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Transcription

Annual Report 2009
Unfolding New
Dimensions in Growth
Automation
E C O - S OLUTION S
IN F R A S T R U C TU R E
While we forge ahead in our vision to be the leading provider of total automation
solutions in the region, we will further develop our expansion initiatives in the medical
equipment, eco-solutions and infrastructure industries. With a clear focus on our
growth path ahead, backed by our commitment to product and service excellence,
we are poised to be a leading regional player.
H i s a k a H o l d i ng s L t d .
Annual Report 2009
Vision
With a clear focus on our growth path ahead, we aim to be the leading provider of
integrated Total Automation Solutions in the Asia Pacific region. By leveraging on the
strengths of our core competencies, we aim to further develop our expansion initiatives
in the medical equipment, eco-solutions and infrastructure industries. Our commitment
to product and service excellence will pave our way to a position of leadership in these
respective industries.
Mission
To create long-term sustainable value for our stakeholders by seeking out and capitalising
on high potential growth opportunities, and nurturing strong and synergistic working
relationships with our partners and associates.
Contents
1 Company Profile
2Executive Chairman & CEO’s Statement
4Operations Review
6 Board of Directors
8Management Team
9 Corporate Information
10 Corporate Governance Report
19 Directors’ Report
22 Statement by Directors
23Independent Auditor’s Report
25 Consolidated Income Statement
26 Balance Sheets
27 Statements of Changes in Equity
30 Consolidated Cash Flow Statement
31Notes to the Financial Statements
68 Statistics of Shareholdings
70Notice of Annual General Meeting
Proxy Form
Annual Report 2009
COMpAny prOfIlE
Established in 1992, HISAKA has transformed into an automation solutions provider specialising in
mechanical motion products.
The Group’s principal activities can be broadly classified into two key business segments, namely: the
Services segment; and the Manufacturing segment, with Supply Chain Management forming an integral
part of both. The Services segment consists of Mechanical Motion Components Management while the
Manufacturing segment comprises Metallic Precision Manufacturing and Mechatronics Integration. Under
Supply Chain Management, the Group provides value-added services such as logistics and inventory
management; administration and customer service management; and technical support management, for
customers.
While the Group is in the midst of attaining GDPMDS and ISO13485 certification, it was awarded ISO 9001:2008
certification for its quality management systems in the supply and fabrication of electromechanical parts for
the semiconductor and factory automation industries, as well as in the sales, stockholding and integration
solutions of electrical energy saving products and related devices.
As part of the Group’s increasing prominence and proven track record in reliability and excellence, over the
years, HISAKA has received numerous Enterprise and SME accolades, such as Enterprise 50, SME 500 and
recently, the Top Internationalising SMEs award.
As part of the Group’s continuous efforts in seeking out and capitalising on new growth opportunities to
create new streams of revenue and value, inroads were paved into medical equipment, eco-solutions and
infrastructure industries during the year. While negotiations are still underway in the infrastructure industry,
key cornerstones have been set in the medical equipment and eco-solutions industries, thus positioning the
Group for greater growth.
In our push towards further growth, the Group’s experienced Management team and staff play a pivotal role
in building enduring relationships with our well-established network of customers and suppliers.
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Annual Report 2009
Executive Chairman & Ceo’s Statement
UNFOLDING NEW DIMENSIONS, CREATING SUSTAINABLE VALUE
Dear Shareholders,
forecasts and orders were greatly reduced since August
2008 and we were faced with under-utilised capacity and
excess manpower with no clear indication of any increase
in customers’ demand or any visible signs of revival in the
economy. In order to survive the massive downturn, we
pulled the reigns and took immediate action to consolidate
our operations and re-align our resources. Capital
expenditure was immediately halted unless absolutely
necessary and where sustainability was the key priority,
prudence was exercised through the implementation of
stringent cost control measures. Throughout the crisis,
we intensely focused on conserving and managing our
cash resources to maintain sound financial health by
minimising inventory levels, managing receivables and
reassessing capital expenditure.
On behalf of the Board of Directors (the “Board”), it is
our pleasure in presenting you the Annual Report and
Financial Statements of HISAKA Holdings Ltd. (the
“Group”) for the financial year ended 30 September 2009
(“FY 2009”). FY 2009 was our first full year of operations
following our listing on the Mainboard of the Singapore
Stock Exchange. We are happy to report that despite
the macroeconomic challenges experienced, especially
in first half of the year, the Group managed to turn in a
credible performance and remained profitable.
In the first half of FY 2009, U.S. subprime loan problems
escalated into a global financial crisis that resulted
in widespread panic and turbulence in the global
economy. Financial institutions throughout the world
reacted by reducing credit exposure and liquidity risk,
and in turn reducing credit facilities significantly to
tighten liquidity. Lending began to dry up and the cost
of borrowings soared. The financial crisis tore through
the global economy resulting in significant cutbacks in
consumer demand. Companies across industries had
to adopt drastic measures such as factory closures
and manpower reduction which further worsened the
global economy. Governments all over the world had
to implement unprecedented monetary stimuli, provide
capital injection and guarantee to financial institutions to
arrest faltering economies and restore confidence in the
global economy.
Financial Performance
As a direct result of the weak market conditions in the
global manufacturing sector and the sharp downturn in
the semiconductor industry, Group revenue for the first
half of FY 2009 took a beating and registered at S$7.8
million, representing a 73.9% decline as compared to
$29.9 million achieved in the first half of FY 2008. However,
in the second half of the year, the vision and foresight of
the Management team played a pivotal role in restoring
Group performance, albeit falling short of pre-crisis levels.
The Group bounced back and registered revenue of
S$26.4 million in the second half of the year.
Over and above the consolidation of operations and
the implementation of stringent cost control measures
within the Group, initiatives in cultivating and nurturing
new streams of revenue came to fruition in June 2009.
The Group, through our wholly-owned subsidiary, Hisaka
(Singapore) Pte Ltd (“Hisaka (S)”), was awarded a threeyear contract worth S$7.0 million to supply medical
equipment to a customer in Singapore. Amidst an ailing
but slowly recovering global economy, the signing of this
contract represented a first step towards recovery for the
Group.
The automation and semiconductor industries that we
serve were likewise negatively impacted. Our customers’
As at 30 September 2009, Group revenue registered at
a respectable S$34.2 million. Though an overall 39.3%
decline from the S$56.3 million in Group revenue achieved
in FY 2008, the Group is optimistic that we are in the
process of actively paving our road to recovery.
Correspondingly, the Group’s gross profit fell from S$12.3
million in FY 2008 to S$6.3 million in FY 2009. Pricing
pressures due to customers’ stringent control on costs
resulted in a decrease in gross profit margin from 21.9%
in FY 2008 to 18.6% in FY 2009.
FY 2009 in Review
FY 2009 was a challenging and volatile year. Despite the
weak market conditions of the global manufacturing sector
and the sharp downturn in the semiconductor industry,
the Group emerged profitable for the year.
Anthony Cheng Ee Chew
Executive Chairman
2
In addition to the medical equipment contract secured
in June 2009, the Group secured another contract in
September 2009 worth S$8.7 million to supply and deliver
parts for Eco communications devices to a manufacturer
in Singapore. These two contracts represent the Group’s
successful foray into the high growth potential medical
and Eco-friendly industries. This is in line with the Group’s
long-term growth strategy of diversifying our revenue base
across a spectrum of industries to reduce our dependence
on any one particular industry, thereby reducing our
exposure to cyclical downturns of that industry.
Annual Report 2009
Backed by a strong Management team and a staff of
experts in their respective fields, the Group will continue
to maintain and grow our market share by leveraging
on our sound competencies and proven track record in
service and product excellence.
On the horizon, the Group aims to develop new pillars
in creating a stronger platform from which new and
higher growth potential businesses will springboard. As
diversification will reduce our reliance on any one industry
and exposure to cyclical downturns, we will continue to
explore joint ventures, acquisition and mergers if we can
find the right fit.
Leveraging on our core competencies in Manufacturing,
specifically Metallic Precision and Mechatronics
Integration, the Group will continue to hone our skills and
enhance our growth initiatives by offering value-added
integrated Total Automation Solutions. By adopting the
strategy of offering a host of integrated services and
products, the Group is able to rise higher up in the value
chain. Coupled with our commitment to seek out and
nurture new and high potential revenue streams, the
Group is well-positioned to capitalise on the slow but
eventual economic upturn.
In Appreciation
On behalf of the Board, we would like to extend our
gratitude to all our shareholders who have stood by us
amidst the turmoil of the economic downturn.
To our customers, associates and partners, our heartfelt
appreciation for your invaluable support. We look forward
to many more years of growing together.
During the year, although the Group did not venture into
new geographical markets, new marketing agents were
nevertheless appointed in Taiwan, Malaysia, Hong Kong
and the United States as part of our efforts to broaden our
geographical footprint across the region. We are optimistic
that our strategic partnerships with these marketing agents
will produce results in the near future.
To our fellow Directors, Management and staff, your
dedication and commitment has been, and will continue
to be, instrumental to the success of the Group. As we
springboard into a new chapter of growth, we hope that
you will continue to play a key role in HISAKA’s success
story.
Dividend
On behalf of the Board, it is our pleasure to announce
that a final dividend of 0.75 cents per ordinary share and
a special dividend of 0.25 cents per ordinary share have
been recommended by the Board. This is subject to
approval at the forthcoming Annual General Meeting.
Executive Chairman
Jackie Cheng Ee Lieng
Chief Executive Officer
Moving Forward
The experiences amassed from the economic downturn
of FY 2009 have proven to be invaluable and we are
optimistic that coupled with our strengths and resilience,
the Group will weather any future storms.
Key priorities for the Group would be to keep fixed costs,
borrowings and interest expenses low; conserve cash; and
maintain a strong balance sheet. As part of our strategy
in exploring and expanding into high growth potential
businesses in order to reduce our reliance on any one
industry, conserving cash and maintaining a strong
balance sheet accords us the added advantage of being
able to immediately capitalise on valuable opportunities
and investments.
As operating conditions and market sentiments continue
to improve, the Group will cautiously push ahead with our
growth and expansion strategies. Our two-pronged strategy
of keeping a tight rein on current operations in both our
Services and Manufacturing segments for all the industries
that we serve, including the medical and Eco-friendly
industries, while at the same time seek out and capitalise
on new and high potential business opportunities will
ensure that we are well-positioned for greater growth in the
longer term.
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Annual Report 2009
OPERATIONS REVIEW
The Group’s gross profit decreased 48.6% from S$12.3
million in FY2008 to S$6.3 million in FY2009. Gross profit
margin decreased from 21.9% in FY2008 to 18.6% in
FY2009. The decrease was mainly due to lower selling
prices resulting from customers’ cost down pressure.
GROWING ON DIVERSITY
Against the backdrop of the global economic crisis
experienced in the first half of FY 2009, the Group’s
businesses were negatively impacted. Nevertheless, in
the second half of FY2009, with rapid execution of the
Group’s growth strategies and stringent cost control
measures, coupled with improved business and market
conditions, the Group managed to emerge profitable
during the year.
The global financial turmoil also led to the decrease in
profit contribution from the Group’s joint ventures by 58.2%
from S$956,000 in FY2008 to S$400,000 in FY2009.
In line with the lower revenue recorded, the Group
recorded an overall net profit of S$681,000.
Review of Financial Performance
Balance Sheet
Cash and cash equivalents decreased from S$17.8
million as at 30 September 2008 to S$15.1 million as at
30 September 2009. Trade and other receivables as at
30 September 2009 stands at S$16.4 million compared
to S$13.8 million as at 30 September 2008. The increase
was due to the increase in revenue in the last quarter of
FY2009. Inventories decreased from S$13.2 million as at
30 September 2008 to S$7.5 million as at 30 September
2009. The decrease was due to faster inventories turnover
as a result of improved revenue in the second half year of
FY2009.
Income statement
The Group’s revenue decreased 39.3% from S$56.3 million
in FY2008 to S$34.2 million in FY2009. The decrease
was mainly attributable to weak market conditions in the
global manufacturing sector and the sharp downturn in
the semiconductor industry in the first half year of FY2009.
However, sales recovered in the second half year of FY2009
with revenue of S$26.4 million, a significant improvement
from S$7.8 million in first half year of FY2009.
As a result of the global slowdown in the manufacturing
sector, revenue contribution from the Manufacturing
segment decreased from 28.8% in FY2008 to 24.5% in
FY2009.
4
Annual Report 2009
to S$2.0 million; the repurchase of Share held as treasury
shares amounting to S$1.4 million; the purchase of
plant and equipment of S$0.4 million; the repayment of
finance lease of S$0.1 million; and offset by net cash
from operating activities of S$1.2 million, interest income
of S$0.2 million and share capital received from minority
shareholder of S$0.1 million.
Trade and other payables decreased from S$8.2 million as
at 30 September 2008 to S$6.1 million as at 30 September
2009. The decrease was due to shorter payment terms
accorded to suppliers for better pricing. Most of the
finance leases were fully settled in FY2009 in order to save
interest costs.
Pursuant to the Share Buy Back Mandate approved by
shareholders on 21 January 2009, the Group purchased
a total of 11,344,000 shares through market purchase on
the Singapore Stock Exchange during the financial year
ended 30 September 2009. The total amount paid to
acquire shares pursuant to the Share Buy Back Mandate
was S$1,417,000 and was deducted from shareholders’
equity. The repurchased shares are held as Treasury
Shares.
Moving Forward
The experiences gained from the economic downturn of
FY 2009 have proven to be invaluable and the Group is
optimistic that coupled with its strengths and resilience, it
will weather any future storms.
While overall business conditions and market sentiments
have improved, the Group continues to be prudent
and cautious as any adverse changes in its business
environment may wipe out earlier improvements in
performance. In the current year, the Group remains
cautiously optimistic given the uncertain state of the
global economy.
Cash flow statement
Net cash and cash equivalents held by the Group
decreased from S$17.5 million as at 30 September 2008
to S$15.1 million as at 30 September 2009. The decrease
was due to dividend payment in February 2009 amounting
5
Annual Report 2009
Board of Directors
Left to right:
first row: Anthony Cheng Ee Chew, Jackie Cheng Ee Lieng, Jessica Ong Boon Chin
second row: John Tan Lee Meng, Tan Ngee Teck, Goon Kok Loon, Chong Weng Hoe
Executive Chairman
Mr Anthony Cheng is our Executive Chairman and the
founder of our Group. He was appointed to the Board
on 23 June 2005. While he is responsible for setting our
Group’s corporate and business directions, he is also
actively involved in our PRC operations.
Mr Jackie Cheng is our Chief Executive Officer and was
appointed to the Board on 23 June 2005. While he is
responsible for the overall management and business
development of our Group, he also works closely with our
Executive Chairman to set our corporate and business
directions.
With over 20 years of experience in the automation and
semiconductor industry, Mr Cheng provides leadership
for the Group and is responsible for the expansion of our
Group overseas.
In addition, Mr Cheng is also responsible for the Group’s
corporate exercises, mergers and acquisitions and fund
raising activities.
6
Annual Report 2009
Mr Tan was formerly the Executive Chairman of Alantac
Technology Ltd. In Alantac, he was responsible for the
overall management, corporate strategic planning,
operations and marketing of the Group.
Jessica Ong Boon Chin
Executive Director – Strategic Business
Ms Jessica Ong is our Executive Director – Strategic
Business and was appointed to the Board on 28
September 2007. She assists our Chief Executive Officer
with the planning, evaluation and implementation of
business opportunities and is responsible for managing
the strategic growth of our Group.
Mr Tan graduated with a Bachelor Degree major in
Finance & Banking and minor in Accountancy from the
Northeast Louisiana University, USA. In addition to being
a member of Board of Directors of listed company, he is
also a member of Board of Directors of SID.
Ms Ong is also actively involved in the Group’s corporate
exercises, mergers and acquisitions and fund raising
activities.
Goon Kok Loon
Lead Independent Director
John Tan Lee Meng
Non-Executive Director
Mr Goon Kok Loon is our Lead Independent Director and
was appointed on 4 March 2008.
Mr John Tan is our Non-Executive Director and was
appointed on 4 March 2008.
He is Executive Chairman of Global Maritime Services
Pte Ltd. He is also an Independent Director of Yongnam
Holdings Ltd, Jaya Holdings Limited and Venture
Corporation Ltd, all of which are listed on the official list of
the SGX-ST. With over 40 years of extensive experience
in corporate management, operations and administration,
both locally and internationally, Mr Goon has been
conferred both the silver and gold public administration
medals from the Singapore Government. He is a fellow of
the Chartered Institute of Logistics and Transport.
He is Director and Managing Director of many local
companies. Backed by his extensive experience in
finance, investments and M&A, he provides investment
and consulting services to individuals and companies on
their investment and M&A exercises.
He is also an Independent Director of BRC Asia Limited
and the Non-Executive Director of See Hup Seng Limited,
both of which are listed on the official list of the SGX-ST.
Chong Weng Hoe
Independent Director
Tan Ngee Teck
Mr Chong Weng Hoe is our Independent Director and was
appointed on 4 March 2008.
Mr Tan Ngee Teck is our Non-Executive Director and was
appointed on 15 October 2009.
He is currently the Chief Executive Officer of TUV SUD
PSB Pte Ltd. Backed by extensive experience in financial
management, marketing and customer support and
project management, Mr Chong is also a director of
several companies, both locally and overseas.
In addition to being a member of the Singapore National
Council for International Electrotechnical Commission
and the Consumer Product Safety Advisory Committee,
he is also a member of the task force for the SingaporeThailand Enhanced Economic relationship (STEER).
He is Chairman and Chief Executive Officer of AMS Group,
a company that provides engineering and manufacturing
services to the semiconductor, medical and marine and
offshore industries.
He is also Executive Director of Concord Corporation
Pte Ltd, a company that provides engineering design,
project management and construction works on electrical
and instrumentation installation for the infrastructure and
process plant industry.
7
Annual Report 2009
MAnAGEMEnT TEAM
Mr Andy Yong Yew Seng
Vice President, Operations (Singapore and Malaysia)
Ms Soon Kui Eng
Financial Controller
Mr Yong is in charge of our Group’s overall operations
in Singapore and Malaysia. His responsibilities include
processing, ensuring deliveries are made on time,
forecasting inventory management and managing our
Group’s production facilities. He is also responsible for
customer relations and is involved in formulating new
strategies to improve the operational processes of our
Group.
Ms Soon is responsible for our Group’s financial
accounting, financial reporting, as well as matters related
to corporate finance of our Group. Her responsibilities also
include fund flow management, management reporting
and tax planning.
Ms Soon is recognized as a Certified Practising Accountant
by CPA Australia and a Certified Public Accountant by the
Institute of Certified Public Accountants of Singapore.
Mr Ang Yee Chuan
Vice President, Mechanical and Metallic Precision
MR Eric Lee Sui Hoi
Vice President, Finance (China)
Mr Ang is in charge of developing and expanding the
mechanical motion and metallic precision manufacturing
businesses of our Group. He is also actively involved in
our PRC offices and is overall responsible for the sales of
our PRC offices. He is also responsible for sourcing and
qualifying PRC suppliers for our Group.
Mr Lee joined our Group in March 2009 and is responsible
for the full accounts and finance spectrum for our China
offices.
Prior to joining the Group, Mr Lee was the Financial
Controller for both of the plants in Suzhou and Kunming
under the Industrial Packaging Division of the Salim
Group from 2005 to 2008. In addition, Mr Lee has over 10
years of audit experience working for a reputable public
accounting firm from 1993 to 2005.
Mr Andrew Sim Joo Chye
Vice President, Mechatronics and Integration
Mr Sim is in charge of expanding and developing the
mechatronics and systems integration business of
our Group. He is also actively involved in the day-today operations of our Group’s PRC offices and has
been instrumental in expanding the mechatronics and
integration business of our Group in the PRC.
8
Annual Report 2009
COrpOrATE InfOrMATIOn
Board of Directors
John Tan Lee Meng
Tan Ngee Teck*
Goon Kok Loon
Chong Weng Hoe
Audit Committee
Goon Kok Loon
John Tan Lee Meng
Chong Weng Hoe
Company Registration Number
200508585R
Executive Chairman
Executive Director
Lead Independent Director
Independent Director
Registrar and Share Transfer Office
Boardroom Corporate & Advisory Services Pte. Ltd.
3 Church Street
#08-01 Samsung Hub
Singapore 049483
Legal Adviser
Colin Ng & Partners LLP
36 Carpenter Street
Singapore 059915
Chairman
Remuneration Committee
Chong Weng Hoe
Chairman
Goon Kok Loon
John Tan Lee Meng
Auditors
RSM Chio Lim LLP
Certified Public Accountants
8 Wilkie Road,
#03-08 Wilkie Edge,
Singapore 228095
Partner-in-charge : Mr Teo Cheow Tong
(appointed with effect from year ended
30 September 2006)
Nominating Committee
Goon Kok Loon
Chairman
John Tan Lee Meng
Chong Weng Hoe
Tan Ngee Teck*
Principal Bankers
United Overseas Bank Limited
80 Raffles Place
UOB Plaza 1
Singapore 048624
Company Secretary
Soon Kui Eng, CPA
Registered Office
63 Sungei Kadut loop
Hisaka Industrial Building
Singapore 729484
Tel : 6455-1311
Fax : 6455-0311
Website : www.hisaka.com.sg
* Mr Tan Ngee Teck was appointed with effect from 15 October 2009.
9
Annual Report 2009
CORPORATE GOVERNANCE REPORT
The Board of Directors (the “Board”) of HISAKA Holdings Ltd. (the “Company”) is committed to setting and maintaining
a high level of corporate governance to preserve and enhance the interest of shareholders. The Company recognises
the importance of practising good corporate governance and fully supports the Code of Corporate Governance 2005
(the “Code”).
This report outlines the corporate governance framework and practices adopted by the Company with reference given
to the principles of the Code.
1. BOARD MATTERS
Principle 1: Board’s Conduct of its Affairs
The Board is responsible for overall corporate governance, strategic direction, formulation of policies and overseeing
the investment and business of the Company. The Board supervises the management of the businesses and
affairs of the Company. The main functions of the Board, apart from its statutory responsibilities are to:
•
•
•
•
•
review and approve the Company’s overall business strategies;
approve annual budgets, investment and divestment proposals and review the Company’s financial
performance;
review and assist in ensuring the adequacy of internal controls, risks management, financial reporting and
compliance;
review and approve half-year and full-year financial statements and announcements; and
assume responsibility for corporate governance.
To facilitate effective execution of its function, the Board has established the following Board Committees:
(a) the Audit Committee (“AC”);
(b) the Remuneration Committee (“RC”); and
(c) the Nominating Committee (“NC”).
The Board Committees operate under clearly defined terms of reference. The Chairman of the Board Committees
reports to the Board on the outcome of the Committees’ meetings.
The Board conducts meetings on a half-yearly basis to coincide with the announcement of the Company’s halfyear and full-year results. Ad-hoc meetings are convened as warranted by particular circumstances.
In addition to these meetings, special corporate events and actions requiring the Board’s immediate approval are
discussed via electronic mails and telephonic conference and thereafter resolved with Directors’ Resolutions in
Writing. Article 120(2) of the Company’s Articles of Association provides for telephonic conferences meetings.
The attendance of the directors at meetings of the Board and Board Committees held in the financial year ended
30 September 2009 is set out as follows:
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Annual Report 2009
Directors’ Attendance at Board and Board Committee Meetings (for the Financial Year ended 30 September
2009)
Board of
Directors
Audit
Committee
Remuneration
Committee
Nominating
Committee
Total Number of Meetings Held
4
4
2
2
4
-
-
-
4
-
-
-
4
-
-
-
John Tan Lee Meng
4
4
2
2
Goon Kok Loon
4
4+
2
2+
Chong Weng Hoe
4
4
2+
2
Name of Director
+
+
Chairman
Matters Requiring Board Approval
The Company has adopted internal guidelines on the following corporate events and actions that require Board
approval:
(a) (b) (c) (d) (e) (f ) announcement of results;
audited results and annual reports;
transactions in acquisition and disposal;
changes in corporate strategies;
declaration of interim dividends and proposed final dividends; and
all matters, which are delegated to Board Committees, are to be reported to and monitored by the Board.
Training of Directors
The Company does not have a formal training program for the Directors but newly appointed Directors are
provided with extensive information on the Company’s businesses and governance practices. Directors also have
the opportunity to visit the Company’s operational facilities and meet up with the Management to familiarise with
the business operations.
Principle 2: Board Composition and Balance
The Board of Directors comprises seven (7) Directors, two (2) of whom are independent.
The Directors of the Company as at the date of this statement are:
1. Mr Anthony Cheng Ee Chew 2. Mr Jackie Cheng Ee Lieng 3. Ms Jessica Ong Boon Chin 4. Mr John Tan Lee Meng 5. Mr Tan Ngee Teck*
6. Mr Goon Kok Loon 7. Mr Chong Weng Hoe (Executive Chairman)
(Chief Executive Officer)
(Executive Director)
(Non-Executive Director)
(Lead Independent Director)
(Independent Director)
* Mr Tan Ngee Teck was appointed with effect from 15 October 2009.
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Annual Report 2009
Key information regarding the Directors is set out on pages 6 and 7 of this Annual Report.
Given the nature and scope of the Company’s operations, the Board considers its current size sufficient and
appropriate. The Board is considered to have competent and qualified Directors who provide the Company with
a good balance of accounting, finance and management expertise with strategic planning experience and sound
industry knowledge.
Non-executive members of the Board exercise no management functions in the Company or any of its subsidiaries.
Although all the Directors have equal responsibility for the performance of the Company, the non-executive
directors are particularly important in ensuring that the strategies proposed by the executive Management are fully
discussed and rigorously examined and taken into account the long-term interests, not only of the shareholders,
but also of the employees, customers and suppliers of the Company.
The Board considers its Independent Directors to be of sufficient calibre and number and that their views to be of
sufficient weight, i.e. that no individual or small group can dominate the Board’s decision-making processes. They
have no financial or contractual interests in the Company other than by way of their fees.
Principle 3: Executive Chairman and Chief Executive Officer (“CEO”)
The Company has a separate Executive Chairman and CEO. There is a clear division of responsibilities between
the Executive Chairman and the CEO to ensure a balance of power and authority. The Executive Chairman, Mr
Anthony Cheng Ee Chew and the CEO, Mr Jackie Cheng Ee Lieng are related.
The CEO holds an executive position as he has considerable industry experience and remains involved in significant
corporate matters, especially those of strategic nature. The Executive Chairman is primarily responsible for the
effective working of the Board. The responsibilities of the Executive Chairman include:
(a) scheduling of meetings (with the assistance of the company secretary) to enable the Board to perform its
duties responsibly while not interfering with the flow of the Company’s operations;
(b) preparing meeting agenda in consultation with the CEO;
(c) assisting in ensuring the Company’s compliance with the Code; and
(d) leading the Board in deliberation and resolution of corporate affairs and management actions.
The Board has delegated the day-to-day running of the Company to the CEO. Both the Executive Chairman and
the CEO exercise control over the quality, quantity and timeliness of information flow between the Board and the
Management.
The Board considers meeting the objectives of the Code as no one individual holds a considerable concentration
of power in the Company.
Principle 4: Board Membership
The Nominating Committee (“NC”) comprises the following four (4) Directors, all non-executive, two (2) of whom,
including the Chairman, are independent.
Mr Goon Kok Loon (Chairman)
Mr John Tan Lee Meng Mr Chong Weng Hoe Mr Tan Ngee Teck*
* Mr Tan Ngee Teck was appointed with effect from 15/10/2009.
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Annual Report 2009
The role of the NC is to oversee the appointment and induction process for directors. Its responsibilities include:
(a)
(b)
(c)
re-nomination of the directors having regard to the director’s contribution and performance;
determining annually whether or not a director is independent; and
assessing the effectiveness of the Board as a whole.
Each member of the NC shall abstain from voting on any resolution in respect of the assessment of his performance
or re-nomination as a Director.
In determining the independence of Directors annually, the NC has reviewed and is of the view that Messrs Goon
Kok Loon and Chong Weng Hoe are independent.
Consistent with the Code, the Chairman of the NC is independent and is not associated with any substantial
shareholders of the Company.
The NC considers and makes recommendations to the Board concerning the appropriate structure, size and
needs of the Board in relation to the appropriate skills mix, personal qualities and experience required for the
effective performance of the Board. The NC also recommends all appointment and retirement of Directors and
considers candidates to fill new positions created through expansion and vacancies which occurred through
resignation, retirement or for any other reasons.
Candidates are selected based on their character, judgment, business experience and acumen. Where a Director
has multiple board representations, the NC will evaluate whether or not a Director is able to and has been adequately
carrying out his or her duties as Director of the Company. The final approval of a candidate is determined by the
Board as a whole.
The Company’s Articles of Association requires that at each Annual General Meeting of the Company, one third
of the Directors, or the number nearest to but not less than one third, to retire by rotation at every annual general
meeting (AGM). These Directors may offer themselves for re-election, if eligible. A retiring Director is eligible for
re-election by the shareholders of the Company at the Annual General Meeting.
Principle 5: Board Performance
The NC put in their best effort to ensure that the Directors appointed to the Board possess the relevant background,
experience and knowledge which enable a balanced and well-considered decision to be made by the Board.
A formal evaluation of the Board’s performance is undertaken collectively by the Board annually. The Board’s
performance will also be evaluated informally by the NC with inputs from the other Board members and the Chief
Executive Officer.
Principle 6: Access to Information
Directors receive a regular supply of adequate and timely information from the Management on the Company
so that they are equipped to play as full a part as possible in the Board meetings. Detailed Board papers are
prepared for each Board meeting and circulated in advance of each meeting. The Board papers include sufficient
information on the financial, business and corporate issues for the Directors to be properly prepared for discussing
the agenda at the Board meetings.
13
Annual Report 2009
All Directors have unrestricted access to the Company’s records and information. The Directors also liaise with the
Senior Management as required and may consult with other employees and seek additional information on request.
In addition, the Directors have separate and independent access to the advice and services of the Company
Secretary, who is responsible to the Board for ensuring that established procedures and relevant statutes and
regulations are complied with.
Should a Director require independent professional advice concerning any aspect of the Company’s operations or
undertakings in order to fulfill his duties and responsibilities as a Director, the Board may appoint, at the Company’s
expense, a professional adviser to assist.
2. REMUNERATION MATTERS
Principle 7: Procedures for Developing Remuneration Policies
Principle 8: Level and Mix of Remuneration
The Remuneration Committee (“RC”) comprises the following three (3) Directors, all non-executive, two (2) of
whom, including the Chairman, are independent.
Mr Chong Weng Hoe (Chairman)
Mr Goon Kok Loon Mr John Tan Lee Meng The RC reviews and approves recommendations on the remuneration packages for the executive Directors
and key executives. No Director is involved in deciding his own remuneration. The review covers all aspects of
remuneration, including but not limited to Directors’ fees, salaries, allowances, bonuses, options, and benefits-inkind.
In setting the remuneration packages for its executive Directors and key executives, the Company has made a
comparative study on the remuneration packages within the industry and comparable companies and taken into
account the performance of the Company and that of its executive Directors and key executives. The Company’s
remuneration policy is to provide compensation packages at the prevailing market rates which reward successful
performance so as to attract, retain and motivate executive Directors and key executives.
The independent and non-executive Directors are paid Directors’ fees, in accordance to their contribution,
taking into account factors such as effort, time spent and the responsibilities of the Directors. Directors’ fees are
recommended by the Board for approval by shareholders at the Company’s Annual General Meetings.
Messrs Anthony Cheng Ee Chew, Jackie Cheng Ee Lieng and Jessica Ong Boon Chin are paid based on their
Service Agreements with the Company. The Agreements are for an initial period of three years with effect from 8
May 2008. The Agreements provide for termination by either party upon giving not less than three months’ notice
in writing.
14
Annual Report 2009
Principal 9: Disclosure on Remuneration
Details of remuneration and fees paid to the Directors of the Company in the financial year ended 30 September
2009 are set out below:
Remuneration Band (in SGD)
Number of Directors
2009
$500,000 and above
1
$250,000 to S$499,999
1
Less than $250,000
4
A breakdown showing the level and mix of each individual Director’s remuneration for the financial year ended 30
September 2009 is set out below:
Name of Directors
Salary
(%)
Bonus
(%)
Fees
(%)
Other
Benefits
(%)
Total
(%)
Options
granted
during the
year
1. Mr Anthony Cheng Ee Chew
84.1
7.0
-
8.9
100
-
2. Mr Jackie Cheng Ee Lieng
78.3
6.5
-
15.2
100
-
3. Ms Jessica Ong Boon Chin
86.2
7.2
-
6.6
100
-
4. Mr John Tan Lee Meng
-
-
100
-
100
-
5. Mr Goon Kok Loon
-
-
100
-
100
-
6. Mr Chong Weng Hoe
-
-
100
-
100
-
Details of the remuneration of the top key executives (who are not also Directors) of the Company including a
breakdown showing the level and mix of each individual key executive’s remuneration for the financial year ended
30 September 2009 is set out below:
Other
Benefits
(%)
Salary
(%)
Bonus
(%)
Fees
(%)
73.5
6.1
-
20.4
100
Ang Yee Chuan
71.5
6.0
-
22.5
100
-
Andrew Sim Joo Chye
88.9
7.4
-
3.7
100
-
Name of Key Manager
Total
(%)
Options
granted
during the
year
Below S$250,000
Andy Yong Yew Seng
-
Soon Kui Eng
84.6
7.0
-
8.4
100
-
Eric Lee Sui Hoi
84.9
7.2
-
7.9
100
-
The RC and the Board have considered and are of the view that the remuneration policies are appropriate and fair.
As such, the Board is of the view that there is no necessity at the moment to invite the shareholders to approve the
remuneration policies at the Annual General Meeting.
The Company does not have any employee who is an immediate family member of a Director or CEO whose
remuneration exceeds S$150,000 during the year.
15
Annual Report 2009
3. ACCOUNTABILITY AND AUDIT
Principle 10: Accountability
In presenting the annual financial statements and interim announcements to shareholders, it is the aim of the
Board to provide the shareholders with a balanced assessment of the Company’s position and prospects. The
Management currently provides the executive Directors with detailed Management accounts of the Company’s
performance, position and prospect on a half-yearly basis. Non-executive and independent Directors are briefed
on significant matters when required and receive appropriate detailed reports on a regular basis.
Principle 11: Audit Committee
The Audit Committee (“AC”) comprises the following three (3) Directors, all non-executive, two (2) of whom,
including the Chairman, are independent.
Mr Goon Kok Loon (Chairman)
Mr John Tan Lee Meng Mr Chong Weng Hoe The Board is of the view that members of the AC are appropriately qualified to discharge their responsibilities.
The main roles and responsibilities of AC includes:
a)
b)
c)
d)
e)
f ) g)
h)
reviewing the audit plans and scope of audit examination of the external auditors;
reviewing and approving the internal audit plans of the internal audit team;
reviewing the adequacy of the internal audit function;
evaluating the adequacy of the internal control systems of the Company by reviewing written reports
from the the internal and external auditors, and the Management’s responses and actions to correct any
deficiencies;
reviewing the annual and interim financial statements and announcements to shareholders before submission
to the Board for adoption;
nominating external auditors of the Company for appointment or re-appointment;
reviewing interested person transactions (as defined in Chapter 9 of the Listing Manual of the SGX-ST)
conducted during the financial year; and
considering other matters as requested by the Board.
The AC is authorised to investigate any matter within its terms of reference and has full access to the Management.
The AC has full discretion to invite any Director or executive officer to attend its meetings as well as utilise reasonable
resources to enable them to discharge their function properly.
The AC met with the external auditors separately without the presence of the Management annually.
The AC has reviewed the volume of non-audit services to the Company by the external auditors and is satisfied that
the nature and extent of such services will not prejudice the independence and objectivity of the external auditors.
The AC has recommended to the Directors the nomination of Messrs RSM Chio Lim LLP for re-appointment as
external auditors of the Company at the forthcoming Annual General Meeting.
The Company has adopted a whistle blowing policy. This policy is aimed to provide well-defined and accessible
channels in the Company through which employees may raise concerns about improper conduct within the
Company.
16
Annual Report 2009
Principal 12: Internal Controls
Principle 13: Internal Audit
The Board acknowledges that it is responsible for the overall internal control framework. However, the Board also
recognises that no cost-effective internal control system will preclude all errors and irregularities as the system is
designed to manage rather than eliminate the risk of failure to achieve its business objectives. Internal Control can
provide only reasonable and not absolute assurance against material misstatement or loss of the Company.
The Company has set up an internal audit team. Currently, there is one internal audit staff performing the internal
audit function. This internal audit staff is responsible for the review on the effectiveness and compliance of its
control system such as financial, operational and compliance controls of the Company, its subsidiaries and its
associates (both local and overseas). The internal audit staff has conducted her internal audit function on various
local and overseas subsidiaries and associates and has reported her findings directly to the AC.
At this point, the AC agreed that it would not be cost-effective for the Company to outsource its internal audit function
relating to the operations of the Company, its subsidiaries and associates to any professional firm and is satisfied
that the internal audit function can be adequately handled by the Company’s internal audit staff. Nevertheless,
the AC will continuously review the situation and would recommend to outsource the internal audit function to a
professional firm should the need arises.
4. COMMUNICATION WITH SHAREHOLDERS
Principle 14: Regular, Effective and Fair Communication with Shareholders
The Company believes in timely and accurate dissemination of information to its shareholders. The Board makes
every effort to comply with continuous disclosure obligations of the Company under the SGX-ST’s Listing Rules
and the Singapore Companies Act. Communication with shareholders is usually made through:
a)
b)
c)
d)
e)
annual reports that are prepared and issued to all shareholders;
announcements of half-year and full-year financial results containing a summary of the financial information
and affairs of the Company for the half-year period;
disclosures and announcements via SGXNET to the SGX-ST;
the Company’s website at http://www.hisaka.com.sg at which shareholders can access information; and
electronic mails to its corporate email address at [email protected].
Principle 15: Greater Shareholder Participation
The Company’s Articles of Association allow a shareholder to appoint one or two proxies to attend and vote
instead of the shareholder.
The Company is in full support of shareholder participation at Annual General Meetings.
Resolutions are as far as possible, structured separately and may be voted on independently.
The Chairpersons of the Board Committees will normally be present for all General Meetings and available to
address questions at General Meetings. External auditors are also present to assist the Directors in addressing
any queries by shareholders.
17
Annual Report 2009
5. INTERESTED PERSON TRANSACTIONS
The Company has adopted an internal policy in respect of any transactions with interested persons and has set
out the procedures for review and approval of the Company’s interested person transactions.
Interested person transactions entered into during the financial year ended 30 September 2009 are disclosed in
the relevant notes to the financial statements.
6. DEALING IN SECURITIES
The Company has a policy governing dealings in the Company’s securities by its Directors and executives within
the Company. The Company has adopted its own internal Code of Best Practices on Securities Transactions
setting out the implications of insider trading and guidance on such dealings.
Its officers are not allowed to deal in the Company’s securities during the period commencing one month before
the announcement of the Company’s financial statements for the half year and the financial year, as the case may
be, and ending on the date of the announcement of the relevant results. This has been made known to Directors
and officers of the Company.
7. MATERIAL CONTRACTS
There were no material contracts entered into by the Company or any of its subsidiaries involving the interest of
the Executive Chairman, CEO, any Director, or controlling shareholder.
8. RISK MANAGEMENT POLICIES
The Board acknowledges that risks are inherent in business and there are commercial risks to be taken in the
course of generating a return on business activities. The primary task of identifying business risks lies with the
Management. The Management regularly reviews the Company’s businesses and operational activities to identify
areas of significant business risks as well as implement appropriate measures to control and mitigate these risks.
The Management reviews all the significant control policies and procedures and highlights all significant matters
to the Board and the AC.
STATUS REPORT ON USE OF IPO PROCEEDS
As of 30 September 2009, the Company has utilised approximately S$2,525,000, comprising of S$181,000 for expansion
of manufacturing facilities, S$937,000 for expansion of the sales and marketing team and S$1,407,000 for working
capital. Management has confirmed that this is in line with the Company’s planned utilisation of funds.
18
Annual Report 2009
Directors’ Report
The directors of the company are pleased to present their report together with the audited financial statements of the
company and of the group for the financial year ended 30 September 2009.
1.
Directors at Date of Report
The directors of the company in office at the date of this report are:
(Executive Chairman)
(Chief Executive Officer)
Chong Weng Hoe
(Independent Director)
Goon Kok Loon
(Lead Independent Director)
(Executive Director)
John Tan Lee Meng
Tan Ngee Teck
2.
Arrangements to Enable Directors to Acquire Benefits by Means of the Acquisition of Shares and
Debentures
Neither at the end of the financial year nor at any time during the financial year did there subsist any arrangement
whose object is to enable the directors of the company to acquire benefits by means of the acquisition of shares
or debentures in the company or any other body corporate.
3.
Directors’ Interests in Shares and Debentures
The directors of the company holding office at the end of the financial year had no interests in the share capital of
the company and related companies as recorded in the register of directors’ shareholdings kept by the company
under section 164 of the Companies Act, Cap. 50 except as follows:
Ordinary shares
Shareholding in which the director Shareholding in which the director is
has direct beneficial interest
deemed to have a beneficial interest
Name of directors
The company
At beginning
of year
At end of year
At beginning
of year
At end of year
Number of shares of no par value
–
–
97,847,026
77,847,026
4,645
5,838
–
–
The ultimate parent company
U9 Investment Pte. Ltd.
By virtue of section 7 of the Companies Act, Cap. 50, the above director with shareholdings is deemed to have an
interest in all the related corporations of the company.
The directors’ interests as at 21 October 2009 were the same as those at the end of the year.
19
Annual Report 2009
Directors’ Report
4.
Contractual Benefits of Directors
Since the beginning of the financial year, no director of the company has received or become entitled to receive
a benefit which is required to be disclosed under section 201(8) of the Companies Act, Cap. 50, 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 financial statements. There were certain transactions (shown in the financial statements under related party transactions) with
corporations in which certain directors have an interest.
5.Options To Take Up Unissued Shares
During the financial year, no option to take up unissued shares of the company or any corporation in the group
was granted.
6.Options Exercised
During the financial year, there were no shares of the company or any corporation in the group issued by virtue of
the exercise of an option to take up unissued shares.
7.
Unissued Shares Under Option
At the end of the financial year, there were no unissued shares under option.
8.Audit Committee
The members of the audit committee at the date of this report are as follows:
Goon Kok Loon
(Chairman of audit committee and independent and non-executive director)
Chong Weng Hoe (Independent and non-executive director)
John Tan Lee Meng (Non-Executive Director)
The audit committee performs the functions specified by section 201B(5) of the Companies Act. Among others, it
performed the following functions:
•
•
•
•
•
Reviewed with the independent external auditors their audit plan;
Reviewed with the independent external auditors their report on the financial statements and the assistance
given by the company’s officers to them;
Reviewed with the internal auditors the scope and results of the internal audit procedures;
Reviewed the financial statements of the group and the company prior to their submission to the directors of
the company for adoption; and
Reviewed the interested person transactions (as defined in Chapter 9 of the Listing Manual of SGX).
Other functions performed by the audit committee are described in the report on corporate governance included
in the annual report. It also includes an explanation of how independent auditor objectivity and independence is
safeguarded where the independent auditors provide non-audit services.
The audit committee has recommended to the board of directors that the independent auditors, RSM Chio Lim LLP,
be nominated for re-appointment as independent auditors at the next annual general meeting of the company.
20
Annual Report 2009
Directors’ Report
9.Independent Auditors
The independent auditors, RSM Chio Lim LLP, have expressed their willingness to accept re-appointment.
10.Subsequent Developments
There are no significant developments subsequent to the release of the group’s and the company’s preliminary
financial statements, as announced on 24 November 2009, which would materially affect the group’s and the
company’s operating and financial performance as of the date of this report.
On Behalf of the Directors
Director
Director
1 December 2009
21
Annual Report 2009
Statement by Directors
In the opinion of the directors, the accompanying financial statements are drawn up so as to give a true and fair view
of the state of affairs of the group and of the company as at 30 September 2009 and the results, changes in equity and
cash flows of the group and the changes in equity of the company for the year ended on that date and 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
Director
Director
1 December 2009
22
Annual Report 2009
Independent Auditors’ Report
to the Members of HISAKA Holdings Ltd. (Registration No: 200508585R)
We have audited the accompanying financial statements of HISAKA Holdings Ltd. and its subsidiaries (the group),
which comprise the balance sheets of the group and the company as at 30 September 2009, and the income statement,
statement of changes in equity and cash flow statement of the group, and statement of changes in equity of the company
for the year then ended, and a summary of significant accounting policies and other explanatory notes.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in accordance with
the provisions of the Singapore Companies Act, Cap. 50 (“the Act”) and Singapore Financial Reporting Standards. This
responsibility includes:
(a)
devising and maintaining a system of internal accounting controls sufficient to provide a reasonable assurance
that assets are safeguarded against loss from unauthorised use or disposition; and transactions are properly
authorised and that they are recorded as necessary to permit the preparation of true and fair income statements
and balance sheet and to maintain accountability of assets;
(b)
selecting and applying appropriate accounting policies; and
(c)
making accounting estimates that are reasonable in the circumstances.
Independent Auditors’ Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in
accordance with Singapore Standards on Auditing. Those standards require that we comply with ethical requirements
and plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material
misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial
statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material
misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order
to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion
on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting
policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall
presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit
opinion.
23
Annual Report 2009
Independent Auditors’ Report
to the Members of HISAKA Holdings Ltd. (Registration No: 200508585R)
Opinion
In our opinion,
(a)
the consolidated financial statements of the group and the balance sheet and the statement of changes in equity
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
30 September 2009 and the results, changes in equity and cash flows of the group for the year ended on that date;
and
(b)
the accounting and other records required by the Act to be kept by the company and those subsidiaries incorporated
in Singapore of which we are the independent auditors have been properly kept in accordance with the provisions
of the Act.
RSM Chio Lim LLP
Public Accountants and
Certified Public Accountants
Singapore
1 December 2009
Partner in charge of audit: Mr Teo Cheow Tong
Effective from year ended 30 September 2006
24
Annual Report 2009
Consolidated Income Statement
Year Ended 30 September 2009
Group
Note
2009
$’000
2008
$’000
4
34,182
56,313
Cost of Sales
(27,839)
(43,970)
Gross Profit
6,343
12,343
Revenue
Other Items of Income
Interest Income
5
192
62
Other Credits
6
636
207
Other Items of Expense
Marketing and Distribution Costs
8
(2,349)
(2,652)
Administrative Expenses
8
(3,990)
(3,922)
Financial Costs
7
(8)
(96)
Other Charges
6
(275)
(2,072)
Share of Profit from Equity-Accounted Joint Venture
Profit Before Tax
Income Tax Expense
9
400
956
949
4,826
(269)
(898)
Profit, Net of Tax
680
3,928
Profit Attributable to Equity Holders of Parent, Net of Tax
681
3,929
Profit Attributable to Minority Interest, Net of Tax
(1)
Earnings Per Share
(1)
680
3,928
Cents
Cents
Earnings per Share Currency Unit
Basic
10
0.35
2.42
Diluted
10
0.35
2.42
The accompanying notes form an integral part of these financial statements.
25
Annual Report 2009
Balance Sheets
As at 30 September 2009
Group
Company
2009
$’000
2008
$’000
2009
$’000
2008
$’000
2,581
–
2,021
–
2,794
–
1,621
–
–
5,403
–
5,000
–
5,348
–
5,000
4,602
4,415
10,403
10,348
7,546
16,384
692
15,060
13,193
13,828
492
17,768
–
5,217
49
10,769
–
3,118
79
12,387
Total Current Assets
39,682
45,281
16,035
15,584
Total Assets
44,284
49,696
26,438
25,932
24,229
(1,417)
14,648
226
24,229
–
15,973
207
24,229
(1,417)
3,423
–
24,229
–
1,592
–
Equity, Attributable to Equity Holders of
Parent, Total
Minority Interest
37,686
63
40,409
1
26,235
–
25,821
–
Total Equity
37,749
40,410
26,235
25,821
80
16
100
84
–
–
–
–
96
184
–
–
288
6,130
21
874
8,178
50
35
168
–
–
111
–
Total Current Liabilities
6,439
9,102
203
111
Total Liabilities
6,535
9,286
203
111
44,284
49,696
26,438
25,932
Note
ASSETS
Non-Current Assets
Property, Plant and Equipment
Investment in Subsidiaries
Investment in Joint Venture
Other Receivables
12
13
14
16
Total Non-Current Assets
Current Assets
Inventories
Trade and Other Receivables
Other Assets
Cash and Cash Equivalents
EQUITY AND LIABILITIES
Equity
Share Capital
Treasury Shares
Retained Earnings
Other Reserves, Total
Non-Current Liabilities
Deferred Tax Liabilities
Finance Leases
15
16
17
18
19
19
9
20
Total Non-Current Liabilities
Current Liabilities
Income Tax Payable
Trade and Other Payables
Finance Leases
21
20
Total Equity and Liabilities
26
Annual Report 2009
Statements of Changes in Equity
Foreign
Currency
Share
Group
Treasury Translation Statutory
Capital
Shares
Reserve
Reserve
$’000
$’000
$’000
$’000
Retained
Parent
Earnings Sub- total
$’000
$’000
Minority
Total
Interest
Equity
$’000
$’000
Current Year:
Opening Balance at 1 October
2008
24,229
–
119
88
15,973
40,409
1
40,410
Items of Income Recognised
Directly in Equity:
Currency Translation Differences
–
–
19
–
–
19
–
19
Net Income Recognised Directly
in Equity
–
–
19
–
–
19
–
19
Profit for the Year
–
–
–
–
681
681
(1)
680
Total Recognised Income and
Expense for the Year
–
–
19
–
681
700
(1)
699
–
–
–
–
–
–
–
–
–
Other Movements in Equity:
Dividend Paid (Note 11)
–
Purchase of Treasury Shares
(Note 19)
–
Deemed dilution of interest in
subsidiary
–
Total Other Movements in
Equity
–
(1,417)
–
–
24,229
(1,417)
138
88
Closing Balance at 30
September 2009
(1,417)
–
27
(2,006)
(2,006)
–
(2,006)
(1,417)
–
(1,417)
–
63
63
(2,006)
(3,423)
63
(3,360)
14,648
37,686
63
37,749
Annual Report 2009
Statements of Changes in Equity
Foreign
Currency
Share
Group
Treasury Translation Statutory
Capital
Shares
Reserve
Reserve
$’000
$’000
$’000
$’000
Retained
Parent
Earnings Sub- total
$’000
$’000
Minority
Total
Interest
Equity
$’000
$’000
Previous Year:
Opening Balance at 1 October
2007
10,510
–
(20)
76
12,056
22,622
2
22,624
Currency Translation Differences
–
–
139
–
–
139
–
139
Transfer from/(to) Statutory
Reserves
–
–
–
12
(12)
–
–
–
Net Income Recognised Directly
in Equity
–
–
139
12
Profit for the Year
–
–
–
–
3,929
3,929
(1)
3,928
Total Recognised Income and
Expense for the Year
–
–
139
12
3,917
4,068
(1)
4,067
14,720
–
–
–
–
14,720
–
14,720
Items of Income and Expense
Recognised Directly in Equity:
(12)
139
–
139
Other Movements in Equity:
Issue of Share Capital
(Note 19)
Initial Public Offering Costs (“IPO
costs”) (Note 19)
(1,001)
–
–
–
–
(1,001)
–
(1,001)
Total Other Movements in Equity
13,719
–
–
–
–
13,719
–
13,719
Closing Balance at 30 September
2008
24,229
–
119
88
15,973
40,409
1
40,410
28
Annual Report 2009
Statement of Changes in Equity
Retained
Earnings /
Company
Share
Treasury
(Accumulated
Capital
Shares
Losses)
Total
$’000
$’000
$’000
$’000
Current Year:
Opening Balance at 1 October 2008
24,229
–
1,592
25,821
Profit for the Year
–
–
3,837
3,837
Total Recognised Income for the Year
–
–
3,837
3,837
Dividends Paid (Note 11)
–
–
(2,006)
(2,006)
Purchase of Treasury Shares (Note 19)
–
(1,417)
–
(1,417)
(2,006)
(3,423)
24,229
(1,417)
3,423
26,235
Closing Balance at 30 September 2009
–
(1,417)
Previous Year:
Opening Balance at 1 October 2007
10,510
–
Profit for the Year
–
–
1,638
(46)
10,464
1,638
Total Recognised Income for the Year
–
–
1,638
1,638
Issue of Share Capital (Note 19)
14,720
–
–
14,720
Initial Public Offering Costs (“IPO costs”)
(1,001)
–
–
(1,001)
13,719
–
–
13,719
Closing Balance at 30 September 2008
24,229
–
1,592
25,821
29
Annual Report 2009
Consolidated Cash Flow Statement
Group
2009
$’000
Cash Flows From Operating Activities
Profit Before Tax
Depreciation of Property, Plant and Equipment
Interest Expense
Interest Income
Gain on Deemed Disposal of Interest in Subsidiary
Gain on Disposal of Plant and Equipment
Plant and Equipment Written Off
Share of the Profit of Joint Venture
IPO Costs Charged to income statement
2008
$’000
949
573
8
(192)
(37)
(2)
3
(400)
–
4,826
630
96
(62)
–
(5)
–
(956)
1,149
902
264
(2,533)
(200)
(2,048)
5,647
5,678
(264)
6,096
1,304
(6,770)
1,279
Net Cash Flows from Operations Before Interest and Tax
Income Tax Paid
2,032
(876)
7,323
(1,162)
Net Cash Flows From Operating Activities
1,156
6,161
Operating Cash Flows before Changes in Working Capital
Cash Restricted in Use
Other Assets
Trade and Other Payables
Inventories
Cash Flows From Investing Activities
Purchase of Property ,Plant and Equipment
Disposal of Plant and Equipment
Interest Received
Proceeds from Shares Issued to Minority Interest in Subsidiary
Net Cash Flows Used in Investing Activities
Cash Flows From Financing Activities
Decrease in Finance Leases
Interest Paid
Dividends Paid
Proceeds from Issuance of Share
IPO costs
Purchase of Treasury Shares
Net Cash Flows (Used in) From Financing Activities
Net (Decrease) Increase in Cash and Cash Equivalents
Cash and Cash Equivalents, Cash Flow Statement, Beginning
Balance
Cash and Cash Equivalents, Cash Flow Statement, Ending
Balance (Note 18)
30
(370)
6
192
100
(488)
11
62
–
(72)
(415)
(97)
(8)
(2,006)
–
–
(1,417)
(3,528)
(2,526)
(96)
(2,000)
14,720
(2,150)
–
7,948
(2,444)
13,694
17,504
3,810
15,060
17,504
Annual Report 2009
Notes to the Financial Statements
30 September 2009
1.
General
The company is incorporated in Singapore with limited liability. The financial statements are presented in
Singapore dollars and they cover the parent and the group’s subsidiaries. The financial statements were approved
and authorised for issue by the board of directors on 1 December 2009.
The company is an investment holding company. It is listed on the Singapore Exchange Securities Trading
Limited.
The principal activities of the subsidiaries are as disclosed in Note 13 below.
The registered office is: 63 Sungai Kadut, Hisaka Industrial Building, Singapore 729484. The company is domiciled
in Singapore.
Many countries in the region and elsewhere, including Singapore, are experiencing economic difficulties as a
consequence of the current turmoil in the worldwide financial markets. This has resulted in violent fluctuations
in foreign currency exchange rates, volatile share and commodity prices, uncertainty of the availability of bank
finance to suppliers and customers and a slowdown in growth. The current financial crisis has affected and will
continue to have an adverse impact on the group’s business, financial condition, results of operations, cash flows
and prospects for the foreseeable future. The recoverability of the assets and the ability of the group to maintain
or pay its debts as they mature are dependent to a large extent on the efficacy of the fiscal and other measures
undertaken by these countries to achieve economic recovery. These measures are beyond the group’s control.
2.
Summary of Significant Accounting Policies
Accounting Convention
The financial statements have been prepared in accordance with the Singapore Financial Reporting Standards
(“FRS”) as well as all related Interpretations to FRS (“INT FRS”) as issued by the Singapore Accounting Standards
Council and the Companies Act, Cap 50. The financial statements are prepared on a going concern basis under
the historical cost convention except where an FRS requires an alternative treatment (such as fair values) as
disclosed where appropriate in these financial statements.
Basis of Presentation
The consolidation accounting method is used for the consolidated financial statements that include the financial
statements made up to the balance sheet date each year of the company and all of its directly and indirectly
controlled subsidiaries. Consolidated financial statements are the financial statements of the group presented as
those of a single economic entity. The consolidated financial statements are prepared using uniform accounting
policies for like transactions and other events in similar circumstances. All significant intragroup balances and
transactions, including income, expenses and dividends, are eliminated in full on consolidation. The equity
accounting method is used for the joint venture in the group financial statements. The results of the investees
acquired or disposed off during the financial year are accounted for from the respective dates of acquisition or up
to the dates of disposal. On disposal the attributable amount of goodwill if any is included in the determination of
the gain or loss on disposal.
31
Annual Report 2009
30 September 2009
2.
Summary of Significant Accounting Policies (Cont’d)
Basis of Preparation of the Financial Statements
The preparation of financial statements in conformity with generally accepted accounting principles requires the
management to make estimates and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. Actual results could differ from those estimates. The estimates
and assumptions are reviewed on an ongoing basis. Apart from those involving estimations, management has
made judgements in the process of applying the entity’s accounting policies. The areas requiring management’s
most difficult, subjective or complex judgements, or areas where assumptions and estimates are significant to the
financial statements, are disclosed at the end of this footnote, where applicable.
Revenue Recognition
The revenue amount is the fair value of the consideration received or receivable from the gross inflow of economic
benefits during the year arising from the course of the ordinary activities of the entity and it is shown net of any
related sales taxes, estimated returns, discounts and volume rebates. Revenue from the sale of goods is recognised
when significant risks and rewards of ownership are transferred to the buyer, there is neither continuing managerial
involvement to the degree usually associated with ownership nor effective control over the goods sold, and the
amount of revenue and the costs incurred or to be incurred in respect of the transaction can be measured reliably.
Revenue from rendering of services that are of short duration is recognised when the services are completed.
Rental revenue is recognised on a time-proportion basis that takes into account the effective yield on the asset.
Interest is recognised using the effective interest method. Dividend from equity instruments is recognised as
income when the entity’s right to receive payment is established.
Employee Benefits Contributions to defined contribution retirement benefit plans are recorded as an expense as they fall due. The
entity’s legal or constructive obligation is limited to the amount that it agrees to contribute to an independently
administered fund which is the Central Provident Fund in Singapore (a government managed retirement benefit
plan). For employee leave entitlement the expected cost of short-term employee benefits in the form of compensated
absences is recognised in the case of accumulating compensated absences, when the employees render service
that increases their entitlement to future compensated absences; and in the case of non-accumulating compensated
absences, when the absences occur. A liability for bonuses is recognised where the entity is contractually obliged
or where there is constructive obligation based on past practice.
32
Annual Report 2009
30 September 2009
2.
Income Tax
The income taxes are accounted using the asset and liability method that requires the recognition of taxes payable
or refundable for the current year and deferred tax liabilities and assets for the future tax consequence of events
that have been recognised in the financial statements or tax returns. The measurements of current and deferred
tax liabilities and assets are based on provisions of the enacted or substantially enacted tax laws; the effects of
future changes in tax laws or rates are not anticipated. Income tax expense represents the sum of the tax currently
payable and deferred tax. Current and deferred income taxes are recognised in the income statement except that
when they relate to items that initially bypass the income statement and are taken to equity, in which case they
are similarly taken to equity. Deferred tax assets and liabilities are offset when they relate to income taxes levied
by the same income tax authority. The carrying amount of deferred tax assets is reviewed at each end of the
reporting year and is reduced, if necessary, by the amount of any tax benefits that, based on available evidence,
are not expected to be realised. A deferred tax amount is recognised for all temporary differences, unless the
deferred tax amount arises from the initial recognition of an asset or liability in a transaction which (i) is not a
business combination; and (ii) at the time of the transaction, affects neither accounting profit nor taxable profit (tax
loss). A deferred tax liability is not recognised for all taxable temporary differences associated with investments in
subsidiaries, branches and associates, and interests in joint ventures because (a) the company is able to control
the timing of the reversal of the temporary difference; and (b) it is probable that the temporary difference will not
reverse in the foreseeable future.
Foreign Currency Transactions
The functional currency is the Singapore dollar as it reflects the primary economic environment in which the entity
operates. Transactions in foreign currencies are recorded in the functional currency at the rates ruling at the dates
of the transactions. At each end of the reporting year, recorded monetary balances and balances measured at fair
value that are denominated in non-functional currencies are reported at the rates ruling at the balance sheet and
fair value dates respectively. All realised and unrealised exchange adjustment gains and losses are dealt with in
the income statement except when deferred in equity as qualifying cash flow hedges. The presentation is in the
functional currency.
Translation of Financial Statements of Other Entities
Each entity in the group determines the appropriate functional currency as it reflects the primary economic
environment in which the entity operates. In translating the financial statements of an investee for incorporation
in the combined financial statements the assets and liabilities denominated in currencies other than the functional
currency of the company are translated at year end rates of exchange and the income and expense items are
translated at average rates of exchange for the year. The components of shareholders’ equity are stated at historical
value. The resulting translation adjustments (if any) are accumulated in a separate component of equity until the
disposal of that investee. The presentation is in the functional currency.
33
Annual Report 2009
30 September 2009
2.
Borrowing Costs
All borrowing costs that are interest and other costs incurred in connection with the borrowing of funds that are
directly attributable to the acquisition, construction or production of a qualifying asset that necessarily take a
substantial period of time to get ready for their intended use or sale are capitalised as part of the cost of that asset
until substantially all the activities necessary to prepare the qualifying asset for its intended use or sale are complete.
Other borrowing costs are recognised as an expense in the period in which they are incurred. The interest
expense is calculated using the effective interest rate method.
Depreciation is provided on a straight-line basis to allocate the gross carrying amounts less their residual values
over their estimated useful lives of each part of an item of these assets. The annual rates of depreciation are as
follows:
Leasehold property and improvements
–
Over the term of lease that is 5% to 20%
Plant and equipment
–
9% to 331/3%
An asset is depreciated when it is available for use until it is derecognised even if during that period the item is idle.
Fully depreciated assets still in use are retained in the financial statements.
Property, plant and equipment are carried at cost on initial recognition and after initial recognition at cost less any
accumulated depreciation and any accumulated impairment losses. The gain or loss arising from the derecognition
of an item of property, plant and equipment is determined as the difference between the net disposal proceeds, if
any, and the carrying amount of the item and is recognised in the income statement. The residual value and the
useful life of an asset is reviewed at least at each financial year-end and, if expectations differ significantly from
previous estimates, the changes are accounted for as a change in an accounting estimate, and the depreciation
charge for the current and future periods are adjusted.
Cost also includes acquisition cost, any cost 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. Subsequent cost are
recognised as an asset only when it is probable that future economic benefits associated with the item will flow to
the entity and the cost of the item can be measured reliably. All other repairs and maintenance are charged to the
income statement when they are incurred.
Segment Reporting
A business segment is a distinguishable component of an enterprise that is engaged in providing an individual
product or service or a group of related products or services and that is subject to risks and returns that are
different from those of other business segments. A geographical segment is a distinguishable component that is
engaged in providing products or services within a particular economic environment and that is subject to risks
and returns that are different from those of components operating in other economic environments.
34
Annual Report 2009
30 September 2009
2.
Subsidiaries
A subsidiary is an entity including unincorporated and special purpose entity that is controlled by the group.
Control is the power to govern the financial and operating policies of an entity so as to obtain benefits from its
activities accompanying a shareholding of more than one half of the voting rights or the ability to appoint or remove
the majority of the members of the board of directors or to cast the majority of votes at meetings of the board
of directors. The existence and effect of potential voting rights that are currently exercisable or convertible are
considered when assessing whether the group controls another entity.
In the company’s own separate financial statements, the investments in subsidiaries are stated at cost less any
provision for impairment in value. Impairment loss recognised in profit or loss for a subsidiary is reversed 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 net book values of the subsidiaries are not necessarily indicative of the
amounts that would be realised in a current market exchange.
Joint Ventures
A joint venture is a contractual arrangement with other parties to undertake an economic activity that is subject
to joint control. In the company’s own financial statements, an investment in joint venture is stated at cost less
any provision for impairment in value. Impairment loss recognised in profit or loss for a joint venture is reversed
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 net book values of the joint ventures are not necessarily indicative of the
amounts that would be realised in a current market exchange.
Losses of joint ventures in excess of the group’s interest in the relevant entity are not recognised except to the extent
that the group has an obligation. Profits on group transactions with joint ventures are eliminated on consolidation
to the extent of the group’s interest in the relevant joint venture.
Business Combinations
Business combinations are accounted for by applying the purchase method. There were none during the year.
Minority Interest
The minority interest in the net assets and net results of consolidated subsidiary are shown separately in the
consolidated balance sheet and consolidated income statement. Any minority interest in the acquiree (subsidiary)
is initially measured at the minority’s proportion of the net fair value of the assets, liabilities and contingent liabilities
recognised.
35
Annual Report 2009
30 September 2009
2.
Leased Assets
Leases are classified as finance leases if substantially all the risks and rewards of ownership are transferred to the
lessee. All other leases are classified as operating leases. At the commencement of the lease term, a finance lease
is recognised as an asset and as a liability in the balance sheet at amounts equal to the fair value of the leased
asset or, if lower, the present value of the minimum lease payments, each determined at the inception of the lease.
The discount rate used in calculating the present value of the minimum lease payments is the interest rate implicit
in the lease, if this is practicable to determine, the lessee’s incremental borrowing rate is used. Any initial direct
costs of the lessee are added to the amount recognised as an asset. The excess of the lease payments over the
recorded lease liability are treated as finance charges which are allocated to each period during the lease term so
as to produce a constant periodic rate of interest on the remaining balance of the liability. Contingent rents are
charged as expenses in the periods in which they are incurred. The assets are depreciated as owned depreciable
assets. Leases where the lessor effectively retains substantially all the risks and benefits of ownership of the leased
assets are classified as operating leases. For operating leases, lease payments are recognised as an expense in
the income statement on a straight-line basis over the term of the relevant lease unless another systematic basis is
representative of the time pattern of the user’s benefit, even if the payments are not on that basis. Lease incentives
received are recognised in the income statement as an integral part of the total lease expense. Rental income from
operating leases is recognised in the income statement on a straight-line basis over the term of the relevant lease
unless another systematic basis is representative of the time pattern of the user’s benefit, even if the payments
are not on that basis. Initial direct cost incurred in negotiating and arranging an operating lease are added to the
carrying amount of the leased asset and recognised on a straight-line basis over the lease term.
Impairment of Non-Financial Assets
Irrespective of whether there is any indication of impairment, an annual impairment test is performed at the same
time every year on an intangible asset with an indefinite useful life or an intangible asset not yet available for use. The carrying amount of other non-financial assets is reviewed at each reporting date for indications of impairment
and where an asset is impaired, it is written down through the income statement to its estimated recoverable
amount. The impairment loss is the excess of the carrying amount over the recoverable amount and is recognised
in the income statement. The recoverable amount of an asset or a cash-generating unit is the higher of its fair value
less costs to sell and its value in use. In assessing value in use, the estimated future cash flows are discounted
to their present value using a pre-tax discount rate that reflects current market assessments of the time value of
money and the risks specific to the asset. For the purposes of assessing impairment, assets are grouped at the
lowest levels for which there are separately identifiable cash flows (cash-generating units). At each reporting date
non-financial assets other than goodwill with impairment loss recognised in prior periods are assessed for possible
reversal of the impairment. An impairment loss is reversed only to the extent that the asset’s carrying amount
does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no
impairment loss had been recognised.
36
Annual Report 2009
30 September 2009
2.
Financial Assets
Initial recognition and measurement and derecognition of financial assets:
A financial asset is recognised on the balance sheet when, and only when, the entity becomes a party to the
contractual provisions of the instrument. The initial recognition of financial assets is at fair value normally
represented by the transaction price. The transaction price for financial asset not classified at fair value through
profit or loss includes the transaction costs that are directly attributable to the acquisition or issue of the financial
asset. Transaction costs incurred on the acquisition or issue of financial assets classified at fair value through profit
or loss are expensed immediately. The transactions are recorded at the trade date.
Irrespective of the legal form of the transactions performed, financial assets are derecognised when they pass the
“substance over form” based derecognition test prescribed by FRS 39 relating to the transfer of risks and rewards
of ownership and the transfer of control.
Subsequent measurement:
Subsequent measurement based on the classification of the financial assets in one of the following four categories
under FRS 39 is as follows:
1.
Financial assets at fair value through profit or loss: As at year end date there were no financial assets classified
in this category.
2.
Loans and receivables: Loans and receivables are non-derivative financial assets with fixed or determinable
payments that are not quoted in an active market. Assets that are for sale immediately or in the near term
are not classified in this category. These assets are carried at amortised costs using the effective interest
method (except that short-duration receivables with no stated interest rate are normally measured at original
invoice amount unless the effect of imputing interest would be significant) minus any reduction (directly or
through the use of an allowance account) for impairment or uncollectibility. Impairment charges are provided
only when there is objective evidence that an impairment loss has been incurred as a result of one or
more events that occurred after the initial recognition of the asset (a ‘loss event’) and that loss event (or
events) has an impact on the estimated future cash flows of the financial asset or group of financial assets
that can be reliably estimated. The methodology ensures that an impairment loss is not recognised on
the initial recognition of an asset. Losses expected as a result of future events, no matter how likely, are
not recognised. For impairment, the carrying amount of the asset is reduced through use of an allowance
account. The amount of the loss is recognised in the income statement. An impairment loss is reversed if the
reversal can be related objectively to an event occurring after the impairment loss was recognised. Typically
the trade and other receivables are classified in this category.
3.
Held-to-maturity financial assets: As at year end date there were no financial assets classified in this
category.
4.
Available for sale financial assets: As at year end date there were no financial assets classified in this
category.
37
Annual Report 2009
30 September 2009
2.
Cash and cash equivalents include bank and cash balances, on demand deposits and any highly liquid debt
instruments purchased with an original maturity of three months or less. For the cash flow statement the item
includes cash and cash equivalents less cash subject to restriction and bank overdrafts payable on demand that
form an integral part of cash management.
Derivatives
All derivatives are initially recognised and subsequently carried at fair value. Certain derivatives are entered into in
order to hedge some transactions but all the strict hedging criteria prescribed by FRS 39 are not met. In those cases,
even though the transaction has its economic and business rationale, hedge accounting cannot be applied. As a
result, changes in the fair value of those derivatives are recognised directly in the income statement and the hedged
item follows normal accounting policies.
Financial Liabilities
Initial recognition and measurement:
A financial liability is recognised on the balance sheet when, and only when, the entity becomes a party to
the contractual provisions of the instrument. The initial recognition of financial liability is at fair value normally
represented by the transaction price. The transaction price for financial liability not classified at fair value through
profit or loss includes the transaction costs that are directly attributable to the acquisition or issue of the financial
liability. Transaction costs incurred on the acquisition or issue of financial liability classified at fair value through
profit or loss are expensed immediately. The transactions are recorded at the trade date. Financial liabilities
including bank and other borrowings are classified as current liabilities unless there is an unconditional right to
defer settlement of the liability for at least 12 months after the end of the reporting year.
Subsequent measurement:
Subsequent measurement based on the classification of the financial liabilities in one of the following two categories
under FRS 39 is as follows:
1.
Financial liabilities at fair value through profit or loss: As at year end date there were no financial liabilities
classified in this category.
2.
Other financial liabilities: All liabilities, which have not been classified in the previous category fall into this
residual category. These liabilities are carried at amortised cost using the effective interest method. Trade
and other payables and borrowing are classified in this category. Items classified within trade and other
payables are not usually re-measured, as the obligation is usually known with a high degree of certainty and
settlement is short-term.
Financial Guarantees
A financial guarantee contract requires that the issuer makes specified payments to reimburse the holder for a loss
when a specified debtor fails to make payment when due. Financial guarantee contracts are initially recognised at
fair value and are subsequently measured at the greater of (a) the amount determined in accordance with FRS 37
and (b) the amount initially recognised less, where appropriate, cumulative amortisation recognised in accordance
with FRS 18.
38
Annual Report 2009
30 September 2009
2.
Fair Value of Financial Instruments
The carrying values of current financial assets and financial liabilities approximate their fair values due to the
short-term maturity of these instruments. Disclosures of fair value are not made when the carrying amount of
current financial instruments is a reasonable approximation of fair value. The fair values of non-current financial
instruments may not be disclosed separately unless there are significant items at the end of the reporting year
and in the event the fair values are disclosed in the relevant notes. The maximum exposure to credit risk is the fair
value of the financial instruments at the end of the reporting year. The fair value of a financial instrument is derived
from an active market. The appropriate quoted market price for an asset held or liability to be issued is usually the
current bid price without any deduction for transaction costs that may be incurred on sale or other disposal and,
for an asset to be acquired or liability held, the asking price.
Inventories
Inventories are measured at the lower of cost (weighted average method) and net realisable value. Net realisable
value is the estimated selling price in the ordinary course of business less the estimated costs of completion and
the estimated costs necessary to make the sale. A write down on cost is made for where the cost is not recoverable
or if the selling prices have declined. Cost includes all costs of purchase, costs of conversion and other costs
incurred in bringing the inventories to their present location and condition.
Equity
Equity instruments are contracts that give a residual interest in the net assets of the company. Ordinary shares
are classified as equity. Equity instruments are recognised at the amount of proceeds received net of incremental
costs directly attributable to the transaction. The shares have no par value. Dividends on equity are recognised as
liabilities when they are declared. Interim dividends are recognised when paid. Where the company reacquires its
own equity instruments as treasury shares, the consideration paid, including any directly attributable incremental
cost is deducted from equity attributable to the company’s equity holders until the shares are cancelled, reissued or
disposed off. Where such shares are subsequently sold or reissued, any consideration received, net of any directly
attributable incremental transaction costs and the related income tax effects, is included in equity attributable to
the company’s equity holders and no gain or loss is recognised in the income statement.
Provisions
A liability or provision is recognised when there is a present obligation (legal or constructive) as a result of a
past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the
obligation and a reliable estimate can be made of the amount of the obligation. Provisions are made using best
estimates of the amount required in settlement and where the effect of the time value of money is material, the
amount recognised is the present value of the expenditures expected to be required to settle the obligation using
a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the
obligation. The increase in the provision due to passage of time is recognised as interest expense. Changes in
estimates are reflected in the income statement in the period they occur.
39
Annual Report 2009
30 September 2009
2.
Government Grants
A government grant is recognised at fair value when there is reasonable assurance that the conditions attaching to
it will be complied with and that the grant will be received. Grants in recognition of specific expenses are recognised
as income over the periods necessary to match them with the related costs that they are intended to compensate,
on a systematic basis. Grants related to depreciable assets are allocated to income over the period in which such
assets are used in the project subsidised by the grant. Government grants related to assets, including non-monetary
grants at fair value, are presented in the balance sheet.
Critical Judgements, Assumptions and Estimation Uncertainties
The critical judgements made in the process of applying the accounting policies that have the most significant
effect on the amounts recognised in the financial statements and the key assumptions concerning the future,
and other key sources of estimation uncertainty at the balance sheet date, that have a significant risk of causing
a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed
below. These estimates and assumptions are periodically monitored to make sure they incorporate all relevant
information available at the date when financial statements are prepared. However, this does not prevent actual
figures differing from estimates.
Allowances for doubtful trade accounts:
An allowance is made for doubtful accounts for estimated losses resulting from the subsequent inability of the
customers to make required payments. If the financial conditions of the customers were to deteriorate, resulting
in an impairment of their ability to make payments, additional allowances may be required in future periods.
Management specifically analyses accounts receivables and analyses historical bad debt, customer concentrations,
customer creditworthiness, current economic trends and changes in customer payment terms when evaluating
the adequacy of the allowance for doubtful trade accounts. At the end of the reporting year, the trade receivables
carrying amount approximates the fair value and the carrying amounts might change materially within the next
financial year but these changes would not arise from assumptions or other sources of estimation uncertainty at
the end of the reporting year.
Determination of functional currency:
The group measures foreign currency translations in the respective functional currencies of the company and its
subsidiaries. In determining the functional currencies of the entities in the group, judgement is required to determine
the currency that mainly influences sales prices of goods and services and of the country whose competitive forces
and regulations mainly determines the sales prices of its goods and services. The functional currencies of the
entities in the group are determined based on management’s assessment of the economic environment in which
the company operate and the company’ process of determining sales price.
40
Annual Report 2009
30 September 2009
2.
Critical Judgements, Assumptions and Estimation Uncertainties (Cont’d)
Net realisable value of inventories:
A review is made periodically on inventory for excess inventory, obsolescence and declines in net realisable
value below cost and an allowance is recorded against the inventory balance for any such declines. These
reviews require management to consider the future demand for the products. In any case the realisable value
represents the best estimate of the recoverable amount and is based on the most reliable evidence available at
the end of the reporting year and inherently involves estimates regarding the future expected realisable value. The
usual considerations for determining the amount of allowance or write-down include ageing analysis, technical
assessment and subsequent events. In general, such an evaluation process requires significant judgment and
materially affects the carrying amount of inventories at the end of the reporting year. Possible changes in these
estimates could result in revisions to the stated value of the inventories. The carrying amount of inventories at the
end of the reporting year was $7,546,000 (2008 : $13,193,000).
Useful lives of plant and equipment:
The estimates for the useful lives and related depreciation charges for plant and equipment is based on commercial
and production factors which could change significantly as a result of technical innovations and competitor actions
in response to severe market conditions. The depreciation charge is increased where useful lives are less than
previously estimated lives, or the carrying amounts written off or written down for technically obsolete or nonstrategic assets that have been abandoned or sold. It is impracticable to disclose the extent of the possible effects.
It is reasonably possible, based on existing knowledge, that outcomes within the next financial year that are
different from assumptions could require a material adjustment to the carrying amount of the balances affected.
The carrying amount of the class of assets affected by the assumption is $928,000 (2008 : $933,000).
3.Related Party Transactions
FRS 24 defines a related party as an entity or person that directly or indirectly through one or more intermediaries
controls, is controlled by, or is under common or joint control with, the entity in governing the financial and
operating policies, or that has an interest in the entity that gives it significant influence over the entity in financial and
operating decisions. It also includes members of the key management personnel or close members of the family of
any individual referred to herein and others who have the ability to control, jointly control or significantly influence
by or for which significant voting power in such entity resides with, directly or indirectly, any such individual.
The definition includes parents, subsidiaries, fellow subsidiaries, associates, joint ventures and post-employment
benefit plans, if any.
41
Annual Report 2009
30 September 2009
3.Related Party Transactions (Cont’d)
3.1 Related companies:
There are transactions and arrangements between the company and members of the group and the effects
of these on the basis determined between the parties are reflected in these financial statements. The current
intercompany balances are unsecured without fixed repayment terms and interest unless stated otherwise. For non-current balances an interest is imputed based on the prevailing market interest rate for similar debt
less the interest rate if any provided in the agreement for the balance. For financial guarantees a fair value
is imputed and is recognised accordingly if significant where no charge is payable. The transactions were not
significant.
Intragroup transactions and balances that have been eliminated in these consolidated financial statements
are not disclosed as related party transactions and balances below.
3.2 Other related parties:
There are transactions and arrangements between the company and related parties and the effects of these
on the basis determined between the parties are reflected in these financial statements. The current related
party balances are unsecured without fixed repayment terms and interest unless stated otherwise. For noncurrent balances an interest is imputed based on the prevailing market interest rate for similar debt less the
interest rate if any provided in the agreement for the balance. For financial guarantees a fair value is imputed
and is recognised accordingly if significant where no charge is payable. Significant related party transactions:
In addition to the transactions and balances disclosed elsewhere in the notes to the financial statements, this
item includes the following: Group
Related Parties
2009
$’000
Revenue
Rental income
Purchases
Other expenses
3
70
(37)
(6)
42
2008
$’000
6
70
(154)
(16)
Annual Report 2009
30 September 2009
3.2 Other related parties: (cont’d)
Group
Company
Joint Venture
Revenue
Dividend income
Purchases
2009
$’000
2008
$’000
2,744
3,740
–
–
–
–
–
238
–
–
(172)
(389)
2009
$’000
2008
$’000
3.3 Key management compensation:
Group
Salaries and other short-term employee benefits
2009
$’000
2008
$’000
1,625
2,001
The above amounts are included under employee benefits expense. Included in the above amounts are the
following items:
Group
Remuneration of directors of the company
Fees to directors of the company
Fees to a director of the group
2009
$’000
2008
$’000
1,014
1,335
110
63
30
27
Key management personnel are directors and those persons having authority and responsibility for
planning, directing and controlling the activities of the group, directly or indirectly. The above amounts for
key management compensation are for all the directors and five key management personnel.
Further information about the remuneration of individual directors is provided in the report on corporate
governance.
43
Annual Report 2009
30 September 2009
3.4 Other receivables from and other payables to related parties:
The trade transactions and the trade receivables and payables balances arising from sales and purchases of
goods and services are disclosed elsewhere in the notes to the financial statements.
The movements in other receivables from and other payables to related parties are as follows:
Related Party
Group
2009
$’000
Other receivables:
Balance at beginning of year – debit
Amounts received during the year
Dividend receivable from joint venture
Balance at end of year – debit
2008
$’000
415
(415)
–
–
85
(85)
415
415
Shareholders
Group
2009
$’000
2008
$’000
Other receivables:
–
(2,000)
Amounts paid out during the year
–
2,000
–
–
Subsidiary
Company
2009
$’000
2008
$’000
7,700
5,000
Dividend receivable
4,000
2,500
Other receivables:
Interest receivable
Loan
Foreign Exchange Adjustment
206
200
2,603
–
(4,283)
–
(23)
10,203
–
7,700
Related Party
Company
2009
$’000
2008
$’000
Other receivables:
Dividend receivable from joint venture
415
–
–
415
(415)
–
44
–
415
Annual Report 2009
30 September 2009
4.Revenue
Group
Sale of goods
Rental income
Others
2009
$’000
2008
$’000
34,059
70
53
34,182
56,184
70
59
56,313
5.Interest Income
Group
2009
$’000
Interest income
2008
$’000
192
62
6.Other Credits/(Charges)
Group
2009
$’000
2008
$’000
Allowance for impairment of inventories
Allowance for impairment on trade receivables – (loss) / reversal
Bad trade debt written off
Plant and equipment written off
Foreign exchange adjustment net gains
Gain on disposal of plant and equipment
Gain on disposal of deemed dilution of interest in subsidiary *
Initial public offering costs (a)
Other income- job credit grant from government
Others
Net
(136)
247
(136)
(3)
222
2
37
–
121
7
361
(600)
(323)
–
–
192
5
–
(1,149)
–
10
(1,865)
Presented in the income statement as:
Other credits
Other charges
Net
636
(275)
361
207
(2,072)
(1,865)
(a)Included non-statutory audit fees of $108,000 to independent external auditors, in connection with share issue exercise in
2008.
*
Amount not taken into equity as not material.
7.Finance Costs
Group
2009
$’000
Interest expense
8
45
2008
$’000
96
Annual Report 2009
30 September 2009
8.
Employee Benefits Expense
Group
Employee benefits expense
Contributions to defined contribution plan
Other benefits
Total employee benefits expense
2009
$’000
2008
$’000
4,246
4,690
321
218
158
173
4,725
5,081
The employee benefits expenses charged to income statement are as follow:
Cost of sales
528
679
Marketing and distribution costs
1,547
1,612
Administrative expenses
2,650
2,790
Total employee benefits expense
4,725
5,081
9.Income Tax
Group
2009
$’000
Current tax
289
Deferred tax
(20)
Total income tax expense
269
2008
$’000
898
–
898
The income tax expense varied from the amount of income tax expense determined by applying the Singapore
income tax rate of 17% (2008 : 18%) to profit before income tax as a result of the following differences:
Group
2009
$’000
2008
$’000
Tax rate reconciliation:
Profit Before Tax
949
Less: Share of Profit from Equity-Accounted Joint Venture
Income tax expense at the statutory rate
Non-deductible items
Tax exemptions
Effects of change in tax rate
Deferred tax assets valuation allowance
Tax effect of profit of subsidiary under tax holiday (*)
Under / (over) adjustment to tax in respect of previous periods
Effect of different tax rates in difference countries
Other items less than 3% each
(400)
4,826
(956)
549
3,870
93
697
94
287
(51)
(161)
5
–
202
100
–
(29)
4
(25)
(76)
23
(2)
6
Total income tax expense
269
898
Effective tax rate
27.9%
19.1%
46
Annual Report 2009
30 September 2009
9.Income Tax (Cont’d)
(*)Pursuant to the relevant laws and regulation in the PRC, the group’s PRC subsidiary is exempt from PRC income tax for
two year’s commencing from the first profitable year (after deducting the losses carried forward) and a 50% reduction for
the next three years. For the year ended 30 September 2009, the PRC subsidiary is in its 5th year after its first profit making
year.
There are no income tax consequences of dividends to shareholders of the company.
In 2009, the government enacted a change in the national income tax rate from 18% to 17%.
The deferred tax amounts and movement in the year are as follows:
Net change in income
statement
Balance sheet
2009
$’000
2008
$’000
2009
$’000
2008
$’000
22
–
Deferred tax liabilities:
Excess of net book value of plant and equipment
(74)
Others
(96)
(6)
(4)
(2)
(5)
(80)
(100)
20
(5)
Tax losses carryforwards
315
10
305
(8)
Allowance for impairment
194
306
(112)
9
–
9
–
518
316
202
105
Total deferred tax liabilities
Deferred tax assets:
Foreign exchange adjustments
Total deferred tax assets
Net total of deferred tax assets / (liabilities)
Deferred tax assets valuation allowance
Balance
113
438
216
222
100
(518)
(316)
(202)
(100)
(80)
(100)
20
–
Presented in balance sheet as follows:
Deferred tax liabilities
(80)
(100)
It is impracticable to estimate the amount expected to be settled or used within one year.
The realisation of the future income tax benefits from tax loss carryforwards and temporary differences from capital
allowances is available for an unlimited future period subject to the conditions imposed by law including the
retention of majority shareholders as defined.
Temporary differences arising in connection with interests in subsidiaries and joint venture are insignificant to the
extent of the retained earnings as at balance sheet date.
47
Annual Report 2009
30 September 2009
10. Earnings per Share
The following table illustrates the numerators and denominators used to calculate basic and diluted earnings per
share of no par value:
Group
2009
$
A. Numerators: earnings attributable to equity:
Continuing operations: attributable to equity holders($’000)
B. Denominator: weighted average number of equity shares
2008
$
681
3,929
194,563,716
162,160,081
Basic (cents)
0.35
2.42
Diluted (cents)
0.35
2.42
The company and group do not have any discontinued operations.
The weighted average number of equity shares refers to shares in circulation during the period. It is after the
neutralisation of the treasury shares.
There is no dilution of earnings per share as there are no dilutive potential ordinary shares outstanding as at the
year end. The denominators used are the same as those detailed above for both basis and diluted earnings per
share.
11. Dividends on Equity Shares
Group
2009
$’000
Final tax exempt (1-tier) dividend paid of 1 cents per share
2,006
2008
$’000
–
In respect of the current year, the directors propose that final tax exempt (1-tier) dividend of 0.75 cents per share and
special tax exempt (1-tier) dividend of 0.25 cents with a total of $2,006,000 be paid to shareholders after the annual
general meeting. There are no income tax consequences. This dividend is subject to approval by shareholders
at the next annual general meeting and has not been included as a liability in these financial statements. The
proposed dividend for 2009 is payable in respect of all ordinary shares in issue at the balance sheet date and
including the new qualifying shares issued up to the date the dividend becomes payable.
48
Annual Report 2009
30 September 2009
12.Property, Plant and Equipment
Leasehold
properties and
improvements
Plant and
equipment
Total
$’000
$’000
$’000
Group
Cost:
At 1 October 2007
Additions
3,056
1,704
4,760
57
431
488
Disposals
At 30 September 2008
Additions
–
(11)
(11)
15
23
38
3,128
2,147
5,275
10
360
370
–
(31)
(31)
(3)
(6)
Disposals
3,135
(9)
2,470
5,605
Accumulated depreciation:
At 1 October 2007
995
849
1,844
Depreciation for the year
268
362
630
Disposals
–
(5)
(5)
4
8
12
1,267
1,214
2,481
217
356
573
(24)
(24)
Depreciation for the year
Disposals
–
(2)
1,482
(4)
1,542
(6)
3,024
Net book value:
At 1 October 2007
2,061
855
2,916
1,861
933
2,794
1,653
928
2,581
The depreciation expense is charged as follows:
Cost of sales
Distribution
costs
Administrative
expenses
Total
$’000
$’000
$’000
$’000
2009
154
203
216
573
2008
170
221
239
630
Certain items are under finance lease agreements (see Note 20).
The company has no property, plant and equipment.
49
Annual Report 2009
30 September 2009
13.Investment in Subsidiaries
Company
2009
$’000
2008
$’000
Unquoted equity shares at cost
5,403
5,348
Movements during the year:
At beginning of year
Additions
Less: allowance for impairment
Total at cost
5,348
152
(97)
5,403
5,141
207
–
5,348
Net book value of subsidiaries
18,993
18,565
The subsidiaries held by the company are listed below:
Name of subsidiary, country of incorporation,
place of operations and principal activities
Cost of the
investments
2009
2008
$’000
$’000
Hisaka Automation Sdn. Bhd. (a)
Malaysia
Importers, exporter of all types of industrial and automation
products including modifying and fabricating precision
engineering products
Percentage of equity
held by company
2009
2008
%
%
98
98
90
90
Hisaka Shanghai Co., Ltd (b)
The People’s Republic of China
Manufacturer, tockiest and distribution of mechanical,
mechanical motion products and alternation of precision
components
1,543
1,543
100
100
Hisaka (Singapore) Pte. Ltd. (c)
Singapore
Importers, exporter of all types of industrial and automation
products including modifying and fabricating precision
3,500
3,500
100
100
207
207
100
100
150
–
60
–
2
–
100
–
5,500
5,348
Tech Motion (Shanghai) Co., Ltd ( Formerly known as Hisaka
Trading Shanghai Co., Limited) (d)
Principal activities as importers, exporters and wholesalers
of mechatronic products, electronic products, metallic
products, rubber and plastic product
iEcopolis (Singapore) Pte. Ltd. (c)
Singapore (incorporated on 20 January 2009)
Manufacturer and supplier of eco & intelligent related products
and services
Hisaka (Hong Kong) Co., Limited (e)
Hong Kong (incorporated on 18 June 2009)
Dormant
50
Annual Report 2009
30 September 2009
13.Investment in Subsidiaries (Cont’d)
(a)
Other independent auditor. Audited by firms of accountants other than member firm of RSM International of which RSM
Chio Lim LLP in Singapore is a member. The name of the independent auditors is Horwath Malaysia.
(b) Audited by member firms of RSM International of which RSM Chio Lim LLP in Singapore is a member.
(c) Audited by RSM Chio Lim LLP.
(d)Not audited, as it is immaterial. The net tangible asset of the subsidiary is 0.3% of the group’s total net tangible asset.
(e)Not audited, as it is immaterial. The net tangible asset of the subsidiary is 0.005% of the group’s total net tangible asset.
As is required by Rule 716 of the Listing Manual of The Singapore Exchange Securities Trading Limited the audit
committee and the board of directors of the company have satisfied themselves that the appointment of different
auditors for certain of its overseas subsidiaries would not compromise the standard and effectiveness of the audit of
the group.
14.Investment in Joint Venture
Group
2009
$’000
Company
2008
$’000
–
2009
$’000
Unquoted equity shares, at cost
(*)
Share of post-acquisition profits
2,021
1,621
–
–
2,021
1,621
–
–
2,021
1,621
–
–
(*)
–
(*)
–
2008
$’000
(*)
–
Analysis of above amount denominated in non-functional
currency:
Chinese Renminbi
The joint venture held by the company is listed below:
Name of company, country of incorporation,
place of operations and principal activities
Cost of the
investments
2009
$’000
Percentage of equity held
by company
2008
$’000
2009
%
2008
%
Tianjin HIT Automation Machinery Co., Ltd (a)
Manufacturing and selling of automation machinery
(*)
–
(*)
–
50%
50%
(*)Pre-acquisition dividends receivable from joint venture was deducted from cost of investment.
The summarised financial information of the joint venture, not adjusted for the percentage ownership held by the
group, is as follows:
Assets
Liabilities
Revenues
Profit
$’000
$’000
$’000
$’000
2009
8,060
2,466
10,702
1,146
2008
7,444
2,926
11,284
3,824
(a)
Audited by member firms of RSM International of which RSM Chio Lim LLP in Singapore is a member for the purpose of
preparation of consolidated financial statements.
51
Annual Report 2009
30 September 2009
15.Inventories
Group
2009
$’000
Goods for resale
Inventories are stated after allowance. Movements in allowance:
Balance at beginning of year
Charged to income statement included in other charges
Balance at end of year
2008
$’000
7,546
13,193
(2,567)
(136)
(15)
(2,718)
(1,917)
(600)
(50)
(2,567)
The reversal of the allowance is for goods with an estimated increase in net realisable value.
Group
Cost of inventories charged to cost of goods sold in income statement
2009
$’000
2008
$’000
25,244
42,105
There are no inventories pledged as security for liabilities.
16.Trade and Other Receivables
Group
Company
2009
$’000
2008
$’000
Trade receivables:
Outside parties
Related parties (Note 3)
Bill receivables
Subtotal
15,167
(317)
960
477
16,287
11,981
(570)
1,488
427
13,326
Other receivables:
Outside parties
Subsidiary (Note 3) *
Subtotal
Total trade and other receivables
–
98
(1)
–
97
16,384
Presented in balance sheets as:
Current
Non-current
Total trade and other receivables
16,384
–
16,384
Movements in above allowance:
(Charge) / reversal for trade receivables to income
statement included in other credits / (charges)
52
2009
$’000
2008
$’000
–
–
–
–
–
–
–
–
–
–
415
87
–
–
502
13,828
–
14
–
10,203
10,217
10,217
415
3
–
7,700
8,118
8,118
13,828
–
13,828
5,217
5,000
10,217
3,118
5,000
8,118
(570)
(236)
–
–
247
6
(317)
(323)
(11)
(570)
–
–
–
–
–
–
Annual Report 2009
30 September 2009
16.Trade and Other Receivables (Cont’d)
*
The agreement for the loan receivable provides that it is unsecured, with floating rate pegged to the bank’s prime rate. The
interest is at 4% per annum has been charged for all balances due from the subsidiary except $2.5 million which pertains to
dividend declared. The carrying value of the loan approximates the fair value.
17.Other Assets
Group
2009
$’000
Deposits to secure services
Company
2008
$’000
2009
$’000
2008
$’000
18
33
–
–
Prepayments
102
136
49
79
Payments in advance to suppliers
572
323
–
–
692
492
49
79
18. Cash and Cash Equivalents
Group
Not restricted in use
2008
$’000
2009
$’000
2008
$’000
15,060
17,504
10,769
12,387
–
264
–
–
15,060
17,768
10,769
12,387
10,044
12,269
10,044
12,005
Restricted in use #a
Interest earning balances
Company
2009
$’000
The rate of interest for the cash on interest earning balances is 0.5%-2% (2008 : 0.88%-1.9%). #a
This is for amounts held by bankers to cover the bank guarantee issued.
18A. Cash and Cash Equivalents in the Cash Flow Statement:
Group
Cash
Cash restricted in use over 3 months
2009
$’000
2008
$’000
15,060
17,768
–
Cash and cash equivalents for cash flow statement purpose at end of year
53
15,060
(264)
17,504
Annual Report 2009
30 September 2009
19.Share Capital
Group and Company
Number of
ordinary shares
Share capital
000
1 October 2007
Subdivision
Issue of shares at $0.23 each
IPO costs #
30 September 2008
Purchase of treasury shares
30 September 2009
10,510
Amount
Treasury
shares
000
–
Share capital
$’000
10,510
Treasury
shares
$’000
–
136,630
–
10,510
–
64,000
–
14,720
–
–
–
(1,001)
–
200,630
–
24,229
–
–
11,344
–
1,417
200,630
11,344
24,229
1,417
#Included non-statutory audit fees of $108,000 to independent external auditors, in connection with share issue exercise in
2008.
The ordinary shares of no par value carry no right to fixed income and are fully paid. The company is not subject to
any externally imposed capital requirements.
The objectives when managing capital are: to safeguard the company’s ability to continue as a going concern,
so that it can continue to provide returns for shareholders and benefits for other stakeholders, and to provide
an adequate return to shareholders by pricing products and services commensurately with the level of risk. The
management sets the amount of capital in proportion to risk. The management manages the capital structure
and makes adjustments to it in the light of changes in economic conditions and the risk characteristics of the
underlying assets. In order to maintain or adjust the capital structure, the management may adjust the amount of
dividends paid to shareholders, return capital to shareholders, issue new shares, or sell assets to reduce debt.
Treasury shares relate to ordinary shares of the company that are held by the Company. Pursuant to the share
buyback mandate approved by shareholders, the company purchased 11,344,000 (2008 : Nil) of its ordinary
shares by way of on-market purchases at shares prices ranging from $0.12 to $0.15. The total amount paid to
purchase the shares was $1,417,000 and this is presented as a component within equity attributable to equity
holders of the company.
The group has insignificant external borrowings. The debt-to-adjusted capital ratio does not provide a meaningful
indicator of the risk of borrowings.
54
Annual Report 2009
30 September 2009
20.Finance Leases
Minimum
payments
Finance
charges
Present value
$’000
$’000
$’000
Due within one year
25
(4)
21
Due within 2 to 5 years
19
(3)
16
Total
44
(7)
37
2009
Minimum lease payments payable:
Net book value of plant and equipment under finance leases
48
Minimum
payments
Finance
charges
Present value
$’000
$’000
$’000
57
(7)
50
2008
Minimum lease payments payable:
Due within one year
Due within 2 to 5 years
Total
96
(12)
84
153
(19)
134
Net book value of plant and equipment under finance leases
161
It is a policy to lease certain of its plant and equipment under finance leases. The average lease term is 3-5 years.
For the year ended 30 September 2009, the rate of interest for finance leases is about 2.6% to 3.5% (2008 : 2.6% to
3.5%) per year. There is an exposure to fair value interest risk because the Interest rates are fixed at the contract
date. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental
payments. All lease obligations are denominated in S$. The obligations under finance leases are secured by the
lessor’s charge over the leased assets.
The carrying amount of the lease liabilities approximates the fair value.
21.Trade and Other Payables
Group
Company
2009
$’000
2008
$’000
2009
$’000
2008
$’000
5,945
7,973
–
–
5
10
–
–
5,950
7,983
–
–
88
96
168
111
Trade payables:
Outside parties and accrued liabilities
Subtotal
Other payables:
Other payables
Other – advances
Subtotal
Total trade and other payables
55
92
99
–
–
180
195
168
111
6,130
8,178
168
111
Annual Report 2009
30 September 2009
22.Statutory Reserve
Pursuant to the relevant laws and regulations for enterprises operating exclusively with foreign capital, profits of the
subsidiaries in the People’s Republic of China (“PRC”) are available for distribution in the form of cash dividends to
the investors after the subsidiaries has (1) satisfied all tax liabilities; (2) provided for losses in previous years and (3)
made appropriations to reserve fund and staff bonus and welfare fund. The subsidiaries has to appropriate at least
10% of its profit after taxation as determined in accordance with the PRC accounting standards and regulations
applicable to the subsidiaries to the reserve fund until the reserve fund reaches 50% of the subsidiaries’ registered
capital. Appropriation to the staff bonus and welfare fund is determined at the discretion of the board of directors.
The reserve fund is not free for distribution as dividends but it can be used to offset losses or be capitalised as
capital. The staff bonus and welfare fund can be used for rewards and collective welfare from employees.
The statutory reserve is not available for distribution as cash dividends.
23.Financial Instruments: Information on Financial Risks
23A. Classification of Financial Assets and Liabilities
The following table summarises the carrying amount of financial assets and liabilities recorded at the end of the
reporting year by FRS 39 categories:
Group
2009
$’000
Company
2008
$’000
2009
$’000
2008
$’000
Financial assets:
Cash and cash equivalents
15,060
17,768
10,769
12,387
Loan and receivables
16,384
13,828
10,217
8,118
At end of year
31,444
31,596
20,986
20,505
37
134
–
–
Financial liabilities:
Finance leases
Trade and other payables at amortised cost
6,130
8,178
168
111
At end of year
6,167
8,312
168
111
Further quantitative disclosures are included throughout these financial statements.
56
Annual Report 2009
30 September 2009
23.Financial Instruments: Information on Financial Risks (Cont’d)
23B.Financial Risk Management
The main purpose of the financial instruments is to raise and manage finance for the entity’s operations. The
main risks arising from the entity’s financial instruments are credit risk, interest risk, liquidity risk, foreign currency
risk and market price risk comprising interest rate and currency risk exposures. However these risks are low or
minimal. The financial instruments comprise some cash and liquid resources, receivables, and payables, and
some borrowings. The management has certain practices for the management of financial risks. However these
are not documented in formal written documents.
The management has certain strategies for the management of financial risks. These guidelines set up the short
and long term objectives and action to be taken in order to manage the financial risks. The major guidelines are
the following:
1.Minimise interest rate, currency, credit and market risk for all kinds of transactions.
2. Maximise the use of “natural hedge”: favouring as much as possible the natural off-setting of sales and
costs and payables and receivables denominated in the same currency and therefore put in place hedging
strategies only for the excess balance. The same strategy is pursued with regard to interest rate risk.
3.Enter into non-complex derivatives or any other similar instruments solely for hedging purposes.
4. All financial risk management activities are carried out and monitored by senior management staff.
5. All financial risk management activities are carried out following good market practices.
6.May consider investing in shares or similar instruments only in the case of temporary excess of liquidity and
such transactions have to be authorised by the board of directors.
With regard to derivatives, the risk management policies are as follows:
1.The management documents carefully all derivatives including the relationship between then and the hedged
items at inception and throughout their life.
2.Ineffectiveness is recognised in the income statement as soon as it arises.
3. Only high quality financial institutions are used as counterparties for derivatives.
23C. Credit Risk on Financial Assets
Financial assets that are potentially subject to concentrations of credit risk and failures by counterparties to
discharge their obligations in full or in a timely manner consist principally of cash balances with banks, cash
equivalents and receivables. The maximum exposure to credit risk is the fair value of the financial instruments at
the end of the reporting year. Credit risk on cash balances with banks and derivative financial instruments is limited
because the counter-parties are banks with acceptable credit ratings. All unencumbered bank deposits with the
banks licensed by the Monetary Authority of Singapore are guaranteed by the Singapore Government until 31
December 2010. For credit risk on receivables an ongoing credit evaluation is performed of the debtors’ financial
condition and a loss from impairment is recognised in the income statement. There is no significant concentration
of credit risk, as the exposure is spread over a large number of counter-parties and customers unless otherwise
disclosed in the notes to the financial statements. The exposure to credit risk is controlled by setting limits on the
exposure to individual customers and these are disseminated to the relevant persons concerned and compliance
is monitored by management.
57
Annual Report 2009
30 September 2009
23.Financial Instruments: Information on Financial Risks (Cont’d)
23C. Credit Risk on Financial Assets (Cont’d)
As is disclosed in Note 18, other than cash restricted in use over 3 months, cash and cash equivalents balances
represent amounts with less than 90 days maturity.
As part of the process of setting customer credit limits, different credit terms are used. The average credit period
generally granted to non-related trade receivable customers is about 30 – 120 days (2008: 30 – 120 days). But
some customers take a longer period to settle the amounts. The table below illustrates the ageing analysis:
2009
$’000
2008
$’000
14,635
10,637
211
593
Group
Net trade receivables:
Not past due
Past due 61-90 days
Past due 91-120 days
85
209
83
299
Past due more than 180 days
At end of year
The total of overdue accounts was
23
55
290
45
15,327
11,838
692
1,201
Other receivables are normally with no fixed terms and therefore there is no maturity. Concentration of trade receivable customers:
Group
2009
$’000
2008
$’000
Top 1 customer
6,385
4,480
Top 2 customers
8,291
6,038
Top 3 customers
8,950
7,357
The allowance which is disclosed in the note on trade receivables is based on individual accounts totalling $317,000
(2008: $570,000) that are determined to be impaired at the year end date. These are not secured.
58
Annual Report 2009
30 September 2009
23. Financial Instruments: Information on Financial Risks (Cont’d)
23D.Liquidity Risk
The liquidity risk is managed on the basis of expected maturity dates of the financial liabilities. The following table analyses financial liabilities by remaining contractual maturity (contractual and undiscounted
cash flows):
Group
Other financial
liabilities
Trade and
other payables
Total
$’000
$’000
$’000
2009:
Less than 1 year
25
6,130
6,155
2 – 5 years
19
–
19
At end of year
44
6,130
6,174
Less than 1 year
57
8,178
8,235
2 – 5 years
96
–
96
153
8,178
8,331
2008:
At end of year
Trade and
other payables
Company
2009
$’000
2008
$’000
Less than 1 year
168
111
At end of year
168
111
The average credit period taken to settle trade payables is about 30 – 90 days (2008 : 30 – 90 days). The other
payables are with short-term durations.
It is expected that all the liabilities will be paid at their contractual maturity. In order to meet such cash commitments
the operating activity is expected to generate sufficient cash inflows. In addition, the financial assets are held for
which there is a liquid market and that are readily available to meet liquidity needs.
Bank facilities:
Group
Undrawn borrowing facilities
2009
$’000
2008
$’000
9,082
13,581
The undrawn borrowing facilities are available for operating activities and to settle other commitments. Borrowing
facilities are maintained to ensure funds are available for forecasted operations. A monthly schedule showing the
maturity of financial liabilities and unused bank facilities is provided to management to assist them in monitoring
the liquidity risk.
59
Annual Report 2009
30 September 2009
23E.Interest Rate Risk
The following table analyses the breakdown by type of interest rate:
Group
2009
$’000
Company
2008
$’000
2009
$’000
2008
$’000
Financial assets:
Floating rate
11,202
13,319
10,046
12,021
Non-interest bearing
20,242
18,277
10,940
8,484
At end of year
31,444
31,596
20,986
20,505
37
134
–
–
Non-interest bearing
Fixed rate
6,130
8,178
168
111
At end of year
6,167
8,312
168
111
2008
$’000
2009
$’000
The interest rates are disclosed in the respective Notes 18 and 20.
Sensitivity analysis:
Group
2009
$’000
Company
2008
$’000
A hypothetical increase in interest rates by 50 basis
points would have a favourable effect on profit before
tax
56
66
50
60
tax
112
133
100
120
tax
168
200
151
180
tax
224
266
201
240
The analysis has been performed separately for fixed interest rate and floating interest rate financial assets and
liabilities. The impact of a change in interest rates on fixed interest rate financial instruments has been assessed
in terms of changing of their fair value. The impact of a change in interest rates on floating interest rate financial
instruments has been assessed in terms of changing of their cash flows and therefore in terms of the impact on
net expenses.
60
Annual Report 2009
30 September 2009
23F.Foreign Currency Risks
Analysis of amounts denominated in non-functional currency:
Cash
Trade
and other
receivables
Total
$’000
$’000
$’000
Chinese Renminbi (“RMB”)
1,035
3,437
4,472
Japanese Yen (“JPY”)
1,003
4,736
5,739
United States dollars (“USD”)
1,157
4,827
5,984
4
5
9
Euro
96
111
207
Malaysia Ringgit
42
78
120
Group
Financial assets:
At 30 September 2009:
Other currencies:
Swiss Franc
Hong Kong Dollar
1
–
1
143
194
337
3,338
13,194
16,532
Chinese Renminbi (“RMB”)
1,276
4,370
5,646
Japanese Yen (“JPY”)
1,032
3,180
4,212
United States dollars (“USD”)
1,200
4,118
5,318
Other currencies :
Swiss Franc
Euro
Malaysia Ringgit
Thai Baht
There is exposure to foreign currency risk as part of its normal business.
61
32
2
34
117
124
241
37
129
166
–
3
3
186
258
444
3,694
11,926
15,620
Annual Report 2009
30 September 2009
23F.Foreign Currency Risks (Cont’d)
Group
Trade and other
payables
$’000
Chinese Renminbi
209
Japanese Yen
1,516
United States dollars
1,605
Other currencies:
Swiss Franc
6
Euro
55
Malaysia Ringgit
31
92
3,422
Chinese Renminbi
337
Japanese Yen
2,395
3,658
Other currencies:
Swiss Franc
2
Euro
21
Malaysia Ringgit
105
128
6,518
Company
Financial assets:
Trade and other
receivables
$’000
588
Other currencies:
Hong Kong dollars
2
590
Chinese Renminbi
415
Total
415
62
Annual Report 2009
30 September 2009
23F.Foreign Currency Risks (Cont’d)
Sensitivity analysis: Group
2009
$’000
Company
2008
$’000
2009
$’000
2008
$’000
A hypothetical 10% increase in the exchange rate of the
functional currency $ against all other currencies would
have an adverse effect on profit before tax
25
32
–
–
functional currency $ against the US$ would have an
adverse effect on profit before tax
438
166
59
–
functional currency $ against the China RMB would
have an adverse effect on profit before tax
426
531
–
42
functional currency $ against the JPY would have an
adverse effect on profit before tax
422
182
–
–
The sensitivity analysis is disclosed for each currency to which the entity has significant exposure. The analysis
above has been carried out on the basis there are no hedged transactions.
24.Operating Lease Payment Commitments
At the end of reporting year the total of future minimum lease payments commitments under non-cancellable
operating leases are as follows:Group
2009
$’000
2008
$’000
Not later than one year
184
222
Later than one year and not later than five years
435
420
Later than five years
854
873
Rental expense for the year
291
197
Operating lease represent mainly rentals payable by the Group for certain of its factory premises and staff
accommodation. It mainly is from the Jurong Town Corporation. The lease period is 20 years commencing from
January 2004. The lease rental terms are negotiated for an average term of three years and rentals are subject to
an escalation clause but the amount of the rent increase is not to exceed a certain percentage. Such increases are
not included in the above amounts.
63
Annual Report 2009
30 September 2009
25.Operating Lease Income Commitments
At the end of the reporting year the total of future minimum lease receivables committed under non-cancellable
operating leases are as follows:2009
$’000
2008
$’000
58
70
Later than one year and not later than five years
–
58
Later than five years
–
–
70
70
Not later than one year
Rental income for the year
Operating lease income is for rentals receivable for certain of office premises. The lease to the tenant (a related
party) is for 36 months from 1 August 2007.
26. Contingent liabilities
Company
Corporate guarantees in favour of subsidiaries (unsecured)
2009
$’000
2008
$’000
21,786
11,000
27. Credit Facilities
Group
Guarantees (unsecured)
2009
$’000
2008
$’000
130
150
28.Financial Information by Segments
For management purposes, the group’s operating businesses are categorised according to the industry in which
their customers operate. These are grouped into the following: a. Services ;
b.Manufacturing ; and
c.Others
Segment results consist of costs directly attributable to a segment as well as those that can be allocated on a
reasonable basis.
Unallocated items comprise cash and cash equivalents, inventories, other receivables, property, plant and
equipment, short-term borrowings, trade and other payables, current tax payable, interest-bearing borrowings,
finance leases, deferred tax liabilities, financial income, financial expense, distribution costs, administrative
expenses, other credits/(charges) and income tax expense.
64
Annual Report 2009
30 September 2009
28.Financial Information by Segments (Cont’d)
Geographical segments : The group operates in three geographical regions such as the East Asia, South and
South-east Asia and other countries. East Asia comprises Hong Kong, Korea, the PRC and Taiwan. South and
South-east Asia comprises Indonesia, Malaysia, Philippines, Singapore, India, Sri Lanka, Vietnam and Thailand.
And other countries comprised Australia, Finland, France, Italy, Switzerland, United Arab Emirates, USA and
United Kingdom.
In presenting information on the basis of geographical segments, segment revenue is based on the countries of
domicile of the customers. Segment assets are based on the geographical location of the assets.
Business segments:
The following tables present the segment revenue and results and certain assets and liabilities information
regarding business segments as at 30 September 2009 and 2008.
2009
2008
Services
Manufacturing
Services
Manufacturing
Others
Total
Others
Total
$’000
$’000
$’000
$’000
$’000
$’000
$’000
$’000
25,678
8,381
123
34,182
39,993
16,191
129
56,313
1,097
703
119
1,919
3,532
3,110
111
6,753
Revenue
External sales
Results
Segment results
Unallocated expenses
(970)
(1,927)
Income tax expense
(269)
(898)
Profit for the year
680
3,928
Other Information:
Segment assets
17,197
6,481
–
23,678
17,672
7,990
–
25,662
Segment assets
– unallocated
20,606
24,034
Total assets
44,284
49,696
Segment liabilities
4,102
1,185
–
5,287
4,891
2,063
–
6,954
Segment liabilities
– unallocated
1,248
2,332
Total liabilities
6,535
9,286
65
Annual Report 2009
30 September 2009
28.Financial Information by Segments (Cont’d)
The following table analyses assets and liabilities not allocated to business segments because they are not directly
attributable to the segment or cannot be allocated to the segment on a reasonable basis:
2009
$’000
2008
$’000
1,775
2,163
Investment in Joint Venture
2,021
1,621
1,058
1,990
692
492
15,060
17,768
20,606
24,034
Borrowings
880
2,297
Tax Liabilities: Current and Deferred
368
35
1,248
2,332
19,358
21,702
Assets
Other Assets
Liabilities
Net balance at end of the year
Geographical segments:
The following table provides an analysis of the revenue by geographical market:
South and
South-east Asia
East Asia
Total revenue
Others
Total
2009
$’000
2008
$’000
2009
$’000
2008
$’000
2009
$’000
2008
$’000
2009
$’000
2008
$’000
24,014
37,381
10,000
18,756
168
176
34,182
56,313
6,202
8,954
38,082
40,742
–
–
44,284
49,696
107
190
263
298
–
–
370
488
99
69
474
561
–
–
573
630
(465)
583
354
340
–
–
(111)
923
Other geographical
information:
Segment assets
Addition of capital
expenditure
Depreciation
Impairment losses
(reversal)
66
Annual Report 2009
30 September 2009
29. Changes and Adoption of Financial Reporting Standards
For the year ended 30 September 2009 the following new or revised Singapore Financial Reporting Standards
were adopted for the first time. The new or revised standards did not require any modification of the measurement
method or the presentation in the financial statements. FRS No.
Title
FRS 107
Financial Instruments: Disclosures
FRS 107
Financial Instruments: Disclosures – Implementation Guidance
INT FRS 111
FRS102 – Group and Treasury Share Transactions
INT FRS 112
Service Concessions Arrangements (*)
INT FRS 114
FRS 19 The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their
Interaction (*)
(*) Not relevant to the entity
30.Future Changes in Financial Reporting Standards
The following new or revised Singapore Financial Reporting Standards that have been issued will be effective in
future. The transfer to the new or revised standards from the effective dates are not expected to result in material
adjustments to the financial position, results of operations, or cash flows for the following year.
Effective date for
periods beginning on
or after
FRS No.
Title
FRS 1
(Revised) Presentation of Financial Statements
1.1.2009
FRS 23
Borrowing Costs
1.1.2009
FRS 103
(Revised) Business Combinations and consecutive amendments in other
Standards (*)
1.1.2009
FRS 108
Operating Segments (*)
1.1.2009
INT FRS 113
Customer Loyalty Programs (*)
1.7.2008
INT FRS 116
Hedges of a Net Investment in a Foreign Operation (*)
1.10.2008
INT FRS 117
Distributions of Non-cash Assets to Owners (*)
1.7.2009
(*) Not relevant to the entity.
67
Annual Report 2009
STATISTICS OF SHAREHOLDINGS
As at 11 December 2009
SHAREHOLDINGS STATISTICS AS AT 11 DECEMBER 2009
Number of Shares
Number of Shares (excluding treasury shares)
Class of Equity Security
Voting Rights of Ordinary Shareholders
(excluding treasury shares)
-
200,630,026
189,286,026
Ordinary shares
On show of hands : 1 vote for each member
On a poll : 1 vote for each ordinary share
As at 11 December 2009, the total number of treasury shares held is 11,344,000 (5.99%).
DISTRIBUTION OF SHAREHOLDINGS
Size of Shareholdings
No. of
Shareholders
1 - 999
1,000 - 10,000
10,001 - 1,000,000
1,000,001 and above
Total :
0
515
382
15
912
%
No. of Shares
(excluding
treasury shares)
%
56.47
41.89
1.64
100.00
2,264,000
38,719,000
148,303,026
189,286,026
0.00
1.20
20.45
78.35
100.00
SHAREHOLDING HELD IN HANDS OF PUBLIC
As at 11 December 2009, approximately 43.21% of the issued ordinary shares of the Company is held by the public and
therefore, Rule 723 of the Listing Manual is complied with.
TWENTY LARGEST SHAREHOLDERS
Name
No. of Shares
%
U9 INVESTMENT PTE. LTD.
CONCORD CAPITAL PTE. LTD.
OCBC SECURITIES PRIVATE LTD
PHILLIP SECURITIES PTE LTD
GLOBAL EMERGING MARKETS SPECIALIST CAPITAL PTE LTD
KIM ENG SECURITIES PTE. LTD.
ANG HUNG KOON
WONG KHOON SAN
JIAN YU CONSTRUCTION PTE LTD
YONG YEW SENG
UOB KAY HIAN PTE LTD
TAN LEE WAH
CIMB-GK SECURITIES PTE. LTD.
CITIBANK CONSUMER NOMINEES PTE LTD
LEE WAN TANG
DBS VICKERS SECURITIES (S) PTE LTD
KASAN
SIA LING SING
HONG LEONG FINANCE NOMINEES PTE LTD
CHENG EE HUANG
Total :
77,847,026
20,000,000
12,400,000
6,412,000
6,238,000
5,058,000
4,095,000
4,095,000
4,000,000
1,675,000
1,601,000
1,590,000
1,122,000
1,110,000
1,060,000
882,000
760,000
750,000
720,000
657,000
152,072,026
41.13
10.57
6.55
3.39
3.30
2.67
2.16
2.16
2.11
0.88
0.85
0.84
0.59
0.59
0.56
0.47
0.40
0.40
0.38
0.35
80.35
68
Annual Report 2009
STATISTICS OF SHAREHOLDINGS
As at 11 December 2009
SUBSTANTIAL SHAREHOLDERS AS AT 11 DECEMBER 2009
as recorded in the Register of Substantial Shareholders
Number of Ordinary Shares
(as at 11 December 2009)
Name of Substantial Shareholder
Direct Interest
Deemed Interest
Total
%
U9 Investment Pte Ltd
77,847,026
-
77,847,026
41.13
Concord Capital Pte Ltd
20,000,000
-
20,000,000
10.57
-
77,847,026
77,847,026
41.13
Chim Swee Yong (2)
-
20,000,000
20,000,000
10.57
Chim Yong Fah
-
20,000,000
20,000,000
10.57
-
20,000,000
20,000,000
10.57
Cheng Ee Chew
Tan Ngee Teck
(1)
(3)
(4)
(1) Cheng Ee Chew is deemed to be interested in the 77,847,026 shares in which U9 Investment Pte Ltd has an interest.
(2) Chim Swee Yong is deemed to be interested in the 20,000,000 shares in which Concord Capital Pte Ltd has an interest.
(3) Chim Yong Fah is deemed to be interested in the 20,000,000 shares in which Concord Capital Pte Ltd has an interest.
(4) Tan Ngee Teck is deemed to be interested in the 20,000,000 shares in which Concord Captial Pte Ltd has an interest.
69
Annual Report 2009
NOTICE OF ANNUAL GENERAL MEETING
NOTICE IS HEREBY GIVEN that the Annual General Meeting of the Company will be held at 63 Sungei Kadut Loop,
Hisaka Industrial Building, Singapore 729484 on Wednesday, 20 January 2010 at 10.00 a.m. to transact the following
businesses:
ORDINARY BUSINESS:
1.
To receive and consider the Directors’ Report and Audited Accounts for the financial year ended
30 September 2009 and the Auditors’ Report thereon.
Resolution 1
2.
To declare a final exempt (one-tier) dividend of 0.75 cent per ordinary share for the financial year
ended 30 September 2009.
Resolution 2
3.
To declare a special exempt (one-tier) dividend of 0.25 cent per ordinary share for the financial
year ended 30 September 2009.
Resolution 3
4.
To re-elect Ms Jessica Ong Boon Chin, a Director retiring by rotation pursuant to Article 107 of
the Articles of Association of the Company.
Resolution 4
5.
To re-elect Mr John Tan Lee Meng, a Director retiring by rotation pursuant to Article 107 of the
Articles of Association of the Company.
Resolution 5
[Mr John Tan Lee Meng will, upon re-election as a Director of the Company, remain as a member of the Audit,
Remuneration and Nominating Committees. Mr John Tan Lee Meng will not be considered independent for the
purpose of Rule 704(8) of the Listing Manual of The Singapore Exchange Securities Trading Limited.]
6.
To re-elect Mr Tan Ngee Teck, a Director retiring by rotation pursuant to Article 117 of the
Articles of Association of the Company.
Resolution 6
[Mr Tan Ngee Teck will, upon re-election as a Director of the Company, remain as a member of the Nominating
Committee. Mr Tan Ngee Teck will not be considered independent for the purpose of Rule 704(8) of the Listing
Manual of The Singapore Exchange Securities Trading Limited.]
7.
To approve the payment of Directors’ fees of S$110,000 for the financial year ended 30
September 2009.
Resolution 7
8.
To re-appoint Messrs RSM Chio Lim LLP as Auditors and to authorise the Directors to fix their
remuneration.
Resolution 8
To consider and, if thought fit, to pass with or without any modifications, the following resolution
as Ordinary Resolutions:
70
Annual Report 2009
SPECIAL BUSINESS :
9.
Ordinary Resolution: Authority to allot and issue shares in the capital of the Company
“That pursuant to Section 161 of the Companies Act, Cap. 50. and Rule 806 of the Listing
Manual of the Singapore Exchange Securities Trading Limited, the Directors of the Company be
authorized and empowered to:
(a)
(i)
issue shares in the Company (“shares”) whether by way of
otherwise; and/or
rights, bonus or
(ii) 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 of the Company may in their absolute discretion deem fit; and
(b)
(notwithstanding the authority conferred by this Resolution may have ceased to be in
force) issue shares in pursuance of any Instrument made or granted by the Directors of
the Company while this Resolution was 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 Resolution) to be issued pursuant to this
Resolution shall not exceed fifty per centum (50%) of the total number of issued shares
(excluding treasury shares) in the capital of the Company (as calculated in accordance
with sub-paragraph (2) below), of which the aggregate number of shares and Instruments
to be issued other than on a pro rata basis to existing shareholders of the Company shall
not exceed twenty per centum (20%) of the total number of issued shares (excluding
treasury shares) in the capital of the Company (as calculated in accordance with subparagraph (2) below);
(2) (subject to such calculation as may be prescribed by the Singapore Exchange Securities
Trading Limited) for the purpose of determining the aggregate number of shares that may
be issued under sub-paragraph (1) above, the total number of issued shares (excluding
treasury shares) shall be based on the total number of issued shares (excluding treasury
shares) in the capital of the Company at the time of the passing of this Resolution, after
adjusting for:
(a)
new shares arising from the conversion or exercise of any convertible securities;
(b)
new shares arising from exercising share options or vesting of share awards which
are outstanding or subsisting at the time of the passing of this Resolution; and
(c) any subsequent bonus issue, consolidation or subdivision of shares;
71
Resolution 9
Annual Report 2009
(3) the 50% limit in sub-paragraph (1) above may be increased to 100% for the Company to
undertake pro-rata renounceable rights issues;
(4) in exercising the authority conferred by this Resolution, the Company shall comply with
the provisions of the Listing Manual of the Singapore Exchange Securities Trading Limited
for the time being in force (unless such compliance has been waived by the Singapore
Exchange Securities Trading Limited) and the Articles of Association of the Company;
and
(5) unless revoked or varied by the Company in a general meeting, such authority shall
continue in force until the conclusion of the next Annual General Meeting of the Company
or the date by which the next Annual General Meeting of the Company is required by law
to be held, whichever is earlier.”
[See Explanatory Note (i)]
10.
Ordinary Resolution: Authority to issue shares other than on a pro-rata basis pursuant to
the aforesaid share issue mandate at discounts not exceeding twenty per centum (20%) of
the weighted average price for trades done on SGX-ST
Resolution 10
“That subject to and pursuant to the aforesaid share issue mandate being obtained, the Directors
of the Company be hereby authorised and empowered to issue shares other than on a pro-rata
basis at a discount not exceeding twenty per centum (20%) to the weighted average price for
trades done on the SGX-ST for the full market day on which the placement or subscription
agreement in relation to such shares is executed (or if not available for a full market day, the
weighted average price must be based on the trades done on the preceding market day up to
the time the placement or subscription agreement is executed), provided that :(a) in exercising the authority conferred by this Resolution, the Company complies with the
provisions of the Listing Manual of the SGX-ST for the time being in force (unless such
compliance has been waived by the SGX-ST); and
(b) unless revoked or varied by the Company in general meeting, such authority shall continue
in force until the conclusion of the next Annual General Meeting of the Company or the date
by which the next Annual General Meeting of the Company is required by law to be held,
whichever is earlier.”
[See Explanatory Note (ii)]
11.
To transact any other business which may be properly transacted at an Annual General
Meeting.
72
Resolution 11
Annual Report 2009
Explanatory Note:
(i)
The proposed Resolution 9 above, if passed, will empower the Directors of the Company, effective until the
conclusion of the next Annual General Meeting of the Company, or the date by which the next Annual General
Meeting of the Company is required by law to be held or such authority is varied or revoked by the Company in a
general meeting, whichever is the earlier, to issue shares, make or grant instruments convertible into shares and
to issue shares pursuant to such instruments, up to a number not exceeding, in total, 50% of the total number of
issued shares (excluding treasury shares) in the capital of the Company, of which up to 20% may be issued other
than on a pro-rata basis to shareholders. The 50% limit referred to in the preceding sentence may be increased to
100% for the Company to undertake pro-rata renounceable rights issues.
For determining the aggregate number of shares that may be issued, the total number of issued shares (excluding
treasury shares) will be calculated based on the total number of issued shares (excluding treasury shares) in the
capital of the Company at the time this Ordinary Resolution is passed after adjusting for new shares arising from
the conversion or exercise of any convertible securities or share options or vesting of share awards which are
outstanding or subsisting at the time when this Ordinary Resolution is passed and any subsequent bonus issue,
consolidation or subdivision of shares.
The 100% renounceable pro-rata rights issue limit is one of the new measures implemented by the SGX-ST as
stated in a press release entitled “SGX introduces further measures to facilitate fund raising” dated 19 February
2009 and which became effective on 20 February 2009. It will provide the Directors with an opportunity to raise
funds and avoid prolonged market exposure by reducing the time taken for shareholders’ approval, in the event
the need arises. Minority shareholders’ interests are mitigated as all shareholders have equal opportunities to
participate and can dispose their entitlements through trading of nil-paid rights if they do not wish to subscribe for
their rights shares. It is subject to the condition that the Company makes periodic announcements on the
use of the proceeds as and when the funds are materially disbursed and provides a status report on the use of
proceeds in the annual report.
(ii)
The proposed Resolution 10 above is pursuant to measures implemented by the SGX-ST as stated in a press
release entitled “SGX introduces further measures to facilitate fund raising” dated 19 February 2009 and which
became effective on 20 February 2009. Under the measures implemented by the SGX-ST, issuers will be allowed
to undertake non pro-rata placements of new shares priced at discounts of up to 20% to the weighted average
price for trades done on the SGX-ST for a full market day on which the placement or subscription agreement in
relation to such shares is executed, subject to the conditions that (a) shareholders’ approval be obtained in a
separate resolution (the “Resolution”) at a general meeting to issue new shares on a non pro-rata basis at discount
exceeding 10% but not more than 20%; and (b) that the resolution seeking a general mandate from shareholders
for issuance of new shares on a non pro-rata basis is not conditional upon the Resolution.
It should be noted that under the Listing Manual of the SGX-ST, shareholders’ approval is not required for
placements of new shares, on a non pro-rata basis pursuant to a general mandate, at a discount of up to 10% to the
weighted average price for trades done on the SGX-ST for a full market day on which the placement or subscription
agreement in relation to such shares is executed.
73
Annual Report 2009
NOTICE OF BOOKS CLOSURE
NOTICE IS HEREBY GIVEN that the Share Transfer Books and Register of Members of the Company will be closed on
29 January 2010, for the purpose of determining members’ entitlements to the final exempt (one-tier) dividend (the “Final
Dividend”) and the special exempt (one-tier) dividend (the “Special Dividend”) to be proposed at the Annual General
Meeting of the Company to be held on 20 January 2010.
Duly completed registrable transfers in respect of the shares in the Company received up to the close of business at
5:00 p.m. on 28 January 2010 by the Company’s Share Registrar, Boardroom Corporate & Advisory Services Pte. Ltd.,
3 Church Street #08-01 Samsung Hub Singapore 049483 will be registered to determine members’ entitlements to the
Final Dividend and Special Dividend. Members whose Securities Accounts with The Central Depository (Pte) Ltd are
credited with shares in the Company as at 5:00 p.m. on 28 January 2010 will be entitled to such proposed Final Dividend
and Special Dividend.
The proposed Final Dividend and Special Dividend, if approved at the Annual General Meeting will be paid on 9 February
2010.
BY ORDER OF THE BOARD
Soon Kui Eng
Company Secretary
Singapore
Date: 4 January 2010
Proxies:
1.
A member of the Company is entitled to attend and vote at the above Meeting and may appoint not more than two
proxies to attend and vote instead of him.
2.
Where a member appoints two proxies, he shall specify the proportion of this shareholding to be represented by
each proxy in the instrument appointing the proxies. A proxy need not be a member of the Company.
3.
If the member is a corporation, the instrument appointing the proxy must be under seal of the hand of an officer or
attorney duly authorised.
4.
The instrument appointing a proxy must be deposited at the Registered Office of the Company at 63 Sungei Kadut
Loop, Hisaka Industrial Building, Singapore 729484 not less than 48 hours before the time appointed for holding
the above Meeting.
74
HISAKA HOLDINGS LTD.
Registration No. 200508585R
(Incorporated in Singapore)
IMPORTANT
1. For investors who have used their CPF monies to buy the Company’s
shares, this Annual Report is forwarded to them at the request of their CPF
Approved Nominees and is sent solely FOR INFORMATION ONLY.
2.This Proxy Form is not valid for use by CPF investors and shall be ineffective
for all intents and purposes if used or purported to be used by them.
PROXY FORM
I/We_____________________________________________________________________________________________________
of _______________________________________________________________________________________________________
being a member/members of Hisaka Holdings Ltd (the “Company”) hereby appoint
Name
Address
NRIC/Passport
Number
Proportion of
Shareholdings (%)
Address
NRIC/Passport
Number
Proportion of
Shareholdings (%)
and/or (delete as appropriate)
Name
as my/our proxy/proxies to attend and to vote for me/us on my/our behalf and, if necessary, to demand a poll at the Annual General Meeting of the Company to be held at 63 Sungei Kadut Loop, Hisaka Industrial Building, Singapore
729484 on Wednesday, 20 January 2010 at 10:00 a.m. and at any adjournment thereof. (Please indicate with an “X” in the spaces provided whether you wish your vote(s) to be cast for or against the resolutions
as set out in the Notice of Annual General Meeting. In the absence of specific directions, the proxy/proxies will vote or
abstain as he/they may think fit, as he/they will on any other matter arising at the Annual General Meeting.)
Resolution
No.
Resolutions
For
Against
ORDINARY BUSINESS
1
To receive and consider Directors’ and Auditors’ Reports and Audited Accounts
2
To declare a final exempt (one-tier) dividend of 0.75 cent per ordinary share
3
To declare a special exempt (one-tier) dividend of 0.25 cent per ordinary share.
4
To re-elect Ms Jessica Ong Boon Chin (Retiring under Article 107)
5
To re-elect Mr John Tan Lee Meng (Retiring under Article 107)
6
To re-elect Mr Tan Ngee Teck (Retiring under Article 117)
7
To approve payment of Directors’ fees of S$110,000
8
To re-appoint RSM Chio Lim LLP as auditors
SPECIAL BUSINESS
9
To authorize the Directors to allot and issue shares
10
To authorize the directors to issue shares other than on pro-rata basis at discounts
not exceeding 20%
Dated this _________ day of ______________ 2010
Total number of Shares held
_________________________________________________
Signature(s) of member(s) or common seal
IMPORTANT: PLEASE READ NOTES OVERLEAF
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), 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. If no number is inserted,
this form of proxy will be deemed to relate to all the shares held by you.
2.
A member of the Company entitled to attend and vote at a meeting of the Company is entitled to appoint not more
than two proxies to attend and vote on his behalf. A proxy need not be a member of the Company.
3.
Where a member appoints more than one proxy, he shall specify the proportion of his shareholding to be
represented by each proxy.
4.The instrument appointing a proxy or proxies must be under the hand of the appointor or his attorney duly
authorised in writing. Where the instrument appointing a proxy or proxies is executed by a corporation, it must be
executed either under its common seal or under the hand of its attorney or duly authorised officer.
5.
A corporation which is a member of the Company may authorise by resolution of its directors or other governing
body such person as it thinks fit to act as its representative at the Annual General Meeting, in accordance with its
Articles of Association and Section 179 of the Companies Act, Chapter 50.
6.The instrument appointing a proxy or proxies, together with the power of attorney or other authority (if any) under
which it is signed, or notarially certified copy thereof, must be deposited at the registered office of the Company
at 63 Sungei Kadut Loop, Hisaka Industrial Building, Singapore 729484 not less than 48 hours before the time
appointed for the Annual General Meeting.
7.The Company shall be entitled to reject the instrument appointing a proxy or proxies if it is incomplete, improperly
completed or illegible or where the true intentions of the appointor are not ascertainable from the instructions of
the appointor specified in the instrument appointing a proxy or proxies. In addition, in the case of members of the
Company whose shares are entered against their names in the Depository Register, the Company may reject any
instrument appointing a proxy or proxies lodged if such members are not shown to have shares entered against
their names in the Depository Register at least 48 hours before the time appointed for holding the Annual General
Meeting as certified by The Central Depository (Pte) Limited to the Company.
63 Sungei Kadut Loop,
Hisaka Industrial Building,
Singapore 729484
Tel : +65 6455 1311
Fax : +65 6455 0311
Website : www.hisaka.com.sg

Notes to tHe fiNaNCial stateMeNts

Transcription

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