OCULUS LIMITED (Company Registration No N) REASONS FOR NON-COMPLIANCE WITH RULE 707 OF THE CATALIST RULES

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1 OCULUS LIMITED (Company Registration No N) REASONS FOR NON-COMPLIANCE WITH RULE 707 OF THE CATALIST RULES BACKGROUND Further to the announcement of 25 April 2008 (the Sponsor Announcement ), the board of directors (the Board ) of Oculus Limited (the Company ) wishes to provide to the shareholders of the Company, the background and the reasons leading to the non-compliance with Rule 707 of Section B of the SGX-Listing Manual (the Catalist Rules ). All capitalized terms used herein shall unless stated otherwise, have the same meaning as the Sponsor Announcement. Additionally as requested by Stamford Corporate Services (the Sponsor ), copies of the Queries and the Company s responses to them are annexed hereto. REASONS FOR NON-COMPLIANCE WITH RULE 707 OF THE CATALIST RULES 1) Delay in the Preparation of Management Accounts The Company completed the acquisition of PJ Services Pte Ltd ( PJS ), a company with various subsidiaries engaged in the supply of oil and gas equipment on 31 August The Company had hired a financial controller in August 2007 in order to supervise the reconciliation of the management accounts of the Company (the Management Accounts ) in light of the difficulties presented by the accounts of PJS (the PJS Accounts ). However, she resigned unexpectedly on 19 October 2007, after which the Company engaged Mssrs RSM Chio Lim ( RSM ) on 31 October 2007 to perform the Company s accounting function. In particular, RSM highlighted that the opening balances for the month of August for PJS and its Singapore, Malaysia and Australia based subsidiaries (the Non-Indonesian Subsidiaries ) could not be reconciled as PJS and its subsidiaries had prepared its audited accounts for its previous financial years on a yearly, as opposed to monthly, basis. Furthermore, it was discovered that PT Panah Jayagita Servisindo ( PT PJS ), the Indonesian subsidiary of PJS, had never been previously audited and had failed to maintain proper records and accounts for audit purposes. This resulted in the Company having to appoint Messrs Doli, Bambang, Sudarmadji & Dadang (Indonesia) to conduct an audit of PT PJS in compliance with IFRS requirements in December As a result of the above matters, RSM experienced considerable difficulties in reconciling the accounts of PJS and consequently, were delayed in completing its preparation of the Company s consolidated accounts. Notwithstanding the delay in the preparation of the Management Accounts, the Company was able to announce its unaudited full year accounts for the financial year ended 31 December 2007 (the Management Accounts ) on 29 February 2008, in compliance with Rule 705(1) of the Catalist Rules. On 29 February 2008, the Company announced its unaudited full year accounts for the financial year ended 31 December 2008 (the Management Accounts )

2 The delay in the preparation of the Management Accounts, complications in reconciling the opening balance for the Non-Indonesian Subsidiaries, as well as difficulties in completing the audit of PT PJS occasioned by the current inadequate state of its records, consequently led the subsidiary s auditors, Messrs Doli, Bambang, Sudarmadji & Dadang (Indonesia), to also experience delays in auditing the management accounts, as the audit could only commence on 1 March Therefore, the Company commenced the preparation of its application to the Sponsor for an extension of time to issue its annual report and to hold its annual general meeting. 2) Delayed Repayment of Trust Monies by Ariel Singapore As mentioned in the announcement of 21 November 2007, the Company had the proceeds of S$15 million raised through its placement exercise (the Placement Proceeds ) which was completed on 21 November The proceeds of the placement were then held by Ariel Singapore Pte Ltd ( Ariel ) (and not the Company) because Ariel s shares were borrowed pursuant to a share-lending arrangement to facilitate the placement. The Directors have on numerous occasions requested Ariel to transfer the Placement Proceeds into the Company s account but have been informed by Ariel that it is unable to do so because of a disagreement between the two Ariel directors over Ariel s direction. The dispute between the 2 directors of Ariel caused an impasse at Ariel in respect of all its transactions. In the interim, Low Shiong Jin as the major shareholder and on behalf of Ariel executed and declared a trust over the Placement Proceeds and interest thereto in favour of the Company to secure the Company s interest over those moneys. The Directors have been further informed that to remedy the situation, Ariel is undergoing an internal restructuring to break the deadlock situation which the Board has been informed will be completed by 5 May The Board received an undertaking on 28 April 2008 from Low Shiong Jin, the majority shareholder of Ariel, that the Placement Proceeds would be paid back to the Company by the close of business on 5 May In view of the explanations, and in reliance on the undertaking provided by Low Shiong Jin, the Board agreed to allow Ariel up to end of business on 5 May 2008 to effect the transfer of moneys to the Company. The Board will provide further updates with regards to the situation on 5 May 2008 through the making of a further announcement on that date. The Board understands from the Auditors that once the Placement Proceeds have been transferred into the accounts of the Company, they can then confirm and sign off the audited accounts. The Company will then issue its Annual Report and hold its AGM as soon as practicable thereafter. 3) Application for extension of time The Company had on 28 April 2008 submitted a written application to the Accounting and Corporate Regulatory Authority for a similar extension of one month to 31 May 2008 for the Company to hold its AGM and to present its audited accounts pursuant to Section 201 of the Companies Act, Cap

3 4) Lifting of Trading Halt The Directors are of the view that the queries from the Sponsor should be adequately addressed and disclosed in this Announcement and accordingly, has requested for a lifting of the trading halt in the Company s shares with effect from 30 April 2008 at 9.00 a.m. However, the Directors wish to advise the Shareholders to refrain from taking any action in respect of their Shares which may be prejudicial to their interests, and to exercise high level caution when dealing in the Shares. By Order of the Board 29 April 2008 This announcement has been prepared by the Company and its contents have been reviewed by the Company s Sponsor, Stamford Corporate Services Pte Ltd, for compliance with the relevant rules of the Exchange. The Company s Sponsor has not independently verified the contents of this announcement. This announcement has not been examined or approved by the Exchange and the Exchange assumes no responsibility for the contents of this announcement including the correctness of any of the statements or opinions made or reports contained in this announcement. The contact person for the Sponsor is Mr Bernard Lui Tel: BernardLui@stamfordlaw.com.sg - 3 -

4 No Sponsor Queries Response 1. Legitimacy of Request for Extension for holding of AGM 1.1 Please explain (a) why extension with respect to the announcement of unaudited full year accounts for the financial year dated 31 December 2007 dated 29 February 2008 (the Management Accounts ); and (b) why the extension for holding of AGM was not requested by the Company, if it was anticipated that the financial figures cannot be confirmed. 1.2 Please explain why (a) was SGX was not informed contemporaneously when RSM Chio Lim advised the Company in December 2007 that the preparation of the Company s consolidated accounts would be delayed; and (b) why was the Sponsor not informed contemporaneously when LTC & Associates advised the Company on 2 April 2008 that it will not be able complete the audit of the Management Accounts prior to 30 April Please explain (a) why the Company requires a 2 month extension for the holding of AGM; and (b) confirm that the Company will complete its annual report by the proposed extended date. (a) The Company did not seek an extension with respect to its announcement of the Management Accounts as it anticipated that the consolidation of the Management Accounts would be completed within the statutory two month period from its year end. (b) Notwithstanding delays in the preparation of the Management Accounts, the Company was initially under the impression that the Company s auditors, LTC & Associates ( LTC ), would be able to complete its audit of the Management Accounts in time for inclusion in its annual report so as to allow the AGM to proceed prior to the 30 April 2008 deadline. However, there were delays in the obtaining of certain confirmations from the management of the Company (the Management ) (which is further elaborated below), after which the Company prepared its application to the Sponsor for an extension of time to hold its AGM (the Application ). (a) As explained in Query 1.1(a) above, the SGX was not informed contemporaneously with RSM Chio Lim advising the Company in December 2007 that the preparation of the Company s consolidated accounts would be delayed as the Company anticipated that the consolidated accounts would nevertheless be completed within the statutory two month period from its year end. (b) The Sponsor was not informed contemporaneously because the Company was initially under the impression that the Company s auditors, LTC would be able to complete its audit of the Management Accounts in time for inclusion in its annual report so as to allow the AGM to proceed prior to the 30 April 2008 deadline. However, there were delays in the obtaining of certain confirmations from the Management, after which the Company prepared its Application. (a) The Company understands that based on the industry practice for the audit of private companies, the auditors typically require three months from their date of commencement to complete their audit. As the audit only commenced on 1 March 2008 due to the delay - 4 -

5 in the preparation of the Management Accounts, the estimated time for completion of the audit on the Company would therefore be 1 June 2008, which consequently led the Company to originally request for an extension of up to 30 June 2008 to hold its AGM. However, further to making the Application, LTC has advised the Management that it has completed its audit of the Management Accounts, subject to certain confirmations which are outstanding. Hence, the Company is of the view that it will not require as long an extension as previously sought, and wishes to amend its application for extension of time to 31 May The extension of time to 31 May 2008 will be necessary in order to provide an adequate time buffer for various logistical issues such as clearance of the annual report with the Sponsor, printing and the giving of statutory notice. (b) As LTC has already completed its audit of the Management Accounts, the Management is of the view that the Company should be able complete its annual report on or before 15 May 2008, other than the confirmation requested in connection to the Placement Proceeds detailed in paragraph 1.6 below. 1.4 Please disclose any outstanding issues for the purposes of the audited accounts, the actions required to enable the audited figures to be produced and the time period to complete such item in a table form. 1.5 Please disclose any corporate actions in the interim between the present and proposed extended AGM date that may affect the financials of the Company. As explained in Query 1.3, there are no outstanding issues with respect to the audited accounts other than the confirmations which are explained in Query 1.6 below. The Company has on 17 April 2008 announced its termination of the sale and purchase agreement announced on 6 February 2008 (as amended by a supplemental agreement dated 21 February 2008) for the acquisition of certain Ophthalmic Assets from Advanced Ocular Systems Limited through the acquisition of Swift Venture Holdings Corporation by mutual agreement of the parties (the Termination Announcement ). Save for the making of the Termination Announcement and the proposed entry into the Subscription Agreement described above, the Company confirms that there are no planned corporate actions in the interim between the present and proposed extended AGM date which may affect the financials of the Company

6 1.6 We refer to Paragraph 8 of the unaudited financial statements of the Company for FY2007 announced on 29 February Please confirm if the S$15 million placement proceeds held on trust by Ariel Singapore Pte Ltd for the Company (the Trust Monies ), has been transferred to the Company. As mentioned in the announcement of 21 November 2007, the Company had the proceeds of S$15 million raised through its placement exercise (the Placement Proceeds ) which was completed on 21 November The proceeds of the placement were then held by Ariel Singapore Pte Ltd ( Ariel ) because Ariel s shares were borrowed pursuant to a share-lending arrangement to facilitate the placement. The Directors have on numerous occasions requested Ariel to transfer the Placement Proceeds into the Company s account but has been informed by Ariel that it is unable to do so because of a disagreement between the two Ariel directors over Ariel s direction. The dispute between the 2 directors of Ariel caused an impasse at Ariel in respect of all its transactions. In the interim, Low Shiong Jin as the major shareholder and on behalf of Ariel executed and declared a trust over the Placement Proceeds and interest thereto in favour of the Company to secure the Company s interest over those moneys. The Directors have been further informed that to remedy the situation, Ariel is undergoing an internal restructuring to break the deadlock situation which the Board has been informed will be completed by 5 May The Board received an undertaking on 28 April 2008 from Low Shiong Jin, the majority shareholder of Ariel, that the Placement Proceeds would be paid back to the Company by the close of business on 5 May In view of the explanations, and in reliance on the undertaking provided by Low Shiong Jin the Board agreed to allow Ariel up to end of business on 5 May 2008 to effect the transfer of moneys to the Company. The Board will provide further updates with regards to the situation on 5 May 2008 through the making of a further announcement on that date. 2. Confirmation and Clarification from the Company s Auditors 2.1 Please explain why the unaudited figures in respect of the income statement for continuing operations as disclosed in the Management Accounts are not available. We will require an explanation from the Company s auditors as to what constitutes the Please refer to Notes 2.21 and 9 of the annual report as extracted and attached hereto for your convenience

7 continuing operations and their basis for treating the entire contact lens and eye care related business as discontinued. 2.2 Please disclose any likelihood of any material variance from the Management Accounts compared to the accounts currently being audited. 2.3 We refer to Paragraph 8 of the unaudited financial statements of the Company for FY2007 as announced on 29 February Please confirm if the S$15 million placement proceeds held on trust by Ariel Singapore Pte Ltd for the Company, has been transferred to the Company. 2.4 Please confirm the basis upon which the disposal of the contact lens and eye care related business to I Kare Pte Ltd is treated as discontinued operations for FY2006 and FY2007, in light of the fact that only a sale and purchase agreement has been signed on 21 February 2007 and the completion date of the disposal has been further extended to 21 May Please provide the Auditor s interpretation of FRS 105 and the one year period firm purchase commitment from the Company. None. The Auditor is unable to confirm as they have been requesting the management to provide to them the evidence to support that the amount has been transferred to the Company. However, to-date, the Auditor has yet to obtain the relevant evidence, such as the bank statement or bank advice of the Company. The accounting treatment of the eyecare business for FY2006 and FY2007 is appropriate. The Company had entered into a binding letter agreement dated 25 October 2006 to dispose the entire eyecare business and announcement had been made on 26 October Therefore, it was accounted for as discontinued operation in FY2006. Please refer to note 25 to the financial statements of Oculus for the year ended 31 December 2006 for details. During FY2006, the management was committed to sell the eyecare business and it was expected to complete within 12 months. Thus, it was classified as discontinued operation. The disposal did not complete in FY2007. When we audit the FY2007, we would be require to re-assess whether it should be continued to be classified as discontinued operation for FY2007. Based on the extension agreement signed, the management is committed to sell the eyecare business. Also, the IFA and FA have been appointed and they are preparing the circular for the disposal. Although the period to complete the sale beyond one year since 31 Dec 2006, it is appropriate to continue to classify the eyecare business as discontinued operations for FY Acquisition of PJ Services Pte Ltd ( PJS ) 3.1 Please disclose the Company s basis There was no concrete basis used for the - 7 -

8 (eg. based on audited financials?) in acquiring PJS especially since PJS s subsidiary PT Panah Jayagita Servisindo ( PT PJS ) did not have any audited accounts. In relation to the foregoing, please explain how did PJS produce its latest and audited financial statements ended 31 December 2006 with a turnover of S$8.5 million and a net profit before tax approximately S$0.1 million. 3.2 Please disclose the extent of due diligence done on PJS at the time of acquisition. 3.3 Please clarify whether there is anything material that ought to have been disclosed, but was not disclosed at the time of announcement on the acquisition of PJS. acquisition of PJS by the Company as it was acquired by the Company from Ariel Singapore Pte Ltd ( Ariel ) for a nominal consideration of S$90,000. Ariel initially acquired PJS from its original shareholders for an aggregate consideration of S$4,000,000. As noted in the Application, the unsatisfactory state of the accounts for PT PJS was a key contributing factor in the difficulty in reconciling the accounts of PJS and for the delay in completion of the audit of the Management Accounts by 30 April However, as PJS only acquired all its subsidiaries on 1 January 2007, it was consequently able to produce audited financial statements for the year ended 31 December As explained in Query 3.1 above, there was very limited due diligence done on PJS at the time of its acquisition as it was being sold to the Company for a nominal sum of S$90,000 in anticipation of the completion of the proposed disposal of the Company s present business to I Kare Pte Ltd. The Management confirms that it has disclosed all material information in connection with its announcement of 18 July 2007 on the acquisition of PJS. 3.4 Please confirm if the disclosures in the announcement on acquisition of PJS are still accurate now. 3.5 Please explain why the Management Accounts have not been audited since the acquisition of PJS was completed in August Please disclose what has or have been done and the recourses deployed since August 2007 to prepare the audit of the Management Accounts. Please provide us with the date of appointment of RSM Chio Lim as the Company's accountant? The Management confirms that all disclosures made in its announcement of 18 July 2007 on the acquisition of PJS remain accurate in all material respects. As explained in the Application, the audit of the Management Accounts was unable to commence until 1 March 2007 due to unforeseen delays in reconciling the accounts for PJS. The reasons for this delay were due to the preparation of the accounts for the Singapore, Malaysia and Australia based subsidiaries of PJS on a yearly, as opposed to monthly basis, which consequently led to difficulties in generating the opening balance for the month of August, as well as the unsatisfactory state of the accounts of PT PJS. The Company has taken various steps post completion of the acquisition of PJS in August 2007 to reconcile the Management Accounts in order to present them for audit. In August 2007, the Company hired Lim Soh Hoon in order to - 8 -

9 supervise the reconciliation of the Management Accounts in light of the difficulties presented by the PJS accounts. However, she resigned unexpectedly on 19 October 2007, after which the Company engaged RSM Chio Lim to perform the Company s accounting function. The Company also engaged a consultant, Ms Tan Sock Hoon, to liase with the Company s auditors, LTC, as well as to assist the consolidation of the Management Accounts and the preparation of the Company s announcements. The date of appointment of RSM Chio Lim as the Company s accountant is 31 October

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