Novena Holdings Limited

Transcription

Contents
1. About Novena
2. Corporate Structure
3. Profile
4. Our Philosophy
5. Financial Highlights
6. CEO’s Message
8. Board of Directors
9. Key Management
10. Corporate Information
11. Investments
12. FMCG Distribution
14. Beauté Spring
16. BSP
18. Dale & Eke
20. Kitoko Kalani
22. Mugens
24. Nozomi
26. Putom
27. Training
28. Community Development 2007
30. Achievements
32. Financial Contents
About Novena
Novena Holdings Limited is an integrated
beauty and wellness provider who takes
care of consumers’ concerns from head
to toe, offering choices through a diverse
range of products and services. Community
development and charity efforts continue
to be our key priorities in the realisation of
our values.
Vision
Mission
Values
The strong belief in branding is behind
Novena’s vision to be the leading
consumer lifestyle group in providing
products and services of superior quality
and value to improve consumer lifestyles,
and in contributing to the community
development.
Continuous upgrading to offer the best
experience, products and services
of superior quality and value to our
consumers.
We are creative, sincere and we care.
ANNUAL REPORT 2007
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corporate structure
• Beaute Spring Pte Ltd – 100%
• B.S.P. Global Pte Ltd – 100%
• Chuan Seng Leong Pte Ltd – 80%
• Fasta International Pte Ltd – 100%
• NiClas International Pte Ltd – 100%
• Novena Investment Pte Ltd – 100%
Suzhou Novena Furniture Co. Ltd (China) – 75%
• Novena Strategic Investment Pte Ltd – 100%
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NOVENA HOLDINGS LIMITED
profile
Novena’s Evolution
Novena Now
Since 1984, Novena has successfully
established itself as a leading local
retailer in home furnishings, with a
sizeable retail network in the region.
Our Business
We specialise in a broad spectrum of
integrated solutions in the emerging
beauty and wellness industry.
From Beautifying Homes to People
• In 2002, Novena expanded into the
beauty business through the acquisition
of LeeWah Beauty, a household brand
name. Similar to the furnishing business,
the beauty business also caters to a
broad spectrum of consumers with a wide
array of beauty and personal needs.
Our current core business is in the FMCG
distribution, retail of products and services,
and Research & Development (R&D).
• In 2004, a beauty service centre, BSP,
Beauty Solutions Place, was set up to
provide value-added services to retail
customers.
• In 2005, LeeWah Beauty was rebranded
as Beauté Spring, to portray a younger,
trendier and more vibrant brand image.
A local Fast-Moving Consumers Goods
(FMCG) distribution company of
household goods, personal care and
health products, Chuan Seng Leong,
CSL, became a subsidiary of Novena.
This allowed Novena to meet its diverse
consumer needs, ranging from lifestyle
furniture, to beauty and personal care and
household products.
• In 2007, Novena makes a historic business
strategic move when it sells its furniture
business to TT International. Novena
consolidated its strength in beauty and
personal care, and redirected its business
focus in beauty and wellness lifestylerelated products and services; and
strategic investments.
• Retail of Products and Services
Beauté Spring is a local beauty retail
chain with a growing retail network of 6
stores island-wide. Its vision is to become
the leading retail chain that provides a
wide variety of quality and great value
products.
The chain retails more than 200 brands of
skincare, haircare, bodycare, fragrance,
make-up, accessories and health care
products from a wide range of brand
profiles, including exclusive international
brands and popular mass brands.
• Research & Development (R&D)
Fasta International and NiClas
International are responsible for
the development of beauty care
products including skincare, haircare,
bodycare, make-up, accessories and
health products. Holding exclusive
distribution rights of brands from
France, Japan, Korea, Switzerland
and Taiwan, Fasta and NiClas are
constantly seeking for the new
and latest technology in beauty
and health products to introduce
to the local market and seeking to
expand its distribution network to the
overseas markets.
Brands distributed by
Fasta and NiClas:
Dale & Eke, Kitoko Kalani, KK PRO,
KK SPA, Putom, Nozomi, Oulla, Zokka,
BPB, Mugens, Carslan, Dainty Design,
Just@100, PLUS, TSAIO.
BSP Beauté Solutions Place comprises
of 3 beauty salons that provide a
comprehensive range of beauty services
by its team of trained professional
therapists and consultants, amidst relaxing
Asian resort inspired settings.
• FMCG Distributions
A leading distributor in the supply of
FMCG household and personal care
essentials, CSL is continuously upgrading
and expanding services and merchandise
to provide the best selections and value
for our customers.
Brands distributed by CSL includes:
Dove, Sunsilk, Lux, Ponds’, Clear, Gatsby,
Walch, Mandom, Apple, Persil, Lipton,
Skippy, Knorr, Four Tens and Parrot.
ANNUAL REPORT 2007
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our philosophy
Novena’s growth and healthy prospects are represented
by the curves that point upward and forward, depicting the
Group’s push forward and its efforts to scale greater heights
of success.
The ripple effect of the curves represents Novena’s extending
reach. While the Group continues on its growth path in the
region, it will also endeavour to achieve global status.
As we strive for excellence in our day-to-day operations,
we understand that our success is driven by our creativity,
sincerity and care for our people and the community. At the
core of these achievements is the understanding and need for
compassion, represented in each stroke that forms the image
of a heart in our logo.
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financial highlights
For the year ended 31 Dec 2007
turnover (s$’000)
2003
2004
2005
2006
profit / (loss) before tax (s$’000)
2007
2003
2004
2005
2006
2007
$70,033
$69,523
$61,546
$54,270
$48,271
$40,195
$3,175
$2,131
$81
($1,330)
turnover (s$’000)
Turnover (‘000)
2003
2004
2005
2006#
(restated)
2007#
$69,523
$61,546
$70,033
$40,195
$54,270
Profit/(loss) before tax (‘000)
$3,175
($1,330)
$2,131
$81
$48,271
Profit/(loss) after tax (‘000)
$2,204
($1,397)
$1,847
($76)
$46,101
Total Assets (‘000)
$44,283
$44,080
$46,214
$57,224
$71,689
Share capital and reserves (‘000)
$20,769
$20,509
$22,504
$26,092
$60,452
$0.26
$0.19
$0.20
$0.24
$0.20
2.67 cents
(1.15) cents
1.56 cents
(0.02) cents
16.80 cents
1 cent
–
1 cent
1 cent
0.5 cents*
Special gross dividend per share
–
–
–
–
2.0 cents*
Special rights issue gross dividend per share
–
–
–
–
5.1 cents**
Net assets value per share
Earning per share
Gross dividend per share
# excludes furniture division
* dividend on ordinary shares, subject to shareholders approval at the AGM.
** in relations to right issue made during the year.
ANNUAL REPORT 2007
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CEO’s message
Dear Shareholders,
On behalf of the Board, I am pleased to present the Group’s Annual Report for
the financial year ended 31 December 2007.
FY 2007 has been an exceptional year with the Group reporting record profits
after tax for the year. This was on the back of several “one off” transactions,
including the disposal of the Furniture Business during the financial year that
resulted in significant gains. For the year under review, Novena Group’s
turnover from continuing operations increased by 35% from S$40 million to
S$54 million (after restating prior year balances to reflect the disposal of the
furniture business ). The profit after tax for the year increased significantly from
S$3.1million to S$45.6 million.
The significant improvement in profit after tax was largely attributable to
several key reasons, one of which was “one off” capital gains arising from the
sale of property. In addition,there were gains from the disposal of the furniture
business mentioned above. The Group also recorded a significant increase in
dividend income from investments in quoted securities. With the excess funds
available, the Group has built up substantial investments in quoted securities
in several companies that the Group considers to have growth potential. The
Group also saw its net assets grow from $26 million in 2006 to $60 million at
the end of 2007.
The Group will continue to grow its beauty division under its wholly owned
subsidiaries Beaute Spring Pte. Ltd., Niclas International Pte Ltd, Fasta
International Pte Ltd and BSP Global Pte Ltd, as well as its interest in the
distribution of FMCG ( fast moving consumer goods ) products through its 80%
owned subsidiary, Chuan Seng Leong Pte Ltd.
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In our ongoing process of expansion of the beauty division, the Group remains
committed to sourcing for products of the highest quality for our customers. We
will continue to strengthen our branding and retail concepts, and widen our range
of beauty products. Nevertheless, we will continue to be mindful of the fact that
the retail industry is in a challenging environment, both locally and in the region.
The past year’s outstanding financial performance was due to several “one
off” non-recurring transactions involving property and investments. Pending the
possibility of the acquisition of new businesses, the scale of recurrent profitability
and turnover of the Group will be constrained. Moving forward, the Group
intends to source for new businesses that will create good value and benefit the
shareholders of the company.
On a broader note and as in previous years, community development and charity
efforts continue to be one of the Group key priorities in the realization of our
values in being creative, sincere and caring. We believe in making a difference
in people’s lives. Knowing that all it takes is a little care and concern, we hope
that our charitable efforts will go a long way in making a difference in the lives of
each and every underprivileged individual we touch. During the year, the Group
contributed more than $270,000 in cash and kind to various charity events and
organizations.
I am pleased to inform that the Board has recommended a first and final dividend
of 0.5 cent per ordinary share. In addition, in view of the outstanding financial
performance of the Group, the Board has also recommended the payment
of a special dividend of 2 cents per ordinary share. I would like to express
my heartfelt gratitude to all our loyal customers in supporting our brands and
products in both the beauty and FMCG divisions. My thanks also go to the Board
of Directors and our shareholders for their commitment and support this past
year. Last but not least, a big thank you for the contributions and support from
all my staff and business associates. I look forward to your continued support for
the group in the year ahead.
Thank you for your continuous support.
Toh Soon Huat (PBM)
Acting Chairman & CEO
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board of directors
Toh Soon Huat
Acting Chairman
and CEO
Manohar P Sabnani
Executive Director
Toh Soon Huat is our founder, Acting Chairman
and Chief Executive Officer. He founded
the business in 1984 and has been deeply
involved and instrumental in the growth of the
Group. Under his leadership, the Group has
successfully established a chain of furniture
retail stores under 8 established brands, and
a chain of beauty retail stores and beauty
salons in Singapore. Mr Toh’s responsibilities
include the management of the Group’s overall
business, particularly in the areas of business
investments business development and
expansion. He was conferred PhD in Business
Administration for professional studies from
Southern California University at Santa Ana,
USA in 1999 and Honorary PhD in Business
Administration from Honolulu University, USA
in 2001. He possesses more than 20 years of
experience in business development, especially
in the area of retail and branding.
Manohar P Sabnani was appointed as our
independent Director on 23 May 2003 and
on 1 June 2007, he became our Executive
Director responsible for the Group strategic
investments and expansions. He was the Chief
Executive Officer/ Editor-in-Chief of MediaCorp
Press Ltd, TODAY until October 2006. Before
joining MediaCorp, he was Executive Director
at Corporate Brokers International. Prior to that,
he had held various appointments including
Managing Director for Equity Capital Markets
at the DBS Bank Ltd, Managing Editor of The
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Chong Hon Kuan Ivan
Independent Director
Tay Beng Chuan
Straits Times and Head of the Editorial Support
Unit of the English/Malay newspapers at
Singapore Press Holdings. He has more than
25 years of experience in total as a newspaper
journalist, editor, manager, investment banker,
and equity research director. He graduated from
the National University of Singapore in 1973
with a Bachelor of Science degree.
Chong Hon Kuan Ivan
Chong Hon Kuan Ivan was appointed as
our Non-Executive Director on 4 December
2000. On 1 June 2007, he became our
Independent Director. He is currently a member
of the Executive Committee of the Consumers
Association of Singapore [CASE] and chairs the
Business Practice Committee and concurrently,
the adviser to the Advertising Standards
Authority of Singapore [ASAS]. In the past, he
had served as President of the Association of
Accredited Advertising Agents and Chairman of
ASAS.
Tay Beng Chuan was appointed as our
Independent Director on 4 December 2000. He
was a Nominated Member of Parliament from
1 October 1997 till dissolution of Parliament
on 18 October 2001. He is a Member of the
Singapore Parliamentary Society. A Board
Member of the Traditional Chinese Medicine
Practitioners Board since April 2005, he is now
the Board’s Chairman effective 7 February 2007.
Wong Meng Yeng
He was the President of The Singapore Chinese
Chamber of Commerce and Industry from March
1997 till March 2001 and is currently the
Honorary President of the said Chamber. He is
the Chairman of Premium Funding Singapore Pte
Ltd, which is an insurance premium funding and
licenced money-lending company. He is also
the Managing Director of Winnow Investments
Pte Ltd, Ocean Navigation Pte Ltd and Alor Star
Shipping Pte Ltd. These companies are involved
in general trading and investments, ship
chartering and shipping related activities. He
holds a Diploma of Commerce from the Gordon
Technical Institution in Geelong, Victoria,
Australia.
Wong Meng Yeng was appointed as our
independent Director on 4 December 2000.
He graduated from the National University of
Singapore in 1983 with a Bachelor of Laws
(Honours) degree. He has been an advocate
and solicitor in Singapore for 24 years of which
the last 18 were spent as a corporate lawyer.
He is currently a director of Alliance LLC, a law
corporation he cofounded and an independent
director of several companies listed on the
Singapore Exchange.
key management
Lee Lai Chuan
Lee Lai Chuan is our Executive Director for the Fast-Moving Consumers’ Goods (FMCG)
distribution division. He founded Chuan Seng Leong Pte Ltd in 1976 and has been actively
involved in the management of the business. He was appointed as Executive Director of
Chuan Seng Leong after the acquisition from Novena in 2005. Mr Lee’s responsibilities
include the management of the overall operations, particularly in the areas of strategic
sourcing, business planning and development. He possesses more than 30 years of
business experience in the FMCG industry, particularly in the areas of merchandise
sourcing and trading.
Chan Lay May Kathy
Chan Lay May Kathy is our Managing Director for the beauty division. She joined the
Group in May 1994 as a Project Manager cum Personal Assistant to the CEO to undertake
business expansion projects and administrative operations. Prior to joining the Group,
she was with Richard Ellis Property Consultant Pte Ltd as a Licensed Property Valuer &
Marketing Executive for 3 years. She was promoted to Director Corporate Planning in
September 2002 and Managing Director for the beauty division in January 2006. She
is currently responsible for the branding, product development, strategic merchandise
sourcing, identifying and evaluating new business opportunities, and overseeing the
operations and expansion of the beauty division. She obtained her Bachelor of Business
from Curtin University of Western Australia and Master of Business Administration from
American University of Hawaii.
Ang Song Len
Ang Song Len is our Assistant General Manager for the FMCG distribution division.
He joined the Group in August 2006 as the Business Development Manager. He was
responsible for all aspects of business development, including sales strategy and new
business expansion. He was promoted to Assistant General Manager in 2007 and he
is currently responsible for all aspects of sales operations, including sales strategy, new
business development and other operational strategies. Prior to joining us, he was with
Colgate-Palmolive (Eastern) Pte Ltd as Business Account Manager for 31 years.
Chong Siew Lan Sheila
Chong Siew Lan Sheila is our Human Resource (HR)/ Training & Development Manager.
She joined the beauty division in May 2004 as a Marketing & Training Manager and was
promoted to her current position in June 2007. She is responsible for all Human Resource
functions and managing intra-department manpower matters. She is also involved in
strategic training and development planning to facilitate the human capital management
efforts of the organization. She obtained her Bachelor of Engineering Degree (Mechanical
Engineering) from Nanyang Technological University and Graduate Diploma in Training &
Development from the Singapore Human Resources Institute (SHRI). she is also a certified
therapist with I.T.E.C (UK) (International Therapy Examination Council).
ANNUAL REPORT 2007
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corporate information
Board of Directors
Toh Soon Huat
Manohar P. Sabnani
Chong Hon Kuan Ivan
Tay Beng Chuan
Wong Meng Yeng
Audit Committee
Wong Meng Yeng Tay Beng Chuan
Chong Hon Kuan Ivan
Nominating Committee
Chong Hon Kuan Ivan
Tay Beng Chuan
Wong Meng Yeng
Acting Chairman and CEO
Executive Director
Chairman
Auditor
Ernst & Young
Certified Public Accountant
1 Raffles Quay North Tower Level 18
Singapore 048583
Chairman
Partner-in-charge
Teo Li Ling
(Since financial year ended 31 December 2005)
Remuneration Committee
Tay Beng Chuan
Chairman
Wong Meng Yeng
Chong Hon Kuan Ivan
Company Secretary
Low Mei Mei Maureen
Registered Office
521 Bukit Batok St 23, Level 3, Singapore 659544
Tel: (65)6899 0900, Fax: (65)6899 0010
Email: [email protected]
Website: www.novenaholdings.com
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Share Registrar and Share Transfer Office
M&C Services Private Limited
138 Robinson Road #17-00
The Corporate Office,
Singapore 068906
Bankers
United Overseas Bank Limited
DBS Bank Ltd
Oversea-Chinese Banking Corporation Limited
Standard Chartered Bank
MayBank
RHB Bank
investments
For the year under review,
income from quoted securities
grew to form an important
revenue contributor to the
Group. Our efforts to deploy
the group’s substantial cash
reserves resulted in total gross
dividends of about $12 million
from our stakes in several listed
companies and our portfolio of
quoted securities.
The Group’s approach is to manage
investment returns and equity price risk using
a mix of investment-grade shares with steady
and superior returns and non-investment
grade shares with higher volatility.
As at the date of this report, the Group has
substantial shareholdings in the following
listed companies:
1. TT International Limited [14.3%]
2. Tung Lok Restaurant 2000 Ltd [14.3%]
3. Nico Steel Holdings Limited [ 9.0%]
4. Old Chang Kee Ltd [11.0%]
The Group deems these investments to be
strategic and it believes such investments
offer opportunities for the Group to increase
its overall returns and also participate in the
growth potential of these companies.
ANNUAL REPORT 2007
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fmcg distribution
A leading distributor in
the supply of Fast-Moving
Consumers Goods (FMCG)
household and personal care
essentials, Chuan Seng Leong
Pte Ltd began its humble
beginnings in 1976.
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In 2005, amidst growing competition and the
need to achieve a stronger financial strength,
Novena Holdings Ltd successfully acquired the
privately owned decade-old family business
and began to expand its business operations.
The company has grown rapidly over the
years and established a network of over
1,200 distributions accounts in Singapore and
over 300 exports to neighbouring countries.
Brands distributed by CSL include:
Today, its distribution network is growing
island-wide, spanning supermarkets, hypermarts, pharmacies, mini-marts, provision
shops, convenience stores and petrol kiosks.
CSL is continuously upgrading and expanding
its range of consumer essential merchandises
and services, so that it can continue to
provide the best products and value to all
consumers.
Over the years, CSL has secured a portfolio of
household brandnames under its distribution
rights in Singapore.
ANNUAL REPORT 2007
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beauty & health store
Beauté Spring, previously known as Leewah
Beauty, is your one-stop shop for beauty
products. Conveniently located within the
heartlands, Beauté Spring stores retail
the latest trends, with assurance of safety
and reliability. With comprehensive ranges
of products in skin care, hair care, body
care, colour cosmetics, fragrances and
accessories, you’ll be spoilt for choice.
Understanding & Responding to Every
Changing Need
The purchasing team at Beauté Spring
actively sources for unique beauty products
and solutions in response to changing
demands and trends. This ensures that
customers are able to find the latest and
most fashionable products in the stores.
Beauté Spring locations
• Toa Payoh
183 Toa Payoh Central #01-272, Tel: 6251 5535
• Bugis Village
247 Victoria Street #01-247, Tel: 6333 0535
• Tampines Mall
4 Tampines Central 5 #B1-13 Tampines Mall, Tel: 6260 3805
• Bedok
208 Upper Changi Road #01-671, Tel: 6444 4544
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Moving Forward
In this challenging industry,
Beauté Spring recognizes
that profitability is essential
for us to continue our efforts
as well as to contribute to
the community. However, we
continue to strive towards
giving our customers quality
goods at the best value
possible. Beauté Spring is
also dedicated to creating
a rewarding partnership
that fulfils the needs of
stakeholders, from customers
to suppliers to employees
and business partners.
• West Mall
1 Bukit Batok Central Link #02-20, Tel: 6862 2004
• Jurong East
131 Jurong East Street 13 #01-265, Tel: 6569 1609
• Shaw Plaza
360 Balestier Road #02-01, Tel: 6256 7535
Exclusive Brands
Skin Care,
Professional Colours
Professional Skin Care
Professional
Skin Care, Hair Care
Skin Care, Body Care,
Accessories
Body Care
Personal Care
Health Food
Accessories
Colours
Professional Hair Care
Skin Care, Body Care
Skin Care, Hair Care
Skin Care
Skin Care
by
by
Professional Skin Care
ANNUAL REPORT 2007
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facial. slimming. relaxation.
BSP, short for Beauté Solutions Place, is a onestop oasis for facial and body treatments. BSP
has adhered closely to strict safety and quality
standards, and delivering total wellness in a
tranquil setting.
A Minimalist Environment
Step into BSP and lounge in a sensory bouquet of softly
illuminating lights and scent, graceful wall draping, and traditional
wood and rattan couches. BSP provides a convenient get-away
experience with its rustic simplicity.
Affordable Treatments
BSP offers both basic and corrective facial and body treatments
using exclusive Biologie Pierre Boutigny (France) products, under
the following categories:
1. Facial Treatment
2. Facial Enhancement
3. Body Glow Scrub
4. Body Wrap
5. Slimming Treatment
6. Hand and Foot Care
7. Waxing
8. Massage
BSP Locations
• Bugis Village
247 Victoria Street, #02-00, Singapore 188033
• Bedok Central
Blk 208 New Changi Road, #01-671, Singapore 460208
• Toa Payoh Central
Blk 178 Toa Payoh Central, #01-228, Singapore 320178
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Popular Treatments
One very popular treatment that BSP customers keep coming back
for is the Signature Guasha Facial; an intensive brightening facial
treatment that lifts, firms, and reduces wrinkles.
BSP Beauté Solutions Place Operating Hours
12pm to 9pm daily.
Booking Hotline
6336 0002
Retail Products
BSP retails the following quality brands
of skincare and bodycare products:
1. Biologie Pierre Boutigny (France)
2. Dale & Eke International (Switzerland)
ANNUAL REPORT 2007
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Advanced Dermatological Research
Swiss solutions
DALE & EKE is the essence of advanced
dermatological research in Swiss laboratories.
Drawing inspiration from high potency
formulations used in salon-grade treatment
products, the D&E team created a cocktail
of youth enhancing, skin smoothening and
optimum hydrating elixir for the face and
called it the Time Defense Serum.
Time Defense
The answer to a youthful, radiant complexion begins with our
Time Defense series, which contains a unique anti-wrinkle
hexapeptide ingredient that effectively diminishes aging
lines, which is an alternative to Botox injection. This exclusive
range also contains vitamins, minerals, proteins, which are all
required by the skin in the right amounts to restore its natural
functions. Scientifically proven, it brings many benefits to your
skin at any age.
Revital Whitening Skincare – Whitening and brightening for all
skin types.
Since its introduction, Time Defense has become a beauty
must-have for many women who are in search of an effective
and safe solution to combat the effects of natural ageing.
The Noble Mission
Whatever your concern, Dale & Eke (D&E) has the answer, from
delectable youth-prolonging cocktails to luscious lightening
solutions to outstanding precision serums for problem areas. The
results: Divine skin that glows effortlessly always
The reality of radiant, resplendent skin is within reach. Start your
dream for a better tomorrow today. Experience the undoubtedly
exquisite range from Dale & Eke now.
Time Defense Skincare – Intensive repair and maintenance for
mature skin
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Purifying Skincare – Potent solutions for
troubled skin.
Body Care.
Make-Up – Basic quality foundations to
help achieve that flawless look.
Eye Care – Basic maintenance for all
skin types.
ANNUAL REPORT 2007
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passion for beauty
Quality, Creativity and Passion, these are the three key areas we focus on
when formulating our products. Kitoko Kalani is a brand that embodies peace,
tranquility and total well being from head to toe. KK is a premium collection
made with specially selected botanical ingredients that promise to pamper,
nourish and balance.
Continuous R&D is being carried out to produce products that
deliver effective formulae that exceed expectations and offer
good value. We source for the best and purest ingredients to
fulfill the brand’s principle of offering only the best nature has
to offer.
The KK range of products include:
• Professional Hair Care
• Professional Skin Care
• Professional Body Care
• Professional Makeup Colours
• Essential Skin Care
• Essential Body Care
• Accessories
Professional Body Spa Salt
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Essential Facial Mask
Professional Active Treatment Essence
Professional Hair Care Treatment
Essential Face Moisturising Gel
Professional Makeup Colours
Essential Sun Screen
ANNUAL REPORT 2007
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moving people, moving the hair scene
Hair is the fashion accessory of today, worn
everyday to reflect the personality of the
individual. With MUGENS Hair Professional
from Korea, we are inspired to create
beautiful hair and trendy hair fashion.
MUGENS, meaning “Move People”, works in partnership with
professional salons internationally to achieve utmost creativity and
outstanding results in the fast growing hair industry.
MUGENS Hair Professional combines the passion for great
looking hair with advanced technology, to bring to you a series of
comprehensive high performance products to meet your needs.
Its Basic Care Line that includes Shampoo, Rinse (Conditioner),
and Treatment products with a relaxing floral-scented state that
unravels your body & mind fatigue from stressed hair. Contains
botanical ingredients such as Mushroom extracts, Ceramide,
Keratin, and Herb complexes.
Legitime Aroma Therapeutic Scalp Care Series
Not to be missed is its exclusive Zen Care Clinic Line that contains
high-quality oriental clinic elements that help the inner structure of
hair regains back its original healthy state.
Achieve the complete runway looks with the GETS styling line that
helps you express your very own professional style with effective
ingredients reformed by Nano-technology; Cerasome DDS that let
you create the look you want while maintaining your healthy hair.
Its latest addition of Aroma therapeutic Scalp care series;
LEGITIME, hit the top list of those seeking solutions for hair loss
problems and hoping to achieve a healthy scalp conditions.
With MUGENS Hair Professional system, you can now have a D.I.Y
Home Hair Spa experience.
Zen Care Clinic Line
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GETS Styling Line
Basic Care Line
Basic Care Line
ANNUAL REPORT 2007
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luv u babe
From body shower to daily
necessities such as cotton
buds, Nozomi’s range of
baby care toiletries ensure
that special care is given
to babies’ sensitive and
delicate skin. Originally
from Japan, Nozomi’s
extensive range of products
made from only the purest
and finest ingredients offers
head-to-toe treatment for
the little ones.
Baby Care Series
Nozomi’s product range includes:
• Baby Care
• Body Care
• Hair Care
• Skin Care
• Accessories
Hair Care Series
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Body Care Series
Hand Hygiene Series
ANNUAL REPORT 2007
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honey citron tea
Putom Honey Citron tea is made from citron
fruits grown in the south coast of Korea,
where it is known as YUJA. It is 100% natural
and contains three times more natural vitamin
C than lemon and ten times more than apple.
It is rich in citric acid and citron cellulose.
The natural fibre extract from YUJA aids
digestion, relieves constipation and promotes
overall well-being. It also helps to improve
overall complexion. Putom is suitable
for all occasions and all ages.
Suggested usage:
• Add 2-3 teaspoonfuls into a glass and top up with desired
amount of hot or cold water. Stir well and serve. Citron fibre
is best eaten.
• Stir into cold fresh milk for a nutritious and tasty drink.
Children who dislike the taste of milk might take to this
fruity concoction.
• Serve as a jam and spread with bread or toast.
• Use as a healthy alternative topping for ice cream, pudding
and fresh fruits.
• Toss it with greens and grilled chicken/seafood for a salad
with oriental twist.
26
training
Since its certification as
a People Developer in
year 2006, Novena Group
continues to believe in human
capital investment and
participated actively in various
national corporate training
initiatives in year 2007.
To achieve greater service excellence,
the Novena Group embarked on the
GEMS (Going the Extra Mile) GEMS
Service workshop to train a group of
selected managers, supervisors and sales
consultants, to inculcate an excellent service
culture within the organization. The GEMS
Service workshop is part of the initiative
of the Singapore Workforce Development
Agency (WDA) to champion an excellent
service culture at the national level.
Diploma in Retail Management, conducted
by the Singapore Institute of Retail Studies
(SIRS), which was jointly established by
WDA and Nanyang Polytechnic (NYP).
Novena Group will continue to develop its
staff training and development functions
through a combination of internal and
external training programmes, in its efforts
to develop a high performance workforce
within the organization.
As part of the Group’s effort to develop
its human capital, it has also appointed
a group of selected managers and
supervisors to attend skills development
training courses, such as the Advanced
Certificate in Retail Management and
ANNUAL REPORT 2007
27
community development 2007
As part of our continuous
efforts in community
development and charity
work, Novena contributed
approximately S$275,100
in cash and kind to various
charity organizations in
FY 2007.
The major events of the year in review are
as follow:
Kong Hiap Memorial Museum
Donations of S$20,000 were made to the Kong
Hiap Memorial Museum.
January 2007
Radin Mas Community Day & Constituency
Event
Over S$5,000 worth of products was
contributed to the Radin Mas Community
Center, in support of the Radin Mas
Community Day 2007.
357 movie tickets for the movie “Curse of
the Golden Flower” (total value of S$5,471)
were given away to the elderly to watch the
movie at Golden Village Tiong Bahru on 14
Jan 07. Buffet lunch was also arranged after
the movie at Radin Mas Community Club.
PAP Chai Chee
S$5,000 was donated to the PAP Chai Chee
branch to support the 4 main activiries: Meetthe-People sessions, PCF Kindergardens,
Women’s Wing and the Young PAP.
Geylang East Home for the Aged
S$1,000 was donated to the Geylang East
Home for the Aged
Singapore Thong Chai Medical Institution
S$3,000 was donated to the Singapore Thong
Chai Medical Institution.
February 2007
Boon Lay CCC
Donated S$5,000 towards Boon Lay annual
Lunar New Year Hong Baos Presentation Event
held on 25 Feb 2007 at Boon Lay CC. Hong
Baos were distributed to senior citizens (over
70 years) in Boon Lay.
Biz Trends Media Pte Ltd
Sponsored 80 tickets for elderly at Bukit Merah
Old Folks Club to watch the “Best of Qing
Shan” Concert (total value S$1,920) held on 25
February, 2007.
Nanyang Academy of Fine Arts
Donated S$2,000 to the NAFA’s fund-raising
concert ~ “Pouches of Love” held on 27 Feb
2007.
March 2007
Novena and
the Community
Our organization
and the employees reach out to
individuals, families, and entire
communities to provide help where it is
needed. Most contributions / donations
are invisible, except to the people
they had affected. For Novena,
this is recognition enough.
Community Chest
Sponsorship of S$10,000 to Singapore Police
Force Charity Dinner Show 2007. SPF is a
strong advocate in raising funds to help the
less fortunate in our society. Fund raised will
benefit the 4 charities under Community Chest.
They are Singapore School for the Deaf (SSD),
Association for Persons with Special Needs
(APSN) Centre for Adults, Sunshine Welfare
Action Mission (SWAMI) Dementia Day Care
& Children-At-Risk Empowerment (CARE)
Association Uth Power!
Handicaps Welfare Association
S$1,000 was donated to the Handicaps
Welfare Association.
April 2007
The Outstanding Young Persons of Singapore
Award 2007
Sponsored S$5,000 to the TOYP Award Gala
Dinner on 26 April 2007.
May 2007
Autism Resource Centre (Singapore)
Donation of S$1000 towards Autism Resource
Centre (Singapore), Breaking Barriers – a very
special walk (AVSW) 2007 which is dedicated
to raise funds for the building of new School at
Ang Mo Kio Avenue 10.
28
We strive to harness the power of our integrated business model to
benefit people. We look into all aspects of our business, including
how we treat our customers, our employees, our partners, our
communities and the environment.
Jalan Kayu Welfare & Education Fund
Donations of S$5,000 to the Welfare and
Education Fund (WEF) used to provide financial
support to students of needy families, whose
combined family income is less than S$2,000
per month.
National Fire Prevention Council
Donation of S$1000 towards NFPC Charity Golf
Tournament 2007 Fund raised will be used for
public education on fire safety awareness and
prevention.
Mother’s Day Event
500 umbrellas, 500 Four Star pillows, & 550
Beauté Spring Mineral Water for Radin Mas
Mother’s Day Celebration held at Bukit Merah
Community Centre. Total value of S$2,897.
Fund Raising Project, 3 Days 2 Night Weekend
Getaway on Superstar Virgo.
PA SCECs Coordinating Council
Donated S$20,000 to the “Senior Support
Groups” programme. A participation loyalty
scheme to encourage the seniors to join in the
activities being planned for them. Including
regular exercises to keep them physically active
and healty; games, outings and get-together
sessions to meet friends; and talks on matters
concerning them such as home safety and
nutrition.
June 2007
President’s Challenge 2007
Sponsored S$20,000 to the Youth Talent
Concert 2007 organised by The Chinese
Newspapers Division of Singapore Press
Holdings in support of President’s Challenge
2007.
President’s Challenge
Donation of S$10,000 towards Singapore
Police Force 24 Hours 3-on-3 basketball
tournament “Police Week Basketball 3’s” in
support of President’s Challenge 2007.
Bukit Batok Home For the Aged
Sponsored a scrubber/dryer and buffet lunch for
the Home and donated 3 bottle of Vina cleaner,
2 bottle of softener & 6 bottle of cream shower.
Total value of S$7,991.
Industrial & Services Co-operative Society Ltd
(ISCOS)
Sponsored S$10,000 to ISCOS “Bag of Hope”
for ex-offenders. The bag will provide the exoffenders with assistance in their first step back
to society. The provision in such areas as food
vouchers and public transportation subsidies
will help each individual to acclimatize to the
environment.
August 2007
Sree Narayana Mission Home
Sponsorship to the Sree Narayana Mission
Home For the Aged Sick fund raising project for
the Home. Total value of S$3,000.
Father’s Day Event
500 umbrellas, 500 Four Star pillows, and 550
Beauté Spring Mineral Water for Radin Mas
Father’s Day Celebration held at Bukit Merah
Community Centre. Total value of S$2,897.
Donated S$5000 towards the PCF Golf Charity.
2002
2003
2004
2005
2006
2007
Total
$100,000
$140,000
$150,000
$260,000
$192,000
$274,000
$1,116,000
September 2007
MILK Fund
Donated S$10,000 to MILK DINNER 2007,
presented by Sincere Watch. Funds raised go
directly to the programmes MILK support for the
disadvantaged kids.
National Arts Council
Donationed S$10,000 to the Singapore
Dance Theatre Legacy of Goh Choo San Gala
Performance.
Nanyang CCC Welfare & Education Fund
Donated S$10,000 to the Nanyang CCC
Welfare & Education Fund.
July 2007
October 2007
Concern & Care Society
Adopted 10 elderly under “Farewell to
loneliness – Adopt An Elderly Programme” for a
period of 1 year. Total value of S$3,000.
National Heritage Fund
Donated S$18,000 in support of the special
exhibition – ‘On the Nalanda Trail: Buddhism
in India, China and South East Asia’. Its a
cross-border exhibition mapping the spread of
Buddhism from India – especially Nalanda to
China and Southeast Asia would underline the
Asian region’s strong connections and ties in
history, which parallell the strength of relations
today.
Radin Mas CC Management Committee
Sponsored S$10,000 to the Radin Mas CCMC
Past years’ contributions
November 2007
Singapore Buddhist Lodge Welfare
Foundation
Donated S$10,000 towards 60th Anniversary
of Hongbao donation for 2008. Hongbao
distribution at the Singapore Buddhist Lodge
began in 1949. In the earliest beginnings, it
was to assist poverty-stricken members at the
Buddhist Lodge to meet escalation of inflation
during the Chinese New Year period. In recent
times, help is extended to the handicapped and
elderly in the community, regardless of race and
religion.
Teck Ghee CCC
Donated S$50,000 to Teck Ghee Welfare and
Education Fund.
ANNUAL REPORT 2007
29
achievements
1998/1999
2002
1999 Excellent Sales Award
Awarded for Novena group outstanding
performance by FIRAC.
2002 Retail Courtesy Award
Awarded to Novena Group by SPRING
Singapore, Singapore Retailers Association
and Retail Promotion Centre. Winning outlets
comprises 10 outlets from Novena, 2 outlets
from Modern Living, 7 outlets from The White
Collection, 2 outlets from Castilla, 2 outlets
from Leewah Essentials and 1 outlet from NC
Essentials.
1998 / 99 Singapore 500 SME
Achievement Award
Castilla Design (subsidiary of Novena Holdings)
has been awarded Singapore SME 500
Achievement Award.
1998 Excellent Business Development Award
(Local and Overseas)
Organised for the first time by the Furniture
& Interior Advisory Committee (FIRAC), the
Top Ten Achievement Awards 1998 gives
recognition to top firms in the furniture industry.
Novena Group was awarded for its innovative
business development projects in the local and
overseas market. Other criteria for winning this
prestigious award include company profitability,
productivity and management focus.
2000
Listed In SGX SESDAQ in 2000
Novena Group has been successfully admitted
to the Official List of the Stock Exchange of
Singapore Dealing and Automated Quotation
System (“SGX SESDAQ) on 18 December 2000.
2000 Enterprise 50 Award
Novena Group has been ranked 32nd in the
Enterprise 50 Award (organized by Business
Times and Andersen Consulting).
2000 Quality Service Award
The White Collection (subsidiary of Novena
Holdings) has been awarded FIRAC Top
Achievement – Quality Service Award Year
2000. The objective of this award is to give
recognition to those who believe what FIRAC
pledges: to render quality products and service
to customers.
2001
2001 Excellent Service Award
Being awarded Excellent Service Award with
6 of our staff achieving 1 Star winner, 1 Gold
winner and 4 Silver winners.
2001 Patron of the Arts Award
Being awarded Associate of the Arts for having
contributed towards promoting the cultural and
artistic activities in Singapore.
30
Excellent Service Award to Novena Group by
SPRING Singapore (formerly PSB Singapore),
with 21 of our staff achieving 12 Star winners, 7
Gold winners and 2 Silver winners.
2002 5th Global Top Enterprise Golden Earl
Award
Organised by the Medium Business
Development Association of China, the Golden
Earl award is a symbolic of excellence in
entrepreneurial performance and business
stability. It aims to recognize outstanding
contributions made by enterprises towards
overall economic development, promotes
global cross learning in the area of enterprise
management and networking.
2003
2003 Retail Courtesy Gold Award
Awarded to Novena Group by SPRING
Singapore, Singapore Retailers Association and
Retail Promotion Centre for a total of 35 winning
outlets.
29 of our staff will be receiving the Excellent
Service Award organized by SPRING Singapore
comprising 3 Star winners, 8 Gold winners and
18 Silver winners.
2003 Singapore Furniture Industry Award
Organised by SFIC (Singapore Furniture
Industries Council), the award seeks to promote
entrepreneurship within the furniture industry,
profile local capabilities in internationalization
and retailing as well as recognize the vital
contributions to the Singapore economy.
2003 Singapore Promising Brand Award
Organised by ASME (The Association of Small
and Medium Enterprises) and Lianhe Zaobao.
Recognising the significance of branding to a
business, ASME inaugurated the award in 2002
to promote branding as a strategic tool and to
recognize promising local brands.
2002-2003 Superbrands Singapore
Superbrands is an award which recognizes
some of the world’s greatest brands by the
Superbrands organization originated from
England for nearly a decade. The Superbrands
Council has set up in Singapore to recognize the
strongest performing brands in the market. The
Novena Group is proud to be included in this
prestigious list for the Singapore edition which
acknowledges excellence in retail sales and
services.
2004
DP Credit Rating
Novena was being certified as a DP 4 credit
rated company by DP Information Group. The
certificate is a certification of the company’s
excellent credit standing and worthiness based
on international standard with Moody’s/ KMV
engine/methodology.
The President’s Social Service Award (PSSA)
2004
Novena was a nominee in the Corporate
Category.
SIAS Investors Choice Awards 2004 –
Singapore Corporate Governance Award
Novena was nominated amongst the SESDAQ
companies for good corporate governance
practices.
SRA Awards 2004 – Best New Entrant of the
Year
A subsidiary of Novena Group, Natural Living
was awarded The Best New Entrant of the Year.
SRA Awards seek to raise standards, profile
and image of the retail industry by promoting
innovation, creativity and excellence, so as to
constantly add new and exciting dimensions to
retail and take the industry to new heights.
2004 Arts Supporter Award
Novena was conferred the Arts Supporter
Award for having contributed towards promoting
cultural and artistic activities in Singapore.
BS EN ISO 9001:2000 Certified
A subsidiary of Novena Group, The White
Collection Pte Ltd received ISO 9001:2000
certification.
38 of our staff received the Excellent Service
Award given out by SPRING Singapore
21 Silver winners.
2004 Singapore Promising Brand Award
Novena received the Singapore Promising
Brand Award for the second consecutive
year. SPBA is established to recognise SMEs
who have shown outstanding performance in
the communication of their brands. The key
objectives are to enhance the awareness of
the importance of branding among local SMEs
and in turn stimulate the growth of Singapore’s
brands and enterprises both locally and
regionally.
Novena was awarded Arts Supporter Award
for having contributed towards promoting the
cultural and artistic activities in Singapore.
Award organized by SPRING Singapore
21 Silver winners.
2004 Retail Asia-Pacific Top 500
This is the region’s first-ever ranking of the top
500 retail companies in 14 markets. Novena
Group has been ranked among the top 500
retail companies in the Asia-Pacific region
based on sales turnover.
2004-2005 Superbrands Singapore
Novena received the Superbrands Award for the
second consecutive year. This is an award which
recognizes some of the world’s greatest brands.
prestigious list of winners which acknowledges
excellence in retail sales.
2005
2006
2005 Most Reliance Award
Suzhou Novena was being awarded one of the
most reliable and trustworthy organization by
Suzhou Consumer Association which reflected
the strong value of Novena of being creative,
sincere and care for the products and services
we provide to our value customers.
Novena Holdings Limited together with its
subsidiaries, Beaute Spring Pte Ltd and Chuan
Seng Leong Pte Ltd, were awarded the Arts
Supporter Award for contributions towards the
promotion of cultural and artistic activities in
Singapore.
Environmental-Friendly Product Award
An award was presented to Suzhou Novena by
Suzhou Quality Control Association for achieving
the environment-friendly standard on the
bedroom series that they had manufactured.
Award, given out by SPRING Singapore,
comprising 9 Star Award winners, 11 Gold
Award winners & 15 Silver Award winners.
National Top 10 Quality Enterprise Award &
National Top 10 Quality Products Award 2005
The National Top 10 Award – Year 2005
organized by Chinese Industry, Commerce,
Economy, Trade Science & Technology
Development Association. The objectives is
to recognize and appreciate the outstanding
contributions and achievements made by
enterprises towards overall economy and
social development, improvement in corporate
efficiency and productivity, innovative
products and services, quality research and
development, as well as promoting global
enterprising networks.
Singapore Service Class (S-Class)
Castilla Design Pte Ltd was one of the 76
organisations to receive the Singapore Service
Class Certification from SPRING Singapore.
The certification was determined by the
organisation’s performance in the Service
Scorecard for Business Excellence.
2006 Superbrands Singapore
Novena received the superbrands Award for the
third consecutive years. This is an award, which
recognizes some of the world’s greatest brands.
prestigious list of winners, which acknowledges
excellence in retail sales.
10th Golden Furniture Award (New
Millennium Award)
Novena Furnishing Centre Pte Ltd, a subsidiary
of Novena Group, was awarded the Golden
Furniture Award. This award was created
in Europe to distinguish companies with
distinguished quality of their products and
services.
The Golden Europe Award For Quality and
Commercial Prestige
Novena Furnishing Centre Pte Ltd, a subsidiary
of Novena Group, was awarded due to its
exceptional brand image, distinguished service
quality and capacity of innovation.
2007
18 of our staffs from Beaute Spring Pte Ltd
& BSP Global Pte Ltd received the Excellent
Service Award given out by SPRING Singapore,
comprising 2 Star Awards winners, 5 Gold
Awards winners & 11 Silver Award winners.
May Day Model Workers Award 2007
Beaute Spring Pte Ltd has a retail staff who
was conferred with this award. Organized
by National Trade Union Congress (NTUC) to
give recognition to outstanding workers from
all categories (e.g. different sectors, age
groups, nationalities, etc.) who have excellent
performance, conduct and attitudes, which bring
recognition to their employers.
People Developer Standard
Novena Holdings Limited was among the list
of 552 Organisations to be certified as People
Developer in Singapore by SPRING Singapore.
People Developer is a quality standard that
gives recognition to organisations that invest
in their people and having a comprehensive
system for developing their staff.
ANNUAL REPORT 2007
31
Financial Contents
33. Corporate Governance
39. Directors’ Report
42. Statement by Directors
43. Independent Auditors’ Report
44. Consolidated Profit and Loss Account
45. Balance Sheets
46. Statement of Changes in Equity
48. Consolidated Cash Flow Statement
50. Notes to the Financial Statements
92. Statistics of Shareholdings
94. Statistics of Warrantholdings
95. Notice of AGM
Proxy Form
32
CORPORATE GOVERNANCE
The Board of Directors (the “Board”) of Novena Holdings Limited and its subsidiaries (the “Group”) is committed to maintaining
high standards of corporate governance and transparency in line with the spirit of the Code of Corporate Governance 2005
(the “Code”) to protect the interest of shareholders. This report outlines the Company’s corporate governance processes and
structures with specific reference to the Code.
Board of Directors
Principle 1: Board’s Conduct of its Affairs
The principal functions of the Board are to:
1.
Approve the corporate direction and strategy of the Company and monitoring the performance of the management;
2.
Approve the nomination of directors and appointment of key managerial personnel;
3.
Approve annual budgets, major funding proposals and investment proposals;
4.
Review the internal controls, risk management, financial performance and reporting compliance;
5.
Assume responsibility for corporate governance.
To facilitate effective management, certain functions have been delegated to various Board Committees, each of which has its
own written terms of reference.
The Board has delegated day-to-day operations to management while reserving certain key matters for its approval. Key functions
include approving the consolidated financial statements for the group, conflict of interest checks for directors, disposal of assets,
strategic planning and material acquisitions, share issuances, dividends and matters which require Board approval as specified
under the Company’s interested person transaction policy. Specific Board approval is required for any investments exceeding
S$0.5 million and for operational expenditures exceeding S$1.0 million in total.
The Board conducts regular scheduled meetings. Ad-hoc meetings are convened when circumstances require. The Company’s
Articles of Association allow a Board meeting to be conducted by way of a tele-conference. The attendance of the directors at
meetings of the Board and Board Committees, as well as the frequency of such meetings, is disclosed in this Report.
Board members are encouraged to attend seminars and receive training in connection with their duties as directors in areas such
as accounting and legal knowledge, particularly on latest developments to relevant laws, regulations and accounting standards.
Directors’ Attendance at Board and Board Committee Meetings FY2007
Novena Board
Name
Toh Soon Huat *
Chong Hon Kuan Ivan **
Tay Beng Chuan ** 2
Wong Meng Yeng **
3
Manohar P Sabnani *
4
1
Audit Committee
Nominating
Committee
Remuneration
Committee
No. of
Meetings
Held
No. of
Meetings
Attended
No. of
Meetings
Held
No. of
Meetings
Attended
No. of
Meetings
Held
No. of
Meetings
Attended
No. of
Meetings
Held
No. of
Meetings
Attended
6
6
NA
NA
NA
NA
NA
NA
6
5
4
2
2
1
2
2
6
6
4
4
2
2
2
2
6
6
4
4
2
2
2
2
6
6
4
2
2
1
NA
NA
Notes:
*
Executive Director
**
1.
Mr Chong was redesignated from Non-Executive Director to Independent on 1 June 2007. He was appointed as Chairman of the
Nominating Committee, a member of the Remuneration Committee and Audit Committee respectively with effect from 1 June 2007.
ANNUAL REPORT 2007
33
2.
Mr Tay resigned as Chairman of the Audit Committee on 1 June 2007 and was appointed as Chairman Remuneration Committee on the
same date. He remains as member of the Audit Committee.
3.
Mr Wong resigned as Chairman of the Remuneration Committee on 1 June 2007 and was appointed as Chairman of the Audit Committee
on the same date. He remains as a member of the Remuneration Committee.
4.
Mr Manohar resigned as Chairman of the Nominating Committee on 1 June 2007 and was redesignated from an Independent Director to
an Executive Director of the company on the same date.
Principle 2 : Board Composition and Balance
The Board comprises three Independent Directors, and two Executive Directors. The independence of each Director is reviewed
annually by the Nominating Committee (“NC”). The NC adopts the Code’s definition of what constitutes an independent director
in its review. The NC is of the view that the Independent Directors are independent, no individual or small group of individuals
dominate the Board’s decision making process and the current composition of the Board possesses adequate competencies to
meet the Company’s objectives.
The Board is of the opinion that the current board size of five directors is appropriate, taking into account the nature and scope of
the Company’s operations. The Board composition reflects the broad range of experience, skills and knowledge for the effective
stewardship of the Group.
Key information regarding the directors is provided in “Board of Directors” section of this Annual Report.
Principle 3 : Role of Chairman and Chief Executive Officer (“CEO”)
The Acting Chairman and Chief Executive Officer of the Company is Mr Toh Soon Huat. The Board, after careful consideration, is
of the opinion that the need to separate the roles of the Acting Chairman and Chief Executive Officer is not necessary for the time
being. The presence of a strong independent element and the participation of the Independent Directors ensure that the Acting
Chairman and the Chief Executive Officers does not have unfettered powers of decision.
The Group’s, Acting Chairman and CEO, Mr Toh Soon Huat, plays an instrumental role in developing the business of the Group
and provides the Group with strong leadership and vision. He is responsible for day-to-day running of the Group as well as the
exercise of control over the timeliness of information flow between the Board and management. As the Acting Chairman, he also
ensures that Board meetings are held regularly and the Board updated on Group affairs, oversees the preparation of the agenda
for Board meetings and ensures the Group’s compliance with the Code.
All major decisions made by the Acting Chairman and CEO is reviewed by the Audit Committee. The Nominating Committee
reviews his performance and appointment to the Board and the Remuneration Committee reviews his remuneration package
periodically. Both the Nominating Committee and Remuneration Committee comprise a majority of Independent Directors of the
Company. As such, the Board believes that there are adequate safeguards in place against an uneven concentration of power
and authority in a single individual.
Principle 6 : Access to Information
In order to ensure that the Board is able to fulfill its responsibilities, management provides the Board with a management report
containing complete, adequate and timely information prior to the Board meetings as well as a report of the group’s activities on a
regular basis.
The Company has approved an agreed procedure for Directors to take independent professional advice at the Company’s
expense of up to a maximum of S$25,000. Before incurring professional fees, the Director concerned must consult two other
Directors, one of whom must be independent. No such advice was sought by any directors during FY2007.
The Company secretary attends Board meetings and meetings of the Board Committee of the Company and ensure that Board
procedures are followed and that applicable rules and regulations are complied with. The Minutes of all Board meetings are
circulated to the Board.
Please refer to the “Corporate Information” section of the annual report for the composition of the Company’s Board of Directors
and Board committees.
34
Board Committees
Nominating Committee (NC)
Principle 4 : Board Membership
The NC comprises three Directors, all of them, including the Chairman are Independent Directors. The principal functions are to:
1.
Establish procedures for and making recommendations to the Board on all board appointments;
2.
Determine orientation programs for new Directors, and recommending opportunities for the continuing training of the
Directors;
3.
Review and make recommendations to the Board for the re-nomination of Directors, having regard to the individual
director’s contribution and performance;
4.
Assess annually whether or not a Director is independent;
5.
Review the size and composition of the Board with the objective of achieving a balanced Board in terms of the mix of
experience and expertise;
6.
Recommend to the Board the performance criteria and appraisal process to be used for the evaluation of individual
Directors as well as the effectiveness of the Board as a whole, which criteria and process shall be subject to Board
approval; and
7.
Review the appointment of relatives of directors and/or substantial shareholders to managerial positions.
The Articles of Association of the Company currently require one-third of the directors to retire and subject themselves to reelection by the shareholders in every Annual General Meeting. In addition, all directors of the Company shall retire from office at
least once every three years.
Principle 5 : Board Performance
The NC evaluates the effectiveness of the Board as a whole and the contribution by each director to the effectiveness of the
Board.
In evaluating the Board’s performance, the NC considers a set of quantitative and qualitative performance criteria such as return
on investment, return on equity, profitability on capital employed, the success of the strategic and long-term objectives and the
effectiveness of the Board in monitoring management’s performance against the targets set by the Board.
The NC, in considering the re-appointment of any Director, evaluates the performance of the director. On an annual basis, the
Chairman will assess each Director’s contribution to the Board, and discuss the results with the Chairman of the NC. The criteria
adopted in assessing the contribution of each individual Director include attendance at the Board and Committee meetings,
intensity of participation at meetings and special contributions.
Audit Committee (AC)
Principle 11 : Audit Committee
The Audit Committee (AC) comprises three members; all of them including the Chairman are Independent Directors. The profile
of the AC comprises professionals and businessman with financial, management and legal background. The Board is of the view
that the members of the AC have sufficient financial management expertise and experience to discharge the AC’s function.
The AC, which has written terms of reference, performs the following delegated functions:
1.
Review the audit plans of the internal and external auditors of the Company and ensures the adequacy of the Company’s
system of accounting controls and the co-operation given by the Company’s management to the external and internal
auditors;
ANNUAL REPORT 2007
35
2.
Review the interim and annual financial statements and the auditors’ report of the Company before their submission to the
Board of directors;
3.
Review with the management and the internal auditor the adequacy of the Company’s internal controls in respect of
management, business and services systems and practices;
4.
Review legal and regulatory matters that may have a material impact on the financial statements, related compliance
policies and programs and any reports received from regulators;
5.
Review the cost effectiveness and the independence and objectivity of the external auditors;
6.
Review the nature and extent of non-audit services provided by the external auditors;
7.
Review the assistance given by the Company’s officers to the auditors;
8.
Nominate the external auditor; and
9.
Review interested person transactions in accordance with the requirements of the listing rules of the Singapore Exchange.
The AC has the express power to conduct or authorize investigations into any matter within its terms of reference. Minutes of the
AC meetings are regularly submitted to the Board for its information and review.
The AC, having reviewed all non-audit services provided by the external auditors to the group, is satisfied that the nature and
extent of such services would not affect the independence of the external auditors. The AC also conducts a review of interested
person transactions and a review to ensure that there are no improper activities of the Company (if any).
The AC meets with the external and internal auditors, without the presence of the Company’s management, at least once a year.
The Company has put in place a whistle-blowing framework endorsed by the AC, where employees of the Company may in
confidence raise concerns about possible corporate improprieties in matters of financial reporting or other matters. To ensure
independent investigation of such matters and for appropriate follow up action, all whistle-blowing reports are to be sent to Mr
Wong Meng Yeng, Mr Tay Beng Chuan and Mr Ivan Chong. Details of the Whistle-Blowing policy and arrangements have been
made available to all employees.
Principle 12 : Internal Controls
The Board believes that, in the absence of any evidence to the contrary, the system of internal control maintained by the
Company’s management provides reasonable assurance against material financial misstatements or loss, and includes the
safeguarding of assets, the maintenance of proper accounting records, the reliability of financial information, compliance with
appropriate legislation, regulation and best practice, and the identification and management of business risks. The Board notes
that no system of internal control can provide absolute assurance against the occurrence of material errors, poor judgments in
decision-making, human error, fraud or other irregularities.
Principle 13 : Internal Audits (IA)
The Board recognizes that it is responsible for maintaining a system of internal control processes to safeguard shareholders’
investments and the Group’s business and assets. The internal audit function of the Group has been outsourced to a public
accounting firm. The internal auditor reports directly to the AC on audit matters. The AC reviews the internal audit report on a
regular basis to ensure the adequacy of the internal audit function. The AC also reviews and approves the annual IA plans.
36
Remuneration Committee (RC)
Principle 7 : Procedures for Developing Remuneration Policies
Principle 8 : Level and Mix of Remuneration
Principle 9 : Disclosure on Remuneration
The Remuneration Committee comprises three Directors, all of them including the Chairman are Independent Directors.
The principal duties and responsibilities are to:
a.
Recommend to the Board an appropriate framework for remuneration of the Board and senior management to ensure that
it is competitive and sufficient to attract, retain and motivate personnel of the required quality;
b.
Determine the policy for establishing the remuneration packages for executive directors and the CEO (or equivalent) and
review the service contracts of such employees;
c.
Review the performance of key senior managers to enable the committee to determine their annual remuneration, bonus
rewards, etc.;
d.
Ensure accountability and transparency in the Company’s policies and procedures for determining the remuneration of its
Directors and senior management;
e.
Review all matters concerning the remuneration of non-executive directors to ensure that the remuneration is
commensurate with the contribution and responsibilities of the directors.
The NC, together with RC reviews the CEO’s performance targets (including quantitative financial figures such as ROE and
revenue growth) for each financial year.
Directors’ fees are set in accordance with a remuneration framework. All the Independent Directors are paid director’s fees,
subject to approval at the AGM. The Acting Chairman does not receive director’s fees.
A breakdown, showing the level and mix of each individual director’s remuneration payable for FY2007 is as follows:
Directors’ Remuneration
Name
Between $250,001 – $500,000
Toh Soon Huat
Up to $250,000
Chong Hon Kuan Ivan**
Tay Beng Chuan**
Wong Meng Yeng**
Manohar P. Sabnani #
Manohar P. Sabnani #
*
Fee*
Salary
Bonus
Allowance
–
79.4%
6.3%
14.3%
100%
100%
100%
100%
–
–
–
–
–
92.4%
–
–
–
–
7.6%
–
–
–
–
–
these fees are subject to approval by the shareholders at the AGM for FY 2007. .
# Mr Manohar P.Sabnani was redesignated from an Independent Director to an Executive Director wef 1 June 2007.
** Independent Directors have no service contracts and their terms are specified in the Articles. The CEO has a three-year service contract that
expires on 31 August 2009.
ANNUAL REPORT 2007
37
Disclosure of the top four executives’ remuneration (executives who are not on the Board of Directors) in bands of $250,000 is as
below:
Gross remuneration less than $250,000:
1.
2.
3
4.
Chan Lay May Kathy
Lee Lai Chuan
Ang Siong Lim
Chong Siew Lan Sheila
–
–
–
–
Managing Director (Beauty Division)
Executive Director (CSL)
Asst General Manager (CSL)
Group Human Resource Manager
Key information regarding the above executives is provided in the “Management” section of this annual report.
Share Option Committee
The Share Option Committee comprises Directors, who are Executive and Independent Directors.
The Share Option Committee administers The Novena Holdings Limited Share Option Scheme (“NSOS”) established
on 9 December 2000, in accordance with the rules as approved by shareholders. Non-executive and Independent
directors have not been granted share options under the NSOS since establishment. In FY 2007, no options were granted.
Principle 10 : Accountability and Audit
Principle 14 : Communication with Shareholders
Principle 15 : Greater Shareholder Participation
In presenting the annual financial statements and announcements to shareholders, it is the aim of the Board to provide the
shareholders with a detailed analysis, explanation and assessment of the Group’s financial position and prospects. The
management provides the Board with management accounts of the Group’s performance, position and prospects on a regular
basis.
The Company will comply with the Listing Rule 705 of The Listing Manual of the Singapore Exchange Securities Trading Limited
on the disclosure requirements of its financial results. Results will be published through the SGXNET, news releases and the
Company’s website. All information on the Company’s new initiatives is first disseminated via SGXNET. Results and annual reports
are announced or issued within the mandatory period and are available on the Company’s website.
The Board is mindful of the obligation to provide timely and fair disclosure of material information in accordance with the
Corporate Disclosure Policy of the Singapore Exchange.
All shareholders of the Company receive the annual report and notice of AGM, which notice is also published in either the Straits
Times or Business Times and made available on the website. At AGM, shareholders are given the opportunity to express their
views and ask directors or management questions regarding the Company.
The Board also welcomes the view of shareholders on matters affecting the Company, whether at shareholders’ meetings or on
an ad hoc basis.
DEALINGS IN SECURITIES
In accordance with the SGX-ST Best Practices Guideline, the Company has adopted an internal code on dealing in the
Company’s shares. The internal code prohibits any dealing in the Company’s shares during the period commencing one month
before the announcement of the Company’s results and ending on the date of the announcement of the results.
RISK MANAGEMENT
The Group regularly reviews and improves its business and operational activities to take into account the risk management
perspective. The Group seeks to identify areas of significant business risks as well as appropriate measures to control and
mitigate these risks.
38
DIRECTORS’ REPORT
The directors are pleased to present their report to the members together with the audited consolidated financial statements of
Novena Holdings Limited (the “Company”) and its subsidiaries (collectively, the “Group”) and the balance sheet and statement of
changes in equity of the Company for the financial year ended 31 December 2007.
1.
Directors
The directors of the Company in office at the date of this report are:
Toh Soon Huat (Acting Chairman and Chief Executive Officer)
Manohar P. Sabnani
Chong Hon Kuan Ivan
Tay Beng Chuan
Wong Meng Yeng
2.
Arrangements to enable directors to acquire shares, debentures and warrants
Except as disclosed below, neither at the end of nor at any time during the financial 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 benefits by
means of the acquisition of shares, debentures or warrants of the Company or any other body corporate.
3.
Directors’ interests in shares and warrants
The following directors, who held office at the end of the financial year, had, accordingly to the register of directors’
shareholdings required to be kept under Section 164 of the Singapore Companies Act, Cap. 50, an interest in shares and
warrants of the Company and related corporations (other than wholly-owned subsidiaries) as stated below :
Direct interest
Deemed interest
At 1
January
2007
At 31
December
2007
At 21
January
2008
At 1
January
2007
At 31
December
2007
At 21
January
2008
4,795,495
812,762
–
6,690,990
1,625,524
500,000
6,690,990
1,625,524
500,000
40,816,617
–
–
87,417,234
–
–
87,417,234
–
–
–
–
–
3,295,495
812,762
–
3,295,495
812,762
–
–
–
–
43,214,617
–
250,000
43,214,617
–
250,000
Ordinary shares of the
Company
Toh Soon Huat
Chong Hon Kuan Ivan
Manohar P Sabnani
Warrants to subscribe
for ordinary shares of
the Company
Toh Soon Huat
Chong Hon Kuan Ivan
Manohar P Sabnani
By virtue of Section 7 of the Singapore Companies Act, Cap. 50, Toh Soon Huat is deemed to have an interest in all of the
subsidiaries of Novena Holdings Limited.
Except as disclosed in this report, no other director who held office at the end of the financial year had an interest in
shares, share options, warrants or debentures of the Company or of related corporations, either at the beginning or the
end of the financial year and on 21 January 2008.
ANNUAL REPORT 2007
39
DIRECTORS’ REPORT
4.
Directors’ contractual benefits
Except as disclosed in the financial statements, since the end of the previous financial year, no director of the Company
has received or become entitled to receive a benefit by reason of a contract made by the Company or a related
corporation with the director, or with a firm of which the director is a member, or with a Company in which the director has
a substantial financial interest.
5.
Share options
Neither at the end of nor at any time during the financial year were :
6.
(a)
options granted by the Company or its subsidiaries to any person to take up unissued shares in the Company or
its subsidiaries; and
(b)
shares issued by virtue of any exercise of options to take up unissued shares of the Company or its subsidiaries.
Warrants
During the financial year, the Company issued 148,304,103 detachable warrants in connection with the issuance of rights
shares.
At the end of the financial year, details of the outstanding warrants are as follow :
Date of issue
Warrants
outstanding at
1/1/2007
Warrants
issued
Warrants
exercised
Warrants
expired
Warrants
outstanding at
31/12/2007
Date of
expiration
16/11/2007
–
148,304,103
(6,346,494)
–
141,957,609
16/11/2010
Each warrant entitles the warrant holder to subscribe for one new ordinary share in the Company at the exercise price
of $0.08 per share. The warrants do not entitle the holders of the warrants, by virtue of such holdings, to any rights to
participate in any share issue of any other company. During the financial year, the Company issued 6,346,494 shares
pursuant to the exercise of warrants as disclosed above.
7.
Audit Committee
The Audit Committee (“AC”) carried out its functions in accordance with Section 201B(5) of the Singapore Companies Act,
Cap. 50.
The AC comprises three Board members, all of them including the Chairman are Independent Directors. The profile of the
AC members comprises professionals and businessman with financial, management and legal background. The Board is
of the view that the members of the AC have sufficient financial management expertise and experience to discharge the
AC’s function.
The AC, which has written terms of reference, performs the following delegated functions:
40
(a)
review the audit plans of the internal and external auditors of the Company and ensures the adequacy of the
Company’s system of accounting controls and the co-operation given by the Company’s management to the
external and internal auditors;
(b)
review the interim and annual financial statements and the auditors’ report of the Company before their submission
to the Board of directors;
(c)
review with the management and the internal auditor the adequacy of the Company’s internal controls in respect of
management, business and services systems and practices;
DIRECTORS’ REPORT
7.
Audit Committee (Cont’d)
(d)
review legal and regulatory matters that may have a material impact on the financial statements, related compliance
policies and programs and any reports received from regulators;
(e)
review the cost effectiveness and the independence and objectivity of the external auditors;
(f)
review the nature and extent of non-audit services provided by the external auditors;
(g)
review the assistance given by the Company’s officers to the auditors;
(h)
nominate the external auditor; and
(i)
review interested person transactions in accordance with the requirements of the Singapore Exchange Securities
Trading Limited (SGX-ST)’s Listing Manual.
The AC has the express power to conduct or authorize investigations into any matter within its terms of reference. Minutes
of the AC meetings are regularly submitted to the Board for its information and review.
The AC, having reviewed all non-audit services provided by the external auditors to the group, is satisfied that the nature
and extent of such services would not affect the independence of the external auditors. The AC also conducts a review of
interested person transactions and a review to ensure that there are no improper activities of the Company (if any). The AC
meets with the external and internal auditors, without the presence of the Company’s management, at least once a year.
8.
Auditors
Ernst & Young have expressed their willingness to accept reappointment as auditors.
On behalf of the board of directors,
Toh Soon Huat
Director
Manohar P. Sabnani
Director
Singapore
27 February 2008
ANNUAL REPORT 2007
41
STATEMENT BY DIRECTORS
We, Toh Soon Huat and Manohar P. Sabnani, being two of the directors of Novena Holdings Limited, do hereby state that, in the
opinion of the directors,
(a)
the accompanying balance sheets, consolidated income statement, statements of changes in equity, and consolidated cash
flow 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 2007, and the results of the business, changes in equity and cash flows of
the Group and the changes in equity of the Company for the year then ended; and
(b)
at the date of this statement, there are reasonable grounds to believe that the Company will be able to pay its debts as and
when they fall due.
On behalf of the board of directors,
Toh Soon Huat
Director
Manohar P. Sabnani
Director
Singapore
27 February 2008
42
INDEPENDENT AUDITORS’ REPORT
To the Members of Novena Holdings Limited
We have audited the accompanying financial statements of Novena Holdings Limited (the “Company”) and its subsidiaries
(collective, the “Group”) set out on pages 44 to 91, which comprise the balance sheets of the Group and the Company as at
31 December 2007, the statements of changes in equity of the Group and the Company, the income statement and cash flow
statement of the Group for the year then ended, and a summary of significant accounting policies and other explanatory notes.
Directors’ responsibility for the financial statements
The Company’s directors are responsible for the preparation and fair presentation of these financial statements in accordance
with the provisions of the Singapore Companies Act, Cap. 50 (the “Act”) and Singapore Financial Reporting Standards. This
responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and fair presentation
of financial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate
accounting policies; and making accounting estimates that are reasonable in the circumstances.
Auditors’ responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in
accordance with Singapore Standards on Auditing. Those standards require that we comply with ethical requirements and plan
and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements.
The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of
the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control
relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal
control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting
estimates made by directors, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion,
(i)
the consolidated financial 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
2007 and the results, changes in equity and cash flows of the Group and the changes in equity of the Company for the
year ended on that date; and
(ii)
the accounting and other records required by the Act to be kept by the Company and by those subsidiaries incorporated
in Singapore of which we are the auditors have been properly kept in accordance with the provisions of the Act.
ERNST & YOUNG
Certified Public Accountants
Singapore
27 February 2008
ANNUAL REPORT 2007
43
CONSOLIDATED PROFIT AND LOSS ACCOUNT
for the year ended 31 December 2007
Note
2007
$
2006
$
54,270,511
40,195,151
Cost of sales
(32,401,088)
(30,588,618)
Gross profit
21,869,423
9,606,533
43,056,092
389,027
360,513
32,812
Distribution and selling expenses
(2,789,939)
(3,125,832)
Administrative expenses
(9,651,880)
(5,152,771)
(4,190,431)
(1,014,024)
(401,174)
(638,615)
18,908
(16,094)
48,271,512
81,036
(2,170,144)
(156,814)
46,101,368
(75,778)
(506,448)
3,234,907
45,594,920
3,159,129
45,693,290
(98,370)
3,183,083
(23,954)
45,594,920
3,159,129
16.80
15.82
(0.02)
(0.02)
(0.18)
(0.17)
1.46
1.46
Continuing operations
Turnover
4
Other items of income
Other income
6(a)
Interest income – fixed deposits
Other items of expenses
Other operating expenses
6(b)
Finance expenses
8
Share of results of associate
Profit before tax from continuing operations
6(c)
Tax
9
Profit/(loss) after tax from continuing operations
Discontinued operations
(Loss)/profit after tax for the year from discontinued operations
10(b)
Profit for the year
Attributable to:
Equity holders of the Company
Minority interests
Earnings/(loss) per share (cents)
From continuing operations
– Basic
– Diluted
11
From discontinued operations
– Basic
– Diluted
11
The accompanying accounting policies and explanatory notes form an integral part of the financial statements.
44
BALANCE SHEETS
as at 31 December 2007
Group
Non-current assets
Property, plant and equipment
Land occupancy rights
Goodwill
Investments in subsidiaries
Investment in associate
Quoted equity investments
Deferred tax asset
Due from subsidiaries (non-trade)
Current assets
Inventories
Trade receivables
Other receivables, deposits and prepayments
Due from subsidiaries (trade)
Due from subsidiary (non-trade)
Due from associate (non-trade)
Fixed deposits
Cash and bank balances
Current liabilities
Trade payables
Bills payable
Other payables and accruals
Tax payable
Deferred rental
Lease obligations
Term loans
Unearned revenue
Due to director of a subsidiary (non-trade)
Due to minority shareholders of subsidiary
(non-trade)
Due to subsidiary (non-trade)
Derivative financial instrument
Bank overdrafts
Net current assets
Non-current liabilities
Deferred tax liability
Deferred rental
Lease obligations
Term loans
Company
Note
2007
$
2006
$
2007
$
2006
$
12
13
14
15
16
17
9
18
4,504,807
498,127
–
–
29,595
26,264,832
–
–
22,280,173
500,924
1,758,113
–
20,336
6,094,285
86,843
–
254,461
–
–
10,746,455
–
26,264,832
–
2,360,000
–
–
–
11,651,885
–
6,094,285
–
600,000
31,297,361
30,740,674
39,625,748
18,346,170
5,914,834
4,078,221
2,210,345
–
–
–
3,616,323
21,500,100
3,072,586
11,342,920
4,506,844
2,837,815
–
–
528
3,960,016
1,677,958
2,157,272
–
43,028
700,782
–
1,230,938
–
820,820
9,242,046
988,814
–
–
–
672,458
6,368,539
–
–
–
141,383
40,392,409
26,483,353
13,026,428
7,182,380
22
3,198,484
580,032
1,208,244
1,025,484
199,714
69,602
224,004
734,947
200,000
5,070,403
2,594,398
4,762,555
968,235
–
118,843
2,759,215
523,326
400,000
–
–
281,663
821,185
–
–
–
–
–
–
–
358,052
20,519
–
–
1,701,615
–
–
22
22
30
31
–
–
–
1,436,257
436,317
–
107,350
5,824,866
–
4,405,223
–
–
–
2,182,507
–
–
19
20
21
22
22
23
17
24
35
25
25
26
27
28
29
9
27
28
29
8,876,768
23,565,508
5,508,071
4,262,693
31,515,641
2,917,845
7,518,357
2,919,687
46,483
1,031,857
199,981
1,082,662
13,849
–
294,852
7,257,974
21,919
–
–
–
–
–
–
–
2,360,983
7,566,675
21,919
–
60,452,019
26,091,844
47,122,186
21,265,857
35,210,275
24,266,680
17,764,108
7,216,165
35,210,275
11,911,911
17,764,108
3,501,749
Minority interests
59,476,955
975,064
24,980,273
1,111,571
47,122,186
–
21,265,857
–
Total equity
60,452,019
26,091,844
47,122,186
21,265,857
Net assets
Equity attributable to equity holders
of the Company
Share capital
Reserves
32
ANNUAL REPORT 2007
45
STATEMENT OF CHANGES IN EQUITY
Attributable to equity holders of the Company
2007
Group
At 1 January 2007
Net change in fair value adjustment reserve
(Note 33(b))
Net effect of exchange differences
(Note 33(a))
Share
capital
(Note 32)
At 31 December 2007
Accumulated
profits
Total
reserves
$
$
$
$
$
$
17,764,108
4,865,594
2,350,571
7,216,165
1,111,571
26,091,844
–
–
(21,229,073)
(21,229,073)
–
(21,229,073)
–
–
31,162
31,162
(38,137)
(6,975)
–
–
–
45,693,290
(21,197,911)
–
(21,197,911)
45,693,290
(38,137)
(98,370)
(21,236,048)
45,594,920
–
45,693,290
(21,197,911)
24,495,379
(136,507)
24,358,872
2,609,676
8,100,000
–
–
–
–
–
–
–
–
2,609,676
8,100,000
6,228,771
507,720
–
(6,228,771)
–
(1,216,093)
–
–
–
(6,228,771)
–
(1,216,093)
–
–
–
–
507,720
(1,216,093)
35,210,275
43,114,020
(18,847,340)
24,266,680
975,064
60,452,019
Minority
interests
Total equity
2006
Group
At 1 January 2006
Net change in fair value
adjustment reserve
(Note 33(b))
Net effect of exchange
differences (Note 33(a))
Accumulated
profits
Other
reserves
(Note 33)
Total
reserves
$
$
$
$
$
$
16,648,988
1,115,120
2,570,457
796,779
3,367,236
1,372,458
22,503,802
–
–
–
1,640,324
1,640,324
–
1,640,324
–
–
–
(86,532)
(86,532)
(236,933)
(323,465)
–
–
–
–
–
3,183,083
1,553,792
–
1,553,792
3,183,083
(236,933)
(23,954)
1,316,859
3,159,129
–
–
3,183,083
1,553,792
4,736,875
(260,887)
4,475,988
1,115,120
(1,115,120)
–
–
–
–
–
–
–
(887,946)
–
(887,946)
–
(887,946)
17,764,108
–
4,865,594
2,350,571
7,216,165
1,111,571
26,091,844
Share
capital
(Note 32)
Share
premium
$
Net income recognised
directly in equity
Net profit for the year
Total recognised income
and expenses for the year
Transfer of share premium
reserve to share capital
(Note 32)
Dividends on ordinary
shares (Note 34)
At 31 December 2006
Total equity
Other
reserves
(Note 33)
Net income recognised directly in equity
Net profit for the year
Total recognised income and expenses for
the year
Issuance of ordinary shares for quoted
equity investment
Issuance of ordinary shares for cash
Issuance of shares for rights cum
warrants issue
Warrants exercised
Dividends on ordinary shares (Note 34)
Minority
interests
46
STATEMENT OF CHANGES IN EQUITY
Total equity
Share capital
(Note 32)
Accumulated
profits
Other
reserves
(Note 33)
Total
reserves
$
$
$
$
$
17,764,108
1,726,425
1,775,324
3,501,749
21,265,857
Net change in fair value adjustment reserve
(Note 33 (b))
–
–
(21,229,073)
(21,229,073)
(21,229,073)
Profit for the year
–
37,084,099
–
37,084,099
37,084,099
Total recognised income and expenses for the year
–
37,084,099
(21,229,073)
15,855,026
15,855,026
Issuance of ordinary shares for quoted
equity investment
2,609,676
–
–
–
2,609,676
Issuance of ordinary shares for cash
8,100,000
–
–
–
8,100,000
Issuance of shares for rights cum warrants issue
6,228,771
(6,228,771)
–
(6,228,771)
–
–
(1,216,093)
–
(1,216,093)
(1,216,093)
507,720
–
–
–
507,720
35,210,275
31,365,660
(19,453,749)
11,911,911
47,122,186
2007
Company
At 1 January 2007
Dividends on ordinary shares (Note 34)
Warrants exercised
At 31 December 2007
Total equity
Share capital
(Note 32)
Share
premium
Accumulated
profits
Other
reserves
(Note 33)
Total
reserves
$
$
$
$
$
$
16,648,988
1,115,120
2,007,298
135,000
2,142,298
19,906,406
Net change in fair value adjustment
reserve (Note 33 (b))
–
–
–
1,640,324
1,640,324
1,640,324
Profit for the year
–
–
607,073
–
607,073
607,073
Total recognised income and
expenses for the year
–
–
607,073
1,640,324
2,247,397
2,247,397
Dividends on ordinary shares
(Note 34)
–
–
(887,946)
–
(887,946)
(887,946)
1,115,120
(1,115,120)
–
–
–
–
17,764,108
–
1,726,425
1,775,324
3,501,749
21,265,857
2006
Company
At 1 January 2006
Transfer of share premium reserve
to share capital (Note 32)
At 31 December 2006
ANNUAL REPORT 2007
47
CONSOLIDATED CASH FLOW STATEMENT
Note
2007
$
2006
$
48,271,512
(506,448)
81,036
3,889,262
47,765,064
3,970,298
(18,908)
(24,995,976)
721,134
(15,039,956)
–
(107,350)
2,811
1,758,113
861,305
38,147
61,536
393,181
(360,513)
38,965
16,094
–
1,838,480
(21,179)
(718,938)
107,350
13,249
–
(84,667)
–
–
741,481
(44,510)
(34,494)
11,117,553
5,783,164
566,244
45,552
(2,115,093)
–
3,668,822
(179,850)
(533,634)
(528)
1,979,732
(2,014,366)
312,809
–
(200,000)
(1,342,228)
(255,501)
295,081
(57,261)
(130,000)
Cash generated from operations
Interest paid
Interest received
Income taxes paid
9,692,431
(393,181)
360,513
(1,933,226)
7,248,065
(741,481)
44,510
(838,591)
Net cash generated from operating activities
7,726,537
5,712,503
Cash flows from operating activities
Profit before taxation from continuing operations
(Loss)/profit before taxation from discontinued operations
Adjustments for:
Share of results of associate
Gain on disposal of subsidiaries
Depreciation of property, plant and equipment
Gain on disposal of plant and equipment (net)
Write back of impairment loss on property
Fair value changes on derivative financial instrument
Amortisation of land occupancy rights
Impairment of goodwill
Fair value loss/(gain) on quoted equity investments
Impairment of doubtful debt
Bad debts written off
Interest expense
Interest income
Translation difference
Operating profit before working capital changes
Decrease/(increase) in:
Inventories
Trade receivables
Increase/(decrease) in:
Trade payables
Bills payable
Due to minority shareholders of a subsidiary (trade)
Due to directors of a subsidiary (non-trade)
10(b)
6(a)
6(b)
6(a)
6(b)
6(b)
6(b)
6(b)
6(b)
48
CONSOLIDATED CASH FLOW STATEMENT
Note
2007
$
2006
$
A
(533,768)
25,044,200
(9,607,556)
239,204
2,776,086
(8,445,004)
193,434
(6,405,143)
–
–
17,918,166
(14,656,713)
Cash flows from financing activities
(Repayment)/proceeds from term loans (net)
Proceeds for issuance of ordinary shares
Proceeds from warrants exercised
Payment of lease obligations
Dividend paid to minority shareholder of a subsidiary
Payment of dividends
Fixed deposits (secured)
(7,595,215)
8,100,000
507,720
(315,050)
–
(1,216,093)
(8,103,267)
4,657,347
–
–
(163,121)
(200,000)
(887,946)
(1,647,507)
Cash (used in)/generated from financing activities
(8,621,905)
1,758,773
17,022,798
(3,637,143)
(7,185,437)
3,548,294
13,385,655
(3,637,143)
Cash flows from investing activities
Purchase of property, plant and equipment
Proceeds from disposal of property, plant and equipment
Purchase of quoted equity investments (net)
Liquidation of a subsidiary
B
10(a)
Cash generated from/(used in) investing activities
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year
35
Note A
During the financial year, the Group acquired property, plant and equipment with an aggregate cost of $704,706 (2006:
$8,563,204) of which $170,938 (2006: $118,200) was acquired by means of finance lease. Cash payments of $533,768 (2006:
$8,445,004) were made to purchase property, plant and equipment.
Note B
During the financial year, the Company liquidated a subsidiary, Da Vinci Collection Ltd, a 65% owned subsidiary. The cash flow
effect of the liquidation were :
Group
2007
$
Inventory
Trade and other receivables
Trade and other payable
Due to minority shareholders of subsidiary
Minority shareholders’ share of loss for the current year
74,639
711,095
72,354
229,650
(143,683)
(436,317)
(38,884)
Attributable net assets disposed
Cash and bank balances of the subsidiary
468,854
(229,650)
Net cash inflow
239,204
ANNUAL REPORT 2007
49
NOTES TO THE FINANCIAL STATEMENTS
31 December 2007
1.
Corporate information
The Company is a limited liability Company domiciled and incorporated in Singapore and is listed on the Singapore
Exchange Securities Trading Limited (SGX-ST).
The address of the Company’s registered office and principal place of business is 521 Bukit Batok Street 23, Level 3,
Singapore 659544.
The principal activities of the Company are the provision of management and other services to related companies
and investment holding. The principal activities of the subsidiaries are as disclosed in Note 15.
2.
Summary of significant accounting policies
2.1
Basis of preparation
The consolidated financial 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 financial statements have been prepared on a historical cost basis except as disclosed in the accounting policies
below.
The financial statements are presented in Singapore Dollars (SGD or $).
The accounting policies have been consistently applied by the Group and the Company and are consistent with
those used in the previous financial year, except for the change in accounting policies discussed below.
2.2
Change in accounting policies
On 1 January 2007, the Group adopted FRS 40 Investment Property which is effective for annual periods beginning
on or after 1 January 2007.
The adoption of FRS 40 is assessed to have no material financial impact on the results and the accumulated profits
of the Group and Company for the year ended 31 December 2007.
2.3
Future changes in accounting policies
The Group has not adopted the following FRS and INT FRS that have been issued but not yet effective:
Reference
Description
FRS 23
FRS 108
INT FRS 111
INT FRS 112
Amendment to FRS 23, Borrowing Costs
Operating Segments
Group and Treasury Share Transactions
Service Concession Arrangements
Effective for annual periods
beginning on or after
1 January 2009
1 January 2009
1 March 2007
1 January 2008
The directors expect that the adoption of the above pronouncements will have no material impact to the financial
statements in the period of initial application, except for FRS 108 as indicated below.
FRS 108 requires entities to disclose segment information based on the information reviewed by the entity’s chief
operating decision maker. The impact of this standard on the other segment disclosures is still to be determined.
As this is a disclosure standard, it will have no impact on the financial position or financial performance of the Group
when implemented in 2009.
50
31 December 2007
2.
Summary of significant accounting policies (Cont’d)
2.4
Basis of consolidation
The consolidated financial statements comprise the financial statements of the Company and its subsidiaries as
at the balance sheet date. The financial statements of the subsidiaries used in the preparation of the consolidated
financial 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, income and expenses and unrealised gains and losses resulting from intra-group
transactions are eliminated in full.
Acquisitions of subsidiaries are accounted for by applying the purchase method. Identifiable assets acquired and
liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the
acquisition date. Adjustments to those fair values relating to previously held interests are treated as a revaluation
and recognised in equity. Any excess of the cost of business combination over the Group’s share in the net fair
value of the acquired subsidiary’s identifiable assets, liabilities and contingent liabilities is recorded as goodwill on the
balance sheet. The accounting policy for goodwill is set out in Note 2.9. Any excess of the Group’s share in the net
fair value of the acquired subsidiary’s identifiable assets, liabilities and contingent liabilities over the cost of business
combination is recognised as income in the income statement on the date of acquisition.
Subsidiaries 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.
2.5
Transactions with minority interests
Minority interests represent the portion of profit or loss and net assets in subsidiaries not held by the Group and are
presented separately in the consolidated income statement and within equity in the consolidated balance sheet,
separately from parent shareholders’ equity. Transactions with minority interests are accounted for using the entity
concept method, whereby, transactions with minority interests are accounted for as transactions with equity holders.
2.6
Functional and foreign currency
(i)
Functional currency
The management has determined the currency of the primary economic environment in which the Company
operates i.e. functional currency, to be SGD. Sales prices and major costs of providing goods and services
including major operating expenses are primarily influenced by fluctuations in SGD.
(ii)
Foreign currency transactions
Transactions in foreign currencies are measured in the respective functional currencies of the Company
and its subsidiaries 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 balance sheet date. 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
balance sheet date are recognised in the income statement except for exchange differences arising on
monetary items that form part of the Group’s net investment in foreign subsidiaries, which are recognised
initially in equity as foreign currency translation reserve in the consolidated balance sheet and recognised in
the consolidated income statement on disposal of the subsidiary.
The assets and liabilities of foreign operations are translated into SGD at the rate of exchange ruling at the
balance sheet date and their income statements are translated at the weighted average exchange rates for the
year. The exchange differences arising on the translation are taken directly to a separate component of equity
as foreign currency translation reserve. On disposal of a foreign operation, the deferred cumulative amount
recognised in equity relating to that particular foreign operation is recognised in the income statement.
ANNUAL REPORT 2007
51
31 December 2007
2.
2.7
All items of property, plant and equipment are initially recorded at cost. 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 benefits associated with the
item will flow to the Group and the cost of the item can be measured reliably.
Subsequent to recognition, property, plant and equipment are measured at cost less accumulated depreciation and
any accumulated impairment losses.
Depreciation of an asset begins when it is available for use and is computed on a straight-line basis over the
estimated useful life of the asset as follows:
Leasehold buildings and factory
Computers and office equipment
Furniture and fixtures
Motor vehicles
Showroom renovation
Air-conditioners
Machinery
–
–
–
–
–
–
–
20 to 67 years
3 to 6 years
3 to 6 years
6 years
3 to 8 years
8 years
8 years
Assets under construction are not depreciated as these assets are not yet available for use.
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.
The residual values, useful life and depreciation method are reviewed at each financial year-end to ensure that the
amount, method and period of depreciation are consistent with previous estimates and the expected pattern of
consumption of the future economic benefits embodied in the items of property, plant and equipment.
An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are
expected from its use or disposal. Any gain or loss arising on derecognition of the asset is included in the income
statement in the year the asset is derecognised.
2.8
Land occupancy rights are stated at cost less accumulated amortisation.
Land occupancy rights are amortised using the straight-line method to write off the cost over the lease term of 50
years.
2.9
Goodwill
Goodwill acquired in a business combination is initially measured at cost, being the excess of the cost of the business
combination over the Group’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities.
Following initial recognition, goodwill is measured at cost less any accumulated impairment losses. Goodwill is
reviewed for impairment annually or more frequently if events or changes in circumstances indicate that the carrying
value may be impaired.
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, or groups of cash-generating units, that are expected to
benefit from the synergies of the combination.
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, by comparing the carrying amount of the cashgenerating unit, including the allocated goodwill, with the recoverable amount of the cash-generating unit. Where the
recoverable amount of the cash-generating unit is less than the carrying amount, an impairment loss is recognised in
the income statement. Impairment losses recognised for goodwill are not reversed in subsequent periods.
52
31 December 2007
2.
2.9
Goodwill (Cont’d)
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.
2.10
Impairment of non-financial assets
The Group assesses at each reporting date whether there is an indication that an asset may be impaired. If any such
indication exists, or when annual impairment assessment 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 inflows that are
largely independent of those from other assets. In assessing value in use, the estimated future cash flows expected
to be generated by the asset are discounted to their present value. Where the carrying amount of an asset exceeds
its recoverable amount, the asset is written down to its recoverable amount.
Impairment losses are recognised in the income statement except for assets that are previously revalued where the
revaluation was taken to equity. In this case the impairment is also recognised in equity up to the amount of any
previous revaluation.
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. 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 be recognised previously. Such reversal is recognised in the income statement unless the
asset is measured at revalued amount, in which case the reversal is treated as a revaluation increase.
2.11
Subsidiaries
A subsidiary is an entity over which the Group has the power to govern the financial and operating policies so as to
obtain benefits from its activities.
In the Company’s separate financial statements, investments in subsidiaries are accounted for at cost less any
impairment losses.
2.12
Associates
An associate is an entity, not being a subsidiary or a joint venture, in which the Group has significant influence. This
generally coincides with the Group having 20% or more of the voting power, or has representation on the board of
directors. The associate is equity accounted for from the date the Group obtains significant influence until the Group
ceases to have significant influence over the associate.
The Group’s investments in associates are accounted for using the equity method. Under the equity method, the
investment in associate is measured in the balance sheet at cost plus post-acquisition changes in the Group’s share
of net assets of the associate.
When the Group’s share of losses in an associate equals or exceeds its interest in the associate, the Group does not
recognise further losses, unless it has incurred obligations or made payments on behalf of the associate.
The financial statements of the associate are prepared as of the same reporting date as the Company. Where
necessary, adjustments are made to bring the accounting policies into line with those of the Group.
ANNUAL REPORT 2007
53
31 December 2007
2.
2.13
Financial assets
Financial assets are recognised on the balance sheet when, and only when, the Group becomes a party to the
contractual provisions of the financial instrument.
When financial assets are recognised initially, they are measured at fair value, plus, in the case of financial assets not
at fair value through profit or loss, directly attributable transaction costs.
A financial asset is derecognised where the contractual right to receive cash flows from the asset has expired. On
derecognition of a financial 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 equity is recognised in
the income statement.
All regular way purchases and sales of financial 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 financial assets that require delivery of assets within the period generally established by regulation or convention in
the marketplace concerned.
(a)
Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss are financial assets classified as held for trading. Financial
assets classified as held for trading are derivatives or are acquired principally for the purpose of selling or
repurchasing it in the near term.
Subsequent to initial recognition, financial assets at fair value through profit or loss are measured at fair value.
Any gains or losses arising from changes in fair value of the financial assets are recognised in the income
statement. Net gains or net losses on financial assets at fair value through profit or loss include unrealised fair
value changes in quoted equity investment.
(b)
Loans and receivables
Financial assets with fixed or determinable payments that are not quoted in an active market are classified
as loans and receivables. Subsequent to initial recognition, loans and receivables are measured at amortised
cost using the effective interest method. Gains and losses are recognised in the income statement when the
loans and receivables are derecognised or impaired, and through the amortisation process.
(c)
Available-for-sale financial assets
Available-for-sale financial assets are financial assets that are not classified in any of the other categories.
After initial recognition, available-for-sale financial assets are measured at fair value. Any gains or losses from
changes in fair value of the financial asset are recognised directly in the fair value adjustment reserve in equity.
The cumulative gain or loss previously recognised in equity is recognised in the income statement when the
financial asset is derecognised.
Investments in equity instruments whose fair value cannot be reliably measured are measured at cost less
impairment loss.
2.14
Impairment of financial assets
The Group assesses at each balance sheet date whether there is any objective evidence that a financial asset or
group of financial assets is impaired.
(a)
Assets carried at amortised cost
If there is objective evidence that an impairment loss on financial assets carried at amortised 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 flows discounted at the financial asset’s original effective interest rate.
The carrying amount of the asset is reduced through the use of an allowance account. The amount of the
loss is recognised in the income statement.
54
31 December 2007
2.
2.14
Impairment of financial assets (Cont’d)
(a)
Assets carried at amortised cost (Cont’d)
When the asset becomes uncollectible, the carrying amount of impaired financial 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 financial asset.
To determine whether there is objective evidence that an impairment loss on financial assets has been
incurred, the Group considers factors such as the probability of insolvency or significant financial difficulties of
the debtor and default or significant 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. Any subsequent reversal of an impairment loss is recognised in the income statement, to the
extent that the carrying value of the asset does not exceed its amortised cost at the reversal date.
(b)
Assets carried at cost
If there is objective evidence (such as significant adverse changes in the business environment where the
issuer operates, probability of insolvency or significant financial difficulties of the issuer) that an impairment loss
on financial assets 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 flows discounted at
the current market rate of return for a similar financial asset. Such impairment losses are not reversed in
subsequent periods.
(c)
Significant or prolonged decline in fair value below cost, significant financial difficulties of the issuer or obligor,
and the disappearance of an active trading market are considerations to determine whether there is objective
evidence that investment securities classified as available-for-sale financial assets are impaired.
If an available-for-sale financial asset is impaired, an amount comprising the difference between its cost (net
of any principal payment and amortisation) and its current fair value, less any impairment loss previously
recognised in the income statement, is transferred from equity to the income statement. Reversals of
impairment loss in respect of equity instruments are not recognised in the income statement. Reversals of
impairment losses on debt instruments are reversed through the income statement, if the increase in fair value
of the instrument can be objectively related to an event occurring after the impairment loss was recognised in
the income statement.
2.15
Cash and cash equivalents
Cash and cash equivalents comprise of fixed deposits, cash and bank balances and bank overdrafts, which are
subject to an insignificant risk of changes in value. Bank overdrafts form an integral part of the Group’s cash
management.
2.16
Inventories
Inventories are stated at the lower of cost and net realisable value. Costs incurred in bringing the inventories to their
present location and condition are accounted for as follows:
–
Raw materials: purchase costs determined on a first-in first-out basis;
–
Finished goods and work-in-progress: costs of direct materials and labour and a proportion of manufacturing
overheads based on normal operating capacity. These costs are assigned on a first-in first-out basis for
wholesale businesses and on a weighted average basis for retail businesses.
Allowance is made for deteriorated, damaged, obsolete and slow moving inventories.
ANNUAL REPORT 2007
55
31 December 2007
2.
2.17
Provisions
Provisions are recognised when the Group has a present obligation as a result of a past event, it is probable that
an outflow of economic resources will be required to settle the obligation and the amount of the obligation can be
estimated reliably.
Provisions are reviewed at each balance sheet date and adjusted to reflect the current best estimate. If it is no longer
probable that an outflow of economic 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 reflects,
where appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the
passage of time is recognised as a finance cost.
2.18
Financial liabilities
Financial liabilities are recognised on the balance sheet when, and only when, the Group becomes a party to the
contractual provisions of the financial instrument.
Financial liabilities are recognised initially at fair value, plus, in the case of financial liabilities other than derivatives,
directly attributable transaction costs.
Subsequent to initial recognition, all financial liabilities are measured at amortised cost using the effective interest
method, except for derivatives, which are measured at fair value.
A financial liability is derecognised when the obligation under the liability is extinguished. For financial liabilities other
than derivatives, gains and losses are recognised in the income statement when the liabilities are derecognised or
impaired, and through the amortisation process. Any gains or losses arising from changes in fair value of derivatives
are recognised in the income statement. Net gains or losses on derivatives include exchange differences.
2.19
Deferred rental
Deferred rental relates to the difference between the selling price and the fair value of the property under a sale and
leaseback transaction. This is amortised on a straight line basis over the term of the lease.
2.20
Borrowing costs
Borrowing costs are recognised in the income statement as incurred except to the extent that they are capitalised.
Borrowing costs 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.
2.21
Employee benefits
(a)
Defined contribution plan
As required by law, the Singapore companies in the Group make contributions to the state pension scheme,
the Central Provident Fund (“CPF”). CPF contributions are recognised as compensation expense in the same
period as the employment that gives rise to the contributions.
(b)
Employee leave entitlement
Employee entitlements to annual leave are recognised when they accrue to employees. The estimated liability
for leave is recognised for services rendered by employees up to the balance sheet date.
(c)
Pension scheme
The subsidiary in the People’s Republic of China contributes to defined contribution pension schemes.
Contributions are charged to the income statement as they become payable in accordance with the rules of
the scheme.
56
31 December 2007
2.
2.22
Leases
(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 finance 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 the income statement. 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 the income statement on a straight-line basis
over the lease term. The aggregate benefit 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 classified
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 2.24(f).
2.23
Discontinued operation
A component of the Group is classified as a ‘discontinued operation’ as it has been disposed of and such a
component represents a separate major line of business. Prior period comparatives are re-presented so that the
disclosures relate to all operations that have been discontinued by the balance sheet date of the current financial
year
2.24
Revenue
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the
revenue can be reliably measured. Revenue is measured at the fair value of consideration received or receivable.
(a)
Sale of goods
Sales are recognised (net of goods and services tax and discounts) when goods have been delivered and
accepted by the customer.
(b)
Rendering of services
Service income is recognised when services are rendered.
Unearned revenue relates to service packages entered into with the customer to the extent that services have
not been rendered and income has not been recognised.
(c)
Management fee
Management fee income is recognised when management services are rendered.
(d)
Dividend income
Dividend income is recognised when the Group’s right to receive payment is established.
ANNUAL REPORT 2007
57
31 December 2007
2.
2.24
Revenue (Cont’d)
(e)
Interest income
Interest income is recognised using the effective interest method.
(f)
Rental income
Rental income on the sublet of a leased property is accounted for on a straight-line basis over the lease
terms. The aggregate costs of incentives provided to leases are recognised as a reduction of rental income
over the lease term on a straight-line basis.
2.25
Income tax
(a)
Current tax
Current 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 substantially enacted by the balance sheet date.
Current taxes are recognised in the income statement except that tax relating to items recognised directly in
equity is recognised directly in equity.
(b)
Deferred tax
Deferred income tax is provided using the liability method on temporary differences at the balance sheet date
between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.
Deferred tax assets and liabilities are recognised for all temporary differences, except:
–
Where the deferred tax 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 profit nor
taxable profit or loss;
–
In respect of temporary differences associated with investments in subsidiaries and associates,
where the timing of the reversal of the temporary differences can be controlled by the Group and it is
probable that the temporary differences will not reverse in the foreseeable future; and
–
In respect of deductible temporary differences and carry-forward of unused tax credits and unused tax
losses, if it is not probable that taxable profit will be available against which the deductible temporary
differences and carry-forward of unused tax credits and unused tax losses can be utilised.
The carrying amount of deferred tax asset is reviewed at each balance sheet date and reduced to the extent
that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax
asset to be utilised. Unrecognised deferred tax assets are reassessed at each balance sheet date and are
recognised to the extent that it has become probable that future taxable profit will allow the deferred tax asset
to be utilised.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to 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 balance sheet date.
Deferred taxes are recognised in the income statement except that deferred tax relating to items recognised
directly in equity is recognised directly in equity and deferred tax arising from a business combination is
adjusted against goodwill on acquisition.
58
31 December 2007
2.
2.25
Income tax (Cont’d)
(c)
Sales tax
Revenues, expenses and assets are recognised net of the amount of sales tax except:
z
Where the sales tax incurred on a purchase of assets or service is not recoverable from the taxation
authority, in which case the sales tax is recognised as part of the cost of acquisition of the asset or as
part of the expense item as applicable; and
z
Receivables and payables that are stated with the amount of sales tax included.
The net amount of sales tax recoverable from, or payable to, the taxation authority is included as part of
receivables or payables in the balance sheet.
2.26
Segments
A business segment is a distinguishable component of the Group that is engaged in providing products or services
that are subject to risks and returns that are different from those of other business segments. A geographical
segment is a distinguishable component of the Group that is engaged in providing products or services within a
particular economic environment and that is subject to risks and returns that are different from those of components
operating in other economic environments.
Segment information is presented in respect of the Group’s business and geographical segments.
2.27
Share capital and share issue expenses
Proceeds from issuance of ordinary shares are recognised as share capital in equity. Incremental costs directly
attributable to the issuance of ordinary shares are deducted against share capital.
3.
Significant accounting judgements and estimates
The preparation of the Group’s financial statements requires management to make judgements, estimates and
assumptions that affect the reported amounts of revenues, expenses, assets and 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.
(a)
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 has the most significant effect on the amounts recognised in the
financial statements:
(i)
Income taxes
The Group has exposure to income taxes in numerous jurisdictions. Significant judgement is
involved in determining the Group-wide provision for income taxes. There are certain transactions
and computations for which the ultimate tax determination is uncertain during the ordinary course
of business. The Group recognises liabilities for expected tax issues based on estimates of whether
additional taxes will be due. Where the final tax outcome of these matters is different from the amounts
that were initially recognised, such differences will impact the income tax and deferred tax provisions in
the period in which such determination is made. The carrying amount of the Group’s tax payables and
deferred tax liabilities at 31 December 2007 was $1,025,484 (2006: $968,235) and $46,483 (2006:
$13,849) respectively.
ANNUAL REPORT 2007
59
31 December 2007
3.
Significant accounting judgements and estimates (Cont’d))
(a)
Judgements made in applying accounting policies (Cont’d)
(ii)
Finance lease-as lessee
The Group has entered into finance leases for its motor vehicles. The Group has determined, based on
an evaluation of the terms and conditions of the arrangements that the risks and rewards incidental to
ownership of the leased items have been transferred to the Group and so accounts for the contracts
as finance leases.
(b)
Key sources of estimation uncertainty
The key assumptions concerning the future and other key sources of estimation uncertainty at the balance
sheet date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and
liabilities within the next financial year are discussed below.
(i)
The Group determines whether goodwill are impaired at least on an annual basis. This requires
an estimation of the value in use of the cash-generating units to which the goodwill is allocated.
Estimating the value in use requires the Group to make an estimate of the expected future cash flows
from the cash-generating unit and also to choose a suitable discount rate in order to calculate the
present value of those cash flows. The carrying amount of the Group’s goodwill at 31 December 2007
was $Nil (2006: $1,758,113). Further details are given in Note 14 to the financial statements.
(ii)
Useful lives of property, plant and equipment
Property, plant and equipment are depreciated on a straight-line basis over their estimated useful
lives. Management estimates the useful lives of these property, plant and equipment to be within
3 to 67 years. The carrying amount of the Group’s property, plant and equipment at 31 December
2007 was $4,504,807 (2006: $22,280,173). Changes in the expected level of usage and technological
developments could impact the economic useful lives and the residual values of these assets, therefore
future depreciation charges could be revised.
4.
Turnover
Group
Sales of goods
Service income
Consultancy and management fee
Dividend income
60
2007
$
2006
$
41,217,389
410,480
663,338
11,979,304
39,845,698
349,453
–
–
54,270,511
40,195,151
31 December 2007
5.
Personnel expenses
Group
Wages and salaries
Pension contributions
Other personnel expenses
2007
$
2006
$
3,332,916
402,761
927,585
3,088,855
421,262
843,793
4,663,262
4,353,910
These include the amount shown as directors’ and executive officers’ remuneration and fee on Note 6(c).
6.
Profit from operations
This is determined after charging/ crediting the following:
Group
2007
$
(a)
Other income:
Gain on disposal of subsidiaries
Gain on disposal of property, plant and equipment
Realised gain on disposal of quoted equity investment
Gain on liquidation of a subsidiary
Rental income
Write back of allowance for inventory obsolescence
Display incentive
Fair value gain on derivative financial instrument
Others
(b)
2006
$
24,995,976
15,420,320
1,847,158
45,876
385,176
–
89,852
107,350
164,384
–
2,922
–
–
–
100,000
147,041
–
139,064
43,056,092
389,027
2,811
721,134
380,364
61,536
38,147
–
119,312
861,305
1,758,113
247,709
13,249
827,489
19,342
2,979
–
100,000
–
–
–
50,965
4,190,431
1,014,024
Other operating expenses:
Amortisation of land use rights
Depreciation of property, plant and equipment
Loss on disposal of plant and equipment
Bad debts written off
Impairment of doubtful debt
Allowance for inventory obsolescence
Closure of outlets
Fair value loss on quoted equity investment
Others
ANNUAL REPORT 2007
61
31 December 2007
6.
Profit from operations (Cont’d)
Group
2007
$
(c)
Other expenses
Non-audit fees paid to auditors
Directors’ remuneration
– directors of the Company
– directors of the subsidiaries
Directors’ fees
Executive officers’ remuneration
Operating lease expenses
7.
2006
$
108,414
–
673,108
115,681
109,667
368,158
2,062,549
514,595
114,941
110,000
390,115
1,886,394
2007
2006
1
–
4
1
–
4
5
5
Directors’ remuneration
Number of directors of the Company in remuneration bands
$500,000 and above
$250,000 to $499,000
0 to $250,000
8.
Finance expenses
Group
Interest expense
– bank overdrafts
– bank term loans
– lease obligations
– brokerage
Fair value loss on derivative financial instrument
Others
62
2007
$
2006
$
178,611
69,021
11,467
134,082
–
7,993
256,394
185,237
9,630
4,271
107,350
75,733
401,174
638,615
31 December 2007
9.
Tax
Group
Current tax
– current year
– under provision in respect of prior year
Deferred tax
– current year
– under/(over) provision in respect of prior year
– effect of reduction in tax rate
2007
$
2006
$
2,074,029
9,046
217,127
22,652
26,116
65,012
(4,059)
(50,057)
(32,908)
–
2,170,144
156,814
A reconciliation between the tax expense and the product of accounting profit multiplied by the applicable tax rate for
the years ended 31 December was as follows:
Group
2007
$
Accounting profit
Tax at statutory tax rate of 18% (2006 : 20%)
Tax effect of expenses that are not deductible in determining taxable profit
Tax effect of income not subject to tax
Effect of reduction in tax rate
Deferred tax asset not recognised
Tax exemption
Under/(over) provision in respect of prior year
Others
2006
$
48,271,512
81,036
8,688,872
1,193,780
(8,124,037)
(4,059)
382,455
(40,664)
74,058
(261)
16,207
136,325
(81,089)
–
128,323
(33,734)
(10,256)
1,038
2,170,144
156,814
The corporate income tax applicable to the Company was reduced to 18% for the Year of Assessment 2008
onwards from 20% for Year of Assessment 2007.
Group
The Group has unutilised tax losses and capital allowances of approximately $1,438,000 (2006: $465,000) available
for offset against future taxable profits, subject to the agreement of the tax authorities and compliance with relevant
provisions of the tax legislation of the respective countries in which the subsidiaries operate. The potential deferred
tax assets arising from these unutilised tax losses have not been recognised in the financial statements in accordance
with the Group’s accounting policy in Note 2.
ANNUAL REPORT 2007
63
31 December 2007
9.
Tax (Cont’d)
Group (Cont’d)
Deferred taxation at 31 December relates to the following:
Consolidated balance sheet
2007
$
2006
$
2007
$
2006
$
–
–
–
(280,635)
75,821
–
(11,248)
(75,821)
–
27,144
75,821
(20,000)
–
291,657
–
–
–
86,843
Deferred tax liability
Differences in depreciation
Provisions
46,483
–
32,980
(19,131)
–
–
–
–
Total deferred tax liability
46,483
13,849
(87,069)
82,965
Deferred tax asset
Differences in depreciation
Unutilised tax losses
Provisions
Fair value loss of available-for-sale
financial assets
Total deferred tax asset
Deferred income tax
10.
Consolidated income statement
On 21 February 2007, the Company publicly announced the decision of its Board of Directors to discontinue and
dispose of the majority of its furniture businesses which was reported in the Furniture Division segment previously.
The disposal of the Furniture Division segment was completed on 27 July 2007. As a result, the Group has
consolidated the Furniture Division’s results until 27 July 2007, the date the Group ceased to have control over the
segment. This represents a discontinuance of the Furniture Division segment of the Group. As such, the results
arising from the disposal is presented separately in the Income statements as “Discontinued Operations”.
64
31 December 2007
10.
Discontinued operations (Cont’d)
(a)
Cash flow effect on disposal
The cash flow effect on disposal of the Furniture Division is set out below :
Group
2007
$
Deferred tax assets
Inventory
Trade and other receivables
Fixed deposit
Trade and other payable
Tax payable
Term loan
Bank overdraft
9,846,205
67,731
4,150,747
2,022,125
134,033
569,019
(7,363,467)
(127,923)
(1,115,308)
(3,479,138)
Net identifiable assets and liabilities
Gain on disposal of Furniture Division
Cash and bank balances of the Furniture Division
Less: Total consideration (quoted equity investments)*
4,704,024
24,995,976
2,776,086
(29,700,000)
Net cash inflow on disposal of the Furniture Division
2,776,086
* The quoted equity investments are classified as available-for-sale financial assets.
(b)
Results of discontinued operations
The results of the discontinued operations for the year ended 31 December are as follows :
Group
Turnover
Cost of sales
Gross profit
Other operating income
Distribution and selling expenses
Administrative expenses
Other operating expenses
Finance expenses
Interest income
(Loss)/profit from discontinued operations before taxation
Taxation
(Loss)/profit for the year from discontinued operations
2007
$
2006
$
19,661,437
(10,560,275)
36,829,711
(19,639,982)
9,101,162
3,813,910
(2,813,170)
(4,425,382)
(6,029,721)
(160,054)
6,807
17,189,729
1,690,582
(5,705,889)
(7,967,842)
(1,023,061)
(305,955)
11,698
(506,448)
3,889,262
–
(654,355)
(506,448)
3,234,907
ANNUAL REPORT 2007
65
31 December 2007
10.
Discontinued operations (Cont’d)
(c)
Impact of discontinued operations on cash flows
The impact of the discontinued operations on the cash flows of the Group is as follows :
Group
11.
2007
$
2006
$
Operating cash flows
Investing cash flows
Financing cash flows
1,329,170
3,595,722
(2,705,977)
4,520,922
(1,997,990)
(5,931,891)
Net inflows/(outflows)
2,218,915
(3,408,959)
Earnings per share
Basic earnings per share amounts are calculated by dividing profit for the year from continuing operations attributable
to ordinary equity holders of the parent by the weighted average number of ordinary shares outstanding during the
financial year.
Diluted earnings per share amounts are calculated by dividing profit for the year from continuing operations
attributable to ordinary equity holders of the parent by the weighted average number of ordinary shares outstanding
during the financial year plus the weighted average number of ordinary shares that would be issued on the conversion
of all the existing warrants of the Company into ordinary shares.
The following tables reflect the profit and loss and share data used in the computation of basic and diluted earnings
per share for the years ended 31 December.
Group
Net profit/(loss) attributable to shareholders from
(a)
continuing operations
(b)
discontinued operations
2007
$
2006
$
46,199,738
(506,448)
(51,824)
3,234,907
45,693,290
3,183,083
Number of shares
2007
$
2006
$
Weighted average number of ordinary shares for the calculation
of basic earnings per share
274,985,280
221,986,508
Adjusted weighted average number of ordinary shares for the
calculation of diluted earnings per share
292,097,978
221,986,508
The basic and diluted earnings per share are the same in 2006 because there are no potential dilutive ordinary shares
as at year end.
Weighted average number of ordinary shares for 2006 has been restated as a result of bonus issue in 2007.
66
12.
ANNUAL REPORT 2007
At 31.12.2006
16,287,850
3,279,369
Net book value
At 31.12.2007
3,485,581
–
–
(2,614,185)
–
(4,348,646)
(257)
730,448
2,614,185
–
–
2,396,337
217,848
–
–
–
–
5,033,344
118,287
(72,280)
At 31.12.2007
At 31.12.2006 and 01.01.2007
Charge for the year
Disposals
Attributable to discontinued
operations
5,298,652
471,909
–
(718,938)
(18,279)
–
Accumulated depreciation
and impairment loss
At 1.1.2006
Charge for the year
Disposals
Impairment loss written back
Written off
–
(6,099,766)
–
(10,223,502)
–
4,009,817
6,099,766
–
–
6,099,766
–
–
–
–
21,321,194
15,600
(7,103,475)
14,279,025
7,087,875
–
(45,706)
–
$
$
At 31.12.2007
At 31.12.2006 and 01.01.2007
Additions
Disposals
Attributable to discontinued
operations
Group
Cost
At 1.1.2006
Additions
Disposals
Written off
Factory
Leasehold
buildings
325,488
278,138
679,385
(298,143)
–
1,037,730
117,706
(177,908)
1,210,793
125,520
(406)
–
(842)
(297,335)
957,523
(353,675)
–
1,363,218
131,167
(183,187)
1,346,777
317,397
(2,513)
(1,108)
(297,335)
$
576,488
79,150
237,614
(1,852,536)
1,535
2,351,076
63,944
(326,405)
2,559,225
155,458
(21,787)
–
(13,990)
(327,830)
316,764
(2,195,695)
–
2,927,564
116,991
(532,096)
3,179,073
179,882
(85,499)
(14,994)
(330,898)
$
Computers
and office
Furniture
equipment and fittings
548,904
387,684
606,172
(1,051,789)
(54)
1,631,023
131,207
(104,215)
1,686,073
196,010
(53,113)
–
(6,385)
(191,562)
993,856
(1,217,050)
–
2,179,927
170,938
(139,959)
2,307,141
158,786
(85,832)
(8,606)
(191,562)
$
Motor
vehicles
727,841
292,940
938,805
(1,874,517)
–
2,724,555
188,929
(100,162)
2,731,770
363,753
(30,784)
–
(23,623)
(316,561)
1,231,745
(2,113,567)
–
3,452,396
96,022
(203,106)
3,253,190
645,377
(92,351)
(32,739)
(321,081)
$
26,884
59,270
117,235
(150,777)
–
251,641
18,238
(1,867)
227,057
27,839
(2,430)
–
–
(825)
176,505
(153,068)
–
278,525
56,648
(5,600)
227,977
66,928
(14,580)
–
(1,800)
$
301,137
37,990
2,088,743
(14,060)
1,507
2,371,555
82,822
(353,081)
2,190,565
280,143
–
–
(80,728)
(18,425)
2,126,733
(16,000)
3,760
2,672,692
26,596
(560,315)
2,695,387
106,959
–
(96,654)
(33,000)
$
–
–
–
–
–
–
90,266
–
–
–
–
–
–
–
–
–
–
–
–
90,266
–
(478)
–
90,744
–
$
Showroom
Air
Construction
renovation conditioners Machinery in progress
22,280,173
4,504,807
5,398,402
(12,204,653)
2,731
18,015,109
721,133
(1,135,918)
18,300,472
1,838,480
(108,520)
(718,938)
(143,847)
(1,152,538)
9,903,209
(22,372,323)
3,282
40,295,282
704,706
(8,727,738)
33,388,336
8,563,204
(280,775)
(199,807)
(1,175,676)
$
Total
31 December 2007
67
31 December 2007
12.
Property, plant and equipment (Cont’d)
Computers
and office
equipment
Furniture
and fittings
Air
conditioners
Total
$
$
$
$
Company
Cost
At 1.1.2006, 31.12.2006 and 1.1.2007
Written off
Additions
67,791
(67,791)
82,493
–
–
133,176
–
–
56,648
67,791
(67,791)
272,317
At 31.12.2007
82,493
133,176
56,648
272,317
Accumulated depreciation
At 1.1.2006, 31.12.2006 and 1.1.2007
Written off
Charge for the year
67,791
(67,791)
8,016
–
–
6,625
–
–
3,215
67,791
(67,791)
17,856
8,016
6,625
3,215
17,856
74,477
126,551
53,433
254,461
–
–
–
–
At 31.12.2007
Net book value
At 31.12.2007
At 31.12.2006
Assets held under finance leases
The carrying amount of motor vehicles held under finance leases as at 31 December 2007 was $351,202 (2006:
$484,524).
Leased assets are pledged as security for the related finance lease liabilities.
Assets pledged as security
In addition to assets held under finance leases, the Company’s factory and leasehold buildings with a carrying
amount of $Nil and $2,696,004 respectively (2006: $3,485,581 and $16,287,850) are subject to a first charge for
term loans and bank overdraft as disclosed in Note 29 and Note 31 respectively.
13.
Group
68
2007
$
2006
$
Cost
At beginning of year
685,473
14
706,178
(20,705)
Less: Accumulated amortisation
685,487
(187,360)
685,473
(184,549)
At end of year
498,127
500,924
31 December 2007
13.
Land occupancy rights (Cont’d)
Movements in accumulated amortisation during the financial year:
Group
2007
$
2006
$
At beginning of year
Amortisation during the year
184,549
2,811
171,300
13,249
At end of year
187,360
184,549
The Group has land use rights over two plots of state-owned land in the People’s Republic of China (“PRC”) where
the Group’s PRC manufacturing and storage facilities reside. The land use rights are not transferable.
14.
Goodwill
Group
Cost
2007
$
2006
$
1,758,113
(1,758,113)
1,758,113
–
–
1,758,113
Impairment loss recognised
Goodwill acquired through business combinations was related to the Beauty segment, which is an individual cashgenerating unit.
During the year, full impairment loss had been recognised to write-down the carrying amount of goodwill since the
segment suffered operational losses in the current financial year.
ANNUAL REPORT 2007
69
31 December 2007
15.
Investment in subsidiaries
Group
(a)
2007
$
2006
$
13,458,335
(5,700,000)
(678,600)
1
13,458,335
–
–
–
7,079,736
5,635,696
13,458,335
–
Impairment losses
12,715,432
(1,968,977)
13,458,335
(1,806,450)
Carrying amount of investments
10,746,455
11,651,885
Balance at beginning of year
Impairment during the year
Attributable to discontinued operations
Attributable to liquidated subsidiary
1,806,450
868,077
(100,000)
(605,550)
1,546,450
260,000
–
–
Balance at end of year
1,968,977
1,806,450
Subsidiaries comprise:
Unquoted equity shares, at cost
At beginning of the year
Disposal during the year
Liquidation during the year
Addition during the year
Capital contribution during the year
Movement in impairment loss:
(b)
The Company and the Group had the following subsidiaries as at 31 December:
Name of Company
Principal activities
Country of
incorporation
and place of
business
Effective
equity held
by the Group
Cost of investment
2007
%
2006
%
2007
$
2006
$
Held by the Company
70
Novena Furnishing
Centre Pte Ltd ****
Trading of household
and office furniture
Singapore
–
100
–
4,300,000
Castilla Design Pte
Ltd ****
Singapore
–
100
–
1,000,000
The White Collection
Pte Ltd ****
Retailing of furniture
and furnishings
Singapore
–
100
–
100,000
Natural Living Pte
Ltd ****
Retailing of furniture
and furnishings
Singapore
–
100
–
100,000
Living Lifestyle Pte
Ltd ****
Singapore
–
100
–
100,000
Poya Communications
Pte Ltd ****
Advertising and
promotions
Singapore
–
100
–
100,000
31 December 2007
15.
Investment in subsidiaries (Cont’d)
Name of Company
Country of
incorporation
and place of
business
Effective
equity held
by the Group
Cost of investment
2007
%
2006
%
2007
$
2006
$
Novena Investment
Pte Ltd *
Investment holding
Singapore
100
100
1,015,048
1,000,000
Novena Strategic
Investments Pte Ltd *
Investment holding
Singapore
100
–
5,620,649
–
Beaute Spring Pte
Ltd*
Retailing of beauty
and personal care
products
Singapore
100
100
3,110,758
3,110,758
Fasta International
Pte Ltd *
Retailing of beauty
and personal care
products
Singapore
100
100
100,000
100,000
Da Vinci Collection
Ltd ***
Retailing of high-end
classical furniture
and furnishing
Taiwan
–
65
–
678,600
(NT$
13,000,000)
Chuan Seng Leong
Pte Ltd *
Distributing and
wholesaling of
household, beauty
and personal care
products
Singapore
80
80
2,868,977
2,868,977
12,715,432 13,458,335
Held by subsidiaries
Suzhou Novena
Furniture Co. Ltd **
Manufacture and retail
of office, household
and custom-made
furniture
People’s
Republic
of China
75
75
B.S.P. Global Pte Ltd *
Provision of beauty
and personal care
services and sales of
beauty and personal
care products
Singapore
100
100
300,000
300,000
Niclas International
Pte Ltd *
Retailer, importer and
distributor of beauty
and personal care
products
Singapore
100
100
327,305
327,305
*
Audited by Ernst & Young, Singapore.
**
Audited by Suzhou Kaicheng Certified Public Accountants, PRC.
***
The Company was liquidated during the financial year.
****
Disposed off during the financial year. See Note 10.
3,202,320 3,202,320
(US$
(US$
2,250,000) 2,250,000)
Subsidiaries not audited by Ernst & Young, Singapore, are not significant as defined under Listing Rule 718 of
the Singapore Exchange Listing Manual.
ANNUAL REPORT 2007
71
31 December 2007
16.
Investment in associate
Group
(a)
Investment in associate comprise:
Unquoted equity shares, at cost
Share of reserves
Carrying amount
(b)
2007
$
2006
$
237,250
(207,655)
237,250
(216,914)
29,595
20,336
Details of the associate company at the end of the financial year are as follows:
Name of Company
Shenzhen Calo
Enersave Furniture Co.
Ltd *
*
Manufacture and retail
of office, household
and custom-made
furniture
Country of
incorporation
and place of
business
People’s
Republic of
China
Effective
equity held
by the Group
Cost of investment
2007
%
2006
%
2007
$
2006
$
26
26
237,250
237,250
Audited by Yuehua Certified Public Accountants Co. Ltd, Shenzhen, PRC. The associate company is not significant as
defined under Listing Rule 718 of the Singapore Exchange Listing Manual.
The summarised financial information of the associate, not adjusted for the proportion of ownership interest held by
the Group, is as follows:
Group
Assets and liabilities:
Total assets
Total liabilities
Results
Revenue
Profit/(loss) for the year
72
2007
$
2006
$
1,870,425
2,220,682
1,362,875
1,785,857
2,526,446
2,653,540
72,723
(61,900)
31 December 2007
17.
Group and Company
2007
$
2006
$
26,264,832
6,094,285
Non-current
Group
Company
2007
$
2006
$
2007
$
2006
$
3,616,323
3,960,016
820,820
–
Current
Financial assets at fair value
through profit and loss
18.
The balance is stated at cost and has no fixed repayment terms. It is unsecured, non-interest bearing and is intended
as quasi-equity.
19.
Inventories
Group and Company
Balance sheet:
Raw materials
Work-in-progress
Finished goods
Income statement:
Inventories recognised as an expense
Inclusive of the following debit/(credit):
– inventories written-down
– write back of allowance
2007
$
2006
$
172,816
54,332
5,687,686
171,745
–
11,171,175
5,914,834
11,342,920
205,145
–
135,864
(100,000)
The reversal of write-down of inventories was made when the related inventories were sold above their carrying
amounts.
ANNUAL REPORT 2007
73
31 December 2007
20.
Trade receivables
Group
Trade receivables
Allowance for doubtful debts
Company
2007
$
2006
$
2007
$
2006
$
4,116,368
(38,147)
4,620,484
(113,640)
43,028
–
–
–
4,078,221
4,506,844
43,028
–
Trade receivables are non-interest bearing and are generally on 30 to 90 days’ terms. They are recognised at their
original invoice amounts which represents their fair values on initial recognition.
As at 31 December 2007, RMB 2,980,000 and NTD Nil (2006: RMB 740,000 and NTD 39,000) are included in trade
receivables for the Group.
Receivables that are past due but not impaired
The Group and Company has trade receivables amounting to $4,040,074 (2006: $4,506,844) and $Nil (2006: $Nil)
respectively, that are past due at the balance sheet date but not impaired. These receivables are unsecured and the
analysis of their aging at the balance sheet date is as follows:
Group
Trade receivables past due:
Lesser than 30 days
30 to 60 days
61-90 days
91-120 days
More than 120 days
74
Company
2007
$
2006
$
2007
$
2006
$
2,417,950
836,313
406,909
96,582
282,320
2,869,180
860,392
412,661
212,911
151,700
–
–
–
–
–
–
–
–
–
–
4,040,074
4,506,844
–
–
31 December 2007
20.
Trade receivables (Cont’d)
Receivables that are impaired
The Group’s trade receivables that are impaired at the balance sheet date and the movement of the allowance
accounts used to record the impairment are as follows:
Group
Collectively impaired
2007
$
Individually impaired
2006
$
2007
$
2006
$
–
–
113,640
(113,640)
38,147
(38,147)
–
–
–
–
–
–
113,640
–
(113,640)
113,640
–
–
–
38,147
–
–
–
–
–
113,640
38,147
–
Trade receivables – nominal amounts
Less: Allowance for impairment
Movement in allowance accounts:
At 1 January
Charge for the year
Attributable to discontinued operations
At 31 December
Trade receivables that are individually determined to be impaired at the balance sheet date relate to debtors that are
in significant financial difficulties and have defaulted on payments. These receivables are not secured by any collateral
or credit enhancements.
21.
Group
Deposits
Other receivables
Prepayments
22.
Company
2007
$
2006
$
2007
$
2006
$
1,183,409
948,953
77,983
2,112,679
554,083
171,053
20,000
676,532
4,250
–
–
–
2,210,345
2,837,815
700,782
–
Due from/(to) subsidiaries / minority shareholders of subsidiary (trade/ non-trade)
Due to director of a subsidiary (non-trade)
Except as disclosed below, these balances are unsecured, interest-free and are repayable on demand.
Due from subsidiary (non-trade)
An amount of $400,000 (2006: $Nil) due from a subsidiary is unsecured, bears interest at 3% per annum (2006: Nil)
and is repayable on 31 January 2008.
ANNUAL REPORT 2007
75
31 December 2007
23.
Group and Company
Due from associate
Allowance for doubtful debts
2007
$
2006
$
–
–
110,294
(109,766)
–
528
The full amount of amount due from associate has been written off in the financial year ended 31 December 2007.
24.
Fixed deposits
Group
Secured
Unsecured
Company
2007
$
2006
$
2007
$
2006
$
9,750,774
11,749,326
1,647,507
30,451
–
9,242,046
–
–
21,500,100
1,677,958
9,242,046
–
Secured fixed deposits have been pledged with banks to secure performance guarantees, bank loans, bills payable
and bank overdrafts granted by the banks.
Fixed deposits are made for varying periods of between 7 days to 12 months, depending on the immediate cash
requirements of the Group, and earn interests at the respective short-term deposit rates, ranging from 0.95% to
3.90% (2006: 1.60% to 3.90%) per annum.
25.
Trade payables and bills payable
Trade payables
Trade payables are non-interest bearing and are normally settled on 30- 90 day terms. As at 31 December 2007,
RMB 2,038,000 and NTD Nil (2006: RMB 1,444,000 and NTD 367,000) are included in trade payables for the
Group.
Bills payable
The interest rate of bills payable ranges from 3.89% to 5.00% (2006: 4.75% to 7.50%) per annum. These bills
mature within 1 to 4 months from the year end.
76
31 December 2007
26.
Group
Accrued operating expenses
Customers’ deposits
Other payables
Provisions
27.
Company
2007
$
2006
$
2007
$
2006
$
428,166
22,208
379,854
378,016
1,366,092
2,246,788
1,149,675
–
5,979
–
6,235
269,449
210,455
–
147,597
–
1,208,244
4,762,555
281,663
358,052
Deferred rental
Group and Company
2007
$
2006
$
Cost
At 1 January
Additions
–
1,398,000
–
–
At 31 December
1,398,000
–
Accumulated Amortization
At 1 January
Amortisation during the year
–
(166,429)
–
–
At 31 December
(166,429)
–
Net Book Value
Current
Non-current
199,714
1,031,857
–
–
At 31 December
1,231,571
–
During the year, a subsidiary in the Group entered into an agreement for sale and leaseback of a property. Deferred
rental relates to the difference between the selling price and the fair value of the property. This will be amortised over
the lease term of the property of 7 years on a straight line basis.
28.
Lease obligations
Group
Minimum
lease
payments
Interest
Present
value of
payments
$
$
$
2007
1 year to 5 years
Later than 5 years
184,740
57,598
(29,757)
(12,600)
154,983
44,998
Not later than 1 year
242,338
82,605
(42,357)
(13,003)
199,981
69,602
324,943
(55,360)
269,583
ANNUAL REPORT 2007
77
31 December 2007
28.
Lease obligations (Cont’d)
Group
Minimum
lease
payments
Interest
Present
value of
payments
$
$
$
2006
1 year to 5 years
Later than 5 years
349,027
–
(54,175)
–
294,852
–
Not later than 1 year
349,027
142,895
(54,175)
(24,052)
294,852
118,843
491,922
(78,227)
413,695
Obligations under finance lease are secured by a charge over the leased asset (Note 12).
Lease terms range from 3 to 7 years with options to purchase at the end of the lease term. Lease terms do not
contain restrictions concerning dividends, additional debt or further leasing. The average discount rate implicit in the
Company’s and Group’s lease obligations are 3.3% to 6.5% (2006: 1.1% to 6.8%) per annum respectively.
29.
Term loans
Group
Company
2007
$
2006
$
2007
$
2006
$
224,004
1,082,662
2,759,215
7,257,974
–
–
1,701,615
–
1,306,666
10,017,189
–
1,701,615
Term loans – secured
Due within 1 year
Due after 1 year
The SGD secured term loans comprise:
(a)
a loan which bears interest at 2.30% (2006 : 4.19%) per annum, repayable in 120 equal monthly instalments
commencing October 2003. The loan is secured by a first legal mortgage on the subsidiary’s building and a
corporate guarantee from a subsidiary.
(b)
a loan which bears interest at 5.00% (2006 : 5.00%) per annum, repayable over 84 equal monthly instalments,
commencing August 2006. The loan is secured by a fixed and floating charge on all the subsidiary’s assets
and undertakings and a first legal mortgage on the subsidiary’s factory and building. This loan has been fully
repaid in 2007.
(c)
a loan repayable in 100 equal monthly instalments commencing February 2002. Interest is charged at 5.50%
(2006 : 5.12%) per annum. This loan is secured by a first legal mortgage on a subsidiary’s building and an
unconditional continuing corporate guarantee by a subsidiary.
(d)
a loan which bears interest at Nil% (2006 : 5.36%) per annum, repayable over 48 equal monthly instalments,
commencing April 2004. The loan is secured by a fixed and floating charge on all the subsidiary’s assets and
undertakings and a first legal mortgage on the subsidiary’s factory and building.
(e)
a short term loan which bears interest at 5.50% (2006 : 5.50%) per annum. The loan is repayable on demand
and is secured over the quoted equity investments.
Loans (c) to (e) forms part of the discontinued operations in Note 10.
78
31 December 2007
30.
There are no derivative financial instruments as at 31 December 2007.
An interest rate swap was used in the financial year ended 31 December 2006 to hedge cash flow interest rate risk
arising from a floating rate SGD bank loan.
31.
Bank overdrafts
Bank overdrafts are secured by a first legal mortgage on a leasehold building, pledge of fixed deposits and a
corporate guarantee from the holding company. Bank overdrafts bear interest of 3.7% to 5.5% (2006 : 4.25% to
5.00%) per annum.
32.
Share capital
Group and Company
2007
No. of shares
2006
No. of shares
2007
$
2006
$
At 1 January
Issue of new shares
– Issuance of ordinary shares for
quoted equity investment
– Issuance of ordinary shares for
cash
– Rights cum warrants issue
– Exercise of warrants
Transfer of share premium reserve
to share capital
110,993,254
110,993,254
17,764,108
16,648,988
10,310,849
–
2,609,676
–
27,000,000
148,304,103
6,346,494
–
–
–
8,100,000
6,228,771
507,720
–
–
–
–
–
–
1,115,120
At 31 December
302,954,700
110,993,254
35,210,275
17,764,108
Issued and fully paid
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.
In accordance with the Companies (Amendment) Act 2005, on 30 January 2006, the shares of the Company ceased
to have a par value and the amount standing in the share premium reserve became part of the Company’s share
capital.
During the financial year, the Company issued the following shares:
–
10,310,849 shares at $0.2532 for the purchase of quoted equity investment;
–
27,000,000 shares at $0.30 for cash;
–
148,304,103 rights shares with 148,304,103 detachable warrants from the reinvestment of a special interim
dividend (Note 34) by equity holders. The gross proceeds of $6,228,771 was credited to share capital; and
–
6,346,494 shares were issued at $0.08 each upon the exercise of warrants.
Each warrant carries the right to subscribe for one new share in the Company at an exercise price of $0.08 for each
new share.
As at the end of the financial year, there were 141,957,609 warrants outstanding of which a further 1,428,500
warrants were exercised for issuance of new shares as of 27 February 2008.
ANNUAL REPORT 2007
79
31 December 2007
33.
Other reserves
Group
Company
2007
$
2006
$
2007
$
2006
$
Foreign currency translation reserve
Fair value adjustment reserve
General reserve
606,409
(19,588,749)
135,000
575,247
1,640,324
135,000
–
(19,588,749)
135,000
–
1,640,324
135,000
Closing balance at 31 December
(18,847,340)
2,350,571
(19,453,749)
1,775,324
(a)
Foreign currency translation reserve
The foreign currency translation reserve is used to record exchange differences arising from the translation
of the financial statements of foreign operations whose functional currencies are different from that of the
Group’s presentation currency.
Group
(b)
Company
2007
$
2006
$
2007
$
2006
$
At 1 January
Net effect of exchange
differences
575,247
661,779
–
–
31,162
(86,532)
–
–
At 31 December
606,409
575,247
–
–
Fair value adjustment reserve
Fair value adjustment reserve records the cumulative fair value changes of available-for-sale financial assets
until they are derecognised or impaired.
Group
2007
$
(c)
Company
2006
$
2007
$
2006
$
At 1 January
Net (loss)/gain on fair value
changes during the year
1,640,324
–
1,640,324
–
(21,229,073)
1,640,324
(21,229,073)
1,640,324
At 31 December
(19,588,749)
1,640,324
(19,588,749)
1,640,324
General reserve
General reserve records reduction in other reserve accounts upon expiry of the balances.
Group
80
Company
2007
$
2006
$
2007
$
2006
$
At 1 January
Expiry of share-options
135,000
–
–
135,000
135,000
–
–
135,000
At 31 December
135,000
135,000
135,000
135,000
31 December 2007
34.
Dividends
Group and Company
2007
$
2006
$
Declared and paid during the year
Dividends on ordinary shares
– Interim dividend for 2007: 5.1 cents (2006: Nil) per share less tax of 18%
(2006: 20%) – Note 32
– Final dividend for 2006: 1.0 cent (2005: 1.0 cent) per share less tax of 18%
(2006: 20%)
6,228,771
–
1,216,093
887,946
7,444,864
887,946
6,059,094
1,514,774
–
–
–
887,946
7,573,868
887,946
Proposed but not recognised as a liability as at 31 December
Dividends on ordinary shares, subject to shareholders’ approval at the AGM :
– Special exempt (one-tier) dividend for 2007: 2.0 cents (2006: Nil) per share
– Final exempt (one-tier) dividend for 2007: 0.5 cent (2006: Nil) per share
– Final dividend for 2007: Nil (2006: 1.0 cent) per share less tax of 20%
35.
Group and Company
2007
$
2006
$
Fixed deposits (unsecured) – Note 24
Bank overdrafts
3,072,586
11,749,326
(1,436,257)
2,157,272
30,451
(5,824,866)
13,385,655
(3,637,143)
Bank overdrafts are included in the determination of cash and cash equivalents because they form an integral part of
the Group’s cash management.
ANNUAL REPORT 2007
81
31 December 2007
36.
Related party information
(a)
Sale and purchase of goods and services
In addition to the related party information disclosed elsewhere in the financial statements, significant
transactions with related parties on terms agreed between the parties, were as follows:
Group
2007
$
Income
Dividend income from
Subsidiaries
Management income from
subsidiaries
Management income from a
company related to a director
Interest income received from
a subsidiary
Expense
Rental of office premise from
a subsidiary
Company
2006
$
2007
$
2006
$
–
–
–
898,639
–
–
–
1,285,593
15,000
–
15,000
–
–
–
2,000
–
–
–
15,000
–
Company related to a director
One of the directors of the Company holds 50% (2006: 50%) equity interest in Premium Capital Pte Ltd
(PCPL). During the financial year, the Company provided management services to PCPL. No balance with
PCPL was outstanding at the balance sheet date (2006: Nil).
(b)
Compensation of key management personnel
Group and Company
2007
$
2006
$
Short-term employee benefits
Central Provident Fund contributions
1,212,768
53,846
963,099
51,611
Total compensation paid to key management personnel
1,266,614
1,014,710
782,775
483,839
624,595
390,115
1,266,614
1,014,710
Comprise amounts paid to :
– Directors of the Company
– Other key management personnel
The remuneration of key management personnel are determined by the remuneration committee having
regard to the performance of individuals and market trends.
Directors’ interests in an employee share option plan
No options were granted during the year ended 31 December 2007.
82
31 December 2007
37.
Commitments
(a)
Operating lease commitments – as lessee
In addition to the land occupancy rights disclosed in Note 13, the Group has entered into commercial leases
for a building (used for office premise and showrooms) and retail outlets. These leases have an average tenure
of between 1 to 7 years with options for renewal. The Group is not restricted from subleasing the property
and retail outlets to third parties.
Future minimum lease payments payable under non-cancellable operating leases as at 31 December are as
follows:
Group and Company
– Not later than 1 year
– 1 year through 5 years
– Later than 5 years
(b)
2007
$
2006
$
3,368,000
12,334,000
2,056,000
4,230,000
5,568,000
2,576,000
17,758,000
12,374,000
Operating lease commitments – as lessor
The Group has entered into commercial leases on a lease property. These non-cancellable leases have
remaining non-cancellable lease terms of 1 to 6 years.
Future minimum rental receivables under non-cancellable operating leases as at 31 December are as follows:
Group and Company
– Not later than 1 year
– 1 year through 5 years
– later than 5 years
38.
2007
$
2006
$
1,307,000
3,139,000
636,000
688,000
166,000
–
5,082,000
854,000
Fair value of financial instruments
The fair value of financial assets and liabilities by classes that are not carried at fair value and whose carrying amounts
are not reasonable approximation of fair value are as follows :
Group
2007
2006
Carrying
amount
Fair value
Carrying
amount
Fair value
$
$
$
$
(269,583)
(286,019)
(413,695)
(445,433)
Financial liabilities
Obligation under finance leases
ANNUAL REPORT 2007
83
31 December 2007
38.
Fair value of financial instruments (Cont’d)
Determination of fair value
Quoted equity investments (Note 17)
Fair value is determined directly by reference to their published market bid price at the balance sheet date.
Due from subsidiaries (non-current, non-trade) (Note 18)
The balance is stated at cost. It is long term, interest-free and given to subsidiaries as quasi-equity. The fair value is
not determinable since it has no fixed repayment terms.
Derivative financial instrument (Note 30)
The fair value of derivative financial instrument is calculated by reference to derivative financial instruments with similar
maturity profiles.
Cash and bank balances (Note 35) and other current financial assets and liabilities
The carrying amounts of these financial assets and liabilities are reasonable approximation of fair values, either due to
their short-term nature or that they are floating rate instruments that are repriced to market interest rates on or near
the balance sheet date.
39.
Classification of financial assets and liabilities
Group
Company
2007
$
2006
$
2007
$
2006
$
3,616,323
3,960,016
820,820
–
–
107,350
–
–
–
4,078,221
1,183,409
948,953
–
–
–
21,500,100
–
4,506,844
2,112,679
554,083
–
–
528
1,677,958
2,360,000
43,028
20,000
676,532
–
1,230,938
–
9,242,046
600,000
–
–
–
672,458
6,368,539
–
–
3,072,586
2,157,272
988,814
141,383
30,783,269
11,009,364
14,561,358
7,782,380
Fair value through profit or loss
Assets
Liabilities
Loans and receivables
Trade receivables
Deposits
Other receivables
Due from subsidiaries (trade)
Fixed deposits
Cash and cash balances
84
31 December 2007
39.
Classification of financial assets and liabilities (Cont’d)
Group
Company
2007
$
2006
$
2007
$
2006
$
3,198,484
580,032
379,854
421,166
269,583
1,306,666
5,070,403
2,594,398
1,149,675
1,366,092
413,695
10,017,189
–
–
6,235
5,979
–
–
–
–
147,597
210,455
–
1,701,615
200,000
400,000
–
–
–
–
1,436,257
436,317
–
5,824,866
–
4,405,223
–
–
2,182,507
–
7,792,042
27,272,635
2,417,437
4,242,174
26,264,832
6,094,285
26,264,832
6,094,285
Financial liabilities at amortised
cost
Trade payables
Bills payable
Other payables
Accrued operating expenses
Lease obligations
Term loans
Due to a director of a subsidiary
(non-trade)
Due to minority shareholders of
subsidiary (non-trade)
Due to subsidiary (non-trade)
Bank overdrafts
40.
Financial risk management objectives and policies
The Group and the Company is exposed to financial risks arising from its operations and the use of financial
instruments. The key financial risks include credit risk, liquidity risk, interest rate risk, foreign currency risk and market
price risk. The Board of directors reviews and agrees policies and procedures for the management of these risks,
which are executed by the Chief Executive Officer, Executive Director, Director of Corporate Planning and Financial
Controller. The Audit Committee provides independent oversight to the effectiveness of the risk management
process.
The Group enters into derivative transactions, including principally interest rate swaps. The purpose is to manage the
interest rate risks arising from the Group’s operations and its sources of finance. The Group does not apply hedge
accounting.
The following sections provide details regarding the Group’s and Company’s exposure to the above-mentioned
financial risks and the objectives, policies and processes for the management of these risks.
(a)
Credit risk
Credit risk is the risk of loss that may arise on outstanding financial instruments should a counterparty default
on its obligations. The Group’s and the Company’s exposure to credit risk arises primarily from trade and
other receivables. For other financial assets (including quoted equity investments, cash and cash equivalents
and derivative financial instrument), the Group and the Company minimise credit risk by dealing exclusively
with high credit rating counterparties.
The Group’s objective is to seek continual revenue growth while minimising losses incurred due to increased
credit risk exposure. The Group trades only with recognised and creditworthy third parties. It is the Group’s
policy that all customers who wish to trade on credit terms are subject to credit verification procedures. In
addition, receivable balances are monitored on an ongoing basis with the result that the Group’s exposure to
bad debts is not significant. For transactions that do not occur in the country of the relevant operating unit,
the Group does not offer credit terms without the approval of the Operations Manager.
ANNUAL REPORT 2007
85
31 December 2007
40.
Financial risk management objectives and policies (Cont’d)
(a)
Credit risk (Cont’d)
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 amount of each class of financial assets recognised in the balance sheets.
Financial assets that are neither past due nor impaired
Trade and other receivables that are neither past due nor impaired are creditworthy debtors with good
payment record with the Group. Cash and cash equivalents are placed with reputable financial institutions.
Financial assets that are either past due or impaired
Information regarding financial assets that are either past due or impaired is disclosed in Note 20 (Trade
receivables).
Credit risk concentration profile
The Group determines concentrations of credit risk by monitoring the country and industry sector profile of
its trade receivables on an on-going basis. The credit risk concentration profile of the Group’s trade at the
balance sheet date is as follows:
2007
$
2006
% of total
$
% of total
Group
By country:
Singapore
People’s Republic of China
Taiwan
By industry sectors:
Furniture
Beauty
Others
3,488,131
590,090
–
86%
14%
–
4,321,476
146,487
38,881
96%
3%
1%
4,078,221
100%
4,506,844
100%
590,090
3,445,103
43,028
14%
85%
1%
1,138,667
3,368,177
–
25%
75%
–
4,078,221
100%
4,506,844
100%
The Group has no significant concentration of credit risk. 100% (2006: Nil) of trade receivables for the
Company is due from one customer.
(b)
Liquidity risk
Liquidity risk is the risk that the Group or the Company will encounter difficulty in meeting financial 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 financial assets and liabilities. The Group’s and the Company’s objective is to
maintain a balance between continuity of funding and flexibility through the use of stand-by credit facilities.
The Group’s and the Company’s liquidity risk management policy is that to maintain sufficient liquid financial
assets and stand-by credit facilities with their different bankers. At the balance sheet date, approximately
17% (2006: 28%) of the Group’s term loans (Note 29) will mature in less than one year based on the carrying
amount reflected in the financial statements.
86
31 December 2007
40.
(b)
Liquidity risk (Cont’d)
The table below summarises the maturity profile of the Group’s and the Company’s financial liabilities at the
balance sheet date based on contractual undiscounted payments.
2007
Group
Trade payables
Bills payable
Other payables
Lease obligations
Term loans
Due to a director of a
Due to minority
shareholders of
2006
1 year
or less
1 to 5
years
Total
1 year
or less
1 to 5
years
Total
$
$
$
$
$
$
3,198,484
580,032
379,854
69,602
224,004
–
–
–
199,981
1,082,662
3,198,484
580,032
379,854
269,583
1,306,666
5,070,403
2,594,398
1,149,675
118,843
2,759,215
–
–
–
294,852
7,257,974
5,070,403
2,594,398
1,149,675
413,695
10,017,189
200,000
–
200,000
400,000
–
400,000
–
–
–
436,317
–
436,317
4,651,976
1,282,643
5,934,619
12,528,851
7,552,826
20,081,677
6,235
–
–
–
6,235
–
147,597
1,701,615
–
–
147,597
1,701,615
4,405,223
–
4,405,223
2,182,507
–
2,182,507
4,411,458
–
4,411,458
4,031,719
–
4,031,719
Company
Other payables
Term loans
Due to subsidiary
(non-trade)
(c)
Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of the Group’s and the Company’s financial
instruments will fluctuate 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 and interest-bearing loans given
to a subsidiary.
The Group’s policy is to manage interest cost using a mix of fixed and floating rate debts. To manage this mix
in a cost-efficient manner, the Group enters into interest rate swaps. At the balance sheet date, approximately
Nil (2006: 100%) of the Group’s borrowings are at fixed rates of interest.
Sensitivity analysis for interest rate risk
At the balance sheet date, if SGD interest rates had been 75 (2006: 75) basis points lower/higher with all
other variables held constant, the Group’s profit net of tax would have been $25,000 (2006: $138,000) higher/
lower, arising mainly as a result of lower/higher interest expense on floating rate loans and borrowings.
ANNUAL REPORT 2007
87
31 December 2007
40.
(d)
Foreign currency risk
The Group has transactional currency exposures arising from purchases that are denominated in a currency
other than the respective functional currencies of Group entities, primarily SGD and Renminbi (RMB). The
foreign currencies in which these transactions are denominated are mainly U.S Dollars (USD) and EURO.
Approximately 8% (2006: 8%) of costs are not denominated in the respective functional currencies of the
Group entities.
The Group also hold cash and cash equivalents denominated in foreign currencies for working capital
purposes. At the balance sheet date, such foreign currency balances (mainly in RMB) amount to $84,000.
It is not the Group’s policy to enter into derivative forward foreign exchange contracts for hedging and
speculative purposes.
The Group is also exposed to currency translation risk arising from its net investments in foreign operations,
namely the People’s Republic of China (“PRC”). The Group’s net investments in PRC are not hedged as
currency positions RMB are considered to be long-term in nature.
Sensitivity analysis for foreign currency risk
The following table demonstrates the sensitivity to a reasonably possible change in the RMB exchange rates
(against SGD), with all other variables held constant, of the Group’s profit net of tax and equity.
2007
RMB – strengthened 10% (2006: 10%)
– weakened 10% (2006: 10%)
(e)
2006
Profit net
of tax
Equity
Profit net
of tax
Equity
$
$
$
$
59,710
(59,710)
175,694
(175,694)
18,740
(18,740)
235,395
(235,395)
Market price risk
Market price risk is the risk that the fair value or future cash flows of the Group’s and Company’s financial
instruments will fluctuate 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 investments. These
investments are quoted on the SGX-ST in Singapore and the Hang Seng Index in Hong Kong and are
classified as held for trading or available-for-sale financial assets.
The Group’s objective is to manage investment returns and equity price risk using a mix of investment grade
shares with steady dividend yield and non-investment grade shares with higher volatility. The Group’s policy
is to limit its interest in the latter type of investments to 30% of its entire equity portfolio. Any deviation from
this policy is required to be approved by the CEO and Audit Committee. At the balance sheet date, 8%
(2006: 54%) of the Group’s equity portfolio consist of non-investment grade shares of companies operating
in Singapore and Hong Kong, while the remaining portion of the equity portfolio comprise investment grade
shares included in the Straits Times Index (STI).
Sensitivity analysis for equity price risk
At the balance sheet date, if the STI had been 2% (2006: 2%) higher/lower with all other variables held
constant, the Group’s profit net of tax would have been $76,000 (2006: $107,000) higher/lower, arising as a
result of higher/lower fair value gains on held for trading investments in equity instruments, and the Group’s
other reserve in equity would have been $917,000 (2006: $89,000) higher/lower, arising as a result of an
increase/decrease in the fair value of equity instruments classified as available-for-sale.
88
31 December 2007
41.
Capital management
The primary objective of the Group’s capital management is to ensure that it maintains a strong credit rating and
healthy capital ratios in order to support its business and maximise shareholder value.
The Group manages its capital structure and makes adjustments to it, in light of changes in economic conditions. To
maintain or adjust the capital structure, the Group may adjust the dividend payment to shareholders, return capital to
shareholders or issue new shares. No changes were made in the objectives, policies or processes during the years
ended 31 December 2007 and 31 December 2006.
The Group monitors capital using a gearing ratio, which is total debt divided by total capital plus total debt. The
Group’s policy is to keep the gearing ratio between 30% and 60%. The Group includes within total debt, loans and
borrowings, trade and other payables and other liabilities. Capital includes equity attributable to the equity holders of
the parent less the fair value adjustment reserve.
Group
2007
$
2006
$
5,934,619
20,081,677
Equity attributable to the equity holders of the parent
Add/(less): – Fair value adjustment reserve (Note 33(b))
59,476,955
19,588,749
24,980,273
(1,640,324)
Total capital
79,065,704
23,339,949
Capital and total debt
85,000,323
43,421,626
7%
46%
Total debt (Note 39(b))
Gearing ratio
42.
Group segmental information
(a)
Analysis by Business Segments
The Group has one main operating division, namely, Beauty.
Other operations comprise corporate division and includes dividend income, income from trading of quoted
equity investments and management fee.
ANNUAL REPORT 2007
89
31 December 2007
42.
Group segmental information (Cont’d)
(a)
Analysis by Business Segments (Cont’d)
Inter-segment pricing is on an arm’s length basis.
Beauty
Others
Elimination
Total
$
$
$
$
37,599,737
3,372,787
16,670,774
286,670
2007
Turnover
External sales
Inter-segment sales
–
(3,659,457)
Total sales
(Loss)/profit from operations
Gain on disposal of property, plant
and equipment
Finance expenses
Interest income
Share of associate results
54,270,511
(1,652,808)
15,576,000
38,988,215
–
(4,618,142)
–
32,717,265
15,576,000
(240,493)
212,003
–
(160,681)
150,510
18,908
–
(2,000)
–
(401,174)
360,513
18,908
Profit before tax
Tax
48,271,512
(2,170,144)
Net profit for the year from continuing
operations
Net loss for the year from discontinued
operations
46,101,368
(506,448)
Profit for the year
Assets
Liabilities
Capital expenditure
Depreciation and amortisation
90
54,270,511
–
45,594,920
31,494,881
(12,601,357)
341,645
585,354
62,805,243
(8,514,871)
363,061
138,591
(22,610,354)
9,878,477
–
–
71,689,770
(11,237,751)
704,706
723,945
31 December 2007
42.
Group segmental information (Cont’d)
(a)
Analysis by Business Segments (Cont’d)
Beauty
Others
Elimination
Total
$
$
$
$
2006
Turnover
External sales
Inter-segment sales
36,683,240
4,787,781
3,511,911
2,659,207
–
(7,446,988)
Total sales
40,195,151
(Loss)/profit from operations
Finance expenses
Interest income
Share of associate results
1,074,877
(505,563)
23,226
–
255,502
(133,052)
9,586
(16,094)
(627,446)
–
–
–
Profit before tax
Tax
702,933
(638,615)
32,812
(16,094)
81,036
(156,814)
Loss for the year from continuing operations
Profit from discontinued operations
(75,778)
3,234,907
Profit for the year
3,159,129
Assets
Liabilities
Capital expenditure
Depreciation and amortisation
Other significant non-cash expenses
(b)
40,195,151
–
21,334,293
(21,061,792)
8,244,836
500,575
–
50,933,422
(25,469,369)
318,368
340,163
100,000
(15,043,688)
15,398,978
–
–
–
57,224,027
(31,132,183)
8,563,204
840,738
100,000
Analysis by Geographical segments
Turnover is based on the location of customers. Assets and capital expenditures are based on the location of
those assets.
2007
Singapore
People’s Republic
of China
Taiwan
Others
43.
2006
Turnover
Assets
Capital
expenditure
Turnover
Assets
Capital
expenditure
$
$
$
$
$
$
50,328,472
69,428,171
613,962
36,208,265
53,460,637
761,693
2,835,290
531,302
575,447
2,261,599
–
–
90,744
–
–
3,172,806
814,080
–
2,675,652
1,087,738
–
79,045
–
–
54,270,511
71,689,770
704,706
40,195,151
57,224,027
840,738
Authorisation of financial statements
The financial statements for the year ended 31 December 2007 were authorised for issue in accordance with a
resolution of the directors on 27 February 2008.
ANNUAL REPORT 2007
91
STATISTICS OF SHAREHOLDINGS
as at 13 March 2008
Number of Shares
Class of Equity Shares
Voting Rights
305,625,200
Ordinary
On show of hands : one vote for each member
On a poll : one vote for each ordinary share
ANALYSIS OF SHAREHOLDINGS
Range of Shareholdings
1 – 999
No. of Shareholders
59
%
6.74
No. of Shares
20,119
%
0.01
1,000 – 10,000
302
34.47
1,749,000
0.57
10,001 – 1,000,000
492
56.16
31,545,645
10.32
23
2.63
272,310,436
89.10
876
100
305,625,200
100.00
1,000,001 and above
Based on information provided to the Company as at 13 March 2008, approximately 23.12% of the issued ordinary shares of the
Company is held by the public, and therefore, Rule 723 of the Listing Manual is complied with.
TOP 20 SHAREHOLDERS LIST AS AT 13 MARCH 2008
Name
No. of shares held
%
Oei Hong Leong Foundation Pte Ltd
74,621,698
24.42
UOB Kay Hian Pte Ltd
31,843,000
10.42
Mayban Nominees (S) Pte Ltd
19,885,750
6.51
SBS Nominees Pte Ltd
19,250,000
6.30
Singapore Nominees Pte Ltd
15,688,000
5.13
Chua Swee Wah
15,564,616
5.09
RHB Bank Nominees Pte Ltd
13,000,000
4.25
Lee Kek Choo
11,652,984
3.81
Kim Eng Securities Pte. Ltd.
10,135,500
3.32
Hong Leong Finance Nominees Pte Ltd
8,929,000
2.92
United Overseas Bank Nominees Pte Ltd
8,229,750
2.69
Citibank Nominees Singapore Pte Ltd
8,127,611
2.66
Corporate Bridge Limited
7,116,000
2.33
Toh Soon Huat
6,690,990
2.19
Lim Andy
5,460,000
1.79
Teo Ngiang Heng
3,520,000
1.15
Lee Lai Chuan
3,362,082
1.10
Chan Lay May
2,614,000
0.86
DBS Nominees Pte Ltd
1,712,762
0.56
Chua Geok Lin
1,500,500
0.49
268,904,243
87.99
92
STATISTICS OF SHAREHOLDINGS
as at 13 March 2008
SUBSTANTIAL SHAREHOLDERS AS AT 13 MARCH 2008
as recorded in the Register of Substantial Shareholders
Name of Substantial Shareholder
Toh Soon Huat (1)
Lee Kek Choo (2)
Sure World Capital Limited
Ong Soon Liong @ Ong Soon Chong (3)
Chua Swee Wah
Number of shares
registered in the name
of substantial
shareholder
Number of shares in
which substantial
shareholder is deemed
to have an interest
Total
%
6,690,990
11,652,984
74,621,698
28,558,000
–
15,564,616
87,417,234
82,455,240
–
–
15,688,000
–
94,108,224
94,108,224
74,621,698
28,558,000
15,688,000
15,564,616
30.79
30.79
24.42
9.34
5.13
5.09
Notes:
(1)
Toh Soon Huat is deemed to have an interest in the shares held by his spouse Lee Kek Choo. In addition, Toh Soon Huat’s deemed
interest of 70,888,500 shares arises from (other than shares held by Lee Kek Choo) 19,250,000 shares, 7,500,000 shares, 8,354,500
shares, 18,773,000 shares, 13,000,000 shares, 3,000,000 shares and 1,011,000 shares held by Singapura Building Society Limited,
United Overseas Bank Nominees (Private) Limited, Kim Eng Securities Pte Ltd, Mayban Nominees Pte Ltd, RHB Bank Nominees Pte Ltd,
UOB Kay Hian Pte Ltd and Hong Leong Finance Nominees Pte Ltd as his nominees, respectively.
(2)
Lee Kek Choo is deemed to have an interest in the shares held by Toh Soon Huat. Lee Kek Choo’s deemed interest arises from (other than
shares held by Toh Soon Huat) 4,875,750 shares held by Hong Leong Finance Nominees Pte Ltd as her nominee.
(3)
The deemed interest of Ong Soon Liong @ Ong Soon Chong arises from Shares held by Singapore Nominees Pte. Ltd.
ANNUAL REPORT 2007
93
STATISTICS OF WARRANTHOLDINGS
as at 13 March 2008
DISTRIBUTION OF WARRANTHOLDINGS
Range of Warrantholdings
1 – 999
No. of Warrantholders
%
No. of Warrants
%
33
7.45
22,465
0.01
1,000 – 10,000
173
39.05
1,039,324
0.75
10,001 – 1,000,000
221
48.89
13,076,860
9.39
26
3.61
125,148,460
89.85
443
100.00
139,287,109
100.00
No. of warrants
%
1,000,001 and above
TOP 20 WARRANTHOLDERS LIST AS AT 13 MARCH 2008
Name
37,310,849
26.79
UOB Kay Hian Pte Ltd
16,165,850
11.61
SBS Nominees Pte Ltd
9,625,000
6.91
Mayban Nominees (S) Pte Ltd
9,456,000
6.79
Chua Swee Wah
7,782,308
5.59
Singapore Nominees Pte Ltd
7,598,000
5.45
RHB Bank Nominees Pte Ltd
6,500,000
4.67
Lee Kek Choo
5,826,492
4.18
Kim Eng Securities Pte. Ltd.
4,476,050
3.21
United Overseas Bank Nominees Pte Ltd
4,038,000
2.90
Corporate Bridge Limited
3,583,000
2.57
Hong Leong Finance Nominees Pte Ltd
3,320,375
2.38
Toh Soon Huat
3,295,495
2.37
Lim Andy
2,730,000
1.96
Teo Ngiang Heng
1,760,000
1.26
Lee Lai Chuan
1,681,041
1.21
Phillip Securities Pte Ltd
967,824
0.69
Chong Hon Kuan Ivan
812,762
0.58
Ng Ser Miang
525,000
0.38
Ng Chze Keong Richard
436,000
0.31
127,890,046
91.81
94
NOTICE OF ANNUAL GENERAL MEETING
Registration No: 199307300M
(Incorporated in Singapore)
NOTICE IS HEREBY GIVEN that the Annual General Meeting of the Company will be held at 521 Bukit Batok Street 23, Level 3,
Singapore 659544 on Monday, 28 April 2008 at 10:30 a.m. to transact the following businesses:
ORDINARY BUSINESS:
1.
To receive and consider the Directors’ Report and Audited Accounts for the financial year ended 31
December 2007 and the Auditors’ Report thereon.
Resolution 1
2.
To declare a final exempt (one-tier) dividend of 0.5 cents per ordinary share for the financial year
ended 31 December 2007.
Resolution 2
3.
To declare a special exempt (one-tier) dividend of 2 cents per ordinary share for the financial year
ended 31 December 2007.
Resolution 3
4.
To re-elect Mr Chong Hon Kuan Ivan, who is retiring by rotation in accordance with Article 104 of the
Company’s Articles of Association, as Director of the Company.
Resolution 4
[Mr Chong Hon Kuan Ivan will, upon re-election as a Director of the Company, remain as member
of the Audit Committee and will be considered independent for the purposes of Rule 704(8) of the
Listing Manual of The Singapore Exchange Securities Trading Limited.]
5.
To re-elect Mr Manohar P. Sabnani, who is retiring by rotation in accordance with Article 104 of the
Company’s Articles of Association, as Director of the Company.
Resolution 5
6.
To approve the Directors’ fees of S$109,667 for the financial year ended 31 December 2007. (2006:
S$110,000)
Resolution 6
7.
To re-appoint Messrs Ernst & Young as Auditors and to authorise the Directors to fix their
remuneration.
Resolution 7
SPECIAL BUSINESS :
To consider and, if thought fit, to pass with or without any modifications, the following resolutions as
Ordinary Resolutions:
8.
Ordinary Resolution : Authority to allot and issue shares up to fifty per centum (50%) of the
total number of issued shares
“That pursuant to Section 161 of the Companies Act, Cap. 50. and subject to Rule 806 of the
Listing Manual of the Singapore Exchange Securities Trading Limited (“SGX-ST”), authority be and
is hereby given to the Directors of the Company to allot and issue shares and convertible securities
in the capital of the Company (whether by way of rights, bonus or otherwise) at any time and upon
such terms and conditions and for such purposes and to such persons as the Directors may in their
absolute discretion deem fit provided always that the aggregate number of shares and convertible
securities to be issued pursuant to this Resolution does not exceed 50% of the total number of issued
shares excluding treasury shares, of which the aggregate number of shares and convertible securities
to be issued other than on a pro rata basis to existing shareholders of the Company does not exceed
20% of the total number of issued shares excluding treasury shares (the percentage of the total
number of issued shares excluding treasury shares shall be based on the Company’s total number
of issued shares excluding treasury shares at the time this Resolution is passed after adjusting for
Resolution 8
ANNUAL REPORT 2007
95
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 this Resolution is passed and
any subsequent bonus issue, consolidation or sub-division of shares) and unless revoked or varied by
the Company in general meeting, such authority shall continue in force until the conclusion of the next
Annual General Meeting or the expiration of the period within which the next Annual General Meeting
of the Company is required by law to be held, whichever is the earlier.”
[See Explanatory Note (i)]
9.
Ordinary Resolution : Authority to offer and grant options and to allot and issue shares
under The Novena Holdings Limited Share Option Scheme
“That authority be and is hereby given to the directors of the Company to offer and grant options
in accordance with the provisions of the The Novena Holdings Limited Share Option Scheme (the
“Scheme”) and to allot and issue from time to time such number of shares in the Company as may
be required to be issued pursuant to the exercise of the options under the Scheme, provided that the
aggregate number of shares to be issued pursuant to the Scheme shall not exceed 15% of the issued
shares in the capital of the Company from time to time.”
[See Explanatory Note (ii)].
10.
Resolution 9
To transact any other business which may be properly transacted at an Annual General Meeting.
Explanatory Notes:
(i)
Resolution 8, if passed, will empower the Directors from the date of the above Meeting until the date of the next Annual General Meeting,
to allot and issue shares and convertible securities in the Company. The number of shares, which the Directors may allot and issue under
this Resolution would not exceed 50% of the issued shares of the Company at the time of passing this Resolution. For allotment and issue
of shares and convertible securities other than on a pro-rata basis to all shareholders of the Company, the aggregate number of shares to
be allotted and issued shall not exceed 20% of the issued shares of the Company. This authority will, unless previously revoked or varied at
a general meeting, expire at the next Annual General Meeting.
(ii)
Resolution 9 is to authorise the Directors of the Company to offer and grant options under The Novena Holdings Limited Share Option
Scheme (the “Scheme”) and to allot and issue shares up to 15% of the Company’s issued shares pursuant to the exercise of the options.
96
NOTICE OF BOOKS CLOSURE
NOTICE IS HEREBY GIVEN that the Share Transfer Books and Register of Members of the Company will be closed on 9 May
2008, for the purpose of determining members’ entitlements to the final exempt (one-tier) dividend and special exempt (one-tier)
dividend (“the final and special dividends”) to be proposed at the Annual General Meeting of the Company to be held on 28 April
2008.
Duly completed registrable transfers in respect of the shares in the Company received up to the close of business at 5:00 p.m.
on 8 May 2008 by the Company’s Share Registrar, M & C Services Private Limited, 138 Robinson Road, #17-00 The Corporate
Office, Singapore 068906 will be registered to determine members’ entitlements to the final and special dividends. Members
whose Securities Accounts with The Central Depository (Pte) Ltd are credited with shares in the Company as at 5:00 p.m. on 8
May 2008 will be entitled to such proposed final and special dividends.
The proposed final and special dividends, if approved at the Annual General Meeting will be paid on 23 May 2008.
BY ORDER OF THE BOARD
Low Mei Mei Maureen
Company Secretary
Singapore
10 April 2008
Proxies :
1.
A member of the Company is entitled to attend and vote at the above Meeting and may appoint not more than two proxies to attend and
vote instead of him.
2.
Where a member appoints two proxies, he shall specify the proportion of this shareholding to be represented by each proxy in the
instrument appointing the proxies. A proxy need not be a member of the Company.
3.
If the member is a corporation, the instrument appointing the proxy must be under seal of the hand of an officer or attorney duly
authorised.
4.
The instrument appointing a proxy must be deposited at the Registered Office of the Company at 521 Bukit Batok Street 23, Level 3,
Singapore 659544 not less than 48 hours before the time appointed for holding the above Meeting.
ANNUAL REPORT 2007
97
This page has been intentionally left blank.
IMPORTANT:
Registration No: 199307300M
(Incorporated in Singapore)
1.
For investors who have used their CPF monies to buy the Company’s shares,
this Annual Report is forwarded to them at the request of their CPF Approved
Nominees and is sent solely FOR INFORMATION ONLY.
2.
This Proxy Form is not valid for use by CPF investors and shall be ineffective for
all intents and purposes if used or purported to be used by them.
PROXY FORM
I/We
of
being a member/members of Novena Holdings Limited (the “Company”) hereby appoint
Name
Address
NRIC/Passport
Number
Proportion of
Shareholdings (%)
Address
NRIC/Passport
Number
Proportion of
Shareholdings (%)
and/or (delete as appropriate)
Name
as my/our proxy/proxies to attend and to vote for me/us on my/our behalf and, if necessary, to demand a poll at the Annual
General Meeting of the Company to be held at 521 Bukit Batok Street 23, Level 3, Singapore 659544 on Monday, 28 April 2008
at 10:30 a.m. and at any adjournment thereof.
(Please indicate with an “X” in the spaces provided whether you wish your vote(s) to be cast for or against the resolutions as set
out in the Notice of Annual General Meeting. In the absence of specific directions, the proxy/proxies will vote or abstain as he/
they may think fit, as he/they will on any other matter arising at the Annual General Meeting.)
No.
Resolutions
For
Against
ORDINARY BUSINESS
1
To receive and consider Directors and Auditors’ Reports and Audited Accounts
2
To approve payment of a final exempt (one-tier) dividend of 0.5 cents per ordinary share.
3
To approve payment of a special exempt (one-tier) dividend of 2 cents per ordinary share.
4
To re-elect Director – Mr Chong Hon Kuan Ivan
5
To re-elect Director – Mr Manohar P. Sabnani
6
To approve the Directors’ fees of S$109,667 for the financial year ended 31 December
2007
7
To re-appoint Auditors and to authorise the Directors to fix their remuneration
SPECIAL BUSINESS
8
To authorise Directors to allot and issue shares and convertible securities pursuant to
Section 161 of the Companies Act, Chapter 50
9
To authorise Directors to offer and grant options and to issue shares under The Novena
Holdings Limited Share Option Scheme
Dated this
day of
2008
Total number of Shares held
Signature(s) of member(s) or common seal
IMPORTANT: PLEASE READ NOTES OVERLEAF
NOTES :
1.
Please insert the total number of shares held by you. If you have shares entered against your name in the Depository Register (as defined
in Section 130A of the Companies Act, Chapter 50), you should insert that number of shares. If you have shares registered in your name
in the Register of Members, you should insert that number of shares. If you have shares entered against your name in the Depository
Register and shares registered in your name in the Register of Members, you should insert the aggregate number of shares. If no number
is inserted, this form of proxy will be deemed to relate to all the shares held by you.
2.
A member of the Company entitled to attend and vote at a meeting of the Company is entitled to appoint not more than two proxies to
attend and vote on his behalf. A proxy need not be a member of the Company.
3.
Where a member appoints more than one proxy, he shall specify the proportion of his shareholding to be represented by each proxy.
4.
The instrument appointing a proxy or proxies must be under the hand of the appointor or his attorney duly authorised in writing. Where the
instrument appointing a proxy or proxies is executed by a corporation, it must be executed either under its common seal or under the hand
of its attorney or duly authorised officer.
5.
A corporation which is a member of the Company may authorise by resolution of its directors or other governing body such person as it
thinks fit to act as its representative at the Annual General Meeting, in accordance with its Articles of Association and Section 179 of the
Companies Act, Chapter 50.
6.
The instrument appointing a proxy or proxies, together with the power of attorney or other authority (if any) under which it is signed, or
notarially certified copy thereof, must be deposited at the registered office of the Company at 521 Bukit Batok Street 23, Level 3, Singapore
659544 not less than 48 hours before the time set for the Annual General Meeting.
7.
The Company shall be entitled to reject the instrument appointing a proxy or proxies if it is incomplete, improperly completed or illegible or
where the true intentions of the appointor are not ascertainable from the instructions of the appointor specified in the instrument appointing
a proxy or proxies. In addition, in the case of members of the Company whose shares are entered against their names in the Depository
Register, the Company may reject any instrument appointing a proxy or proxies lodged if such members are not shown to have shares
entered against their names in the Depository Register as at 48 hours before the time appointed for holding the Annual General Meeting as
certified by The Central Depository (Pte) Limited to the Company.
Thank you for your support
感谢您的支持

Novena Holdings Limited

Transcription

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