease liabilities are secured over the leased motor vehicles (Note 17), as the legal title is retained by the lessor and will be transferred to the Company upon full settlement of the finance lease liabilities.

(b) Fair value of non-current borrowings

The fair values above are determined from the cash flow analyses, discounted at market borrowing rates of an equivalent instrument at the balance sheet date which the directors expect to be available to the Group as follows:

Group Company2012 2011 2012 2011$’000 $’000 $’000 $’000

6 months or less 298 604 - -6-12 months 19 550 - -1-5 years - 317 - -Total borrowings 317 1,471 - -

Group Company2012 2011 2012 2011$’000 $’000 $’000 $’000

Bank borrowings - 307 - -Finance lease liabilities (Note 22) - 10 - -

Group Company2012 2011 2012 2011$’000 $’000 $’000 $’000

Bank borrowings - 5.42% - -Finance lease liabilities (Note 22) - 6.30% - -


22. Finance lease liabilities

The present values of finance lease liabilities are analysed as follows:

23. Deferred income taxes

Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current income tax assets against current income tax liabilities and when the deferred income taxes relate to the same fiscal authority. The amounts, determined after appropriate offsetting, are shown on the balance sheet as follows:

Group

2012 2011

$’000 $’000

Minimum lease payments due:- Not later than one year 11 29- Between one and five years - 11

11 40Less: future finance charges (1) (4)Present value of finance lease liabilities 10 36


Group

2012 2011

$’000 $’000

- Not later than one year 10 26- Between one and five years - 10

10 36

Group Company2012 2011 2012 2011$’000 $’000 $’000 $’000

Deferred income tax liabilities to be settled after one year 521 746 - -


23. Deferred income taxes (Cont’d)

Movement in deferred income tax account is as follows:

The movement in deferred income tax liabilities (prior to offsetting of balances within the same tax jurisdiction) is as follow:

24. Share capital

Group Company

$’000 $’000

2012Beginning of financial year 746 -Tax credited to profit or loss (225) -End of financial year 521 -

2011Beginning of financial year 600 -Tax charged to profit or loss 146 -End of financial year 746 -


Group Company2012 2011 2012 2011$’000 $’000 $’000 $’000

Beginning of the financial year 746 600 - -(Credited)/charged to profit or loss (Note 10) (225) 146 - -End of the financial year 521 746 - -

Group and Company2012 2011

Number of ordinary

shares Amount

Number of ordinary

shares Amount’000 $’000 ’000 $’000

Issued share capitalBeginning of financial year 96,170 8,809 88,170 6,603Issuance of bonus shares 19,234 - - -Issuance of share pursuant to private placement exercise

- - 8,000 2,280

Share issue expenses - (18) - (74)End of financial year 115,404 8,791 96,170 8,809

Accelerated tax depreciation


24. Share capital (Cont’d)

All issued ordinary shares are fully paid. There is no par value for these ordinary shares. Fully paid ordinary shares carry one vote per share and carry a right to dividends as and when declared by the Company.

On 21 December 2011, the Company issued and allotted 19,234,000 new ordinary shares in the capital of the Company pursuant to a bonus issue of new ordinary shares in the capital of the Company on the basis of one bonus share for every five existing ordinary shares in the capital of the Company. The newly issued bonus shares rank pari passu in all respects with the previously issued shares.

25. Currency translation reserve

The currency translation reserve is non-distributable.

26. Retained profits

Retained profits of the Group and the Company are distributable.

Movement in retained profits for the Company is as follows:


Group

2012 2011

$’000 $’000

Beginning of financial year 2 (7)Net currency translation differences of financial statements of foreign subsidiary 6 9End of financial year 8 2

Company

2012 2011

$’000 $’000

Beginning of financial year 441 552Net profit 2,036 538Dividend paid (Note 27) (721) (649)End of financial year 1,756 441



27. Dividends

At the Annual General Meeting on 26 July 2012, a final exempt (one-tier) dividend of 0.7 cents per share amounting to a total $808,000 has been recommended. These financial statements do not reflect this dividend, which will be accounted for in shareholders’ equity as an appropriation of retained profits in the financial year ending 31 March 2013.

28. Financial guarantees

The Company has issued corporate guarantees to banks for borrowings of a subsidiary. These bank borrowings amounted to $307,000 (2011: $1,435,000). The fair values of the corporate guarantees have not been recognised in the financial statements of the Company as the amounts involved are not material to the Company.

29. Operating lease commitments

The Group leases restaurants and central kitchen facilities under non-cancellable operating lease agreements. The leases have varying terms, escalation clauses and renewal rights.

The future aggregate minimum lease payable under non-cancellable operating leases contracted for at the balance sheet date but not recognised as liabilities, are as follows:

Group

2012 2011

$’000 $’000

Ordinary dividends paid Final exempt dividend paid in respect of the previous financial year of 0.4 cents (2011: 0.3 cents) per share

385 264

Interim exempt dividend paid in respect of the current financial year of 0.35 cents (2011: 0.4 cents) per share

336 385

721 649

Group

2012 2011

$’000 $’000

Not later than one year 12,360 11,824Between one and five years 10,854 9,518

23,214 21,342


30. Related party transactions

Related parties are entities with common direct or indirect shareholders and/or directors or management. Parties are considered to be related if one party has the ability to control the other party or exercise significant influence over the party in making financial or operating decisions. There is no related party identified by the management in the financial year.

Key management personnel compensation

Included in the above is total compensation to the directors amounting to $636,000 (2011: $582,000).

31. Financial risk management

The Group’s activities expose it to market risk (including currency risk, cash flow risk and fair value interest rate risk), credit risk, liquidity risk and capital risk. The Group’s overall risk management strategy seeks to minimise adverse effects from the unpredictability of financial markets on the Group’s financial performance.

The Board of Directors is responsible for setting the objectives and underlying principles of financial risk management for the Group. This includes establishing policies such as authority levels, oversight responsibilities, risk identification and measurement and exposure limits.

(a) Market risk

(i) Currency risk

Currency risk arises within entities in the Group when transactions are denominated in foreign currencies. The Group’s exposure to currency risk is not significant as the Group operates mainly in Singapore. Certain of the Group’s purchases are from Japan and Hong Kong, giving rise to exposures to the changes in foreign exchange rates primarily with respect to the Japanese Yen (“JPY”) and Hong Kong Dollar (“HKD”). The Group does not enter into any derivative contracts to hedge its foreign exchange risk.


Group

2012 2011

$’000 $’000

Wages and salaries 992 985Directors’ fees 100 100Employer’s contribution to Central Provident Fund 40 39

1,132 1,124



31. Financial risk management (Cont’d)

(a) Market risk (Cont’d)

(i) Currency risk (Cont’d)

The Group’s currency exposure are analysed as follows:

SGD JPY HKD Others Total$’000 $’000 $’000 $’000 $’000

2012Financial assetsCash and cash equivalents 11,074 - - 74 11,148Trade and other receivables 982 - - - 982Other financial assets 4,385 - - 3 4,388Receivables from subsidiaries 8,299 - - 2 8,301

24,740 - - 79 24,819

Financial liabilitiesTrade and other payables (5,349) (306) (77) (48) (5,780)Borrowings (317) - - - (317)Payables to subsidiaries (8,299) - - (2) (8,301)

(13,965) (306) (77) 50 (14,398)

Net financial assets/(liabilities) 10,775 (306) (77) 29 10,421Add: Net non-financial assets 10,042 - - - 10,042Net assets/ (liabilities) 20,817 (306) (77) 29 20,463

Currency profile including non-financial assets/ (liabilities) 20,817 (306) (77) 29 20,463

Currency exposure of financial assets/(liabilities) in the respective entities in the respective entities functional currency - (306) (77) 3 (380)


At 31 March 2012, if the JPY and HKD both strengthened/weakened by 5% (2011: 5%) against the SGD with all variables including tax rate being held constant, the Group’s profit after tax for the financial year would have been $19,000 (2011: $11,000) higher/lower respectively as a result of currency translation gains/losses on the remaining JPY and HKD denominated financial assets.

The Company does not have significant exposure to currency risk as it operates only in Singapore.


SGD JPY HKD Others Total$’000 $’000 $’000 $’000 $’000

2011Financial assetsCash and cash equivalents 7,486 - - 84 7,570Trade and other receivables 596 - - - 596Other financial assets 4,078 - - 3 4,081Receivables from subsidiaries 6,903 - - 1 6,904

19,063 - - 88 19,151

Financial liabilitiesTrade and other payables (4,621) (145) (74) (50) (4,890)Borrowings (1,471) - - - (1,471)Payables to subsidiaries (6,903) - - (1) (6,904)

(12,995) (145) (74) (51) (13,265)

Net financial assets/(liabilities) 6,068 (145) (74) 37 5,886Add: Net non-financial assets 11,591 - - - 11,591Net assets/ (liabilities) 17,659 (145) (74) 37 17,477

Currency profile including non-financial assets/ (liabilities) 17,659 (145) (74) 37 17,477

Currency exposure of financial assets/(liabilities) in the respective entities in the respective entities functional currency - (145) (74) 9 (210)



(i) Currency risk (Cont’d)




(ii) Cash flow and fair value interest rate risk

Cash flow interest rate risk is the risk that the future cash flows of a financial instrument will fluctuate because of changes in market interest rates. Fair value interest rate risk is the risk that the value of a financial instrument will fluctuate due to changes in market interest rates. The Group’s interest rate risk mainly arises from bank loan at floating interest rate. The Group’s exposure to interest risk is not significant and the Group manages its interest rate risk by keeping borrowings to the minimum.

(b) Credit risk

Credit risk refers to the risk that counterparties will default on their contractual obligations resulting in financial loss to the Group. The Group trades mainly in cash. Receivable balances are monitored on an ongoing basis with the result that the Group’s exposure to bad debts is not significant.

The Group’s major classes of financial assets are bank deposits and trade receivables. As the Group and the Company do not hold any collateral, the maximum exposure to credit risk for each class of financial assets is the carrying amount of that class of financial assets presented on the balance sheet, except as follows:

There are no significant concentrations of credit risk within the Group.

There are no financial assets that are past due and/or impaired as at each of the balance sheet dates.

(c) Liquidity risk

Liquidity or funding risk is the risk that an enterprise will encounter difficulty in raising funds to meet commitments associated with financial assets. Liquidity risk may result from an inability to sell a financial asset quickly at close to its fair value.

The Group manages its liquidity risk by ensuring the availability of adequate funds to meet its obligation.


Company

2012 2011

$’000 $’000

Corporate guarantees provided to banks on subsidiary’s loans 317 1,435



(c) Liquidity risk (Cont’d)

The table below analyses the maturity profile of the Group’s financial liabilities based on contractual undiscounted cash flows:

Balance due within 12 months equal their carrying amounts as the impact of discounting is not significant.

(d) Capital risk

The primary objective of the Group’s capital management is to ensure that it maintains a strong credit rating and healthy capital ratios in order to support its business and maximise shareholder value.

The Group manages its capital structure and makes adjustments to it, in light of changes in economic conditions. To maintain or adjust the capital structure, the Group may adjust the amount of dividend payment, return capital to shareholders, issue new shares, buy back issued shares, obtain new borrowings or sell assets to reduce borrowings.

Management monitors capital based on gross gearing ratio. The Group is also required by the banks to maintain a gearing ratio of not exceeding 100% (2011: 100%)


Not later than one year

Between one and five years Total

$’000 $’000 $’000

GroupAs at 31 March 2012Trade and other payables 5,780 - 5,780Borrowings 322 - 322

6,102 - 6,102

As at 31 March 2011Trade and other payables 4,890 - 4,890Borrowings 1,205 322 1,527

6,095 322 6,417

CompanyAs at 31 March 2012Trade and other payables 1,301 - 1,301Financial guarantee contracts 322 - 322

1,623 - 1,623

As at 31 March 2011Trade and other payables 755 - 755Financial guarantee contracts 1,128 322 1,450

1,883 322 2,205




(d) Capital risk (Cont’d)

The gearing ratio is calculated as total borrowing, as disclosed in Note 21, divided by total equity.

The Group is in compliance with all externally imposed capital requirements for the financial year ended 31 March 2012 and 2011.

(e) Fair value measurement

The fair value of long-term security deposits for disclosure purposes are computed based on cash flow analyses, discounted at market borrowing rates of an equivalent instrument at the balance sheet date, as disclosed in Note 19. The carrying value of the financial assets and liabilities approximate their fair value because of short period to maturity. The carrying amounts of these financial assets and liabilities carried at cost or amortised costs are not materially different from their fair values as at 31 March 2012.

Group

2012 2011

$’000 $’000

Total borrowing 317 1,471Total equity 20,463 17,477

Gearing ratio 2% 8%


32. Segment information

Management has determined the operating segments based on the reports reviewed by the Board of Directors (“BOD”) that are used to make strategic decisions.

The BOD considers the business from both a geographic and business segment perspective. Geographically, management manages and monitors the business in the two geographic areas: Singapore and Malaysia. The Singapore operation derives its revenue from operation of restaurants and sales of food ingredients. There is no operating activity in Malaysia since the financial year ended 31 March 2011.

The segment information provided to the BOD for the reportable segments for the financial year ended 31 March 2012 is as follows:


Restaurant sales

Food ingredients

Total reportable segments

$’000 $’000 $’000

Group2012Revenue

Total segment revenue 55,867 353 56,220Inter-segment revenue - (104) (104)External revenue 55,867 249 56,116

Segment results 4,448 58 4,506

Depreciation and amortisation 3,959 28 3,987Written off of property, plant and equipment 441 - 441Loss on disposal of property, plant and equipment 45 - 45

Segment assets 22,541 678 23,219

Segment assets include:Additions to property, plant and equipment 2,892 - 2,892

Segment liabilities 5,412 368 5,780



32. Segment information (Cont’d)

The Group’s principal business is in the operation of restaurants and its ancillary business is in the supply of food ingredients to its sub-franchisees and franchisee. Sales between segments are carried out at the normal business terms and conditions. The revenue from external parties reported to Directors is measured in a manner consistent with that in the consolidated statement of comprehensive income.

Restaurant sales

Food ingredients

Total reportable segments

$’000 $’000 $’000

Group2011Revenue

Total segment revenue 50,182 383 50,565Inter-segment revenue - (118) (118)External revenue 50,182 265 50,447

Segment results 3,176 79 3,255

Depreciation and amortisation 3,557 36 3,593Impairment loss on property, plant and equipment 1,555 - 1,555Written off of property, plant and equipment 300 - 300

Segment assets 22,743 819 23,562

Segment assets include:Additions to property, plant and equipment 7,223 - 7,223Additions to intangible assets - 31 31

Segment liabilities 4,608 282 4,890



The BOD assesses the performance of the operating segments based on a measure of segment results before interest (net) and income tax expenses. Interest income and finance expenses are not allocated to segments, as this type of activity is driven by the Group finance team, which manages the cash position of the Group.

A reconciliation of reported segment results to profit before tax is provided as follows:

Reportable segments’ assets are reconciled to total assets as follows:

The amounts provided to the BOD with respect to total assets are measured in a manner consistent with that of financial statements. For the purposes of monitoring segment performance and allocating resources between segments, the BOD monitors the property, plant and equipment, intangible assets, inventories, receivables and operating cash attributable to each segment. All assets are allocated to reportable segments other than short-term bank deposits.

Group

2012 2011

$’000 $’000

Reported segments 4,506 3,255Interest income 17 22Finance expense (51) (132)Profit before income tax 4,472 3,145

Group

2012 2011

$’000 $’000

Segment assets for reportable segments 23,219 23,562Short-term bank deposits 5,095 1,794

28,314 25,356




Group

2012 2011

$’000 $’000

Segment liabilities for reportable segments 5,780 4,890Borrowings 317 1,471Current income tax liabilities 1,233 772Deferred income tax liabilities 521 746

7,851 7,879


Reportable segments’ liabilities are reconciled to total liabilities as follows:

The amounts provided to the BOD with respect to total liabilities are measured in a manner consistent with that of financial statements. These liabilities are allocated based on the operations of the segment. All liabilities are allocated to the reportable segments other than current income tax and deferred income tax liabilities and borrowings.

Geographical Segments

The Group’s two business segments operate in two main geographical areas:

(i) Singapore – the Group is headquartered and has operations in Singapore. The principal business in this area is the operation of restaurants and sales of food ingredients.

(ii) Malaysia – the principal operations in this area is the operation of restaurants. There is no operating activity in Malaysia since the financial year ended 31 March 2011.

33. Events occurring after balance sheet date

On 14 June 2012, the Company entered into an acquisition and shareholders’ agreement with Ajisen Investments (International) Limited (“Ajisen Investments”), an indirect wholly-owned subsidiary of Ajisen (China) Holdings Limited, Shigemitsu Industry Co., Ltd (“Shigemitsu Industry”) and ACJF Holding Limited (“ACJF”) to jointly develop and operate restaurants under the “Menya Musashi” trademark in Hong Kong. Under the agreement, the Company and Shigemitsu Industry have agreed to acquire from Ajisen Investments, 12,500 and 5,000 ordinary shares of USD1.00 (equivalent to $1.28) each in capital of ACJF, for a purchase consideration of HKD98,000 and HKD39,000 respectively (equivalent to approximately $16,000 and $6,000 respectively), based on par value of the capital of ACJF.

Revenue AssetsAs at 31 March

2012 2011 2012 2011$’000 $’000 $’000 $’000

Singapore 56,116 50,447 28,240 25,277Malaysia - - 74 79

56,116 50,447 28,314 25,356


33. Events occurring after balance sheet date (Cont’d)

Upon completion of the acquisition, Ajisen Investments, the Company and Shigemitsu Industry shall provide funding to ACJF by way of a shareholder’s loan amounting to HKD3,900,000, HKD1,500,000 and HKD600,000 respectively (equivalent to approximately $644,000, $248,000 and $99,000 respectively) for purpose of working capital for ACJF. The loan shall be unsecured, interest-free and with no fixed repayment terms.

34. New or revised accounting standards and interpretations

Below are the mandatory standards, amendments and interpretations to existing standards that have been published, and are relevant for the Group’s accounting periods beginning on after 1 April 2012 or later periods and which the Group has not early adopted:

• AmendmentstoFRS1–PresentationofItemsofOtherComprehensiveIncome(effectiveforannualperiodsbeginning or after 1 July 2012)

• AmendmentstoFRS12DeferredTax–RecoveryofUnderlyingAssets(effectiveforannualperiodsbeginningonor after 1 January 2012)

• FRS19(Revised2011)–EmployeeBenefits(effectiveforannualperiodsbeginningorafter1January2013)

• FRS27(revised)–SeparateFinancialStatements(effectiveforannualperiodsbeginningonorafter1January2013)

• FRS28(revised)–InvestmentinAssociatesandJointVentures(effectiveforannualperiodsbeginningonorafter1 January 2013)

• FRS110-ConsolidatedFinancialStatements(effectiveforannualperiodsbeginningorafter1January2013)

• FRS111–JointArrangements(effectiveforannualperiodsbeginningonorafter1January2013)

• FRS112 –Disclosureof Interest inOtherEntities (effective for annualperiodsbeginningor after 1 January2013)

• FRS113–FairValueMeasurement(effectiveforannualperiodsbeginningorafter1January2013)

The management anticipates that the adoption of the above FRSs, INT FRSs and amendments to FRS in the future periods will not have a material impact on the financial statements of the Group and the Company in the period of their initial adoption.

35. Authorisation of financial statements

The financial statements were authorised for issue in accordance with a resolution of the Board of Directors of Japan Foods Holding Ltd on 26 June 2012.



No. Name of shareholders No. of shares %

1 Kenichi Takahashi 76,543,200 66.332 Chan Chau Mui 5,400,000 4.683 HSBC (Singapore) Nominees Pte Ltd 5,022,000 4.354 Sirius Venture Capital Pte Ltd 4,777,200 4.145 DBS Nominees Pte Ltd 4,572,000 3.966 Loh Yih 3,567,600 3.097 Shigemitsu Katsuaki 2,240,400 1.948 Shigemitsu Industry Co. Ltd. 2,240,400 1.949 DB Nominees (S) Pte Ltd 1,720,800 1.4910 Amfraser Securities Pte. Ltd. 1,608,000 1.3911 DBS Vickers Securities (S) Pte Ltd 1,608,000 1.3912 Tan Kay Toh or Yu Hea Ryeong 1,106,400 0.9613 Kwok Lai Fong Evangeline 300,000 0.2614 Kwok Meng Sun or Wong Poh Yook 300,000 0.2615 Christella Chuah Poh Choo 240,000 0.2116 Teng Chai Hai 240,000 0.2117 CIMB Securities (Singapore) Pte Ltd 232,000 0.2018 Koh Chin Hwa 226,000 0.2019 Morgan Stanley Asia (S’pore) Securities Pte Ltd 208,800 0.1820 United Overseas Bank Nominees Pte Ltd 139,200 0.12

Total 112,292,000 97.30

Statistics of Shareholdings

Number of shares issued : 115,404,000 shares Class of shares : Ordinary share Voting rights : One vote per share

Distribution of shareholdings as at 18 June 2012

Size of shareholdingsNo. of

shareholders % No. of shares %

1 - 999 2 1.21 1,000 0.001,000 - 10,000 93 56.02 279,200 0.2410,001 - 1,000,000 59 35.54 4,717,800 4.091,000,001 and above 12 7.23 110,406,000 95.67Total 166 100.00 115,404,000 100.00

Twenty largest shareholders as at 18 June 2012


Statistics of Shareholdings

Based on the information available to the Company as at 18 June 2012, approximately 20.97% of the issued ordinary shares of the Company is held by the public and, therefore, Rule 723 of the SGX-ST Listing Manual Section B : Rules of Catalist is complied with.

The Company has no treasury shares as at 18 June 2012.

Substantial shareholder

Name of Shareholder No. of shares (Direct interest)

% No. of shares (Deemed interest)

%

Takahashi Kenichi (1) 76,543,200 66.33 5,400,000 4.68

Note :

(1) Takahashi Kenichi is deemed interested in the 5,400,000 shares held by his deemed associate, Chan Chau Mui.


Notice of Annual General Meeting

NOTICE IS HEREBY GIVEN that the Annual General Meeting (“AGM”) of Japan Foods Holding Ltd. (“Company”) will be held at “Ajisen Gourmet Town”, 23 Serangoon Central, #03-06/07 nex, Singapore 556083 on Thursday, 26 July 2012 at 9.30 a.m. for the purpose of transacting the following business:

AS ORDINARY BUSINESS

1. To receive and adopt the Directors’ Report and the audited financial statements of the Company for the financial year ended 31 March 2012 together with the Auditors’ Report thereon.

2. To declare a final tax-exempt one-tier dividend of 0.7 cents for each ordinary share held in the capital of the Company in respect of the financial year ended 31 March 2012.

3. To approve the payment of S$100,000 as fees to the directors of the Company (“Directors”) for the financial year ended 31 March 2012 (2011: S$100,000).

4. To re-elect the retiring Director, Mr Tan Lye Huat, who is retiring pursuant to Article 98 of the Company’s Articles of Association. [See explanatory Note (a)]

5. To re-elect the retiring Director, Mdm Lee Sok Koon, who is retiring pursuant to Article 102 of the Company’s Articles of Association. [See explanatory Note (b)]

6. To re-appoint Nexia TS Public Accounting Corporation as the auditors of the Company to hold office until the conclusion of the next AGM of the Company and to authorise the Directors to fix their remuneration.

7. To transact any other business which may properly be transacted at an AGM.

AS SPECIAL BUSINESS

8. Authority to issue shares in the capital of the Company and/or Instruments (as defined hereinafter)

That pursuant to Section 161 of the Companies Act, Cap. 50 of Singapore (“Companies Act”) and Rule 806 of the Singapore Exchange Securities Trading Limited (“SGX-ST”) Listing Manual Section B: Rules of Catalist (“Catalist Rules”), the Directors be and are hereby authorised and empowered to:

(a) (1) allot and issue shares in the capital of the Company (“Shares”) whether by way of rights, bonus or otherwise; and/or

(Resolution 1)

(Resolution 2)

(Resolution 3)

(Resolution 4)

(Resolution 5)

(Resolution 6)

(Resolution 7)

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


(2) 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) options, warrants, debentures or other instruments convertible into Shares,

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

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

provided that:

(1) the aggregate number of Shares (including Shares to be issued in pursuance of the Instruments, made or granted pursuant to this Ordinary Resolution) and Instruments to be issued pursuant to this Ordinary Resolution shall not exceed 100% of the total issued Shares at the time of passing of this Ordinary Resolution (excluding treasury shares) (as calculated in accordance with sub-paragraph (2) below), of which the aggregate number of Shares to be issued other than on a pro rata basis to existing shareholders of the Company shall not exceed 50% of the total issued Shares (excluding treasury shares) (as calculated in accordance with sub-paragraph (2) below);

(2) (subject to such manner of calculation as may be prescribed by the SGX-ST) for the purpose of determining the aggregate number of Shares and Instruments that may be issued under sub-paragraph (1) above, the percentage of issued Shares shall be based on the Company’s total issued Shares (excluding treasury shares) at the time of the passing of this Ordinary Resolution, after adjusting for:

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

(ii) new Shares arising from exercising of share options or vesting of shares awards outstanding and/or subsisting at the time of the passing of this Ordinary Resolution provided that share options or share awards (as the case may be) were granted in compliance with Part VIII of Chapter 8 of the Catalist Rules; and

(iii) any subsequent bonus issue, consolidation or sub-division of Shares;

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




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

[See explanatory Note (c)]

9. Authority to grant options and issue Shares under the Japan Foods Employee Share Option Scheme

That pursuant to Section 161 of the Companies Act, the Directors be and are hereby authorised and empowered to offer and grant options (“Options”) under the Japan Foods Employee Share Option Scheme (“Scheme”) and to allot and issue from time to time such number of Shares as may be required to be issued pursuant to the exercise of Options granted by the Company under the Scheme, whether granted during the subsistence of this authority or otherwise, provided always that the aggregate number of additional Shares to be allotted and issued pursuant to the Scheme shall not exceed 15% of the total issued Shares (excluding treasury shares) from time to time and that such authority shall, unless revoked or varied by the Company in a general meeting, continue in force until the conclusion of the next AGM of the Company or the date by which the next AGM of the Company is required by law to be held, whichever is earlier.

[See explanatory Note (d)]

10. Renewal of the IPT Mandate

That:

(a) approval be and is hereby given, for the purposes of Chapter 9 of the Catalist Rules, for the Company, its subsidiaries and associated companies (if any) (“Group”) or any of them that are deemed an entity at risk as defined in Chapter 9 of the Catalist Rules, to enter into any of the transactions falling within the type of Mandated Transactions as defined and set out in the Company’s appendix to the Annual Report 2012 (“Appendix”), with any party who falls within the classes of Interested Persons as defined and set out in the Appendix, provided that such Mandated Transactions are carried out in the ordinary course of business, on normal commercial terms and are not prejudicial to the interests of the Company and its minority Shareholders, and is in accordance with the guidelines and review procedures for Mandated Transactions as set out in the Appendix (“IPT Mandate”);

(b) such approval given in paragraph (a) above shall, unless revoked or varied by the Company in general meeting, continue in force until the conclusion of the next AGM of the Company or the date by which the next AGM of the Company is required by law to be held, whichever is the earlier; and

(c) the Audit Committee of the Company be and are hereby authorised to complete and do all such acts and things (including, without limitation, executing all such documents as may be required) as they may consider expedient or necessary or in the interests of the Company to give effect to the IPT Mandate and/or this Ordinary Resolution.

[See explanatory Note (e)]

(Resolution 8)

(Resolution 9)


NOTICE OF BOOKS CLOSURE DATE

NOTICE IS ALSO HEREBY GIVEN that subject to approval of shareholders of the Company (“Shareholders”) being obtained for the proposed final tax-exempt one-tier dividend of 0.7 cents for each Share for the financial year ended 31 March 2012 (“Final Dividend”), the Share Transfer Books and Register of Members of the Company will be closed on 3 August 2012 for the purpose of determining Shareholders’ entitlements to the Final Dividend.

Duly completed registrable transfers received by the Company’s Share Registrar, B.A.C.S. Private Limited, at 63 Cantonment Road, Singapore 089758 up to 5.00 p.m. on 2 August 2012 will be registered to determine Shareholders’ entitlements to the Final Dividend. Shareholders whose securities accounts with The Central Depository (Pte) Limited are credited with the Shares as at 5.00 p.m. on 2 August 2012 will be entitled to the Final Dividend.

Payment of the Final Dividend, if approved by Shareholders at the AGM of the Company, will be made on 15 August 2012.

By Order of the Board

Esther AuCompany SecretarySingapore

11 July 2012

Explanatory Notes:

(a) Mr Tan Lye Huat will, upon re-election as a Director, remain as the Chairperson of the Audit Committee and a member of the Nominating and Remuneration Committees of the Company, and will be considered independent for the purposes of Rule 704(7) of the Catalist Rules.

(b) Mdm Lee Sok Koon will, upon re-election as a Director, remain as the Chairperson of the Nominating and Remuneration Committees of the Company and a member of the Audit Committee of the Company, and will be considered independent for the purposes of Rule 704(7) of the Catalist Rules.

(c) The Ordinary Resolution 7 in item 8 above, if passed, will empower the Directors, from the date of this AGM of the Company until the date of the next AGM of the Company, or the date which the next AGM of the Company is required by law to be held, or such authority is varied or revoked by the Company in general meeting, whichever is the earlier, to issue Shares, make or grant instruments convertible into Shares pursuant to such instruments, up to a number not exceeding, in total, 100% of the issued Shares (excluding treasury shares), of which up to 50% may be issued other than on a pro-rata basis to existing shareholders of the Company.

(d) The Ordinary Resolution 8 in item 9 above, if passed, will empower the Directors, from the date of this AGM of the Company until the next AGM of the Company, or the date by which the next AGM of the Company is required by law to be held, or such authority is varied or revoked by the Company in a general meeting, whichever is the earlier, to issue Shares pursuant to the exercise of options granted or to be granted under the Scheme up to a number not exceeding in total (for the entire duration of the Scheme) 15% of the total issued Shares (excluding treasury shares) from time to time.



(e) The Ordinary Resolution 9 in item 10 above, if passed, will empower the Group, from the date of this AGM of the Company until the next AGM of the Company, or the date by which the next AGM of the Company is required by law to be held, or such authority is varied or revoked by the Company in a general meeting, whichever is the earlier, enter into the Mandated Transactions as described in the Appendix and to do all acts necessary to give effect to the IPT Mandate. In accordance with the requirements of Chapter 9 of the Catalist Rules, Shigemitsu Industry Co., Ltd and Mr Shigemitsu Katsuaki will abstain and each of them has also undertaken that their respective associates will abstain, from voting on this Ordinary Resolution 9 in relation to the proposed renewal of the IPT Mandate.

The Audit Committee of the Company has reviewed the terms of the IPT Mandate and is satisfied that the guidelines and review procedures for the Mandated Transactions as set out in the Appendix have not changed since the IPT Mandate was renewed at the AGM of the Company held on 28 July 2011. The Audit Committee of the Company is also of the view that the guidelines and review procedures for the Mandated Transactions are adequate to ensure that the Mandated Transactions will be transacted on arm’s length basis and on normal commercial terms and will not be prejudicial to the interests of the Company and its minority shareholders.

If during the periodic reviews by the Audit Committee of the Company, it is of the view that the established guidelines and review procedures for the Mandated Transactions are no longer appropriate or adequate to ensure that the Mandated Transactions will be transacted on arm’s length basis and on normal commercial terms and would not be prejudicial to the interests of the Company and its minority shareholders, the Company will seek a fresh mandate from its shareholders based on new guidelines and procedures.

Notes:

1. A member of the Company entitled to attend and vote at the AGM of the Company is entitled to appoint a proxy to attend and vote in his/her stead. A proxy need not be a member of the Company.

2. The instrument appointing a proxy must be deposited at the registered office of the Company at 420 North Bridge Road, #02-01 North Bridge Centre, Singapore 188727 not less than forty-eight (48) hours before the time for holding the AGM.


This page has been intentionally left blank.

Proportion of ShareholdingsName NRIC/Passport No.

No. of Shares %Address

and/or (delete as appropriate)

JAPAN FOODS HOLDING LTD. (Company Registration No. 200722314M)(Incorporated in the Republic of Singapore)

PROXY FORM(Please see notes overleaf before completing this form)

I/We, (Name)

of (Address)

being a *member/members of JAPAN FOODS HOLDING LTD. (“Company”) hereby appoint:

or failing the person, or either or both of the persons, referred to above, the Chairman of the Annual General Meeting (“AGM”) of the Company as *my/our *proxy/proxies to vote for *me/us and on *my/our behalf, at the AGM of the Company, to be held at “Ajisen Gourmet Town”, 23 Serangoon Central, #03-06/07 nex, Singapore 556083 on Thursday, 26 July 2012 at 9.30 a.m. and at any adjournment thereof.

*I/We direct *my/our *proxy/proxies to vote for or against the Resolutions to be proposed at the AGM of the Company as indicated hereunder. If no specific direction as to voting is given or in the event of any other matter arising at the AGM of the Company and at any adjournment thereof, the *proxy/proxies will vote or abstain from voting at *his/their discretion. The authority herein includes the right to demand or to join in demanding a poll and to vote on a poll.

(Please indicate your vote “For” or “Against” with a tick [3] within the box provided.)

No. Ordinary Resolutions For Against

1. Adoption of the Directors’ Report and the audited financial statements for the financial year ended 31 March 2012, together with the Auditors’ Report thereon.

2. Payment of proposed final tax-exempt one-tier dividend of 0.7 cents for each ordinary share in the capital of the Company for the financial year ended 31 March 2012.

3. Approval of Directors’ fees of S$100,000 for the financial year ended 31 March 2012 (2011: S$100,000).

4. Re-election of Mr Tan Lye Huat as a Director.

5. Re-election of Mdm Lee Sok Koon as a Director.

6. Re-appointment of Nexia TS Public Accounting Corporation as auditors of the Company.

Special Business

7. Authority to issue shares in the capital of the Company pursuant to Section 161 of the Companies Act, Cap. 50 of Singapore.

8. Authority to grant options and issue shares in the capital of the Company under the Japan Foods Employee Share Option Scheme.

9. Renewal of the IPT Mandate.

Ordinary Business

Proportion of ShareholdingsName NRIC/Passport No.

No. of Shares %Address

Dated this 2012

Signature of Shareholder(s)/Common Seal of Corporate Shareholder*Delete where inapplicable

Total Number of Shares in: No. of SharesCDP Register Register of Members

$

Notes:

1. Please insert the total number of Shares held by you. If you have Shares entered against your name in the Depository Register (as defined in Section 130A of the 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, the instrument appointing a proxy or proxies shall be deemed to relate to all the Shares held by you.

2. A member of the Company entitled to attend and vote at the above meeting is entitled to appoint one or two proxies to attend and vote in his/her stead. A proxy need not be a member of the Company.

3. Where a member appoints two proxies, the appointments shall be invalid unless he/she specifies the proportion of his/her shareholding (expressed as a percentage of the whole) to be represented by each proxy.

4. Completion and return of this instrument appointing a proxy shall not preclude a member from attending and voting at the AGM of the Company. Any appointment of proxy or proxies shall be deemed to be revoked if a member attends the meeting in person, and in such event, the Company reserves the right to refuse to admit any person or persons appointed under the instrument of proxy to the AGM of the Company.

Second fold along this line

Second fold along this line

Japan Foods Holding Ltd.420 North Bridge Road

#02-01 North Bridge CentreSingapore 188727

AffixPostageStamp

5. The instrument appointing a proxy or proxies must be deposited at the Company’s place of business at 420 North Bridge Road, #02-01 North Bridge Centre, Singapore 188727, not less than 48 hours before the time appointed for the AGM of the Company.

6. The instrument appointing a proxy or proxies must be under the hand of the appointor or of his attorney 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 of power of attorney or a duly certified copy thereof must be lodged with the instrument.

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

General:

The Company shall be entitled to reject the instrument appointing a proxy or proxies if it is incomplete, imporperly 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 AGM of the Company, as certified by The Central Depository (Pte) Limited to the Company.

japan food ar 2012

Documents