Notes to the Financial Statements

Transcription

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Contents
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Corporate Information
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Financial
Highlights
YEAR ENDED 31 DECEMBER ($’000)
2010
2009
2008
2007
(restated) (restated)
Income Statement
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(<90*7(*0-0*.96<73040;,+(UU\HS9LWVY[ 11
Board of
Directors
12 (<90*7(*0-0*.96<73040;,+(UU\HS9LWVY[
Albert Saychuan Cheok
Non-executive Chairman
Yao Che Wan
Group Managing Director
Stephen Riady
Executive Director
Tan Keh Poo @ Tan Kay Poo
Non-executive Director
Bryan Chang Yew Chan
Non-executive, Independent Director
Lim Boh Soon
Jan Gert Vistisen
Edwin Neo
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Non-executive Chairman
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Financial
Contents
18
25
27
36
37
39
40
42
45
47
126
128
131
Corporate Governance Report
Risk Factors Statement
Directors’ Report
Statement by Directors
Independent Auditors’ Report
Consolidated Statement of Comprehensive Income
Balance Sheets
Statements of Changes in Equity
Consolidated Cash Flow Statement
Notes to Financial Statements
Shareholding Statistics
Notice of Annual General Meeting
Proxy Form
AURIC PACIFIC GROUP LIMITED Annual Report 2010 • 17
This Corporate Governance Report (the “Report”) describes Auric PaciÄc Group Limited (“Auric”) corporate governance
processes for the Änancial year ended 31 December 2010 and activities with reference to the Singapore’s Code of Corporate
Governance 2005 (the “Code”).
The Board of Directors (the “Board”) is pleased to conÄrm that for the Änancial year ended 31 December 2010, the Company
has generally adhered to the framework as outlined in the Code and where there are deviations from the Code, the reasons for
which deviation are explained accordingly.
BOARD OF DIRECTORS
Principle 1: Board’s Conduct of its Affairs
The principal functions of the Board are:
1)
2)
3)
4)
5)
approving the broad policies, strategies and Änancial objectives of the Company and monitoring the performance of
management;
overseeing the processes for evaluating the adequacy of internal controls, risk management, Änancial reporting and
compliance;
appointment of board directors recommended by the Nomination Committee;
approving annual budgets, major funding proposals, investment and divestment proposals; and
assuming responsibility for corporate governance.
The Company has adopted guidelines which set out matters requiring Board approval. Matters which require the decision
of the Board are those involving corporate governance practices, material acquisitions and disposals of assets, corporate
restructuring, share issuances, dividends and other returns to shareholders. The Board delegates certain decision making
authorities to the Audit Committee, Nomination Committee and Remuneration Committee.
As regards to material acquisition and realization transactions, the Board may, and for business efÄcacy purposes, delegate
authorities to board committee, to inter alia, review, negotiate, structure and manage those material acquisition and realization
transactions, while retaining its authority to give its Änal approval for such transactions.
The Board conducts regular scheduled meetings. For the calendar year 2010, the Board has scheduled board meetings to be
held at least once every quarter. Ad-hoc meetings are convened when circumstances require.
The Company’s Articles of Association (the “Articles”) allow a board meeting to be conducted by way of a teleconference. The
attendance of the directors at meetings of the Board and Board committees, as well as the frequency of such meetings for the
calendar year 2010, is disclosed in this Report.
DIRECTORS’ ATTENDANCE AT BOARD AND BOARD COMMITTEE MEETINGS DURING THE CALENDAR YEAR 2010
Name of Director
Number of Meetings Held
Board
Audit
Committee
Nomination
Committee
Remuneration
Committee
5
4
1
1
ATTENDANCE
5
–
–
1
Yao Che Wan
5
–
–
–
Stephen Riady
2
–
–
–
Ronnie Tan Keh Poo
5
–
–
–
5
4
1
1
Lim Boh Soon
5
3
1
1
Jan Gert Vistisen
5
4
–
–
18 • AURIC PACIFIC GROUP LIMITED Annual Report 2010
The Company encourages its directors to attend conferences or training programme (at the Company’s expense) in connection
with their duties as directors in areas such as accounting and legal knowledge and to update themselves about new laws
and regulations. An orientation programme will be organised for new directors to ensure that incoming directors are familiar
with the Company’s business and governance policies. Each director is provided with a Company Director’s tool kit to allow
directors to have quick reference to Corporate Governance principles and practices.
The Company encourages its directors to request from the Management further explanation, brieÄng or informal discussion
on any aspect of the Company’s operations. The Group Managing Director (“GMD”) is responsible for making the necessary
arrangements for the brieÄngs, informal discussions or explanations required by the director.
Principle 2: Board Composition and Balance
The Board consists of four independent non-executive directors who when taken together can be expected to exercise objective
judgment, provide constructive advice on corporate matters impartially and help develop proposals on strategy. The Board is of
the view that the effectiveness and proper functioning of the Board was not and is not impaired as the independent directors
forms the majority in the composition of the Board.
The independence of each director is reviewed annually by the Nomination Committee (“NC”). The NC adopts the Code’s
deÄnition of what constitutes an independent director. From the NC’s review of the independence of each director for FY2010,
the NC is of the view that Mr. Albert Saychuan Cheok, Mr. Bryan Chang Yew Chan, Dr. Lim Boh Soon and Mr. Jan Gert Vistisen
are independent directors, and further, that no individual or small group of individuals dominate the Board’s decision making
process.
Key information regarding the directors is given in the “Directors’ ProÄle” section of the annual report. The NC is of the view
that the current Board comprises persons who as a group provide core competencies necessary to meet the Company’s targets.
Whilst the Company’s Articles allow for the appointment of a maximum of 12 directors, the NC is of the view that the current
board size of 7 directors is adequate and appropriate, in relation to the nature and scope of the Company’s operations.
Principle 3: Role of Chairman and Chief Executive OfÄcer
The Company has a separate Chairman and GMD. The position of Chairman is non-executive. The Chairman and GMD are
not related to each other.
To ensure an appropriate balance of power, increased accountability and greater capacity of the Board for independent
decision making, the roles of the Chairman and GMD are separated. The GMD bears executive responsibility for implementing
the Board’s decision and policies. In addition, the GMD also supervises and directs the Company’s business.
The role of the non-executive Chairman includes:
1)
2)
3)
4)
5)
6)
leading the Board to achieve its effectiveness on all aspects of its role;
working closely with the GMD in setting Board Meeting agenda and scheduling Board Meetings and in this connection
procure from Management accurate, timely and clear information for Board members;
promoting effective communication with shareholders, including at general meetings and extraordinary general
meetings of shareholders;
encouraging constructive relations between the Board and Management and between executive directors and nonexecutive directors;
facilitating the effective contribution of non-executive directors in the functions of the Board; and
offering suggestions to the Chairman of the respective board committees on closer compliance with the Code.
BOARD COMMITTEES
Nomination Committee (“NC”)
Principle 4: Board Membership
The establishment of the NC is mandated by Article 106 of the Articles. The NC comprises three directors, the majority of
whom are independent. The Chairman of the NC, Dr. Lim Boh Soon, is an independent non-executive director who is not a
substantial shareholder nor directly associated with a substantial shareholder.
The principal functions of the NC are:
1)
2)
3)
to make recommendations to the Board on all Board appointments, including making recommendations on the
composition of the Board, taking into account the balance between executive and non-executive directors and between
independent and non-independent directors;
to decide how the Board’s performance will be evaluated and propose objective performance criteria for the Board’s
approval; and
to assess the effectiveness of the Board as a whole, and the contribution by each individual director to the effectiveness
of the Board.
The NC will seek to identify the competencies and expertise required to enable the Board to fulÄll its responsibilities in the
selection of potential new members to the Board. The NC will in consultation with the Board determine the selection criteria
for the new board member. The NC considers the recommendations of Board members as well as access to other independent
research, if necessary in selecting and appointing new members to the Board.
New directors will be appointed by way of a board resolution, upon the recommendation of the NC. Such new directors must
submit themselves for re-election at the next Annual General Meeting (“AGM”) of the Company.
Article 91 of the Articles requires one third of the Board to retire by rotation at every AGM. The NC has reviewed the multiple
directorships disclosed by each director of the Company and was of the view that for the role expected of each director, the
existing various directorships of the respective director has not impinged on his ability to discharge his duties.
Principle 5: Board Performance
The NC evaluates the contribution of each director to the Company. Assessment parameters include demonstration of integrity,
commitment and competence, attendance record at meetings of the Board and committees, vigour and intensity of participation
at meetings and special contributions.
The NC also evaluates the Board’s performance as a whole. The assessment process looks at both quantitative and qualitative
criteria, which include review of discussions as reported in minutes of Board and Committee meetings, various Änancial
benchmarks and performance ratios, the structural characteristics of the Board, the combined contributions and competencies
of individual directors and the effectiveness of the Board in monitoring management’s performance.
The NC is of the view that the Board as a whole provided effective policy and strategic direction for the Group and took active
participation in monitoring the performance of the management and accordingly is satisÄed with the effectiveness of the Board
as a whole.
Principle 6: Access to Information
In order to ensure that the Board is able to fulÄll its responsibilities, Management provides the board members with monthly
management accounts and other relevant Änancial statements. The directors have also been provided with the phone numbers
and e-mail addresses of the Company’s senior management and company secretary to facilitate access.
Directors may have access to independent professional advice if this is needed. Directors, as a group or individually, may
make a written request to the Board to appoint a nominated professional advisor to render advice. The cost will be borne by
the Company.
The Company Secretary and in her absence, her designated ofÄcer, attends all board meetings and is responsible for ensuring
that board procedures are being followed. The Company Secretary, together with other ofÄcers of the Company, procures the
compliance by the Company of the relevant regulatory requirements including those of the Listing Manual of the Singapore
Exchange Securities Trading Limited (“SGX-ST”).
The composition of the Company’s Board of Directors and Board Committees for FY2010 are contained in the “Corporate
Information” section of the annual report.
Remuneration Committee (“RC”)
Principle 7: Procedures for Developing Remuneration Policies
Principle 8: Level and Mix of Remuneration
Principle 9: Disclosure on Remuneration
The RC consists of three members, all of whom are independent non-executive directors.
The RC is chaired by Mr. Albert Saychuan Cheok, an independent non-executive director. The other members of the RC are
Dr. Lim Boh Soon and Mr. Bryan Chang Yew Chan. The RC has access to expert advice on executive compensation outside the
Company, if circumstances require such advice.
The RC’s principal functions are to:
1)
2)
3)
make recommendations for approval by the entire Board of a framework of remuneration covering all aspects of
remuneration including fees, salaries, allowances, bonuses, options and beneÄts-in-kind and the speciÄc remuneration
package for each member of the Board and the GMD (or executive of equivalent rank);
review executive directors’ compensation annually and determine appropriate adjustments; and
administer any share option scheme of the Company.
With effect from the Änancial year commencing 1 January 2003, executive directors no longer receive directors’ fees. Nonexecutive directors are paid directors’ fees to be approved by shareholders as a lump sum payment at each general meeting.
A breakdown, showing the level and mix of each individual director’s remuneration and key executives payable for FY2010
is as follows:
REMUNERATION OF DIRECTORS AND KEY EXECUTIVES (IN PERCENTAGE TERMS) FOR FY2010
Name of Director
Salary(1)
Bonus
Fees(2)
BeneÄts-In-Kind
Total
Above S$500,000
%
%
%
%
%
91.5
0
0
8.5
100
0
0
100
0
100
78.7
0
0
21.3
100
Ronnie Tan Keh Poo
0
0
100
0
100
0
0
100
0
100
Lim Boh Soon
0
0
100
0
100
Jan Gert Vistisen
0
0
100
0
100
Yao Che Wan
Below S$250,000
Stephen Riady
Notes:
(1) Exclusive of Äxed allowance but inclusive of CPF contribution.
(2) Directors’ fees only payable after approval by Shareholders at the AGM.
The RC was of the view the indicative remuneration for executive directors should be guided by the principles that remuneration
should:
(1)
(2)
(3)
(4)
reÅect the qualiÄcations and experience of the person;
be broadly consistent with industry practice;
reÅect the duties and responsibilities of the position; and
take into account the performance of the Group.
Non-executive directors have no service contracts and the Articles specify their terms of appointment. The RC will liaise with
the GMD when the service contracts of key executives are reviewed. The RC reviewed the service contracts of Messrs Yao Che
Wan and Stephen Riady.
Mr. Yao Che Wan’s service contract as GMD will expire on 28 December 2011 while Mr. Stephen Riady’s service contract as
Executive Director will expire on 22 February 2012. The RC will hold a meeting by June 2011 to discuss the renewal of service
contracts of Mr. Yao Che Wan and Mr. Stephen Riady.
The remuneration package of the GMD has a variable bonus element, which is performance related, while the remuneration
package of the other executive director has been individually negotiated taking into accounts the needs and Änancial
environment of the Group. The service contracts for all these executive directors are for a Äxed term to expire not more than 3
years or when the director fails to be re-elected or becomes disqualiÄed from continuing to be a director, whichever is shorter,
with any renewal of his employment upon expiry, being subject to the recommendation of the NC.
The Board has endorsed the recommendations of the RC in relation to the executive director’s remuneration packages. During
FY2010, there were no employees who are immediate family members of a director or the GMD and whose remuneration
exceeds S$150,000.
Since the last Executives’ Share Option Scheme (“ESOS”), which expired on 16 December 2002, there has been no new
scheme. Accordingly, none of the Directors of the Company were granted any options under the Company’s Employees Share
Option Scheme.
Audit Committee (“AC”)
Principle 10: Accountability and Audit
Principle 11: Audit Committee
Principle 12: Internal Controls
The AC comprises three members, all of whom are independent non-executive directors. The Chairman of the AC, Mr. Bryan
Chang, is a qualiÄed accountant and a Fellow Member of both Institute of CertiÄed Public Accountants of Singapore and
CertiÄed Public Accountants, Australia. He is also a member of The Institute of Internal Auditors, Singapore.
Dr. Lim Boh Soon is currently a director and shareholder of Arise Asset Management Pte Ltd and was formerly Chief Executive
OfÄcer of Kuwait Finance House (Singapore) Pte Ltd.
Mr. Jan Gert Vistisen is presently a director and sole shareholder of Executives’ Global Network, Singapore.
The NC is of the view that the members of the AC have sufÄcient Änancial management expertise and experience to discharge
the AC’s functions.
The AC performs the following main functions:
1)
2)
3)
recommends to the Board of Directors the appointment, reappointment or removal of external auditors, and approving
the remuneration and terms of engagement of the external auditors;
reviews the audit plan proposed by the external auditors, evaluates the scope and results of the external audits and
reviews the audit reports;
evaluates the audit process;
4)
with the Chief Financial OfÄcer or the relevant ofÄcer and the external auditors, makes regular reviews of the Änancial
state of affairs of the Company at the completion of the quarterly reviews and annual examination by the external
auditors.
At these quarterly and annual discussions, the AC seeks to be satisÄed that:
• there is proper reporting of Änancial and relevant information to shareholders (such as formal announcements
relating to Änancial performance), taking into consideration the external auditors’ audit of the annual Änancial
statements and accompanying reports, before making the appropriate recommendation to the Board for approval;
• the Company has an adequate system of accounting controls;
• management has provided full assistance to external auditors;
• signiÄcant Änancial reporting issues and views and recommendations of the external and internal auditors have
been addressed by management; and
5)
reviews with management and the internal auditors at least once annually:
• the adequacy and effectiveness of the system of internal controls (Änancial and operational) and risk management
policies and systems established by management;
• the signiÄcant observations made by the internal auditors and management’s responses; and
• the internal auditing standards to ensure that these meet or exceed the standards set by nationally or internationally
recognised professional bodies, including the Standards for the Professional Practice of Internal Auditing set by the
Institute of Internal Auditors.
6)
7)
holds separate meeting sessions with each of the internal auditors, the external auditors, other committees, and
management to discuss matters that each of these groups believes should be discussed privately with the AC; and
reports actions and minutes of meetings of the AC to the Board of Directors with such recommendations as the AC
considers appropriate.
The AC has the express power to conduct or authorise investigations into any matters within its terms of reference. The
Company has put in place a whistleblowing policy, endorsed by the AC, where employees of the Company may, in conÄdence,
raise concerns about possible improprieties in matters of Änancial reporting or other matters.
Minutes of the AC meetings are circulated to the Board for information. The AC has conducted an annual review of the volume
of non-audit services provided by the Company’s external auditors to satisfy itself that the nature and extent of such services
will not prejudice the independence and objectivity of the external auditors before conÄrming their re-nomination.
The AC conducts review of interested person transactions in accordance with the Company’s internal guidelines and when
advised of such transactions by the compliance ofÄcer or as required by the relevant regulatory authorities for securities or the
provisions of the Companies Act. If the AC becomes aware of any suspected fraud or irregularity, or suspected infringement of
any Singapore law, rules or regulations, which has or is likely to have a material impact on the Company’s operating results
or Änancial position, the AC shall after discussing such matters with the external auditors as well as other advisers, report the
matter as soon as possible to the Board.
As at the date of this report, the AC has met with the external auditors as well as the internal auditors, without the presence
of management, at least once a year. The Company’s external auditors, Ernst & Young LLP (“E&Y”), carries out in the course
of their statutory audit an annual review of the Company’s accounting controls to the extent of their scope as laid out in their
audit plan. Material internal accounting control weaknesses noted during their audit and the auditors’ recommendations are
reported to the AC.
Principle 13: Internal Audits
To ensure the adequacy of the internal audit function, the AC will have regular discussions with the internal auditors. The
Company’s internal audit function has been outsourced to PriceWaterCoopers LLP (“PWC”). PWC reports directly to the AC
on audit matters and in carrying out its internal audit functions, has adopted the Standards for Professional Practice of Internal
Auditing set by The Institute of Internal Auditors.
The AC has reviewed the Company’s risk management framework based on the reports of both E&Y and PWC and is satisÄed
that the overall control environment of the Company and the Group is conducive for the promotion of good controls.
Communication with Shareholders
Principle 14: Communication with Shareholders
Principle 15: Greater Shareholder Participation
Since the beginning of 2003, the Company has been announcing its results on a quarterly basis. Financial results, whether
quarterly or full year, are published through the SGXNET. All information on the Company’s new initiatives is disseminated via
SGXNET. The Company does not practice selective disclosure.
The Company has an ofÄcer who communicates with its investors and attends to their queries. All shareholders of the Company
receive the annual report and notice of AGM. The notice is also advertised in newspapers. At the AGMs, shareholders are given
the opportunity to air their views and ask directors or management questions regarding the Company.
The Articles allow a member of the Company to appoint one or two proxies to attend and vote at the AGM instead of the
member.
Dealings in Securities
The Company observes and complies with the SGX-ST Listing Rules on dealing in securities. Its ofÄcers are reminded not to
deal in the Company’s shares during the period commencing two weeks before the announcement of the Company’s quarterly
results, or one month before the announcement of its full year Änancial results, as the case may be, and ending on the date
of the announcement of the results.
Interested Person Transactions (“IPT”) Policy
The Company has adopted an internal policy in relation to transactions with interested persons which sets out the framework
for the notiÄcation to and the approval by AC of IPT. The aggregate value of IPT entered into during the Änancial year under
review under Chapter 9 of the SGX-ST Listing Rules were as follows:Name of
Interested Person
Overseas Union
Enterprise Limited
Aggregate value (S$’000) of all
IPTs during the Änancial year under
review (excluding transactions less
than S$100,000 and transactions
conducted under shareholders’
mandate pursuant to Rule 920)
Aggregate value of all IPTs conducted
during the Änancial year under review
under shareholders’ mandate pursuant
to Rule 920 (excluding transactions
less than S$100,000)
S$321,666
Not applicable
Material Contracts
There are no material contracts of the Company or its subsidiary companies involving the interests of the GMD, each director
or controlling shareholder, either for the Änancial year ended 31 December 2010 or entered into since the end of the previous
Änancial years.
The Group is committed to manage risk especially due to greater business diversiÄcations over the past few years.
Exposures ranging from politics, business, and operations to Änancial risks cannot be fully controlled or eliminated owing
to the consideration of cost over beneÄt element. Hence, we tend to adopt the approach to address the basics as part of our
strategy to identify, evaluate, control and mitigate risks.
POLITICAL RISK
As the Group expands our businesses overseas, we pay close attention to political and economic environments that we operate
in. Changes in policies that may pose impacts on our investments are carefully evaluated. SigniÄcant projects are monitored
closely to ensure key areas of concerns are properly addressed and attended.
BUSINESS RISK
Our food and distribution businesses operate under a highly competitive environment. For instance on bakery business, not
only do we face direct competition from other manufacturers and distributors but also from our customers, which grow their
house brands in promoting their own private labels.
Owing to global consolidation in food businesses through merger and acquisitions, our distribution business is subjected to
intense competition and the risk of losing agencies. One way to mitigate such risk is through further expansion and development
of our own house brands. In addition, continuing efforts will be made to secure more proÄtable agencies and very importantly,
improve current margin through inter-group business synergies, cost efÄciency and productivity.
OPERATING RISK
Major risks confronting operation arise from environmental, health and safety in production, stock pilferage, stock obsolescence,
raw materials and energy costs, staff retention etc. Some of these risks can be controlled while some are uncontrollable.
Stringent policies and procedures have been established for production, warehouse and inventory control. The management
adopts a relentless approach to ensure both external regulations and internal rules are observed and abided. In addition, on
Änancial aspect, we have set accounting policy that requires appropriate provisions to be made, where necessary, for probable
losses arising from stock loss and obsolescence and other contingent liabilities in litigations.
To mitigate operating risk, the Group has taken up adequate insurance cover against any Änancial loss suffered as part of
safeguarding the assets.
FINANCIAL RISK
A.
Investment Risk
The Board of Directors has overall responsibility for determining the level and type of business investment risk the
Group undertakes. All major investment proposals are submitted to the Board for evaluation and approval.
The monitoring of new existing investments is facilitated by regular communications and reporting from Management
at the Board meetings.
B.
Credit Risk
Credit risk related to trade and other debtors is primarily limited to the risk arising from debtors’ inability to make
payments when obligations are due. Credit policies with guidelines on credit terms and limits set the basis for credit
control. All customers are subjected to continuing observations and supervision.
C.
Liquidity Risk
Cash Åow requirements are closely monitored and we maintain a level of cash to meet our obligations and commitments
due. To ensure cash efÄciency, we manage a cash pool controlled by the head quarter, whereby maximization of cash
Åow position can be achieved.
D.
Interest Rate Risk
The Group obtains partial Änancing through external borrowings. Hence, interest rate Åuctuations coupled with foreign
exchanges can constitute additional risk to our Änancial performance.
Hence, the Group tends to monitor the interest rate Åuctuations closely and where necessary, restructure our loans to
save interest costs. The Group also uses interest rate swaps to hedge against changes in interest rates.
E.
Foreign Exchange Risk
The Group’s exposure to foreign currency risk arises primarily from its investments in subsidiaries overseas. The currency
giving rise to these risks are United States dollar, Malaysian ringgit, Renminbi and Hong Kong dollars. The Group’s
policy is not to hedge our foreign currency exposures of investments in subsidiaries apart from some forward contracts
purchased to meet the foreign currency requirements to the overseas suppliers.
Directors’ Report
The directors are pleased to present their report to the members together with the audited consolidated Änancial statements of
Auric PaciÄc Group Limited (“the Company”) and its subsidiary companies (collectively, “the Group”) and the balance sheet
and the statement of changes in equity of the Company for the Änancial year ended 31 December 2010.
DIRECTORS
The directors of the Company in ofÄce at the date of this report are :Mr. Albert Saychuan Cheok
(Non-Executive Chairman)
Mr. Yao Che Wan
(Group Managing Director)
Mr. Stephen Riady
(Executive Director)
Dr. Ronnie Tan Keh Poo @ Tan Kay Poo
(Non-Executive Director)
Mr. Bryan Chang Yew Chan
(Independent Non-Executive Director)
Dr. Lim Boh Soon
Mr. Jan Gert Vistisen
Mr. Edwin Neo
(Appointed as Independent Non-Executive Director on 15 March 2011)
ARRANGEMENTS TO ENABLE DIRECTORS TO ACQUIRE SHARES AND DEBENTURES
Neither at the end of nor at any time during the Änancial year was the Company a party to any arrangement whose objects are,
or one of whose objects is, to enable the directors of the Company to acquire beneÄts by means of the acquisition of shares or
debentures of the Company or any other body corporate.
DIRECTORS’ INTERESTS IN SHARES AND DEBENTURES
According to the register of directors’ shareholdings required to be kept under Section 164 of the Singapore Companies Act,
Cap. 50 (“the Act”), the following directors, who held ofÄce at the end of the Änancial year, had interests in the shares of the
Company and related companies as stated below :Shareholdings registered in
the name of directors as at
01/01/10 31/12/10 21/01/11
Shareholdings in which directors are
deemed to have an interest as at
01/01/10
31/12/10
21/01/11
Auric PaciÄc Group Limited
(Ordinary shares)
Mr. Stephen Riady
–
–
–
89,420,646
89,420,646
89,420,646
Dr. Ronnie Tan Keh Poo
@ Tan Kay Poo
–
–
–
41,000
–
–
Dr. Lim Boh Soon
–
–
–
4,000
4,000
4,000
By virtue of Section 7 of the Act, Mr. Stephen Riady is deemed to have interests in shares of the subsidiary companies of
the Company.
Directors’ Report
DIRECTORS’ INTERESTS IN SHARES AND DEBENTURES (cont’d)
Except as disclosed above, the following directors who held ofÄce at the end of the Änancial year had interests in the shares of
the following entities, which are related corporations to a corporate shareholder of the Company :Shareholdings registered in
01/01/10 31/12/10 21/01/11
01/01/10
31/12/10
21/01/11
Goldstream Capital Limited
(Ordinary shares)
Mr. Stephen Riady
–
–
–
7
7
7
Bravado International Ltd
(Ordinary shares)
Mr. Stephen Riady
–
–
–
1
1
1
Nine Heritage Pte Ltd
(Ordinary shares)
Mr. Stephen Riady
–
–
–
800,000
800,000
800,000
Pantogon Holdings Pte Ltd
(Ordinary shares)
Mr. Stephen Riady
–
–
–
1,000,000
1,000,000
1,000,000
Jeremiah Holdings Limited
(Ordinary shares of S$1.00 each)
Mr. Stephen Riady
–
–
–
779,187
779,187
779,187
Dragon Board Holdings Limited
(Ordinary shares of S$1.00 each)
Mr. Stephen Riady
–
–
–
1
1
1
Lippo China Resources Limited
(Ordinary shares of HK$0.10 each)
Mr. Stephen Riady
–
–
–
6,544,696,389
–
–
–
319,322,219
319,322,219
319,322,219
–
–
–
35,312,240
35,312,240
35,312,240
Lippo Limited
(Warrants giving rise to underlying
ordinary shares of HK$0.10 each)
Mr. Stephen Riady
6,544,696,389 6,544,696,389
Directors’ Report
Shareholdings registered in
01/01/10 31/12/10 21/01/11
Hongkong Chinese Limited
(Warrants giving rise to underlying
ordinary shares of HK$0.10 each)
Mr. Stephen Riady
01/01/10
31/12/10
21/01/11
–
–
–
1,014,222,978
–
–
–
106,765,641
106,765,641
106,765,641
The HCB General Investment
(Singapore) Pte Ltd
(Ordinary shares)
Mr. Stephen Riady
Mr. Yao Che Wan
–
30,000
–
30,000
–
30,000
70,000
–
70,000
–
70,000
–
East Winds Food Pte Ltd
(Ordinary shares)
Mr. Stephen Riady
Mr. Yao Che Wan
–
38,000
–
38,000
–
38,000
400,000
400,000
400,000
400,000
400,000
400,000
–
–
–
3,669,576,788
AcrossAsia Limited
Mr. Stephen Riady
1,014,222,978 1,014,222,978
3,669,576,788 3,669,576,788
Apart from the above, Mr. Stephen Riady is also deemed to have interests in the holding companies of the controlling
shareholders and companies related to the controlling shareholders as stated below :Lippo Cayman Limited
(Ordinary shares of US$1.00 each)
–
–
–
10,000,000
10,000,000
10,000,000
Lippo Capital Limited
–
–
–
705,690,000
705,690,000
705,690,000
LCR Catering Services Limited
–
–
–
8,100,000
–
–
First Tower Corporation
–
–
–
1
1
1
Directors’ Report
01/01/10 31/12/10 21/01/11
01/01/10
31/12/10
21/01/11
Skyscraper Realty Limited
–
–
–
10
10
10
Lippo Finance Limited
–
–
–
6,176,470
6,176,470
6,176,470
Lanius Limited
–
–
–
20
20
20
Tamsett Holdings Limited
–
–
–
1
1
1
Max Turbo Limited
–
–
–
100
100
100
Shanghai Lippo Fuxing
Real Estate Limited
(Total paid-up registered
capital: US$25,000,000)
–
–
–
23,750,000
23,750,000
23,750,000
TechnoSolve Limited
–
–
–
18,053,500
18,053,500
18,053,500
–
–
–
–
–
–
10,408 Class A
10,408 Class B
–
–
–
–
–
–
–
399,999
–
–
Kingtek Limited
–
–
–
60
60
60
Beijing Lippo Century
Realty Co., Ltd.
(Total paid-up registered
capital: US$36,000,000)
–
–
–
36,000,000
36,000,000
36,000,000
Four Prosperity Holdings Limited*
(company was struck off
on 1/5/2010)
Rossinis Restaurant Pte. Ltd.
(Ordinary shares)
(company was liquidated
on 7/7/2010)
*
Only Class A ordinary shares carry voting rights.
Directors’ Report
01/01/10 31/12/10 21/01/11
01/01/10
31/12/10
21/01/11
PT AsiaNet Multimedia
(Rp 7,600/US$1.00 at par
per share)
–
–
–
1,333,333
PT Multipolar Tbk
(Rp 500 at par per Class A share)
(Rp 2000 at par per Class A share)
(Rp 125 at par per Class B share)
(Rp 500 at par per Class B share)
(Rp 100 at par per Class C share)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
678,871,705
–
1,834,788,394
–
–
PT First Media Tbk
(Rp 500 at par per share)
–
–
–
723,711,420
723,711,420
723,711,420
PT Tryane Saptajagat
–
–
–
100,000
–
–
PT Reksa Puspita Karya
–
–
–
50,000
–
–
PT Natrindo Global Telekomunikasi
–
–
–
50,000,000
50,000,000
50,000,000
PT Lippo On Line
–
–
–
25,000,000
25,000,000
25,000,000
PT VisionNet Internasional
–
–
–
60,000,000
–
–
PT Sharestar Indonesia
(Rp 1,000 at par per share)
–
–
–
500,000
–
–
PT Air PasiÄk Utama
–
–
–
69,950,000
–
–
PT Natrindo Kartu Panggil
–
–
–
10,000
–
–
PT Multipolar Technology
–
–
–
5,000,000
–
–
1,333,333
1,333,333
–
–
169,717,927
169,717,927
–
–
458,697,099
458,697,099
2,100,652,536 2,100,652,536
Directors’ Report
01/01/10 31/12/10 21/01/11
01/01/10
31/12/10
21/01/11
PT Inti Miratama Abadi
–
–
–
80,000,000
80,000,000
80,000,000
PT Link Net
–
–
–
130,000,000
6,500,000
6,500,000
PT Tirta Mandiri Sejahtera
–
–
–
5,000
5,000
5,000
PT Margayu Vatri Chantiqa
–
–
–
12,500
12,500
12,500
PT Ayunda Prima Mitra
–
–
–
35,000
35,000
35,000
PT First Media News
(Rp 1,000,000 at par per share)
–
–
–
2,500
2,500
2,500
PT First Media Production
–
–
–
4,950,000
4,950,000
4,950,000
PT First Media Television
–
–
–
10,000
10,000
10,000
PT Matahari Putra Prima Tbk
–
–
–
2,261,702,895
–
–
PT Matahari Super Ekonomi
–
–
–
2,500,000
–
–
Matahari International
Finance Company B.V.
(NLG 100 at par per share)
–
–
–
400
–
–
PT Nadya Putra Investama
–
–
–
2,000
–
–
PT Taraprima Reksabuana
–
–
–
48,000
–
–
PT Matahari Kafe Nusantara
–
–
–
15,000
–
–
Directors’ Report
01/01/10 31/12/10 21/01/11
01/01/10
31/12/10
21/01/11
PT Matahari Mega Swalayan
–
–
–
2,000
–
–
PT Matahari Mega Toserba
–
–
–
2,000
–
–
PT Matahari Boston Drugstore
–
–
–
2,000
–
–
Prime Connection Limited
(US$1.00 at par per share)
–
–
–
50,000
–
–
PT Matahari Graha Fantasi
–
–
–
20,004,000
–
–
PT Matahari Dana Prima
–
–
–
2,000,000
–
–
PT Matahari Leisure
–
–
–
412,500
–
–
PT MultiÄling Mitra Indonesia
–
–
–
504,000
–
–
Brighter Limited
–
–
–
1
–
–
Bright Regent Corporation Limited
(HK$1.00 at par per share)
–
–
–
1
–
–
Matahari Department Store
Shenzhen Limited
(Total paid-up capital :
RMB 10,000,000)
–
–
–
1
–
–
Merril Investment Limited
–
–
–
1
–
–
Matahari Finance BV
(EUR 100 at par per share)
–
–
–
180
–
–
Directors’ Report
01/01/10 31/12/10 21/01/11
01/01/10
31/12/10
21/01/11
Grand Bright Corporation Limited
(HK$1.00 at par per share)
–
–
–
1
–
–
PT Prima Gerbang Perkasa
–
–
–
500
–
–
Tristar Capital Limited
–
–
–
1
–
–
PT Times Prima Indonesia
–
–
–
7,500
–
–
PT Prima Cipta Lestari
–
–
–
2,500
–
–
PT Matahari PaciÄc
–
–
–
25,000
–
–
Matahari Trading (Shenzhen)
Limited
(Total paid-up registered capital:
HK$500,000)
–
–
–
1
–
–
Mr. Edwin Neo was appointed as a new director on 15 March 2011. He has interests in the form of 2,300,000 and 130,000
share options in Lippo China Resources Limited and Lippo Limited respectively.
Except as disclosed in this report, no other director who held ofÄce at the end of the Änancial year had interests in shares,
share options, warrants or debentures of the Company and its related companies, either at the beginning or at the end of the
Änancial year.
DIRECTORS’ CONTRACTUAL BENEFITS
Since the end of the previous Änancial year, no director of the Company has received or become entitled to receive a
beneÄt (other than as disclosed in the Änancial statements) by reason of a contract made by the Company or by a related
corporation with the director, or with a Ärm of which the director is a member, or with a company in which the director has
a substantial Änancial interest, apart from remuneration from the Company and/or related corporations in their capacities as
directors/executives of those corporations.
OPTIONS
There is presently no option scheme on unissued shares of the Company.
Directors’ Report
AUDIT COMMITTEE
The Audit Committee (“AC”) carried out its functions in accordance with Section 201B(5) of the Act, including the following:• Reviews the audit plans of the internal and external auditors of the Company, and reviews the internal auditors’ evaluation
of the adequacy of the Company’s system of internal accounting controls and the assistance given by the Company’s
management to the external and internal auditors
• Reviews the quarterly and annual Änancial statements and the auditors’ report on the annual Änancial statements of the
Company before their submission to the Board of directors
• Reviews effectiveness of the Company’s material internal controls, including Änancial, operational and compliance
controls, and risk management via reviews carried out by the internal auditors
• Meets with the external auditors, other committees, and management in separate executive sessions to discuss any matters
that these groups believe should be discussed privately with the AC
• Reviews legal and regulatory matters that may have a material impact on the Änancial statements, related compliance
policies and programmes, and any reports received from regulators
• Reviews the cost effectiveness and the independence and objectivity of the external auditors
• Reviews the nature and extent of non-audit services provided by the external auditors
• Recommends to the Board of directors the external auditors to be nominated, approves the compensation of the external
auditors, and reviews the scope and results of the audit
• Reports actions and minutes of the AC to the Board of directors with such recommendations as the AC considers appropriate
• Reviews interested person transactions in accordance with the requirements of the Singapore Exchange Securities Trading
Limited’s Listing Manual
The AC, having reviewed all non-audit services provided by the external auditors to the Group, is satisÄed that the nature and
extent of such services would not affect the independence of the external auditors. The AC has also conducted a review of
interested person transactions.
The AC convened 4 meetings during the Änancial year with full attendance from all members, except one where a member
was absent. As at the date of this report, the AC has also met with the external and internal auditors, without the presence of
management at least once a year.
Further details regarding the AC are disclosed in the Report on Corporate Governance as set out in the Annual Report of
the Company.
AUDITORS
Ernst & Young LLP have expressed their willingness to accept reappointment as auditors.
On behalf of the Board of directors,
Yao Che Wan
Stephen Riady
Executive Director
Singapore
4 April 2011
Statement by Directors
We, Yao Che Wan and Stephen Riady, being two of the directors of Auric PaciÄc Group Limited (the “Company”), do hereby
state that, in the opinion of the directors:(i)
the accompanying consolidated statement of comprehensive income, balance sheets, statements of changes in equity
and consolidated cash Åow statement, together with the notes thereto, 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 31 December 2010, and the results of the business, changes
in equity, and cash Åows of the Group, and the changes in equity of the Company for the Änancial year then ended on
that date; and
(ii)
at the date of this statement, there are reasonable grounds to believe that the Company will be able to pay its debts as
and when they fall due.
On behalf of the Board of directors,
Yao Che Wan
Stephen Riady
Executive Director
Singapore
4 April 2011
for the Änancial year ended 31 December 2010
TO THE MEMBERS OF AURIC PACIFIC GROUP LIMITED
Report on the Financial Statements
We have audited the accompanying Änancial statements of Auric PaciÄc Group Limited (“the Company”) and its subsidiary
companies (collectively, “the Group”), which comprise the consolidated statement of comprehensive income of the Group for
the Änancial year ended 31 December 2010, the balance sheets of the Group and the Company as at 31 December 2010, the
statements of changes in equity of the Group and the Company, and the consolidated cash Åow statement of the Group for
the Änancial year then ended, and a summary of signiÄcant accounting policies and other explanatory information.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation of Änancial statements that give a true and fair view in accordance with
the provisions of the Singapore Companies Act, Cap. 50 (the “Act”) and Singapore Financial Reporting Standards, and for
devising and maintaining a system of internal accounting controls sufÄcient 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 of proÄt and loss accounts and balance sheets and to maintain
accountability of assets.
Auditors’ Responsibility
Our responsibility is to express an opinion on these Änancial statements based on our audit. We conducted our audit in
accordance with Singapore Standards on Auditing. Those standards require that we comply with ethical requirements and
plan and perform the audit to obtain reasonable assurance about whether the Änancial statements are free from material
misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the Änancial statements.
The procedures selected depend on the auditors’ judgment, including the assessment of the risks of material misstatement of
the Änancial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control
relevant to the entity’s preparation of the Änancial statements that give a true and fair view in order to design audit procedures
that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s
internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of
accounting estimates made by management, as well as evaluating the overall presentation of the Änancial statements.
We believe that the audit evidence we have obtained is sufÄcient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the consolidated Änancial statements of the Group and the balance sheet and 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 31 December 2010 and the
results, changes in equity and cash Åows of the Group and the changes in equity of the Company for the Änancial year ended
on that date.
Report on Other Legal and Regulatory Requirements
In our opinion, the accounting and other records required by the Act to be kept by the Company and by those subsidiary
companies incorporated in Singapore of which we are the auditors have been properly kept in accordance with the provisions
of the Act.
ERNST & YOUNG LLP
Public Accountants and CertiÄed Public Accountants
Singapore
4 April 2011
Consolidated Statement of
Comprehensive Income
(In Singapore dollars)
Group
Note
2010
$’000
2009
$’000
381,814
(225,249)
405,964
(252,970)
156,565
152,994
5
2,285
4,097
6
(63,119)
(27,494)
(80)
(530)
(58,685)
144
515
(68,804)
(29,550)
4,403
(1,211)
(63,804)
(200)
397
7
8
9,601
(2,032)
(1,678)
(419)
7,569
(2,097)
(1,812)
(298)
Other comprehensive expenses for the Änancial year, net of taxation
(1,812)
(298)
Total comprehensive income/(expenses) for the Änancial year
5,757
(2,395)
ProÄt/(loss) attributable to:
Owners of the Company
Non-controlling interests
6,302
1,267
(3,405)
1,308
7,569
(2,097)
4,475
1,282
(3,635)
1,240
5,757
(2,395)
Revenue
Cost of revenue
3
4
Gross proÄt
Other item of income
Other revenue
Other items of expenses
Selling and marketing expenses
General and administration expenses
Investment related activities
Finance costs
Other operating expenses
Share of results of associated companies
Share of results of a joint venture company
ProÄt/(loss) before taxation
Income tax expense
ProÄt/(loss) for the Änancial year, net of taxation
Other comprehensive expenses:
Foreign currency translation
28
Total comprehensive income/(expenses) attributable to:
Owners of the Company
Earnings/(loss) per share attributable to owners of
the Company (cents per share):
Basic
9
5.01
(2.71)
Diluted
9
5.01
(2.71)
The accompanying accounting policies and explanatory notes form an integral part of the Änancial statements.
Balance Sheets
as at 31 December 2010
Group
ASSETS
Non-current assets
Property, plant and equipment
Intangible assets
Investments in subsidiary companies
Investments in associated companies
Investment in a joint venture company
Long–term investments
Other debtors
Prepayments and other recoverables
Deferred tax assets
Current assets
Short-term investments
Stocks
Trade debtors
Other debtors
Prepayments and other recoverables
Amounts due from subsidiary
companies
Fixed deposits (restricted)
Cash and cash equivalents
2010
$’000
2009
$’000
2010
$’000
2009
$’000
10
11
12
13
14
15
18
18
26
33,627
103,753
–
1,607
1,416
17,728
4,726
2,827
831
35,125
102,957
–
1,463
901
22,376
2,990
1,972
1,188
445
–
67,061
–
–
–
–
–
–
667
–
66,941
–
–
–
–
–
–
166,515
168,972
67,506
67,608
15
16
17
18
18
6,630
39,879
56,324
48,169
3,348
5,952
41,298
51,458
30,553
4,760
–
–
–
468
11
–
–
–
18,595
–
19
–
720
52,893
–
623
59,177
284,323
–
6,817
193,377
–
20,276
207,963
193,821
291,619
232,248
374,478
362,793
359,125
299,856
38,928
31,940
1,170
1,291
–
15,592
17,675
39,049
33,789
975
1,290
–
19,420
18,443
–
1,504
–
–
236,280
8,869
43
–
1,383
–
–
172,079
13,196
–
106,596
112,966
246,696
186,658
101,367
80,855
44,923
45,590
20
Total assets
EQUITY AND LIABILITIES
Current liabilities
Trade creditors
Other creditors and accruals
Deferred income
Provisions
Amounts due to subsidiary companies
Loans and borrowings
Tax payable
Net current assets
Company
Note
21
22
22
23
24
25
Balance Sheets
as at 31 December 2010
Group
Company
Note
2010
$’000
22
22
23
25
26
997
14,786
1,529
23
5,800
287
–
1,532
34
5,927
–
–
100
–
–
–
–
100
–
–
23,135
7,780
100
100
Total liabilities
129,731
120,746
246,796
186,758
Net assets
244,747
242,047
112,329
113,098
64,461
157,611
(112)
–
64,461
153,822
(331)
–
64,461
39,393
–
8,475
64,461
40,162
–
8,475
221,960
22,787
217,952
24,095
112,329
–
113,098
–
Total equity
244,747
242,047
112,329
113,098
Total equity and liabilities
374,478
362,793
359,125
299,856
EQUITY AND LIABILITIES (cont’d)
Non-current liabilities
Deferred income
Other liability
Provisions
Deferred tax liabilities
Equity attributable to owners of
the Company
Share capital
Retained earnings
Other reserve
Merger reserve
27
29
2009
$’000
2010
$’000
2009
$’000
Group
Attributable to owners of the Company
Premium
Gain on
paid on
purchase
Total
Foreign acquisition of treasury
equity
Other
currency
of non- shares by a attributable
NonShare Retained reserves, translation controlling subsidiary to owners of controlling Total
capital earnings
total
reserve
interests
company the Company interests equity
(Note 27)
(Note 28)
$’000
$’000
$’000
$’000
$’000
$’000
$’000
$’000
$’000
2010
Balance at
1 January 2010
Total comprehensive
income/(expenses) for
the Änancial year
64,461 153,822
–
(331)
(331)
–
–
217,952
24,095 242,047
6,302 (1,827)
(1,827)
–
–
4,475
1,282
5,757
Contributions by and
distributions to owners
Purchase of treasury shares
by a subsidiary company
(Note 12)
Acquisition of a subsidiary
company (Note 12)
Dividend on ordinary
shares (Note 30)
Dividend paid to minority
shareholders of a
subsidiary company
–
–
42
–
–
42
42
(328)
(286)
–
–
–
–
–
–
–
181
181
–
(2,513)
–
–
–
–
(2,513)
–
(2,513)
–
–
–
–
–
–
–
(410)
(410)
–
(2,513)
42
–
–
42
(2,471)
(557)
(3,028)
Acquisition of non-controlling
interests (Note 12)
–
–
2,004
–
2,004
–
2,004
(2,033)
(29)
Total changes in ownership
interests in subsidiary
companies
–
–
2,004
–
2,004
–
2,004
(2,033)
(29)
Total transactions with owners
in their capacity as owners
–
(2,513) 2,046
–
2,004
42
(467)
(2,590)
(3,057)
2,004
42
221,960
Total contributions by and
Changes in ownership
interests in subsidiary
companies that do not
result in a loss of control
Balance at
31 December 2010
64,461 157,611
(112)
(2,158)
22,787 244,747
Group
Share
capital
(Note 27)
$’000
Retained
earnings
Other
reserve,
total
$’000
$’000
Foreign
currency
translation
reserve
(Note 28)
$’000
64,461
157,426
(101)
–
(199)
64,461
Total equity
attributable
Nonto owners of controlling
the Company
interests
Total
equity
$’000
$’000
$’000
(101)
221,786
28,760
250,546
–
–
(199)
(1,483)
(1,682)
157,227
(101)
(101)
221,587
27,277
248,864
–
(3,405)
(230)
(230)
(3,635)
1,240
(2,395)
Dividend paid to minority
shareholders of a
subsidiary company
–
–
–
–
–
(457)
(457)
Total contributions by and
–
–
–
–
–
(457)
(457)
Acquisition of non-controlling
interests (Note 12)
–
–
–
–
–
(3,965)
(3,965)
Total changes in ownership
interests in subsidiary companies
–
–
–
–
–
(3,965)
(3,965)
Total transactions with owners
in their capacity as owners
–
–
–
–
–
(4,422)
(4,422)
Balance at 31 December 2009
64,461
153,822
217,952
24,095
242,047
2009
Balance at 1 January 2009,
as previously reported
Adjustments to initial accounting
for business combinations
(Note 11(b))
Balance at 1 January 2009,
as restated
Total comprehensive
(expenses)/income for
the Änancial year
Contributions by and
Changes in ownership interests
in subsidiary companies that
do not result in a loss of control
(331)
(331)
Company
Share
capital
(Note 27)
$’000
Retained
earnings
*
$’000
Merger
reserve
(Note 29)
$’000
Total
equity
64,461
–
40,162
1,744
8,475
–
113,098
1,744
Dividend on ordinary shares (Note 30)
–
(2,513)
–
(2,513)
Total contributions by and distributions to owners
–
(2,513)
–
(2,513)
64,461
39,393
8,475
112,329
2009
Balance at 1 January 2009
Total comprehensive income for the Änancial year
64,461
–
33,204
6,958
8,475
–
106,140
6,958
64,461
40,162
8,475
113,098
2010
Total comprehensive income for the Änancial year
$’000
Contributions by and distributions to owners
*
It includes an amount of $32,617,000 (2009: $32,617,000), which relates to the gain resulting from an internal restructuring
of certain subsidiary companies in 1999. This amount is non-distributable in accordance with the Company’s Memorandum
and Articles of Association.
Consolidated Cash Flow
Statement
Group
2010
$’000
Cash Åows from operating activities
ProÄt/(loss) before taxation
Adjustments for:
Dividend income
Interest income
Interest expense
Share of results of associated companies
Share of results of a joint venture company
Depreciation of property, plant and equipment
Fair value changes of Änancial instruments:
– Loss/(gain) on investment funds at fair value through proÄt or loss
– Gain on investment securities held-for-trading
– Gain on redeemable preference shares issued by a subsidiary company
– Gain on derivative Änancial instrument at fair value through proÄt or loss
Write-back of impairment loss on property, plant and equipment
Allowance/(write-back of allowance) for impairment loss on
unquoted equity shares
Allowance for impairment on trade debtors
Allowance/(write-back of allowance) for impairment on non-trade debtors
Bad debts recovered
Net fair value gain on an investment property
Gain on disposal of an associated company
Loss on disposal of subsidiary companies
Loss on liquidation of a subsidiary company
Loss on disposal of an investment property
Amortisation of intangible assets
Net loss/(gain) on disposal of property, plant and equipment
Gain on acquisition of non-controlling interests
Stocks written down
Write-back of provision for performance incentive management fee
Write-back of provision for long outstanding creditors
Write-back of provision for reinstatement costs
Property, plant and equipment written off
Translation differences
2009
$’000
9,601
(1,678)
(207)
(368)
530
(144)
(515)
8,374
(207)
(363)
1,211
200
(397)
10,273
41
(702)
(414)
–
–
(308)
(1,107)
–
(191)
(100)
816
644
935
(109)
–
(25)
–
–
–
2,855
331
–
2,781
–
–
(158)
312
(703)
(350)
1,024
(2)
–
(500)
–
1,073
634
79
2,874
(207)
(2,062)
3,110
(1,655)
(259)
(29)
1,176
387
Operating cash Åows before working capital changes
(Increase)/decrease in assets:
Stocks
Trade and other debtors
Decrease in liabilities:
Trade and other creditors
23,875
12,626
(1,077)
12,772
(2,018)
(18,364)
(1,694)
(6,398)
Net cash generated from/(used in) operations
Tax paid
Interest paid
Interest received
33,876
(3,529)
(530)
368
(14,154)
(2,435)
(1,172)
314
Net cash Åows generated from/(used in) operating activities
30,185
(17,447)
Consolidated Cash Flow
Statement
Group
Note
Cash Åows from investing activities
Acquisition of non-controlling interests
Acquisition of a subsidiary company
Disposal and dilution of interests of subsidiary companies
Dividend income received
Dividend income received from a joint venture company
Proceeds on disposal of property, plant and equipment
Proceeds on disposal of an investment property
Proceeds on disposal of an associated company
Proceeds from disposal of investment funds
Proceeds from return of capital from investment funds
Proceeds from return of capital from unquoted equity shares
Purchase of property, plant and equipment
Purchase of investment funds
Reinvestment of investment funds
Advance of mezzanine loan
Proceeds from issuance of redeemable preference shares
by a subsidiary company
2010
$’000
2009
$’000
(29)
(3,586)
–
207
–
159
–
25
2,270
94
154
(7,601)
–
(38)
(36,611)
(1,903)
–
(376)
207
255
559
5,921
–
14
102
–
(7,310)
(600)
(15)
–
15,200
–
(29,756)
(3,146)
Cash Åows from Änancing activities
Repayment of obligations under Änance leases
Dividend on ordinary shares
Dividend paid to minority shareholders of a subsidiary company
Proceeds from bank borrowings
Purchase of treasury shares by a subsidiary company
Repayment of bank borrowings
(Increase)/decrease in Äxed deposits pledged with the banks
(156)
(2,513)
(410)
–
(286)
(3,683)
(97)
(597)
–
(457)
18,941
–
(26,800)
108
Net cash Åows used in Änancing activities
(7,145)
(8,805)
Net decrease in cash and cash equivalents
Cash and cash equivalents at beginning of Änancial year
Effect of exchange rate changes on cash and cash equivalents
(6,716)
59,177
432
(29,398)
88,740
(165)
52,893
59,177
Fixed deposits (current)
Cash and bank balances
720
8,018
44,875
623
25,986
33,191
Fixed deposits pledged with the banks
53,613
(720)
59,800
(623)
52,893
59,177
37
38
Net cash Åows used in investing activities
Cash and cash equivalents at end of Änancial year
A
(A) Analysis of the balances of cash and cash equivalents
Fixed deposits pledged to banks as security for bankers’ guarantees issued in lieu of rental deposits at balance sheet date
amount to $720,000 (2009: $623,000).
1.
CORPORATE INFORMATION
Auric PaciÄc Group Limited (the “Company”) is a limited liability company incorporated and domiciled in Singapore
and is listed on the Singapore Exchange Securities Trading Limited.
The registered ofÄce and principal place of business of the Company is located at 78 Shenton Way, #22-02,
Singapore 079120.
The principal activities of the Company are those of investment holding and the provision of services to its subsidiary
companies. The principal activities of its subsidiary companies are disclosed in Note 12 to the Änancial statements.
There have been no signiÄcant changes in the nature of these activities during the Änancial year.
2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
2.1
Basis of preparation
The consolidated Änancial statements of the Group and the balance sheet and statement of changes in equity of the
Company have been prepared in accordance with Singapore Financial Reporting Standards (“FRS”).
The Änancial statements have been prepared on a historical cost basis, except as disclosed in the accounting
policies below.
The Änancial statements are presented in Singapore dollars (SGD or $) and all values are rounded to the nearest
thousand ($’000) unless otherwise indicated.
2.2
Changes in accounting policies
The accounting policies adopted are consistent with those of the previous Änancial year except in the current Änancial
year, the Group has adopted all the new and revised standards and Interpretations of FRS (“INT–FRS”) that are effective
for annual periods beginning on or after 1 January 2010. The adoption of these standards and interpretations did not
have any effect on the Änancial performance or position of the Group and the Company, except as disclosed below:
FRS 103, Business Combinations (revised) and FRS 27, Consolidated and Separate Financial Statements (revised)
The revised FRS 103, Business Combinations and FRS 27, Consolidated and Separate Financial Statements are
applicable for annual periods beginning on or after 1 July 2009. As of 1 January 2010, the Group adopted both
revised standards at the same time in accordance with their transitional provisions.
FRS 103, Business Combinations (revised)
The revised FRS 103 introduces a number of changes to the accounting for business combinations that will impact
the amount of goodwill recognised, the reported results in the period that an acquisition occurs, and future reported
results. Changes in signiÄcant accounting policies resulting from the adoption of the revised FRS 103 include:
• Transaction costs would no longer be capitalised as part of the cost of acquisition but will be expensed
immediately;
• Consideration contingent on future events are recognised at fair value on the acquisition date and any changes in
the amount of consideration to be paid will no longer be adjusted against goodwill but recognised in proÄt or loss;
• The Group elects for each acquisition of a business, to measure non-controlling interest at fair value, or at the
non-controlling interest’s proportionate share of the acquiree’s identiÄable net assets, and this impacts the amount
of goodwill recognised; and
2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d)
2.2
Changes in accounting policies (cont’d)
• When a business is acquired in stages, the previously held equity interests in the acquiree is remeasured to fair value
at the acquisition date with any corresponding gain or loss recognised in proÄt or loss, and this impacts the amount
of goodwill recognised.
According to its transitional provisions, the revised FRS 103 has been applied prospectively. Assets and liabilities that
arose from business combinations whose acquisition dates are before 1 January 2010 are not adjusted.
FRS 27, Consolidated and Separate Financial Statements (revised)
Changes in signiÄcant accounting policies resulting from the adoption of the revised FRS 27 include:
• A change in the ownership interest of a subsidiary that does not result in a loss of control is accounted for as an
equity transaction. Therefore, such a change will have no impact on goodwill, nor will it give rise to a gain or loss
recognised in proÄt or loss;
• Losses incurred by a subsidiary company are allocated to the non-controlling interest even if the losses exceed the
non-controlling interest in the subsidiary company’s equity; and
• When control over a subsidiary company is lost, any interest retained is measured at fair value with the corresponding
gain or loss recognised in proÄt or loss.
According to its transitional provisions, the revised FRS 27 has been applied prospectively, and does not impact the
Group’s consolidated Änancial statements in respect of transactions with non-controlling interests, attribution of losses
to non-controlling interests and disposal of subsidiary companies before 1 January 2010. The changes will affect future
transactions with non-controlling interests.
Prior to the adoption of the revised FRS 27, the Group’s accounting policy is to recognise any excess of the interest in the
net assets acquired from the non-controlling interests in subsidiary companies over the cost of additional investment, in
proÄt or loss.
The effects of the adoption of the revised FRS 27 on the Group’s consolidation Änancial statements, relating to the
acquisition of additional 16.7% equity interests in Auric Chun Yip Sdn Bhd and Auric PaciÄc Food Processing Sdn Bhd
respectively from their non-controlling interests (Note 12) are as follows:
Group
2010
$’000
Increase/(decrease) in:
Consolidate balance sheet
Other reserves
– Premium paid on acquisition of non-controlling interests
2,004
Consolidate income statement
Other income
(2,004)
2.
2.3
Standards issued but not yet effective
The Group has not adopted the following standards and interpretations that have been issued but not yet effective:
Effective for annual periods
beginning on or after
Description
Revised FRS 24, Related Party Disclosures
Amendment to FRS 32, Financial Instruments: Presentation - ClassiÄcation of Rights Issues
INT FRS 119, Extinguishing Financial Liabilities with Equity Instruments
Amendments to INT FRS 114, Prepayments of a Minimum Funding Requirement
INT FRS 115, Agreements for the Construction of Real Estate
Amendment to FRS 101, First-time Adoption of Financial Reporting Standards
– Limited Exemption from Comparative FRS 107, Disclosures for First-time Adopters
Amendment to FRS 101, First-time Adoption of Financial Reporting Standards
– Severe HyperinÅation and Removal of Fixed Dates for First-time Adopters
Amendment to FRS 107, Financial Instruments: Disclosures – Transfers of Financial Assets
1 January 2011
1 February 2010
1 July 2010
1 January 2011
1 January 2011
1 July 2010
1 July 2011
1 July 2011
Improvements to FRSs issued in 2010:
–
–
–
–
–
–
Amendments to FRS 1, Presentation of Financial Statements
Amendments to FRS 34, Interim Financial Reporting
Amendments to FRS 101, First-time Adoption of Financial Reporting Standards
Amendments to FRS 103, Business Combinations
Amendments to FRS 107, Financial Instruments: Disclosures
Transition requirements for amendments arising as a result of FRS 27,
Consolidated and Separate Financial Statements
– Amendments to INT FRS 113, Customer Loyalty Programmes
1 January 2011
1 January 2011
1 January 2011
1 July 2010
1 January 2011
1 July 2010
1 January 2011
Except for the revised FRS 24, the directors expect that the adoption of the other standards and interpretations above
will have no material impact on the Änancial statements in the period of initial application. The nature of the impending
changes in accounting policy on adoption of the revised FRS 24 is described below.
Revised FRS 24, Related Party Disclosures
The revised FRS 24 clariÄes the deÄnition of a related party to simplify the identiÄcation of such relationships and to
eliminate inconsistencies in its application. The revised FRS 24 expands the deÄnition of a related party and would treat
two entities as related to each other whenever a person (or a close member of that person’s family) or a third party has
control or joint control over the entity, or has signiÄcant inÅuence over the entity. The revised standard also introduces
a partial exemption of disclosure requirements for government-related entities. The Group is currently determining
the impact of the changes to the deÄnition of a related party has on the disclosure of related party transaction. As this
is a disclosure standard, it will have no impact on the Änancial position or Änancial performance of the Group when
implemented in 2011.
2.4
SigniÄcant accounting estimates and judgements
The preparation of the Group’s Änancial statements requires management to make judgements, estimates and assumptions
that affect the reported amounts of revenues, expenses, assets and liabilities, and the disclosure of contingent liabilities
at the reporting date. However, uncertainty about these assumptions and estimates could result in outcomes that could
require a material adjustment to the carrying amount of the asset or liability affected in the future periods.
2.
2.4
SigniÄcant accounting estimates and judgements (cont’d)
(i)
Key sources of estimation uncertainty
The key assumptions concerning the future and other key sources of estimation uncertainty at the end of each
reporting period, that have a signiÄcant risk of causing a material adjustment to the carrying amounts of assets
and liabilities within the next Änancial year are discussed below:
Useful lives of plant and equipment
The cost of plant and equipment for the manufacture of electronic components is depreciated on a straightline basis over the plant and equipment’s estimated economic useful lives. Management estimates the useful
lives of these plant and equipment to be within 1 to 10 (2009: 1 to 10) years. Changes in the expected level of
usage and technological developments could impact the economic useful lives of these assets, therefore, future
depreciation charges could be revised. The carrying amount of the Group’s plant and equipment at the end of
each reporting period is disclosed in Note 10 to the Änancial statements. A 5% (2009: 5%) difference in the
expected useful lives of these assets from management’s estimates would result in approximately 3.8% (2009:
10.9%) variance in the Group’s proÄt/(loss) before tax.
Impairment of non-Änancial assets
An impairment exists when the carrying value of an asset or cash generating unit exceeds its recoverable amount,
which is the higher of its fair value less costs to sell and its value in use. The fair value less costs to sell calculation
is based on available data from binding sales transactions in an arm’s length transaction of similar assets or
observable market prices less incremental costs for disposing the asset. The value in use calculation is based
on a discounted cash Åow model. The cash Åows are derived from the budget for the next Äve years and do
not include restructuring activities that the Group is not yet committed to or signiÄcant future investments that
will enhance the asset’s performance of the cash generating unit being tested. The recoverable amount is most
sensitive to the discount rate used for the discounted cash Åow model as well as the expected future cash
inÅows and the growth rate used for extrapolation purposes. Further details of the key assumptions applied in
the impairment assessment of goodwill and trademark licence agreement, are given in Note 11 to the Änancial
statements.
Impairment of loans and receivables
The Group assesses at the end of each reporting period whether there is any objective evidence that a Änancial
asset is impaired. To determine whether there is objective evidence of impairment, the Group considers factors
such as the probability of insolvency or signiÄcant Änancial difÄculties of the debtor and default or signiÄcant
delay in payments.
Where there is objective evidence of impairment, the amount and timing of future cash Åows are estimated
based on historical loss experience for assets with similar credit risk characteristics. The carrying amounts of
the Group’s loans and receivables at the end of each reporting period are disclosed in Note 20 to the Änancial
statements.
2.
2.4
(i)
Key sources of estimation uncertainty (cont’d)
Taxes
Uncertainties exist with respect to the interpretation of complex tax regulations and the amount and timing of
future taxable income. Given the wide range of international business relationships and the long-term nature and
complexity of existing contractual agreements, differences arising between the actual results and the assumptions
made, or future changes to such assumptions, could necessitate future adjustments to tax provisions already
recorded. The Group establishes provisions, based on reasonable estimates, for possible consequences of audits
by the tax authorities of the respective countries in which it operates. The amount of such provisions is based on
various factors, such as experience of previous tax audits and differing interpretations of tax regulations by the
taxable entity and the relevant tax authority. Such differences of interpretation may arise on a wide variety of
issues depending on the conditions prevailing in the respective companies’ domicile.
Deferred tax assets are recognised for all unused tax losses to the extent that it is probable that taxable proÄt will
be available against which the losses can be utilised. SigniÄcant management judgment is required to determine
the amount of deferred tax assets that can be recognised, based upon the likely timing and level of future taxable
proÄts together with future tax planning strategies.
The carrying amount of the Group’s deferred tax assets, and recognised and unrecognised tax losses at the
balance sheet date are disclosed in Note 26 to the Änancial statement.
(ii)
Judgements made in applying accounting policies
In the process of applying the Group’s accounting policies, management has made the following judgements,
apart from those involving estimations, which have the most signiÄcant effect on the amounts recognised in the
consolidated Änancial statements:
Useful life of trademark license agreement
Trademark license agreement arose from the Group’s acquisition of Edmontor Investments Pte Ltd in 2008, and was
related to the right to use the “Delifrance” trademark granted under a license agreement. Since its acquisition in
2008, management had estimated the useful life of trademark license agreement to be indeÄnite, as management
believed that there was no foreseeable limit to the period over which the agreement was expected to generate
net cash inÅows to the Group. Moreover, the agreement allowed for automatic renewal without signiÄcant cost.
In December 2010, Grand Marlins De Paris (“GMP”) served notice that the existing trademark license agreement
is due for renewal by 30 June 2012. Subsequent to year-end in February 2011, GMP had provided management
with a revised draft agreement for a renewal of the agreement for a period of 7 years after 30 June 2012. The
revised agreement shall be further extended for a period of 7 years, subject to the satisfactory compliance with
the terms and conditions of the revised agreement.
Notwithstanding this, management estimates the useful life of trademark license agreement to remain indeÄnite,
as management believes that the agreement would be renewed beyond the period of 14 years. Moreover,
management also believes that it would be able to meet the new terms and conditions in the revised agreement,
and there is no foreseeable limit to the period over which the revised agreement is expected to generate net cash
inÅows to the Group.
As the negotiations and discussions for the revised agreement are ongoing as of the date when the Änancial
statements are issued, any signiÄcant changes to the terms and conditions of the agreement could impact the
useful life of the trademark license agreement. As at 31 December 2010, the net carrying value of the trademark
license agreement is $32,495,000 (2009: $32,495,000).
2.
2.4
(ii)
Judgements made in applying accounting policies (cont’d)
Operating lease commitments – as lessor
The Group has entered into operating leases with the landlords on its food court premises. The Group licences the
use of the food and beverage stalls within the food courts to individual stallholders. The Group has determined
that these are operating lease arrangements where signiÄcant risks and rewards of these food court premises have
not been transferred.
Impairment of available-for-sale investments
The Group records impairment charges on available-for-sale equity investments when there has been a signiÄcant
or prolonged decline in the fair value below their cost. The determination of what is “signiÄcant” or “prolonged”
requires judgement. In making this judgement, the Group evaluates, among other factors, the duration and
extent to which the fair value of the investment is less than its cost, and the Änancial health of and near-term
business outlook for the Änancial asset, including factors such as industry and sector performance, changes in
technology, and operational and Änancing cash Åows.
For the Änancial year ended 31 December 2010, the allowance/(write-back of allowance) for impairment loss
recognised for unquoted equity shares was $816,000 (2009: $350,000).
Fair values of Änancial instruments
Where the fair values of Änancial instruments recorded on the balance sheet cannot be derived from active
markets, they are determined using secondary market quotations approximating the carrying value of the
Änancial instruments. The valuation of Änancial instruments is described in Note 33 to the Änancial statements.
Determination of functional currency
The Group measures foreign currency transactions in the respective functional currencies of the Company and
its subsidiary companies. In determining the functional currencies of the entities in the Group, judgement is
required to determine the currency that mainly inÅuences sales prices for 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 entities operate and the entities’ process of determining sales prices.
Consolidation of special purpose entity (“SPE”)
In 2010, the Group formed an entity to provide a mezzanine loan to a third party. The Group holds a 100%
equity interest in this entity, and its principal activity is that of investment holding. Based on these facts and
circumstances, management concluded that the Group controls this entity and therefore, consolidates the
entity in its Änancial statements.
2.
2.5
Basis of consolidation
Business combinations from 1 January 2010
The consolidated Änancial statements comprise the Änancial statements of the Company and its subsidiary companies
as at the end of the reporting period. The Änancial statements of the subsidiary companies used in the preparation of
the consolidated Änancial statements are prepared for the same reporting date as the Company. Consistent accounting
policies are applied to like transactions and events in similar circumstances.
All intra-group balances, transactions, income and expenses, and unrealised gains and losses resulting from intra-group
transactions are eliminated in full.
Subsidiary companies are consolidated from the date of acquisition, being the date on which the Group obtains control,
and continue to be consolidated until the date that such control ceases.
Business combinations are accounted for by applying the acquisition method. IdentiÄable assets acquired and liabilities
assumed in a business combination are measured initially at their fair values at the acquisition date. Acquisition-related
costs are recognised as expenses in the periods in which the costs are incurred and the services are received.
When the Group acquires a business, it assesses the Änancial assets and liabilities assumed for appropriate classiÄcation
and designation in accordance with the contractual terms, economic circumstances and pertinent conditions as at the
acquisition date. This includes the separation of embedded derivatives in host contracts by the acquiree.
Any contingent consideration to be transferred by the acquirer will be recognised at fair value at the acquisition date.
Subsequent changes to the fair value of the contingent consideration which is deemed to be an asset or liability, will
be recognised in accordance with FRS 39 either in the comprehensive income or as change to other comprehensive
income. If the contingent consideration is classiÄed as equity, it is not be remeasured until it is Änally settled within
equity.
In business combinations achieved in stages, previously held equity interests in the acquiree are remeasured to fair
value at the acquisition date and any corresponding gain or loss is recognised in proÄt or loss.
The Group elects for each individual business combination, whether non-controlling interest in the acquiree (if any) is
recognised on the acquisition date at fair value, or at the non-controlling interest’s proportionate share of the acquiree
identiÄable net assets.
Any excess of the sum of the fair value of the consideration transferred in the business combination, the amount of
non-controlling interest in the acquiree (if any), and the fair value of the Group’s previously held equity interest in the
acquiree (if any), over the net fair value of the acquiree’s identiÄable assets and liabilities is recorded as goodwill. The
accounting policy for goodwill is set out in Note 2.14 to the Änancial statements. In instances where the latter amount
exceeds the former, the excess is recognised as gain on bargain purchase in proÄt or loss on the acquisition date.
Business combinations before 1 January 2010
In comparison to the above mentioned requirements, the following differences applied:
Business combinations are accounted for by applying the purchase method. Transaction costs directly attributable to the
acquisition formed part of the acquisition costs. The non-controlling interest (formerly known as minority interest) was
measured at the proportionate share of the acquiree’s identiÄable net assets.
Business combinations achieved in stages were accounted for as separate steps. Adjustments to those fair values relating
to previously held interests are treated as a revaluation and recognised in equity under other comprehensive income.
2.
2.6
Transactions with non-controlling interests
Non-controlling interest represents the equity in subsidiary companies not attributable, directly or indirectly, to owners
of the Company, and are presented separately in the consolidated statement of comprehensive income and within
equity in the consolidated balance sheet, separately from equity attributable to owners of the Company.
Changes in the Company’s owners’ ownership interest in a subsidiary company that do not result in a loss of control are
accounted for as equity transactions. In such circumstances, the carrying amounts of the controlling and non-controlling
interests are adjusted to reÅect the changes in their relative interests in the subsidiary company. Any difference between
the amount by which the non-controlling interest is adjusted and the fair value of the consideration paid or received is
recognised directly in equity and attributed to owners of the Company.
2.7
Foreign currency
The Group’s consolidated Änancial statements are presented in Singapore Dollars, which is also the parent company’s
functional currency. Each entity in the Group determines its own functional currency and items included in the Änancial
statements of each entity are measured using that functional currency.
(a)
Transactions and balances
Transactions in foreign currencies are measured in the respective functional currencies of the Company and
its subsidiary companies and are recorded on initial recognition in the functional currencies at exchange rates
approximating those ruling at the transaction dates. Monetary assets and liabilities denominated in foreign
currencies are translated at the rate of exchange ruling at the end of the reporting period. Non-monetary items
that are measured in terms of historical cost in a foreign currency are translated using the exchange rates as at the
dates of the initial transactions. Non-monetary items measured at fair value in a foreign currency are translated
using the exchange rates at the date when the fair value was determined.
Exchange differences arising on the settlement of monetary items or on translating monetary items at the end
of the reporting period are recognised in proÄt or loss except for exchange differences arising on monetary
items that form part of the Group’s net investment in foreign operations, which are recognised initially in other
comprehensive income and accumulated under foreign currency translation reserve in equity. The foreign
currency translation reserve is reclassiÄed from equity to proÄt or loss of the Group on disposal of the foreign
operation.
(b)
Group companies
The assets and liabilities of foreign operations are translated into SGD at the rate of exchange ruling at the end
of the reporting period and their proÄt or loss are translated at the exchange rates prevailing at the date of the
transactions. The exchange differences arising on the translation are recognised in other comprehensive income.
On disposal of a foreign operation, the component of other comprehensive income relating to that particular
foreign operation is recognised in proÄt or loss.
The Group has elected to recycle the accumulated exchange differences in the separate component of other
comprehensive income that arises from the direct method of consolidation, which is the method the Group uses
to complete its consolidation.
2.
2.8
Revenue
Revenue is recognised to the extent that it is probable that the economic beneÄts will Åow to the Group and the revenue
can be reliably measured. Revenue is measured at the fair value of consideration received or receivable, excluding
discounts, rebates, and sales taxes or duty. The following speciÄc recognition criteria must also be met before revenue
is recognised:
(a)
Sale of goods
Revenue from sale of goods is recognised upon the transfer of signiÄcant risks and rewards of ownership of
the goods to the customer. Revenue is not recognised to the extent where there are signiÄcant uncertainties
regarding recovery of the consideration due, associated costs or the possible return of goods.
(b)
Sale of food and beverage
Revenue from sale of food and beverage is recognised upon the delivery to and acceptance by customers, net of
sales discounts.
(c)
Operation of food courts
Revenue from operation of food courts is recognised when fees are charged to the food court tenants based on a
percentage of their gross sales.
(d)
Sale of investment securities held-for-trading
Revenue from the sale of investment securities is recognised as earned upon the execution of sale and purchase
contracts.
(e)
Interest income
Interest income is recognised using the effective interest method.
(f)
Dividend income
Dividend income is recognised when the Group’s right to receive payment is established.
(g)
Rental income
Rental income arising from operating leases on an investment property is accounted for on a straight-line basis
over the lease terms. The aggregate costs of incentives provided to lessees are recognised as a reduction of rental
income over the lease terms on a straight-line basis.
(h)
Royalty and franchise income
Royalty income is recognised based on percentage of sales to the franchisees. Franchise income under the
‘Delifrance’ trademark is recognised in accordance with the underlying agreements.
2.9
Employee beneÄts
(a)
DeÄned contribution plans
The Group participates in the national pension schemes as deÄned by the laws of the countries in which it has
operations. In particular, the Singapore companies in the Group make contributions to the Central Provident
Fund (“CPF”) scheme in Singapore, a deÄned contribution pension scheme. Contributions to deÄned contribution
pension schemes are recognised as an expense in the period in which the related service is performed.
2.
2.9
Employee beneÄts (cont’d)
(b)
Employee leave entitlement
Employee entitlements to annual leave are recognised as a liability when they accrue to employees. The estimated
liability for leave is recognised for services rendered by employees up to the end of the reporting period.
(c)
Termination beneÄts
Termination beneÄts are payable when employment is terminated before the normal retirement date or whenever
an employee accepts voluntary redundancy in exchange for these beneÄts. The Group recognises termination
beneÄts when it is demonstrably committed to either terminate the employment of current employees according
to a detailed plan without possibility of withdrawal; or providing termination beneÄts as a result of an offer
made to encourage voluntary redundancy. In the case of an offer made to encourage voluntary redundancy, the
measurement of termination beneÄts is based on the number of employees expected to accept the offer. BeneÄts
falling due more than 12 months after end of the reporting period are discounted to present value.
2.10
Borrowing costs
Borrowing costs are recognised in proÄt or loss as incurred, except to the extent that they are capitalised if they are
directly attributable to the acquisition, construction or production of a qualifying asset. Capitalisation of borrowing costs
commences when the activities to prepare the asset for its intended use or sale are in progress and the expenditures and
borrowing costs are incurred. Borrowing costs are capitalised until the assets are ready for their intended use or sale.
2.11
Government grants
Government grants are recognised at their fair value where there is reasonable assurance that the grant will be received
and all attaching conditions will be complied with.
Government grant shall be recognised in proÄt or loss on a systematic basis over the periods in which the entity
recognises as expenses the related costs for which the grants are intended to compensate. Grants related to income may
be presented as a credit in proÄt or loss, under a general heading such as “other revenue”.
2.12
All items of property, plant and equipment are initially recorded at cost. Such cost includes the cost of replacing part
of the property, plant and equipment and borrowing costs that are directly attributable to the acquisition, construction
or production of a qualifying property, plant and equipment. The accounting policy for borrowing costs is set out in
Note 2.10. The cost of an item of property, plant and equipment is recognised as an asset if, and only if, it is probable
that future economic beneÄts associated with the item will Åow to the Group and the cost of the item can be measured
reliably.
Subsequent to recognition, property, plant and equipment are stated at cost less accumulated depreciation and any
accumulated impairment losses. The cost of an asset comprises its purchase price and any directly attributable costs of
bringing the asset to working condition for its intended use. When signiÄcant parts of property, plant and equipment are
required to be replaced in intervals, the Group recognises such parts as individual assets with speciÄc useful lives and
depreciation, respectively. Expenditure for additions, improvements and renewals are capitalised and all other repair
and maintenance costs are recognised in proÄt or loss as incurred.
An item of property, plant and equipment is derecognised upon disposal or when no future economic beneÄts are
expected from its use or disposal. Any gains or losses arising on derecognition of the asset is included in proÄt or loss
in the Änancial year the asset is derecognised.
The carrying values of property, plant and equipment are reviewed for impairment when events or changes in
circumstances indicate that the carrying value may not be recoverable.
2.
2.13
Depreciation
Depreciation of a property, plant and equipment begins when it is available for use and is calculated on the straight-line
method to write off the costs of property, plant and equipment over their estimated useful lives as follows :Leasehold land and improvements, and factory and ofÄce buildings
Plant and equipment
Food court equipment
Motor vehicles
–
–
–
–
Over period of lease ranging from 5 to 50 years
1 to 10 years
6 years
3 to 6 years
Fully depreciated assets are retained in the Änancial statements until they are no longer in use and no further charge for
depreciation is made in respect of these assets.
Construction-in-progress is not depreciated as the asset is not available for use.
The residual value, useful life and depreciation method are reviewed at each Änancial year-end, and adjusted
prospectively, if appropriate.
2.14
Intangible assets
(a)
Goodwill on consolidation
Goodwill is initially measured at cost. Following initial recognition, goodwill is measured at cost less any
accumulated impairment losses.
For the purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition
date, allocated to each of the Group’s cash-generating units that are expected to beneÄt from the synergies of the
combination, irrespective of whether other assets or liabilities of the acquire are assigned to those units.
The cash-generating unit to which goodwill has been allocated is tested for impairment annually and whenever
there is an indication that the cash-generating unit may be impaired. Impairment is determined for goodwill by
assessing the recoverable amount of each cash-generating unit (or group of cash-generating units) to which the
goodwill relates. Where the recoverable amount of the cash-generating unit is less than the carrying amount,
an impairment loss is recognised in proÄt or loss. Impairment losses recognised for goodwill are not reversed in
subsequent periods.
Where goodwill forms part of a cash-generating unit and part of the operation within that cash-generating
unit is disposed of, the goodwill associated with the operation disposed of is included in the carrying amount
of the operation when determining the gain or loss on disposal of the operation. Goodwill disposed of in this
circumstance is measured based on the relative fair values of the operations disposed of and the portion of the
cash-generating unit retained.
Goodwill and fair value adjustments arising on the acquisition of foreign operations on or after 1 January 2005
are treated as assets and liabilities of the foreign operations and are recorded in the functional currency of the
foreign operations and translated in accordance with the accounting policy set out in Note 2.7 to the Änancial
statements.
Goodwill and fair value adjustments which arose on acquisitions of foreign operations before 1 January 2005
are deemed to be assets and liabilities of the Group and are recorded in SGD at the rates prevailing at the date
of acquisition.
2.
2.14
Intangible assets (cont’d)
(b)
Other intangible assets
Intangible assets acquired separately are measured initially at cost. The cost of intangible assets acquired in a
business combination is their fair value as at the date of acquisition. Following initial acquisition, intangible
assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.
The useful lives of intangible assets are assessed as either Änite or indeÄnite.
Intangible assets with Änite useful lives are amortised on a straight-line basis over the estimated useful lives
and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The
amortisation period and method are reviewed at least at each Änancial year-end. Changes in the expected useful
life or the expected pattern of consumption of future economic beneÄts embodied in the asset is accounted
for by changing the amortisation period or method, as appropriate, and are treated as changes in accounting
estimates. The amortisation expense on intangible assets with Änite lives is recognised in proÄt or loss in the
expense category consistent with the function of the intangible asset.
Intangible assets relating to unpatented technology, customer relationships and management service agreement
acquired in a business combination have Änite useful lives and are measured at cost less accumulated amortisation
and impairment losses. These intangible assets are amortised in proÄt or loss on a straight-line basis over their
estimated useful lives as follows:
Unpatented technology
Customer relationships
Management service agreement
10 years
10 years
3 years
Intangible assets with indeÄnite useful lives or not yet available for use are tested for impairment annually,
or more frequently if the events and circumstances indicate that the carrying value may be impaired either
individually or at the cash-generating unit level. Such intangible assets are not amortised. The useful life of an
intangible asset with an indeÄnite useful life is reviewed annually to determine whether the useful life assessment
continues to be supportable. If not, the change in useful life from indeÄnite to Änite is made on a prospective
basis.
Gains or losses arising from derecognition of an intangible asset are measured as the difference between the
net disposal proceeds and the carrying amount of the asset and are recognised in proÄt or loss when the asset is
derecognised.
(i)
Trademarks
Trademarks were acquired in business combinations. The useful life of the “Food Junction” trademark
is estimated to be indeÄnite given that no legal, regulatory, contractual, competitive, economic or any
other factors limit the life of the trademark. The useful life of the “Malone’s” trademark is estimated to
be indeÄnite because it is expected to contribute to net cash inÅows indeÄnitely. As a result, trademarks
would not be amortised until the useful life is determined to be Änite. Trademarks would be tested for
impairment in accordance with FRS 36 annually and whenever there is an indication that it may be
impaired.
(ii)
Trademark licence agreement
Trademark licence agreement (“the Agreement”) was acquired in a business combination. The Agreement
relates to the right to use a trademark, and allows for automatic renewal without signiÄcant cost. As a
result, management believes there is no foreseeable limit to the period over which the Agreement is
expected to generate net cash inÅows to the Group, and the useful life of the Agreement is estimated to
be indeÄnite (Note 2.4).
2.
2.15
Investments in subsidiary companies
A subsidiary company is an entity over which the Group has the power to govern the Änancial and operating policies
so as to obtain beneÄts from its activities.
In the Company’s separate Änancial statements, investments in subsidiary companies are accounted for at cost less any
2.16
Investments in associated companies
An associated company is an entity, not being a subsidiary company or a joint venture company, in which the Group
has signiÄcant inÅuence. An associate is equity accounted for from the date the Group obtains signiÄcant inÅuence until
the date the Group ceases to have signiÄcant inÅuence over the associated companies.
The Group’s investments in associated companies are accounted for using the equity method. Under the equity method,
the investment in associated companies is carried in the balance sheet at cost plus post-acquisition changes in the
Group’s share of net assets of the associated companies.
Goodwill relating to associated companies is included in the carrying amount of the investment and is neither amortised
nor tested individually for impairment.
Any excess of the Group’s share of the net fair value of the associated companies’ identiÄable assets, liabilities and
contingent liabilities over the cost of investment is deducted from the carrying amount of the investment and is recognised
as income as part of the Group’s share of result of the associated companies in the period in which the investment is
acquired.
The proÄt or loss reÅects the share of the results of operations of the associated companies. Where there has been a
change recognised in other comprehensive income by the associates, the Group recognises its share of such changes
in other comprehensive income. Unrealised gains and losses resulting from transactions between the Group and the
associated companies are eliminated to the extent of the interest in the associated companies.
The Group’s share of the proÄt or loss of its associated companies is shown on the face of proÄt or loss after tax.
When the Group’s share of losses in an associated company equals or exceeds its interest in the associated company,
the Group does not recognise further losses, unless it has incurred obligations or made payments on behalf of the
associated company.
After application of the equity method, the Group determines whether it is necessary to recognise an additional
impairment loss on the Group’s investments in its associated companies. The Group determines at each balance sheet
date whether there is any objective evidence that the investment in the associated company is impaired. If this is
the case, the Group calculates the amount of impairment as the difference between the recoverable amount of the
associated company and its carrying value and recognises the amount in proÄt or loss.
The Änancial statements of the associated companies are prepared as of the same reporting date as the Company. Where
necessary, adjustments are made to bring the accounting policies in line with those of the Group.
2.
2.17
Investment in a joint venture company
A joint venture is a contractual arrangement whereby two or more parties undertake an economic activity that is subject
to joint control, where the strategic Änancial and operating decisions relating to the activity require the unanimous
consent of the parties sharing control.
Investment in a joint venture company is accounted for using the equity method. Under the equity method, the Group’s
investment in the joint venture company is measured in the balance sheet at cost plus post-acquisition changes in the
Group’s share of net assets of the joint venture company, less any accumulated impairment losses.
When the Group’s share of losses in the joint venture company equals or exceeds its interest in the joint venture
company, the Group does not recognise further losses, unless it has incurred obligations or made payments on behalf
of the joint venture company.
Adjustments are made in the Group’s consolidated Änancial statements to eliminate the Group’s share of unrealised
gains and losses on transactions between the Group and its joint venture company. Losses on transactions are recognised
immediately if the loss provides evidence of a reduction in the net realisable value of current assets or an impairment
loss.
The Änancial statements of the joint venture company are prepared as of the same reporting date as the Company.
Where necessary, adjustments are made to bring the accounting policies to be in line with those of the Group.
2.18
Financial assets
Initial recognition and measurement
Financial assets are recognised on the balance sheets when, and only when, the Group becomes a party to the
contractual provisions of the Änancial instrument. The Group determines the classiÄcation of its Änancial assets at initial
recognition. The Group does not have any Änancial assets designated as held-to-maturity investments.
When Änancial assets are recognised initially, they are measured at fair value, plus, in the case of Änancial assets not at
fair value through proÄt or loss, directly attributable transaction costs.
Subsequent measurement
The subsequent measurement of Änancial assets depends on their classiÄcation as follows:
Financial assets at fair value through proÄt or loss
Financial assets at fair value through proÄt or loss include Änancial assets held-for-trading and Änancial assets designated
upon initial recognition at fair value through proÄt or loss. Financial assets are classiÄed as held-for-trading if they
are acquired for the purpose of selling or repurchasing in the near term. This catagory includes derivative Änancial
instruments entered into by the Group that are not designated as hedging instruments in hedge relationships as deÄned
by FRS 39.
Subsequent to initial recognition, Änancial assets at fair value through proÄt or loss are measured at fair value. Any gains
or losses arising from changes in fair value of the Änancial assets are recognised in proÄt or loss. Net gains or net losses
on Änancial assets at fair value through proÄt or loss includes exchange differences.
Available-for-sale Änancial assets
Available-for-sale Änancial assets include equity securities. Equity securities classiÄed as available-for-sale are those,
which are neither classiÄed as held-for-trading nor designated at fair value through proÄt or loss.
2.
2.18
Financial assets (cont’d)
Subsequent measurement (cont’d)
After initial recognition, available-for-sale Änancial assets are subsequently measured at fair value. Any gains or losses
from changes in fair value of the Änancial asset are recognised in other comprehensive income, except that impairment
losses, foreign exchange gains and losses on monetary instruments and interest calculated using the effective interest
method are recognised in proÄt or loss. The cumulative gain or loss previously recognised in other comprehensive income
is reclassiÄed from equity to proÄt or loss as a reclassiÄcation adjustment when the Änancial asset is derecognised.
Investments in equity instruments whose fair value cannot be reliably measured are measured at cost less any
Loans and receivables
Non-derivative Änancial assets with Äxed or determinable payments that are not quoted in an active market are classiÄed
as loans and receivables. Subsequent to initial recognition, loans and receivables are measured at amortised cost using
the effective interest method, less impairment. Gains and losses are recognised in proÄt or loss when the loans and
receivables are derecognised or impaired, and through the amortisation process.
Derecognition
A Änancial asset is derecognised where the contractual rights to receive cash Åows from the asset have expired.
On derecognition of a Änancial asset in its entirety, the difference between the carrying amount and the sum of the
consideration received and any cumulative gain or loss that has been recognised directly in other comprehensive
income is recognised in proÄt or loss.
All regular way purchases and sales of Änancial assets are recognised or derecognised on the trade date i.e., the
date that the Group commits to purchase or sell the asset. Regular way purchases or sales are purchases or sales of
Änancial assets that require delivery of assets within the period generally established by regulation or convention in the
marketplace concerned.
2.19
Cash and cash equivalents consist of cash and bank balances, and Äxed deposits, which are readily convertible to
known amounts of cash and which are subject to an insigniÄcant risk to changes in value.
Cash and bank balances, and Äxed deposits carried in the balance sheets are classiÄed and accounted for as loans
and receivables under FRS 39. The accounting policy for this category of Änancial assets is stated in Note 2.18 to the
Änancial statements.
2.20
Stocks
Stocks are stated at the lower of cost and net realisable value. Costs incurred in bringing the stocks to their present
location and condition are accounted for as follows:
• Raw materials and stores: Purchase costs on a weighted-average basis; and
• Finished goods and goods for sale: Costs of direct materials, labour and production overheads based on the level of
normal activity, assigned on a weighted-average basis.
2.
2.20
Stocks (cont’d)
Where necessary, allowance is provided for damaged, obsolete and slow moving items to adjust the carrying value of
inventories to the lower of cost and net realisable value.
Net realisable value represents the estimated selling price in the ordinary course of business, less estimated costs of
completion and the estimated costs necessary to make the sale.
2.21
Impairment of assets
(a)
Impairment of Änancial assets
The Group assesses at the end of each reporting period whether there is any objective evidence that a Änancial
asset is impaired.
Financial assets carried at amortised cost
For Änancial assets carried at amortised cost, the Group Ärst assesses individually whether objective evidence
of impairment exists individually for Änancial assets that are individually signiÄcant, or collectively for Änancial
assets that are not individually signiÄcant. If the Group determines that no objective evidence of impairment
exists for an individually assessed Änancial asset, whether signiÄcant or not, it includes the asset in a group of
Änancial assets with similar credit risk characteristics and collectively assesses them for impairment. Assets that
are individually assessed for impairment and for which an impairment loss is, or continues to be recognised are
not included in a collective assessment of impairment.
If there is objective evidence that an impairment loss on Änancial assets carried at amortised cost has incurred,
the amount of the loss is measured as the difference between the asset’s carrying amount and the present value of
estimated future cash Åows discounted at the Änancial asset’s original effective interest rate. The carrying amount
of the asset is reduced through the use of an allowance account. The impairment loss is recognised in proÄt or
loss.
When the asset becomes uncollectible, the carrying amount of impaired Änancial assets is reduced directly or
if an amount was charged to the allowance account, the amounts charged to the allowance account are written
off against the carrying value of the Änancial asset.
To determine whether there is objective evidence that an impairment loss on Änancial assets has been incurred,
the Group considers factors such as the probability of insolvency or signiÄcant Änancial difÄculties of the debtor
and default or signiÄcant delay in payments.
If in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively
to an event occurring after the impairment was recognised, the previously recognised impairment loss is reversed
to the extent that the carrying amount of the asset does not exceed its amortised cost at the reversal date. The
amount of reversal is recognised in proÄt or loss.
If there is objective evidence (such as signiÄcant adverse changes in the business environment where the issuer
operates, probability of insolvency or signiÄcant Änancial difÄculties of the issuer) that an impairment loss on
an unquoted equity instrument that is not carried at cost has been incurred, the amount of the loss is measured
as the difference between the asset’s carrying amount and the present value of estimated future cash Åows
discounted at the current market rate of return for a similar Änancial asset. Such impairment losses are not
reversed in subsequent periods.
2.
2.21
Impairment of assets (cont’d)
(a)
Impairment of Änancial assets (cont’d)
Available-for-sale Änancial assets
In the case of equity investments classiÄed as available-for-sale, objective evidence of impairment include (i)
signiÄcant Änancial difÄculty of the issuer or obligor, (ii) information about signiÄcant changes with an adverse
effect that have taken place in the technological, market, economic or legal environment in which the issuer
operates, and indicates that the cost of the investment in equity instrument may not be recovered; and (iii) a
signiÄcant or prolonged decline in the fair value of the investment below its costs. “SigniÄcant” is to be evaluated
against the original cost of the investment and “prolonged” against the period in which the fair value has been
below its original cost.
If an available-for-sale Änancial asset is impaired, an amount comprising the difference between its acquisition
cost (net of any principal payment and amortisation) and its current fair value, less any impairment loss previously
recognised in proÄt or loss is transferred from equity and recognised in proÄt or loss. Reversals of impairment
losses in respect of equity instruments are not recognised in proÄt or loss; increase in their fair value after
impairment are recognised directly in equity.
(b)
Impairment of non-Änancial assets
The Group assesses at each reporting date whether there is an indication that an asset may be impaired. If any
indication exists, or when an annual impairment testing for an asset is required, the Group makes an estimate of
the asset’s recoverable amount.
An asset’s recoverable amount is the higher of an asset’s or cash-generating unit’s fair value less costs to sell and
its value in use and is determined for an individual asset, unless the asset does not generate cash inÅows that
are largely independent of those from other assets or group of assets. Where the carrying amount of an asset or
cash-generating unit exceeds its recoverable amounts, the asset is considered impaired and is written down to its
recoverable amount. In assessing value in use, the estimated future cash Åows expected to be generated by the
asset are discounted to their present value using a pre-tax discount rate that reÅects current market assessments
of the time value of money and the risks speciÄc to the asset. In determining fair value less costs to sell, an
appropriate valuation model is used. These calculations are corroborated by valuation multiples, quoted share
prices for publicly traded subsidiary companies, or other available fair value indicators.
Impairment losses of continuing operations are recognised in proÄt or loss in those expense categories consistent
with the function of the impaired asset, except for assets that are previously revalued where the revaluation was
taken to other comprehensive income. In this case, the impairment is also recognised in other comprehensive
income up to the amount of any previous revaluation.
For assets excluding goodwill, an assessment is made at each reporting date as to whether there is any indication
that previously recognised impairment losses may no longer exist or may have decreased. If such indication
exists, the Group estimates the asset’s or cash-generating unit’s recoverable amount. A previously recognised
impairment loss 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. If that is the case, the carrying amount of
the asset is increased to its recoverable amount. That increase cannot exceed the carrying amount that would
have been determined, net of depreciation, had no impairment loss been recognised previously. Such reversal is
recognised in proÄt or loss unless the asset is measured at revalued amount, in which case the reversal is treated
as a revaluation increase.
2.
2.22
Financial liabilities
Initial recognition and measurement
Financial liabilities are recognised on the balance sheets when, and only when, the Group becomes a party to the
contractual provisions of the Änancial instrument. The Group determines the classiÄcation of its Änancial liabilities at
initial recognition.
All Änancial liabilities are recognised initially at fair value and in the case of other Änancial liabilities, plus directly
attributable transaction costs.
Subsequent measurement
The measurement of Änancial liabilities depends on their classiÄcation as follows:
Financial liabilities at fair value through proÄt or loss
Financial liabilities at fair value through proÄt or loss includes Änancial liabilities held-for-trading and Änancial liabilities
designated upon initial recognition as at fair value. Financial liabilities are classiÄed as held-for-trading if they are
acquired for the purpose of selling in the near term. This category includes derivative Änancial instruments entered into
by the Group that are not designated as hedging instruments in hedge relationships. Separated embedded derivatives
are also classiÄed as held-for-trading unless they are designated as effective hedging instruments.
Subsequent to initial recognition, Änancial liabilities at fair value through proÄt or loss are measured at fair value. Any
gains or losses arising from changes in fair value of the Änancial liabilities are recognised in proÄt or loss.
The Group has designated the redeemable preference shares issued by a subsidiary company upon initial recognition
at fair value through proÄt or loss.
Other Änancial liabilities
After initial recognition, other Änancial liabilities are subsequently measured at amortised cost using the effective
interest rate method. Gains and losses are recognised in proÄt or loss when the liabilities are derecognised, and through
the amortisation process.
Derecognition
A Änancial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. When
an existing Änancial liability is replaced by another from the same lender on substantially different terms, or the terms
of an existing liability are substantially modiÄed, such an exchange or modiÄcation is treated as a derecognition of
the original liability and the recognition of a new liability, and the difference in the respective carrying amounts is
recognised in proÄt or loss.
2.23
Redeemable preference shares
Redeemable preference shares issued by a subsidiary company relate to the Group’s real estate fund investment
activities and are classiÄed as Änancial liabilities at fair value through proÄt or loss. The liabilities arising from the
redeemable shares are carried at the redemption amount being the net asset value calculated in accordance with FRS.
For the purpose of calculating the net assets attributable to shareholders in accordance with the redemption requirements,
the assets and liabilities relating to the real estate fund investment activities are measured at fair value.
2.
2.24
Provisions
Provisions are recognised by the Group when a present obligation (legal or constructive) arises as a result of a past
event, it is probable that an outÅow of economic resources will be required to settle the obligation, and the amount of
the obligation can be estimated reliably.
Provisions are reviewed at the end of each reporting period and adjusted to reÅect the current best estimate. If it is no
longer probable that an outÅow of resources will be required to settle the obligation, the provision is reversed. If the
effect of the time value of money is material, provisions are discounted using a current pre tax rate that reÅects, where
appropriate, the risks speciÄc to the liability. When discounting is used, the increase in the provision due to the passage
of time is recognised as a Änance cost.
2.25
Income taxes
(a)
Current income tax
Current income tax assets and liabilities for the current and prior periods are measured at the amount expected
to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount
are those that are enacted or substantively enacted by the end of the reporting period, in the countries where the
Group operates and generates taxable income.
Current income taxes are recognised in proÄt or loss except to the extent that the tax relating to items recognised
outside proÄt or loss, either in other comprehensive income or directly in equity. Management periodically
evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are
subject to interpretation and establishes provisions where appropriate.
(b)
Deferred tax
Deferred taxation is provided, using the liability method on all temporary differences at the end of the reporting
period between the tax bases of assets and liabilities and their carrying amounts for Änancial reporting purposes.
Deferred tax liabilities are recognised for all temporary differences, except:
• where the deferred tax liability arises from the initial recognition of goodwill or of an asset or liability in a
transaction that is not a business combination and, at the time of the transaction, affects neither the accounting
proÄt nor taxable proÄt or loss; and
• in respect of taxable temporary differences associated with investments in subsidiary companies, associated
company and joint venture company, where the timing of the reversal of the temporary differences can be
controlled and it is probable that the temporary differences will not reverse in the foreseeable future.
Deferred tax assets are recognised for all deductible temporary differences, carry-forward of unused tax credits
and unused tax losses, to the extent that it is probable that taxable proÄt will be available against which the
deductible temporary differences, and the carry-forward of unused tax credits and unused tax losses can be
utilised, except:
• where the deferred tax asset relating to the deductible temporary difference arises from the initial recognition
of an asset or liability in a transaction that is not a business combination and, at the time of the transaction,
affects neither the accounting proÄt nor taxable proÄt or loss; and
2.
2.25
Income taxes (cont’d)
(b)
Deferred tax (cont’d)
• in respect of deductible temporary differences associated with investments in subsidiary companies,
associated company and joint venture company, deferred tax assets are recognised only to the extent that
it is probable that the temporary differences will reverse in the foreseeable future and taxable proÄt will be
available against which the temporary differences can be utilised.
The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the
extent that it is no longer probable that sufÄcient taxable proÄt will be available to allow all or part of the deferred
tax asset to be utilised. Unrecognised deferred tax assets are reassessed at the end of each reporting period and
are recognised to the extent that it has become probable that future taxable proÄt will allow the deferred tax asset
to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the
asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively
enacted at the end of each reporting period.
Deferred tax relating to items recognised outside proÄt or loss is recognised outside proÄt or loss. Deferred tax
items are recognised in correlation to the underlying transaction either in other comprehensive income or directly
in equity and deferred tax arising from a business combination is adjusted against goodwill on acquisition.
Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set off current tax
assets against current tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation
authority.
(c)
Goods and services tax
Revenues, expenses and assets are recognised net of the amount of goods and services tax, except:
– Where the goods and services tax incurred on a purchase of assets or services is not recoverable from the
taxation authority, in which case the goods and services tax is recognised as part of the cost of acquisition of
the asset or as part of the expense item as applicable; and
– Receivables and payables that are stated with the amount of goods and services tax included.
The net amount of goods and services tax recoverable from, or payable to, the taxation authority is included as
part of receivables or payables in the balance sheets.
2.26
Leases
The determination of whether an arrangement is, or contains a lease is based on the substance of the arrangement
at inception date: whether fulÄlment of the arrangement is dependent on the use of a speciÄc asset or assets or the
arrangement conveys a right to use the asset. For arrangements entered into prior to 1 January 2005, the date of
inception is deemed to be 1 January 2005 in accordance with the transitional requirements of INT FRS 104.
2.
2.26
Leases (cont’d)
(a)
As lessee
Finance leases, which transfer to the Group substantially all the risks and rewards incidental to ownership of
the leased item are capitalised at the inception of the lease at the fair value of the leased asset or, if lower, at the
present value of the minimum lease payments. Any initial direct costs are also added to the amount capitalised.
Lease payments are apportioned between the Änance charges and reduction of the lease liability so as to achieve
a constant rate of interest on the remaining balance of the liability. Finance charges are charged to proÄt or loss.
Contingent rents, if any, are charged as expenses in the periods in which they are incurred.
Capitalised leased assets are depreciated over the shorter of the estimated useful life of the asset and the lease
term, if there is no reasonable certainty that the Group will obtain ownership by the end of the lease term.
Operating lease payments are recognised as an expense in proÄt or loss on a straight-line basis over the lease
term. The aggregate beneÄt of incentives provided by the lessor is recognised as a reduction of rental expense
over the lease term on a straight-line basis.
(b)
As lessor
Leases where the Group retains substantially all the risks and rewards of ownership of the asset are classiÄed as
operating leases. Initial direct costs incurred in negotiating an operating lease are added to the carrying amount
of the leased asset and recognised over the lease term on the same bases as rental income. The accounting policy
for rental income is set out in Note 2.8 to the Änancial statements. Contingent rents are recognised as revenue in
the period in which they are earned.
2.27
Segment reporting
For management purposes, the Group is organised into operating segments based on their products and services which
are independently managed by the respective segment managers responsible for the performance of the respective
segments under their charge. The segment managers report directly to the management of the Company who regularly
reviews the segment results in order to allocate resources to the segments and to assess the segment performance.
Additional disclosures on each of these segments are shown in Note 36 to the Änancial statements, including the factors
used to identify the reportable segments and the measurement basis of segment information.
2.28
Contingencies
A contingent liability is:
(a)
a possible obligation that arises from past events and whose existence will be conÄrmed only by the occurrence
or non-occurrence of one or more uncertain future events not wholly within the control of the Group; or
(b)
a present obligation that arises from past events but is not recognised because:
(i)
It is not probable that an outÅow of resources embodying economic beneÄts will be required to settle the
obligation; or
(ii)
The amount of the obligation cannot be measured with sufÄcient reliability.
A contingent asset is a possible asset that arises from past events and whose existence will be conÄrmed only by
the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the
Group.
Contingent liabilities and assets are not recognised on the balance sheet of the Group.
2.
2.29
Related parties
A party is considered to be related to the Group if:
(a)
3.
The party, directly or indirectly through one or more intermediaries,
(i)
controls, is controlled by, or is under common control with, the Group;
(ii)
has an interest in the Group that gives it signiÄcant inÅuence over the Group; or
(iii)
has joint control over the Group;
(b)
The party is an associate;
(c)
The party is a jointly-controlled entity;
(d)
The party is a member of the key management personnel of the Group or its parent;
(e)
The party is a close member of the family of any individual referred to in (a) or (d); or
(f)
The party is an entity that is controlled, jointly controlled or signiÄcantly inÅuenced by or for which signiÄcant
voting power in such entity resides with, directly or indirectly, any individual referred to in (d) or (e); or
(g)
The party is a post-employment beneÄt plan for the beneÄt of the employees of the Group, or of any entity that
is a related party of the Group.
REVENUE
Revenue was made up of the following :Sales of goods
Fees charged to food court stallholders (including contingent licensing fee)
Rental income
Interest income *
Sales of investment securities held-for-trading
Dividend income from quoted investment securities
Royalty and franchise income
* Interest income :– Fixed deposits, and cash and bank balances
– Investment funds at fair value through proÄt or loss
– Convertible bond
Group
2010
$’000
2009
$’000
258,422
103,351
18,753
–
368
–
207
713
272,211
115,230
17,105
64
363
14
207
770
381,814
405,964
114
254
–
107
216
40
368
363
4.
COST OF REVENUE
Cost of goods sold
Cost of food and beverage
Cost of goods manufactured
Cost of investment securities held-for-trading
5.
Group
2010
$’000
2009
$’000
(161,301)
(33,603)
(30,345)
–
(158,825)
(38,839)
(53,019)
(2,287)
(225,249)
(252,970)
OTHER REVENUE
Group
2010
$’000
Write-back of trade creditors
Recovery of renovation costs from tenants
Grant income from Jobs Credit Scheme
Income from expired coupons
Finance income on rental deposits
Income from forfeiture deposits
Insurance claim
Miscellaneous income
2009
$’000
76
246
360
15
178
638
316
456
12
330
2,549
177
189
344
–
496
2,285
4,097
In Singapore Budget 2009, the Singapore Finance Minister announced the introduction of a Jobs Credit Scheme
(“Scheme”). Under this Scheme, the Group received a 12% cash grant on the Ärst $2,500 of each month’s wages for
each employee on their Central Provident Fund payroll in four payments: March, June, September and December 2009.
In October 2009, the Government announced that the Scheme is extended for half a year with another two payments at
stepped-down rates in March and June 2010 at 6% and 3% of wages respectively. During the Änancial year, the Group
received grant income of $360,000 (2009: $2,549,000).
6.
FINANCE COSTS
Group
2010
$’000
Finance costs are made up of the following :– bank borrowings
– obligations under Änance leases
– others
2009
$’000
(487)
(3)
(40)
(1,155)
(17)
(39)
(530)
(1,211)
7.
PROFIT/(LOSS) BEFORE TAXATION
ProÄt/(loss) before taxation included the following for the Änancial years ended 31 December:2010
$’000
Advertising and promotional expenses
Amortisation of intangible assets
(Allowance)/write-back of allowance for impairment on non-trade debtors
(Allowance)/write-back of allowance for impairment loss on unquoted equity shares
Bad debts recovered
Depreciation of property, plant and equipment
Employee beneÄts expense :– Salaries, bonuses and related expenses
– Contributions to deÄned contribution plans
– Termination beneÄts
Fair value changes of Änancial instruments :– (Loss)/gain on investment funds at fair value through proÄt or loss
– Gain on investment securities held-for-trading
– Gain on redeemable preference shares issued by a subsidiary company
– Gain on derivative Änancial instrument at fair value through proÄt or loss
Gain on acquisition of non-controlling interests
Gain on disposal of an associated company
Loss on disposal of an investment property
Net foreign exchange loss
Net (loss)/gain on disposal of property, plant and equipment
Non-audit services provided by :– Auditors of the Company
– Other auditors
Operating lease expenses (including contingent rent)
Remuneration paid to :– Directors of the Company :
Fees paid to directors
Salaries, bonuses and related expenses
Contributions to deÄned contribution plans
– Directors of the subsidiary companies and other key management personnel :
Fees paid to directors of the subsidiary companies
Stocks recognised as an expense in cost of sales
Transaction costs incurred in a business combination
Utilities expenses
Write-back of impairment loss on property, plant and equipment
Write-back of performance incentive management fee
Write-back of provision for long outstanding creditors
Write-back of provision for reinstatement costs
Write-back of impairment loss on an associated company
(included in share of results of associated companies) (Note 13(b))
Group
2009
$’000
(8,838)
(644)
(2,855)
(935)
(816)
109
(8,374)
(9,233)
(1,024)
(2,874)
2
350
–
(10,273)
(48,387)
(5,082)
–
(52,231)
(5,244)
(27)
(41)
702
414
–
–
25
–
–
–
–
(40)
(331)
308
1,107
–
191
2,062
–
(1,073)
(634)
(79)
500
(612)
207
(215)
(63)
(37,096)
(312)
(250)
(37)
(40,546)
(1,176)
(424)
(615)
(3)
(364)
(729)
(6)
(200)
(2,145)
(141)
–
(300)
(3,642)
(138)
(173)
(204,577)
(193)
(7,038)
–
–
–
158
(240,468)
–
(6,841)
100
1,655
259
29
410
–
8.
INCOME TAX EXPENSE
Major components of income tax expense
The major components of income tax expense for the Änancial years ended 31 December 2010 and 2009 are :
Group
2010
$’000
2009
$’000
(3,570)
1,738
(3,176)
2,245
(1,832)
(931)
(317)
117
–
(762)
1,018
256
(2,032)
(419)
Income statement
Current income tax :Current income taxation
Overprovision in respect of previous years
Deferred income tax :Origination and reversal of temporary differences
BeneÄts from temporary differences previously unrecognised
Effect of changes in tax rates
Income tax expense recognised in proÄt or loss
Relationship between tax expense and accounting profit/(loss)
The reconciliation between tax expense and the product of accounting proÄt/(loss) multiplied by the applicable
corporate tax rate for the Änancial years ended 31 December 2010 and 2009 are as follows :ProÄt/(loss) before taxation
9,601
(1,678)
Tax calculated at the domestic tax rate of 17% (2009: 17%)
1,632
(285)
Adjustments :
BeneÄts from temporary differences not recognised
Different tax rates of subsidiary companies operating in other jurisdictions
Non-deductible expenses
Income not subject to taxation
Effect of partial tax exemption and tax relief
BeneÄts from temporary difference previously unrecognised
Share of results of associated companies and a joint venture company
Overprovision in respect of previous years
Effect of changes in tax rates
1,007
609
1,084
(194)
(138)
(117)
(113)
(1,738)
–
1,839
127
5,733
(3,222)
(221)
(1,018)
(33)
(2,245)
(256)
Income tax expenses recognised in proÄt or loss
2,032
419
8.
9.
INCOME TAX EXPENSE (cont’d)
(a)
In 2009, in relation to the Singapore Group Relief System, the Group had utilised tax losses and capital
allowances of approximately $3,288,000 and $1,059,000 respectively to set off the assessable income of
certain companies within the Group. The utilisation of tax losses and capital allowances under the Singapore
Group Relief System was subject to compliance with the relevant rules and procedures and agreement
respectively of the Inland Revenue Authority of Singapore. In 2010, the Group had not utilised tax losses, capital
allowances and donation relief under Singapore Group Relief System.
(b)
As at 31 December 2010, the Group has unutilised tax losses of approximately $18,263,000 (2009: $13,505,000),
unabsorbed capital allowances of $1,862,000 (2009: $1,635,000), unabsorbed donation relief of $638,000
(2009: $706,000) and unrealised loss on investment securities of $3,345,000 (2009: $4,047,000) respectively,
available for offset against future taxable income, subject to compliance with the relevant rules and procedures
and agreement of the respective tax authorities.
(c)
The corporate income tax rate applicable to Singapore companies of the Group was reduced to 17% for the
year of assessment 2010 onwards from 18% for the year of assessment 2009.
(d)
The corporate income tax rate applicable to the Malaysian companies of the Group was reduced from 27% to
26%, and from 26% to 25% for the years of assessment 2008 and 2009 onwards respectively.
EARNINGS/(LOSS) PER SHARE
Basic earnings/(loss) per share are calculated by dividing the “proÄt/(loss) for the Änancial year, net of taxation,
attributable to owners of the Company” by the weighted average number of ordinary shares outstanding during the
Änancial year of 125,667,324 (2009: 125,667,324).
Diluted earnings/(loss) per share are calculated by dividing the “proÄt/(loss) for the Änancial year, net of taxation,
attributable to owners of the Company” by the weighted average number of ordinary shares outstanding during the
Änancial year plus the weighted average number of ordinary shares outstanding during the Änancial year of 125,667,324
(2009: 125,667,324).
As there was no unexpired share option scheme and no warrants granted, the basic and diluted earnings/(loss) per
share are the same.
The following tables reÅect the proÄt/(loss) and share data used in the computation of basic and diluted earnings
per share for the Änancial years ended 31 December:
Group
2010
$’000
ProÄt/(loss) for the year attributable to owners of the Company
Weighted average number of ordinary shares for basic earnings
per share computation
2009
$’000
6,302
(3,405)
125,667
125,667
10. PROPERTY, PLANT AND EQUIPMENT
Leasehold
land and
improvements,
and factory
Plant
and ofÄce
and
buildings
equipment
$’000
$’000
Food
court
equipment
$’000
Motor
vehicles
$’000
Construction
-in-progress
$’000
Total
$’000
Group
Cost :Balance at 1 January 2009
Additions *
Disposals
Write-offs #
ReclassiÄcations
22,294
3,035
(44)
(3,269)
217
(282)
57,380
3,515
(2,910)
(4,451)
154
1
1,210
363
(93)
(37)
–
2
2,491
679
(717)
(126)
–
1
1,116
–
–
(650)
(371)
–
84,491
7,592
(3,764)
(8,533)
–
(278)
21,951
53,689
1,445
2,328
95
79,508
100
2,970
(23)
(3,276)
168
(609)
67
4,028
(1,699)
(8,544)
34
(380)
3
717
(244)
(30)
–
(21)
–
3
(5)
–
–
(11)
–
167
–
–
(202)
–
170
7,885
(1,971)
(11,850)
–
(1,021)
21,281
47,195
1,870
2,315
60
72,721
(11,127)
(31,272)
(8)
(1,905)
(51)
(44,363)
(4,615)
100
36
2,447
217
(4,926)
–
2,749
3,732
184
(328)
–
37
30
(1)
(404)
–
590
126
6
–
–
–
–
–
(10,273)
100
3,412
6,335
406
(12,942)
(29,533)
(270)
(1,587)
(51)
(44,383)
(3,654)
22
2,936
2
344
(4,157)
1,311
8,514
44
350
(371)
145
15
–
10
(192)
3
–
(46)
13
–
–
–
–
–
(8,374)
1,481
11,465
–
717
(13,292)
(23,471)
(471)
(1,809)
(51)
(39,094)
Net carrying amount :As at 31 December 2009
9,009
24,156
1,175
741
44
35,125
As at 31 December 2010
7,989
23,724
1,399
506
9
33,627
and 1 January 2010
Due to acquisition of a
subsidiary company (Note 37)
Additions *
Disposals
Write-offs #
ReclassiÄcations
Accumulated depreciation and
impairment loss :–
Charge for the Änancial year
(Note 7)
Write-back of impairment loss
Disposals
Write-offs #
and 1 January 2010
(Note 7)
Disposals
Write-offs #
ReclassiÄcations
10. PROPERTY, PLANT AND EQUIPMENT (cont’d)
*
Included in additions for the Änancial year was an amount of $284,000 (2009: $282,000) relating to reinstatement
costs for dismantling, removal and restoration of property, plant and equipment which was provided for as provision
for reinstatement costs (Note 23). Cash payments of $7,601,000 (2009: $7,310,000) were made to purchase property,
plant and equipment during the Änancial year.
#
Included in write-offs for the Änancial year was an amount of $242,000 (2009: $402,000) relating to reinstatement
costs for dismantling, removal and restoration of property, plant and equipment for those outlets which were
closed down during the Änancial year (Note 23) and an amount of $650,000 relating to a reversal of provision for
construction-in-progress in 2009.
OfÄce equipment
$’000
Company
Cost :Balance at 1 January 2009
Additions
Disposals
2,266
512
(409)
Balance at 31 December 2009 and 1 January 2010
Additions
2,369
39
2,408
Accumulated depreciation :Balance at 1 January 2009
Disposals
(1,708)
(280)
286
Balance at 31 December 2009 and 1 January 2010
(1,702)
(261)
(1,963)
Net carrying amount :As at 31 December 2009
667
445
Construction-in-progress
The Group’s construction-in-progress included $10,000 (2009: $44,000) which relates to expenditure for new start-up
food retail outlets in the course of renovations.
Assets held under finance leases
The carrying amount of plant and equipment of the Group held under Änance lease obligations as at 31 December 2010
is $38,000 (2009: $496,000). These relate to assets assumed from the acquisitions of subsidiary companies in prior
years.
Leased assets are pledged as security for the related Änance lease obligations (Note 25).
10. PROPERTY, PLANT AND EQUIPMENT (cont’d)
Assets pledged as security
Bank borrowings are secured with a Äxed charge over the leasehold land and building with a carrying amount of
$2,502,000 (2009: $2,588,000) and a Åoating charge over certain property, plant and equipment with a net carrying
amount of $4,441,000 (2009: $5,143,000) (Note 25). These relate to assets assumed from the acquisitions of subsidiary
companies in prior years.
11. INTANGIBLE ASSETS
Group
Cost:
Balance at
31 December 2008
and 1 January 2009,
Adjustments to
initial accounting
for business
combinations (b)
Balance at
31 December 2008
and 1 January 2009,
as restated
Due to disposal
of subsidiary
companies
Adjustment to
goodwill
Balance at
31 December 2009
and 1 January 2010
Due to acquisition of
a subsidiary company
(Note 37), (c)
Balance at
31 December 2010
Goodwill
Trademark
on
licence
consolidation Trademarks agreement
$’000
$’000
$’000
Management
Unpatented Customer
service
technology relationships agreement Total
$’000
$’000
$’000
$’000
40,036
18,165
32,495
14,245
16,841
–
121,782
(2,569)
2,473
–
–
(2,039)
216
(1,919)
37,467
20,638
32,495
14,245
14,802
216
119,863
(1,131)
–
–
–
–
–
(1,131)
(2,337)
14
–
–
–
–
–
–
–
–
–
–
(2,337)
14
34,013
20,638
32,495
14,245
14,802
216
116,409
3,579
72
–
–
–
–
–
–
–
–
–
–
3,579
72
37,664
20,638
32,495
14,245
14,802
216
120,060
11. INTANGIBLE ASSETS (cont’d)
Goodwill
Trademark
on
licence
consolidation Trademarks agreement
$’000
$’000
$’000
Group
Accumulated amortisation and impairment loss:
Balance at
31 December 2008
and 1 January 2009,
(7,707)
–
Adjustments to
initial accounting
for business
combinations (b)
–
–
Balance at
31 December 2008
and 1 January 2009,
as restated
Charge for the Änancial
year (Note 7), (a)
Management
Unpatented Customer
service
technology relationships agreement Total
$’000
$’000
$’000
$’000
–
(1,425)
(1,460)
–
(10,592)
–
–
14
–
14
(7,707)
–
–
(1,425)
(1,446)
–
(10,578)
–
–
–
(1,425)
(1,376)
(73)
(2,874)
(7,707)
–
–
(2,850)
(2,822)
(73)
(13,452)
–
–
–
(1,425)
(1,376)
(54)
(2,855)
Balance at
31 December 2010
(7,707)
–
–
(4,275)
(4,198)
(127)
(16,307)
Net carrying amount:
Balance at
31 December 2009
26,306
20,638
32,495
11,395
11,980
143
102,957
Balance at
31 December 2010
29,957
20,638
32,495
9,970
10,604
89
103,753
Balance at
31 December 2009
and 1 January 2010
Charge for the Änancial
year (Note 7), (a)
(a)
Amortisation expense
Trademarks relate to “Food Junction” and “Malone’s” trademarks and the useful lives of these trademarks are
estimated to be indeÄnite.
Trademark licence agreement relates to the right to use the “Delifrance” trademark granted under a licence
agreement. The useful life of this trademark licence agreement is estimated to be indeÄnite.
Unpatented technology relates to Delifrance’s ModiÄed Sons Vide Process for the Group’s food retail business,
which allows for the preparation of food to reduce wastage signiÄcantly, increases the shelf life of the food items,
and reduces the time required to reheat food signiÄcantly. The remaining amortisation period of unpatented
technology is 7 (2009: 8) years.
(a)
Amortisation expense (cont’d)
Customer relationships relate to tenancy agreements between the stallholders and the food court operators in the
food court business. The remaining amortisation period is 7 (2009: 8) years.
Management service agreement relates to the trademark license agreement between a subsidiary company of
the Group and its licensee for the provision of management services to the licensee. The remaining amortisation
period is 1 (2009: 2) years.
The amortisation of unpatented technology, customer relationships, and management service agreement are
included in the “Selling and marketing, and other operating expenses” line item in proÄt or loss.
(b)
Adjustments to initial accounting for business combinations
(i)
On 15 September 2008, APG Strategic Investment Pte Ltd acquired 29,513,515 ordinary shares at
$0.55 per share for a cash consideration of $16,223,000 in Food Junction Holdings Limited (“FJH”) via
a conditional partial offer to acquire an additional 24.5% or 65,474,725 of the ordinary shares in FJH.
As a result of the acquisition, the Group’s shareholding in FJH increased from 29.9% to 54.4%, and FJH
became a subsidiary company of the Group.
In 2009, the PPA exercise was completed. Accordingly, the Group’s comparative information presented
for goodwill on consolidation, intangible assets, deferred tax liabilities and minority interests have been
restated. The Änancial impact on the Änancial statements of the Group for the Änancial year ended 31
December 2008 was to increase retained earnings by $7,000. The Änalised fair values and PPA adjustments
are summarised below.
(ii)
On 1 October 2008, FJH acquired the entire share capital of Malones Holdings Pte Ltd (“Malones”),
for a total consideration of RMB48,000,000 (S$9,300,000), which comprised a cash consideration
of RMB24,000,000 (S$4,600,000), and the issuance of 9,347,250 new FJH shares at $0.50 per share
(S$4,700,000). In accordance with FRS 103, Business Combinations, the total consideration was derived
to be $8,158,000 with the issuance of 9,347,250 ordinary shares at a fair value of $0.33 each, being the
published price of the shares at the date of exchange to the vendor.
In 2009, the PPA exercise was completed. Accordingly, the Group’s comparative information presented
for goodwill on consolidation, intangible assets and deferred tax liabilities have been restated. There was
no impact on the retained earnings of the Group for the Änancial year ended 31 December 2008. The
Änalised fair values and PPA adjustments are summarised below.
Group
Before
After
Änalisation
PPA
Änalisation
of PPA
adjustments
of PPA
$’000
$’000
$’000
Intangible assets
Retained earnings
32,329
78,861
(7,135)
28,760
157,426
(2,569)
664
223
(1,483)
(199)
29,760
79,525
(6,912)
27,277
157,227
(c)
Intangible assets arising on acquisition of a subsidiary company, and provisional accounting of acquisition
On 2 November 2010, Food Junction International Pte Ltd, a wholly-owned subsidiary of FJH, acquired 100%
equity interest in All Around Limited. Under FRS 103, Business Combinations, goodwill is required to be
determined within 12 months from the date of acquisition. As the PPA exercise has not been Änalised yet, the
goodwill of $3,579,000 is based on a provisional basis as at 31 December 2010 and is subject to further review.
The Group is in the process of engaging an independent valuer to perform the PPA exercise (Note 12).
Goodwill arising from this acquisition will be adjusted for accordingly on a retrospective basis when the fair
valuation is Änalised.
(d)
Impairment testing of trademark license agreement
In December 2010, Grand Marlins De Paris (“GMP”) served notice on Delifrance Asia Ltd that the existing
trademark licensing agreement is due for renewal by 30 June 2012. Since then, discussions and negotiations
on a revised agreement are on-going as at the date when the Änancial statements are issued. Nonetheless,
management had assessed the useful life of the trademark license agreement to remain indeÄnite, and performed
the impairment assessment review for 2010, based on the judgement that the agreement has an indeÄnite useful
life.
In 2010 and 2009, impairment assessment review had been performed for the trademark license agreement, and
no impairment was assessed as the recoverable amount was in excess of the carrying value.
(e)
Impairment testing of goodwill on consolidation
Goodwill acquired through business combinations has been allocated to the Group’s cash-generating units
(“CGU”) identiÄed according to each individual business unit for impairment testing.
The carrying amount of goodwill allocated to each CGU is as follows:Basis on
which
recoverable
values are
determined
2010
$’000
Auric Chun Yip Sdn Bhd (i)
Auric PaciÄc Food Processing Sdn Bhd (i)
Edmontor Investments Pte Ltd (ii)
Food Junction Holdings Limited (iii)
Malones Holdings Pte Ltd (i)
All Around Limited (iv)
3,146
196
11,449
10,101
1,486
3,579
29,957
Value-in-use
Value-in-use
Value-in-use
Value-in-use
Value-in-use
Growth
rates
per annum
Pre-tax
discount
rate
per annum
%
%
6.0 – 11.0
5.0
6.0
10.0 – 11.0
4.0
10.80
10.00
9.50
13.51
11.90
(e)
Impairment testing of goodwill on consolidation (cont’d)
Basis on
which
recoverable
values are
determined
2009
$’000
Auric Chun Yip Sdn Bhd (i)
Auric PaciÄc Food Processing Sdn Bhd (i)
Edmontor Investments Pte Ltd (ii)
Food Junction Holdings Limited (iii)
Malones Holdings Pte Ltd (i)
3,080
190
11,449
10,101
1,486
Growth
rates
per annum
Pre-tax
discount
rate
per annum
%
Value-in-use
Value-in-use
Value-in-use
Value-in-use
Value-in-use
%
6.0 – 10.0
5.0 – 6.0
2.0
10.0 – 14.0
4.0
10.30
10.00
9.67
12.42
13.83
26,306
The value-in-use calculation using cash Åow projections is based on Änancial budgets approved by management
covering a period of 5 (2009: 5) years. Management has considered and determined the factors applied in these
Änancial budgets which include budgeted gross margins and the target growth rates. Management determines
the budgeted gross margins and growth rates based on past performance and its expectations for market
development. The target growth rates do not exceed the long-term average growth rate of the country in which
the entities operate. The discount rates applied are the target weighted average cost of capital of the business
units and reÅect speciÄc risks relating to the relevant business activities.
(i)
In 2010 and 2009, no impairment loss was assessed to be required for the goodwill acquired for Auric
Chun Yip Sdn Bhd, Auric PaciÄc Food Processing Sdn Bhd, and Malones as their recoverable amounts
were in excess of their carrying values.
(ii)
In 2010 and 2009, impairment assessment review had been performed for the goodwill acquired for
Edmontor Investments Pte Ltd and no further impairment was assessed as the recoverable amount was in
excess of the carrying value.
(iii)
In 2010 and 2009, impairment assessment review had been performed for the goodwill acquired for FJH
and no further impairment was assessed as the recoverable amount was in excess of the carrying value.
(iv)
No impairment assessment review was performed for the goodwill acquired by FJH in All Around Ltd, as
management was of the opinion that the acquisition was completed near to the end of reporting period.
Further details of the acquisition of All Around Ltd are disclosed in Note 37 of this Änancial statements.
12. INVESTMENTS IN SUBSIDIARY COMPANIES
Company
Unquoted ordinary shares, at cost
Impairment loss
2010
$’000
2009
$’000
101,572
(34,511)
101,452
(34,511)
67,061
66,941
12. INVESTMENTS IN SUBSIDIARY COMPANIES (cont’d)
Impairment assessment of investment in subsidiary companies
Since 2008, an allowance for impairment loss of $34,511,000 was recognised for the investments in subsidiary
companies. In 2010 and 2009, no further allowance for impairment loss was recognised.
Details of subsidiary companies as at 31 December are:Name of company
(Country of incorporation)
Principal activities
(Place of business)
Cost of
investments
2010
2009
$’000
$’000
Percentage of
equity held
by the Group
2010
2009
%
%
Held by the Company
APG Foods Pte Ltd ++
(Singapore)
Investment holding
(Singapore)
50,000
50,000
100
100
Auric Property Pte Ltd ++
(Singapore)
Property investment
(Singapore)
10,000
10,000
100
100
Auric PaciÄc Investment Holdings
Pte Ltd ++
(Singapore)
Investment holding
(Singapore)
#
#
100
100
Milford Sound Pte Ltd ++
(Singapore)
Investment trading
(Singapore)
#
#
100
100
Top-One Foods Pte Ltd ++++
(Singapore)
Dormant
9,815
9,815
100
100
Auric PaciÄc (M) Sdn Bhd +++
(Malaysia)
Food wholesale and distribution
(Malaysia)
634
634
100
100
Classic Aspire Sdn Bhd +++
(Malaysia)
– Ordinary shares
– Preference shares
Investment trading
(Malaysia)
63
8,991
63
8,991
100
100
100
100
Sunshine Services (HK) Ltd +++
(Hong Kong)
Investment trading
(Hong Kong)
#
#
100
100
Cold Storage Holdings Limited +
(England)
Dormant
21,948
21,948
100
100
Auric PaciÄc China Limited +
(British Virgin Islands)
Dormant
#
#
100
100
Charm Fit Pte Ltd ++
(Singapore)
Investment holding
(Singapore)
1
1
100
100
AP Fund Management Pte Ltd ++ (1)
(Singapore)
Fund manager
(Singapore)
120
#
100
100
101,572 101,452
Name of company
(Place of business)
Percentage of equity
held by the Group
2010
2009
%
%
Held by subsidiary companies
Auric PaciÄc Marketing Pte Ltd ++
(Singapore)
(Singapore)
100
100
Auric PaciÄc Food Industries Pte Ltd ++
(Singapore)
Food wholesale, distribution and manufacturing
(Singapore)
100
100
Centurion Marketing Pte Ltd ++
(Singapore)
(Singapore)
100
100
Sunshine Manufacturing Pte Ltd ++++
(Singapore)
Dormant
100
100
Gourmet Foods Pte Ltd ++++
(Singapore)
Dormant
100
100
Auric PaciÄc (International) Pte Ltd ++++ Dormant
(Singapore)
100
100
Auric PaciÄc Investment Pte Ltd ++
(Singapore)
Investment holding
(Singapore)
100
100
Auric PaciÄc Dairy (Foshan) Limited +
Investment holding
100
100
Auric PaciÄc Fine Wines Pte Ltd ++
(Singapore)
Dormant
100
100
Auric Asset Management Pte Ltd ++
(Singapore)
Investment management and advisory services
(Singapore)
100
100
Auric Chun Yip Sdn Bhd +++ (5)
(Malaysia)
Supply of bakery, confectionery and dairy products
(Malaysia)
100
83.33
ConÄdence Driven Sdn Bhd +++
(Malaysia)
Dormant
100
100
Auric PaciÄc Food Processing
Sdn Bhd +++ (5)
(Malaysia)
Manufacture of and dealer in butter, margarine
and related confectionery products
(Malaysia)
100
83.33
Chunex Pte Ltd ++
(Singapore)
Dormant
100
100
Name of company
(Place of business)
held by the Group
2010
2009
%
%
Held by subsidiary companies (cont’d)
Auric PaciÄc Bakeries Sdn Bhd +++
(Malaysia)
Food wholesale, distribution and manufacturing
(Malaysia)
100
100
Maxreal Property Investment
Pte Ltd ++++
(Singapore)
Dormant
100
100
Auric PaciÄc Realty Pte Ltd ++++
(Singapore)
Dormant
100
100
APG Strategic Investment Pte Ltd ++
(Singapore)
Investment holding
(Singapore)
100
100
Mequestic Investments Limited +
Dormant
60
60
Red Oasis Pte Ltd ++++
(Singapore)
Dormant
60
60
Foshan Ausoon Diary Co Ltd *
(People’s Republic of China)
Sublet of farm for rental income
75
75
GainÄeld Holdings Limited +
Investment holding
100
100
Auric PaciÄc Food Retail Pte Ltd ++
(Singapore)
Investment holding
(Singapore)
100
100
Auric PaciÄc Real Estate Fund +
(Cayman Islands)
Private equity fund
(Cayman Islands)
100
100
Champ Mark Holdings Limited+ (3)
Investment holding
100
–
Edmontor Investments Pte Ltd ++
(Singapore)
Investment holding
(Singapore)
100
100
Delifrance Asia Ltd ++
(Singapore)
Management and holding company, and
sale of Delifrance group’s franchising activities
(Singapore)
100
100
Cuisine Creation Pte Ltd ++
(Singapore)
Dormant
100
100
Name of company
(Place of business)
held by the Group
2010
2009
%
%
Cuisine Continental Pte Ltd ++
(Singapore)
Food and beverages retail, catering and
central kitchen production
(Singapore)
100
100
Delifrance Singapore Pte Ltd ++
(Singapore)
Manufacture and sale of French bakery
and pastry products and the operation of
café-bakeries, bakery corners, and restaurants
(Singapore)
100
100
Nouvelle Carte Asia Pte Ltd ++++
(Singapore)
Dormant
100
100
Delifrance (HK) Limited +++
(Hong Kong)
Manufacture and sale of French bakery
and pastry products and the operation
of café-bakeries and kiosks
(Hong Kong)
100
100
Delifrance Food (M) Sdn Bhd **
(Malaysia)
Dormant
100
100
Delifrance (Malaysia) Sdn Bhd +++
(Malaysia)
Manufacture and sale of French bakery and
pastry products and the operation of café-bakeries
(Malaysia)
100
100
Shanghai Delifrance Foodstuff
Co., Ltd. ****
Manufacture and sale of bakery and pastry
products and the operation of café-bakeries
100
100
DLF (Thailand) Ltd ## ***
(Thailand)
Manufacture and sale of bakery and pastry
products and the operation of café-bakeries
(Thailand)
49
49
DLF (NSW) Pty Ltd +
(Australia)
Dormant
100
100
Food Junction Holdings Limited ++ (2)
(Singapore)
Investment holding and provision of management
services to its subsidiary companies
(Singapore)
58.40
57.80
Food Junction Management
Pte Ltd ++ (2)
(Singapore)
Operation and management of food courts
(Singapore)
58.40
57.80
Name of company
(Place of business)
held by the Group
2010
2009
%
%
Food Junction International
Pte Ltd ++ (2)
(Singapore)
and sale of food and beverage
(Singapore)
58.40
57.80
Food Culture Pte Ltd ++ (2)
(Singapore)
and sale of food and beverage
(Singapore)
58.40
57.80
FNC International Pte Ltd ++ (2)
(Singapore)
(Singapore)
58.40
57.80
Malones Holdings Pte Ltd ++ (2)
(Singapore)
Investment holding company for Malone’s
business operations
(Singapore)
58.40
57.80
Food Junction Singapore Pte Ltd ++ (2)
(Singapore)
(Singapore)
58.40
57.80
T&W Food Junction Sdn Bhd +++ (2)
(Malaysia)
Management of food courts and
operation of food outlets
(Malaysia)
58.40
57.80
Food Culture Sdn Bhd +++ (2)
(Malaysia)
Dormant
58.40
57.80
PT. FJ Square Indonesia +++ (2)
(Indonesia)
(Indonesia)
58.40
57.80
Food Junction Beijing Co., Ltd @ (2)
58.40
57.80
Malone’s Limited +++ (2)
(Hong Kong)
Owns and manages trademarks in Hong Kong
(Hong Kong)
58.40
57.80
Maibo Restaurant Management
(Shanghai) Co., Ltd +++ (2)
Management and operation of restaurants
in Shanghai
58.40
57.80
All Around Limited + (4)
Investment holding
58.40
–
LCR Catering Services Limited @@ (4)
Management and operation of restaurant
in Hong Kong
(Hong Kong)
52.56
–
#
##
*
**
***
****
+
++
+++
++++
@
@@
Investment cost is less than $1,000.
Deemed subsidiary company as the Group has more than half of the voting rights of the shareholders.
Audited by Guangzhou Xingdao CertiÄed Public Accountants, People’s Republic of China.
Audited by OK Yau & How Yong, Malaysia.
Audited by Dharmniti Auditing Co. Ltd, Thailand.
Audited by Shanghai Saint C.P.A. Partnership, People’s Republic of China.
Not required to be audited by the law of the country of incorporation.
Audited by Ernst & Young LLP, Singapore.
Audited by member Ärms of Ernst & Young Global in the respective countries.
QualiÄed for exemption from audit for the Änancial year ended 31 December 2010 in accordance with Section 205(b)
of the Singapore Companies Act.
Audited by LegendHouse CPAs, People’s Republic of China.
Audited by Peter W.H. Ma & Co.
(1)
On 8 April 2009, the Company incorporated a wholly-owned subsidiary company, AP Fund Management Pte Ltd
(“APFM”), in Singapore, with an issued and paid-up capital of APFM of $1. On 14 April 2010, the Company injected a
cash consideration of $120,000 as additional paid-up capital. The principal activity of APFM is that of a fund manager.
(2)
In December 2010, Food Junction Holdings Limited (“FJH”) acquired 1,367,000 of its ordinary shares through
purchases on the Singapore Exchange. The total cash consideration paid was $286,000. Following the completion of
the acquisition, the Group’s effective interest in FJH increased from 57.8% to 58.4%. As a result of the acquisition, a
premium paid on acquisition of non-controlling interests of $42,000 was recognised as equity in “Other reserves”.
(3)
On 11 November 2010, Auric PaciÄc Real Estate Fund (“APREF”) incorporated a wholly-owned subsidiary company,
Champ Mark Holding Limited (“CMHL”), in the British Virgin Islands with an authorised capital of US$50,000
(approximately S$65,000), comprising 50,000 ordinary shares of US$1.00 each. On 3 December 2010, APREF
subscribed for 1 share, comprising 100% equity interest in CMHL for a cash consideration of US$1.00 (approximately
S$1.31). The principal activity of CMHL is that of investment holding.
(4)
On 2 November 2010, Food Junction International Pte Ltd, a wholly-owned subsidiary company of FJH, completed its
acquisition of 100% equity interest in All Around Limited, a company incorporated in British Virgin Islands for a cash
consideration of $5,210,000. All Around Limited in turn owns an equity interest of 90% of the issued share capital of
LCR Catering Services Limited, a company incorporated in Hong Kong, which owns and operates a restaurant in Hong
Kong. Further details of the acquisition of All Around Ltd are disclosed in Note 11 and 37 to the Änancial statements.
(5)
On 2 December 2010, Auric PaciÄc (M) Sdn Bhd, acquired an additional 16.7% equity interest in Auric Chun Yip Sdn
Bhd (“ACY”) and Auric PaciÄc Food Processing Sdn Bhd (“APFP”) respectively from their non-controlling interests for
a total consideration of RM69,000 (approximately S$29,000). As a result of this acquisition, ACY and APFP became
wholly-owned subsidiary companies of the Group. The carrying values of the net assets of ACY and APFP acquired
were RM30,572,000 and RM8,951,000 respectively and the carrying value of the additional interest acquired were
S$2,033,000. The difference of S$2,004,000 between the consideration and the carrying value of the additional
interests has been recognised as “Other reserves” within equity.
13. INVESTMENTS IN ASSOCIATED COMPANIES
Group
Unquoted equity shares, at cost
Costs directly attributable to acquisition of associated companies
Share of post-acquisition reserves:
Share of post-acquisition losses (net of tax)
Impairment loss
Net carrying amount
2010
$’000
2009
$’000
4,000
22
4,100
22
4,022
4,122
(819)
(1,596)
(553)
(2,106)
(2,415)
(2,659)
1,607
1,463
There are no contingent liabilities relating to the Group’s interests in its associated companies.
Impairment assessment of investments in associated companies
(a)
Since the previous Änancial years, the Group has made a full allowance for impairment loss of $100,000,
relating to A P Nutripharm Pte Ltd. The Group has not recognised losses relating to A P Nutripharm Pte Ltd, as its
share of losses exceeds the Group’s interest in this associated company. As at 31 December 2009, the Group’s
cumulative share of unrecognised losses at the balance sheet date was $532,000. The Group has no obligation
in respect of those losses. In 2010, the Group disposed of A P Nutripharm Pte Ltd for a cash consideration of
$25,000.
(b)
During the Änancial year, the Group had written back an allowance for impairment loss of $410,000 relating to
JVC Capital Pte Ltd. This amount was recognised in proÄt or loss under the line item of “share of results of the
associated companies”.
Details of associated companies as at 31 December are :Name of company
(Place of business)
Cost of
investments
2010
2009
$’000
$’000
held by the Group
2010
2009
%
%
Held by subsidiary companies
A P Nutripharm Pte Ltd *
(Singapore)
Research and development
of health-enhancing fungi
(Singapore)
JVC Capital Pte Ltd **
(Singapore)
Property agency and brokerage
(Singapore)
* Audited by Mazars Moores Rowland LLP, Singapore.
** Audited by Lee SF & Co, Singapore.
–
100
–
20.00
4,022
4,022
44.46
44.46
4,022
4,122
13. INVESTMENTS IN ASSOCIATED COMPANIES (cont’d)
The summarised Änancial information of the associated companies, which has not been adjusted for the proportion of
ownership interests held by the Group, is as follows:2010
$’000
2009
$’000
Assets and liabilities :Current assets
Non-current assets
1,847
1,947
1,068
6,362
Total assets
3,794
7,430
Current liabilities
Non-current liabilities
(178)
–
(621)
(467)
Total liabilities
(178)
(1,088)
Results :Revenue
491
565
Loss for the Änancial year
(443)
(720)
14. INVESTMENT IN A JOINT VENTURE COMPANY
Group
2010
$’000
2009
$’000
Unquoted equity shares, at cost
Share of post-acquisition proÄts
Post-acquisition dividend received
453
1,218
(255)
453
703
(255)
Net carrying amount
1,416
901
There are no contingent liabilities relating to the Group’s interest in the joint venture company.
Details of the joint venture company as at 31 December are as follows:
Name of company
Delifrance Asia Wholesale Pte Ltd *
(Singapore)
*
(Place of business)
Cost of
investments
2010
2009
$’000
$’000
Wholesale of French bakery
and pastry products
(Singapore)
453
453
held by the Group
2010
2009
%
%
49
49
Audited by Ernst & Young LLP, Singapore.
14. INVESTMENT IN A JOINT VENTURE COMPANY (cont’d)
The aggregate amounts of current and non-current assets, current and non-current liabilities, revenue and expenses
related to the Group’s interest in the joint venture company as at 31 December are as follows :2010
$’000
2009
$’000
Assets and liabilities :Current assets
Non-current assets
3,253
856
2,260
798
Total assets
4,109
3,058
Current liabilities
(408)
(452)
Total liabilities
(408)
(452)
Income and expenses :Revenue
9,199
7,744
Expenses
(2,067)
(1,793)
15. LONG-TERM AND SHORT-TERM INVESTMENTS
Group
2010
$’000
2009
$’000
Non-Current:
Long-term investments
Financial assets at fair value through proÄt or loss :Investment funds (unquoted) (1)
Available-for-sale Änancial assets :Unquoted preferred shares (2)
Unquoted equity shares (3)
2,547
5,233
13,217
1,964
14,209
2,934
17,728
22,376
6,630
5,952
Current:
Short-term investments
Investments held-for-trading :Investment securities (quoted) (4)
15. LONG-TERM AND SHORT-TERM INVESTMENTS (cont’d)
(1)
Unquoted investment funds are held in the following currencies:Group
United States dollars
Singapore dollars
2010
$’000
2009
$’000
1,968
579
4,633
600
2,547
5,233
(2)
On 21 January 2009, the Group completed the exchange of its entire stake in the convertible bond for subscription
in 46 new preferred shares of $14,653,000 to be issued by Peace Base Investments Limited (“Peace Base”), a
subsidiary company of the issuer, Heng Yue. As a result of the exchange, the Group owns an effective equity
interest of 4.56% (2009: 4.56%) in Peace Base via the unquoted preferred shares. The Group has recognised a
foreign exchange loss of $992,000 (2009: $354,000) in proÄt or loss for the Änancial year ended 31 December
2010. Management has reclassiÄed the preferred shares as available-for-sale Änancial assets since 2009.
(3)
The breakdown of unquoted equity shares are as follows:Unquoted equity shares, at cost
Impairment loss
7,265
(5,301)
7,419
(4,485)
1,964
2,934
Unquoted equity shares were measured at cost less accumulated impairment loss. The fair value cannot be
reliably measured as these unquoted equity shares do not have quoted market prices in an active market and it
is not practicable to determine the fair value using valuation models as the assumptions in these models cannot
be reasonably determined.
During the Änancial year, the Group recognised an impairment loss of $816,000 in unquoted equity shares,
reÅecting a write-down in the carrying value of the shares, based on the Group’s share of the assets of the
investees in 2010 as there were “signiÄcant” or “prolonged” decline in the fair value of these investments below
their costs. The Group treats “signiÄcant” generally as 5% and “prolonged” as greater than 12 months. In 2009,
the Group wrote back an allowance for impairment loss of $350,000, reÅecting an increase in the carrying value
of these shares, based on the Group’s share of the assets of the investees in 2009.
Unquoted equity shares are denominated in United States dollars.
(4)
Quoted investment securities are held in the following currencies:Singapore dollars
Hong Kong dollars
6,146
484
5,613
339
6,630
5,952
16. STOCKS
Group
2010
$’000
2009
$’000
Balance sheet:
Raw materials and stores
Finished goods and goods for sale
2,530
37,349
819
40,479
Total
39,879
41,298
204,577
240,468
2,781
3,110
Income statement:
Stocks recognised as an expense in cost of sales
Inclusive of the following charge :
– stocks written down
The Group has pledged stocks of $2,943,000 (2009: $2,994,000) as security for bank borrowings (Note 25).
17. TRADE DEBTORS
Group
Trade debtors are stated net of allowance for impairment of
2010
$’000
2009
$’000
(3,795)
(3,369)
35,765
19,800
759
32,856
17,857
745
56,324
51,458
Trade debtors of the Group are held in the following currencies:Singapore dollars
Malaysian ringgit
Other currencies
Trade debtors of the Group are non-interest bearing and are generally on 30 to 120 days’ credit terms. They are
recognised at their original invoiced amounts which represent their fair values on initial recognition.
Included in trade debtors is an amount of $679,000 (2009: $995,000) due from a joint venture company of the Group.
The amount due from the joint venture company arose from sales made to that company, and is unsecured, interest-free,
repayable within normal trade credit terms, and denominated in Singapore dollars.
17. TRADE DEBTORS (cont’d)
Trade debtors that are past due but not impaired
The Group has trade debtors amounting to $18,324,000 (2009: $9,230,000) that are past due at the balance sheet date
but not impaired. These debtors are unsecured and the analysis of their aging at the balance sheet date is as follows:Group
Less than 30 days
30 to 60 days
61 to 90 days
91 to 120 days
More than 120 days
2010
$’000
2009
$’000
12,028
2,915
1,109
2,023
249
7,125
842
1,232
3
28
18,324
9,230
Trade debtors that are impaired
The Group’s trade debtors that are impaired as at balance sheet date and the movements of the allowance account used
to record the impairment are as follows:
Collectively impaired
2010
2009
$’000
$’000
Trade debtors
Allowance for impairment
Group
Individually impaired
2010
2009
$’000
$’000
Total
2010
$’000
2009
$’000
1,141
(1,141)
1,208
(1,208)
2,654
(2,654)
2,161
(2,161)
3,795
(3,795)
3,369
(3,369)
–
–
–
–
–
–
Movements in allowance account :Balance at 1 January
Due to disposal of subsidiary companies
(Write-back)/charge for the Änancial year
Write-off against allowance
Exchange differences
1,208
–
(94)
–
27
946
(43)
352
(35)
(12)
2,161
–
738
(227)
(18)
1,484
–
672
(38)
43
3,369
–
644
(227)
9
2,430
(43)
1,024
(73)
31
Balance at 31 December
1,141
1,208
2,654
2,161
3,795
3,369
Trade debtors that are individually determined to be impaired at the balance sheet date relate to debtors that are in
signiÄcant Änancial difÄculties and have defaulted on payments. These debtors are not secured by any collateral or
credit enhancements.
For the Änancial year ended 31 December 2010, an allowance for impairment of $644,000 (2009: $1,024,000) and
bad debts recovered of $109,000 (2009: Nil) were recognised in proÄt or loss subsequent to a debt recovery assessment
performed on trade debtors as at balance sheet date.
18. OTHER DEBTORS, PREPAYMENTS AND OTHER RECOVERABLES
Group
Company
2010
$’000
2009
$’000
2010
$’000
2009
$’000
Non-current
Refundable deposits
Staff loans (1)
4,719
7
2,990
–
–
–
–
–
Total other debtors, non-current
4,726
2,990
–
–
Current
Staff loans (1)
Refundable deposits placed with landlords
Refundable deposits for potential investment
Sundry debtors
Interest receivable
Tax recoverable
13
5,386
168
4,063
46
1,882
16
7,427
18,462
4,221
374
53
–
194
168
106
–
–
–
131
18,462
2
–
–
11,558
30,553
468
18,595
Total loans and receivables at
amortised cost (Note 20)
16,284
33,543
468
18,595
Mezzanine loan, carried at fair value
through proÄt or loss (2)
36,611
–
–
–
Total other debtors, current
48,169
30,553
468
18,595
Total other debtors
52,895
33,543
468
18,595
Other debtors are stated net of
allowance for impairment of
(1,317)
(468)
–
–
(a) Other debtors
(1)
Staff loans are unsecured, non-interest bearing and have repayment terms of 36 (2009: 5) months.
(2)
On 28 December 2010, the Group acquired a mezzanine loan of HK$217,921,000 (approximately
S$36,611,000). The loan has a maturity period of one year and bears interest at the rate of 15% per annum
payable monthly in arrears and is secured by a Ärst ranking mortgage over the land owned by the external party.
As part of the agreement to purchase the mezzanine loan, China Project Limited (“CPL”), an investment
holding company in Hong Kong, will grant an option (the “Call Option”) to APREF to (i) purchase all of CPL’s
shares in Head Crown Development Limited (“HCDL”) (being 50.0% of the total issued shares), which owns
90.0% of the equity interest in Hunan Tianjing Mingyuan Property Company Limited (the “Project Company”)
and (ii) purchase up to 100.0% of the shareholder’s loans that CPL has extended to HCDL, as well as all interest
accrued thereon at 20.0% per annum payable monthly in arrears.
The Call Option will expire upon the maturity of the mezzanine loan. The exercise price will be determined
according to an agreed formula which incorporates an agreed return to CPL. The Put Option is exercisable at
any time after 12 months from the closing of the Call Option and shall lapse after 36 months from the closing of
the Call Option.
With the loan acquired on 28 December 2010, management has regarded the carrying amount of the loan of
$36,611,000 to approximate its fair value as at 31 December 2010.
18. OTHER DEBTORS, PREPAYMENTS AND OTHER RECOVERABLES (cont’d)
Group
Company
2010
$’000
2009
$’000
2010
$’000
2009
$’000
437
1,898
492
280
423
1,269
–
–
–
–
–
–
2,827
1,972
–
–
31
576
664
1,806
271
24
1,195
126
966
2,449
–
–
–
11
–
–
–
–
–
–
3,348
4,760
11
–
6,175
6,732
11
–
(b) Prepayments and other recoverables
Non-current
Deferred lease expenses
Renovation fees to be billed to tenants
Prepayments
Current
Deferred lease expenses
Renovation fees to be billed to tenants
Renovation costs recoverable *
Prepayments
Advance payment for purchases
Total prepayments and other recoverables
* This relates to renovation costs which may be recoverable from tenants, upon Änalisation of renovation works.
Other debtors of the Group and the Company are held in the following currencies:Singapore dollars
Malaysian ringgit
Renminbi
Hong Kong dollars
Other currencies
9,686
2,957
530
39,474
248
8,189
3,066
341
21,674
273
196
–
–
168
104
133
–
–
18,462
–
52,895
33,543
468
18,595
18. OTHER DEBTORS, PREPAYMENTS AND OTHER RECOVERABLES (cont’d)
Other debtors that are past due but not impaired
The Group has other debtors amounting to $214,000 (2009: $1,134,000) that are past due at the balance sheet date but
not impaired. These debtors are unsecured and the analysis of their aging at the balance sheet date is as follows:Group
Less than 30 days
30 to 60 days
61 to 90 days
91 to 120 days
More than 120 days
2010
$’000
2009
$’000
10
27
–
–
177
967
26
18
8
115
214
1,134
Other debtors that are impaired
The Group’s other debtors that are impaired at the balance sheet date and the movements of the allowance account
used to record the impairment are as follows:Group
2010
2009
$’000
$’000
Other debtors
Write-off against allowance
Write-back during the Änancial year
1,317
(1,317)
468
(468)
–
–
468
935
(49)
–
(37)
541
–
(2)
(2)
(69)
1,317
468
For the Änancial year ended 31 December 2010, an allowance for impairment of $935,000 was recognised in proÄt or
loss subsequent to a debt recovery assessment performed on other debtors as at balance sheet date. In 2009, a writeback of allowance for impairment of $2,000 was recognised in proÄt or loss.
Other debtors that are individually determined to be impaired at the balance sheet date relate to debtors that have
defaulted on payments. There are no balances that are collectively determined to be impaired.
19. AMOUNTS DUE FROM SUBSIDIARY COMPANIES
Company
Loans to subsidiary companies
Amounts due from subsidiary companies (non-trade)
Total
2010
$’000
2009
$’000
165,889
(10,527)
80,127
(10,527)
155,362
69,600
129,987
(1,026)
124,583
(806)
128,961
123,777
284,323
193,377
As at 31 December 2010, loans to subsidiary companies are non-trade in nature, unsecured, interest-free, except for
loans of $$3,578,000 (2009: $3,578,000), $30,200,000 (2009: $30,200,000), and $21,800,000 (2009: $21,800,000)
to subsidiary companies, which bear interest at 4% (2009: 4%), 2.69% (2009: 2.71%), and 2.69% (2009: 2.71%) per
annum respectively, and are repayable on demand.
The amounts due from subsidiary companies are non-trade in nature, unsecured, interest-free and are repayable on
demand.
The Company does not have any loans to and amounts due from subsidiary companies that are past due but not
impaired at the balance sheet date.
Loans to and amounts due from subsidiary companies are held in the following currencies: Singapore dollars
Renminbi
284,122
201
193,167
210
284,323
193,377
Amounts due from subsidiary companies that are impaired:
The Company’s loans to and amounts due from subsidiary companies that are impaired at the balance sheet date and
the movements in allowance accounts used to record the impairment are as follows:
Loans to subsidiary companies :
Loans to subsidiary companies
10,527
(10,527)
10,527
(10,527)
–
–
19. AMOUNTS DUE FROM SUBSIDIARY COMPANIES (cont’d)
Amounts due from subsidiary companies that are impaired (cont’d):
Company
2010
2009
$’000
$’000
Loans to subsidiary companies :
Write-back for the Änancial year
10,527
–
10,639
(112)
10,527
10,527
Company
2010
$’000
2009
$’000
Amounts due from subsidiary companies :
Amounts due from subsidiary companies
1,026
(1,026)
806
(806)
–
–
Company
2010
2009
$’000
$’000
Charge/(write-back) for the Änancial year
806
220
2,364
(1,558)
1,026
806
For the Änancial years ended 31 December 2010 and 2009, a net allowance for impairment of $220,000 and a net
write-back of allowance for impairment of $1,670,000 respectively were recognised in proÄt or loss of the Company,
subsequent to a recovery assessment performed on loans to and amounts due from subsidiary companies as at balance
sheet date.
Loans to and amounts due from subsidiary companies that are individually determined to be impaired at the balance
sheet date relate to subsidiary companies that are in Änancial difÄculties and have defaulted on payments. There are no
balances that are collectively determined to be impaired.
20. CASH AND CASH EQUIVALENTS
Cash and cash equivalents comprise the following:
Group
Fixed deposits (a)
Cash and bank balances (b)
(a)
Company
2010
$’000
2009
$’000
2010
$’000
2009
$’000
8,018
44,875
25,986
33,191
2,116
4,701
14,592
5,684
52,893
59,177
6,817
20,276
Fixed deposits :Fixed deposits are held in the following currencies :Singapore dollars
Malaysian ringgit
Hong Kong dollars
Other currencies
2,148
4,663
857
350
21,521
2,093
1,539
833
2,116
–
–
–
14,592
–
–
–
8,018
25,986
2,116
14,592
Fixed deposits have effective interest rates ranging from 0.01% to 3.6% (2009: 0.01% to 3.0%) per annum and
are made for varying periods from 1 day to 6 months (2009: 1 day to 6 months) depending on the immediate
cash requirements of the Group, and earn interest at the respective short-term deposit rates.
(b)
Cash and bank balances :Cash and bank balances are held in the following currencies :Singapore dollars
Malaysian ringgit
Renminbi
Indonesian rupiah
Hong Kong dollars
Other currencies
25,176
146
9,511
616
606
8,675
145
17,290
442
9,644
138
450
4,425
802
4,643
53
–
5
–
–
–
5,678
1
–
5
–
–
–
44,875
33,191
4,701
5,684
Cash and bank balances earn interest at Åoating rates based on daily bank deposit rates ranging up to 3.4%
(2009: 3.6%) per annum.
The carrying amounts of loans and receivables comprise :Trade debtors (Note 17)
Other debtors (Note 18)
Amounts due from subsidiary companies
(Note 19)
56,324
16,284
51,458
33,543
–
468
–
18,595
–
52,893
720
–
59,177
623
284,323
6,817
–
193,377
20,276
–
126,221
144,801
291,608
232,248
21. TRADE CREDITORS
Trade creditors are non-interest bearing and are normally settled on their normal trade terms of 7 to 90 (2009: 7 to 90)
days.
Trade creditors of the Group are held in the following currencies :Group
Singapore dollars
Malaysian ringgit
Australian dollars
Hong Kong dollars
Other currencies
2010
$’000
2009
$’000
21,670
1,713
8,402
2,043
2,630
2,470
25,534
2,419
6,050
1,599
2,182
1,265
38,928
39,049
22. OTHER CREDITORS AND ACCRUALS, OTHER LIABILITY, AND DEFERRED INCOME
Group
(a)
(b)
2009
$’000
2010
$’000
2009
$’000
Sundry creditors
Accrual for unutilised leave
Accrued operating expenses
Deposits from tenants
Accrued renovation costs
7,442
1,094
20,336
3,068
–
6,255
1,270
23,607
2,499
158
309
265
930
–
–
213
218
952
–
–
Total other creditors and accruals
31,940
33,789
1,504
1,383
14,786
–
–
–
Current
Non-current
1,170
997
975
287
–
–
–
–
Total deferred income
2,167
1,262
–
–
Other liability
Non-current
Redeemable preference shares
issued by a subsidiary company (1)
(c)
Company
2010
$’000
Deferred income (2)
22. OTHER CREDITORS AND ACCRUALS, OTHER LIABILITY AND DEFERRED INCOME
(cont’d)
(1)
As at 31 December 2010, Auric PaciÄc Real Estate Fund (“APREF”), a private equity fund sponsored by the
Group issued 1,520 redeemable preference shares (“RPS”) at $10,000 each speciÄcally for the real estate fund
investment activities. The RPS generally do not carry a voting right and are entitled to distributions from the
net proceeds arising from the sale of investment and all other proceeds from the real estate fund investment
activities, at the discretion of the Investment committee. The shares has a duration of 5 years with an option
to extend by up to 2 consecutive one-year period or a single two-year period. As such, management has
designated the RPS as a Änancial liability at fair value through proÄt or loss.
The Group has recognised a fair value gain of $414,000 (2009: Nil) from the RPS to the proÄt or loss. RPS are
denominated in Singapore dollars.
(2)
Included in the deferred income is an amount of $166,000 (2009: $236,000) which represents amounts received
from customers in respect of en-primeur and bill-and-hold sales, for which goods are to be delivered in future
and is recognised in proÄt or loss upon the delivery of the goods.
Other creditors and accruals of the Group and of the Company are held in the following currencies:Group
Singapore dollars
Malaysian ringgit
Renminbi
Hong Kong dollars
Other currencies
Company
2010
$’000
2009
$’000
2010
$’000
2009
$’000
22,026
4,372
1,546
3,708
288
21,115
8,219
906
3,237
312
1,499
–
5
–
–
1,377
–
6
–
–
31,940
33,789
1,504
1,383
38,928
31,940
–
15,615
39,049
33,789
–
19,454
–
1,504
236,280
8,869
–
1,383
172,079
13,196
86,483
92,292
246,653
186,658
(38)
(194)
–
–
86,445
92,098
246,653
186,658
The carrying amounts of Änancial liabilities at amortised cost comprise :Trade creditors (Note 21)
Amounts due to subsidiary companies (Note 24)
Loans and borrowings (Note 25)
Less:
– Obligations under Änance leases (Note 25)
Total Änancial liabilities at amortised cost
23. PROVISIONS
Provisions for reinstatement costs:Group
Company
2010
$’000
2009
$’000
2010
$’000
2009
$’000
Balance at 1 January
Provision during the Änancial year
Utilised during the Änancial year
Finance costs during the year
2,822
284
(47)
(242)
40
(37)
2,975
282
(50)
(402)
39
(22)
100
–
–
–
–
–
100
–
–
–
–
–
2,820
2,822
100
100
Comprises:
Current
Non-current
1,291
1,529
1,290
1,532
–
100
–
100
2,820
2,822
100
100
Provisions for reinstatement costs are recognised for expected costs for dismantling, removal and restoration of property,
plant and equipment based on the best estimate of the expenditure with reference to past experience.
It is expected that these costs will be incurred after one year from the balance sheet date and would have been incurred
within 7 (2009: 7) years of the balance sheet date. The provision is discounted using a current rate of 5% (2009: 5%)
per annum that reÅects the risks speciÄc to the liability.
24. AMOUNTS DUE TO SUBSIDIARY COMPANIES
Company
Loans from subsidiary companies
Amounts due to subsidiary companies (non-trade)
2010
$’000
2009
$’000
70,795
165,485
70,795
101,284
236,280
172,079
Loans from subsidiary companies are non-trade in nature, unsecured, interest-free, except for a loan of $2,350,000
(2009: $2,350,000) from a subsidiary company, which bears interest at 3.5% (2009: 3.5%) per annum, and is repayable
on demand.
The amounts due to subsidiary companies are non-trade in nature, unsecured, interest-free and repayable on demand,
except for a balance of $58,685,000 (2009: $49,220,000) which bears interest rate of 4% (2009: 4%) per annum.
These represent amounts received from the Company’s subsidiary companies for working capital purposes.
Loans from and amounts due to subsidiary companies are denominated in Singapore dollars.
25. LOANS AND BORROWINGS
Group
Current :
Bank borrowings
– secured (1)
– unsecured (2)
Obligations under Änance leases (3)
Non-current :
Obligations under Änance leases (3)
Total loans and borrowings
Company
2010
$’000
2009
$’000
2010
$’000
2009
$’000
8,869
6,708
15
13,196
6,064
160
8,869
–
–
13,196
–
–
15,592
19,420
8,869
13,196
23
34
–
–
15,615
19,454
8,869
13,196
Loans and borrowings of the Group and of the Company are held in the following currencies:Singapore dollars
Malaysian ringgit
(1)
8,869
6,746
13,199
6,255
8,869
–
13,196
–
15,615
19,454
8,869
13,196
As the loan is repayable by 2011, the entire loan of $8,869,000 (2009: $13,196,000) is classiÄed as current as at
31 December 2010. The bank loan is secured by a legal mortgage over leasehold land and buildings, Äxed and
Åoating charge on all assets of certain subsidiary companies and joint corporate guarantees of other subsidiary
companies. It bears a weighted average effective interest rate of 1.25% + SGD Swap Offer Rate (2009: 1.25% +
SGD Swap Offer Rate) per annum and is repayable by 2011 (2009: 2011).
As at 31 December 2010 and 2009, the Group did not meet a loan covenant for this loan. The bank is contractually
entitled to request for immediate repayment of the outstanding loan amount in the event of breach of covenant.
As such, the non-current portion of the bank loan of $6,664,000 as at 31 December 2009 had been reclassiÄed
as current.
However, the bank has not requested for immediate repayment of the outstanding loan amount, and management
has obtained a letter of waiver from the bank as at the date when these Änancial statements were authorised for
issue.
(2)
Bankers’ acceptances issued by the subsidiary companies of $6,708,000 (2009: $6,064,000) bear a weighted
average effective interest rate of 3.06% (2009: 2.6%) per annum and are repayable within 3 (2009: 3) months.
(3)
The Group has obligations under Änance leases for certain plant and equipment. These leases are classiÄed as
Änance leases and expire over the 2 (2009: 3) years. The implicit average interest rate in the leases ranges from
3.9% to 4.8% (2009: 2.95% to 4.50%) per annum. These obligations are secured by the rights to the leased plant
and equipment (Note 10).
25. LOANS AND BORROWINGS (cont’d)
Future minimum lease payments under Änance leases together with the present value of the net minimum lease
payments are as follows:
Group
2010
$’000
2009
$’000
Within 1 year
Within 2 to 5 years
17
24
173
38
Total minimum lease payments
Less: Amounts representing Änance charges
41
(3)
211
(17)
Present value of minimum lease payments
38
194
Present value of minimum lease payments :
Within 1 year
Within 2 to 5 years
15
23
160
34
Total
38
194
26. DEFERRED TAX ASSETS/(LIABILITIES)
Group
(a)
2010
$’000
2009
$’000
1,188
(383)
–
26
1,677
(463)
(9)
(17)
831
1,188
831
1,188
Effects of changes in tax rates
(5,927)
183
–
(56)
(6,912)
719
265
1
(5,800)
(5,927)
Deferred tax assets
Reversal during the Änancial year
Effects of changes in tax rates
Net deferred tax assets recognised as at 31 December relate to the following :Accruals
(b)
26. DEFERRED TAX ASSETS/(LIABILITIES) (cont’d)
Deferred tax liabilities as at 31 December, after appropriately offsetting against deferred tax assets, relate to the following:Group
2010
$’000
2009
$’000
Excess of net book values over tax written down values of
property, plant and equipment
Fair value adjustments on acquisition of subsidiary companies
Fair value adjustments on investments
(2,368)
(3,546)
–
(2,204)
(4,057)
(35)
Gross deferred tax liabilities
(5,914)
(6,296)
Deferred tax assets :Accruals
114
369
Gross deferred tax assets
114
369
(5,800)
(5,927)
Deferred tax liabilities :-
Net deferred tax liabilities
Unrecognised temporary differences relating to investments in subsidiary companies, associated companies and joint
venture companies
At the balance sheet date, no deferred tax liability (2009: Nil) has been recognised for taxes that would be payable on
the undistributed earnings of certain subsidiary companies.
Net deferred tax assets not recognised at 31 December relate to the following :Group
Company
2010
$’000
2009
$’000
2010
$’000
2009
$’000
Unutilised tax losses
Unabsorbed capital allowances
Unabsorbed donation relief
Unrealised loss on investment securities
Accruals
3,105
317
108
569
239
2,296
278
120
688
66
1,672
95
108
–
46
1,218
48
120
–
37
Gross deferred tax assets
4,338
3,448
1,921
1,423
Unremitted income
–
–
(536)
(426)
Gross deferred tax liabilities
–
–
(536)
(426)
4,338
3,448
1,385
997
Deferred tax assets :-
Deferred tax liabilities :-
Net deferred tax assets not recognised
26. DEFERRED TAX ASSETS/(LIABILITIES) (cont’d)
The Group and the Company did not recognise deferred tax assets amounting to $4,338,000 (2009: $3,448,000) and
$1,385,000 (2009: $997,000) respectively, as it is not probable that taxable proÄts will be available against which the
deferred tax assets can be utilised.
Tax consequences of proposed dividends
There are no income tax consequences attached to the dividends to the shareholders proposed by the Company but not
recognised as a liability in the Änancial statements (Note 30).
27. SHARE CAPITAL
Group and Company
2010
2009
Issued and fully paid ($’000)
Number of ordinary shares
64,461
64,461
125,667,324
125,667,324
The holders of ordinary shares are entitled to receive dividends as and when declared by the Company. All ordinary
shares carry one vote per share without restriction. The ordinary shares do not carry any par value.
28. FOREIGN CURRENCY TRANSLATION RESERVE
Foreign currency translation reserve represents exchange differences arising from the translation of the Änancial
statements of foreign operations whose functional currencies are different from that of the Company’s functional
currency.
29. MERGER RESERVE
The reserve arose from a Scheme of Arrangement undertaken by a subsidiary company in prior Änancial year and is not
distributable.
30. DIVIDEND ON ORDINARY SHARES
Group and Company
2010
2009
$’000
$’000
Declared and paid during the Änancial year
Dividend on ordinary shares :Final tax exempt (one-tier) dividend for 2009: $0.02 (2008 : Nil) per share
2,513
–
3,770
2,513
Proposed but not recognised as a liability as at 31 December
Dividend on ordinary shares, subject to shareholders approval at AGM :Final tax exempt (one-tier) dividend for 2010 : $0.03 (2009 : $0.02) per share
At the Annual General Meeting on 29 April 2011, a Änal exempt dividend of 3 cents per share amounting to a total of
$3,770,000 will be recommended. These Änancial statements do not reÅect this dividend, which will be accounted for
in shareholders’ equity as an appropriation of retained earnings in the Änancial year ending 31 December 2011.
31. CONTINGENT LIABILITIES AND COMMITMENTS
(a)
Operating lease commitments – As lessor
The Group licenses the use of food and beverage stalls within food courts to individual third party stallholders
and a subsidiary company.
The licenses with third party stallholders are typically for a period of 1 to 2 (2009: 1 to 2) years and are not
cancellable. In the course of a Änancial year, there may be terminations and renewals of such licenses. The
Group has accounted for license fee in respect of non-cancellable leases as at balance sheet date. Licenses that
expire during the course of a Änancial year and have not been renewed will not be accounted for from their
respective dates of expiration.
All the leases provide for contingent rentals based on a percentage of sales derived from assets held under
operating leases. During the Änancial year, the contingent rent received amounted to $6,343,000 (2009:
$2,529,000).
Future minimum lease rental receivable under non-cancellable operating leases as at 31 December are as
follows:Group
Within 1 year
Within 2 to 5 years
(b)
2010
$’000
2009
$’000
15,988
4,709
12,079
614
20,697
12,693
Operating lease commitments – As lessee
The Group leases certain properties and vehicles under lease agreements that are non-cancellable. These leases
expire on various dates till 15 December 2032 (2009: 15 December 2032) and leases for properties contain
provisions for rental adjustments. A few of the lease agreements provide for renewable options, escalation
clauses and contingent rentals based on percentage of sales in excess of base rent. There are no restrictions
placed upon the Group’s activities concerning dividends, additional debt or further leasing by entering into these
leases. Rental expense (including contingent rental) for the Group was $37,096,000 (2009: $40,546,000) for the
Änancial year ended 31 December 2010. Future minimum lease payments for the leases are as follows :Group
Within 1 year
Within 2 to 5 years
More than 5 years
Company
2010
$’000
2009
$’000
2010
$’000
2009
$’000
35,905
41,121
6,340
32,766
36,577
5,890
255
46
–
480
160
–
83,366
75,233
301
640
31. CONTINGENT LIABILITIES AND COMMITMENTS (cont’d)
(c)
Capital commitments
Capital expenditure contracted for as at the balance sheet date but not recognised in the Änancial statements is
as follows :Group
2010
2009
$’000
$’000
Capital commitments in respect of plant and equipment
(d)
687
239
2,548
983
3,908
156
3,531
4,064
Bankers’ guarantees
Secured (1)
Unsecured (2)
(1)
As at 31 December 2010, the Group had approximately $20,000 (2009: $20,000) banker’s guarantee
issued by a bank to the Comptroller of Goods and Services Tax in the ordinary course of business.
As at 31 December 2009, the Group had approximately $664,000 of outstanding performance and
shipping guarantees issued to customers and suppliers. There were no such guarantees issued in 2010.
As at 31 December 2010, the Group had approximately $720,000 (2009: $$623,000) of Äxed deposits
pledged to banks as security for bankers’ guarantees issued in lieu of rental deposits (Note 20).
As at 31 December 2010, the Group had approximately $1,869,000 (2009: $2,601,000) bankers’
guarantees which is in lieu of rental deposits to landlords for retail outlets and this is secured against the
leasehold property (Note 10).
(2)
The banker’s guarantee of $105,000 (2009: $103,000) is issued by a subsidiary company to a supplier in
the ordinary course of business. The guarantee is denominated in Malaysian ringgit in 2010 and 2009.
There was also a banker’s guarantee of $41,000 (2009: $53,000) which is in lieu of rental deposits to
landlords for retail outlets and is based on corporate guarantee issued by a subsidiary company of the
Group. The guarantee is denominated in Malaysian ringgit in 2010 and 2009.
(e)
Financial support
As at 31 December 2010 and 2009, the Company has provided Änancial support to certain subsidiary companies
to enable them to continue as a going concern. The net deÄcit position of these subsidiary companies as at 31
December 2010 amounted to $43,358,000 (2009: $36,581,000).
(f)
Corporate guarantee
As at 31 December 2010, a subsidiary company of the Group has provided a corporate guarantee of $2,500,000
(2009: $2,500,000) to a bank on its subsidiary company’s rent and service charge payable to the landlord.
32. SIGNIFICANT RELATED PARTY TRANSACTIONS
In addition to the related party information disclosed elsewhere in the Änancial statements, the Group had the following
signiÄcant transactions with its related parties during the Änancial years at terms agreed between the companies :Group
Rental expenses paid to related parties
Sale of goods to a joint venture company
Sale of food and beverage to a related company
Payroll expenses paid on behalf of a company related to directors of the Company
2010
$’000
2009
$’000
(428)
3,617
322
–
(148)
3,264
203
(169)
(424)
(615)
(3)
(364)
(729)
(6)
(200)
(2,145)
(141)
–
(300)
(3,642)
(138)
(173)
Compensation of key management personnel :Remuneration paid to :– Directors of the Company
Fees paid to directors of the Company
– Directors of subsidiary companies and other key management personnel
Fees paid to directors of the subsidiary companies
33. FAIR VALUES OF FINANCIAL INSTRUMENTS
(a)
Fair values of Änancial instruments that are carried at fair value
The following table shows an analysis of Änancial instruments carried at fair value by level of fair value hierarchy:
2010
Quoted prices
in active market
for identical
instruments
(Level 1)
$’000
SigniÄcant
other
observable
inputs
(Level 2)
$’000
$’000
–
–
2,547
36,611
2,547
36,611
Investments held-for-trading:Investment securities (quoted) (Note 15)
6,630
–
6,630
Total
6,630
39,158
45,788
–
(14,786)
(14,786)
Financial assets :
Financial assets at fair value through proÄt or loss:Investment funds (unquoted) (Note 15)
Mezzanine loan (unquoted) (Note 18)
Financial liabilities :
Financial liabilities at fair value through proÄt or loss:Redeemable preference shares issued
by a subsidiary company (unquoted)
Total
33. FAIR VALUES OF FINANCIAL INSTRUMENTS (cont’d)
(a)
Fair values of Änancial instruments that are carried at fair value (cont’d)
2009
Quoted prices
in active market
for identical
instruments
(Level 1)
$’000
Financial assets :
Financial assets at fair value through proÄt or loss:Investment funds (unquoted) (Note 15)
SigniÄcant
other
observable
inputs
(Level 2)
$’000
Total
$’000
–
5,233
5,233
Investments held-for-trading:Investment securities (quoted) (Note 15)
5,952
–
5,952
Total
5,952
5,233
11,185
Fair value hierarchy
The Group classiÄes fair value measurement using a fair value hierarchy that reÅects the signiÄcance of the inputs
used in making the measurements. The fair value hierarchy has the following levels:
Level 1 – Quoted prices in active markets for identical assets or liabilities; and
Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability,
either directly (i.e. as prices) or indirectly (i.e. derived from prices).
There have been no transfers between Level 1 and Level 2 during the Änancial years ended 2010 and 2009.
Determination of fair value
Unquoted investment funds (Note 15): Fair value is determined by reference to secondary market quotations
approximating the carrying value of the investment funds.
Quoted investment securities (Note 15): Fair value is determined directly by reference to their published market
bid prices at the end of the reporting period.
Unquoted mezzanine loan (Note 18): The carrying amount of this loan approximates its fair value as it is acquired
near to the balance sheet date.
Unquoted redeemable preference shares issued by a subsidiary company (Note 22): Fair value is determined
at the redemption amound being the net asset value of the real estate fund calculated in accordance with FRS.
33. FAIR VALUES OF FINANCIAL INSTRUMENTS (cont’d)
(b)
Fair values of Änancial instruments by classes that are not carried at fair value and whose carrying amounts are
reasonable approximation of fair value
Trade debtors, other debtors (current portion), trade creditors, other creditors and accruals, amounts due
from/(to) subsidiary companies, loans and borrowings, cash and cash equivalents, and Äxed deposits (restricted)
The carrying amounts of these Änancial assets and liabilities are reasonable approximation of fair values, either
due to their short-term nature or that they are Åoating rate instruments that are re-priced to market interest rates
on or near the balance sheet date.
(c)
Fair values of Änancial instruments by classes that are not carried at fair value and whose carrying amounts are
not reasonable approximation of fair value
The fair values of Änancial assets by classes that are not carried at fair value and whose carrying amounts are not
reasonable approximation of fair value are as follows:
Group
2010
$’000
Financial assets
Available-for-sale Änancial assets:– Unquoted equity shares (Note 15)
– Unquoted preferred shares (Note 15)
*
2009
$’000
Carrying
value
Fair
value
Carrying
value
Fair
value
1,964
13,217
*
*
2,934
14,209
*
*
Investments in unquoted equity shares and preferred shares carried at cost
Fair value information has not been disclosed for the Group’s investments in unquoted equity shares and
preferred shares that are carried at cost less accumulated impairment loss because fair value cannot be
measured reliably. The unquoted equity shares and preferred shares represent investments in technologyrelated investment fund companies and property development company which are not quoted on any
market. The fair value cannot be reliably measured as these unquoted equity shares and preferred shares do
not have quoted market prices in an active market, and it is not practicable to determine the fair value using
valuation models as the assumptions in these models cannot be reasonably determined. The Group does not
intend to dispose of these investments in the foreseeable future. The Group intends to eventually dispose of
their investments through sales to institutional or private investors.
34. FINANCIAL RISK MANAGEMENT POLICIES AND OBJECTIVES
The Group and the Company are exposed to Änancial risks arising from its operations and the use of Änancial
instruments. The Group’s principal Änancial instruments comprise loans and borrowings, investments, and cash and
short-term deposits. The Group has various other Änancial assets and liabilities, such as trade debtors and creditors, and
other debtors and creditors.
The key Änancial risks are credit risk, foreign currency risk, interest rate risk, liquidity risk, and market price risk. The
Board of directors reviews and agrees policies and procedures for the management of these risks.
There has no change to the Group’s exposure to these Änancial risks or the manner in which it manages and measures
the risks.
(a)
Credit risk
Credit risk is the risk of loss that may arise on outstanding Änancial instruments should a counterparty default on
its obligations. The Group’s exposure to credit risk arises primarily from trade and other debtors. Guidelines on
credit terms provided to trade customers are established and continually monitored. For other Änancial assets
(including cash and short-term deposits, Äxed deposits, investment securities, and investment funds), the Group
minimises credit risk by dealing exclusively with reputable and well-established local and foreign banks, and
companies with high credit ratings and no history of defaults.
The Group’s objective is to seek continual revenue growth while minimising losses incurred due to increased
credit risk exposures. Credit policies with guidelines on credit terms and limits set the basis for risk control. New
customers are subject to credit evaluation while the Group continues to monitor existing customers, especially
those with repayment issues. In addition, appropriate allowances are made for probable losses when necessary
for identiÄed debtors.
In addition, the Group’s exposure to credit risk for its food court operations arises primarily from other debtors.
The Group does not have credit risk exposure from the tenants. It is the Group’s policy that all tenants need to
place deposits before the Group licenses the stalls to the tenants. Moreover, the Group collects sales proceeds
on behalf of the tenants and returns the net proceeds to the tenants upon settlement.
In 2010, the Group acquired a mezzanine loan from an external party. Management does not expect to incur
material credit losses, as the loan is secured by a Ärst ranking mortgage over the land owned by the external party
and a Ärst Äxed charge over the equity interest in the external party (Note 18).
Exposure to credit risk
At the balance sheet date, the Group’s and the Company’s maximum exposure to credit risk is represented by:
– the carrying amounts of each class of Änancial assets recognised in the balance sheets; and
– a nominal amount of $2,500,000 (2009: $2,500,000) relating to a corporate guarantee provided by a
subsidiary company to a bank on subsidiary company’s rent and service charge payable to the landlord.
34. FINANCIAL RISK MANAGEMENT POLICIES AND OBJECTIVES (cont’d)
(a)
Credit risk (cont’d)
Credit risk concentration profile
As at 31 December 2010, 61% (2009: 61%) of trade debtors related to 24 (2009: 19) major customers of
subsidiary companies. The credit risk concentration proÄle of the Group’s trade debtors at the balance sheet date
are as follows :Group
2010
2009
Total
Total
$’000
%
$’000
%
By business segment
Wholesale and distribution
Manufacturing
Food retail
By geographical segment
Singapore
Hong Kong
Malaysia
People’s Republic of China
Others
*
45,821
7,508
2,995
82
13
5
40,929
7,017
3,512
79
14
7
56,324
100
51,458
100
36,170
323
19,800
8
23
64
1
35
*
*
33,252
288
17,857
8
53
64
1
35
*
*
56,324
100
51,458
100
Less than 1%.
Financial assets that are neither past due nor impaired
Trade and other debtors that are neither past due nor impaired mainly comprise debtors with good payment
records. Cash and cash equivalents, investment securities, and investment funds are placed with or entered into
with reputable Änancial institutions, well-established local and foreign banks and companies with high credit
ratings and no history of defaults.
Financial assets that are either past due or impaired
Information regarding Änancial assets that are either past due or impaired is disclosed in Notes 17,18, and 19 to
the Änancial statements.
(b)
Foreign currency risk
The Group’s foreign exchange risk arises both from its subsidiary companies operating in foreign countries,
generating revenue and incurring costs denominated in foreign currencies, and from operations of its local
subsidiary companies which are transacted in foreign currencies. The Group’s foreign exchange exposures are
primarily from United States dollar (USD), Australian dollar (AUD), Hong Kong dollar (HKD), Malaysian Ringgit
(Ringgit), and Renminbi (RMB). The Group does not consider foreign exchange risk arising from other currencies,
such as Indonesian Rupiah (Rupiah) to be signiÄcant.
(b)
Foreign currency risk (cont’d)
The Group’s policy is to enter into forward currency contracts to reduce its foreign exchange risk, where
appropriate, but does not hedge the foreign currency exposures of its investments in subsidiary companies.
The Group does not have any forward currency contracts outstanding as at 31 December 2010 and 2009.
Sensitivity analysis for foreign currency risk
The following table demonstrates the sensitivity to a reasonably possible change in the exchange rates of USD,
AUD, HKD, Ringgit and RMB (against SGD), with all other variables held constant, of the Group’s proÄt/(loss)
net of taxation.
Group
ProÄt/(loss) net of taxation
2010
2009
$’000
$’000
Increase/
(Increase)/
(decrease)
decrease
in proÄt
in loss
USD
– strengthened 4% (2009: 6%)
– weakened 4% (2009: 6%)
135
(135)
370
(370)
AUD
– weakened 6% (2009: 12%)
(124)
124
(126)
126
HKD
– weakened 4% (2009: 6%)
1,813
(1,813)
263
(263)
RMB
– weakened 3% (2009: 6%)
476
(476)
858
(858)
Ringgit – strengthened 3% (2009:2%)
– weakened 3% (2009: 2%)
436
(436)
249
(249)
(c)
Interest rate risk
Interest rate risk is the risk that the fair value or future cash Åows of the Group’s and the Company’s Änancial
instruments will Åuctuate because of changes in market interest rates. The Group’s and the Company’s exposure
to interest rate risk arises primarily from their loans and borrowings, interest-bearing loans from/to subsidiary
companies, mezzanine loan, cash and cash equivalents.
The Group’s policy is to minimise its interest exposure through the restructure of loans and borrowings, and to
enter into interest rate swaps, where appropriate. In the past 2 years, the Group has not entered into any interest
rate swaps.
Sensitivity analysis for interest rate risk
Movements in interest rates will have an impact on the Group’s loans and borrowings. A change of 50 basis
points (bp) in interest rates at the reporting date would change proÄt/(loss) net of taxation by the amounts shown
below. This analysis assumes that all other variables remain constant.
Group
50bp
50bp
Increase
Decrease
$’000
$’000
Increase/(decrease) in proÄt
2010
(92)
92
(Increase)/decrease in loss
2009
(139)
139
Information relating to the Group’s interest exposure is also disclosed in various notes to the Änancial statements.
(d)
Liquidity risk
Liquidity risk is the risk that the Group or the Company will encounter difÄculty in meeting Änancial obligations
due to shortage of funds. The Group’s and the Company’s exposure to liquidity risk arises primarily from
mismatches of the maturities of Änancial assets and liabilities. The Group’s and the Company’s objective is to
maintain a level of cash to meet the obligations and commitments due and to ensure cash efÄciency whereby
maximisation of cash Åow position can be achieved.
The Group’s liquidity risk management policy is to monitor its working capital projections, taking into account
the available banking and other borrowings facilities of the Group, and ensuring that the Group has adequate
working capital to meet obligations and commitments due.
(d)
Liquidity risk (cont’d)
Analysis of financial instruments by remaining contractual maturities
The table below summarises the maturity proÄle of the Group’s and the Company’s Änancial assets and liabilities
at the balance sheet date, based on contractual undiscounted repayment obligations.
Within
1 year
$’000
2010
Within
2 to 5
years
$’000
Within
1 year
$’000
2009
Within
2 to 5
years
$’000
Total
$’000
Total
$’000
104,493
52,893
4,726
–
109,219
52,893
82,011
59,177
2,990
–
85,001
59,177
157,386
4,726
162,112
141,188
2,990
144,178
70,868
–
15,592
–
14,786
23
70,868
14,786
15,615
72,838
–
19,420
–
–
34
72,838
–
19,454
86,460
14,809
101,269
92,258
34
92,292
70,926 (10,083)
60,843
48,930
2,956
51,886
Group
Financial assets
Other liability
Total net undiscounted
Änancial assets/(liabilities)
Company
Financial assets
Total net undiscounted Änancial assets
284,791
6,817
–
–
284,791
6,817
211,972
20,276
–
–
211,972
20,276
291,608
–
291,608
232,248
–
232,248
237,784
8,869
–
–
237,784
8,869
173,462
13,196
–
–
173,462
13,196
246,653
–
246,653
186,658
–
186,658
44,955
–
44,955
45,590
–
45,590
(d)
Liquidity risk (cont’d)
The table below summarises the contractual expiry by maturity of the Group’s contingent liabilities and
commitments. The maximum amount of the Änancial guarantee contracts are allocated to the earliest period in
which the guarantee could be called.
Group
Financial guarantees
(e)
Within
1 year
$’000
2010
Within
2 to 5
years
$’000
Total
$’000
2,267
1,264
3,531
Within
1 year
$’000
2009
Within
2 to 5
years
$’000
Total
$’000
2,569
1,495
4,064
Market price risk
Market price risk is the risk that the fair value or future cash Åows of the Group’s Änancial instruments will
Åuctuate because of changes in market prices (other than interest or exchange rates). The Group is exposed to
equity price risk arising from its investment in quoted equity instruments. These instruments are quoted in the
SGX-ST in Singapore and HKEX in Hong Kong, and are classiÄed as held-for-trading. The Group does not have
exposure to commodity price risk.
The Group’s policy is to manage investment returns and equity risk through close monitoring of the holding
limits prescribed for each individual Änancial instruments and a class of similar instruments. The Group tries to
maintain a well-diversiÄed portfolio to balance risks and returns. Further diversiÄcation is achieved by investing
in foreign securities so that the Group is not dependent on one country’s economy.
The Board of directors has overall responsibility for determining the level and type of business investment risk the
Group undertakes. All major investment proposals are submitted to the Board for evaluation and approval. The
monitoring of new existing investments is facilitated by regular communications and reporting from management
at Board meetings.
Sensitivity analysis for equity price risk
The sensitivity analysis below is based on the assumption that a change of market prices by 15% (2009: 20%)
in the underlying quoted equities at the reporting date would increase/decrease the Group’s proÄt/(loss) net of
taxation by the following amounts. This analysis assumes that all other variables remain constant.
Group
2010
2009
$’000
$’000
Increase/
(Increase)/
(decrease)
decrease
in proÄt
in loss
Quoted equity shares
Increase by 1,500bp (2009: 2,000bp)
Decrease by 1,500bp (2009: 2,000bp)
994
(994)
964
(964)
35. CAPITAL MANAGEMENT
The main objective of the Group in capital management is to ensure that it maintains a healthy capital structure from
various sources of funds to Änance its overall operations, support business growth and maximise shareholder value.
While debt Änancing provides more Åexibility in arrangement, the Group monitors the volatility of interest rates on
the variability of earnings before taxation. Hence, the Group ensures that a sufÄcient income stream is maintained to
service all contractual obligations arising from debt Änancing and dividend payments to shareholders.
Interest coverage is calculated by dividing adjusted proÄt by Änance costs. Adjusted proÄt relates to the proÄt/(loss)
before taxation after adjusting for Änance costs, share of results of associated companies and a joint venture company,
depreciation and amortisation, gain on acquisition of non-controlling interests, loss on disposal of subsidiary companies
and an associated company, loss on liquidation and dilution of interest in a subsidiary company, and impairment loss
on goodwill on consolidation.
The interest coverage was 40.3 in 2010 as compared to 10.3 in 2009. No changes were made in the objectives, policies
or processes during the Änancial years ended 31 December 2010 and 2009. The Group’s policy is to maintain the
interest coverage not less than 1.2 (2009: 1.2).
The Group monitors capital using a debt-equity ratio, which is calculated by dividing its total loans and borrowings by
total shareholders’ equity. The Group’s policy is to keep the ratio below 1 (2009: 1). Total liabilities include loans and
borrowings, and trade and other creditors. Total shareholders’ equity includes equity attributable to the equity holders
of the parent.
Group
Loans and borrowings (Note 25)
Equity attributable to the owners of the Company
Gearing ratio
Adjusted proÄt from continuing operations
Finance costs
Interest coverage
2010
$’000
2009
$’000
15,615
221,960
0.07
19,454
217,952
0.09
21,360
530
40.3
12,525
1,211
10.3
36. SEGMENT INFORMATION
For management purposes, the Group is organised into business units based on their products and services, and has
seven reportable operating segments as follows:
(i)
The Wholesale and Distribution segment is in the business of supplying fast-moving consumer goods, Äne wines,
cosmetics and health supplements.
(ii)
The Manufacturing segment is in the business of manufacturing bread and other house brand products.
(iii)
The Food Retail segment operates chains of bakeries, cafes and bistros.
(iv)
The Food Courts segment is in the business of managing food courts, and sale of food and beverages.
(v)
The Property Investment segment is in the business of leasing residential and commercial properties.
(vi)
The Securities Investment segment is mainly in the business of investing in funds and quoted investment securities.
(vii)
The Investment Holding segment is involved in Group-level corporate services, treasury functions, and investing
in unquoted investments.
(viii)
The Fund Investment segment is in the business of real estate fund investment.
Management monitors the operating results of its business units separately for the purpose of making decisions about
resource allocation and performance assessment. Segment proÄt is used to measure performance as management
believes that such information is the most relevant in evaluating the results of certain segments relative to other entities
that operate within these industries.
Segment accounting policies are the same as the policies described in Note 2 to the Änancial statements.
Transfer prices between operating segments are on an arm’s length basis in a manner similar to transactions with third
parties.
Information regarding the results of each reportable operating segment is included below.
36. SEGMENT INFORMATION (cont’d)
For the Änancial year ended 31 December 2010:
Wholesale
and
Distribution
$’000
Manufacturing
$’000
Food
Retail
$’000
Food
Courts
$’000
Revenue:
– External customers
– Inter-segment
219,440
18,203
38,951
10,770
109,506
1,665
13,405
–
Total revenue
237,643
49,721
111,171
13,405
–
–
–
–
–
–
62
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(2,815)
(359)
–
34
(3)
–
–
(282)
–
–
–
(262)
(836)
(2)
(324)
(1,309)
–
–
(4,909)
(210)
–
(3,914)
(100)
515
–
–
–
–
10,925
–
7,248
158
(2,436)
–
1,501
Assets:
Investments in associated and
joint venture companies
Additions to non-current assets
Segment assets
1,416
650
105,456
–
1,533
22,692
–
2,492
78,429
–
3,171
71,652
Segment liabilities
(35,407)
(7,807)
(13,352)
(16,916)
Results:
Interest income
Dividend income
Fair value loss on investment funds
at fair value through proÄt or loss
Fair value gain on investment securities
held-for-trading
Fair value gain on redeemable preference
shares issued by a subsidiary company
Allowance for impairment loss
on unquoted equity shares
Stocks (written down)/written-back
Allowance for impairment on
non-trade debtors
Depreciation and amortisation
Share of results of associated
and joint venture companies
Write-back of provision for
reinstatement costs
Segment proÄt/(loss)
Property
Investment
$’000
Securities
Investment
$’000
Investment
Holding
$’000
Fund
Investment
$’000
Adjustments
and
Eliminations
$’000
Notes
Consolidated
Financial
Statements
$’000
–
–
460
71
7
9,429
45
–
–
(40,138)
–
531
9,436
45
(40,138)
381,814
–
–
254
207
7
–
45
–
–
–
368
207
–
(23)
(18)
–
–
(41)
–
702
–
–
–
702
–
–
–
414
–
414
–
–
–
(816)
–
–
–
–
–
–
–
–
–
–
–
(816)
(2,781)
(644)
–
–
–
–
–
–
(349)
(261)
–
–
–
–
–
–
–
(935)
(11,229)
(312)
–
144
–
–
–
659
–
(190)
–
(397)
–
(6,391)
–
(788)
–
129
–
–
1,561
1,607
–
13,522
–
39
7,481
–
–
37,992
(19)
(47)
(1,702)
(15,391)
(i)
381,814
–
(ii)
158
9,601
–
–
35,693
(iii)
3,023
7,885
374,478
(39,090)
(iv)
(129,731)
For the Änancial year ended 31 December 2009:
Wholesale
and
Distribution
$’000
Manufacturing
$’000
Food
Retail
$’000
Food
Courts
$’000
Revenue:
– External customers
– Inter-segment
235,475
20,911
36,713
10,867
116,064
1,151
17,076
–
Total revenue
256,386
47,580
117,215
17,076
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(2,888)
(592)
(1,172)
(226)
–
–
–
(222)
(10)
(1,247)
(56)
–
–
–
–
(422)
(6,654)
(656)
–
–
–
–
–
(3,765)
(238)
–
–
397
–
–
–
–
–
–
100
–
259
3,615
–
–
5,781
–
–
(10,063)
29
–
2,108
Assets:
Investments in associated and
Additions to non-current assets
Segment assets
901
620
92,651
–
1,846
19,547
–
2,897
79,979
–
1,697
72,114
Segment liabilities
(31,692)
(11,955)
(16,324)
(13,723)
Results:
Interest income
Dividend income
Fair value gain/(loss) on investment funds
at fair value through proÄt or loss
Fair value gain on investment securities
held-for-trading
Write-back of impairment loss on
unquoted equity shares
Stocks written down
Depreciation and amortisation
Share of results of associated and
Write-back of impairment of
non-Änancial assets
Write-back of provision for
reinstatement costs
Other material non-cash income
Segment proÄt/(loss)
Property
Investment
$’000
Securities
Investment
$’000
Investment
Holding
$’000
Adjustments
and
Eliminations
$’000
Notes
Consolidated
Financial
Statements
$’000
52
–
231
23
353
10,128
–
(43,080)
52
254
10,481
(43,080)
405,964
–
–
216
1
147
206
–
–
363
207
–
500
524
–
(216)
–
–
–
308
500
–
480
627
–
1,107
–
–
–
(20)
–
–
–
350
–
–
–
–
–
–
–
–
–
(289)
–
(1,073)
(634)
–
–
–
–
–
–
–
350
(3,110)
(1,024)
(13,147)
(1,176)
(1,073)
(634)
–
(200)
–
–
197
–
–
–
–
100
–
–
394
–
1,655
2,700
–
2,062
(5,199)
–
–
(1,014)
–
20
188
1,463
–
4,551
–
512
63,853
(25)
(46)
(3,157)
(i)
405,964
–
(v)
(ii)
29
3,976
(1,678)
–
–
29,910
(iii)
2,364
7,592
362,793
(43,824)
(iv)
(120,746)
Notes Nature of adjustments and eliminations to arrive at amounts reported in the consolidated Änancial statements
(i)
Inter-segment revenues are eliminated on consolidation.
(ii)
The following items are added to/(deducted from) segment proÄt to arrive at “ProÄt/(loss) before taxation”
presented in the statement of comprehensive income:
2010
$’000
Finance costs
Share of results of associated and joint venture companies
(iii)
(1,211)
197
129
(1,014)
3,023
29,957
831
1,882
2,364
26,305
1,188
53
35,693
29,910
The following items are added to segment liabilities to arrive at total assets reported in the consolidated balance
sheet:
Tax payable
Obligations under Änance leases
(v)
(530)
659
The following items are added to segment assets to arrive at total assets reported in the consolidated balance
sheet:
Investments in associated and joint venture companies
Deferred tax assets
Tax recoverable
(iv)
2009
$’000
5,800
17,675
15,577
38
5,927
18,443
19,260
194
39,090
43,824
Other material non-cash income consist of write-back of performance incentive management fee, write-back of
provision for long outstanding creditors and gain on acquisition on non-controlling interests.
Revenue and non-current assets information based on geographical location of customers and assets respectively are as
follows:
Revenue
Non-current assets
2010
2009
2010
2009
$’000
$’000
$’000
$’000
Singapore
Malaysia
People’s Republic of China
Indonesia
Hong Kong
Others
231,185
98,166
5,429
1,309
44,474
1,251
260,974
88,802
7,989
794
45,603
1,802
136,622
2,580
1,589
286
3,840
16
130,772
5,143
2,063
414
4,595
57
381,814
405,964
144,933
143,044
Non-current assets information presented above consist of property, plant and equipment, intangible assets, other
debtors, and prepayments and other recoverables.
Information from major customers
Revenue from a major customer amounts to $38,568,000 (2009: $36,593,000), arising from sales from Wholesale and
Distribution segment.
37. ACQUISITION OF A SUBSIDIARY COMPANY
On 2 November 2010, a subsidiary company, Food Junction Holdings Limited, completed its acquisition of All Around
Limited (“AAL”) from a related party, Tamsett Holdings Limited, a wholly-owned subsidiary company of Lippo China
Resources Limited (Note 11 and 12).
The provisional fair values of the identiÄed assets and liabilities of the subsidiary company as at acquisition date were:
2010
$’000
Stocks
Trade debtors
Other debtors, and prepayments and other recoverables
Trade creditors
170
285
79
235
1,624
(155)
(426)
Net assets acquired
Less: Non-controlling interests
1,812
(181)
Net identiÄable assets acquired
Goodwill arising on acquisition (Note 11)
1,631
3,579
Total consideration
Less: Cash and cash equivalents on acquisition
5,210
(1,624)
Cash Åows arising on acquisition, net of cash acquired
3,586
37. ACQUISITION OF A SUBSIDIARY COMPANY (cont’d)
Pursuant to the Sale and Purchase agreement, the consideration for the acquisition of this subsidiary company amounted
to HK$31,000,000 (approximately S$5,210,000) and negotiated on a willing-buyer willing-seller basis.
Impact of the acquisition on profit or loss
From the acquisition date, AAL contributed to the Group’s revenue and proÄt for the year of $742,000 and $148,000
respectively. If the business combination had taken place at the beginning of the year, the revenue would have been
$387,535,000 and the Group’s proÄt for the year would have been $6,640,000.
38. DISPOSAL AND DILUTION OF INTERESTS OF SUBSIDIARY COMPANIES
In 2009, the net assets and liabilities arising from the disposal and dilution of subsidiary companies and the cash Åow
effects of the disposal and dilution were as follows :2009
$’000
Total assets
Total liabilities
1,647
(1,261)
Net assets disposed
Foreign currency translation reserve gain realised
Net loss on disposal of subsidiary companies
386
(348)
1,131
(1,073)
Total consideration
Cash and bank balances of subsidiary companies disposed
96
(472)
Cash outÅows arising from disposal of subsidiary companies
(376)
39. DIRECTORS’ REMUNERATION
The number of directors of the Company whose total remuneration from the Group falls into the following bands is as
follows:
Group
2010
2009
$’000
$’000
$500,000 and above
Below $250,000
1
6
1
6
Total
7
7
40. RECLASSIFICATIONS AND COMPARATIVE FIGURES
Certain reclassiÄcations have been made to the prior year’s Änancial statements to enhance comparability with the
current year’s Änancial statements.
As a result, relevant line items have been amended on the face of balance sheets, consolidated cash Åow statement, and
the related notes to the Änancial statements.
41. EVENTS OCCURRING AFTER THE REPORTING PERIOD
(i)
On 18 February 2011, the Singapore Government announced tax changes in the Singapore Budget 2011. In
particular, these changes include enhancements being made to the Productivity and Innovation Credit (“PIC”)
Scheme, which will be effective from Year of Assessment 2011.
Under the PIC Scheme, businesses were entitled to enhanced deductions or allowances of amount of
expenditure incurred (subject to an annual ceiling) on qualifying activities. The enhancements increased the
PIC tax deduction to 400% (up from 250%) on the Ärst $400,000 (up from $300,000) of qualifying expenditure.
In addition, a corporate income tax rebate will be granted for the year assessment (“YA”) 2011. The rebate will be
20% of the corporate income tax payable, capped at $10,000. For companies who pay very little taxes a one-off
cash grant will be provided. The grant will be based on 5% of the company’s revenue for YA2011, subject to a
cap of $5,000. The company must, however make CPF contributions in YA2011. The company will receive the
higher of the corporate income tax rebate or the grant in the corporate income tax return tax YA2011.
In accordance with FRS 12, Income Taxes, and FRS 10, Events after the Balance Sheet Date, this is a nonadjusting event, and the Änancial effect will be reÅected in the 31 December 2011 Änancial year.
(ii)
Since the end of the Änancial year-end up to 15 March 2011, FJH acquired 858,000 of its shares through
purchases on the Singapore Exchange for an amount of $179,000.
(iii)
On 28 February 2011, the Group made a partial repayment of its bank borrowings, amounting to $2,426,000, to
Raiffeisen Bank International AG Singapore Branch. Concurrently, the Group extended the repayment term for
the remaining amount of $6,443,000 to August 2011.
42. AUTHORISATION OF FINANCIAL STATEMENTS FOR ISSUE
The Änancial statements for the Änancial year ended 31 December 2010 were authorised for issue in accordance with
a resolution of the directors on 4 April 2011.
as at 14 March 2011
Issued and Fully Paid-up Capital
No. of Shares Issued
Class of Shares
Voting Rights
:
:
:
:
$64,460,182
125,667,324
Ordinary share
One vote per share
ANALYSIS OF SHAREHOLDINGS
No. of
Shareholders
%
No. of
Shares
%
535
1,846
479
7
18.66
64.39
16.71
0.24
126,218
6,073,933
21,705,352
97,761,821
0.10
4.83
17.27
77.80
2,867
100.00
125,667,324
100.00
BeneÄcial Interest
%
Deemed Interest
%
4,999,283
27,493,311
20,004,000
36,165,052
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
3.98
21.88
15.92
28.78
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Range of Shareholdings
1 – 999
1,000 – 10,000
10,001 – 1,000,000
1,000,001 and above
SUBSTANTIAL SHAREHOLDERS
(as shown in the Register of Substantial Shareholders)
Name
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
Jeremiah Holdings Limited
Goldstream Capital Limited
Nine Heritage Pte Ltd
Pantogon Holdings Pte Ltd
Dragon Board Holdings Limited
Ir Endang Utari Mokodompit
Max Turbo Limited
Tamsett Holdings Limited
Win Joyce Limited
Goldmax PaciÄc Limited
Lippo China Resources Limited
Skyscraper Realty Limited
First Tower Corporation
Lippo Limited
Lippo Capital Limited
Lippo Cayman Limited
Lanius Limited
James T. Riady
Stephen Riady
Bravado International Ltd.
Castello International Limited
Provatas Investments Limited
Oxley Capital Holdings Limited
20,004,000 (1)
–
–
–
25,003,283 (2)
61,168,335 (3)
25,653,283 (4)
25,653,283 (5)
36,165,052 (6)
36,165,052 (7)
61,927,335 (8)
61,927,335 (9)
61,927,335 (10)
61,927,335 (11)
61,927,335 (12)
61,927,335 (13)
61,927,335 (14)
61,927,335 (15)
89,420,646 (16)
27,493,311 (17)
27,493,311 (18)
27,493,311 (19)
27,493,311 (20)
15.92
–
–
–
19.90
48.67
20.41
20.41
28.78
28.78
49.28
49.28
49.28
49.28
49.28
49.28
49.28
49.28
71.16
21.88
21.88
21.88
21.88
Note:
(1) Jeremiah Holdings Limited (“Jeremiah”) is deemed to be interested in the shares held by Nine Heritage Pte Ltd in Auric PaciÄc Group
Limited (“APGL”). On 31 January 2011, Jeremiah transferred its entire shareholding in Pantogon Holdings Pte Ltd (“Pantogon”) which
holds approximately 28.78% interest in APGL to Goldmax PaciÄc Limited (“Goldmax”), a wholly owned subsidiary of Win Joyce Limited
(“Win Joyce”).
(2) Dragon Board Holdings Limited (“Dragon Board”) is deemed to be interested in the shares held by Jeremiah and its related corporation in APGL.
(3) Ir Endang Utari Mokodompit is deemed to be interested in the shares held by Jeremiah and its related corporation in APGL.
(4) Max Turbo Limited (“Max Turbo”) is deemed to be interested in the shares held by Dragon Board and its related corporations in APGL.
SUBSTANTIAL SHAREHOLDERS (cont’d)
(5) Tamsett Holdings Limited (“Tamsett”) is deemed to be interested in the shares held by Max Turbo and its related corporations in APGL.
(6) Win Joyce is deemed to be interested in the shares of APGL through Goldmax. Win Joyce is a wholly owned subsidiary of Lippo China
Resources Limited (“LCR”).
(7) Goldmax is deemed to be interested in the shares of APGL through Pantogon.
(8) LCR is deemed to be interested in the shares held by Tamsett, Win Joyce and their related corporations in APGL.
(9) Skyscraper Realty Limited (“Skyscraper”) is deemed to be interested in the shares held by LCR and its related corporations in APGL.
(10) First Tower Corporation (“First Tower”) is deemed to be interested in the shares held by Skyscraper and its related corporations in APGL.
(11) Lippo Limited (“Lippo”) is deemed to be interested in the shares held by First Tower and its related corporations in APGL.
(12) Lippo Capital Limited (“Lippo Capital”) is deemed to be interested in the shares held by Lippo and its related corporations in APGL.
(13) Lippo Cayman Limited (“Lippo Cayman”) is deemed to be interested in the shares held by Lippo Capital and its related corporations in APGL.
(14) Lanius Limited (“Lanius”) is deemed to be interested in the shares held by Lippo Cayman and its related corporations in APGL.
(15) Mr. James T. Riady is deemed to be interested in the shares held by Lanius and its related corporations in APGL.
(16) Mr. Stephen Riady (“Mr. SR”) is deemed to be interested in the shares held by Lanius and its related corporations in APGL. Lanius is the trustee of
a discretionary trust of which Mr. SR is a beneÄciary. Mr. SR is also deemed to be interested in the shares of APGL through Bravado International
Ltd. (“Bravado”). Mr. SR is the beneÄcial owner of the entire issued share capital of Bravado.
(17) Bravado is deemed to be interested in the shares of APGL held by Goldstream Capital Limited (“Goldstream”), 70% of its issued share capital
is held by Bravado.
(18) Castello International Limited (“Castello”) is deemed to be interested in the shares of APGL through Goldstream.
(19) Provatas Investments Limited (“Provatas”) is deemed to be interested in the shares of APGL through Castello.
(20) Oxley Capital Holdings Limited is deemed to be interested in the shares of APGL through Provatas.
TWENTY LARGEST SHAREHOLDERS
(as shown in the Register of Members)
Name
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
OCBC Securities Private Ltd
DMG & Partners Securities Pte Ltd
Lee Rubber Company Pte Ltd
DBS Nominees Pte Ltd
United Overseas Bank Nominees Pte Ltd
Ng Soo Giap
Phillip Securities Pte Ltd
HSBC (Singapore) Nominees Pte Ltd
Chen Shu-Yuan
Goh Geok Loo
Chee Swee Cheng & Co Pte Ltd
Lim Ah Han
Leong Chee Keng
OCBC Nominees Singapore Pte Ltd
Tan Chee Jin
Seet Christina
Citibank Nominees Singapore Pte Ltd
Tang Hon Chew
Chan Seoh Khim Angelia
Atlas Ice (Singapore) Private Limited
No. of Shares Held
%
61,986,375
27,499,311
3,712,457
1,237,000
1,147,946
1,109,000
1,069,732
846,079
718,418
559,000
518,469
516,000
510,000
492,000
460,000
400,000
395,506
337,000
326,000
305,735
49.33
21.88
2.95
0.98
0.91
0.88
0.85
0.67
0.57
0.45
0.41
0.41
0.41
0.39
0.37
0.32
0.32
0.27
0.26
0.24
104,146,028
82.87
Free Float
Based on the information available to the Company as at 14 March 2011, approximately 28.84% of the issued ordinary shares
of the Company is held by the public and the Company is in compliance with Rule 723 of the Listing Manual.
Notice is hereby given that the Twenty-fourth Annual General Meeting of Auric PaciÄc Group Limited will be held at Mandarin
Ballroom III, 6th Floor, Main Tower, Mandarin Orchard Singapore, 333 Orchard Road, Singapore 238867 on 29 April 2011
at 10.00 a.m. to transact the following business:
As Ordinary Business
1.
2.
3.
4.
To receive and adopt the Directors’ Report and Audited Financial Statements for the year ended
31 December 2010 and the Auditors’ Report thereon.
(Resolution 1)
To declare and approve a one-tier tax exempt Änal dividend of 3 cents per share for the year ended
31 December 2010.
(Resolution 2)
To approve directors’ fees of S$424,000 (FY31/12/2009: S$364,000) for the year ended 31
December 2010.
(Resolution 3)
To re-elect separately the following directors who retire and being eligible offered themselves for
re-election:
(a)
(b)
Dr. Lim Boh Soon, who retires by rotation pursuant to Article 91 of the Articles of
Association of the Company, as Director of the Company.
(Resolution 4)
Mr. Edwin Neo, who retires pursuant to Article 97 of the Articles of Association of the
Company, as Director of the Company.
(Resolution 5)
[See Explanatory Notes 1 and 2]
Mr. Jan Gert Vistisen who also retires by rotation pursuant to Article 91 of the Articles of
Association of the Company will not be offering himself for re-election.
5.
6.
To re-appoint Messrs Ernst & Young LLP as auditors of the Company and to authorise the Directors
to Äx their remuneration.
To transact any other business that may be transacted at an Annual General Meeting.
As Special Business
To consider and if thought Ät, to pass the following resolution as Ordinary Resolution, with or without
any modiÄcations:
7.
Authority to issue shares
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 (“SGX-ST”), the Directors of the Company
be authorised and empowered to:
(a)
(i)
issue shares in the Company (“shares”) whether by way of rights, bonus or otherwise;
and/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 Ät; and
(Resolution 6)
(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 Äfty per cent. (50%) of the total number of issued 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 cent. (20%) of the total number of issued shares
in the capital of the Company (as calculated in accordance with sub-paragraph (2) below);
(2)
(subject to such calculation as may be prescribed by the SGX-ST) for the purpose of
determining the aggregate number of shares that may be issued under sub-paragraph (1)
above, the total number of issued shares shall be based on the total number of issued 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;
(3)
in exercising the authority conferred by this Resolution, the Company shall comply with
the provisions of the Listing Manual of the SGX-ST for the time being in force (unless such
compliance has been waived by the SGX-ST) and the Articles of Association for the time
being of the Company; and
(4)
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 3]
(Resolution 7)
By Order of the Board
Cheong Soo Bin
Company Secretary
13 April 2011
Singapore
Note: A member entitled to attend and vote at the General Meeting is entitled to appoint a proxy to attend and vote in
his stead and the proxy need not be a Member of the Company. The instrument appointing the proxy must be lodged
at the Company’s registered ofÄce at 78 Shenton Way, #22-02, Singapore 079120 not less than 48 hours before the
time Äxed for the meeting.
Ordinary Business
Explanatory Notes:
1.
In relation to Resolution 4, Dr. Lim Boh Soon will upon re-election continue to serve as independent non-executive
director, Chairman of Nomination Committee and Member of Audit and Remuneration Committees.
2.
In relation to Resolution 5, Mr. Edwin Neo will upon re-election continue to serve as independent non-executive
director.
The Nomination Committee and the Board consider Dr. Lim Boh Soon and Mr. Edwin Neo as independent directors.
Please refer to the section on “Directors’ ProÄle” in Auric’s Annual Report for FY2010 for more information relating to
Dr. Lim Boh Soon and Mr. Edwin Neo.
3.
Resolution 7 in item 7 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 in the capital
of the Company, of which up to 20% may be issued other than on a pro-rata basis to shareholders.
For determining the aggregate number of shares that may be issued, the total number of issued shares will be calculated
based on the total number of issued shares in the capital of the Company at the time Resolution 7 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 Resolution 7 is passed and any subsequent bonus
issue, consolidation or subdivision of shares.
IMPORTANT:
1. For investors who have used their CPF moneys to buy
ordinary shares in the capital of Auric PaciÄc Group
Limited, the 2010 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.
3. CPF investors who wish to attend the Annual General
Meeting as OBSERVERS have to submit their requests
through their respective CPF Approved Nominees so
that their CPF Approved Nominees may register with the
Company’s Registrar. (Please see Note No. 10 on the
reverse of this page).
Proxy Form
Company Registration No. 198802981D
(Incorporated in the Republic of Singapore)
Registered OfÄce: 78 Shenton Way, #22-02
Singapore 079120
I/We
, NRIC/Passport No.
of
being a member of Auric PaciÄc Group Limited hereby appoint
NAME
ADDRESS
NRIC/
PASSPORT NO.
PROPORTION OF
SHAREHOLDINGS (%)
ADDRESS
NRIC/
PASSPORT NO.
PROPORTION OF
SHAREHOLDINGS (%)
and/or failing him/her (delete as appropriate)
NAME
As my/our proxy to vote for me/us and on my/our behalf at the Twenty-fourth Annual General Meeting of the Company
to be held at Mandarin Ballroom III, 6th Floor, Main Tower, Mandarin Orchard Singapore, 333 Orchard Road, Singapore
238867 on 29 April 2011 at 10.00 a.m. and at any adjournment thereof in the manner indicated below.
BY HAND
NO.
RESOLUTIONS RELATING TO
1.
Directors’ Report and Audited Financial
Statement
2.
Declaration of Dividend
3.
Directors’ Fees
4.
Re-election of Dr. Lim Boh Soon as
a Director
5.
Re-election of Mr. Edwin Neo as a Director
6.
Re-appointment of Ernst & Young
LLP as Auditors
7.
Authority to issue new shares
2011
day of
Signature of Member(s)/Common Seal
FOR
AGAINST
BY POLL
NO. OF VOTES
NO. OF VOTES
FOR
AGAINST
Total Number of Shares Held
Notes:
1.
A member entitled to attend and vote at the General Meeting is entitled to appoint not more than two proxies to attend and vote
in his stead and the proxy need not be a member of the Company.
2.
A member may use separate proxy forms for purpose of appointing not more than two proxies. The appointments of such proxies
shall be invalid unless he speciÄes the number of shares to be represented by each proxy on the respective proxy forms.
3.
In the case of voting by show of hands; if you wish to vote “FOR” the respective resolutions, please indicate an “” in the box
marked “FOR”. If you wish to vote “AGAINST” the respective resolutions, please indicate an “” in the box marked “AGAINST”.
4.
In the case of a poll, please insert the total number of shares held by you against the respective resolutions. If you have
shares entered against your name in the Depository Register (as deÄned in Section 130A of the Companies Act, Chapter 50 of
Singapore), you should insert that number of shares. If you have shares registered in your name in the Register of Members,
you should insert that number of shares. If you have shares entered against your name in the Depository Register and shares
registered in your name in the Register of Members, you should insert the aggregate number of shares entered against your name
in the Depository Register and registered in your name in the Register of Members. If no number is inserted, the instrument
appointing a proxy or proxies will be deemed to relate to all the shares held by you.
5.
The instrument appointing a proxy or proxies must be executed under the hand of the appointer or of his attorney duly authorised
in writing. Where the instrument appointing a proxy is signed on behalf of the appointer by an attorney, the letter or power of
attorney or a duly certiÄed copy thereof must (failing previous registration with the Company) be lodged with the instrument of
proxy in accordance to note 6 below. Where the instrument appointing a proxy or proxies is executed by a corporation, it must
be executed either under the common seal of the corporation or under the hand of any ofÄcer or attorney duly authorised.
Please fold here
AFFIX
STAMP
The Company Secretary
78 Shenton Way #22-02
Singapore 079120
Please fold here
6.
The instrument appointing the proxy must be lodged at the Company’s registered ofÄce at 78 Shenton Way #22-02 Singapore
079120 not less than 48 hours before the time Äxed for the Annual General Meeting.
7.
The Company is 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 appointer are not ascertainable from the instructions of the appointer speciÄed in the
instrument appointing a proxy or proxies.
8.
If the member is a Depositor, the Company shall be entitled and bound (a) to reject any instrument of proxy lodged if the
Depositor is not shown to have any shares entered against his name in the Depository Register as at 48 hours before the time
of the Annual General Meeting as certiÄed by the Depository to the Company and (b) to accept as the maximum number of
votes which in aggregate the proxy or proxies appointed by the Depositor is or are able to cast on a poll a number which is
the number of shares entered against the name of that Depositor in the Depository Register as at 48 hours before the time of
the Annual General Meeting as certiÄed by the Depository to the Company, whether the number is greater or smaller than the
number speciÄed in any instrument of proxy executed by or on behalf of that Depositor.
9.
If the Proxy Form contains no indication as to how the proxy should vote in relation to each resolution, the proxy shall vote as
it deems Ät or abstain from voting.
10. CPF Approved Nominees acting on the request of the CPF investors who wish to attend the meeting as observers are requested
to submit in writing, a list with details of the investor’s names, NRIC/Passport numbers, addresses and number of Shares held.
The list, signed by an authorised signatory of the relevant CPF Approved Nominees, should reach the Company’s Registrar, M &
C Services Private Limited at 138 Robinson Road #17-00, The Corporate OfÄce, Singapore 068906, at least 48 hours before the
time appointed for holding the Annual General Meeting.

Notes to the Financial Statements

Transcription

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