a Brand neW era - Pan Pacific Hotels Group

Transcription

Pan Pacific Hotels Group Limited
Annual Report 2010
A Brand
new era
Unleashing Our
Brand Potential
A new look for “Pan Pacific”
and “parkroyal”
G’day, Australia!
Upping our ante Down Under
Riding Waves in Bali
Relax and rejuvenate
at our newest resort
1
TABLE OF
contents
Our
Vision
Creating memorable
hotel experiences…
Our
Purpose
Snapshot
Great Brands, Great
Hotels, Great People,
Great Relationships!
Milestones
2010/11
Our
Values
A Note From
Pan Pacific
Hotels Group
Pan Pacific Hotels Group owns and/or manages
over 30 hotels, resorts and serviced suites across
Asia, Oceania and North America, including those
under development. Headquartered in Singapore,
it is a listed subsidiary of UOL Group Limited,
an established property company in Asia with a
diversified portfolio.
As an international hotel management company with more
than 11,000 rooms including those under development,
Pan Pacific Hotels Group is dedicated to creating memorable
hotel experiences. Its hospitality offerings are grouped
under two acclaimed brands: “Pan Pacific” features luxurious
accommodations and refreshing experiences that entice
the senses; while “PARKROYAL” reflects stylish comfort and
authentic local encounters inspired by the interesting locales
of its hotels.
Pan Pacific Hotels Group builds brands that resonate with
guests, customers and associates. It enhances shareholders’
value by driving greater innovation, customer focus and
partner engagement. Complementing its hospitality brands,
the Group also owns and operates the award-winning
“St Gregory” spas and “Si Chuan Dou Hua” restaurants.
• We work better
together because
we collaborate,
share, care about
each other and
communicate openly
with everyone.
Chairman’s
Message
• We keep our
processes as simple
and as uncomplicated
as possible and take
full responsibility for
our actions.
• We have an “internal
debate, external
cohesion” culture
with a can-do
attitude and always
try to have fun.
• We enhance our
performance by
always aiming higher
and are not afraid
of making the tough
decisions.
• We respect and
care for our wider
community through
being connected
and sharing, we also
recognise and value
diversity in every way.
ON THE COVER
Annual Report 2010
Our Leadership
45 People’s Republic of China
12 Board of Directors
46 Australia
16 Key Management
Executives
48 North America
18 Group Structure
Our brands
A Brand
new era
Unleashing Our
Brand Potential
A new look for “Pan Pacific”
and “parkroyal”
22 Embracing A
Brand New Era
G’day, Australia!
Upping our ante Down Under
Riding Waves in Bali
Relax and rejuvenate
at our newest resort
Pan Pacific Hotels
Group ushers in
A Brand New Era,
marked by the
refreshment of our
“Pan Pacific” and
“PARKROYAL” brand
identities.
Primed for growth,
our brands are geared
for expansion in Asia,
Greater China, North
America and Australia.
Page 22
24 Pan Pacific Hotels
and Resorts
28 PARKROYAL Hotels
& Resorts
32 Lifestyle Brands
OUR Hotels
36 Operations Overview
38 Portfolio Summary
42 Southeast Asia
49 Our Awards 2010
50 Our Pipeline Projects
52 Human Capital
and Development
54 Sustainability and Corporate
Social Responsibility
our performance
58 Five-Year Financial
Summary
61 Financial Review
64 Group Value-Added
Statement
65 Financial Contents
65 Financial Calendar
a brand
new era
2
snapshot
Delivering Shareholder Value
Each year, embracing the challenge to drive operational
excellence – ensuring profitability, continued growth and
superior brand performance – has enabled Pan Pacific Hotels
Group to deliver solid financial results.
KEY FINANCIAL TRENDS
2006
$287m
$105.97
$80m
6.87 cents
$740m
$514m
Revenue
RevPAR
EBITDA
Earnings per share*
Total assets
Shareholders' funds
2010
$324m
$125.03
$97m
7.53 cents
$1,129m
$802m
3
CAGR
3.10%
4.22%
4.94%
2.32%
11.13%
11.75%
2010 was no exception. Continued efforts to grow our portfolio,
strengthen our brands, nurture stakeholder relationships and
develop our human capital have stood us in good stead.
With these endeavours working together to create memorable
hotel experiences, we are confident in our ability to deliver
greater shareholder returns for years to come.
* before other gains/(losses)
and fair value adjustments
group revenue $’M
RETURN ON shareholders’ EQUITY $’M
350
Net Cash Flow Returns on Assets
30%
900
SOURCES OF FINANCE $’M
1,200
30
800
25%
25
1,000
700
20
300
800
20%
600
15
500
600
15%
400
250
10
400
10%
300
5
200
5%
200
0
100
200
0
2006
2007
2008
2009
2010
legend
0
2006
2007
2008
2009
2010
legend
Hotel
ownership
property
investments
hotel
management
services
investments
Return
on Equity
-5
0
2006
2007
2008
2009
2010
2007
2008
2009
2010
legend
legend
Average
Shareholders’
Fund
2006
Singapore
hotels
average
Australia
hotels
average
vietnam
hotels
average
NONCONTROLLING
INTERESTS
Myanmar
hotels
average
CHINA
hotels
average
malaysia
hotels
average
INTERESTS OF
THE EQUITY
HOLDERS OF
THE COMPANY
BORROWINGS
pan pacific
hotels group
average
PAN PACIFIC HOTELS GROUP LIMITED
ANNUAL REPORT 2010
a brand
new era
4
milestones
2010/11
January
Smooth Strides
into suzhou
The opening of Pan Pacific Suzhou
marked our second hotel in China.
Fusing traditional landscapes and
ancient aesthetics with modern
comforts and luxury, this 481-room
hotel welcomed its first guests with
premier facilities and unrivalled
personalised service.
February
5
May
Riding Waves
Common Platform for
A hotel management agreement for an integrated resort,
to be rebranded Pan Pacific Nirwana Bali Resort, was
inked. Featuring 278 luxurious suites and villas, world-class
amenities and an award-winning golf course designed
by Greg Norman, this 103-ha development in Tanah
Lot overlooks Bali’s magnificent coast and the island’s
spectacular volcanic mountains.
SAP was adopted Group-wide as the enterprise
resource-planning solution across our owned
hotels. A common platform for our operating
On 1 April, the rebranded Pan Pacific Nirwana Bali Resort
was launched amidst champagne celebrations and colourful
ceremonies. As part of our Vision to create memorable
hotel experiences, the resort is undergoing enhancements
to improve its integrated and holistic appeal.
setting our
in Bali
Seamless Integration
and accounting systems enables quicker and
more efficient decisions as we streamline
business processes.
June
sights on ningbo
The signing of a hotel management agreement
for the 430-room Pan Pacific Ningbo and the
200-room Pan Pacific Serviced Suites Ningbo
was a highlight for our expansion in China. The
brand-defining additions, coupled with their
location in Ningbo’s up and coming industrial and
economic zone, are important stepping-stones
towards our growth in Greater Shanghai.
a partnership
above par
The Group teamed up
w i t h A s i a n To u r a s
official hotel partner for
its highly anticipated
golf tournaments in the
region. Collaboration with
Asia’s official sanctioning
body for professional
g o l f u n d e r s co re s o u r
mission to reach out to
new customer segments
across Asia.
March
Building Our Brand
Membership has
in Bangkok
Cementing Connections
in china
To reinforce our China presence
and deliver on our global expansion
strategy, our seventh Global Sales
Office was established in Shanghai.
its Privileges
Setting industry standards
in Thailand with round-theclock personal assistance
is the newly opened Pan
Pacific Serviced Suites
Bangkok. The 148-suite
luxury accommodation
offers easy access to the
city’s business district and
trendiest nightspots while
providing all the comforts
of home.
“Pan Pacific” and “PARKROYAL” launched
a new guest loyalty programme, GHA
Discovery, founded on the Global Hotel
Alliance platform, the world’s largest
alliance of 12 independent upscale and
luxury hotel brands. Rewarding members
with ‘Amazing Local Experiences’ unique
to wherever they travel, the programme
extends more benefits for loyal guests
and customers of “Pan Pacific” and
“PARKROYAL”, thus enhancing their
appeal to customers.
ANNUAL REPORT 2010
a brand
new era
6
July
upping our ante
down under
7
November
September
New Perspectives on
People Management
G’day,
Australia!
October
The Group announced its entry into
Australia with three hotels: PARKROYAL
Darling Harbour, Sydney, PARKROYAL
Parramatta and Pan Pacific Perth. To
nurture our presence in Australia and
New Zealand and launch our journey
into an exciting growth market, an
Oceania Area Team was appointed to
synergise efforts across our Operations,
Human Capital & Development and
Marketing & Sales functions.
Unleashing our Brand
Insights
Potential
Demonstrating the Group’s
thought leadership among
industry peers, Mr Patrick
Imbardelli was a panellist
speaker on “Future Trends/
Bold Predictions” at the
Hotel Investment Conference
held in Hong Kong.
Global branding agency, The
Brand Union was appointed
to refresh the “Pan Pacific”
and “PARKROYAL” brands.
The exercise was aimed at
strengthening our brands’
identities and offerings so
that they resonate more
strongly with the modern
consumer.
Top Hoteliers
Stylish Residences in
Converge
Kuala Lumpur
Mr Patrick Imbardelli (third from
left), our President and CEO, shared
insights on “Global Issues, Local
Impacts” together with industry
experts at the 2010 Australia, New
Zealand & Pacific Hotel Industry
Conference held in Sydney. Mr Eric
Levy, Senior Vice President for Growth
& Development, was a panel member
at the discussion on “Hot New Brands,
Hotels & Players Take Centre Stage”.
The opening of the 287-room PARKROYAL Serviced
Suites Kuala Lumpur marked the first “PARKROYAL”
extended-stay product outside Singapore. Exuding
stylish comfort replete with modern amenities, the
property offers full access to business and leisure
facilities in the heart of Kuala Lumpur.
Awakening in
Western Australia
The opening of the 486room Pan Pacific Perth
signaled the brand’s debut
in Australia. Impressing
the market with signature
hospitality and elegant
accommodations, the hotel
a l s o f e a t u re s s p a c i o u s
function rooms, indulgent
dining options and great
views of the Swan River.
Sharing global best practices with HR professionals, our
Senior Vice President for Human Capital & Development,
Mrs Melody King, spoke on “Harnessing Human Capital
for Successful Regionalisation in Asia” at the Singapore
Human Capital Summit.
Sharing Strategic
January 2011
“PARKROYAL” marked its homecoming
to Australia with the 345-room
PARKROYAL Darling Harbour, Sydney
and the 196-room PARKROYAL
Parramatta. After a 10-year absence
from where the “PARKROYAL” brand
was conceived, the newly rebranded
properties put us back on the map
with prime locations in downtown
Sydney and Parramatta.
Clicking-in
Online
The refreshed “Pan Pacific” and “PARKROYAL” brand
websites were launched. With easy navigation and onestop reservation just a click away, the new look reflects our
rejuvenated brands captured through their new visual and
verbal identities.
December
Touchdown in
Melbourne
“PARKROYAL” Ventures
INTO China
The Group invested further in
Australia with an agreement to
acquire the Hilton Melbourne Airport
Hotel. The 276-room landmark
property is sited at Australia’s second
busiest aviation hub.
The Group entered into two hotel management agreements
that will launch the “PARKROYAL” brand in China. The 325room PARKROYAL Serviced Suites, Green City, Shanghai
will open its doors in 2012, followed by the 200-room
PARKROYAL Suzhou Taihu Resort, Suzhou in 2014.
ANNUAL REPORT 2010
a brand
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chairman’s
message
During the year, the Group also secured the
management rights to two new developments
in China, namely the Pan Pacific Ningbo
(comprising 430 hotel guestrooms and 200
serviced suites) and the PARKROYAL Serviced
Suites Green City, Shanghai (325 serviced
suites). The two properties are expected to open
in the first quarter of 2012.
Dr wee cho yaw
Chairman, Pan Pacific Hotels Group
The Group’s hotel management
division continued its expansion
during the year with the addition
of six new properties to its brands.
2010 Performance And Dividend
2010 saw a strong rebound from the global
economic slowdown in 2009. In line with the
improvements in the global economy, Singapore
achieved a strong GDP growth of 14.5% in 2010.
International travel and tourism which is driven
by the global economy gained momentum in
2010 with the Asia Pacific region leading the
recovery.
For the year under review, Group’s pre-tax profit
before impairment charge and fair value losses
increased by 19% to $60.2 million from the $50.8
million achieved in 2009. In 2010, the Group also
recognised a fair value gain of $10.0 million on
its investment properties (2009: fair value loss
of $1.6 million). As a result, the Group’s profit
before tax increased by $21.2 million or 43% to
$70.4 million (2009: $49.2 million). The Group’s
net profit attributable to shareholders increased
by 36% to $53.6 million from $39.3 million
achieved in 2009.
Your Board is recommending a first and final
dividend of 4 cents per share (2009: first and
final dividend of 3.5 cents) amounting to $24
million (2009: $21 million) for the year ended 31
December 2010.
Operations
Singapore Operations
Benefiting from the opening of the two
integrated resorts and the pickup in business
travel, visitor arrivals to Singapore increased
by 20% to reach a record high of 11.6 million in
2010. Average occupancy for the hotel industry
increased by 9.8 percentage points to 86% while
average room rate increased by 12% to $212
in 2010 (2009: $190). The Group’s hotels and
9
serviced suites in Singapore benefited from the
increase in visitor arrivals and achieved higher
revenue and profit.
Overseas Operations
Outside Singapore, the Group’s hotels in Australia
and Myanmar benefited from improvements in
occupancy and average room rates while the
Vietnam hotels, despite enjoying improved
occupancy still lagged in average room rates
when compared to 2009. In Malaysia, while
the Kuala Lumpur hotel showed improvements
in occupancy and average room rates, the
average occupancy rate of the hotel in Penang
was affected by the re-opening of a competitor
hotel previously under renovation. Our hotel
in Suzhou, China continues to be affected by
increased competition.
Hotel Management Division
The Group’s hotel management division
continued its expansion during the year with the
addition of six new properties to its brands. Three
of the Group owned hotels were rebranded to
“Pan Pacific” or “PARKROYAL” during the course
of 2010 when the management contracts with
third party operators expired. The Pan Pacific
Suzhou was rebranded in January 2010 while
PARKROYAL Darling Harbour and PARKROYAL
Parramatta were rebranded in November 2010.
The Group saw the opening of two new serviced
suites, namely the 148-unit Pan Pacific Serviced
Suites Bangkok in March 2010 and the 287-unit
PARKROYAL Serviced Suites Kuala Lumpur in
October 2010. The Group also expanded its
profile in Indonesia with the rebranding of the
278-room Pan Pacific Nirwana Bali Resort in
April 2010.
In January 2011, the Group rebranded the 486room Pan Pacific Perth when the management
contract with a third party operator expired.
The Group also secured the management rights
to a resort development in Suzhou, China. The
200-room PARKROYAL Taihu Resort, Suzhou is
scheduled to open in 2014.
Corporate Developments
Incorporation of New Subsidiary in China
To enhance the management and operations
of hotels and serviced suites in China, the
Group incorporated a new wholly owned
subsidiary named Pan Pacific (Shanghai) Hotel
Management Co., Ltd. in Shanghai to support
the development of our two brands.
Acquisition of Shares in Subsidiaries
In May 2010, the Company acquired the remaining
5% interest in Success City Pty Limited (“SCPL”)
further to the exercise of the put options by the
two minority shareholders. Total consideration
of A$2.0 million (S$2.5 million) was paid for the
2,151,042 ordinary shares.
The Company also acquired from the same
parties the remaining 40% interest in Success
Venture Investments (Australia) Ltd (“SVIA”)
in November 2010 for a total consideration of
A$34.0 million (approximately S$43.5 million).
SVIA is an investment company with its principal
assets being two hotels in Sydney, Australia,
namely PARKROYAL Darling Harbour and
PARKROYAL Parramatta.
Following the acquisitions, SCPL and SVIA
became wholly owned subsidiaries.
Hotel / Serviced Suites Development
Hotel & Commercial Development at
Upper Pickering Street, Singapore
Construction works are in progress for the
development of the 363-room hotel and
approximately 7,300 square metres of office
space. The project is expected to be completed
in mid-2012.
Redevelopment at The Plaza,
Beach Road, Singapore
Works for the redevelopment of the existing
Furniture Mall located at The Plaza into a 184unit serviced suites, with a column-free ballroom
and meeting rooms, commenced in September
2010. Piling works are in progress and the
project is scheduled to be completed in the
fourth quarter of 2012.
Acquisition of Hotel in Melbourne, Australia
The Group entered into a conditional agreement
for the acquisition of the Hilton Melbourne
Airport Hotel for an aggregate cash consideration
of A$108.9 million (or approximately S$141.6
million). The Hilton Melbourne Airport Hotel
comprises a 276-room hotel with three food and
beverage outlets and extensive convention and
meeting facilities. The acquisition is scheduled
to be completed on 31 March 2011 and the hotel
will be rebranded as PARKROYAL Melbourne
Airport.
Outlook for 2011
The economies of Singapore and the region
should continue to grow in 2011, albeit at a more
moderate pace. The Asia Pacific is expected to
be the most dynamic region for tourism with
strong growth in intra-regional travel. Against
this background of robust outlook, the Group
expects to see improved occupancy and/or
room rates for its hotels.
Acknowledgement
Dr Lim Kee Ming who has served as a director
since 1995, has indicated that he would not be
standing for re-appointment at the forthcoming
Annual General Meeting. On behalf of the Board,
I would like to thank Dr Lim for his invaluable
contributions in the past 16 years.
On behalf of the Board, I wish to express my
appreciation and thanks to the management and
staff for their hard work and to our shareholders
and business associates for their continuing
support. My appreciation goes to my colleagues
on the Board for their counsel and guidance
during the past year.
DR WEE CHO YAW
Chairman
February 2011
ANNUAL REPORT 2010
a brand
10
new era
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our
leadership
in this section
Board of Directors
Key Management Executives
Group Structure
ANNUAL REPORT 2010
a brand
new era
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1
2
13
4
3
5
board of directors
1.DR WEE CHO YAW
Chairman
Dr Wee is the Chairman of the Company
(“PPHG”) and its holding company, UOL
Group Limited (“UOL”). He was appointed
to the Board since 25 May 1973 and was last
re-appointed as Director at PPHG’s Annual
General Meeting on 21 April 2010.
Dr Wee, who is a non-executive and nonindependent Director of PPHG, is also the
Chairman of the Executive Committee
and a Member of the Nominating and
Remuneration Committees.
Dr Wee received Chinese high school
education and he is a career banker with
more than 50 years of experience. He is the
Chairman of United Overseas Bank Limited,
Far Eastern Bank Limited, United Overseas
Insurance Limited, United International
Securities Ltd, Haw Par Corporation Limited,
United Industrial Corporation Limited,
Singapore Land Limited and Marina Centre
Holdings Private Limited. He is also the
Chairman of Wee Foundation.
Dr Wee is the Honorary President of the
Singapore Federation of Chinese Clan
Associations, Singapore Hokkien Huay
Kuan and Singapore Chinese Chamber of
Commerce & Industry and a Pro-Chancellor
of Nanyang Technological University.
In 2008, he was conferred an honorary
Doctor of Letters by the National University
of Singapore for his accomplishments
in banking, education and community
leadership. He was a recipient of the Credit
Suisse Ernst & Young Lifetime Achievement
Award in 2006 and named Singapore
as Director at PPHG’s Annual General
Meeting on 21 April 2010. Mr Choe, who is
an independent and non-executive Director,
is also the Chairman of the Nominating
Committee and a Member of the Executive,
Audit and Remuneration Committees. He is
also a Director of UOL.
Businessman of the Year in 1990 and
2001. In 2009, he was conferred a Lifetime
Achievement Award by The Asian Banker.
2.MR GWEE LIAN KHENG
Group Chief Executive
Mr Gwee is the Group Chief Executive of
PPHG and UOL and has been with the
UOL Group since 1973. He was appointed
to the Board since 20 January 1987 and
was last re-elected as Director at PPHG’s
Annual General Meeting on 28 April 2009.
Mr Gwee, who is an executive and nonindependent Director, is also a Member of
the Executive Committee.
Mr Gwee is a Director of various subsidiaries
in the PPHG Group and UOL Group. He
is also a Director of United Industrial
Corporation Limited and Singapore Land
Limited and was previously a Director of
Overseas Union Enterprise Limited.
He holds a Bachelor of Accountancy
(Honours) degree from the University
of Singapore and is a Fellow Member of
the Chartered Institute of Management
Accountants and Association of Chartered
Certified Accountants in the United
Kingdom and the Institute of Certified
Public Accountants of Singapore.
Mr Gwee was awarded the Pingat Bakti
Masyarakat (PBM) Public Service Medal and
the Bintang Bakti Masyarakat (BBM) Public
Service Star in 1994 and 2002 respectively
by the President of Singapore.
3.MR ALAN CHOE FOOK CHEONG
Mr Alan Choe was appointed to the Board
since 2 May 1990 and was last re-appointed
A n a rc h i t e c t a n d t ow n p l a n n e r by
profession, Mr Choe was the first General
Manager of the Urban Redevelopment
Authority and a Senior Partner of one
of the largest architectural practices in
Singapore. He was the Chairman of Sentosa
Development Corporation, Sentosa Cove
Pte Ltd, Pasir Ris Resort Pte Ltd, a Trustee
of NTUC Income and Member of Singapore
Tourism Board.
Mr Choe holds a Bachelor of Architecture
degree, a Diploma in Town & Regional
Planning from University of Melbourne
and a Fellowship Diploma from the Royal
Melbourne Institute of Technology. He is a
Fellow Member of the Singapore Institute of
Architects, Singapore Institute of Planners
and Royal Australian Institute of Architects.
He is also a Member of the Royal Institute
of British Architects, Royal Town Planning
Institute, Royal Australian Planning Institute
and American Planning Association.
He was awarded the Public Administration
Medal (Gold) in 1967, the Meritorious Service
Medal in 1990, and the Distinguished
Service Order in 2001.
General Meeting on 21 April 2010. Dr Lim,
who is an independent and non-executive
Director, is also the Chairman of the Audit
and Remuneration Committees and a
Member of the Nominating Committee. He
is also a Director of UOL.
Dr Lim is the Chairman of Lim Teck Lee
Group of companies. He is also a Director
of Haw Par Corporation Limited and is
presently the President of Ngee Ann Kongsi
and Chairman of Ngee Ann Development.
He is an Honorary President of Singapore
Chinese Chamber of Commerce & Industry,
Teochew Poit Ip Huay Kuan and Advisor of
Network China.
He was awarded the Pingat Bakti
Masyarakat (PBM) Public Service Medal and
the Bintang Bakti Masyarakat (BBM) Public
Service Star in 1995 and 2004 respectively
by the President of Singapore and also
The Royal Order of the Polar Star “Class of
Commander” by his Excellency, the King of
Sweden in 1982.
Dr Lim holds a Master of Science
(International Trade & Finance) degree
from Columbia University, New York,
and a Bachelor of Science (Business
Administration) degree from New York
University, USA.
In 2009, Dr Lim was conferred the degree
of Doctor of the University of Adelaide
honoris causa, for his distinguished service
to the community.
4.DR LIM KEE MING
Dr Lim Kee Ming was appointed to the
Board since 1 June 1995 and was last
re–appointed as Director at PPHG’s Annual
5.MR WEE EE CHAO
Mr Wee was appointed to the Board since
9 May 2006 and was last re-elected as
ANNUAL REPORT 2010
a brand
new era
14
6
Director at PPHG’s Annual General Meeting
on 21 April 2010. Mr Wee, who is a nonexecutive and non-independent Director, is
a Member of the Executive Committee and
Mr Wee has led the management of UOBKay Hian Holdings Limited for more than
25 years. He is currently the Chairman
and Managing Director of UOB-Kay Hian
Holdings Limited and a Director of most of
the UOB-Kay Hian Group of companies. Mr
Wee also manages Kheng Leong Company
(Private) Limited which is involved in real
estate development and investments and
is a non-executive director of Haw Par
Corporation Limited. He had previously
served as Chairman of the Singapore
Tourism Board between 2002 to 2004.
Mr Wee holds a Bachelor of Business
Administration degree from The American
University Washington DC, USA.
7
Mr James Koh was appointed to the Board
since 23 November 2005 and was last
re-elected as Director at PPHG’s Annual
General Meeting on 23 April 2008. Mr Koh,
who is an independent and non-executive
Director, is also a Director of UOL.
Mr Koh joined the Housing & Development
Board (“HDB”) in July 2005 after retiring
from 35 years of distinguished service in the
civil service. He is currently the Chairman of
the HDB. His prior appointments included
Permanent Secretary, Ministry of National
Development (1979), Ministry of Community
Development (1987) and Ministry of
Education (1994) as well as Commissioner of
8
Mr Koh is also the Chairman of CapitaMall
Trust Management Limited, Singapore
Deposit Insurance Corporation Limited
and Singapore Island Country Club. He
is also a Director of CapitaLand Limited,
Singapore Airlines Limited, Singapore
Cooperation Enterprise and CapitaLand
Hope Foundation. He is also a Member
of the Presidential Council for Religious
Harmony and an Adjunct Professor of the
Lee Kuan Yew School of Public Policy.
Mr Koh holds a Bachelor of Arts (Honours)
degree in Philosophy, Political Science
and Economics, Master of Arts degree
from University of Oxford, UK and holds
a Master in Public Administration degree
from Harvard University, USA.
He was awarded the Public Administration
Medal (Gold) in 1983 and the Meritorious
Service Medal in 2002.
Mr Low was appointed to the Board since
23 November 2005. He was last re-elected
as Director at PPHG’s Annual General
Meeting on 23 April 2008. Mr Low, who is
an independent and non-executive Director,
is a Member of the Audit Committee and
Mr Low is a Fellow Member of CPA Australia,
Institute of Chartered Accountants in
England & Wales, Institute of Certified
Public Accountants of Singapore and an
Associate Member of Chartered Institute
of Taxation (UK).
10
non–independent Director, is also a director
of various subsidiaries in PPHG.
She oversees the asset management
of PPHG’s hotel properties and is also
responsible for the management of the
chain of St Gregory Spa and Si Chuan Dou
Hua Restaurants.
Ms Wee holds a Bachelor of Arts degree
from Nanyang University, Singapore.
8.MR WEE EE LIM
7.MR LOW WENG KEONG
9
Ernst & Young, Singapore and is currently
the President and Chairman of the Board
of Directors of CPA Australia Limited.
Inland Revenue and Chief Executive Officer
of Inland Revenue Authority of Singapore.
6.MR JAMES KOH CHER SIANG
15
Mr Wee was appointed to the Board since
9 May 2006. He was last re-elected as
Director at PPHG’s Annual General Meeting
on 21 April 2010. Mr Wee, who is a nonexecutive and non-independent Director,
is also a Director of UOL.
He joined Haw Par Corporation Limited
(“Haw Par”) in 1986 and is currently the
President and Chief Executive Officer of
Haw Par. He is also a Director of United
Industrial Corporation Limited, Singapore
Land Limited, Hua Han Bio-Pharmaceutical
Holdings Limited (a company listed on
the Hong Kong Stock Exchange) and
Wee Foundation. He was previously a
board member of Sentosa Development
Corporation.
10.MR AMEDEo PATRICK IMBARDELLI
Mr Imbardelli is the President and Chief
Executive Officer and was appointed
to the Board since 21 August 2009. He
was last re-elected as Director at PPHG’s
Annual General Meeting on 21 April 2010.
Mr Imbardelli, who is an executive and nonindependent Director, is also a director of
various subsidiaries in PPHG.
Prior to joining PPHG, Mr Imbardelli
held senior management positions at
InterContinental Hotels Group, Southern
Pacific Hotel Corporation and Hilton
International. He has over 25 years of
experience in the hotel industry including
managing global multibrand organisations.
He leads the strategic management
and expansion of PPHG’s hotels and
businesses, including both “Pan Pacific”
and “PARKROYAL” brands across the Asia
Pacific region.
Mr Imbardelli holds a Master of Science
(Honours) degree in Finance from The City
University of New York, USA. He is a Fellow
of the American Academy of Financial
Management, USA and a Member of the
Young Presidents’ Organisation and its
Singapore Executive Committee.
Mr Wee holds a Bachelor of Arts (Economics)
degree from Clark University, USA.
9.MS WEE WEI LING
Mr Low is also an independent Director
of listed companies Riverstone Holdings
Limited and Unionmet (Singapore) Limited.
He is also a director of Singapore Institute
of Accredited Tax Professionals Limited. He
was a former Country Managing Partner of
Ms Wee was appointed to the Board since
24 March 1994 and has been with the PPHG
Group for over 20 years.
She was last re-elected as Director at
PPHG’s Annual General Meeting on 28 April
2009. Ms Wee, who is an executive and
ANNUAL REPORT 2010
a brand
new era
16
Key management
executives
17
1.MR GWEE LIAN KHENG
2.MS WEE WEI LING
3.MR AMEDEO PATRICK IMBARDELLI
Mr Foo joined UOL in 1977 after graduating
f ro m U n i ve r s i t y o f S i n g a p o re w i t h
a Bachelor of Accountancy (Honours)
degree. He is Company Secretary of both
UOL and PPHG, and a director of several of
their subsidiaries. He is also Chief Financial
Officer of UOL.
Mr Foo is a Fellow of the Institute of
Certified Public Accountants of Singapore
and CPA Australia, and an Associate of
both the Institute of Chartered Secretaries
and Administrators and the Chartered
Institute of Management Accountants.
7
6
8
9
Mr Schreiber was appointed PPHG’s Senior
Vice President, Operations in 2010. His
responsibilities include the development
of operational systems and management
of service quality standards across all “Pan
Pacific” and “PARKROYAL” properties.
Mr Schreiber’s 24-year career in hospitality
management has spanned nine countries
and five continents. Prior to PPHG, he
was Group Managing Director with KOP
Group, where he was instrumental in the
development and operation of premium
hospitality brands including Franklyn Hotels
& Resorts and Montigo Resorts. He was also
Group Operations Leader with Pan Pacific
Hotels and Resorts from 2004 to 2007
before joining luxury hospitality group,
Essque, as Vice President Operations.
The profiles of Mr Gwee, Ms Wee and
Mr Imbardelli are in the Board of Directors
section of this report.
4.MR FOO THIAM FONG WELLINGTON
5
7.MR DEAN SCHREIBER
8.MR ERIC LEVY
Mr Levy joined PPHG in 2009 and is currently
Senior Vice President, Growth & Development.
He leads the Group’s global development
efforts to expand its hotel portfolio.
He has over 31 years of experience in hotel
operations, development advisory and
private equity, having previously established
his own hospitality investment and
advisory firms, Octagon Capital Partners
and Tourism Solutions International. His
previous appointments include senior roles
at Horwath Asia Pacific and Colony Capital
in Asia Pacific.
Mr Levy holds a Bachelor of Science
degree in hotel administration from Cornell
University in Ithaca, New York.
5.MR NEO SOON HUP
Mr Neo is Chief Financial Officer of PPHG
and a director of several of its subsidiaries.
He oversees the financial management
of PPHG and focuses on improving
efficiency to drive business performances.
Mr Neo was a Senior Audit Manager with
PricewaterhouseCoopers prior to joining
UOL in 2003 and has 14 years of experience
in auditing.
He is a Fellow of the Institute of Certified
Public Accountants of Singapore and
a member of the Singapore Institute of
Chartered Secretaries and Administrators.
6.MR KEVIN CROLEY
3
1
2
4
Mr Croley joined Pan Pacific Hotels and
Resorts in 2005 and is currently Senior Vice
President, Marketing & Sales of PPHG. He is
responsible for the development of brand
strategies and platforms for distribution,
e-commerce and revenue management. He
has over 29 years of experience in sales and
marketing, of which 22 years were spent in
the Asia Pacific region.
Af te r st a r t i n g h i s c a re e r w i t h F i r st
Hospitality Corporation of America, Mr
Croley worked with Hilton International,
InterContinental Hotels Group and the
Royal Garden Resorts Hotel Group. He
holds a Diploma in Hotel Management
and Operations from Belfast College of
Business Studies, UK.
9.MRS MELODY KING
Mrs King joined PPHG in 2009 and is
currently Senior Vice President, Human
Capital & Development. She leads the
Group’s efforts in building capability and
developing talent.
A veteran with over 21 years of experience in
human resource management, she has held
senior Human Resources leadership roles
with multi-national companies including
Siebe Intelligent Automation, Asea Brown
Broveri (ABB) and Herbalife International.
Mrs King graduated from Les Roches Hotel
and Tourism School in Bluche-Montana,
Switzerland.
ANNUAL REPORT 2010
a brand
new era
18
group
structure
19
100%
100%
Hotel Investments (Suzhou) Pte. Ltd.
100%
Hotel Investments (Hanoi) Pte. Ltd.
100%
YIPL Investment Pte. Ltd.
100%
Hotel Plaza Property
(Singapore) Pte. Ltd.
100%
New Park Hotel (1989) Pte Ltd
100%
Parkroyal Hotels & Resorts Pte. Ltd.
75%
As at 2 March 2011
95%
Suzhou Wugong
Hotel Co., Ltd [PRC]
Westlake International
Company [VN]
Yangon Hotel
Limited [MN]
100%
100%
100%
100%
Pan Pacific Hotels and
Resorts America, Inc. [USA]
Parkroyal Serviced Residences Pte. Ltd.
Resorts Pte. Ltd.
99%
100%
PT Pan Pacific Hotels &
Resorts Indonesia [IN]
100%
Pan Pacific Marketing
Services Pte. Ltd.
100%
Resorts Japan Co., Ltd [JP]
Pan Pacific Technical
Services Pte. Ltd.
100%
100%
Pan Pacific (Shanghai) Hotel
Management Co., Ltd. [PRC]
100%
Pan Pacific
Hospitality Pte. Ltd.
Parkroyal International Pte. Ltd.
100%
Pan Pacific Hospitality Holdings Pte. Ltd.
100%
Pan Pacific International Pte. Ltd.
100%
United Lifestyle Holdings Pte Ltd
100%
St Gregory Spa Pte Ltd
48.9%
Resorts Seattle, LLC [USA]
1%
PPHR (Thailand)
Company Limited [TH]
Pan PACIFIC HOTELS GROUP LIMITED
33.3%
100%
AU
BVI
MY
MN
IN
JP
PRC
TH
USA
VN
Incorporated in Australia
Incorporated in The British Virgin Islands
Incorporated in Malaysia
Incorporated in Myanmar
Incorporated in Indonesia
Incorporated in Japan
Incorporated in The People’s
Republic of China
Incorporated in Thailand
Incorporated in United States
of America
Incorporated in Vietnam
PRINCIPAL ACTIVITIES
Dou Hua Restaurants Pte Ltd
100%
66.7%
President Hotel
Sdn Berhad [MY]
100%
HPL Properties (Malaysia) Sdn. Bhd. [MY]
100%
Garden Plaza Company Limited [VN]
39.4%
Pilkon Development Company
Limited [BVI]
65%
Plaza Hotel
Company Limited [VN]
100%
Success Venture Investments
(WA) Limited [BVI]
100%
Success Venture (WA)
Unit Trust [AU]
100%
Success City Pty Limited [AU]
100%
Success Venture Pty
Limited [AU]
100%
100%
Success Venture Investments
(Australia) Ltd [BVI]
Success Venture (Darling
Harbour) Unit Trust [AU]
100%
Success Venture
(Parramatta) Unit Trust [AU]
100%
Grand Elite Sdn. Bhd. [MY]
Grand Elite (Penang)
Sdn. Bhd. [MY]
Investment holding and others
Hotelier
Hotel management services
Spa, lifestyle and restaurant operations
Associated companies
ANNUAL REPORT 2010
a brand
20
new era
21
our
brands
in this section
Embracing A Brand New Era
Pan Pacific Hotels and Resorts
PARKROYAL Hotels & Resorts
Lifestyle Brands
ANNUAL REPORT 2010
a brand
22
new era
Embracing
A Brand
New Era
23
The drive to connect with our guests at a level
that is meaningful and relevant was the reason
for an 18-month initiative that resulted with
fresh interpretations of our “Pan Pacific” and
“PARKROYAL” brands.
Quite clearly, the rebranding of two acclaimed
and well-established identities was not carried
out in isolation. We appointed established
international brand consultancy Interbrand,
and through a series of focus groups involving
qualitative interviews with hundreds of guests
and customers, we were able to determine the
nuances and unique elements that defined “Pan
Pacific” and “PARKROYAL”. We also worked
with experts at The Brand Union, another global
branding agency, to articulate the refreshed
brands’ positioning with new visual and verbal
elements.
We also worked with experts
at The Brand Union, another
global branding agency,
to articulate the refreshed
brands’ positioning with new
visual and verbal elements.
Associate engagement workshops are a
quintessential element of the programme, so
that the right values and brand behaviours may
be imparted to each and every associate from
back office to front desk, and greater consistency
is achieved through our service delivery.
Ultimately, great brands offer unique experiences
that are valued and preferred over others. The
rebranding initiative we have embarked on will
continue to evolve in tandem with industry
benchmarks and global standards.
01:
New “Pan Pacific” visual identity as
expressed in in-room compendium
and key cards.
02: New “PARKROYAL” visual identity as
expressed in hotel brochures, outdoor
advertising and key cards.
The “Pan Pacific” and “PARKROYAL” identities
have always been associated with distinctive
accommodations and high service standards.
Over time, as the industry and consumer
preferences evolve and change, so too do brands
to address these changes.
01
02
ANNUAL REPORT 2010
a brand
new era
24
25
19
hotels, resorts
and serviced suites
11
countries
20
over
industry honours and
top awards in 2010/2011
over
35
years of global
recognition
A Unique Pacific Ocean Blend
The “Pan Pacific” portfolio features
19 premium hotels, resorts and
serviced suites across Asia, North
America and Oceania. For over
35 years, these properties have
delighted guests with sensory
voyages, offering an invigorating
blend of the best that the Pacific
region has to offer.
Our Pacific Touch is the key to
enriching experiences that enliven
the senses and reinvigorate the
soul. Each property delivers a
sense of modern vibrancy and the
warmth of Pacific Rim hospitality.
This year, our outstanding brand of
hospitality was backed by various
accolades. Pan Pacific Hotels and
Resorts garnered World Travel
Awards in various categories with
Pan Pacific Singapore (‘Leading
Business Hotel in the World’),
Pan Pacific Nirwana Bali Resort
(‘Indonesia’s Leading Golf Resort’),
Pan Pacific Vancouver (‘Leading
Hotel in Canada’) and Pan Pacific
Serviced Suites Singapore
(‘Singapore’s Leading Serviced
Apartments’).
We also received the World Luxury
Hotel Award for ‘Luxury Airport
Hotel’ and APBF BrandLaureate
Award for ‘Best Airport Hotel Brand’
with Pan Pacific Kuala Lumpur
International Airport, as well as
coveted rankings on Travel+Leisure,
Condé Nast and other prestigious
magazines.
In 2010, the “Pan Pacific” footprint
was augmented with more great
hotels: Pan Pacific Suzhou, the
integrated Pan Pacific Nirwana Bali
Resort, and in January 2011, Pan
Pacific Perth. In its ever-expanding
pipeline are also Pan Pacific Ningbo
and Pan Pacific Serviced Suites
Ningbo in China, which are set to
open in 2012.
ANNUAL REPORT 2010
a brand
26
Our
Promise
The “Pan Pacific” brand provides refreshing
Pacific experiences inspired by an invigorating
blend of its Pacific Rim locations. It is focussed
on enriching experiences that draw on a diversity
of landscapes and cultures; and relevant choices
that convey freedom and individuality.
The brand is delivered through an unmistakable “Pacific Touch” –
welcoming environments where easy efficiency is met by warm
hospitality, and contemporary styles reflect their local surrounds.
In line with its expansion strategy to grow the Pan Pacific Hotels
and Resorts portfolio in Asia, Greater China, North America and
Oceania, “Pan Pacific” debuted in Australia with the launch of Pan
Pacific Perth in 2011.
new era
27
Visually engaging collateral
highlight the play of light, warmth
and the expanse of the Pacific Rim.
Locally sourced ingredients and
innovative visual presentations are
at the heart of the Pacific palate.
Offering enriching experiences and
relevant choices to guests define
our service philosophy.
Our
Identity
the pacific
cuisine
experience
i am
pan pacific
As part of the “Pan Pacific”
brand refreshment, refinements
to the logo and typography
were introduced to symbolise
the sensory enhancements to
the “Pan Pacific” experience.
A soothing colour palette,
together with refreshed
designs for marketing materials
and hotel amenities were
also created to highlight the
moods and physical sensations
associated with ‘discovery’.
G astronomically, the “Pan
Pacific” brand is evoked through
c u li n a r y ex p er i e n ce s t h at
appeal to the five senses. From
locally sourced ingredients to
innovative visual presentations,
the Pacific Cuisine experience
features menus that boast the
best food the Pacific Rim has
to offer.
The “Pan Pacific” brand is
dedicated to a way of doing
things that is different from its
competitors. “I am Pan Pacific”
is an attitude that empowers
all associates to act as brand
ambassadors, infusing service
with a personal touch.
Visually, the brand essence
is redefined through a
photography style in advertising
and marketing collateral that
captures the sensual appeal
of the Pacific, the human
touch that conveys intuitive
yet unobtrusive service, and
emotive textures inspired by
each hotel’s location.
I t a l s o o f f e r s a ra n g e o f
unique settings and dining
environments to complement
each experience.
To further enhance the Pacific
Cuisine experience, a list of
signature Pacific Cocktails was
also created, showcasing the
choicest local ingredients –
from Californian pomegranates
to Thai calamansi – and
some of the latest mixology
techniques.
Every associate is actively
involved in the “Pan Pacific”
brand through a variety
of touch points ranging
f ro m g u e st s ’ a r r i va l s a n d
departures, to the Pacific
C u i s i n e , g u e s t ro o m s a n d
spa experience. The brand
advocates going the extra
mile to meet guests’ needs
according to their time
zones.
The opening of Pan Pacific Ningbo and Pan Pacific Serviced Suites
Ningbo, scheduled for 2012, will strengthen the brand’s presence
in China.
ANNUAL REPORT 2010
a brand
new era
28
5
29
close to
decades
of trusted
hospitality
15
hotels, resorts
and serviced suites
10
destinations across
Asia Pacific
2010
PARKROYAL comes
home to Australia
A Trusted Local Companion
The “PARKROYAL” portfolio comprises
15 hotels, resorts and serviced suites
in gateway cities across Australia,
China, Malaysia, Myanmar, Singapore
and Vietnam, including those under
development.
Suites Kuala Lumpur. It also marked
its homecoming to Australia, a market
where the brand was conceived, with
the launch of PARKROYAL Darling
Harbour, Sydney and PARKROYAL
Parramatta.
Exuding the spirit and individuality
of their location, each “PARKROYAL”
provides a connection to authentic
local experiences. A trusted provider
of hospitality that is consistently
supportive, modern and uncomplicated,
“PARKROYAL” leverages a strong
heritage that has flourished into
a reputable, upscale brand in the
Asia-Pacific.
The brand continues to chart its
journey in Australia with the upcoming
PARKROYAL Melbourne Airport in
April 2011. Strengthening its footprint
in Singapore, the brand’s flagship
hotel in the city’s Central Business
District, PARKROYAL on Pickering,
is scheduled to open in 2012.
In 2010, the brand opened its first
extended-stay property outside
Singapore with PARKROYAL Serviced
In addition, “PARKROYAL” is set to
debut in China with PARKROYAL
Serviced Suites Green City, Shanghai
and PARKROYAL Taihu Resort,
Suzhou.
ANNUAL REPORT 2010
a brand
30
our
promise
The “PARKROYAL” brand is centred on the idea
of being a trusted local companion for guests
and customers. It is focussed on providing
travellers with the best local knowledge and
connections in modern, comfortable and
welcoming environments through which they
can explore their surrounds.
Energised by the sights, sounds and flavours of their respective
unique locales, each “PARKROYAL” hotel weaves a tapestry
of personable charm fused with thoughtful creative touches,
local tastes and authentic encounters that connect guests to
the local environment.
new era
31
What to see, where to go, what to
do – the best local tips presented
through vivid photography and a
vibrant palette.
Personable charm, friendly support
and uncomplicated service are
exemplified by our PARKROYAL
People.
Authentic local encounters, through
expert advice and knowledge,
connect guests to each destination.
Our
Identity
our
parkroyal
people
truly local
Experiences
The refreshed “PARKROYAL”
brand is captured visually
through key enhancements
to its logo, the introduction
of a vivid colour palette and
a series of stylised motifs that
symbolise the vibrant cultures
of its respective regions.
PARKROYAL People are unified
by “PARKROYAL’s” objective
of being a trusted local
companion. Wherever they are,
our PARKROYAL People are
important touch points for the
brand, channelling their skills,
talents and local knowledge
to create a unique experience
that is consistently supportive,
authentic and personable.
Every “PARKROYAL” property
is enlivened by the spirit and
individuality of its location.
Through locally inspired
accents, cuisines and truly
authentic encounters, the brand
invites travellers to discover
a personal connection to the
local destination and culture.
These are carried through in
the brand’s print collaterals,
website and guestroom
amenities. Visually, the allure
and unobtrusive service at
each “PARKROYAL” destination
is conveyed in a photography
style that reflects spontaneity,
movement and friendly faces.
As brand ambassadors,
PARKROYAL People bring a
caring human touch to every
aspect of the brand experience.
They also lend personality
and character to the rich
diversity of customs, cultures
and languages that define
the authenticity of every local
experience.
By involving every touch point
available from the moment
of arrival, the “PARKROYAL”
brand is an experience greater
than the sum of its parts, going
above and beyond to inject
extraordinary encounters with
local life and culture that bring
a genuine and unforgettable
dimension to the wonder of
travel.
Above all, “PARKROYAL” values a standard of service that is
consistent, genuine and uncomplicated. It caters to travellers’
needs by providing accommodations that are hospitable,
contemporary and comfortable.
ANNUAL REPORT 2010
a brand
new era
32
lifestyle
brands
33
05: Si Chuan Dou Hua Restaurant
at TOP of UOB Plaza, with
breathtaking views of the city
skyline.
Complementing our
hospitality services are
three lifestyle brands that
extend our philosophy
of creating memorable
experiences to the domains
of fine dining and premium
spas. Each brand offers
complete indulgence for
the senses – exemplifying
our aspiration to provide
unforgettable destinations
for dining and relaxation.
06: The Thai Herbal Compress,
a signature treatment at St.
Gregory at Pan Pacific Singapore.
05
06
St. Gregory
Established in Singapore in 1997, “St. Gregory”
is a pioneer and leader in the spa and wellness
industry, offering an integrated lifestyle
management concept built on four unique
pillars: therapy, fitness, aesthetics and activeageing.
Si Chuan Dou Hua
The “Si Chuan Dou Hua” dining brand was
introduced with its flagship restaurant at
PARKROYAL on Beach Road in 1996. This
was followed by a second restaurant on the
60th floor of UOB Plaza 1 in 2002, a third at
PARKROYAL Kuala Lumpur in 2003 and a fourth
in Tokyo in 2007.
“St. Gregory” continues to set benchmarks in
a unique brand of spa expertise that combines
traditional therapies from China, India, Indonesia
and Thailand with advanced technology and
techniques from Europe and Asia.
01
01:
02
The ‘Mu Tong’ Milk Bath
treatment performed in
traditional cedar wood hot
tubs imported from the
United States.
02: 功夫茶 (Gong Fu Cha)
– an exacting ritual of
tea preparation by a Tea
Connoisseur.
In 2010, St. Gregory at PARKROYAL Penang
Resort was awarded the “Best Body Loving
Treatment” for its Signature Traditional Spa
Treatment in Harper’s Bazaar Spa Awards.
“St. Gregory’s” Tui Na Massage was also named
“Best Muscle-Relief Massage” in The Singapore
Women’s Weekly Best of Beauty Salons, Spas
and Services ranking.
03: A skilled Tea Master in action.
04: Chong Qing Diced Chicken
with Dried Chilli – a
signature Sichuan dish.
03
As a one-stop centre for health and wellness,
“St. Gregory” offers state-of-the-art equipment
and workout systems, complete with personal
training programmes and fitness classes.
To enhance wellbeing, “St. Gregory” also
partners with a team of aesthetic and wellness
professionals to provide specialised treatments
and health management programmes.
04
Over the years, “Si Chuan Dou Hua” has
impressed food connoisseurs with its delivery
of excellent culinary experiences, bringing the
delectable tastes of authentic Sichuan and
Cantonese cuisine to the world.
Amidst its elegant and contemporary interiors,
master chefs gratify astute palates with an
extensive menu of delicacies that truly showcase
the diverse flavours of Chinese food. At the same
time, diners are treated to premium Chinese teas
brewed by skillful Tea Masters who combine
martial arts, dance and gymnastics in the
traditional art of tea-pouring.
Tian Fu Tea Room
The first “Tian Fu Tea Room” was introduced in
2005 at PARKROYAL on Beach Road, followed
by a second outlet at UOB Plaza 1 in 2008. It is
the first fully dedicated tearoom in Singapore,
offering over 25 types of premium Chinese teas.
“St. Gregory” owns and/or manages seven spas
in the Asia Pacific region including Singapore,
Malaysia and Japan.
ANNUAL REPORT 2010
a brand
34
new era
35
our
hotels
in this section
Operations Overview
-Portfolio Summary
-Southeast Asia
-People’s Republic of China
-Australia
-North America
Our Awards 2010
Our Pipeline Projects
Human Capital and Development
Sustainability and
Corporate Social Responsibility
ANNUAL REPORT 2010
a brand
new era
36
37
operations
overview
Growing from Strength to Strength
2010 presented Pan Pacific Hotels Group
with opportunities to strengthen its
portfolio and intensify its expansion
efforts.
Continuing on its growth strategy, the
Group concluded two landmark hotel
management agreements: the first for
an integrated resort in Bali, and the
second, for two properties in Ningbo,
China. It also commenced its expansion
in Oceania, beginning with three hotels
in Australia.
Cementing its international presence,
the Group made seven brand-defining
additions to its “Pan Pacific ” and
“PARKROYAL” portfolios. These included:
Pan Pacific Suzhou, Pan Pacific Serviced
Suites Bangkok, Pan Pacific Nirwana Bali
Resort, PARKROYAL Serviced Suites
Kuala Lumpur, PARKROYAL Darling
9
8
7
16
2
1
Harbour, Sydney, PARKROYAL Parramatta
and in January 2011, Pan Pacific Perth.
14
During the year, the Group made further
headway with its brands refreshment
work to engage its customers. Its work
with international brand agency The
Brand Union resulted in rejuvenated
brand strategies for “Pan Pacific” and
“ PA R K R OYA L” , exe c u te d t h ro u g h
new visual and verbal identities in
multiple channels and enhanced guest
experiences.
15
10
The Group currently manages and/
or owns over 30 hotels, resorts and
serviced suites in 12 countries. Including
pipeline developments, the “Pan Pacific”
portfolio comprises 19 hotels, resorts
and serviced suites in Asia, Oceania and
North America, while “PARKROYAL” is
represented by 15 hotels, resorts and
serviced suites in Asia Pacific.
1
CONFIRMED PIPELINE
NO. OF HOTELS
NO. OF ROOMS
16
10
2
5,111
2,990
595
3
5
–
964
1,348
–
TOTAL
28*
8,696
8
2,312
Owned
Managed
13
15
4,265
4,431
3
5
823
1,489
TOTAL
28
8,696
8
2,312
As at 31/1/2011
singapore
The Plaza
PARKROYAL on Beach Road
PARKROYAL on Kitchener Road
PARKROYAL Serviced Suites Singapore
Pan Pacific Singapore
Pan Pacific Orchard
Pan Pacific Serviced Suites Singapore
Pan Pacific
PARKROYAL
Others
*
12
18
EXISTING
NO. OF HOTELS
NO. OF ROOMS
BY ownership type
13
17
2
BY BRANDS
11
kuala lumpur
PARKROYAL Kuala Lumpur
Pan Pacific Kuala Lumpur
International Airport
PARKROYAL Serviced Suites
Kuala Lumpur
3
penang
PARKROYAL Penang Resort
4
BANGKOK
Pan Pacific Serviced Suites Bangkok
5
Bali
7
6
Jakarta
3
6
5
MANILA
Pan Pacific Manila
8
9
HANOI
Sofitel Plaza Hanoi
10
YANGON
PARKROYAL Yangon
11
15
SYDNEY
PARKROYAL Darling Harbour, Sydney
PARKROYAL Parramatta
ho chi minh city
PARKROYAL Saigon
Sofitel Saigon Plaza
16
Seattle
Pan Pacific Seattle
17
Vancouver
Pan Pacific Vancouver
18
Whistler
Pan Pacific Whistler Mountainside
Pan Pacific Whistler Village Centre
DHAKA
Pan Pacific Sonargaon Dhaka
12
SUZHOU
Pan Pacific Suzhou
13
XIAMEN
Pan Pacific Xiamen
14
Sari Pan Pacific Jakarta
4
PERTH
Pan Pacific Perth
LEGEND
Investment Property Owned
by The Group
Properties Owned and Managed
by The Group
Properties Owned by The Group and
Managed by Third Parties
Properties Owned by Third Parties and
Managed by The Group
ANNUAL REPORT 2010
a brand
new era
38
39
Portfolio
Summary
Investment Properties Owned by The Group
The Plaza
Retained interests in a 32-storey tower block comprising restaurants, hotel function rooms, shops,
offices and serviced suites, two adjacent commercial buildings and a multi-storey carpark block at
7500 Beach Road, Singapore
PARKROYAL Serviced Suites Singapore
90 serviced suites and
1 owner-occupied apartment
Shops & Offices
Completed
Tenure of Land
Approximate Net
Lettable Area (SqM)
Car Park Facilities
1974 & 1979
99-Year Lease from 1968
18,597
385 (portion of multi-storey carpark under construction)
S$101.7m
Present Capital Value
Completed
1979
Tenure of Land
Approximate Net
Lettable Area (SqM) 6,125 & 165 respectively
S$70.0m
Hotels Owned and Managed by The Group
Completed PARKROYAL on Beach Road
A 7-storey hotel building with 343 rooms at Tenure of Land
Approximate Gross
7500C Beach Road, Singapore
S$122.0m
PARKROYAL on Kitchener Road
Comprising a 5-storey podium with a basement
and a 16-storey Y-shaped tower with 534 rooms,
at 181 Kitchener Road, Singapore
S$210.0m
Floor Area (SqM)
Car Park Facilities
Completed Purchased
Tenure of Land
Approximate Gross
Floor Area (SqM)
Car Park Facilities
1971 & 1979
19,900
41
1976 & 1981
1989
Freehold
37,811
273
PARKROYAL Kuala Lumpur and President House
Comprising a 23-storey tower with a 6-storey podium and an annexed 8-storey car park building,
the 426-room hotel occupies the tower and part of the podium at Jalan Sultan Ismail, Kuala Lumpur,
Malaysia
Hotel and President House
Car Park Annex
Completed
Purchased
Tenure of Land
Approximate Gross
Floor Area (SqM)
Tenure of Land
Approximate Gross
Floor Area (SqM)
Car Park Facilities
1974
1999
Freehold
Completed PARKROYAL Penang Resort
A 309-room 8-storey beachfront resort hotel at Purchased
Tenure of Land
Batu Ferringhi Beach, Penang, Malaysia
1990
1999
Freehold
S$60.0m
31,502
147
PARKROYAL Yangon
An 8-storey V-shaped tower comprising 267
rooms at the corner of Alan Pya Phaya Road and
Yaw Min Gyi Road, Yangon, Union of Myanmar
S$13.0m
PARKROYAL Saigon
Comprising 193 rooms in a 10-storey hotel
building with a 9- storey extension wing, and a
4-storey annex office building at Nguyen Van
Troi Street, Ho Chi Minh City, Vietnam
Approximate Gross
Floor Area (SqM)
Car Park Facilities
Completed Purchased
Tenure of Land
Approximate Gross
Floor Area (SqM)
Car Park Facilities
1997
2001
Completed Tenure of Land
Approximate Gross
Floor Area (SqM)
Car Park Facilities
1997
Completed Purchased
Tenure of Land
Approximate Gross
Floor Area (SqM)
Car Park Facilities
1998
2001
17,700
140
12,165
25
S$36.3m
Pan Pacific Suzhou
A hotel built in the Ming Dynasty style, with 481
rooms accommodated within a low-rise cluster
at Xinshi Road, Suzhou, Jiangsu, The People’s
Republic of China
63,232
100
S$84.5m
Completed PARKROYAL Darling Harbour, Sydney
A 13-level hotel with 345 rooms at 150 Day Purchased
Tenure of Land
Street, Sydney, Australia
Approximate Gross
S$104.6m
Floor Area (SqM)
Car Park Facilities
1991
1993
Freehold
24,126
53
Leasehold, expiring in 2080
11,128
320
56,707
S$99.1m
ANNUAL REPORT 2010
a brand
new era
40
Hotels Owned and Managed by The Group
A 13-level hotel with 196 rooms at 30 Phillip
Street, Parramatta, New South Wales, Australia
S$39.2m
Pan Pacific Perth
Comprising 486 rooms in a 23-storey hotel tower
and a 4-level extension wing, at the corner of
Adelaide Terrace and Hill Street, Perth, Australia
S$196.1m
Completed Purchased
Tenure of Land
Approximate Gross
Floor Area (SqM)
Car Park Facilities
Completed Purchased
Tenure of Land
Approximate Gross
Floor Area (SqM)
Car Park Facilities
1986
1994
Freehold
16,694
176
1973
1995
Freehold
31,513
220
Hotel Owned by the Group and Managed by Third Parties
Sofitel Plaza Hanoi
A 20-storey hotel with 309 rooms and 36
serviced apartments at Thanh Nien Road, Hanoi,
Vietnam
S$93.5m
Completed Purchased
Tenure of Land
Approximate Gross
Floor Area (SqM)
Car Park Facilities
1998
2001
39,250
40
Properties Under Construction
Upper Pickering Street
A development comprising a 363-room hotel
and approximately 7,300 square metres of
office space
Beach Road
Redevelopment of existing Furniture Mall
located at The Plaza into a 184-unit serviced
suites and approximately 1,900 square metres
constructed into a column-free ballroom and
meeting rooms
41
Properties Owned by Third Parties and
Managed by The Group
PROPERTY
SINGAPORE
Pan Pacific Orchard
Pan Pacific Serviced Suites Singapore
MALAYSIA
PARKROYAL Serviced Suites
Kuala Lumpur
(Opened in October 2010)
THAILAND
Pan Pacific Serviced Suites Bangkok
(Opened in March 2010)
INDONESIA
Sari Pan Pacific Jakarta
Expected
Completion Tenure of Land
Site Area (SqM)
Gross Floor
Area (SqM)
Expected
Completion Tenure of Land
Gross Floor
Area (SqM)
Mid-2012
6,959
(Opened in April 2010)
29,812
THE PHILIPPINES
Pan Pacific Manila
4Q 2012
17,844
BANGLADESH
Pan Pacific Sonargaon Dhaka
CHINA
Pan Pacific Xiamen
NORTH AMERICA
Pan Pacific Seattle, USA
Pan Pacific Vancouver, Canada
NO. OF
ROOMS
ADDRESS
7 Raffles Boulevard, Marina Square,
Singapore 039595
10 Claymore Road, Singapore 229540
96 Somerset Road, Singapore 238163
Jalan CTA 4B, 64000 KLIA, Sepang
Selangor Darul Ehsan, Malaysia
No. 1, Jalan Nagasari, Off Jalan Raja
Chulan, Kuala Lumpur 50200, Malaysia
88/333 Sukhumvit Soi 55, North
Klongton, Wattana District, Bangkok
10110, Thailand
205
126
441
287
148
Jalan M.H.Thamrin 6, P.O. Box 3138,
Jakarta 10340, Indonesia
Jalan Raya Tanah Lot, P.O. Box 158
Tabanan 82171, Bali- Indonesia
400
M. Adriatico Cor. Gen Malvar Streets,
Malate, Manila City 1004, Philippines
236
107 Kazi Nazrul Islam Avenue. G.P.O. Box
3595, Dhaka 1215, Bangladesh
277
19 Hubin Bei Road, Xiamen 361012,
Fujian, China
387
2125 Terry Ave, Seattle. WA 98121, USA
Suite 300 - 999 Canada Place,
Vancouver, BC, V6C 3B5, Canada
Pan Pacific Whistler Mountainside, Canada 4320 Sundial Crescent, Whistler, BC,
V0N 1B4, Canada
Pan Pacific Whistler Village Centre, Canada 4299 Blackcomb Way, Whistler,
BC, V0N 1B4, Canada
778
278
160
504
121
83
ANNUAL REPORT 2010
a brand
42
new era
43
increases of 28%, in line with the hotels’ overall
RevPAR growth of 26%.
SouthEast
Asia
Other properties in Jakarta and Manila saw
marginal improvements in RevPAR. Despite ARR
continuing to fall below 2009 levels, Vietnam
OCCUPANCY
Tourism Landscape
The 13% recovery in visitor arrivals by the Asia
region was the fastest and strongest compared
to other regions around the world. Southeast
Asia saw strong growth of 12% with 69.6 million
international visitors in 2010. Industry occupancy
for Southeast Asia grew by 5 percentage points
to 66% while average room rate (ARR) increased
by 15% to US$125 and revenue per available
room (RevPAR) increased by 24% to US$82.
Visitor arrivals to Singapore was at 11.6 million,
an increase of 2.0 million or 20% against
2009. Overall hotel occupancy increased by 10
percentage points and ARR increased by 12%.
Overall, RevPAR increased by 26% versus 2009.
Malaysia saw a total of 24.6 million visitors or a
4% increase in visitor arrivals compared to 2009,
above the Ministry of Tourism’s target of 24.0
million visitor arrivals in 2010. Hotel occupancy
in Malaysia increased by 4 percentage points
with Kuala Lumpur and Penang enjoying 4 and 5
percentage points increase respectively. ARR grew
by 6% in Malaysia with Kuala Lumpur increasing by
4% and Penang improving by 9% over 2009.
The total number of international arrivals to
Vietnam in 2010 was at 5.0 million, up by 34%
over the 3.8 million arrivals achieved in 2009
and above the original goal of 4.2 million.
International visitor arrivals to Hanoi and Ho Chi
Minh increased by 20% and 19% respectively.
Vietnam hotel occupancy improved by 10
percentage points although ARR remained flat
against 2009. Ho Chi Minh experienced a similar
trend with occupancy growth of 11 percentage
points while ARR declined by 5%.
Other countries in the region also enjoyed good
visitor growth with Myanmar increasing 28%
year on year, Indonesia seeing 11% growth to 7.0
million, Philippines, 3.5 million or 17% increase,
and Thailand, 15.8 million or 12% increase.
Indonesia hotel occupancy grew by 4 percentage
points with Jakarta occupancy growing by 5
percentage points and Bali by 4 percentage
points. However, ARR was flat against 2009.
Hotel occupancy in Philippines grew by 5
percentage points with marginal ARR increase of
2%. Bangladesh saw good occupancy increase by
12 percentage points and ARR increasing by 6%.
Overall RevPAR increased by 27% over 2009.
Bangkok, Thailand was the only city which
ended the year with occupancy decline (by 3%
to 53%) and a flat RevPAR in 2010.
Group Performance
The Group has operations in eight countries in
the region including cities such as Bali, Bangkok,
Dhaka, Hanoi, Ho Chi Minh, Jakarta, Kuala Lumpur,
Manila, Penang, Singapore and Yangon.
Revenue improved by 22% to $426 million during
the year, driven by improvements in RevPAR.
Occupancy grew by 4 percentage points to 73%
and ARR improved by 5%.
Myanmar and Bangladesh had the best
improvement in performance with RevPAR
improving by more than 40% compared against
2009. Singapore hotels and serviced suites
also saw strong growth with average RevPAR
hotels still managed good RevPAR growth of
9%. Kuala Lumpur hotels also saw good RevPAR
growth of 12% while Penang RevPAR declined
by 3% with the re-opening of a fully renovated
competitor hotel.
REVPAR (S$)
REVENUE (S$’M)
100%
150
250
90%
140
220
80%
130
190
70%
120
160
60%
110
130
50%
100
100
40%
90
70
30%
80
40
0%
0
0
2006
2007
2008
2009
2010
2006
2007
2008
2009
2010
2006
2007
2008
2009
2010
owned and managed
owned and managed
owned and managed
owned and managed by third party
managed
managed
managed
Singapore
Parkroyal Serviced
Suites Singapore
Functionality meets
contemporary style in 90 newly
upgraded apartments. Further
to the renovations of 40 units
in 2009, the remaining 50 units
were completed in February
2010. The refurbished suites
offer a spacious living area
with panoramic views of the
sea or city skyline, a stylish
home away from home just
minutes away from the Central
Business District.
Average
occupancy:
Parkroyal On
Beach Road
This 343-room hotel offers
spacious accommodations
in an ethnic enclave fringed
by bustling shopping, dining,
b u s i n e s s a n d c o nve n t i o n
facilities, conveniently located
within the city’s central
business district.
+20%
Average
occupancy:
+21%
+56%
Average
room rate:
points
Average
room rate:
Revenue per
available
room:
+13%
Parkroyal On
Kitchener Road
Exuding stylish comfort, this
elegant 534-room hotel at
Little India is situated in a
neighbourhood brimming with
colours, culture and vibrancy.
Average
occupancy:
points
Revenue per
available
room:
+10%
+29%
+10%
points
Average
room rate:
Revenue per
available
room:
+22%
+38%
* All figures are compared year on year over 2009.
ANNUAL REPORT 2010
a brand
new era
44
45
SouthEast Asia
MALAYSIA
Myanmar
Parkroyal
Kuala Lumpur
Discover an authentic mix of
tradition and modernity at this
426-room hotel in the heart of
Kuala Lumpur’s trendy Golden
Triangle, the capital’s main
commercial and retail district.
Average
occupancy:
Average
room rate:
Revenue per
available
room:
remained flat
against 2009
+17%
+17%
PARKROYAL
Penang resort
An idyllic 309-room resort
hotel overlooking lush greenery
and the Batu Ferringhi beach.
Occupancy and room rates were
marginally affected by the reopening of a competitor hotel
previously under renovation.
Average
occupancy:
PARKROYAL
Yangon
Old-world charm and stately
elegance feature at this 267room property surrounded by
Yangon’s cultural landmarks
in the heart of the city. Pan
Pacific Hotels Group holds a
95% interest in the hotel.
-3%
Average
occupancy:
+1%
-3%
Average
room rate:
points
Average
room rate:
Revenue per
available
room:
People’s
Republic
of China
Tourism Landscape
Arrivals into China in 2010 increased by 6% compared to the same
period in 2009. Overall China’s hotel occupancy improved by 14
percentage points with ARR increasing by 13%. In the East China
region which includes Fujian and Jiangsu, occupancy and ARR
also improved but at a lower rate of 7 percentage points and 4%
respectively.
Group Performance
During the year, occupancy decreased by 3 percentage points
while ARR declined by average of 9%. The weak performance in
both occupancy and ARR was due to increased competition.
PAN PACIFIC SUZHOU
This 481-room hotel is set in
magnificent Suzhou gardens
and intricate landscapes, fusing
traditional architecture with
modern luxuries.
+12%
points
Revenue per
available
room:
+17%
+41%
points
Average
room rate:
Revenue per
available
room:
Vietnam
PARKROYAL Saigon
This 193-room hotel, offers easy
access to Ho Chi Minh City,
and is minutes from the Tan
Son Nhat International Airport
and Exhibition and Convention
Centre. Renovation for the
hotel will be carried out in 2011,
including refurbishments to the
guestrooms, expansion of the
event spaces and enhancements
to guest facilities.
Average
occupancy:
Sofitel Plaza Hanoi
Pan Pacific Hotels Group holds
a 75% interest in this luxurious
hotel. It features 309 wellappointed rooms showcasing
scenic views of the West Lake
and Red River in Hanoi, and
convenient access to the city.
+10%
Average
occupancy:
-2%
+14%
Average
room rate:
points
Average
room rate:
Revenue per
available
room:
Sofitel Saigon Plaza
And Central Plaza
With 287 rooms and 11 spacious
suites, this hotel in which Pan
Pacific Hotels Group has a
26% interest, is enlivened by
breathtaking city views and
a historic address on LeDuan
Boulevard, the main commercial
and diplomatic precinct. As part
of its repositioning to the new
Sofitel brand standard, the hotel
renovated 18 club guestrooms
and 10 suites and will be
refurbishing its bar in 2011.
+11%
Average
occupancy:
-4%
+13%
Average
room rate:
points
Revenue per
available
room:
+9%
points
Revenue per
available
room:
-12%
+2%
-9%
Average
occupancy:
-9%
-25%
OCCUPANCY
REVPAR (S$)
REVENUE (S$’M)
75%
160
40
70%
140
35
65%
120
30
60%
100
25
55%
80
20
50%
60
15
45%
40
10
40%
20
5
0%
0
0
2006
2007
2008
2009
2010
2006
2007
2008
2009
2010
2006
2007
2008
2009
2010
owned and managed
owned and managed
owned and managed
managed
managed
managed
ANNUAL REPORT 2010
a brand
46
AUSTRALIA
new era
47
OCCUPANCY
REVPAR (S$)
100%
220
120
95%
210
110
90%
200
100
85%
190
90
80%
180
80
75%
170
70
70%
160
60
65%
150
50
0%
2007
2008
2009
2010
Industry occupancy for Australia saw
growth by 2 percentage points to 64%
while ARR improved by 2% to A$139 and
RevPAR grew by 5% to A$89. Sydney saw
strong growth with occupancy increase
by 5 percentage points, ARR increased
by 4% to A$176 and RevPAR grew by 11%
to A$151. Perth CBD occupancy grew by 3
percentage points versus 2009 while ARR
increased by 1% and RevPAR by 5%.
0
0
2006
Tourism Landscape
The Oceania region saw international tourist
arrivals increase by 6% to 11.6 million in 2010.
In Australia, visitor arrivals hit a record high
of 5.9 million, 5% above the same period
in 2009. This was above Australia’s 2010
forecast of 5.5 million visitor arrivals.
REVENUE (S$’M)
PARKROYAL DARLING
HARBOUR, SYDNEY
(formerly Crowne Plaza
Darling Harbour)
This scenic 345-room
accommodation, surrounded
by Sydney’s famous attractions
and located near the
waterfront, is the ideal base
for shopping, sightseeing and
sheer relaxation. In 2010, Pan
Pacific Hotels Group bought
over the remaining 40% stake
from minority shareholders and
now wholly owns the hotel,
rebranded to the “PARKROYAL”
brand on 1 November 2010.
Group Performance
The three hotels saw a 6% increase in
revenue to $104 million during 2010. This
was the result of a 4 percentage points
increase in occupancy and 4% increase
in ARR. The increase in occupancy was in
spite of the renovations carried out in the
Parramatta hotel during the year.
Average
occupancy:
The two Sydney hotels were rebranded and
managed under the “PARKROYAL” brand
from November 2010. The Perth hotel was
rebranded and managed under the “Pan
Pacific” brand from January 2011.
Revenue per
available
room:
2006
2007
2009
2010
2006
2007
2008
2009
2010
PARKROYAL PARRAMATTA
PAN PACIFIC PERTH
(formerly Crowne
Plaza Parramatta)
(formerly Sheraton
Perth Hotel)
This 196-room hotel is situated
on Phillip Street, in Parramatta’s
fa s h i o n a b l e b u s i n e ss a n d
shopping district. In 2010, Pan
Pacific Hotels Group bought
over the remaining 40% stake
from minority shareholders and
now wholly owns the hotel,
rebranded to the “PARKROYAL”
brand on 1 November 2010.
Renovation of all 196 guestrooms
was completed in August 2010
and further refurbishments for
the public areas, restaurants
and bars will continue in the first
quarter of 2011. The reduction
in occupancy was mainly due
to the renovations of rooms
carried out during the year.
This 486-room hotel is flanked
by scenic vistas of the Swan
River and its surrounding
parks. The Group commenced
renovations of the ballrooms in
August 2010 to be completed
by early 2011. The hotel was
rebranded to the “Pan Pacific”
brand on 6 January 2011.
+4%
Average
occupancy:
+5%
+9%
Average
room rate:
points
Average
room rate:
2008
-1%
Average
occupancy:
points
Revenue per
available
room:
+6%
+5%
+6%
points
Average
room rate:
Revenue per
available
room:
+2%
+11%
ANNUAL REPORT 2010
a brand
new era
48
a feather in our cap
for a brand new era
North
America
Tourism Landscape
International visitors to North America
increased by 8% to 99.2 million in 2010.
The United States (“US”) saw visitor
arrivals increase by 11% to 60.9 million
while Canada registered a marginal
increase of 2% against 2009.
our
awards
2010
Industry occupancy for US increased
3 percentage points to 58% while
ARR was flat at US$98 and RevPAR
was up 6% to US$56. Canadian hotel
occupancy increased by 2 percentage
points to 61%. ARR increased by 2%
to C$129 while RevPAR was at C$78,
a 5% improvement over the same
period in 2009.
• Asia’s Leading Business Hotel
•Canada’s Leading Hotel
•Canada’s Leading
Business Hotel
OCCUPANCY
REVPAR (S$)
REVENUE (S$’M)
80%
300
200
75%
280
180
70%
260
160
65%
240
140
60%
220
120
55%
200
100
50%
180
80
45%
160
60
2007
2008
2009
2010
managed
•Indonesia’s Leading
Golf Resort
Pan Pacific Nirwana
Bali Resort
•Singapore’s Leading
Serviced Apartments
Pan Pacific Serviced
Suites Singapore
Condé Nast Traveler
Readers’ Choice
Awards 2010
• Top Hotels (Canada)
0
0
2006
Awards and global recognition are testaments to the brand
experience and distinctive service standards that separate us
from our competition. We are motivated by our accolades,
and inspired to create many more memorable hotel
experiences so that you, our valued guests, have compelling
reasons to return to us, year after year.
World Travel
Awards 2010
• World’s Leading
Business Hotel
Group Performance
Performance of the hotels improved
i n l i n e w i t h t h e m a r ke t t re n d .
Managed revenue increased by 10%
to $88 million during 2010 boosted
by a 13% improvement in RevPAR.
The increase in RevPAR comprised
of a 3 percentage points increase in
occupancy and 7% increase in ARR.
0%
49
2006
2007
managed
2008
2009
2010
2006
2007
managed
2008
2009
2010
• Top Resorts (Canada)
Pan Pacific Whistler
Village Centre
TripAdvisor’s
Travelers’ Choice
Awards 2010
• Top 25 Hotels in
United States
Pan Pacific Seattle
• Top 25 Hotels in China
Pan Pacific Xiamen
Golden Pillow
Awards 2010
•China’s Top 10 Most
Popular Resort Hotels
Pan Pacific Suzhou
Travel+Leisure
China’s China
Travel Awards 2010
•China’s Top 100 Hotels
Pan Pacific Suzhou
Travel & Leisure’s
Annual Travel
Awards 2010
• Top 25 Best Business
Hotels in Greater China
Pan Pacific Xiamen
BCA Construction
Excellence
Awards 2010
•Commercial/Mixed
Development Buildings
Category
Suites Singapore
FIABCI Prix
d’Excellence
Awards 2010
• Hotel Category
Pan Pacific Suzhou
ASEAN Green Hotel
Award 2010-2011
•Sari Pan Pacific Jakarta
ASSOCIATION OF ROOMS
DIVISION EXECUTIVES
(SINGAPORE)
AWARDS 2010
• Best Front Office
Department
(Superior Hotel)
PARKROYAL on
Beach Road
The Asia Pacific
Brands Foundation
(APBF) BrandLaureate
Award 2009/2010
• Best Brand in
Airport Hotels
World Luxury Hotel
Awards 2010
• Luxury Airport Hotel
Category
ANNUAL REPORT 2010
a brand
new era
50
our pipeline
projects
Committed to steady expansion, Pan
Pacific Hotels Group continues to
extend its presence in Greater China,
Asia and Oceania.
PARKROYAL
Melbourne Airport
Featuring 276 guest rooms complete with
dining, meeting, business and fitness facilities,
this is the only airport hotel in Australia with
direct connectivity to the terminal building. Its
location at one of Australia’s busiest airports
offers superb visibility for brand building.
51
The Plaza
Beach Road Extension
The Plaza Beach Road Extension features 184
serviced suites, with a column-free ballroom
and function rooms for meetings and events,
in a vibrant enclave bordering downtown
Singapore. Piling and redevelopment works,
which commenced in 2010, are expected to
be completed by end-2012.
Opening in 2012
PARKROYAL
Serviced Suites
Green City,
Shanghai
Opening on 1 April 2011
Pan Pacific
Ningbo
Suites Ningbo
This 430-room luxury hotel is part of a mixeduse development and located at the gateway
to Ningbo’s upcoming industrial and economic
zone. It is also the focal point of a commercial
and up-market residential district evolving in
the area.
Providing a contemporary home away from home
is this 200-room property situated in the mixeduse development housing Pan Pacific Ningbo.
An ideal base for extended-stay travellers,
it is located next to Ningbo’s International
Conference and Exhibition Centre.
Opening in 2012
Opening in 2012
PARKROYAL
on Pickering
Redefining conventions with its
‘hotel-in-a-garden’ concept is this
363-room property showcasing
sustainable features in elegant and
contemporary settings. Located at
the crossroad of Singapore’s central
business district and Chinatown, it is
close to the waterfront entertainment
along Singapore River.
Opening in 2012
M a r k i n g “ PA R K R OYA L’ s ”
debut in China is this 325room property located in a
prestigious district catering
to Shanghai’s burgeoning
expatriate community. Its
exclusive amenities include
an indoor swimming pool and
private clubhouse, while a
three-story annex houses a
café and restaurant.
Opening in 2012
Pan Pacific
Tianjin
Commanding panoramic views
of Haihe River is this 334room hotel strategically sited
in the bustling harbour city
of Tianjin. Home to luxurious
accommodations and part of
a mixed-use development, it
offers convenient access to
the central business district
and airport.
PARKROYAL Taihu Resort, Suzhou
This elegant 200-room hotel is located at Taihu, one of Suzhou’s
most popular resort destinations. Overlooking the beautiful Taihu
Lake, it features authentic restaurants, spacious ballrooms, lush
garden landscapes and a stunning lakeside spa among other
well-appointed amenities.
Opening in 2014
Opening in 2013
ANNUAL REPORT 2010
a brand
52
human
capital
and
development
Pan Pacific Hotels Group
believes that Human Capital and
Development plays a crucial role
when it comes to driving the
company forward.
Guided by a Purpose for Great
Brands, Great Hotels, Great People
and Great Relationships, our
associates embraced a renewed
commitment to supporting the
Group’s expansion plans and
delivering on its brand promises.
A Great Future Driven by Great People
We recognised that inculcating a passionate
confidence for the Group’s Vision and Purpose
was the cornerstone from which the “Pan
Pacific” and “PARKROYAL” brands would grow.
During the year, the Group rolled out its new
Vision, Purpose and Values across all of its hotels
and helped associates translate them into action
in day-to-day operations. This was inculcated
through a year-long Vision, Purpose and Values
programme that included creative competitions,
associate engagement programmes and even a
‘Doing Good’ month.
Constant employee engagement remained a key
priority for the Group. The improved scores from
this year’s “Our People, Voices & Views Associate
Satisfaction Survey” attest to the fact that
clarity in management direction and a sense of
ownership and work empowerment are essential
ingredients for organisational growth.
Strengthening Our Talent
Management Strategies
Furthering our efforts to build Human Capital
capabilities in strategic functions such as Brand
Development, Operations, Strategic Planning
new era
53
and Human Capital & Development, a systematic
Talent Management Programme was instituted
to track the contributions and performance
of our talents. Through the programme, we
identified a strong pool of high potential
candidates whom we can groom for leadership
roles in the course of succession planning and
future expansion.
As part of the Talent Development process, a
robust Performance Management System was
also introduced to provide greater transparency
and objectivity in our appraisal systems, and
to foster stronger links between employee
performance, business goals and company
values. The system encouraged a greater
ownership of roles as we work hand-in-hand
with our associates to hone their strengths for
future growth.
...clarity in management
direction and a sense
of ownership and work
empowerment are
essential ingredients for
organisational growth...
Sharing Our Best Practices
Sharing strategic insights with professionals
from the industry, our Senior Vice President
for Human Capital & Development, Mrs Melody
King, was a speaker at a panel on “Harnessing
Human Capital for Successful Regionalisation
in Asia” during the Singapore Human Capital
Summit held in September.
The Group was also invited to be a member of
the Future of Work (FOW) Consortium, to share
perspectives on talent management and HR
practices that will shape the future. Working in
tandem with academia and global professionals,
our participation will provide a voice for the
hospitality industry and help in the development
of useful benchmarks that will reveal how “future
proofed” today’s businesses are for evolving
global trends.
Encouraging Meaningful Work
During the year, the Group appointed several
internal teams to spearhead a series of work
improvement measures. These have enhanced
our associates’ abilities to function efficiently
across geographies and operations. In particular,
red tape and complex processes were simplified
so that front-liners could focus on what they do
best – creating memorable hotel experiences.
With a growing family of over 7,500 global
associates and an ever-expanding property
portfolio, the sustained ability to support and
complement one another will take the Group to
new heights.
ANNUAL REPORT 2010
a brand
54
new era
55
For families devastated by the 7.0-magnitude
earthquake in Haiti, our associates at Pan Pacific
Seattle dug into their pockets for the Haitian
Earthquake Relief Fund. At PARKROYAL Saigon,
associates rallied to donate food and money to
families who lost their homes to massive storms
in Vietnam.
Spreading yuletide cheer, associates at Pan
Pacific Serviced Suites Singapore shared
food and presents with children from a local
orphanage, while PARKROYAL on Beach Road
supported the Boys’ Brigade Share-A-Gift
project for the needy.
SUSTAINABILITY
AND Corporate
social
Responsibility
It’s not about duty, it’s about being
there for people at a time when they
need us most. [The flight disruptions
caused by the volcanic eruption in
Iceland] gave us a real chance to
put our vision into practice, bringing
heartfelt gestures to the travellers
whom we managed to help.
Sundra Kulendra
Director, Restaurants, Bars & Events
PARKROYAL Kuala Lumpur
Pan Pacific Hotels Group
supports numerous social
and environmental causes –
transforming lives, forging
relationships and giving
back to local communities
– with the view that
environmental, social and
governance considerations
impact on the long term
performance of a company.
Helping the Less Privileged
In Singapore, the “Pan Pacific” and
“PARKROYAL” hotels co-hosted the
Assisi Hospice Charity Fun Day 2010
at St. Joseph Institution International
School with games and food stalls.
Through combined efforts, we doubled
our contributions from last year.
At the Singapore corporate office,
the Group organised an in-house
sale of art and crafts designed by
youths from the Muscular Dystrophy
Association.
Doing Good Month
December was designated “Doing
Good Month”. Group-wide, our hotels
supported local charities with activities
demonstrating our respect and care
for the wider community and our
recognition and value for diversity.
Going Green
In North America, Pan Pacific Whistler Village
Centre and Pan Pacific Whistler Mountainside
introduced hybrid heating power to reduce
greenhouse gas emissions; while the latter,
together with Pan Pacific Vancouver, were rated
3 and 4 Green Keys respectively in the Green
Key ECO-ratings awarded by the Canadian
Hotel Association.
Pan Pacific Seattle embarked on a PanEarth
Sustainability Programme, where eco-initiatives
are continually reviewed and improved upon by a
designated Green Team. It is also an active member
of the Seattle Climate Partnership dedicated to
sustainable strategies for the environment.
To offset its carbon footprint, Pan Pacific
Sonargaon Dhaka planted over 300 trees, which
also served to provide shade for a new parking
area.
The Annual Christmas Wish Breakfast project
by Pan Pacific Vancouver collected over 11
tonnes of gifts and US$14,000 in cash donations
for underprivileged children. Special festive
programmes by Pan Pacific Suzhou, Pan Pacific
Serviced Suites Bangkok, Pan Pacific Kuala Lumpur
International Airport, PARKROYAL Kuala Lumpur,
PARKROYAL Saigon and PARKROYAL Penang
Resort brought Christmas cheer to children and
the elderly in their respective communities.
Supporting Local Communities
Volunteers from Pan Pacific Nirwana Bali Resort
extended a helping hand to neighbouring villages
through cleaning and maintenance projects. The
hotel also supported local Beraban businesses
by buying local produce and supplies, providing
employment, financial support and internships
for the local community in doing so.
Providing Solace in Times of Need
PARKROYAL Kuala Lumpur rose to the occasion
when UK-bound passengers were stranded
in Kuala Lumpur due to flight cancellations
caused by the eruption of Mount Eyjafallajökull
in Iceland. The hotel provided several guest
rooms to affected passengers for rest – an
initiative commended by both KLM Airlines and
the British High Commission.
Currently under development is PARKROYAL on
Pickering in Singapore, which features a hotelin-a-garden concept and sustainable features
that have earned it a Green Mark Platinum
certification.
Amongst its green features are a smart water
management system, rainwater harvesting and
automatic sensors to regulate energy and water
usage. Greenery also features prominently in
the hotel’s design concept; lofty four-storey tall
skygardens, spread throughout the building’s
façade, bring lush greenery to the rooms and
internal spaces.
Enterprise-wide Risk Management
We have put in place our Enterprise-wide Risk
Management Programme (“ERM Programme”)
in 2009. In 2010, we continued to cascade the
ERM Programme down to our businesses and
operations. This allows the Group to have a
system to deal with current and evolving risks in
the business and regulatory environment which
it operates in, and enables the Group to stay on
a sustainable growth path in the long term. The
details on the ERM Programme can be found
in pages 146 to 147 of the Annual Report (the
Corporate Governance Report).
ANNUAL REPORT 2010
our
performance
in this section
Five-Year Financial Summary
Financial Review
Group Value-Added Statement
a brand
new era
58
59
five-year
financial summary
CONSOLIDATED INCOME STATEMENTS
In $’000
Revenue
Cost of sales
Gross profits
Other miscellanous gains
Expenses
- Marketing & distribution
- Administrative
- Other operating
Profit from operations
Finance income
Exchange (loss)/gain
Finance expense
Share of profit of
associated companies
Profit before other gains/(losses)
and fair value adjustments
Gain on disposal of subsidiaries
Impairment charge on property
under construction
Fair value gains/(losses) on
investment properties
Profit before income tax
Income tax expense
Net profit
Attributable to:
Equity holders of the Company
Non-controlling interests
REVENUE BY SEGMENTS
2006
2007
2008
2009
2010
287,255
(156,420)
130,835
2,520
290,159
(149,040)
141,119
1,137
315,225
(153,970)
161,255
1,058
287,806
(147,347)
140,459
1,440
324,242
(160,649)
163,593
1,987
(13,247)
(26,717)
(44,741)
48,650
3,036
(1,040)
(13,273)
(12,793)
(23,895)
(43,893)
61,675
2,708
539
(6,901)
(14,364)
(28,415)
(44,600)
74,934
1,999
959
(1,747)
(14,343)
(31,059)
(45,610)
50,887
2,505
(621)
(3,034)
(15,805)
(36,482)
(50,998)
62,295
3,368
(3,450)
(3,124)
1,411
1,907
1,946
1,067
1,127
38,784
86,717
59,928
–
78,091
–
50,804
–
60,216
156
–
–
(37,000)
–
–
–
125,501
(8,898)
49,267
109,195
(21,187)
(9,840)
31,251
(15,829)
(1,620)
49,184
(9,109)
9,979
70,351
(15,131)
116,603
88,008
15,422
40,075
55,220
114,211
2,392
84,977
3,031
12,818
2,604
39,312
763
53,640
1,580
116,603
88,008
15,422
40,075
55,220
In $’000
Business
Hotel ownership
Hotel management
Total segment sales
Inter-segment sales
Property investments
Investments
Total
Hotel ownership
Total
Australia
- before other gains/(losses) and
fair value adjustments
- after other gains/(losses) and
fair value adjustments
Gross dividend declared
- Final (cents)
- Special (cents)
- Cover (times)
6.87
11.13
9.65
6.78
7.53
28.55
21.22
2.14
6.55
8.94
5.00
35.00
0.87
5.00
–
2.83
4.00
–
0.53
3.50
–
1.87
4.00
–
2.24
2008
2009
2010
273,707
–
–
–
12,498
1,050
277,202
–
–
–
11,691
1,266
296,556
4,268
10,928
(6,660)
13,135
1,266
260,877
13,760
19,895
(6,135)
13,027
142
288,561
17,611
27,535
(9,924)
17,329
741
287,255
290,159
315,225
287,806
324,242
83,848
96,643
37,068
41,352
25,682
5,566
–
99,980
104,025
41,198
40,176
22,966
5,986
894
87,432
90,316
32,822
41,887
22,738
7,829
4,782
111,104
103,531
33,847
44,943
17,273
9,664
3,880
287,255
290,159
315,225
287,806
324,242
Malaysia
China
0%
6%
2010
89%
89%
Investments
99,676
82,047
31,015
38,366
30,539
5,612
–
Vietnam
5%
Myanmar
1%
3%
5%
34%
14%
2010
11%
32%
Other
Profit from Operations by segments
In $’000
Business
Hotel ownership
Hotel management
Investments
Total
Hotel ownership
Basic earnings per ordinary
shares (cents)
2007
Hotel management
Geographical
Singapore
Australia
Vietnam
Malaysia
China
Myanmar
Others
Singapore
2006
41,010
–
6,590
1,050
52,998
–
7,411
1,266
63,451
1,476
8,741
1,266
42,050
673
8,022
142
48,491
2,728
10,335
741
48,650
61,675
74,934
50,887
62,295
Hotel management
Geographical
Singapore
Australia
Vietnam
Malaysia
China*
Myanmar
Others
Total
Singapore
1%
4%
Australia
21,718
17,342
12,754
5,990
5,020
(1,149)
–
31,643
22,465
16,219
2,249
3,202
(134)
(710)
18,815
16,829
10,429
4,866
(920)
296
572
29,824
19,725
11,423
4,665
(5,389)
1,722
325
48,650
61,675
74,934
50,887
62,295
Malaysia
China
2010
78%
Investments
16,793
11,214
8,091
5,755
7,840
(1,043)
–
Vietnam
17%
Myanmar
3%
1%
7%
18%
2010
48%
32%
Other
* Pie chart does not show China segment losses.
ANNUAL REPORT 2010
a brand
new era
60
five-year
financial summary
61
Financial
Review
Consolidated Statements of Financial Position
In $’000
Net assets employed
Available-for-sale financial assets
Investment in associated companies
Investment properties
Property, plant and equipment
Property under construction
Intangibles
Other assets
Deferred income tax assets
Advances to holding company
Net current assets, excluding
borrowings
Non-current liabilities, excluding
borrowings
Capital employed
Share capital
Reserves
Retained earnings
Interests of the shareholders
Borrowings
Year ended 31 December
31.12.06
31.12.07
31.12.08
31.12.09
31.12.10
20,892
12,897
118,677
464,757
–
14,415
–
8,395
–
21,633
10,566
165,309
502,644
–
14,315
71,096
4,353
–
12,968
12,506
155,469
478,171
237,059
28,026
–
2,014
–
18,032
6,954
155,481
491,716
248,122
27,200
–
3,330
55,662
17,167
7,394
165,460
480,544
273,778
30,772
–
2,783
49,630
40,126
195,423
6,960
49,899
22,777
(35,424)
(51,265)
(52,107)
(53,859)
(57,395)
644,735
934,074
881,066
1,002,537
992,910
217,623
47,546
248,617
513,786
24,108
106,841
557,333
31,768
212,736
801,837
27,949
104,288
557,333
(9,079)
195,554
743,808
23,463
113,795
557,333
22,278
210,866
790,477
29,942
182,118
557,333
25,715
218,635
801,683
–
191,227
644,735
934,074
881,066
1,002,537
992,910
Net tangible asset backing
per ordinary share ($)
1.25
1.31
1.19
1.27
1.28
- after accounting for surplus on
revaluation of hotel properties
2.14
2.17
1.98
2.05
2.20
0.21
0.13
0.15
0.16
0.18
Gearing ratio
Debt : equity ratio
%
Change
2009
$’000
Revenue
Gross revenue from hotel ownership
Revenue from hotel management services
Revenue from property investments
Dividend income
288,561
17,611
17,329
741
260,877
13,760
13,027
142
27,684
3,851
4,302
599
11
28
33
422
Total revenue
324,242
287,806
36,436
13
Group revenue for the year ended 31 December 2010 increased by 13% or $36.4 million to $324.2 million from
$287.8 million achieved in the previous year. The increase was due to better performance in all the business
segments.
Revenue from the hotels owned by the Group increased by 11% from $260.9 million in 2009 to $288.6 million
in 2010. With the exception of the hotels in Penang and Suzhou, all the Group’s hotels registered increase in
revenue per available room (“RevPAR”).
Revenue from hotel management services for the year ended 31 December 2010 increased by $3.9 million or
28% to $17.6 million on the back of better performance from hotels under management.
Revenue from property investments of $17.3 million for the year ended 31 December 2010 was 33% higher
than the previous year due to higher rental from the commercial properties and better performance of the
Group’s serviced suites at The Plaza.
Expenses
Cost of sales
- before accounting for surplus on
revaluation of hotel properties
Increase/
(Decrease)
$’000
2010
$’000
2010
$’000
2009
$’000
160,649
147,347
Increase/
(Decrease)
$’000
13,302
%
Change
9
The increase in cost of sales was due mainly to higher payroll cost as a result of annual increments and the
lifting of hiring freeze; higher depreciation charge arising largely from the completion of extension works and
refurbishment works at Pan Pacific Suzhou and PARKROYAL Serviced Suites Singapore respectively in 2009;
and increase in other operating costs in line with the increase in revenue.
ANNUAL REPORT 2010
a brand
new era
62
Financial
Review
63
Financial
Review
Expenses
- Marketing and distribution
- Administrative
- Other operating
2010
$’000
2009
$’000
15,805
36,482
50,998
14,343
31,059
45,610
Increase/
(Decrease)
$’000
1,462
5,423
5,388
%
Change
10
17
12
The increase in administrative expenses by $5.4 million or 17% from $31.1 million in 2009 to $36.5 million in
2010 was in line with higher revenue and higher payroll costs as a result of annual increments and the lifting
of hiring freeze.
Other operating expenses increased by 12% or $5.4 million from $45.6 million in 2009 to $51.0 million in 2010
due mainly to increases in property tax; repairs and maintenance expenses; heat, light and power; write-off of
property, plant and equipment; and rebranding expenses for the Suzhou and Australian hotels.
Finance expenses
Interest expenses, net of capitalisation
Foreign exchange loss – net
Increase/
(Decrease)
$’000
Income tax expenses
Tax expense on profit for the financial year
Effect of changes in tax rate
(Over)/under provision in preceding financial years
Effective tax rate(1)
16,985
–
(1,854)
10,904
(2,160)
365
6,081
2,160
(2,219)
56
100
(608)
15,131
9,109
6,022
66
24%
22%
2%
9
Based on tax expense on profit for the financial year over profit before income tax
%
Change
2009
$’000
3,124
3,450
3,034
621
90
2,829
3
456
6,574
3,655
2,919
80
The exchange loss in 2010 arose mainly from the repayment of USD-denominated shareholder loans by
subsidiaries. These loans are deemed to be part of the Company’s investments in the subsidiaries and movement
in currency translation are taken to equity. These exchange differences are transferred from equity and recognised
in the Group’s income statement upon realisation, i.e. when repayments are made by the subsidiaries.
%
Change
2009
$’000
In line with higher profits, the Group’s tax charge for the year ended 31 December 2010 increased from $9.1
million in 2009 to $15.1 million in 2010. Included in the tax charge was a write-back of overprovision of income
tax of $1.9 million (2009: write-back of deferred tax amounting to $2.2 million due to change in tax rate). The
effective tax rate is higher than the Singapore statutory rate of 17% due mainly to certain overseas profits being
subject to statutory rates higher than the Singapore statutory rate and disallowable expenses.
(1)
2010
$’000
Increase/
(Decrease)
$’000
2010
$’000
2010
$’000
As at 31 December
Increase/
2009
(Decrease)
$’000
$’000
%
Change
Borrowings and capital management
Gross borrowings
192,294
183,796
8,498
5
Less: Advances to holding company
(49,630)
(55,662)
6,032
11
Net borrowings
142,664
128,134
14,530
11
18%
2.50%
16%
2.69%
2%
-0.19%
10
(7)
Within one year
70,833
6,087
64,746
nm
One to two years
119,348
80,994
38,354
47
Two to five years
2,113
96,715
(94,602)
(98)
192,294
183,796
8,498
5
Debt : equity ratio (based on net borrowings)
Average interest rate on borrowings
Fair value adjustments
Fair value gains/(losses) on investment properties
2010
$’000
2009
$’000
9,979
(1,620)
Increase/
(Decrease)
$’000
11,599
%
Change
Maturity of borrowings
716
Investment properties are carried at fair values as determined by independent professional valuers. It is the
practice of the Group to revalue its investment properties on a half yearly basis on 30 June and 31 December.
In 2010, the Group recognised a fair value gain of $10.0 million on its investment properties compared to a
fair value loss of $1.6 million in 2009.
nm: not meaningful
The bank borrowings are secured by mortgages on the borrowing subsidiaries’ hotel properties or property
under development and/or assignment of all rights and benefits with respect to the properties.
The debt-equity ratio after taking into account capital commitments for the Upper Pickering development, Beach
Road extension and the purchase of Melbourne Airport Hotel will increase from the current 18% to 59%.
ANNUAL REPORT 2010
a brand
new era
64
group value-added
statement
2010
2009
In $’000
Sale of goods and services
Purchases of materials and services
323,501
(120,626)
287,664
(111,834)
Gross value added
Share of profit of associated companies
Income from investments, interest and others
Gain on liquidation of a subsidiary
Exchange loss
202,875
1,127
6,096
156
9,979
(3,450)
175,830
1,067
4,087
–
(1,620)
(621)
Total value added
216,783
178,743
100,271
2,779
103,050
86,413
2,425
88,838
21,797
14,465
3,124
21,000
11,272
35,396
3,034
24,000
398
27,432
160,243
130,735
33,592
19,784
(9,692)
43,684
32,331
13,294
365
45,990
75
6,096
156
9,979
(3,450)
12,856
172
4,087
–
(1,620)
(621)
2,018
216,783
178,743
$
54,042
1.97
$
49,895
1.98
0.26
0.22
0.63
0.21
0.18
0.61
Distribution of value added :
To employees and directors Employees’ salaries, wages and benefits
Directors’ remuneration
To government Corporate and property taxes
To providers of capital Interest paid
Net dividend to shareholders
Net dividend attributable to non-controlling interests
Total value-added distributed
Retained in the business:
Depreciation
Retained earnings
Non-production cost and income
Bad debts
Income from investments, interest and others
Gain on liquidation of a subsidiary
Exchange loss
Productivity ratios :
Value added per employee
Value added per $ employment costs
Value added per $ investment in fixed assets (before depreciation)
- at cost
- at valuation
Value added per $ net sales
65
Financial
contents
66 Report of the Directors
69 Statement by Directors
77 Notes to the
Financial Statements
141 Corporate
Governance Report
70 Independent
Auditor’s Report
71 Income Statements
152 Interested Person
Transactions
72 Statements of
Comprehensive Income
153 Shareholding Statistics
154 Share Price and Turnover
73 Statements of
Financial Position
74 Consolidated Statement
of Changes in Equity
155 Notice of Annual
General Meeting
Proxy Form
75 Statement of Changes
in Equity
76 Consolidated Statement
of Cash Flows
Financial
calendar
Announcement of first-quarter results
Announcement of second-quarter results
Announcement of third-quarter results
Announcement of unaudited full-year results
Annual General Meeting
Books closure dates
First and final dividend payment date
2010
2009
12.05.10
06.08.10
10.11.10
22.02.11
19.04.11
04.05.11 to 05.05.11
18.05.11
12.05.09
12.08.09
13.11.09
23.02.10
21.04.10
03.05.10 to 04.05.10
13.05.10
ANNUAL REPORT 2010
a brand
new era
66
67
Report of the Directors
For the financial year ended 31 December 2010
The directors have pleasure in submitting this report to the members together with the audited financial statements
of the Company and of the Group for the financial year ended 31 December 2010.
Directors’ interests in shares or debentures (continued)
Directors
The directors of the Company in office at the date of this report are as follows:
Wee Cho Yaw
Gwee Lian Kheng
Alan Choe Fook Cheong
Lim Kee Ming
Wee Ee Chao
Low Weng Keong
Wee Wei Ling
James Koh Cher Siang
Wee Ee Lim
Amedeo Patrick Imbardelli
-
-
(c)Save as disclosed above, none of the other directors holding office at 31 December 2010 has any interest
in the ordinary shares of the Company, the ordinary shares and Executives’ Share Options of UOL and the
ordinary shares of any other related corporations of the Company, as recorded in the register of directors’
shareholdings.
Chairman
Directors’ contractual benefits
Since the end of the previous financial year, no director has received or become entitled to receive a benefit by
reason of a contract made by the Company or a related corporation with the director or with a firm of which he is a
member or with a company in which he has a substantial financial interest, except as disclosed in the accompanying
financial statements and in this report, and except that Mr Gwee Lian Kheng has an employment relationship with
the holding company and has received remuneration in that capacity.
Arrangements to enable directors to acquire shares and debentures
Neither at the end of nor at any time during the financial year was the Company a party to any arrangement whose
object was to enable the directors of the Company to acquire benefits by means of the acquisition of shares in, or
debentures of, the Company or any other body corporate.
Directors’ interests in shares or debentures
(a)The directors holding office at 31 December 2010 are also the directors holding office at the date of this report. Their
interests in the share capital of and options to subscribe for ordinary shares of the Company and related corporations,
as recorded in the register of directors’ shareholdings, were as follows:
Holdings registered
in name of director
At
At
31.12.2010
1.1.2010
Pan Pacific Hotels Group Limited (“PPHG”)
– Ordinary Shares
Wee Cho Yaw
Gwee Lian Kheng
Lim Kee Ming
Wee Ee Chao
Wee Wei Ling
Immediate holding company –
UOL Group Limited (“UOL”)
– Ordinary Shares
Wee Cho Yaw
Gwee Lian Kheng
Lim Kee Ming
Wee Ee Chao
Wee Wei Ling
Wee Ee Lim
– Executives’ Share Options
Gwee Lian Kheng
Wee Wei Ling
*
(b)The directors’ interests in the share capital of and options to subscribe for ordinary shares of the Company
and related corporations, as recorded in the register of directors’ shareholdings at 21 January 2011, were the
same as those at 31 December 2010.
–
171,000
15,000
–
27,000
–
171,000
15,000
–
27,000
Holdings in which a
director is deemed to
have an interest
At
At
31.12.2010
1.1.2010
489,440,652* 489,440,652*
315,000
315,000
–
–
892,500
892,500
67,500
67,500
Share options
There were no options granted in respect of unissued ordinary shares of the Company or any subsidiary during the
financial year.
No shares have been issued during the financial year by virtue of the exercise of options to take up unissued ordinary
shares of the Company or any subsidiary.
There were no unissued ordinary shares of the Company or any subsidiary under option at the end of the
financial year.
Audit committee
The Audit Committee comprises three members, all of whom are independent and non-executive Directors. The
Audit Committee members are:
Lim Kee Ming - Chairman
Low Weng Keong
The Audit Committee carries out the functions set out in the Companies Act (Cap. 50). The terms of reference include
reviewing the financial statements, the internal and external audit plans and audit reports, the scope and results of the
internal audit procedures and proposals for improvements in internal controls, the independent auditor’s report on
the weaknesses of internal accounting controls arising from the statutory audit, the cost effectiveness, independence
and objectivity of the independent auditor and interested persons transactions.
In performing the functions, the Audit Committee has met with the internal and independent auditors and reviewed
the overall scope of the internal and external audits and the assistance given by Management to the auditors.
3,388,151*
388,000
348,477
30,748*
941,493*
385
241,489
580,000
126,000
34,000
3,388,151* 228,818,442* 228,818,442*
388,000
–
–
348,477
532,277
532,277
30,748* 82,820,597* 82,820,597*
941,493*
30,603*
30,603*
385
–
–
241,489
80,553,452* 80,553,452*
680,000
126,000
–
–
–
–
The Audit Committee has nominated PricewaterhouseCoopers LLP for re-appointment as independent auditor of
the Company at the forthcoming Annual General Meeting.
–
–
–
Includes shares registered in the name of nominees.
ANNUAL REPORT 2010
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69
Statement by Directors
Independent auditor
In the opinion of the directors,
The independent auditor, PricewaterhouseCoopers LLP, has expressed its willingness to accept re-appointment.
On behalf of the directors
(a)the income statements, statements of comprehensive income, statements of financial position and statements
of changes in equity of the Company and of the Group and the consolidated statement of cash flows of the
Group as set out on pages 71 to 140 are drawn up so as to give a true and fair view of the state of affairs of the
Company and of the Group as at 31 December 2010, of the results of the business and the changes in equity
of the Company and of the Group for the financial year then ended; and the cash flows of the Group for the
financial year then ended; and
(b)at the date of this statement, there are reasonable grounds to believe that the Company will be able to pay
its debts as and when they fall due.
WEE CHO YAW
Chairman
22 February 2011
GWEE LIAN KHENG
Director
On behalf of the directors
WEE CHO YAW
Chairman
GWEE LIAN KHENG
Director
22 February 2011
ANNUAL REPORT 2010
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new era
71
Independent Auditor’s Report
Income Statements
To the Members of Pan Pacific Hotels Group Limited
Report on the Financial Statements
We have audited the accompanying financial statements of Pan Pacific Hotels Group Limited (the “Company”)
and its subsidiaries (the “Group”) set out on pages 71 to 140, which comprise the consolidated statement of
financial position of the Group and the statement of financial position of the Company as at 31 December 2010, the
consolidated income statement of the Group, the income statement of the Company, the consolidated statement
of comprehensive income of the Group, the statement of comprehensive income of the Company, the consolidated
statement of changes in equity of the Group and the statement of changes in equity of the Company and the
consolidated statement of cash flows of the Group for the financial year then ended, and a summary of significant
accounting policies and other explanatory information.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of financial statements that give a true and
fair view in accordance with the provisions of the Singapore Companies Act (the “Act”) and Singapore Financial
Reporting Standards and for devising and maintaining a system of internal accounting controls sufficient to provide a
reasonable assurance that assets are safeguarded against loss from unauthorised use or disposition, that transactions
are properly authorised and that they are recorded as necessary to permit the preparation of true and fair profit and
loss accounts and balance sheets and to maintain accountability of assets.
Auditor’s Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our
audit in accordance with Singapore Standards on Auditing. Those Standards require that we comply with ethical
requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements
are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial
statements. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of
material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments,
the auditor considers internal controls relevant to the entity’s preparation of financial statements that give a true
and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose
of expressing an opinion on the effectiveness of the entity’s internal controls. An audit also includes evaluating the
appropriateness of accounting policies used and the reasonableness of accounting estimates made by management,
as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
audit opinion.
Note
Revenue
Cost of sales
Gross profit
Other income
– Finance income
– Miscellaneous income
Expenses
– Marketing and distribution
– Administrative
– Finance
– Other operating
4
4
4
8
The Group
2010
2009
$’000
$’000
324,242
(160,649)
163,593
287,806
(147,347)
140,459
The Company
2010
2009
$’000
$’000
66,347
(20,692)
45,655
57,602
(19,672)
37,930
3,368
1,987
2,505
1,440
3,501
619
4,786
542
(15,805)
(36,482)
(6,574)
(50,998)
(14,343)
(31,059)
(3,655)
(45,610)
(1,423)
(7,815)
(2,688)
(7,096)
(1,063)
(6,936)
(1,227)
(5,960)
Share of profits of associated companies
16
1,127
60,216
1,067
50,804
–
30,753
–
28,072
Other gains – net
7
156
–
4,108
–
Fair value gains/(losses) on investment
properties
18
9,979
70,351
(1,620)
49,184
9,979
44,840
(1,620)
26,452
9
(15,131)
55,220
(9,109)
40,075
(2,586)
42,254
(505)
25,947
53,640
1,580
55,220
39,312
763
40,075
42,254
–
42,254
25,947
–
25,947
8.94
6.55
Income tax expense
Net profit
Opinion
In our opinion, the consolidated income statement of the Group, the income statement of the Company, the
consolidated statement of comprehensive income of the Group, the statement of comprehensive income of the
Company, the consolidated statement of changes in equity of the Group and the statement of changes in equity of
the Company, the consolidated statement of financial position of the Group and the statement of financial position
of the Company and the consolidated statement of cash flows of the Group 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 Company and of the Group as at 31 December 2010, and the results, changes in equity of the
Company and of the Group, and cash flows of the Group for the financial year ended on that date.
Report on Other Legal and Regulatory Requirements
In our opinion, the accounting and other records required by the Act to be kept by the Company and by those
subsidiaries incorporated in Singapore of which we are the auditors, have been properly kept in accordance with
the provisions of the Act.
Attributable to:
Earnings per share attributable to equity
holders of the Company (expressed in cents
per share)
– Basic and diluted
10
PricewaterhouseCoopers LLP
Public Accountants and Certified Public Accountants
Singapore, 22 February 2011
The accompanying notes form an integral part of these financial statements.
ANNUAL REPORT 2010
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73
Statements of Comprehensive Income
Statements of Financial Position
As at 31 December 2010
Note
55,220
Net profit
Other comprehensive (loss)/income:
Fair value (losses)/gains on available for sale
financial assets
Cash-flow hedges
– Fair value losses
– Transfer to income statement
Currency translation differences arising from
consolidation
Change in tax rate
Other comprehensive income/(loss),
net of tax
The Group
2010
2009
$’000
$’000
40,075
The Company
2010
2009
$’000
$’000
42,254
15
(865)
5,064
30(d)
30(d)
(436)
421
(296)
194
–
–
–
–
5,262
–
32,347
162
–
–
–
165
4,382
37,471
59,602
77,546
41,389
31,176
57,077
2,525
59,602
70,669
6,877
77,546
41,389
–
41,389
31,176
–
31,176
30(c)
28
Total comprehensive income
Attributable to:
(865)
25,947
(865)
5,064
5,229
Note
11
12
25
13
14
57,904
24,619
49,630
1,531
17,153
150,837
93,117
19,991
55,662
2,580
3,332
174,682
2,089
16,263
49,630
103
237
68,322
9,632
36,505
55,662
280
221
102,300
Non-current assets
Trade and other receivables
Investment in associated companies
Investment in subsidiaries
Intangibles
12
15
16
17
18
19
20
21
28
–
17,167
7,394
–
165,460
480,544
273,778
30,772
2,783
977,898
–
18,032
6,954
–
155,481
491,716
248,122
27,200
3,330
950,835
149,154
17,167
9,820
369,666
165,460
43,786
–
589
–
755,642
257,102
18,032
9,820
201,819
155,481
41,484
–
204
–
683,942
1,128,735
1,125,517
823,964
786,242
Total assets
LIABILITIES
Current liabilities
Trade and other payables
Derivative financial instruments
Current income tax liabilities
Borrowings
Loans from a subsidiary
22
24
9(b)
23
26
61,933
457
16,040
70,663
–
149,093
54,273
–
14,848
6,087
–
75,208
9,230
–
4,308
–
–
13,538
9,255
–
6,553
–
4,653
20,461
Non-current liabilities
Borrowings
Loans from subsidiaries
Provision for retirement benefits
Deferred income tax liabilities
22
24
23
26
27
28
5,125
–
120,564
–
2,539
49,731
177,959
2,882
439
176,031
–
2,316
48,222
229,890
2,928
–
28,609
100,857
–
31,812
164,206
2,715
–
–
106,663
–
30,572
139,950
Total liabilities
327,052
305,098
177,744
160,411
NET ASSETS
801,683
820,419
646,220
625,831
557,333
25,715
218,635
801,683
–
801,683
557,333
22,278
210,866
790,477
29,942
820,419
557,333
31,181
57,706
646,220
–
646,220
557,333
32,046
36,452
625,831
–
625,831
29
30
Total equity
The Company
2010
2009
$’000
$’000
ASSETS
Current assets
Cash and bank balances
Inventories
Other assets
EQUITY
Capital and reserves attributable to equity
holders of the Company
Share capital
Reserves
Retained earnings
The Group
2010
2009
$’000
$’000
ANNUAL REPORT 2010
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74
Consolidated Statement
Of Changes In Equity
75
Statement of Changes In Equity
Attributable to
equity holders of the Company
Share
capital
$’000
Note
2010
Beginning of
financial year
Dividends relating
to 2009
Reserves
$’000
Retained
earnings
$’000
Non–
controlling
interests
Total
$’000
$’000
Total
equity
$’000
Note
2010
Beginning of financial year
Dividends relating to 2009
557,333
22,278
210,866
790,477
29,942
820,419
–
–
(21,000)
(21,000)
(11,271)
(32,271)
31
31
Total comprehensive (loss)/income for the year
End of financial year
2009
Purchase of shares in
subsidiaries from
non-controlling
interests
–
–
(24,871)
(24,871)
(21,196)
(46,067)
Total comprehensive
income for the year
–
557,333
3,437
25,715
53,640
218,635
57,077
801,683
2,525
–
59,602
801,683
Dividends relating to 2008
31
Total comprehensive income for the year
Share
capital
$’000
Reserves
$’000
Retained
earnings
$’000
Total
equity
$’000
557,333
32,046
36,452
625,831
–
–
(21,000)
(21,000)
–
557,333
(865)
31,181
42,254
57,706
41,389
646,220
557,333
26,817
34,505
618,655
–
–
(24,000)
(24,000)
–
557,333
5,229
32,046
25,947
36,452
31,176
625,831
An analysis of movements in each category within “Reserves” is presented in Note 30.
2009
Beginning of
financial year
Dividends relating
to 2008
Total comprehensive
income for the year
557,333
(9,079)
195,554
743,808
23,463
767,271
–
–
(24,000)
(24,000)
(398)
(24,398)
–
557,333
31,357
22,278
39,312
210,866
70,669
790,477
6,877
29,942
77,546
820,419
31
An analysis of movements in each category within “Reserves” is presented in Note 30.
ANNUAL REPORT 2010
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77
Consolidated Statement of Cash Flows
Notes to the Financial Statements
Note
Cash flows from operating activities
Net profit
Adjustments for:
– Income tax expense
– Depreciation and amortisation
– Property, plant and equipment written off and net loss on disposals
– Fair value (gain)/loss on investment properties
– Interest income
– Dividend income
– Interest expense
– Net provision for retirement benefits
– Share of profit of associated companies
– Unrealised translation gain
– Gain on liquidation of investment in a subsidiary
Operating cash flow before working capital changes
Change in operating assets and liabilities, net of effects from acquisition of
subsidiaries
– Inventories
– Receivables
– Payables
Cash generated from operations
Income tax paid – net
Retirement benefits paid
Net cash from operating activities
2010
$’000
2009
$’000
55,220
40,075
15,131
33,592
1,992
(9,979)
(3,368)
(741)
3,124
343
(1,127)
3,406
(156)
97,437
9,109
32,331
1,166
1,620
(2,505)
(142)
3,034
290
(1,067)
2,298
–
86,209
1,049
(18,583)
10,009
89,912
(12,739)
(179)
76,994
259
989
1,158
88,615
(13,979)
(61)
74,575
–
–
5,025
(4,474)
139
(21,398)
(23,505)
4,375
873
(38,965)
69
4,155
(55,555)
–
178
(21,314)
(8,802)
2,398
2,246
(76,625)
Cash flows from financing activities
Proceeds from borrowings
Repayment of borrowings
Expenditure on long term borrowings
Interest paid
Dividends paid to shareholders of the Company
Dividends paid to non-controlling interests of subsidiaries
Purchase of shares in subsidiaries from non-controlling interests
Net cash (used in)/from financing activities
30,522
(22,253)
(239)
(4,376)
(21,000)
(11,272)
(46,067)
(74,685)
114,173
(44,495)
(1,680)
(4,733)
(24,000)
(398)
–
38,867
Net (decrease)/increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the financial year
Effects of currency translation on cash and cash equivalents
Cash and cash equivalents at the end of the financial year
(36,656)
93,117
1,434
57,895
36,817
48,948
7,352
93,117
Cash flows from investing activities
Acquisition of subsidiaries, net of cash acquired
Repayment of loans from an associated company
Payment for intangible assets
Net proceeds from disposal of property, plant and equipment
Purchase of investment property and property, plant and equipment
Expenditure on property under construction
Interest received
Dividend received
Net cash used in investing activities
11(c)
11(a)
These notes form an integral part of and should be read in conjunction with the accompanying financial statements.
1.General information
Pan Pacific Hotels Group Limited (the “Company”) is incorporated and domiciled in Singapore and its shares
are publicly traded on the Singapore Exchange. The address of its registered office is 101 Thomson Road,
#33-00, United Square, Singapore 307591. The principal place of business of the Company is 238A Thomson
Road, #08-00, Novena Square Office Tower A, Singapore 307684.
The principal activities of the Company are those of an hotelier, property owner and the holding of investments.
The principal activities of its subsidiaries are set out in Note 17.
2.Significant accounting policies
2.1
Basis of preparation
These financial statements have been prepared in accordance with Singapore Financial Reporting Standards
(“FRS”). The financial statements have been prepared under the historical cost convention, except as disclosed
in the accounting policies below.
The preparation of financial statements in conformity with FRS requires management to exercise its judgement
in the process of applying the Group’s accounting policies. It also requires the use of certain critical accounting
estimates and assumptions. The areas involving a higher degree of judgement or complexity, or areas where
assumptions and estimates are significant to the financial statements, are disclosed in Note 3.
Interpretations and amendments to published standards effective in 2010
On 1 January 2010, the Group adopted the new or amended FRS that are mandatory for application from
that date. Changes to the Group’s accounting policies have been made as required, in accordance with the
transitional provisions in the respective FRS.
The adoption of these new or amended FRS did not result in substantial changes to the Group’s and Company’s
accounting policies and had no material effect on the amounts reported for the current or prior financial years,
except for the following:
(a)FRS 103 (revised) Business Combinations (effective for annual periods beginning on or after 1 July 2009)
Please refer to note 2.3(a)(ii) for the revised accounting policy on business combinations which the Group
has adopted.
As the changes have been implemented prospectively, no adjustments were necessary to any of the
amounts previously recognised in the financial statements. These changes do not have any material
impact on the financial statements for the current financial year.
(b)FRS 27 (revised) Consolidated and Separate Financial Statements (effective for annual periods beginning
on or after 1 July 2009)
The revisions to FRS 27 principally change the accounting for transactions with non-controlling interests.
Please refer to Notes 2.3(a)(iii) for the revised accounting policy on changes in ownership interest that
results in a lost of control and 2.3(b) for that on changes in ownership interests that do not result in lost
of control.
amounts previously recognised in the financial statements.
ANNUAL REPORT 2010
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79
2.Significant accounting policies (continued)
2.1
2.2
Basis of preparation (continued)
(b)FRS 27 (revised) Consolidated and Separate Financial Statements (effective for annual periods beginning
on or after 1 July 2009) (continued)
(b)
Revenue from hotel management services includes property and project management fees, hotel
management fees, franchise fees and other hotel management related fees.
In the current financial year, the Group purchased the remaining 40% interest in a subsidiary, Success
Venture Investments (Australia) Ltd and 5% interest in a subsidiary, Success City Pty Limited from noncontrolling interests. The revised accounting policy was applied to account for these transactions. The
difference between the change in the carrying amounts of the non-controlling interests and the fair
value of the considerations paid, relating to the purchase of interest in Success City Pty Limited was not
significant, while that relating to the purchase of interest in Success Venture Investments (Australia) Ltd,
amounting to $24,871,000 was recognised in retained profits. Previously, such difference would have
been recognised as intangible assets – goodwill.
(i)
Management fees
Management fees earned from hotels managed by the Group, usually under long-term contracts
with the hotel owner, are recognised when services are rendered under the terms of the contract.
The fees include a base fee, which is generally a percentage of hotel revenue, and/or an incentive
fee, which is generally based on the hotel’s profitability.
(c)Amendment to FRS 28 Investments in Associates (effective for annual periods beginning on or after
1 July 2009)
(ii)
Franchise fees
Franchise fees received in connection with licensing of the Group’s brand names, usually under
long-term contracts with the hotel owner, are recognised when services are rendered under the
terms of the agreement. The Group generally charges franchise fees as a percentage of hotel
revenue.
On partial disposal of an associated company associated with the loss of significant influence, the
amendment requires the retained investment in associated companies to be measured at fair value. The
difference between the carrying amount of the retained investment and its fair value is recognised in the
income statement.
amounts previously recognised in the financial statements. These changes do not have any material
impact on the financial statements for the current financial year.
2.2
Revenue recognition (continued)
(iii)
Other hotel management related fees
Other related fees earned from hotels managed by the Group are recognised when services are
rendered under the terms of the contract.
(d) Amendment to FRS 38 Intangible Assets (effective for annual periods beginning on or after 1 July 2009)
(c)
Under the amendment, it includes specific references to the more commonly used methods of valuing
intangible assets: market comparisons using multiples, discounted cash flow (including the relief from
royalty method) and the replacement cost approach. This change has been applied prospectively. It
had no material effect on the financial statements for the current or prior year
Rental income from operating leases (net of any incentives given to the lessees) on investment properties
is recognised on a straight-line basis over the lease term.
Revenue recognition
Dividend income is recognised when the right to receive payment is established.
Revenue for the Group comprises the fair value of the consideration received or receivable for the sale of
goods and rendering of services in the ordinary course of the Group’s activities. Revenue is presented, net of
goods and services tax, rebates and discounts, and after eliminating sales within the Group.
(e)
The Group recognises revenue when the amount of revenue and related cost can be reliably measured, it is
probable that the collectability of the related receivables is reasonably assured and when the specific criteria for
each of the Group’s activities are met as follows:
(a)
Revenue from hotel ownership and operation
Revenue from the ownership and operation of hotels is recognised at the point at which the
accommodation and related services are provided.
(d)
Revenue from property investments - rental income
Dividend income
Interest income
Interest income is recognised using the effective interest method.
2.3
Group accounting
(a)
Subsidiaries
(i)
Consolidation
Subsidiaries are entities over which the Group has power to govern the financial and operating
policies, generally accompanied by a shareholding giving rise to a majority of the voting rights.
The existence and effect of potential voting rights that are currently exercisable or convertible
are considered when assessing whether the Group controls another entity.
Subsidiaries are consolidated from the date on which control is transferred to the Group. They
are de-consolidated from the date on which control ceases.
ANNUAL REPORT 2010
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81
2.3
2.3
Group accounting (continued)
Group accounting (continued)
(a)
Subsidiaries (continued)
(a)
Subsidiaries (continued)
(i)
(iii)
Consolidation (continued)
In preparing the consolidated financial statements, transactions, balances and unrealised gains
on transactions between group companies are eliminated. Unrealised losses are also eliminated
but are considered an impairment indicator of the asset transferred. Accounting policies of
subsidiaries have been changed where necessary to ensure consistency with the policies adopted
by the Group.
Non-controlling interests are that part of the net results of operations and of net assets of a
subsidiary attributable to the interests which are not owned directly or indirectly by the equity
holders of the Company. They are shown separately in the consolidated income statement,
consolidated statement of comprehensive income, consolidated statement of changes in equity
and the consolidated statement of financial position of the Group. Total comprehensive income
is attributed to the non-controlling interests based on their respective interests in a subsidiary,
even if this results in the non-controlling interests having a deficit balance.
(ii)
Acquisition of businesses
The acquisition method of accounting is used to account for business combinations (including
business combinations under common control) by the Group.
The consideration transferred for the acquisition of a subsidiary comprises the fair value of the
assets transferred, the liabilities incurred and the equity interests issued by the Group. The
consideration transferred also includes the fair value of any contingent consideration arrangement
and the fair value of any pre-existing equity interest in the subsidiary.
Identifiable assets acquired and liabilities and contingent liabilities assumed in a business
combination are, with limited exceptions, measured initially at their fair values at the acquisition
date.
On an acquisition-by-acquisition basis, the Group recognises any non-controlling interest in
the acquiree at the date of acquisition either at fair value or at the non-controlling interest’s
proportionate share of the acquiree’s net identifiable assets.
The excess of the consideration transferred, the amount of any non-controlling interest in the
acquiree and the acquisition-date fair value of any previous equity interest in the acquiree over
the fair value of the net identifiable assets acquired is recorded as goodwill. Please refer to the
paragraph “Intangible assets - Goodwill” for the subsequent accounting policy on goodwill.
(iii)
Disposals of subsidiaries or businesses
When a change in the Company’s ownership interest in a subsidiary results in a loss of control
over the subsidiary, the assets and liabilities of the subsidiary including any goodwill are
derecognised. Amounts recognised in other comprehensive income in respect of that entity are
also reclassified to the income statement or transferred directly to retained earnings if required
by a specific Standard.
Any retained interest in the entity is remeasured at fair value. The difference between the carrying
amount of the retained investment at the date when control is lost and its fair value is recognised
in the income statement.
Disposals of subsidiaries or businesses (continued)
Please refer to the paragraph “Investments in subsidiaries and associated companies” for
the accounting policy on investments in subsidiaries in the separate financial statements of
the Company.
(b)
Transactions with non-controlling interests
Changes in the Company’s ownership interest in a subsidiary that do not result in a loss of control
over the subsidiary are accounted for as transactions with equity owners of the Group. Any difference
between the change in the carrying amounts of the non-controlling interest and the fair value of the
consideration paid or received is recognised in retained profits.
(c)
Associated companies
Associated companies are entities over which the Group has significant influence, but not control, and
generally accompanied by a shareholding giving rise to between and including 20% and 50% of the
voting rights. Investments in associated companies are accounted for in the consolidated financial
statements using the equity method of accounting less impairment losses.
Investments in associated companies are initially recognised at cost. The cost of an acquisition is
measured at the fair value of the assets given, equity instruments issued or liabilities incurred or assumed
at the date of exchange, plus costs directly attributable to the acquisition. Goodwill on associated
companies represents the excess to the cost of acquisition of the associate over the Group’s share of
the fair value of the identifiable net assets of the associate and is included in the carrying amount of
the investments.
In applying the equity method of accounting, the Group’s share of its associated companies’ postacquisition profits or losses is recognised in the income statement and its share of post-acquisition
movements in reserves is recognised in equity directly. These post-acquisition movements and dividends
are adjusted against the carrying amount of the investment. When the Group’s share of losses in an
associated company equals or exceeds its interest in the associated company, including any other
unsecured non-current receivables, the Group does not recognise further losses, unless it has obligations
or has made payments on behalf of the associated company.
Unrealised gains on transactions between the Group and its associated companies are eliminated to
the extent of the Group’s interest in the associated companies. Unrealised losses are also eliminated
unless the transaction provides evidence of an impairment of the asset transferred. Accounting policies
of associated companies have been changed where necessary to ensure consistency with the accounting
policies adopted by the Group.
Gains and losses arising from partial disposals or dilutions in investments in associated companies are
recognised in the income statement.
Investments in associated companies are derecognised when the Group loses significant influence. Any
retained interest in the entity is remeasured at its fair value. The difference between the carrying amount
of the retained investment at the date when significant influence is lost and its fair value is recognised
in the income statement.
Please refer to the paragraph “Investments in subsidiaries and associated companies” for the accounting
policy on investments in associated companies in the separate financial statements of the Company.
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2.4
2.4
Property, plant and equipment (continued)
(a)
Measurement
(c)
(i)
Subsequent expenditure relating to property, plant and equipment that has already been recognised
is added to the carrying amount of the asset only when it is probable that future economic benefits
associated with the item will flow to the Group and the cost of the item can be measured reliably. All
other repair and maintenance expenses are recognised in the income statement when incurred.
Land and buildings
Land and buildings are initially recognised at cost. Certain leasehold land and buildings
comprising hotel properties were subsequently revalued in 1985, in accordance with a valuation
by an independent professional firm of valuers on their existing use basis. The valuation was done
in 1985. However, a decision was then made that future valuations of hotel properties would not
be recognised in the financial statements.
Freehold land is subsequently carried at cost less accumulated impairment losses. Leasehold
land and buildings are subsequently carried at cost or valuation less accumulated depreciation
and accumulated impairment losses.
(ii)
Property under construction is carried at cost less accumulated impairment losses until
construction is completed at which time depreciation will commence over its estimated useful
life.
(iii)
Other property, plant and equipment
(d)
Subsequent expenditure
Disposal
On disposal of an item of property, plant and equipment, the difference between the disposal proceeds
and its carrying amount is recognised in the income statement. Any amount in revaluation reserve
relating to that asset is transferred to retained earnings directly.
2.5
Intangibles
(a)
Goodwill on acquisitions
Goodwill on acquisitions of subsidiaries on or after 1 January 2010 represents the excess of the
consideration transferred, the amount of any non-controlling interest in the acquiree and the acquisitiondate fair value of any previous equity interest in the acquiree over the fair value of the net identifiable
assets acquired.
Plant, equipment, furniture and fittings and motor vehicles are initially recognised at cost and
subsequently carried at cost less accumulated depreciation and accumulated impairment
losses.
If those amounts are less than the fair value of the net identifiable assets of the subsidiary acquired and
the measurement of all amounts has been reviewed, the difference (“negative goodwill”) is recognised
directly in the income statement as a bargain purchase.
Goodwill on acquisitions of subsidiaries prior to 1 January 2010 and on acquisition of associated
companies represents the excess of the cost of an acquisition over the fair value of the Group’s share
of the identifiable assets, liabilities and contingent liabilities of the acquired subsidiaries and associated
companies at the date of acquisition.
(iv)
Components of costs
The cost of an item of property, plant and equipment initially recognised includes its purchase
price and any cost that is directly attributable to bringing the asset to the location and condition
necessary for it to be capable of operating in the manner intended by management, including
borrowing costs incurred for the properties under development. The projected cost of
dismantlement, removal or restoration is also recognised as part of the cost of property, plant
and equipment if the obligation for the dismantlement, removal or restoration is incurred as a
consequence of either acquiring the asset or using the asset for purpose other than to produce
inventories.
(b)
Depreciation
Freehold land, property under construction and renovation in progress are not depreciated. Leasehold
land is amortised evenly over the term of the lease. (Please refer to Note 19(d) for the lease period of
each property.)
Depreciation on other items of property, plant and equipment is calculated using the straight-line
method to allocate their depreciable amounts over their estimated useful lives as follows:
Buildings
Plant, equipment, furniture and fittings
Motor vehicles
Useful lives
50 years or period of the lease,
whichever is shorter
3 to 20 years
7 years
Goodwill on subsidiaries is recognised separately as intangible assets and carried at cost less
accumulated impairment losses. Goodwill on associated companies is included in the carrying amount
of the investments.
Gains and losses on the disposal of the subsidiaries and associated companies include the carrying
amount of goodwill relating to the entity sold.
(b)
Trademark
Acquired trademarks are initially recognised at cost and are subsequently carried at cost less accumulated
amortisation and accumulated impairment losses. These costs are amortised to the income statement
using the straight-line method over their estimated useful lives of 10 to 20 years.
The amortisation period and amortisation method of intangible assets other than goodwill are reviewed
at least at the end of each reporting period. The effects of any revision are recognised in the income
statement when the changes arise.
The residual values, estimated useful lives and depreciation method of property, plant and equipment
are reviewed, and adjusted as appropriate, at the end of each reporting period. The effects of any
revision are recognised in the income statement when the changes arise.
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2.5
2.8
Intangibles (continued)
(c)
Acquired computer software costs
Acquired computer software costs are initially capitalised at cost which includes the purchase price
(net of any discounts and rebates) and other directly attributable cost of preparing the asset for its
intended use. Direct expenditure includes employee costs, which enhances or extends the performance
of computer software beyond its specifications and which can be reliably measured, is added to the
original cost of the software. Costs associated with maintaining the computer software are recognised
as an expense when incurred.
Computer software is subsequently carried at cost less accumulated amortisation and accumulated
impairment losses. Computer software that is under development is not amortised. These costs are
amortised to profit or loss using the straight-line method over their estimated useful lives of three to
five years.
(d)
Investments in subsidiaries and associated companies
Investments in subsidiaries and associated companies are carried at cost less accumulated impairment losses
in the Company’s statement of financial position. On disposal of investments in subsidiaries and associated
companies, the difference between disposal proceeds and the carrying amounts of the investments are
2.9
Impairment of non-financial assets
(a)
Goodwill is tested for impairment annually, and whenever there is indication that the goodwill may
be impaired.
For the purpose of impairment testing of goodwill, goodwill is allocated to each of the Group’s cashgenerating units (“CGU”) expected to benefit from synergies arising from the business combination.
Contract acquisition costs
An impairment loss is recognised when the carrying amount of a CGU, including the goodwill, exceeds
the recoverable amount of the CGU. The recoverable amount of a CGU is the higher of the CGU’s fair
value less cost to sell and value-in-use.
Directly attributable costs incurred in the securing of management contracts or franchise agreements
are capitalised as intangibles. These costs do not represent a physical asset which the Group has legal
title to. They represent costs incurred to obtain a legal contractual right.
The total impairment loss of a CGU is allocated first to reduce the carrying amount of goodwill allocated
to the CGU and then to the other assets of the CGU pro-rata on the basis of the carrying amount of
each asset in the CGU.
The directly attributable costs are amortised to the income statement using the straight-line method
over the number of years of the management contract or franchise agreement they relate to. They are
also reviewed for impairment when events or changes in circumstances indicate that the carrying value
may not be recoverable.
2.6
Borrowing costs
Borrowing costs are recognised in the income statement using the effective interest method except for those
costs that are directly attributable to the construction or development of properties. This includes those costs
on borrowings acquired specifically for the construction or development of properties, as well as those in
relation to general borrowings used to finance the construction or development of properties.
The actual borrowing costs incurred during the period up to the issuance of the temporary occupation permit
less any investment income on temporary investments of these borrowings are capitalised in the cost of the
property under construction. Borrowing costs on general borrowings are capitalised by applying a capitalisation
rate to construction or development expenditures that are financed by general borrowings.
2.7
Investment properties include those land and buildings or portions of buildings that are held for long-term
rental yields and/or for capital appreciation and land under operating leases that are held for long-term capital
appreciation or for a currently indeterminate use.
Investment properties are initially recognised at cost and subsequently carried at fair value, determined semiannually by independent professional valuers on the highest-and-best-use basis. Changes in fair values are
Investment properties are subject to renovations or improvements at regular intervals. The cost of major
renovations and improvements is capitalised and the carrying amounts of the replaced components are
recognised in the income statement. The cost of maintenance, repairs and minor improvements is charged
to the income statement when incurred.
On disposal of an investment property, the difference between the disposal proceeds and the carrying amount
is recognised in the income statement.
Goodwill
An impairment loss on goodwill is recognised in the income statement and is not reversed in a
subsequent period.
(b)
Intangibles
Investments in subsidiaries and associated companies
Intangibles, property, plant and equipment and investments in subsidiaries and associated companies
are tested for impairment whenever there is any objective evidence or indication that these assets may
be impaired.
For the purpose of impairment testing, the recoverable amount (i.e. the higher of the fair value less
cost to sell and the value-in-use) is determined on an individual asset basis unless the asset does not
generate cash flows that are largely independent of those from other assets. If this is the case, the
recoverable amount is determined for the CGU to which the asset belongs.
If the recoverable amount of the asset (or CGU) is estimated to be less than its carrying amount, the
carrying amount of the asset (or CGU) is reduced to its recoverable amount. The difference between
the carrying amount and recoverable amount is recognised as an impairment loss in the income
statement.
An impairment loss for an asset other than goodwill is reversed if, and only if, there has been a
change in the estimates used to determine the assets’ recoverable amount since the last impairment
loss was recognised. The carrying amount of an asset other than goodwill is increased to its revised
recoverable amount, provided that this amount does not exceed the carrying amount that would have
been determined (net of any accumulated amortisation or depreciation) had no impairment loss been
recognised for the asset in prior years.
A reversal of impairment loss for an asset other than goodwill is recognised in the income statement.
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2.10 Financial assets
2.10 Financial assets (continued)
(a)
Classification
The Group classifies its financial assets in the following categories: loans and receivables and availablefor-sale. The classification depends on the nature of the asset and the purpose for which the assets were
acquired. Management determines the classification of its financial assets at initial recognition.
(i)
Loans and receivables
(d)
Impairment
The Group assesses at the end of each reporting period whether there is objective evidence that a
financial asset or a group of financial assets is impaired and recognises an allowance for impairment
when such evidence exists.
(i)
Loans and receivables are non-derivative financial assets with fixed or determinable payments
that are not quoted in an active market. They are presented as current assets, except for those
maturing later than twelve months after the end of the reporting period which are presented as
non-current assets. Loans and receivables are presented as “trade and other receivables” and
“cash and bank balances”, “advances to holding company” and deposits within “other assets”
on the statement of financial position.
(ii)
Significant financial difficulties of the debtor, probability that the debtor will enter bankruptcy,
and default or significant delay in payments are objective evidence that these financial assets
are impaired.
The carrying amount of these assets is reduced through the use of an impairment allowance
account which is calculated as the difference between the carrying amount and the present
value of estimated future cash flows, discounted at the original effective interest rate. When
the asset becomes uncollectible, it is written off against the allowance account. Subsequent
recoveries of amounts previously written off are recognised against the same line item in the
income statement.
Available-for-sale financial assets are non-derivatives that are either designated in this category
or not classified in any of the other categories. They are presented as non-current assets unless
management intends to dispose of the assets within twelve months after the end of the reporting
period.
(b)
(c)
Loans and receivables
The allowance for impairment loss account is reduced through the income statement in a
subsequent period when the amount of impairment loss decreases and the related decrease can
be objectively measured. The carrying amount of the asset previously impaired is increased to
the extent that the new carrying amount does not exceed the amortised cost had no impairment
been recognised in prior periods.
Recognition and derecognition
Purchases and sales of financial assets are recognised on trade-date – the date on which the Group
commits to purchase or sell the asset.
Financial assets are derecognised when the rights to receive cash flows from the financial assets have
expired or have been transferred and the Group has transferred substantially all risks and rewards of
ownership.
In addition to the objective evidence of impairment described in Note 2.10(d)(i), a significant
or prolonged decline in the fair value of an equity security below its cost is considered as an
indicator that the available-for-sale financial asset is impaired.
On disposal of a financial asset, the difference between the carrying amount and the sale proceeds
is recognised in the income statement. Any amount in the fair value reserve relating to that asset is
transferred to the income statement.
If any evidence of impairment exists, the cumulative loss that was recognised in other
comprehensive income is reclassified to the income statement. The cumulative loss is measured
as the difference between the acquisition cost (net of any principal repayments and amortisation)
and the current fair value, less any impairment loss previously recognised as an expense. The
impairment losses recognised as an expense on equity securities are not reversed through the
income statement.
Measurement
Financial assets are initially recognised at fair value plus transaction costs.
Available-for-sale financial assets are subsequently carried at fair value. Loans and receivables are
subsequently carried at amortised cost using the effective interest method.
Dividend income on available-for-sale financial assets is recognised separately in the income statement.
Changes in fair values of available-for-sale equity securities (i.e. non-monetary items) are recognised in
other comprehensive income.
(ii)
2.11 Financial guarantees
The Company has issued corporate guarantees to banks for borrowings of its subsidiaries and associated
companies. These guarantees are financial guarantees as they require the Company to reimburse the banks if
the subsidiaries or associated companies fail to make principal or interest payments when due in accordance
with the terms of their borrowings.
Financial guarantees are initially recognised at their fair values plus transaction costs in the Company’s
statement of financial position except when the fair value is determined to be insignificant.
Financial guarantees are subsequently amortised to the income statement over the period of the subsidiaries’
or associated companies’ borrowings, unless it is probable that the Company will reimburse the bank for an
amount higher than the unamortised amount. In this case, the financial guarantees shall be carried at the
expected amount payable to the bank in the Company’s statement of financial position.
Intra-group transactions are eliminated on consolidation.
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2.12 Borrowings
2.15 Fair value estimation of financial assets and liabilities (continued)
Borrowings are presented as current liabilities unless the Group has an unconditional right to defer settlement
for at least twelve months after the end of the reporting period.
Borrowings are initially recognised at fair value (net of transaction costs) and subsequently carried at amortised
cost. Any difference between the proceeds (net of transaction costs) and the redemption value is recognised
in the income statement over the period of the borrowings using the effective interest method.
2.13 Trade and other payables
Trade and other payables are initially recognised at fair value, and subsequently carried at amortised cost
using the effective interest method.
2.14 Derivative financial instruments and hedging activities
A derivative financial instrument is initially recognised at its fair value on the date the contract is entered into
and is subsequently carried at its fair value. The method of recognising the resulting gain or loss depends
on whether the derivative is designated as a hedging instrument, and if so, the nature of the item being
hedged.
The Group documents at the inception of the transaction the relationship between the hedging instruments
and hedged items, as well as its risk management objective and strategies for undertaking various hedge
transactions. The Group also documents its assessment, both at hedge inception and on an ongoing basis,
of whether the derivatives designated as hedging instruments are highly effective in offsetting changes in fair
value or cash flows of the hedged items.
The Group has designated its derivative financial instrument as a cash flow hedge. Fair value changes on
derivatives that are not designated or do not qualify for hedge accounting are recognised in the income
statement when the changes arise.
Cash flow hedge - Interest rate swaps
The Group has entered into interest rate swaps that are cash flow hedges for the Group’s exposure to interest
rate risk on its borrowings. These contracts entitle the Group to receive interest at floating rates on notional
principal amounts and oblige the Group to pay interest at fixed rates on the same notional principal amounts,
thus allowing the Group to raise borrowings at floating rates and swap them into fixed rates.
The fair value changes on the effective portion of interest rate swaps designated as cash flow hedges are
recognised in other comprehensive income and transferred to the income statement when the interest expense
on the borrowings is recognised in the income statement. The fair value changes on the ineffective portion of
interest rate swaps are recognised immediately in the income statement.
The carrying amount of a derivative designated as a hedge is presented as a non-current asset or liability if
the remaining expected life of the hedged item is more than twelve months, and as a current asset or liability
if the remaining expected life of the hedged item is less than twelve months.
2.15 Fair value estimation of financial assets and liabilities
The fair values of financial instruments traded in active markets (such as exchange-traded and over-the-counter
securities and derivatives) are based on quoted market prices at the end of the reporting period. The quoted
market prices used for financial assets are the current bid prices; the appropriate quoted market prices for
financial liabilities are the current asking prices.
The fair values of financial instruments that are not traded in an active market are determined by using valuation
techniques. The Group uses a variety of methods and makes assumptions that are based on market conditions
existing at the end of each reporting period. Where appropriate, quoted market prices or dealer quotes for
similar instruments are used. Valuation techniques, such as estimated discounted cash flow analyses, are also
used to determine the fair values of the financial instruments.
The fair values of interest rate swaps are calculated as the present value of the estimated future cash flows
discounted at actively quoted interest rates.
The fair values of current financial assets and liabilities carried at amortised cost approximate their
carrying amounts.
2.16 Leases
Operating leases
(a)
When the Group is the lessee:
The Group leases certain property, plant and equipment from non-related parties.
Leases of property, plant and equipment where substantially all risks and rewards incidental to ownership
are retained by the lessors are classified as operating leases. Payments made under operating leases (net
of any incentives received from the lessors) are recognised in the income statement on a straight-line basis
over the period of the lease.
(b)
When the Group is the lessor:
The Group leases out certain investment properties to non-related parties.
Leases of investment properties where the Group retains substantially all risks and rewards incidental to
ownership are classified as operating leases. Rental income from operating leases (net of any incentives
given to the lessees) is recognised in the income statement on a straight-line basis over the lease term.
Initial direct costs incurred by the Group in negotiating and arranging operating leases are added to the
carrying amount of the leased assets and recognised as an expense in the income statement over the
lease term on the same basis as the lease income.
Contingent rents are recognised as income in the income statement when earned.
2.17 Inventories
Inventories are carried at the lower of cost and net realisable value. Cost is determined using the first-in,
first-out method and includes all costs in bringing the inventories to their present location and condition. Net
realisable value is the estimated selling price in the ordinary course of business, less the cost of completion
and selling expenses.
2.18 Income taxes
Current income tax for current and prior periods is recognised at the amount expected to be paid to or
recovered from the tax authorities, using the tax rates and tax laws that have been enacted or substantially
enacted by the end of the reporting period.
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2.18 Income taxes (continued)
2.20 Employee benefits
Deferred income tax is recognised for all temporary differences arising between the tax bases of assets and
liabilities and their carrying amounts in the financial statements except when the deferred income tax arises from
the initial recognition of goodwill or an asset or liability in a transaction that is not a business combination and
affects neither accounting nor taxable profit or loss at the time of the transaction.
A deferred income tax liability is recognised on temporary differences arising on investments in subsidiaries and
associated companies, except where the Group is able to control the timing of the reversal of the temporary
difference and it is probable that the temporary difference will not reverse in the foreseeable future.
A deferred income tax asset is recognised to the extent that it is probable that future taxable profit will be
available against which the deductible temporary differences and tax losses can be utilised.
Deferred income tax is measured:
(i)at the tax rates that are expected to apply when the related deferred income tax asset is realised or
the deferred income tax liability is settled, based on tax rates and tax laws that have been enacted or
substantially enacted by the end of the reporting period; and
(ii)based on the tax consequence that will follow from the manner in which the Group expects, at the end
of the reporting period, to recover or settle the carrying amounts of its assets and liabilities.
Current and deferred income taxes are recognised as income or expense in the income statement, except
to the extent that the tax arises from a business combination or a transaction which is recognised directly in
equity. Deferred tax arising from a business combination is adjusted against goodwill on acquisition.
2.19 Provisions
Provisions for legal claims, asset dismantlement, removal or restoration are recognised when the Group has a
present legal or constructive obligation as a result of past events, when it is more likely than not that an outflow
of resources will be required to settle the obligation, and when the amounts have been reliably estimated.
(a)
Post-employment benefits
The Group has various post-employment benefit schemes in accordance with local conditions and
practices in the country in which it operates. These benefit plans are either defined contribution or
defined benefit plans.
Defined contribution plan
Defined contribution plans are post-employment benefit plans under which the Group pays fixed
contributions into separate entities such as the Central Provident Fund on a mandatory, contractual or
voluntary basis. The Group has no further payment obligations once the contributions have been paid.
The Group’s contributions are recognised as employee compensation expense when they are due.
Defined benefit plan
Defined benefit plans are a post-employment benefit plans other than defined contribution plans.
Defined benefit plans typically define the amount of benefit that an employee will receive on
or after retirement, usually dependent on one or more factors such as age, years of service and
compensation.
A subsidiary in Malaysia operates an unfunded defined benefit scheme under the Collective Union
Agreement for unionised employees and certain management staff. Benefits payable on retirement
are calculated by reference to the length of service and earnings over the employees’ period of
employment; that benefit is discounted to determine the present value. The discount rate is the market
yield at the end of the reporting period on high quality corporate bonds or government bonds. Provision
for employee retirement benefits is made in the financial statements so as to provide for the accrued
liability at year end. An actuarial valuation, based on the projected credit unit method, of the fund is
conducted by a qualified independent actuary once in every three years as the directors are of the
opinion that yearly movements in provision for the defined benefit plan is not likely to be significant.
The Group recognises the estimated costs of dismantlement, removal or restoration of items of property, plant
and equipment arising from the acquisition or use of assets. This provision is estimated based on the best
estimate of the expenditure required to settle the obligation, taking into consideration time value.
When the benefits of a plan are improved, the portion of the increased benefit relating to past service
by employees is recognised as an expense in the income statement on a straight-line basis over the
average period until the benefits become vested. To the extent that the benefits vest immediately, the
expense is recognised immediately in the income statement.
Other provisions are measured at the present value of the expenditure expected to be required to settle the
obligation using a pre-tax discount rate that reflects the current market assessment of the time value of money
and the risks specific to the obligation. The increase in the provision due to the passage of time is recognised
in the income statement as finance expense.
In calculating the Group’s obligation in respect of a plan, to the extent that any cumulative unrecognised
actuarial gain or loss exceeds ten percent of the present value of the defined benefit obligation, that
portion is recognised in the income statement over the expected average remaining working lives of
the employees participating in the plan. Otherwise, the actuarial gain or loss is not recognised.
Changes in the estimated timing or amount of the expenditure or discount rate are recognised in the income
statement when the changes arise, except for changes in the estimated timing or amount of the expenditure
or discount rate for asset dismantlement, removal and restoration costs, which are adjusted against the
cost of the related property, plant and equipment unless the decrease in the liability exceeds the carrying
amount of the asset or the asset has reached the end of its useful life. In such cases, the excess of the
decrease over the carrying amount of the asset or the changes in the liability is recognised in the income
statement immediately.
Where the calculation results in a benefit to the Group, the recognised asset is limited to the net total
of any unrecognised actuarial losses and past service costs and the present value of any future refunds
from the plan or reductions in future contributions to the plan.
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2.20 Employee benefits (continued)
2.21 Currency translation (continued)
(b)
Share-based compensation
The holding company operates an equity-settled, share-based compensation plan and grants share
options to executives of the Group. The fair value of the employee services received in exchange for
the grant of options is recognised as an expense in the income statement. The total amount to be
recognised over the vesting period is determined by reference to the fair value of the options granted
on the date of the grant. Non-market vesting conditions are included in the estimation of the number
of shares under options that are expected to become exercisable on the vesting date. At the end of
each reporting period, the Group revises its estimates of the number of shares under options that are
expected to become exercisable on the vesting date and recognises the impact of the revision of the
estimates in the income statement.
2.21 Currency translation
(a)
Functional and presentation currency
Items included in the financial statements of each entity in the Group are measured using the currency
of the primary economic environment in which the entity operates (“functional currency”). The financial
statements are presented in Singapore Dollars, which is the functional currency of the Company.
(b)
Transactions and balances
Transactions in a currency other than the functional currency (“foreign currency”) are translated into
the functional currency using the exchange rates at the dates of the transactions. Currency translation
differences from the settlement of such transactions and from the translation of monetary assets and
liabilities denominated in foreign currencies at the closing rates at the end of the reporting period are
recognised in the income statement, unless they arise from borrowings in foreign currencies, other
currency instruments designated and qualifying as net investment hedges and net investment in foreign
operations. Those currency translation differences are recognised in other comprehensive income in
the consolidated financial statements and transferred to the income statement as part of the gain or
loss on disposal of the foreign operation.
Non-monetary items measured at fair values in foreign currencies are translated using the exchange
rates at the date when the fair values are determined.
(c)
Translation of Group entities’ financial statements
The results and financial position of all the Group entities (none of which has the currency of a
hyperinflationary economy) that have a functional currency different from the presentation currency are
translated into the presentation currency as follows:
(i)Assets and liabilities are translated at the closing exchange rates at the end of the
reporting period;
(ii)Income and expenses are translated at average exchange rates (unless the average is not a
reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates,
in which case income and expenses are translated using the exchange rates at the dates of the
transactions); and
(iii)All resulting currency translation differences are recognised in the currency translation reserve.
(c)
Translation of Group entities’ financial statements (continued)
Goodwill and fair value adjustments arising on the acquisition of foreign operations on or after
1 January 2005 are treated as assets and liabilities of the foreign operations and translated at the closing
rates at the end of the reporting period. For acquisitions prior to 1 January 2005, the exchange rates
at the dates of acquisition are used.
2.22 Segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the Executive
Committee whose members are responsible for allocating resources and assessing performance of the
operating segments.
2.23 Cash and cash equivalents
For the purpose of presentation in the consolidated cash flow statement, cash and cash equivalents include
cash and bank balances, short-term deposits with financial institutions, and bank overdrafts.
2.24 Share capital
Ordinary shares are classified as equity. Incremental costs directly attributable to the issuance of new ordinary
shares are deducted against the share capital account.
2.25 Dividends
Dividends to Company’s shareholders are recognised when the dividends are approved for payments.
2.26 Government grants
Grants from the government are recognised as a receivable at their fair value when there is reasonable
assurance that the grant will be received and the Group will comply with all the attached conditions.
Government grants receivable are recognised as income over the periods necessary to match them with the
related costs which they are intended to compensate, on a systematic basis. Government grants relating to
expenses are deducted in reporting the related expenses.
3.Critical accounting estimates, assumptions and judgements
Estimates, assumptions and judgements are continually evaluated and are based on historical experience
and other factors, including expectations of future events that are believed to be reasonable under the
circumstances.
(a)
Classification of the Group’s serviced apartments as investment property
Management applies judgement in determining the classification of all its serviced apartments owned
by the Group. The key criteria used to distinguish the Group’s serviced apartments which are classified
as investment properties, and its other properties classified as property, plant and equipment, is the
level of services provided to tenants of the serviced apartments.
The Group’s serviced apartments have been classified as investment properties and the carrying amount
was $64,030,000 (2009: $53,206,000).
ANNUAL REPORT 2010
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95
3.Critical accounting estimates, assumptions and judgements (continued)
5.Expenses by nature
(b)
Other estimates and judgements applied
The Group
2010
2009
$’000
$’000
The Group, on its own or in reliance on third party experts, also applies estimates and judgements in
the following areas:
(i)the determination of investment property values by independent professional valuers;
(ii)the assessment of adequacy of provision for income taxes; and
(iii)the level of impairment of goodwill.
These estimates, assumptions and judgements are however not expected to have a significant risk of
causing a material adjustment to the carrying amounts of assets and liabilities within the next financial
year. The carrying amounts of the above assets and liabilities are disclosed in the respective notes to
the financial statements.
4.Revenue, finance income and miscellaneous income
The Group
2010
2009
$’000
$’000
Gross revenue from hotel ownership and
operations
Revenue from property investments – rental
income
Dividend income
Total revenue
The Company
2010
2009
$’000
$’000
288,561
260,877
34,295
29,153
17,329
17,611
741
324,242
13,027
13,760
142
287,806
14,362
–
17,690
66,347
12,247
–
16,202
57,602
Interest income
– advances to holding company
– loans to subsidiaries
– fixed deposits with financial institutions
– others
Finance income
1,185
–
2,018
165
3,368
996
–
1,254
255
2,505
1,185
2,218
53
45
3,501
996
3,766
–
24
4,786
Miscellaneous income
1,987
1,440
619
542
329,597
291,751
70,467
62,930
Total
Cost of inventory sold
Depreciation of property, plant and equipment
(Note 19)
Amortisation of intangibles (Note 21)
Total depreciation and amortisation
Employees compensation (Note 6)
Staff cost recharges by related companies for
corporate management and maintenance
services
Rental expense on operating leases
Auditors’ remuneration paid/payable to:
– auditors of the Company
– other auditors
Other fees paid/payable to:
– auditors of the Company
– other auditors
Repairs and maintenance
Currency exchange loss – net
Heat, light and power
Property, plant and equipment written off and net
loss on disposals
Group marketing expenses
Advertising and promotion
Management fee to hotel operators
Property tax
Other hospitality related expenses
Total cost of sales, marketing and distribution,
administrative and other operating expenses
The Company
2010
2009
$’000
$’000
26,157
24,633
3,834
3,596
32,690
902
33,592
102,407
31,505
826
32,331
88,311
4,799
42
4,841
13,573
4,493
100
4,593
11,825
2,494
2,196
3,542
1,859
1,420
61
1,843
53
268
437
262
474
124
–
139
–
26
176
8,311
232
16,436
56
93
6,942
212
14,509
3
–
972
–
1,511
32
–
953
42
1,243
1,992
2,405
9,616
5,059
6,666
45,464
1,166
2,580
9,203
4,714
5,356
42,116
227
–
1,015
1,417
1,890
6,138
339
–
698
1,145
1,007
6,123
263,934
238,359
37,026
33,631
ANNUAL REPORT 2010
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97
6.Employee compensation
8.Finance expenses
The Group
2010
2009
$’000
$’000
Wages and salaries
Employer’s contribution to defined contribution
plans including Central Provident Fund
Retirement benefits
Share options granted to employees
95,252
82,475
12,249
10,639
6,594
343
218
102,407
5,396
290
150
88,311
1,106
–
218
13,573
1,036
–
150
11,825
The wages and salaries for the financial year ended 31 December 2010 are stated after netting off the Jobs
Credit Scheme – government grant of $238,000 (2009: $1,261,000). The Jobs Credit Scheme is a cash grant
introduced in the Singapore Budget 2009 to help businesses preserve jobs in the economic downturn. The
Jobs Credit will be paid to eligible employers in 2009 in four payments and the amount an employer can
receive would depend on the fulfilment of the conditions as stated in the scheme. On 13 October 2009, the
Government has announced that the Jobs Credit Scheme will be extended for six months with another two
payouts in March and June 2010 at stepped down rates.
During the financial year, the Company was charged share option expenses amounting to $218,000
(2009: $150,000) by the holding company for share options granted to executives of the Group under
the UOL Group Executives’ Share Option Scheme.
The UOL Group Executives’ Share Option Scheme is an equity settled, share-based compensation plan. The
vesting of the granted options is conditional upon the completion of one year of service from the grant date.
The amount recharged by the holding company relates to the fair value of 220,000 (2009: 481,000) options
granted to executives of the Company on the grant date, 5 March 2010 (2009: 6 March 2009), determined using
the Trinomial Tree model. The significant inputs into the model were share price of $3.91 (2009: $1.63) at the
grant date exercise price of $3.95 (2009: $1.65), standard deviation of expected share price returns of 36.73%
(2009: 32.51%), option life from 5 March 2011 to 4 March 2020 (2009: 6 March 2010 to 5 March 2019) and annual
risk-free interest rate of 1.68% (2009: 1.24%) and total expected dividends payout of $0.389 per share (2009
$0.375 per share). The volatility measured at the standard deviation of expected share price returns is based
on statistical analysis of daily share prices of UOL over the last three years.
7.Other gains - net
The Group
2010
2009
$’000
$’000
Gain on liquidation of investment in a subsidiary
Gain on capital reduction
Write-back of impairment charge on a subsidiary
156
–
–
156
–
–
–
–
The Group
2010
2009
$’000
$’000
The Company
2010
2009
$’000
$’000
The Company
2010
2009
$’000
$’000
2,662
46
1,400
4,108
–
–
–
–
Interest expense:
– loans from subsidiaries
– bank loans and overdrafts
– cash flow hedges, transfer from hedging reserve
(Note 30(d))
Amount capitalised to property under construction
(Note 20(a))
Currency exchange loss – net
The Company
2010
2009
$’000
$’000
–
4,768
–
5,061
660
268
743
83
507
5,275
234
5,295
–
928
–
826
(2,151)
3,124
3,450
6,574
(2,261)
3,034
621
3,655
–
928
1,760
2,688
–
826
401
1,227
9.Income taxes
(a)
Income tax expense
The Group
2010
2009
$’000
$’000
The Company
2010
2009
$’000
$’000
Tax expense attributable to profit is made up of:
Current income tax
– Singapore (Note (b) below)
– Foreign (Note (b) below)
Deferred income tax (Note 28)
Effect of changes in tax rate on deferred taxation:
– Singapore (Note 28)
(Over)/under provision in the preceding financial
years
– Singapore current income tax (Note (b) below)
– Deferred income tax (Note 28)
6,132
9,853
1,000
16,985
4,627
6,665
(388)
10,904
3,208
–
1,240
4,448
2,624
–
(488)
2,136
–
(2,160)
–
(1,657)
16,985
8,744
4,448
479
(2,349)
495
15,131
(48)
413
9,109
(1,862)
–
2,586
26
–
505
ANNUAL REPORT 2010
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99
9.
Income taxes (continued)
(a)
Income tax expense (continued)
10.Earnings per share
The tax expense on profit for the financial year differs from the amount that would arise using the Singapore
standard rate of income tax due to the following:
The Group
2010
2009
$’000
$’000
Share of profit of associated companies, net of tax
Profit before tax and share of profit of associated
companies
Tax calculated at a tax rate of 17%
Effects of:
– Singapore statutory stepped income exemption
– Different tax rate in other countries
– Income not subject to tax
– Expenses not deductible for tax purposes
– Foreign tax expense not recoverable
– Utilisation of previously unrecognised tax losses
– Deferred tax asset not recognised in the current
financial year
– Effect of changes in tax rate
Tax charge
(b)
The Company
2010
2009
$’000
$’000
70,351
(1,127)
49,184
(1,067)
44,840
–
26,452
–
69,224
11,768
48,117
8,180
44,840
7,623
26,452
4,497
(224)
2,360
(1,182)
1,783
139
(212)
(26)
–
(3,784)
635
–
–
(26)
–
(2,908)
573
–
–
60
(2,160)
8,744
–
–
4,448
–
(1,657)
479
(226)
2,920
(903)
2,712
137
(170)
747
–
16,985
Basic earnings per share is calculated by dividing the net profit attributable to equity holders of the Company
by the weighted average number of ordinary shares outstanding during the financial year.
Net profit attributable to equity holders of the Company ($’000)
Weighted average number of ordinary shares in issue for basic earnings per
share (‘000)
Basic earnings per share (cents per share)
At the beginning of the financial year
Currency translation differences
Income tax paid
Tax refund received
Tax expense on profit (Note (a) above)
– current financial year
– (over)/under provision in preceding financial years
Acquisition of subsidiaries
At the end of the financial year
Comprise:
Tax recoverable (Note 12)
Current income tax liabilities (included under
current liabilities)
15,359
1,521
(15,759)
1,780
5,916
–
(2,954)
–
6,911
–
(4,212)
567
15,985
(2,349)
–
16,040
11,292
(48)
62
14,207
3,208
(1,862)
–
4,308
2,624
26
–
5,916
–
(641)
–
(637)
16,040
16,040
14,848
14,207
4,308
4,308
6,553
5,916
53,640
39,312
600,000
600,000
8.94
6.55
11.Cash and bank balances
The Group
2010
2009
$’000
$’000
Cash at bank and on hand
Fixed deposits with financial institutions
43,256
14,648
57,904
28,060
65,057
93,117
The Company
2010
2009
$’000
$’000
1,898
191
2,089
3,181
6,451
9,632
(a)For the purposes of the consolidated cash flow statement, the consolidated cash and cash equivalents
comprised the following:
The Group
2010
2009
$’000
$’000
The Company
2010
2009
$’000
$’000
14,207
936
(12,997)
258
2009
Diluted earnings per share is the same as basic earnings per share as there were no potential dilutive
ordinary shares.
Movements in current income tax (assets)/liabilities
The Group
2010
2009
$’000
$’000
2010
57,904
(9)
57,895
Cash and bank balances (as above)
Less : Bank overdrafts (Note 23)
Cash and cash equivalents per consolidated cash flow statement
93,117
–
93,117
(b)The fixed deposits with financial institutions for the Group and Company mature on varying dates within twelve
months (2009: twelve months) from the end of the financial year and have the following weighted average
effective interest rates as at the end of the reporting period:
Singapore Dollar
United States Dollar
Australian Dollar
Malaysian Ringgit
The Group
2010
2009
%
%
The Company
2010
2009
%
%
–
0.95
2.81
2.80
–
0.01
3.36
–
0.20
0.72
3.76
1.95
–
0.01
2.47
–
ANNUAL REPORT 2010
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101
11.Cash and bank balances (continued)
12.Trade and other receivables (continued)
(c)
(a)Impairment loss on trade and other receivables for the Group recognised as an expense and included in
‘Administrative expenses’ amounted to $112,000 (2009: $94,000).
During the financial year ended 31 December 2009, the Company acquired a 100% interest in Parkroyal Serviced
Residences Pte Ltd (“PSR”) from UOL Group Limited, the holding company of the Company. The effects of
the acquisition of PSR on the cash flows of the Group are as follows:
$’000
Identifiable assets and liabilities
Cash and cash equivalents
Property, plant and equipment (Note 19)
Shareholder’s loan
Total assets
51
86
454
599
1,190
Current income tax liabilities (Note 9)
Deferred income tax liabilities (Note 28)
Total liabilities
(545)
(62)
(2)
(609)
Identifiable net assets acquired
Cash consideration paid
Repayment of shareholder’s loan
Less: Cash and cash equivalents in subsidiaries acquired
Net cash flow on acquisition net of cash acquired
581
581
(599)
(51)
(69)
(b) The non-trade amounts due from subsidiaries are unsecured, interest-free and repayable on demand.
(c)The non-current loans to subsidiaries with interest charged on a floating-rate basis is subjected to monthly
repricing. The carrying values of the loans approximate their fair values. The loans have no fixed terms of
repayment and are not expected to be repaid within twelve months from the end of the reporting period.
(d)Loans to subsidiaries of $22,468,000 (2009: $127,523,000) have been subordinated to the secured bank loans
of the subsidiaries.
13.Inventories
The Group
2010
2009
$’000
$’000
Trading stock
Food and beverages
Spares for maintenance
Current
Trade receivables:
–non-related parties
–fellow subsidiaries
–associated companies
Less: Allowance for impairment of receivables –
non-related parties
Trade receivables – net
Other receivables:
–loans to subsidiaries
–subsidiaries (non-trade)
–sundry debtors
–tax recoverable (Note 9(b))
Non-current
Loans to:
– subsidiaries
Total trade and other receivables
The Company
2010
2009
$’000
$’000
17,337
117
–
15,047
370
46
1,332
4
–
1,309
11
–
(280)
17,174
(355)
15,108
–
1,336
(1)
1,319
–
–
7,445
–
7,445
–
–
4,242
641
4,883
11,356
3,019
552
–
14,927
21,343
12,583
623
637
35,186
24,619
19,991
16,263
36,505
–
–
–
–
149,154
149,154
257,102
257,102
24,619
19,991
165,417
293,607
61
1,554
965
2,580
52
51
–
103
43
163
74
280
The cost of inventories recognised as expense and included in ‘cost of sales’ amounted to $26,157,000 (2009:
$24,633,000) and $3,834,000 (2009: $3,596,000) respectively for the Group and the Company.
12.Trade and other receivables
The Group
2010
2009
$’000
$’000
272
872
387
1,531
The Company
2010
2009
$’000
$’000
14.Other assets
The Group
2010
2009
$’000
$’000
Deposits
Prepayments
15.
14,802
2,351
17,153
544
2,788
3,332
The Company
2010
2009
$’000
$’000
45
192
237
–
221
221
The Group
2010
2009
$’000
$’000
Fair value (losses)/gains recognised in other
comprehensive income (Note 30(a))
The Company
2010
2009
$’000
$’000
18,032
12,968
18,032
12,968
(865)
17,167
5,064
18,032
(865)
17,167
5,064
18,032
ANNUAL REPORT 2010
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103
15.
17.Investment in subsidiaries
Available-for-sale financial assets (continued)
At the end of the reporting period, available-for-sale financial assets included the following:
The Group
2010
2009
$’000
$’000
Listed securities:
– Equity shares - Singapore
17,167
18,032
The Company
2010
2009
$’000
$’000
The Company
2010
2009
$’000
$’000
17,167
18,032
16.Investment in associated companies
The Group
2010
2009
$’000
$’000
The Company
2010
2009
$’000
$’000
9,820
Equity investments at cost
Share of profits
Dividend paid during the year
6,954
1,127
(555)
(132)
7,394
9,820
8,242
1,067
(251)
(2,104)
6,954
(a)The summarised financial information of associated companies, not adjusted for the proportion ownership
interest held by the group were as follows:
The Group
2010
2009
$’000
$’000
52,102
24,412
16,971
2,854
– Assets
– Liabilities
– Revenues
– Net profit after tax
58,057
31,179
17,055
2,710
(b)Contingent liabilities of the associated company in which the Group is severally liable (Note 32) amounted to
$7,557,000 (2009: $9,834,000).
(c)
The associated companies are:
Name of companies
Principal
activities
Country of business/
incorporation
Pilkon Development Company
Limited*
Investment
holding
The British Virgin
Islands
PPHR (Thailand) Company
Limited**
Marketing
agent
Thailand
* Not required to be audited under the laws of the country of incorporation.
** Audited by Thana-Ake Advisory Limited.
Equity holding
2010
2009
%
%
39.35
by PPHG
39.35
by PPHG
48.97
by PPH
48.97
by PPH
Equity investments at cost
Less: accumulated impairment charge:
Impairment reversal/(charge) for the financial year
Equity investments at cost less accumulated impairment charge
at the end of the financial year
408,806
242,359
(40,540)
1,400
(39,140)
(38,040)
(2,500)
(40,540)
369,666
201,819
Additional investment
Capital reduction in subsidiaries
Impairment reversal/(charge) for the financial year
201,819
171,100
(4,653)
1,400
369,666
197,952
6,367
–
(2,500)
201,819
(a)The impairment write-back of $1,400,000 (2009: impairment charge of $2,500,000) was recognised for the
Company’s investment in certain subsidiaries, being the difference between the carrying amount of the
investment and its recoverable amount. This is to reduce the carrying value of investments to the recoverable
amounts, taking into account the general economic and operating environment in which the relevant
subsidiaries operate in.
The recoverable amount for the relevant subsidiaries was mainly estimated based on the fair value less cost to
sell of the net assets as at balance sheet date. The carrying amount of the net assets of the relevant subsidiaries
approximates their fair values.
(b)
The subsidiaries are:
Principal
activities
Country of
business/
incorporation
New Park Hotel (1989)
Pte Ltd
Hotelier
Singapore
5,000
5,000
100
100
Parkroyal Hotels & Resorts
Pte. Ltd.
Hotel manager and
operator
Singapore
10
10
100
100
United Lifestyle Holdings
Pte Ltd
Investment
holding
Singapore
1,200
3,500
100
100
HPL Properties (Malaysia)
Sdn. Bhd. (“HPM”) *
Investment
holding
Malaysia
50,172
50,172
100
100
President Hotel Sdn Berhad
(“PHSB”) @ *
Hotelier
Malaysia
25,130
25,130
33.33
33.33
The British
Virgin Islands
49,978
6,353
100
60
Name of companies
Cost of
investment
2010
2009
$’000
$’000
Equity holding
2010
2009
%
%
Held by the Company
Success Venture Investments Investment holding
(Australia) Ltd (“SVIA”)
ANNUAL REPORT 2010
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105
17.Investment in subsidiaries (continued)
(b)
(b)
The subsidiaries are: (continued)
Name of companies
Principal activities
Country of
business/
incorporation
Cost of
investment
2010
2009
$’000
$’000
Equity holding
2010
2009
%
%
Held by the Company
Country of
business/
incorporation
Success Venture Pty Limited *
Trustee company
Australia
100
by SVIA
100
by SVIA
Yangon Hotel Limited **
Hotelier
Myanmar
95
by YIPL
95
by YIPL
Westlake International Company *
Hotelier
Vietnam
75
by HIH
75
by HIH
Suzhou Wugong Hotel Co., Ltd *
Hotelier
The People’s
Republic of
China
100
by HIS
100
by HIS
President Hotel Sdn Berhad (“PHSB”) @ *
Hotelier
Malaysia
66.67
by HPM
66.67
by HPM
Grand Elite Sdn. Bhd. *
Dormant
Malaysia
100
by PHSB
100
by PHSB
Grand Elite (Penang) Sdn. Bhd. *
Dormant
Malaysia
100
by PHSB
100
by PHSB
Name of companies
Equity holding
2010
2009
%
%
Held by subsidiaries
Success Venture Investments Investment holding
(WA) Limited (“SVIWA”)
The British
Virgin Islands
21,279
21,279
100
100
Success City Pty Limited *
Dormant
Australia
22,528
20,052
100
95
Garden Plaza Company
Limited *
Hotelier
Vietnam
1,748
1,748
100
100
Dou Hua Restaurants
Pte Ltd
Operator of
restaurants
Singapore
175
875
100
100
St Gregory Spa Pte Ltd
Manage and operate
health and beauty
retreats and facilities
Singapore
–
1,654
100
100
Hotel Investments (Suzhou)
Pte. Ltd. (“HIS”)
Investment holding
Singapore
7
7
100
100
Hotel Investments (Hanoi)
Pte. Ltd. (“HIH”)
Investment holding
Singapore
6
6
100
100
YIPL Investment Pte. Ltd.
(“YIPL”)
Investment holding
Singapore
6,045
6,045
100
100
Hotel Plaza Property
(Singapore) Pte Ltd
Property development Singapore
and hotelier
200,000
75,000
100
100
Pan Pacific Hotels and Resorts Pte. Ltd.
(“PPHR”)
Hotel manager and
operator
Singapore
100
by PPHH
100
by PPHH
Parkroyal International
Pte. Ltd.
Managing and licensing Singapore
of trademarks
100
100
100
100
Pan Pacific Hotels and Resorts America,
Inc. (“PPHRA”) ^
Hotel manager and
operator
United States
of America
100
by PPHR
100
by PPHR
Pan Pacific Hospitality
Holdings Pte Ltd
Investment holding
Singapore
21,757
21,757
100
100
Pan Pacific Hotels and Resorts Seattle
Limited Liability Co (“PPHRS”) ^
Hotel manager and
operator
United States
100
of America
by PPHRA
100
by PPHRA
Pan Pacific International
Pte. Ltd.
Managing and licensing Singapore
of trademarks
3,090
3,090
100
100
Pan Pacific Hotels and Resorts Japan
Co., Ltd ^
Hotel manager and
operator
Japan
100
by PPHR
100
by PPHR
Parkroyal Serviced
Residences Pte. Ltd.
[Note (d) below]
Management of
serviced suites
581
581
100
100
PT. Pan Pacific Hotels & Resorts Indonesia Hotel manager and
(“PPHRI”) ***
operator
Indonesia
408,806
242,359
99
by PPHR
and 1
by PPHRA
99
by PPHR
and 1
by PPHRA
Pan Pacific Hospitality Pte. Ltd. (“PPH”)
Manage and operate
serviced suites
Singapore
100
by PPHH
100
by PPHH
Pan Pacific Technical Services Pte. Ltd.
Provision of technical Singapore
services to hotels and
serviced suites
100
by PPHH
100
by PPHH
Singapore
ANNUAL REPORT 2010
a brand
new era
106
107
(b)
(d)
Name of companies
Country of
business/
incorporation
n 13 July 2009, the Company acquired a 100% interest in Parkroyal Serviced Residences Pte Ltd (“PSR”) from
O
UOL for cash consideration of $581,000.
PSR contributed revenue of $780,000 and net profit after tax of $205,000 to the Group for the period
from 13 July 2009 to 31 December 2009. The assets and liabilities of PSR as at 31 December 2009 were
$1,239,000 and $618,000 respectively. If the acquisition had occurred on 1 January 2009, Group revenue
would have been increased by $592,000 and net profit after tax increased by $20,000 for the financial year
ended 31 December 2009.
Equity holding
2010
2009
%
%
Held by subsidiaries
(c)
Pan Pacific Marketing Services Pte. Ltd.
Singapore
Provision of
marketing and related
services to hotels and
serviced suites
100
by PPHH
100
by PPHH
Pan Pacific (Shanghai) Hotels
Management Co., Ltd****
Hotel manager and
operator
100
by PPHR
–
The People’s
Republic of
China
he cash consideration for the acquisition was determined based on the net book values of the assets and
T
liabilities of PSR and no goodwill was recognised. Details of net assets acquired are disclosed in Note 11(c).
18. Investment properties
The Group and
The Company
2010
2009
$’000
$’000
The following unit trusts are held by:
Name of unit trusts
Country of
business/
Constitution
155,481
–
9,979
165,460
Additions
Fair value gains/(losses) recognised in income statement
Units held
2010
2009
%
%
155,469
1,632
(1,620)
155,481
SVIA
Success Venture (Darling Harbour) Unit
Trust*
Hotelier
Australia
100
100
(a)Investment properties are carried at fair values at the end of the reporting period as determined by independent
professional valuers. Valuations are made semi-annually based on the properties’ highest-and-best use using
various valuation methods such as Direct Market Comparison Method and Income Method.
Success Venture (Parramatta) Unit Trust*
Hotelier
Australia
100
100
(b)The investment properties are leased to non-related parties under operating leases (Note 33(c)).
SVIWA
Success Venture (WA) Unit Trust*
(c)The details of the Group’s investment properties at 31 December 2010 were:
Hotelier
Australia
100
100
Tenure of land
PricewaterhouseCoopers LLP Singapore is the auditor of all subsidiaries of the Group unless
otherwise indicated.
~Less than $1,000.
@
The Group’s effective interest in PHSB is 100% (2009: 100%) of which 33.33% (2009: 33.33%) is held directly by the Company and the remainder
interest held through HPM.
*Companies audited by PricewaterhouseCoopers firms outside Singapore.
**Company audited by Myanmar Vigour Company Limited.+
***Company audited by Kanaka Puradiredja, Robert Yogi Dan Suhartono.+
****Company audited by Shanghai LSC Certified Public Accountants Co., Ltd.+
^Not required to be audited under the laws of the country of incorporation.+
+
The subsidiaries not audited by PricewaterhouseCoopers LLP Singapore or PricewaterhouseCoopers firms outside Singapore are not significant
subsidiaries as defined under Rule 718 of the Listing Manual of the Singapore Exchange Securities Trading Limited.
The Plaza
(d)
– retained interests in a 32-storey tower block comprising restaurants,
function rooms, shops, offices and serviced suites, two adjacent
commercial buildings and a multi-storey car park block at Beach
Road, Singapore
The following amounts are recognised in profit or loss:
The Group
2010
2009
$’000
$’000
Rental income (Note 4)
Direct operating expenses arising from investment
properties that generated rental income
99-year lease
from 1968
The Company
2010
2009
$’000
$’000
17,329
13,027
14,362
12,247
(6,917)
10,412
(4,686)
8,341
(6,893)
7,469
(4,676)
7,571
ANNUAL REPORT 2010
a brand
new era
108
109
19.Property, plant and equipment
19.Property, plant and equipment (continued)
Plant,
equipment,
Land and building
furniture
Freehold Leasehold and fittings
$’000
$’000
$’000
Motor Renovation
vehicles in progress
$’000
$’000
The Group
Cost
At 1 January 2010
Additions
Reclassification
Disposals
At 31 December 2010
298,703
9,207
4,767
371
(1,642)
311,406
178,436
(7,579)
236
122
(716)
170,499
366,393
(1,469)
6,868
2,828
(88,324)
286,296
1,878
(76)
201
–
(405)
1,598
1,432
(10)
9,326
(3,321)
–
7,427
Accumulated depreciation
At 1 January 2010
Charge for the financial year
Reclassification
Disposals
At 31 December 2010
50,243
1,762
4,542
114
(1,230)
55,431
62,692
(2,649)
4,146
–
(681)
63,508
240,663
(1,224)
23,840
(114)
(86,640)
176,525
1,528
(67)
162
–
(405)
1,218
–
–
–
–
–
–
255,975
106,991
109,771
380
Net book value
At 31 December 2010
Plant,
equipment,
Land and building
furniture
Freehold Leasehold and fittings
$’000
$’000
$’000
The Group
Cost
At 1 January 2009
Acquisition of subsidiary
(Note 11(c))
Additions
Reclassification
Transfer from other assets
Disposals
At 31 December 2009
At 1 January 2009
Acquisition of subsidiary
(Note 11(c))
Reclassification
Transfer from other assets
Disposals
At 31 December 2009
Net book value
At 31 December 2009
Total
$’000
Motor Renovation
$’000
$’000
846,842
73
21,398
–
(91,087)
777,226
The Company
Cost
At 1 January 2010
Additions
Disposals
Reclassification
At 31 December 2010
43,484
–
(524)
–
42,960
38,152
718
(9,942)
3,167
32,095
163
16
(99)
–
80
355,126
(2,178)
32,690
–
(88,956)
296,682
At 1 January 2010
Disposals
At 31 December 2010
21,769
996
(504)
22,261
19,721
3,792
(9,651)
13,862
115
11
(99)
27
20,699
18,233
53
7,427 480,544
Motor Renovation
$’000
$’000
Plant,
Leasehold equipment,
furniture
land and
building and fittings
$’000
$’000
Net book value
At 31 December 2010
Plant,
Leasehold equipment,
furniture
land and
building and fittings
$’000
$’000
Total
$’000
271,387
24,658
166,010
(2,829)
333,127
17,350
1,340
(24)
23,605
(533)
795,469
38,622
–
52
2,609
–
(3)
298,703
475
206
13,519
2,072
(1,017)
178,436
95
12,033
12,067
–
(8,279)
366,393
–
92
744
17
(291)
1,878
–
7,299
(28,939)
–
–
1,432
570
19,682
–
2,089
(9,590)
846,842
42,247
4,063
60,688
(1,094)
213,329
10,982
1,034
(22)
–
–
317,298
13,929
–
4,081
(146)
–
(2)
50,243
35
4,254
(1,471)
507
(227)
62,692
81
23,011
987
–
(7,727)
240,663
–
159
630
17
(290)
1,528
–
–
–
–
–
–
116
31,505
–
524
(8,246)
355,126
248,460
115,744
125,730
350
1,432
491,716
Total
$’000
1,290 83,089
6,678
7,412
– (10,565)
(3,167)
–
4,801 79,936
–
–
–
–
41,605
4,799
(10,254)
36,150
4,801 43,786
Motor Renovation
$’000
$’000
Total
$’000
The Company
Cost
At 1 January 2009
Additions
Disposals
Reclassification
At 31 December 2009
43,484
–
–
–
43,484
36,208
5,326
(4,424)
1,042
38,152
163
–
–
–
163
(1,042)
1,290
80,954
6,559
(4,424)
–
83,089
At 1 January 2009
Disposals
At 31 December 2009
20,679
1,090
–
21,769
20,384
3,394
(4,057)
19,721
106
9
–
115
–
–
–
–
41,169
4,493
(4,057)
41,605
Net book value
At 31 December 2009
21,715
18,431
48
1,290
41,484
1,099
1,233
(a)The leasehold land and building of the Company comprise a hotel property which was revalued by a firm of
professional valuers on 31 December 1985 on an open market existing use basis, with subsequent additions
at cost. The valuation done in 1985 was incorporated in the financial statements. However, a decision was
then made subsequently by the Board of Directors that future valuations of hotel properties would not be
incorporated in the financial statements.
ANNUAL REPORT 2010
a brand
new era
110
111
19.Property, plant and equipment (continued)
20.Property under construction
(b)At 31 December 2010, the open market value of the hotel property of the Company (including plant, equipment,
furniture and fittings) was $122,000,000 (2009: $112,000,000) and the net book value was $37,493,000 (2009:
$36,017,000). The valuation of the hotel properties was carried out by a firm of independent professional valuers
on an open market existing use basis. The surplus on valuation amounting to $84,507,000 (2009: $75,983,000)
has not been incorporated in the financial statements.
The open market value of hotel properties of the Group (including plant, equipment, furniture and fittings)
was $1,058,261,000 (2009: $992,240,000) and the net book value at 31 December 2010 was $465,623,000
(2009: $477,901,000). The valuations were carried out by firms of independent professional valuers on an open
market existing use basis. The surplus on valuation of these hotel properties amounting to $592,638,000 (2009:
$514,339,000) has not been incorporated in the financial statements.
(c)Bank borrowings and other banking facilities are secured on certain hotel properties of the Group amounting
to $327,739,000 (2009: $324,159,000) (Note 23(a)).
(d)
The details of the Group’s hotel properties at 31 December 2010 were:
Tenure
of land
Remaining
Lease
term
PARKROYAL on
Kitchener Road
– a 534-room hotel at Kitchener Road,
Singapore
Freehold
PARKROYAL on
Beach Road
– a 343-room hotel at Beach Road, Singapore
99-year lease
from 1968
PARKROYAL Darling
Harbour, Sydney
– a 345-room hotel at Darling Harbour, Sydney,
Australia
Freehold
–
– a 196-room hotel at Parramatta, Australia
Freehold
–
Sheraton Perth Hotel
– a 486-room hotel and carpark at Adelaide
Terrace, Perth, Australia
Freehold
–
PARKROYAL Kuala Lumpur – a 426-room hotel and a 6-storey podium block
and President House
at Jalan Sultan Ismail, Kuala Lumpur, Malaysia
– a 320-lot carpark at Jalan Sultan Ismail, Kuala
Lumpur, Malaysia
Freehold
–
PARKROYAL Penang
Resort
– a 309-room resort hotel at Jalan Batu
Ferringhi, Penang, Malaysia
Freehold
PARKROYAL Saigon
– a 193-room hotel and 4-storey annex block
at Nguyen Van Troi Street, Ho Chi Minh City,
Vietnam
49-year lease
from 1994
Sofitel Plaza Hanoi
– a 309-room hotel and 36-unit serviced
apartment at Thanh Nien Road, Hanoi,
Vietnam
48-year lease
from 1993
31 years
Pan Pacific Suzhou
– a 481-room hotel at Xinshi Road, Suzhou,
Jiangsu, The People’s Republic of China
50-year lease
from 1994
34 years
PARKROYAL Yangon
– a 267-room hotel at the corner of Alan Pya
Phaya Road and Yaw Min Gyi Road, Yangon,
Union of Myanmar
30-year lease
from 1997
17 years
Leasehold
expiring in
2080
–
The Group
2010
2009
$’000
$’000
253,200
48,514
9,064
310,778
(37,000)
273,778
Costs of land
Development costs
Property taxes, interest and other overheads
Less: Impairment charge
(a)Borrowing costs of $2,151,000 (2009: $2,261,000) (Note 8) arising on financing specifically entered into for
the development of the property were capitalised during the financial year and are included in property
under construction.
(b)Details of the property under construction as at 31 December 2010 are as follows:
Property
Expected
Tenure
Stage of completion
date
of land completion
57 years
70 years
Upper Pickering Street
A proposed development comprising 363-room hotel
and approximately 7,300 square metres of office
space
99 year
leasehold
from 2008
19%
Mid-2012
Site area/
gross
floor area
(sq m)
6,959/
29,812
(c) Bank borrowings of a subsidiary of $88,480,000 (2009: $88,480,000) (Note 23(a)) is secured by a legal mortgage
on the land and proposed developments and all present and future rights and interests arising from the lease,
sale and other agreements in respect of the development.
21.Intangibles
The Group
2010
2009
$’000
$’000
–
33 years
253,200
25,813
6,109
285,122
(37,000)
248,122
Trademark (Note (a) below)
Goodwill arising on consolidation
(Note (b) below)
Computer software costs – under development
(Note (c) below)
Contract acquisition costs (Note (d) below)
The Company
2010
2009
$’000
$’000
12,524
13,289
–
204
13,911
13,911
–
–
2,932
1,405
30,772
–
–
27,200
589
–
589
–
–
204
ANNUAL REPORT 2010
a brand
new era
112
113
21.Intangibles (continued)
21.Intangibles (continued)
(a)
(b)
Trademark
The Group
2010
2009
$’000
$’000
(b)
Key assumptions used for fair value less cost to sell calculations:
The Company
2010
2009
$’000
$’000
Addition
Transfer
Amortisation for the financial year
13,289
107
–
(872)
12,524
14,115
–
–
(826)
13,289
204
107
(269)
(42)
–
304
–
–
(100)
204
Cost
Accumulated amortisation
Net book value
15,045
(2,521)
12,524
14,938
(1,649)
13,289
784
(784)
–
946
(742)
204
Goodwill arising on consolidation (continued)
(c)
China
Malaysia
2010
Growth rate
Discount rate
9.8%
12.3%
1.6%
6.2%
2009
Growth rate
Discount rate
14.0%
12.3%
2.4%
7.3%
Computer software costs – under development
The Group
2010
2009
$’000
$’000
Goodwill arising on consolidation
The Company
2010
2009
$’000
$’000
There were no movements in goodwill arising on consolidation for the current and previous financial year.
Additions
Impairment tests for goodwill
Goodwill is allocated to the Group’s cash-generating units (“CGUs”) identified according to countries
of operation and business segment. A segment-level summary of the goodwill allocation is analysed as
follows:
(d)
13,080
831
13,911
13,080
831
13,911
The recoverable amount of the above CGU was determined based on fair value less cost to sell calculations.
The fair value less cost to sell reflect the best estimate of the amount obtainable from the sale of a CGU
in an arm’s length transaction between knowledgeable, willing parties, less the costs of disposal. The fair
values were determined by independent professional valuers using the cash flows projections of 5 and 9
years (2009: 5 and 9 years) which were prepared based on the expected future market trend.
–
–
–
–
589
589
–
–
–
Contract acquisition costs
The Group
2010
2009
$’000
$’000
Hotel ownership
2010
2009
$’000
$’000
China
Malaysia
–
2,932
2,932
Cost
Additions
–
1,435
1,435
–
–
–
Accumulated amortisation
Amortisation charge
–
30
30
–
–
–
1,405
–
Net book value
In 2010, the Group incurred costs in the securing of management contracts. These costs have been capitalised
as intangible assets in accordance with the group policy in Note 2.5(d).
ANNUAL REPORT 2010
a brand
new era
114
115
22.Trade and other payables
23.Borrowings (continued)
The Group
2010
2009
$’000
$’000
Current
Trade payables:
– non-related parties
– fellow subsidiaries
– holding company
– associated company
– subsidiaries
Other payables:
– accrued operating expenses
– sundry creditors
– retention monies
– accrued interest payable
– rental deposits
– other deposits
Non-current
Rental deposits
Retention monies
Total trade and other payables
The Company
2010
2009
$’000
$’000
15,149
300
1,309
–
–
16,758
16,199
268
279
5
–
16,751
2,382
–
–
–
48
2,430
3,660
254
272
–
140
4,326
31,410
8,861
388
335
1,129
3,052
45,175
27,073
4,761
675
285
1,845
2,883
37,522
4,303
1,805
353
43
203
93
6,800
2,743
1,478
288
–
326
94
4,929
61,933
54,273
9,230
9,255
3,057
2,068
5,125
2,882
–
2,882
2,928
–
2,928
2,715
–
2,715
67,058
57,155
12,158
11,970
The carrying amount of rental deposits and retention monies approximate their fair values.
23.Borrowings
The Group
2010
2009
$’000
$’000
Current
Bank overdrafts (unsecured)
Bank loans (secured)
The Company
2010
2009
$’000
$’000
9
70,654
70,663
–
6,087
6,087
–
–
–
–
–
–
Non-current
Bank loans (secured)
120,564
176,031
28,609
–
Total borrowings
191,227
182,118
28,609
–
(a) Securities granted
The bank overdrafts and loans are secured by mortgages on certain subsidiaries’ hotel properties; and/or
assignment of all rights and benefits with respect to the properties. The net book value of hotel properties
which have been pledged as securities amounted to $327,739,000 (2009: $324,159,000) (Note 19(c)).
Bank borrowings of a subsidiary of $88,480,000 (2009: $88,480,000) is secured by a legal mortgage on the land
and proposed developments and all present and future rights and interests arising from the lease, sale and
other agreements in respect of the development (Note 20(c)).
(b)
Repricing analysis
Interest on the bank loans of the Group and of the Company is on floating-rate basis and all the loans are due
for repricing between one to twelve months (2009: between one to six months) from the end of the reporting
period. The carrying values of the loans approximate their fair values.
24.
The Group
Contract
notional Fair value
amount
liability
$’000
$’000
2010
Cash-flow hedges
– Interest rate swaps
Less: Current portion
Non-current portion
40,000
457
457
–
2009
Cash-flow hedges
– Interest rate swaps
Less: Current portion
Non-current portion
40,000
439
–
439
A subsidiary entered into Singapore dollar interest rate swap to hedge floating semi-annual interest payments
on borrowings that will mature on 5 October 2011. The interest rate swap terminates on 5 October 2011.
Fair value gains and losses on the interest rate swaps recognised in the hedging reserve are transferred to
income statement as part of interest expense over the period of the borrowings.
25.Holding company
The Company’s immediate and ultimate holding company is UOL Group Limited (“UOL”).
In 2010, the advances to the holding company are unsecured with interest charged at 0.40% above a subsidiary’s
average costs of funds and is repayable on demand. The effective interest rate at the end of the reporting
period was 1.99% (2009: 2.18%) per annum. The carrying values of the advances to the holding company
approximate their fair values.
ANNUAL REPORT 2010
a brand
new era
116
117
26.Loans from subsidiaries
27.Provision for retirement benefits (continued)
(b)The movements during the year recognised in the statements of financial position were as follows:
Details of the loans from subsidiaries are as follows:
Current
(a)
The Group
2010
2009
$’000
$’000
Interest-free loans
Loans from a subsidiary of $nil (2009: $4,653,000) are interest-free. The loans have no fixed terms of
repayment and are expected to be repaid within 12 months from the end of the reporting period.
Non-current
(a)
Interest-free loans
Loans of $78,222,000 (2009: $81,216,000) are interest-free. The fair value of the interest-free loans from
subsidiaries is $76,307,000 (2009: $79,021,000). The fair value is computed based on the present value
of the cash flows on the loans discounted at a rate of 2.43% (2009: 2.78%), which is the borrowing rate
that the directors expect would be available to the Company at the end of the reporting period. The
loans have no fixed terms of repayment but are not expected to be repaid within 12 months from the
end of the reporting period.
(b)
(c)
(c)
2,316
(179)
343
59
2,539
2,112
(61)
290
(25)
2,316
The expense recognised in the income statement may be analysed as follows:
The Group
2010
2009
$’000
$’000
Floating rate loans
Loans from subsidiaries of $4,090,000 (2009: $7,380,000) with interest charged on a floating-rate basis,
subject to monthly repricing. The carrying values of the loans approximate their fair values. The loans
have no fixed terms of repayment but are not expected to be repaid within 12 months from the end of
the reporting period.
Benefits paid
Charged to income statement (Note 6)
Exchange differences
Fixed rate loans
Current service cost
Interest on obligation
Expense recognised in the income statement
(d)The principal actuarial assumptions used in respect of the Group’s defined benefit plan were as follows:
The Group
2010
2009
%
%
27.Provision for retirement benefits
The Group
2010
2009
$’000
$’000
2,539
2,316
(a)A subsidiary in Malaysia operates an unfunded defined benefit scheme under the Collective Union Agreement
for unionised employees and certain management staff. Benefits payable on retirement are calculated by
reference to length of service and earnings over the employees’ years of employment. Provision for postemployment benefit obligations is made in the financial statements so as to provide for the accrued liability
at the end of the reporting period. An actuarial valuation, based on the projected unit credit method, of
the fund is conducted by a qualified independent actuary once every three years as the directors are of the
opinion that yearly movement in provision is not likely to be significant. The most recent revaluation was at
31 December 2009.
178
112
290
The charge to the income statement was included under ‘administrative expenses’ in the income statement.
Loans of $18,545,000 (2009: $18,067,000) with interest charged at fixed rate of 3.50% (2009: 3.50%) per
annum. The carrying values of the loans approximate their fair values. The loans have no fixed terms of
repayment but are not expected to be repaid within 12 months from the end of the reporting period.
Non-current
203
140
343
Discount interest rate
Future salary increase
Inflation rate
Normal retirement age (years)
– Male
– Female
6.2
6.5
3.5
6.2
6.5
3.5
55
50
55
50
ANNUAL REPORT 2010
a brand
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118
119
28.
28.
Deferred income taxes
Deferred income tax assets and liabilities are offset when there is a legally enforceable right to set off current
income tax assets against current income tax liabilities and when the deferred income taxes relate to the
same fiscal authority. The amounts, determined after appropriate offsetting, are shown on the statements of
financial position as follows:
The Group
2010
2009
$’000
$’000
Deferred income tax assets:
– to be recovered within one year
– to be recovered after more than one year
Deferred income tax liabilities:
– to be settled within one year
– to be settled after more than one year
The Company
2010
2009
$’000
$’000
(78)
(2,705)
(2,783)
(625)
(2,705)
(3,330)
–
–
–
–
–
–
513
49,218
49,731
1,448
46,774
48,222
717
31,095
31,812
1,519
29,053
30,572
46,948
44,892
31,812
30,572
The movements in the deferred income tax account are as follows:
The Group
2010
2009
$’000
$’000
Effects of change in tax rate:
– income statement (Note 9(a))
– equity (Note 30(b),(d))
Tax charge/(credit) to:
– income statement (Note 9(a))
– equity (Note 30(d))
44,892
564
–
–
1,495
(3)
–
46,948
46,845
363
The Company
2010
2009
$’000
$’000
30,572
–
32,882
–
(2,160)
(162)
–
–
(1,657)
(165)
25
(21)
2
44,892
1,240
–
–
31,812
(488)
–
–
30,572
Deferred income taxes (continued)
The movements in the deferred income tax assets and liabilities (prior to offsetting of balances within the same
tax jurisdiction) during the financial year are as follows:
The Group
Accelerated
tax
depreciation
$’000
Fair value
adjustments
on investment
property and
surplus on
revaluation of
certain hotel
properties
$’000
18,737
522
25,813
–
1,519
–
2,224
–
(71)
(1)
48,222
521
350
19,609
1,696
27,509
(802)
717
(124)
2,100
(132)
(204)
988
49,731
12,543
443
28,701
(7)
5,864
–
2,485
–
(734)
5
48,859
441
(333)
–
(1,365)
(165)
(326)
–
(138)
–
2
–
(2,160)
(165)
6,082
2
18,737
(1,351)
–
25,813
(4,019)
–
1,519
(123)
–
2,224
656
–
(71)
1,245
2
48,222
Unremitted
foreign
income,
Other
interest and Amortisation temporary
dividends of intangibles differences
$’000
$’000
$’000
Total
$’000
2010
At the beginning of the
financial year
Charged/(credited) to
income statement
2009
At the beginning of the
financial year
Effects of changes in tax rate:
– income statement
– equity
Charged/(credited) to
income statement
Deferred income tax assets are recognised for tax losses carried forward to the extent that realisation of the
related tax benefits through future taxable profits is probable. The Group has unrecognised tax losses of
approximately $15,000 (2009: $15,000) at the end of the reporting period which can be carried forward and
used to offset against future taxable income subject to those subsidiary companies meeting certain statutory
requirements in their respective countries of incorporation. These tax losses have no expiry date.
ANNUAL REPORT 2010
a brand
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120
121
28.
29.Share capital of Pan Pacific Hotels Group Limited
Deferred income taxes (continued)
The Group (continued)
Excess of
depreciation
over capital
allowances
$’000
2010
Charged to income statement
Credited to equity
At end of the financial year
2009
Effects of changes in tax rate:
– equity
Credited to income statement
Credited to equity
At end of the financial year
Tax losses
$’000
Fair value
loss on
derivative
financial
instruments
$’000
2010 and 2009
At the beginning and end of the financial year
All issued ordinary shares have no par value and are fully paid.
Total
$’000
(2,003)
43
–
–
(1,960)
(1,252)
–
507
–
(745)
(75)
–
–
(3)
(78)
(3,330)
43
507
(3)
(2,783)
(1,473)
1
(484)
(79)
(57)
–
(2,014)
(78)
–
(531)
–
(2,003)
–
(689)
–
(1,252)
3
–
(21)
(75)
3
(1,220)
(21)
(3,330)
The Group
2010
2009
$’000
$’000
Fair value reserve (Note (a) below)
Asset revaluation reserve (Note (b) below)
Currency translation reserve (Note (c) below)
Hedging reserve (Note (d) below)
Accelerated
tax
depreciation
$’000
600,000
557,333
Fair value
adjustments
on investment
property and Unremitted
foreign
surplus on
income,
revaluation of
certain hotel interest and
dividends
properties
$’000
$’000
(a)
3,239
346
3,585
25,814
1,696
27,510
1,519
(802)
717
30,572
1,240
31,812
3,654
27,620
1,608
32,882
(203)
–
(212)
3,239
(1,365)
(165)
(276)
25,814
(89)
–
–
1,519
(1,657)
(165)
(488)
30,572
7,456
23,070
(7,884)
(364)
22,278
6,591
24,590
–
–
31,181
7,456
24,590
–
–
32,046
Fair value reserve
Fair value (losses)/gains on available-for-sale
financial assets (Note 15)
Total
$’000
6,591
23,070
(3,567)
(379)
25,715
The Company
2010
2009
$’000
$’000
All the reserves are non-distributable.
2009
Effect of changes in tax rate
– income statement
– equity
Credited to income statement
Amount
$’000
30.Reserves
The Company
2010
Charged/(credited) to income statement
Number
of shares
‘000
(b)
The Group
2010
2009
$’000
$’000
The Company
2010
2009
$’000
$’000
7,456
2,392
7,456
2,392
(865)
6,591
5,064
7,456
(865)
6,591
5,064
7,456
Asset revaluation reserve
The Group
2010
2009
$’000
$’000
Effect of change in Singapore tax rate
23,070
–
23,070
22,905
165
23,070
The Company
2010
2009
$’000
$’000
24,590
–
24,590
24,425
165
24,590
The asset revaluation reserve does not take into account the surplus of $84,507,000 (2009: $75,983,000) and
$592,638,000 (2009: $514,339,000), arising from the revaluation of the hotel properties of the Company and of
the Group respectively as stated in Note 19.
ANNUAL REPORT 2010
a brand
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122
123
30.Reserves (continued)
32.Contingent liabilities
(c)
Currency translation reserve
The Company has guaranteed the borrowings of a subsidiary amounting to $4,714,000 (2009: $3,093,000). The
borrowings were denominated in United States Dollar.
The Group
2010
2009
$’000
$’000
Net currency translation differences of financial statements of foreign
subsidiaries and borrowings designated as hedges against foreign
subsidiaries
Less: Amount attributable to non-controlling interests
(d)
(7,884)
(34,117)
5,262
(945)
4,317
(3,567)
32,347
(6,114)
26,233
(7,884)
At the end of the reporting period, the Group has given guarantees of $7,557,000 (2009: $9,834,000) in respect
of banking facilities granted to an associated company. The guarantees granted are unsecured.
The directors are of the view that no material losses will arise from these contingent liabilities.
The Company has also given undertakings to provide financial support to certain subsidiaries.
33.Commitments
(a)
Capital commitments
Capital expenditure contracted for at the end of the reporting period but not recognised in the financial
statements are as follows:
Hedging reserve
The Group
2010
2009
$’000
$’000
The Group
2010
2009
$’000
$’000
Effect of change in Singapore tax rate
Fair value loss
Deferred tax on fair value loss
Transfer to income statement (Note 8)
Tax on transfer adjustments
(364)
–
(525)
89
(436)
507
(86)
421
(379)
(259)
(3)
(357)
61
(296)
234
(40)
194
(364)
The hedging reserve comprises the effective portion of the cumulated net change in the fair value of interest
rate swaps for hedged transactions that have not occurred.
31.
Dividends
Expenditure contracted for
– property, plant and equipment
– property under construction
21,000
24,000
At the forthcoming Annual General Meeting on 19 April 2011, a final dividend of 4 cents per share
amounting to $24,000,000 will be recommended. These financial statements do not reflect this dividend,
which will be accounted for in shareholders’ equity as an appropriation of retained profits in the financial
year ending 31 December 2011.
7,424
163,344
170,768
64,427
–
64,427
2,182
–
2,182
On 21 December 2010, the Group entered into a conditional sale and purchase agreement to acquire the
Hilton Melbourne Airport hotel in Australia for a cash consideration of $141,544,000. The capital commitment
(included above) relating to the acquisition amounted to $128,085,000 at the end of the reporting period.
(b)
Operating lease commitments – where a group company is a lessee
The Group leases various premises under non-cancellable operating lease agreements. The leases have varying
terms, escalation clauses and renewal rights.
The future aggregate minimum lease payable under non-cancellable operating leases contracted for at the
end of the reporting period but not recognised as liabilities, are analysed as follows:
The Group and the
Company
2010
2009
$’000
$’000
Final one-tier dividend paid in respect of the previous financial year of 3.5 cents
(2009: one-tier dividend of 4 cents) per share
200,149
137,687
337,836
The Company
2010
2009
$’000
$’000
The Group
2010
2009
$’000
$’000
Not later than one year
Later than one year but not later than five years
Later than five years
3,619
5,639
5,989
15,247
2,495
3,344
7,040
12,879
ANNUAL REPORT 2010
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124
125
33.Commitments (continued)
34.Financial risk management (continued)
(c)
(a)
Operating lease commitments – where a group company is a lessor
The Group leases various premises under non-cancellable operating lease agreements. The leases have varying
terms, escalation clauses and renewal rights.
The Group and Company lease out its investment properties to non-related parties under non-cancellable
operating leases (Note 18). The future minimum lease receivable under non-cancellable operating leases
contracted for at the end of the reporting period but not recognised as receivables, are analysed as follows:
The Group
2010
2009
$’000
$’000
Not later than one year
Later than one year but not later than five years
13,463
2,503
15,966
11,854
14,873
26,727
The Company
2010
2009
$’000
$’000
9,547
1,211
10,758
9,297
13,684
22,981
34. Financial risk management
Financial risk factors
The Board of Directors provides guidance for overall risk management. The management continually monitors
the Group’s risk management process to ensure that an appropriate balance between risk and control is
achieved. Risk management policies and systems are reviewed regularly to reflect changes in market conditions
and the Group’s activities.
The Group’s activities expose it to market risk (including currency risk, interest rate risk and price risk), credit
risk and liquidity risk. The Group’s overall risk management strategy seeks to minimise adverse effects from
the unpredictability of financial markets on the Group’s financial performance. When necessary, the Group
uses financial instruments such as interest rate swaps, currency forwards and foreign currency borrowings to
hedge certain financial risk exposures.
(a)
Market risk (continued)
(i)
Currency risk (continued)
The Group’s currency exposure based on the information provided to key management is
as follows:
SGD
USD
AUD
MYR
RMB
Others
Total
$’000
$’000
$’000
$’000
$’000
$’000
$’000
The Group
At 31 December 2010
Financial assets
Trade and other
receivables and other
assets
Advances to holding
company
Available-for-sale
financial assets
5,185
14,369
23,725
6,214
2,548
5,863
57,904
11,880
3,666
21,645
2,209
449
1,923
41,772
49,630
–
–
–
–
–
49,630
17,167
83,862
–
18,035
–
45,370
–
8,423
–
2,997
–
7,786
17,167
166,473
(10,494)
–
(11,032)
–
(5,678)
(6,341)
(2,993)
(4,714)
(3,214) (67,058)
– (191,227)
–
(10,494)
–
(11,032)
–
(12,019)
–
(7,707)
–
(457)
(3,214) (258,742)
7,541
34,338
(3,596)
(4,710)
4,572
(92,269)
(1,550)
(34,633)
3,633
4,710
(3,062)
97,680
–
128,085
–
–
–
128,085
–
5,991
(115,015)
12,775
–
37
–
–
–
1,510
(115,015)
18,481
Financial liabilities
Trade and other payables (33,647)
Borrowings
(180,172)
Derivative financial
instruments
(457)
(214,276)
Market risk
(i)
Currency risk
The Group operates in the Asia Pacific region and is exposed to foreign exchange risk arising from
various currency exposures primarily with respect to Australian Dollar (“AUD”), Malaysian Ringgit
(“MYR”), Renminbi (“RMB”) and United States Dollar (“USD”). As the entities in the Group transact
substantially in their functional currency, the Group’s exposure to currency risk is not significant.
The Group has a number of investments in foreign subsidiaries whose net assets are exposed to currency
translation risk. Currency exposures to the net assets of the Group’s subsidiaries in Australia, Malaysia,
Myanmar, China and Vietnam are managed through borrowings, as far as are reasonably practical, in
foreign currencies which broadly match those in which the net assets are denominated or in currencies
that are freely convertible.
Net financial assets/
(liabilities)
(130,414)
Less: Net financial
assets/(liabilities)
denominated in the
respective entities’
functional currencies
128,582
Add: Firm commitments
and highly probable
forecast transactions in
foreign currencies
–
Less: Firm commitments
and highly probable
forecast transactions
denominated in the
respective entities
–
Currency exposure
(1,832)
ANNUAL REPORT 2010
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126
127
34. Financial risk management (continued)
(a)
(a)
(i) Currency risk (continued)
The Group
At 31 December 2009
Financial assets
Trade and other
receivables and other
assets
Advances to holding
company
Available-for-sale
financial assets
(i) SGD
$’000
USD
$’000
AUD
$’000
MYR
$’000
RMB
$’000
Others
$’000
Total
$’000
7,322
16,670
53,184
7,176
5,028
3,737
93,117
8,546
4,408
5,827
2,417
829
1,296
23,323
55,662
–
–
–
–
–
55,662
18,032
89,562
–
21,078
–
59,011
–
9,593
–
5,857
–
5,033
18,032
190,134
Trade and other payables (20,358)
Borrowings
(164,801)
Derivative financial
instruments
(439)
(185,598)
Net financial assets/
(liabilities)
Less: Net financial
assets/(liabilities)
denominated in the
respective entities’
Currency exposure
(10,944)
–
(9,755)
–
(5,312)
(14,224)
(9,318)
(3,093)
(1,468) (57,155)
– (182,118)
–
(10,944)
–
(9,755)
–
(19,536)
–
(12,411)
–
(439)
(1,468) (239,712)
(96,036)
10,134
49,256
(9,943)
(6,554)
3,565
(49,578)
96,089
53
337
10,471
(49,285)
(29)
9,968
25
6,554
–
(3,179)
386
60,484
10,906
Currency risk (continued)
The Company’s currency exposure based on the information provided to key management is as follows:
The Company
At 31 December 2010
Financial assets
Trade and other receivables and other
assets
Advance to holding company
Borrowings
Net financial assets
Less: Net financial assets/(liabilities)
denominated in the Company’s
functional currency
Currency exposure
SGD
$’000
USD
$’000
AUD
$’000
MYR
$’000
Total
$’000
1,899
97
93
–
2,089
99,586
49,630
17,167
168,282
66,006
–
–
66,103
47
–
–
140
15
–
–
15
165,654
49,630
17,167
234,540
(12,158)
(28,609)
(43,422)
(84,189)
–
–
(57,435)
(57,435)
–
–
–
–
–
–
–
–
(12,158)
(28,609)
(100,857)
(141,624)
84,093
8,668
140
15
92,916
(84,093)
–
–
8,668
–
140
–
15
(84,093)
8,823
The Group does not have significant exposure to currency risk other than USD and AUD. Assuming that
the USD and AUD change against the SGD by 5% (2009: 5%) with all other variables including tax rate
being held constant, the effects on the Group’s profit after tax will be as follows:
Increase/(Decrease)
2010
2009
$’000
$’000
The Group
USD against SGD
– strengthened
– weakened
AUD against SGD
– strengthened
– weakened
300
(300)
524
(524)
639
(639)
–
–
ANNUAL REPORT 2010
a brand
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128
129
(a)
(a)
(i) Currency risk (continued)
(iii) SGD
$’000
The Company
At 31 December 2009
Financial assets
Trade and other receivables and
other assets
Advance to holding company
Net financial assets
Less: Net financial assets/(liabilities)
denominated in the Company’s
functional currency
Currency exposure
USD
$’000
AUD
$’000
MYR
$’000
Cash flow interest rate risk is the risk that the future cash flows of a financial instrument will fluctuate
because of changes in market interest rates. Fair value interest rate risk is the risk that the fair value of
a financial instrument will fluctuate due to changes in market interest rates.
The Group’s exposure to cash flow interest rate risks arises mainly from variable-rate borrowings.
The Company’s exposure to cash flow interest rate risks arises mainly from borrowings and loans to
subsidiaries at variable rates. The management of Group and Company monitor closely the changes in
interest rates and when appropriate, manages their exposure to changes in interest rates by entering
into fixed rate arrangements where necessary.
3,181
6,365
86
–
9,632
205,610
55,662
18,032
282,485
87,444
–
–
93,809
192
–
–
278
582
–
–
582
293,828
55,662
18,032
377,154
(11,970)
(49,205)
(61,175)
–
(62,111)
(62,111)
–
–
–
–
–
–
(11,970)
(111,316)
(123,286)
221,310
31,698
278
582
253,868
(221,310)
–
–
31,698
–
278
–
582
(221,310)
32,558
Increase/(Decrease)
2010
2009
$’000
$’000
(ii) 433
(433)
Cash flow and fair value interest rate risks
Total
$’000
Assuming that the USD change by a respective 5% against the SGD (2009: 5%), with all other variables
including tax rate being held constant, the effects on the Company’s profit after tax will be as follows:
The Company
USD against SGD
– strengthened
– weakened
1,585
(1,585)
Price risk
The Group’s and Company’s variable-rate financial assets and liabilities on which effective hedges
have not been entered into, are denominated mainly in SGD, USD, MYR and RMB. Assuming that the
interest-rates increase/decrease by 1% with all other variables including tax rate being held constant,
the effects on the profit after tax will be lower/higher as follows:
The Group
2010
2009
$’000
$’000
SGD
USD
MYR
RMB
(b)
1,163
–
48
35
1,036
–
107
23
The Company
2010
2009
$’000
$’000
691
547
–
–
690
667
–
–
Credit risk
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial
loss to the Group. The Group’s and Company’s major classes of financial assets are bank deposits and trade
and other receivables. For trade receivables, the Group adopts the policy of dealing only with customers of
appropriate credit history, and obtaining sufficient security such as deposits and bankers’ guarantees where
appropriate to mitigate credit risk. Bank deposits were mainly placed with financial institutions which have
high credit ratings. There are no significant credit risks arising from other receivables.
Credit exposure to an individual customer or counterparty is generally restricted by credit limits that are
approved by the respective management at the entity level based on ongoing credit evaluation. The customer’s
or counterparty’s payment profile and credit exposure are continuously monitored at the entity level by the
respective management and at Group management.
The Group’s and Company’s maximum exposure to credit risk on corporate guarantees provided to banks on
subsidiaries’ and an associated company’s loans are disclosed in Note 32.
The Group and Company are exposed to equity securities price risk due to its quoted investment
in securities listed in Singapore, which has been classified in the consolidated statement of financial
position as available-for-sale financial assets. Management does not consider the exposure to be
significant as the quoted investment is intended to be held for long-term and the value of the quoted
investment is not significant to the Group’s and the Company’s financial statements.
ANNUAL REPORT 2010
a brand
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130
131
(b)
(b)
Credit risk (continued)
(ii) The credit risk of trade and other receivables based on the information provided to key management is
as follows:
The Group
2010
2009
$’000
$’000
By geographical areas
Singapore
Australia
China
Malaysia
Vietnam
Myanmar
Others
By operating segments
Hotel ownership
(i) 9,873
4,592
699
2,042
1,203
348
1,234
19,991
165,417
–
–
–
–
–
–
165,417
293,607
–
–
–
–
–
–
293,607
914
10,830
12,875
24,619
676
11,585
7,730
19,991
353
165,064
–
165,417
612
292,995
–
293,607
Financial assets that are neither past due nor impaired
Bank deposits that are neither past due nor impaired are mainly deposits with banks with high creditratings assigned by international credit rating agencies. Trade receivables that are neither past due nor
impaired are substantially companies with a good collection track record with the Group.
(ii) Financial assets that are past due and/or impaired
There is no other class of financial assets that is past due and/or impaired except for trade receivables
and loans to subsidiaries and an associated company. The aged analysis of trade and other receivables
past due but not impaired is as follows:
The Group
2010
2009
$’000
$’000
Past due 0 to 3 months
Past due 3 to 6 months
Past due over 6 months
4,268
108
38
4,414
3,522
113
105
3,740
The Company
2010
2009
$’000
$’000
95
–
–
95
106
–
–
106
The carrying amount of trade and other receivables and loans to subsidiaries and an associated company
individually determined to be impaired and the movements in the related allowance for impairment
are as follows:
Financial assets that are past due and/or impaired (continued)
The Group
2010
2009
$’000
$’000
The Company
2010
2009
$’000
$’000
13,030
6,309
553
1,846
1,503
263
1,115
24,619
Credit risk (continued)
(c)
The Company
2010
2009
$’000
$’000
Gross amount
Less: Allowance for impairment
289
(280)
9
382
(355)
27
–
–
–
1
(1)
–
Allowance made
Allowance utilised
355
112
(187)
280
527
94
(266)
355
1
–
(1)
–
–
1
–
1
Liquidity risk
The table below analyses the maturity profile of the Group’s and the Company’s financial liabilities based on
contractual undiscounted cash flows:
The Group
At 31 December 2010
Borrowings
Net settled interest rate swaps
Financial guarantee contracts
At 31 December 2009
Borrowings
Net settled interest rate swaps
The Company
At 31 December 2010
Borrowings
At 31 December 2009
Less than
1 year
$’000
Between
1 and 2 years
$’000
Between
2 to 5 years
$’000
61,933
74,204
421
7,557
144,115
4,783
120,446
–
–
125,229
342
2,170
–
–
2,512
54,273
8,440
187
–
62,900
547
88,811
143
9,834
99,335
2,335
98,430
–
–
100,765
9,231
–
680
7,557
17,468
2,585
28,754
40,857
4,714
76,910
342
–
60,681
–
61,023
9,255
5,395
3,093
17,743
380
41,998
9,834
52,212
2,335
65,407
–
67,742
ANNUAL REPORT 2010
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133
(c)
(e)
Liquidity risk (continued)
The Group and the Company manage the liquidity risk by maintaining sufficient cash to enable them to meet
their normal operating commitments, having an adequate amount of committed credit facilities.
(d)
Capital risk
The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going
concern and to maintain an optimal capital structure so as to maximise shareholders’ value. In order to maintain
or achieve an optimal capital structure, the Group may, subject to the necessary approvals from the shareholders
and/or the regulatory authorities, adjust the amount of dividend payment, return capital to shareholders, issue
new shares, buy back issued shares, obtain new borrowings or sell assets to reduce borrowings.
Management monitors capital based on gearing ratio. The Group will strive to manage a ratio of total
borrowings to shareholders’ equity not exceeding 150%.
The Group
2010
2009
$’000
$’000
Total borrowings
Shareholders’ equity
Total borrowings to shareholders’ equity ratio
191,227
801,683
182,118
790,477
24%
23%
The Group’s bank borrowing facilities require it to meet certain ratios based on consolidated capital and
reserves attributable to the Company’s equity holders and consolidated total equity. The Group has satisfactory
complied with all covenants under its borrowing agreements.
The Group and the Company are in compliance with the banks’ imposed capital requirements for the financial
years ended 31 December 2010 and 2009.
(e)
Fair value measurements
The following table presents assets and liabilities measure at fair value and classified by level of the following
fair value measurement hierarchy:
(a)quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1);
(b)inputs other than quoted prices included within Level 1 that are observable for the asset or liability,
either directly (ie as prices) or indirectly (ie derived from prices) (Level 2); and
(c)inputs for the asset or liability that are not based on observable market data (unobservable inputs)
(Level 3).
Fair value measurements (continued)
Group
2010
Assets
– Equity securities
Liabilities
Derivatives used for hedging
Company
2010
Assets
Group
2009
Assets
Liabilities
Derivatives used for hedging
Company
2009
Assets
Level 1
$’000
Level 2
$’000
Total
$’000
17,167
–
–
–
457
–
17,167
–
–
Level 1
$’000
Level 2
$’000
Total
$’000
18,032
–
18,032
–
439
439
18,032
–
18,032
The fair value of financial instruments traded in active markets (such as available-for-sale securities) is based
on quoted market prices at the end of the reporting period. The quoted market price used for financial assets
held by the Group is the current bid price. These instruments are included in Level 1.
The fair value of financial instruments that are not traded in an active market is determined by using valuation
techniques. The Group uses a variety of methods and makes assumptions that are based on market conditions
existing at the end of each reporting period. Quoted market prices or dealer quotes for similar instruments are
used to estimate fair value for long-term debt for disclosure purposes. Other techniques, such as estimated
discounted cash flows, are used to determine fair value for the remaining financial instruments. The fair value
of interest rate swaps is calculated as the present value of the estimated future cash flows. These investments
are included in Level 2. The Group has no investments in Level 3 where valuation techniques were used based
on significant unobservable inputs.
ANNUAL REPORT 2010
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135
35.Related party transactions (continued)
(e)
(d)
Fair value measurements (continued)
Key management personnel compensation is analysed as follows:
The carrying value less impairment provision of trade receivables and payables are assumed to approximate
their fair values. The fair value of financial assets and financial liabilities for disclosure purposes is estimated
based on quoted market prices or dealer quotes for similar instruments by discounting the future contractual
cash flows at the current market interest rate that is available to the Group for similar financial instruments.
The fair value of current borrowings approximates their carrying amount.
There are no transfers between Level 1, Level 2, and Level 3 of the fair value hierarchy for the financial years
ended 31 December 2010 and 2009.
35.Related party transactions
(a)In addition to the related party information disclosed elsewhere in the financial statements, there were the
following significant transactions between the Group and related companies during the financial year on terms
agreed between the parties concerned:
The Group
2010
2009
$’000
$’000
Transactions with UOL and its subsidiaries
Acquisition of Parkroyal Serviced Residences
Pte Ltd
Staff costs recharges for corporate management
and property maintenance services received
Fees received for management of hotels and
serviced suites
Rental paid
The Company
2010
2009
$’000
$’000
–
581
–
581
2,382
3,542
1,420
1,843
2,599
991
1,489
826
78
991
78
826
The Group
2010
2009
$’000
$’000
Salaries and other short-term employee benefits
Directors’ fees
Post-employment benefits – contribution to CPF and pension fund
Share options granted
4,341
598
173
116
5,228
3,438
486
138
22
4,084
Total compensation to directors of the Company included in above amounted to $2,722,000
(2009: $ 2,376,000).
36.Group segmental information
Management has determined the operating segments based on the reports reviewed by the Executive
Committee (“Exco”) that are used to make strategic decisions. The Exco comprises the Chairman, the Group
Chief Executive and two other Board members of the Group.
The Exco considers the business from both a business and geographic segment perspective. The Group’s four
key business segments operate in various geographical areas.
The hotels owned by the Group are located in Singapore, Australia, Vietnam, Malaysia, China and Myanmar
and key asset and profit contributions are from the hotels in Singapore and Australia.
The property investment activities of the Group are concentrated in Singapore.
The Group’s investment segment relates to the investments in equity shares in Singapore.
Transactions with UOL’s associated companies
Fees received for management of hotel
Fees received for operation of spas
6,782
493
5,628
339
–
47
–
34
Transactions with banks and insurance companies
in which certain directors have interests
Interest earned from fixed deposits
Rental and maintenance fees received
Interest paid on bank loans
Commitment and facility fee paid
Bankers’ guarantee commission
Rental paid
Insurance premium paid
1,878
264
1,746
126
175
594
420
1,213
279
1,405
1,761
106
769
419
53
25
189
79
162
–
79
–
55
22
42
101
–
101
The Group also provides hotel management services to companies and hotels in Singapore and overseas.
(b)The borrowings (Note 23) of the Group and the Company amounting to $117,234,000 (2009: $88,480,000) and
$28,754,000 (2009: $nil) respectively were extended by a bank in which certain directors have interests.
(c)Cash at bank and fixed deposits with financial institutions (Note 11) of the Group and the Company amounting
to $35,521,000 (2009: $68,878,000) and $2,047,000 (2009: $9,632,000) respectively were placed with a bank in
which certain directors have interests.
ANNUAL REPORT 2010
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137
36.Group segmental information (continued)
The segment information provided to the Exco for the reportable segments for the year ended
31 December 2010 is as follows:
The segment information provided to the Exco for the reportable segments for the year ended
31 December 2009 is as follows:
Hotel
Hotel ownership
Hotel
Property management
Australia
Singapore
Vietnam
Malaysia
$’000
$’000
$’000
$’000
China Myanmar
$’000
$’000
investments
$’000
Hotel ownership
services Investments
$’000
$’000
Property management
Total
Australia
Singapore
Vietnam
Malaysia
$’000
$’000
$’000
$’000
$’000
$’000
$’000
$’000
$’000
Group
Group
2010
2009
Revenue
China Myanmar
investments
services Investments
Total
$’000
$’000
310,001
Revenue
Total segment sales
103,531
79,803
33,847
44,943
16,773
9,664
21,529
27,535
17,691
355,316
Total segment sales
90,316
65,284
32,822
41,888
22,738
7,829
13,027
19,895
16,202
Inter-segment sales
–
–
–
–
–
–
(4,200)
(9,924)
(16,950)
(31,074)
Inter-segment sales
–
–
–
–
–
–
–
(6,135)
(16,060)
(22,195)
103,531
79,803
33,847
44,943
16,773
9,664
17,329
17,611
741
324,242
Sales to external parties
90,316
65,284
32,822
41,888
22,738
7,829
13,027
13,760
142
287,806
Sales to external parties
Adjusted EBITDA
26,817
24,159
17,478
10,652
(568)
2,543
11,453
3,739
741
97,014
Adjusted EBITDA
23,173
18,223
16,660
10,995
3,497
1,100
8,825
1,670
142
84,285
Depreciation
7,092
7,444
4,948
5,987
5,046
821
1,118
234
–
32,690
Depreciation
6,344
7,572
5,165
6,129
4,417
804
803
271
–
31,505
Amortisation
–
145
–
–
–
–
–
757
–
902
Amortisation
–
100
–
–
–
–
–
726
–
826
Fair value loss on
–
–
–
–
–
–
1,620
–
–
1,620
149,532
388,670
53,579
102,276
92,929
9,806
161,365
24,638
18,032
1,000,827
–
–
6,909
–
–
–
–
45
–
6,954
Fair value gain on
–
–
–
–
–
–
9,979
–
–
9,979
Other gains – net
–
156
–
–
–
–
–
–
–
156
187,618
419,207
48,398
98,794
82,715
8,916
167,609
31,250
17,167
1,061,674
Total segment assets
Total segement assets
includes:
Investment in associated
companies
Investment in associated
companies
–
–
7,328
–
–
–
–
66
–
7,394
Additions during the
financial year to:
– property, plant and
equipment
– property under
construction
Total segment
liabilities
includes:
Additions during the
financial year to:
– property, plant and
equipment
7,171
1,428
1,037
2,354
1,751
567
6,632
458
–
2,258
3,717
732
849
7,466
322
3,872
466
–
19,682
21,398
– investment property
–
–
–
–
–
–
1,632
–
–
1,632
–
11,063
–
–
–
–
–
–
–
11,063
9,777
15,567
5,413
7,825
8,354
4,915
3,965
3,655
–
59,471
–
25,656
–
–
–
–
–
–
–
25,656
– property under
construction
11,143
20,625
5,145
9,031
5,432
5,910
4,402
7,909
–
69,597
Total segment
liabilities
ANNUAL REPORT 2010
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139
Sales between segments are carried out at arm’s length. The revenue from external parties reported to the
Exco is measured in a manner consistent with that in the statement of comprehensive income.
The Exco assesses the performance of the operating segments based on a measure of Earnings before
interest, tax, depreciation and amortisation (“adjusted EBITDA”). This measurement basis excludes the effects
of expenditure from the operating segments such as restructuring costs and goodwill impairment that are
not expected to recur regularly in every period. Finance income and finance expenses are not allocated to
segments, as this type of activity is driven by the Group Treasury, which manages the cash position of the
Group. Since the Exco reviews adjusted EBITDA, the results of discontinued operations are not included in
the measure of adjusted EBITDA.
A reconciliation of adjusted EBITDA to profit before tax and discontinued operations is provided as follows:
Adjusted EBITDA for reportable segments
Depreciation
Amortisation
Fair value gain/(loss) on investment properties
Gain of liquidation of investment in a subsidiary
Finance income
Finance expenses
Profit before tax
2010
$’000
2009
$’000
97,014
(32,690)
(902)
9,979
156
3,368
(6,574)
70,351
84,285
(31,505)
(826)
(1,620)
–
2,505
(3,655)
49,184
The amounts provided to the Exco with respect to total assets are measured in a manner consistent with that
of the financial statements. For the purposes of monitoring segment performance and allocating resources
between segments, the Exco monitors the property, plant and equipment, intangible assets, inventories,
receivables, operating cash and investment properties attributable to each segment. All assets are allocated
to reportable segments other than fixed deposits, tax recoverable, deferred income tax assets and advances
to holding company.
The amounts provided to the Exco with respect to total liabilities are measured in a manner consistent with
that of the financial statements. These liabilities are allocated based on the operations of the segment. All
liabilities are allocated to the reportable segments other than current income tax liabilities, deferred income
tax liabilities, borrowings and derivative financial instruments.
Segment liabilities for reportable segments
Unallocated:
Current income tax liabilities
Borrowings
Total liabilities
Geographical information
2010
$’000
2009
$’000
69,597
59,471
16,040
49,731
191,227
457
327,052
14,848
48,222
182,118
439
305,098
The Group’s four business segments operate in six main geographical areas. In Singapore, where the Company
is domiciled, the areas of operation of the Company are principally hotel ownership, hotel management
services, property investments and investment holdings.
The main activities in Australia, Vietnam, Malaysia, China and Myanmar consist of hotel ownership.
Revenue and non-current assets are shown by the geographical areas where the assets are located.
Reportable segments’ assets are reconciled to total assets as follows:
Segment assets for reportable segments
Unallocated:
Fixed deposits
Tax recoverable
Total assets
Reportable segments’ liabilities are reconciled to total liabilities as follows:
2010
$’000
2009
$’000
1,061,674
1,000,827
14,648
–
2,783
49,630
1,128,735
65,057
641
3,330
55,662
1,125,517
Revenue
Singapore
Australia
Vietnam
Malaysia
China
Myanmar
Others
2010
$’000
2009
$’000
111,104
103,531
33,847
44,943
17,273
9,664
3,880
324,242
87,432
90,316
32,822
41,887
22,738
7,829
4,782
287,806
Non-current assets
2010
2009
$’000
$’000
Singapore
Australia
Vietnam
Malaysia
China
Myanmar
Others
601,556
145,213
43,530
92,998
82,578
6,959
5,064
977,898
566,770
138,260
49,878
94,182
89,469
7,760
4,516
950,835
ANNUAL REPORT 2010
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141
Corporate Governance Report
For the year ended 31 December 2010
The Company is committed in its continuing efforts to achieve high standards of corporate governance and business
conduct so as to enhance long-term shareholder value and safeguard the interests of its stakeholders. It has adopted
a framework of corporate governance policies and practices in line with the principles and guidelines set out in the
Code of Corporate Governance 2005 (“Code”).
Geographical segments (continued)
There is no single external customer that contributes 10% or more to the Group’s or the Company’s revenues.
Revenue from major products and services
Revenue from external customers are derived mainly from the Group’s hotel ownership, property investment
and hotel management services. Revenue from investment holdings are included in “Others” below. Breakdown
of the revenue is as follows:
Hotel ownership
Others
2010
$’000
2009
$’000
288,561
17,611
17,329
741
324,242
260,877
13,760
13,027
142
287,806
37.New or revised accounting standards and interpretations
STATEMENT OF COMPLIANCE
The Board of Directors (the “Board”) of the Company confirms that for the financial year ended 31 December 2010,
the Company has generally adhered to the principles and guidelines as set out in the Code.
BOARD MATTERS
Principle 1: The Board’s Conduct of its Affairs
The principal responsibilities of the Board are:
1.
2.
3.
reviewing and approving the corporate policies, strategies, budgets and financial plans of the Company;
monitoring financial performance including approval of the annual and interim financial reports;
overseeing and reviewing the processes for evaluating the adequacy of internal controls, risk management,
financial reporting and compliance;
approving major funding proposals, investments, acquisitions and divestment proposals;
planning board and senior management succession and the remuneration policies; and
assuming responsibility for corporate governance.
Below are the mandatory standards, amendments and interpretations to existing standards that have been
published, and are relevant for the Group’s accounting periods beginning on or after 1 January 2011 or later
periods and which the Group has not early adopted:
4.
5.
6.
•
mendments to FRS 24 – Related party disclosures (effective for annual periods beginning on or after
A
1 January 2011)
Amendments to FRS 32 Financial Instruments: Presentation – Classification of rights issues (effective
for annual periods beginning on or after 1 February 2010)
Amendments to INT FRS 114 – Prepayments of a minimum funding requirement (effective for annual
periods commencing on or after 1 January 2011)
INT FRS 119 Extinguishing financial liabilities with equity instruments (effective for annual periods
commencing on or after 1 July 2010).
To facilitate effective management, certain functions of the Board have been delegated to various board committees,
which review and make recommendations to the Board on specific areas. There are currently four standing board
committees appointed by the Board, namely:
The management anticipates that the adoption of the above FRSs, INT FRSs and amendments to FRS in the
future periods will not have a material impact on the financial statements of the Group and of the Company
in the period of their initial adoption, except for the amendments to FRS 24 – related party disclosures.
The membership and attendance of the Directors for the four standing board committees are set out on page 148.
•
•
•
The amendment removes the requirement for government-related entities to disclose details of all transactions
with the government and other government-related entities. It also clarifies and simplifies the definition of a
related party. However, the revised definition of a related party will mean that some entities will have more
related parties and will be required to make additional disclosures.
Management is currently considering the revised definition to determine whether any additional disclosures
will be required and has yet to put systems in place to capture the necessary information. It is therefore not
possible to disclose the financial impact, if any, of the amendment on the related party disclosures.
38.
This report sets out the corporate governance practices that have been adopted by the Company with specific
reference to the principles of the Code, as well as any deviation from any guideline of the Code together with an
explanation for such deviation.
Authorisation of financial statements
These financial statements were authorised for issue in accordance with a resolution of the Board of Directors
of Pan Pacific Hotels Group Limited on 22 February 2011.
Executive Committee
Nominating Committee
Remuneration Committee
Audit Committee
The Board has conferred upon the Executive Committee (“EXCO”) and the Group Chief Executive (“GCE”) and the
President & CEO (“CEO”) certain discretionary limits and powers for capital expenditure, budgeting, treasury and
investment activities and human resource management. The levels of authorisation required for specified transactions
are specified in a Charter adopted by the Board.
The EXCO, GCE and CEO are assisted by the management team (“Management”) in the daily operations and
administration of the Group’s business activities and the effective implementation of the Group’s strategies. The
GCE sets the major strategies and policies for the Group. The CEO is responsible for leading the implementation of
strategies and the day-to-day operations and businesses of the Group. Management is issued with a chart of authority
and limits for capital expenditure, budgets, investment and other activities for their compliance.
In addition to the GCE and the CEO, the key personnel leading the management team are Executive Director, Asset
Management (“ED Asset Management”), Chief Financial Officer (“CFO”), Senior Vice President, Human Capital &
Development (“SVP Human Capital”), Senior Vice President, Operations (“SVP Operations”), Senior Vice President,
Marketing & Sales (“SVP Marketing”) and Senior Vice President, Growth & Development (“SVP Development”).
Save for the ED Asset Management, the CFO, SVP Human Resources, SVP Operations, SVP Marketing and SVP
Development have no familial relationship with each other, the Chairman, the GCE and the CEO.
ANNUAL REPORT 2010
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143
The EXCO currently comprises four members, namely:
Principle 4: Board Membership
Wee Cho Yaw, Chairman
Gwee Lian Kheng
Wee Ee Chao
The EXCO is chaired by the Chairman of the Board and has been given certain authority and functions such as
the formulation and review of policies, approval of investments, overall planning and review of strategy as well as
dealing with business of an urgent, important or extraordinary nature whilst the CEO is responsible for the day-to-day
operations and administration of the Group.
At the Board meetings, the Directors not only review the financial performance of the Company, but also participate
in discussions of matters relating to corporate governance, business operations, risks and transactions undertaken
by the Company.
The Board conducts regular scheduled meetings on a quarterly basis. Ad-hoc meetings are convened when
circumstances require. The Company’s Articles of Association (“Articles”) allow a board meeting to be conducted
by way of telephonic and video-conferencing. The attendance of Directors at meetings of the Board and board
committees, as well as the frequency of such meetings, is disclosed on page 148.
New Directors are provided with information on the corporate background, the key personnel, the core businesses,
the group structure, financial statements of the Group and their scope of duties and responsibilities. All Directors are
appointed to the Board by way of a formal letter of appointment. Guidance is also given to all Directors on regulatory
requirements concerning disclosure of interests and restrictions on dealings in securities. Training is made available to
Directors on the Company’s business and governance practices, updates/developments in the regulatory framework
and environment affecting the Company including those organised by the Singapore Exchange Securities Trading
Limited (“SGX-ST”) and the Singapore Institute of Directors. This aims to give Directors better understanding of the
Group’s businesses and allows them to integrate into their roles and duties.
Principle 2: Board Composition and Guidance
Currently, four of the ten-member Board are independent. As Lim Kee Ming is retiring and hence, does not wish
to be considered for re-appointment at the annual general meeting (“AGM”) on 19 April 2011, there will be three
independent directors.
With three Board members being independent directors constituting one-third of the Board, and such independent
directors having the requisite experience, expertise and standing, the Board is able to exercise objective judgment
independently, and no individual or small group of individuals dominate the Board’s decision-making process.
The Articles allow for the maximum of ten Directors. The Board considers the current board size to be appropriate,
taking into account the nature and scope of the Group’s operations.
The current Board comprises persons who possess diverse corporate experiences and as a group, the relevant
qualifications and experience and core competencies necessary to manage the Group and contribute effectively to
the Group.
Principle 3: Chairman and GCE/CEO
The Company has a separate Chairman, GCE and CEO as it believes that a distinctive separation of responsibilities
between the Chairman, GCE and CEO will ensure an appropriate balance of power, increased accountability and
greater capacity of the Board for independent decision-making in the best interest of the Company and shareholders.
The Chairman, GCE and CEO have no familial relationship with each other. The GCE has, working together with
the CEO, the executive responsibility for the overall administration of the Group. On the other hand, the Chairman
provides leadership to the Board. He sets the meeting agenda in consultation with the GCE and ensures that Directors
are provided with accurate, timely and clear information.
The Nominating Committee (“NC”) currently comprises three non-executive Directors of whom two are independent.
The NC members are:
Alan Choe Fook Cheong, Chairman
Lim Kee Ming
Wee Cho Yaw
The NC is responsible for re-nomination of Directors at regular intervals and at least every three years. In recommending
to the Board any re-nomination and re-election of existing Directors, the NC takes into consideration the Directors’
contribution and performance at Board meetings, including attendance, preparedness, participation and candour.
The independence of the Board is also reviewed annually by the NC. The NC adopts the Code’s definition of
what constitutes an independent director in its review. The independent non-executive Directors are Alan Choe
Fook Cheong, Lim Kee Ming, Low Weng Keong and James Koh Cher Siang. Each NC member has abstained from
deliberations in respect of his own assessment. Lim Kee Ming will not be seeking re-appointment at the AGM on
19 April 2011.
Where a Director has multiple board representations, the NC also considers whether or not the Director is able to
and has adequately carried out his duties as a Director of the Company. The NC is satisfied that sufficient time and
attention are being given by the Directors to the affairs of the Company, notwithstanding that some of the Directors
have multiple board representations.
Directors of or over 70 years of age are required to be re-appointed every year at the AGM under Section 153(6) of
the Companies Act before they can continue to act as a Director. The NC, with each member abstaining in respect
of his own re-appointment, has recommended to the Board that Wee Cho Yaw, Gwee Lian Kheng and Alan Choe
Fook Cheong, who are over 70 years of age, be nominated for re-appointment at the forthcoming AGM.
Article 94 of the Articles also require all Directors except a Managing Director to retire from office once at least in each
three years. These Directors may offer themselves for re-election if eligible. The NC has recommended that Wee Ee
Chao and Wee Ee Lim who retire by rotation pursuant to this Article, be nominated for re-election as well.
The NC recommends all appointments and re-appointments of Directors to the Board. New directors are appointed
by way of a board resolution after the NC recommends their appointment for approval of the Board. New directors
thus appointed by way of board resolution must submit themselves for re-election at the next AGM pursuant to
Article 99 of the Articles.
The NC makes recommendations to the Board on all board appointments. The search and nomination process for
new directors (if any) will be conducted through contacts and recommendations that go through the normal selection
process, to ensure the search for the right candidates is as objective and comprehensive as possible.
Key information regarding the Directors’ academic qualifications and other appointments are set out on pages 149
to 150. In addition, information on shareholdings in the Company held by each Director is set out in the “Report of
the Directors” section of this Annual Report.
Principle 5: Board Performance
The NC has assessed the contributions of each Director to the effectiveness of the Board and evaluated the
performance of the Board as a whole. In evaluating the performance of the Board as a whole, the NC has adopted
certain quantitative indicators which include return on equity, return on assets and the Company’s share price
performance. These performance criteria allow the Company to make comparisons with its industry peers and are
linked to long-term shareholder value. For consistency in assessment, the selected performance criteria are not
changed from year to year and where circumstances deem it necessary for any of the criteria to be changed, the NC,
in its consultation with the Board will justify such changes.
ANNUAL REPORT 2010
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144
145
Principle 6: Access to Information
Wee Wei Ling and Amedeo Patrick Imbardelli, executive Directors of the Company, each have an employment contract
with the Company which may be terminated by the giving of 2 months’ notice and 3 months’ notice respectively. Their
individual remuneration package includes a variable bonus element (which is substantially linked to the performance
of the Company).
Currently, Directors receive regular financial and operational reports on the Group’s businesses and briefings
during its quarterly Board meetings. In addition, management reports comparing actual performance with budget,
highlighting key performance indicators, as well as accounts and reports on the financial performance of the Group
are also provided. During the quarterly Board meetings, key Management staff who are able to explain and provide
insights to the matters to be discussed at the Board meetings are invited to make the appropriate presentations and
answer any queries from Directors. Directors who require additional information may approach senior management
directly and independently.
Under the direction of the Chairman, the Company Secretaries are responsible for ensuring good information flow
within the Board and its committees and between senior management and non-executive Directors, as well as
facilitating orientation and assisting with professional development as required.
Directors have separate and independent access to the advice and services of the Company Secretaries and
may, either individually or as a group, in the furtherance of their duties and where necessary, obtain independent
professional advice at the Company’s expense.
The Company Secretaries attend all Board meetings and ensure that all Board procedures are followed. The
Company Secretaries, together with Management, ensure that the Company complies with all applicable statutory
and regulatory rules. The minutes of all Board and Committee meetings are circulated to the Board.
REMUNERATION MATTERS
The RC reviews and makes recommendations to the Board on directors’ fees and allowances. RC members abstain
from deliberations in respect of their own remuneration. Details of the total fees and other remuneration of the
Directors are set out in the Remuneration Report on page 151. The GCE’s remuneration package is reviewed by the
Remuneration Committee of UOL.
Principle 9: Disclosure on Remuneration
In relation to employees of the Group, the remuneration policy of the Company seeks to align the interests of such
employees with those of the Company as well as to ensure that remuneration is commercially attractive to attract,
retain and motivate employees. The typical remuneration package comprises both fixed and variable components,
with a base salary making up the fixed component and a variable component in the form of a performance bonus
and/or share options. The report on the remuneration of the top 5 key executives (who are not directors) of the
Company is disclosed on page 151.
Save for Wee Wei Ling who is an immediate family member of three Directors of the Company, namely Wee Cho
Yaw, Wee Ee Chao and Wee Ee Lim, no other employee who is an immediate family member of a Director was paid
more than $150,000 during FY2010. “Immediate family member” means spouse, child, adopted child, step-child,
brother, sister and parent.
Principle 7: Procedures for Developing Remuneration Policies
ACCOUNTABILITY AND AUDIT
The Remuneration Committee (“RC”) currently comprises three non-executive Directors of whom two are independent.
The RC members are:
Principle 10: Accountability
Lim Kee Ming, Chairman
Wee Cho Yaw
The RC is currently chaired by an independent Director. The RC is responsible for ensuring a formal procedure for
developing policy on executive remuneration and for fixing the remuneration packages for Directors and senior
management. The RC recommends for the Board’s endorsement a framework of remuneration which covers all aspects
of remuneration, including without limitation, directors’ fees, salaries, allowances, bonuses, options and benefits-inkind. None of the RC members or Director is involved in deliberations in respect of any remuneration, compensation
or any form of benefit to be granted to him.
The RC members are familiar with remuneration / compensation matters as they manage their own businesses and/
or are holding other directorships in the boards of other listed companies. The RC has access to appropriate expert
advice if necessary.
Principle 8: Level and Mix of Remuneration
In determining remuneration packages, the RC takes into consideration industry practices and norms in
compensation.
The Company announces in advance when quarterly and annual financial results will be released and ensures the
financial results are released to its shareholders in a timely manner.
The Board is responsible for providing a balanced and understandable assessment of the Company’s performance,
position and prospects, including interim and other price sensitive public reports and reports to regulators, if
required.
Management provides to members of the Board for their endorsement, annual budgets and targets, and management
accounts which present a balanced and understandable assessment of the Company’s performance, position and
prospects on a regular basis.
Principle 11: Audit Committee (“AC”)
The AC comprises three members, with the members having many years of related accounting and financial
management expertise and experience, and all of whom are independent and non-executive Directors. The AC
members are:
Lim Kee Ming, Chairman
Low Weng Keong
In relation to Directors, the performance-linked elements of the remuneration package for executive Directors
are designed to align their interests with those of shareholders. For non-executive Directors, their remuneration is
appropriate to their level of contribution, taking into account factors such as effort and time spent as well as their
respective responsibilities.
The AC carries out the functions set out in the Code and the Companies Act. The terms of reference include reviewing
the financial statements, the internal and external audit plans and audit reports, the external auditors’ evaluation of the
system of internal accounting controls, the scope and results of the internal audit procedures, the cost effectiveness,
independence and objectivity of the external auditors and interested person transactions.
The Board recommends the fees to be paid to Directors for shareholders’ approval annually. The fees are divided on
the basis that Directors with additional duties as members or chairmen of board committees would receive a higher
portion of the total fees.
In performing the functions, the AC has met with the internal and external auditors, without the presence of the GCE,
CEO and Management, at least annually and reviewed the overall scope of the internal and external audits and the
assistance given by Management to the auditors.
Gwee Lian Kheng, an executive Director of the Company, has an employment contract with UOL, which may be
terminated by either party giving 3 months’ notice. His remuneration package includes a variable bonus element
(which is substantially linked to the performance of UOL) and share options of UOL.
The AC has explicit authority to investigate any matter within its terms of reference. It has full access to, and the cooperation of Management, and full discretion to invite any Director or executive officer to attend its meetings. It has
reasonable resources to enable it to discharge its functions properly.
ANNUAL REPORT 2010
a brand
146
new era
147
The AC has reviewed and is satisfied with the independence and objectivity of the external auditors and recommends
to the Board the nomination of PricewaterhouseCoopers LLP for re-appointment.
Management believes the above measures will ensure that the ERM Programme is a cohesive and comprehensive
one which employees of the Group will collectively participate in and contribute to in order to enhance the Group’s
internal controls. The ERM Programme is intended to ensure that the Group has a system to deal with current and
evolving risks so that the Group will stay on a sustainable growth path in the long term.
The Audit Committee Guideline Committee issued the Guidebook for Audit Committees in Singapore in October 2008
(“AC Guidebook”) and the AC Guidebook had been disseminated to the members of the AC for their reference.
The Company has in place a Code of Business Conduct (“CBC”) which was adopted in 2006. The CBC is reviewed
by the AC regularly and is also disseminated to the employees who are required to affirm their compliance with the
CBC. The CBC contains, inter alia, a whistle-blowing policy to encourage and provide a channel to employees to
report, in good faith and in confidence, concerns about possible fraud, improprieties in financial reporting or other
matters. The objective of such arrangement is to ensure independent investigation of such matters and for appropriate
follow-up action.
Principle 12: Internal Controls
The Board recognises the importance of sound internal controls and risk management practices as part of good
corporate governance. The Board is responsible for ensuring that Management maintains a sound system of internal
controls to safeguard shareholders’ investments and the assets of the Group.
The Group has in place various guidelines and strategies to manage risks and safeguard its businesses.
This includes the enterprise-wide risk management programme (“ERM Programme”) for the Group which was
introduced in 2009 in consultation with KPMG LLP and which the Group is continually cascading down to its business
and operations. The ERM Programme which consolidates the Group’s risk management practices in an enterprise-wide
framework would enable Management to have a formal structure to continually:(i)
(ii)
establish and evaluate the risk appetite of the Group,
identify the key risks which the Group faces and the current controls and strategies for the Group to manage
and/or mitigate these risks,
(iii) assess the effectiveness of the current controls and strategies and determine if further risk treatment plans are
needed in line with best practices, and
(iv)
set up and monitor key risk indicators (“KRIs”) so that Management can evaluate and respond to risks that
have a material impact on the Group’s businesses and operations as and when they arise and take mitigating steps
as necessary.
This ERM Programme is in line with the best practices highlighted in the AC Guidebook.
Key management staff had actively participated in the ERM Programme and they have acquired an adequate
understanding of ERM concepts, methodologies and tools to enable them to perform risk management functions in
their respective areas of work. Further, the Group has set up a Group ERM Committee comprising senior members
of the Management team to oversee the direction, implementation and running of the ERM Programme and the
Group ERM Committee reports to the AC on the ERM Programme.
It is intended that Management will continually review the key risks, both existing and emerging, current controls and
the KRIs on a regular basis and take necessary measures to address and mitigate any new key risks that may have
arisen. Management will continue to reinforce the “risk-aware” culture within the Group. The AC will be updated
half-yearly or more frequently as needed, on the progress of the ERM Programme by Management.
Further, as PPHG is part of the UOL Group, its key risks and registers are consolidated and reviewed at the UOL
Group level.
Management will continually review the key risks, both existing and emerging, current controls and the KRIs on
a regular basis and take necessary measures to address and mitigate any new key risks that may have arisen.
Management will continue to reinforce the “risk-aware” culture within the Group and to progressively cascade the
ERM Programme down to all levels of the Group’s businesses and hotel operations. The AC will be updated half-yearly
or more frequently as needed, on the progress of the ERM Programme including the key risks and risk management
controls and treatment plans by Management.
The key risks identified can be broadly grouped as operational risks, financial risks and investment risks.
Operational Risks
The Group’s operational risk framework is designed to ensure that operational risks are continually identified,
managed and mitigated. This framework is implemented at each operating unit and in the case of the Group’s hotels,
is monitored at the Group level by the Group’s asset management team. In the case of the Group’s investment and
hotel properties, these are subject to operating risks that are common to the property and hotel industries and to
the particular countries in which the investment and hotel properties are situated. It is recognised that risks can
never be entirely eliminated and the Group must always weigh the cost and benefit in managing the risks. As a tool
to transfer and/or mitigate certain portions of risks, the Group also maintains insurance covers at levels determined
to be appropriate taking into account the cost of cover and risk profiles of the businesses in which it operates.
Complementing the Management’s role is the internal audit which provides an independent perspective on the
controls that help to mitigate major operational risks.
Management will continuously review and implement further improvements to the current measures as and when these
improvements are identified from the ERM Programme. To further enhance the existing operational risk framework,
Management will be taking steps to progressively cascade the ERM Programme down to the individual investment
and hotel property and reinforce a “risk-aware” culture amongst the employees.
Financial Risks
The Group is exposed to a variety of financial risks, including interest rates, foreign currency, credit and liquidity risks.
The management of financial risks is outlined under Note 34 of the Notes to the Financial Statements.
Investment Risks
The Board and EXCO have overall responsibility for determining the level and type of business risk the Group
undertakes. The Group has a dedicated Development and Growth department that evaluates all new investment
opportunites on the bases and investment criteria set out by the Board and EXCO. All major investment proposals
are submitted to the EXCO and the Board, as the case may be, for approval. Ongoing performance monitoring and
asset management of new and existing investments are performed by the Group. In addition, Management will
continually determine under the ERM Programme, if further measures could be implemented to monitor, analyse
and to the extent possible, mitigate the respective country risks in respect of which current and future investment
projects are located.
The AC, with the assistance of internal and external auditors, has reviewed, and the Board is satisfied with, the
adequacy of such controls, including financial, operational and compliance controls established by Management.
Principle 13: Internal Audit
The Internal Audit function of the Group is supported by the Internal Audit Department of UOL, its holding company,
and it is independent of the activities it audits. The Deputy General Manager (Group Internal Audit) has a direct
reporting line to the AC, with administrative reporting to the GCE.
The Internal Audit Department aims to meet or exceed the Standards for the Professional Practice of Internal
Auditing set by the Institute of Internal Auditors. As part of its audit activities, the Internal Audit Department reviews
all interested party transactions and ensure that the necessary controls are in place and are complied with.
The Internal Audit function is adequately resourced and has appropriate standing within the Group. The Deputy
General Manager (Group Internal Audit), who is employed by UOL, joined UOL in October 1997 and holds a Bachelor
of Accountancy (Honours) Degree from the Nanyang Technological University. He is also a non-practising member
of the Institute of Certified Public Accountants of Singapore and a Member of the Institute of Internal Auditors
(Singapore).
The AC has reviewed and is satisfied with the adequacy of the Internal Audit function.
ANNUAL REPORT 2010
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148
149
COMMUNICATION WITH SHAREHOLDERS
PARTICULARS OF DIRECTORS
Principle 14: Communication with Shareholders
Principle 15: Greater Shareholder Participation
Board
Committees as
Chairman or
Age Member
Directorship:
Date first
appointed
Date last
re-appointed/
re-elected
Board
appointment
Executive/
Non-executive
Independent/
Non-independent
The Group engages in regular, effective and fair communication with its shareholders through the quarterly
release of the Group’s results, the timely release of material information through the SGXNET of SGX-ST and the
publication of the Annual Report. Shareholders and investors can also access information on the Company at its
website at www.pphg.com.
Name of Director/
Academic & Professional
Qualifications
The Company also encourages greater shareholder participation at its annual general meetings and allows
shareholders the opportunity to communicate their views on various matters affecting the Company. The Articles
allow a shareholder of the Company to appoint up to two proxies to attend and vote in his or her place at general
meetings. The Chairpersons of the EXCO, NC, RC and AC, as well as senior management, are present and available
to address questions at general meetings. The external auditors are also present to address any shareholders’ queries
on the conduct of audit and the preparation of the Auditors’ Report.
Wee Cho Yaw
Chinese high school; Honorary
Doctor of Letters, National University
of Singapore
81
EXCO – Chairman 25.05.1973
RC – Member
21.04.2010
NC – Member
Non-executive
Non-independent
Gwee Lian Kheng
Bachelor of Accountancy (Hons),
University of Singapore;
Fellow Member of Chartered
Institute of Management Accountants,
Association of Chartered
Certified Accountants and
Institute of Certified Public
Accountants of Singapore
70
EXCO – Member
20.01.1987
28.04.2009
Executive
Non-independent
Bachelor of Architecture,
University of Melbourne;
Diploma in Town & Regional
Planning, University
of Melbourne;
Fellowship Diploma,
Royal Melbourne Institute
of Technology;
Fellow of Singapore Institute of
Architects, Singapore Institute of
Planners, and Royal Australian
Institute of Architects;
Member of Royal
Institute of British Architects,
Royal Town Planning Institute,
Royal Australian Planning
Institute and American
Planning Association
79
EXCO – Member
AC – Member
RC – Member
NC – Chairman
02.05.1990
21.04.2010
Non-executive
Independent
Lim Kee Ming (who retires on 19 April 2011)
Master of Science (International
Trade & Finance) Columbia
University, New York;
Bachelor of Science
(Business Administration)
New York University, USA
Degree of Doctor of the
University of Adelaide honoris causa
83
AC – Chairman
RC – Chairman
NC – Member
01.06.1995
21.04.2010
Non-executive
Independent
The Board notes that there should be separate resolutions at general meetings on each substantially separate issue
and supports the Code’s principle as regards “bundling” of resolutions. In the event that there are resolutions which
are interlinked, the Board will explain the reasons and material implications.
In line with its communications with shareholders, as and when briefings on the Company’s performance and financial
results are conducted for analysts and the media, the Company will also disclose the presentation materials on
SGXNET.
DEALINGS IN SECURITIES
In line with Listing Rule 1207 (18) on Dealings in Securities, the Company issues annually, with such updates as may
be necessary from time to time, a circular to its Directors, officers and employees prohibiting dealings in listed
securities of the Group from two weeks to one month, as the case may be, before the announcement of the Group’s
quarterly and full-year financial results and ending on the date of announcement of the results, or at any time they
are in possession of unpublished material price sensitive information.
Directors and officers are required to comply with and observe the laws on insider trading even if they trade in the
Company’s securities outside the prohibited periods. They are discouraged from dealing in the Company’s securities
on short-term considerations and should be mindful of the law on insider trading.
ATTENDANCE AT BOARD AND BOARD COMMITTEE MEETINGS
Number of meetings attended in 2010
Name of Directors
Wee Cho Yaw
Gwee Lian Kheng
Lim Kee Ming
Wee Ee Chao
Low Weng Keong
Wee Wei Ling
Wee Ee Lim
Number of meetings held in 2010
BOARD
EXCO
4
4
4
4
2
3
4
4
4
4
4
2
2
2
AC
4
4
RC
NC
1
1
1
1
1
1
2
3
2
4
1
1
ANNUAL REPORT 2010
a brand
new era
150
151
PARTICULARS OF DIRECTORS (continued)
REMUNERATION REPORT
Name of Director/
Academic & Professional
Qualifications
Board
Committees as
Chairman or
Age Member
Directorship:
Date first
appointed
Date last
re-appointed/
re-elected
Board
appointment
Executive/
Non-executive
Independent/
Non-independent
09.05.2006
21.04.2010
Non-executive
Non-independent
Remuneration Bands
Non-executive
Independent
$1,750,000 to
$2,000,000
Amedeo Patrick
Imbardelli (1)
48
22
3
$250,000 to $500,000
Wee Wei Lingc (2)
64
16
–
–
–
–
–
–
–
–
Wee Ee Chao
Bachelor of Business Administration,
The American University,
Washington DC, USA
56
Low Weng Keong
Fellow of CPA Australia, Institute
of Chartered Accountants in
England & Wales and Institute
of Certified Public Accountants
of Singapore;
Associate Member of Chartered
Institute of Taxation (UK)
58
Wee Wei Ling
Bachelor of Arts, Nanyang University
58
Nil
24.03.1994
28.04.2009
Executive
Non-independent
Bachelor of Arts (Hons) in Philosophy,
Political Science and Economics;
Master of Arts from
University of Oxford, UK;
Master in Public Administration,
Harvard University, USA
64
Nil
23.11.2005
23.04.2008
Non-executive
Independent
Wee Ee Lim
Bachelor of Arts (Economics),
Clark University, USA
49
Master of Science (Honours) in Finance,
The City University of New York, USA;
Fellow of the American Academy of
Financial Management, USA
50
EXCO – Member
AC – Member
23.11.2005
23.04.2008
REMUNERATION OF DIRECTORS
The following table shows a breakdown (in percentage terms) of the remuneration of Directors for the year ended
31 December 2010 :
Share
Share
Defined
Total Option
Directors’ Option Contribution
Fees Granta
Plans Others Remuneration Grantsb
Salary Bonuses
% Number
%
%
%
%
%
%
Below $250,000
Wee Cho Yaw, Chairman
Gwee Lian Kheng (3)
Lim Kee Ming
Wee Ee Chao
Low Weng Keong
Wee Ee Lim
2
5
20
100
34,000
10
1
9
100
–
100
100
100
100
100
100
100
100
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
100
100
100
100
100
100
100
100
–
–
–
–
–
–
–
–
a Fair value of share options is estimated using the Trinomial Tree model at date of grant.
b Refers to options granted on 5 March 2010 under the UOL 2000 Share Option Scheme to subscribe for ordinary shares in the capital of the holding
company, UOL Group Limited (“UOL”). The options may be exercised at any time during the option period from 5 March 2011 to 4 March 2020 at the
offer price of S$3.95 per ordinary share.
c Wee Wei Ling is the daughter of Wee Cho Yaw and sister of Wee Ee Chao and Wee Ee Lim.
Amedeo Patrick Imbardelli, an executive director of the Company, has an employment contract with the Company
which may be terminated by either party giving three months’ notice. His remuneration package includes a
performance bonus of a minimum of three months base salary subject to the achievement of key performance
indicators and financial targets set by the Company.
(1)
Nil
Nil
09.05.2006
21.04.2010
Non-executive
Non-independent
21.04.2010
Executive
Non-independent
Notes :
1) Directors’ shareholdings in the Company and related corporations, please refer to pages 66 and 67.
2) Directorships or Chairmanships in other listed companies and other major appointments, both present and over the preceding 3 years, please refer to
pages 12 to 15.
Wee Wei Ling, an executive director of the Company, has an employment contract with the Company which may
be terminated by either party giving two months’ notice. Her remuneration package includes a variable bonus
element (which is substantially linked to the performance of the Company).
(2)
Gwee Lian Kheng, another executive director of the Company, has an employment contract with UOL.
(3)
REMUNERATION OF KEY EMPLOYEES
The remuneration1 of the top five key employees of the Group (who are not directors) is analysed into the respective
remuneration bands as follows :
$500,000 to $750,000
Senior Vice President, Hotel Operations (Joined on 16 March 2010)
Senior Vice President, Growth & Development
Senior Vice President, Marketing & Sales
$250,000 to $500,000
Chief Financial Officer
Senior Vice President, Human Capital & Development
1
Included in the remuneration is the value of share options granted during the year (if any) under the UOL 2000 Share Option Scheme. Fair value of share
options is estimated using the Trinomial Tree model.
ANNUAL REPORT 2010
a brand
new era
152
INTERESTED PERSON TRANSACTIONS
153
Shareholdings Statistics
As at 2 March 2011
Name of interested person
Aggregate value of all
interested person transactions
during the financial year under
review (excluding transactions
less than $100,000 and
transactions conducted
under shareholders’ mandate
pursuant to Rule 920 of the
Listing Manual)
$’000
Advance to UOL
Interest received on advance to UOL
Management and corporate support services
provided to the Pan Pacific Hotels Group
by UOL
– Share of payroll
– Administrative fee
Size of Shareholdings
Range
Aggregate value of all
interested person transactions
conducted under shareholders’
mandate pursuant to Rule 920
(excluding transactions less
than $100,000)
$’000
49,630
–
1,185
–
–
2,297
81
UOL Claymore Investment Pte. Ltd.*
Fees received for the franchise of hotel
–
809
UOL Somerset Investments Pte. Ltd.*
Fees received for the management of
serviced suites
–
900
Hua Ye Xiamen Hotel Limited*
Fees received for the management of hotel
–
748
UOL Serviced Residences Sdn Bhd*
Fees received for the management of
serviced suites
–
64
Hotel Marina City Pte Ltd**
Fees received for the management of hotel
–
6,782
* These companies are subsidiaries of UOL, a controlling shareholder.
** This is an associated company of UOL.
%
No. of Shares
%
46
6,043
782
12
6,883
0.67
87.80
11.36
0.17
100.00
11,884
18,390,003
33,942,049
547,656,064
600,000,000
0.00
3.06
5.66
91.28
100.00
No. of Shareholders
%
No. of Shares
%
6,766
67
50
6,883
98.30
0.97
0.73
100.00
597,736,484
576,501
1,687,015
600,000,000
99.62
0.10
0.28
100.00
No. of Shares
%
435,000,000
55,447,652
38,380,000
3,845,659
3,751,500
3,368,403
1,810,500
1,454,000
1,430,350
1,118,000
1,030,000
1,020,000
1,000,000
918,000
837,000
802,000
800,000
586,000
580,000
513,000
553,692,064
72.50
9.24
6.40
0.64
0.63
0.56
0.30
0.24
0.24
0.19
0.17
0.17
0.17
0.15
0.14
0.13
0.13
0.10
0.10
0.09
92.29
1 - 999
1,000 - 10,000
10,001 - 1,000,000
1,000,001 and above
Total
Location of Shareholders
Country
–
No. of Shareholders
Singapore
Malaysia
Others
Total
Twenty Largest Shareholders
No.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
Name
Uol Group Limited
Uob Kay Hian Pte Ltd
Tye Hua Nominees (Pte) Ltd
United Overseas Bank Nominees Pte Ltd
Citibank Nominees Singapore Pte Ltd
Dbs Nominees Pte Ltd
Hsbc (Singapore) Nominees Pte Ltd
Morph Investments Ltd
Ocbc Nominees Singapore Pte Ltd
Kor Beng Shien
Oversea-Chinese Bank Nominees Pte Ltd
Ong Kian Kok
Morgan Stanley Asia (Singapore) Securities Pte Ltd
Phillip Securities Pte Ltd
Citibank Consumer Nominees Pte Ltd
Kim Eng Securities Pte. Ltd.
Teo Kok Kheng
Ng Soo Giap
Wee Aik Koon Pte Ltd
Goh Geok Ling
Total
Based on information available to the Company as at 2 March 2011, approximately 11.8% of the issued shares of the
Company is held by the public and therefore, Rule 723 of the SGX-ST Listing Manual is complied with.
Substantial Shareholders as shown in the Register of Substantial Shareholders
Name
Wee Cho Yaw
United Overseas Bank Limited 4
No. of Shares fully paid
Direct Interest Deemed Interest
489,440,652 2
–
–
–
489,440,652 3
38,380,000
Total
489,440,652
489,440,652
38,380,000
%1
81.57
81.57
6.40
Notes
1
As a percentage of the issued share capital of the Company, comprising 600,000,000 shares.
2
Includes 54,440,652 shares held in the name of UOB Kay Hian Pte Ltd (“UOB Kay Hian”).
3
Dr Wee is deemed to have an interest in the 435,000,000 shares held by UOL and 54,440,652 shares held by UOB Kay Hian for the benefit of UOL.
4
Held in the name of Tye Hua Nominees (Pte) Ltd.
ANNUAL REPORT 2010
a brand
new era
154
Share Price and Turnover
155
Notice of Annual General Meeting
For the period from 1 January 2006 to 31 December 2010
Share Price ($)
3.0
High
2.600
2.570
Low
1.0
2010 Prices
1.780
2.040
2.100
1.990
2.010
2.100
2.170
2.200
2.240
2.130
2.380
2.350
Low
Prices
1.800
1.690
1.840
1.620
1.780
1.730
1.870
1.810
1.910
1.890
2.020
1.830
1.950
1.690
1.930
1.560
1.680
1.390
1.600
1.300
1.460
1.090
1.360
1.230
1.320
1.010
1.290
1.100
1.180
1.030
1.160
0.900
1.040
0.900
0.960
0.890
0.970
0.905
1.190
1.180
1.460
1.440
1.480
1.390
1.500
1.300
1.420
1.340
1.470
1.450
1.600
1.630
1.500
1.590
1.480
1.590
1.530
1.610
1.510
1.410
1.550
1.540
1.590
1.570
1.620
1.580
1.610
1.600
1.670
1.620
1.690
1.610
1.660
1.570
1.610
1.5
1.060
1.170
1.120
1.160
1.150
1.380
1.280
1.390
1.130
1.310
1.110
1.240
1.180
1.260
1.170
1.210
1.200
1.330
1.320
1.520
1.440
1.490
1.450
1.590
1.530
1.650
1.630
1.910
2.0
2.300
2.020
2.340
2.5
High
Notice is hereby given that the 42nd Annual General Meeting of the Company will be held at Pan Pacific Singapore,
Ocean 1-3, Level 2, 7 Raffles Boulevard, Marina Square, Singapore 039595, on Tuesday, 19 April 2011, at 3.00 p.m. to
transact the following business:
As Ordinary Business
Resolution 1
To receive and adopt the Audited Financial Statements and the Reports of the Directors and the
Auditors for the year ended 31 December 2010.
Resolution 2
To declare a first and final tax exempt (one-tier) dividend of 4 cents per ordinary share for the
year ended 31 December 2010.
Resolution 3
To approve Directors’ fees of S$472,500 for 2010 (2009: S$457,500).
Resolution 4
To re-appoint Dr Wee Cho Yaw, pursuant to Section 153(6) of the Companies Act, Cap. 50,
as Director of the Company to hold such office until the next Annual General Meeting of the
Company.
Resolution 5
To re-appoint Mr Alan Choe Fook Cheong, pursuant to Section 153(6) of the Companies Act,
Cap. 50, as Director of the Company to hold such office until the next Annual General Meeting
of the Company.
Resolution 6
To re-appoint Mr Gwee Lian Kheng, who attains the age of 70 years, pursuant to Section 153(6)
of the Companies Act, Cap. 50, as Director of the Company to hold such office until the next
Annual General Meeting of the Company.
Resolution 7
To re-elect Mr Low Weng Keong, who retires by rotation pursuant to Article 94 of the Company’s
Articles of Association, as Director of the Company.
Resolution 8
To re-elect Mr James Koh Cher Siang, who retires by rotation pursuant to Article 94 of the
Company’s Articles of Association, as Director of the Company.
Resolution 9
To re-appoint Messrs PricewaterhouseCoopers LLP as Auditors of the Company and authorise
the Directors to fix their remuneration.
0.5
JAN
FEB
MAR
APR
MAY
JUN
JUL
AUG
SEP
OCT
NOV
DEC
JAN
FEB
MAR
APR
MAY
JUN
JUL
AUG
SEP
OCT
NOV
DEC
JAN
FEB
MAR
APR
MAY
JUN
JUL
AUG
SEP
OCT
NOV
DEC
JAN
FEB
MAR
APR
MAY
JUN
JUL
AUG
SEP
OCT
NOV
DEC
JAN
FEB
MAR
APR
MAY
JUN
JUL
AUG
SEP
OCT
NOV
DEC
0.0
2006
2007
2008
2009
2010
Turnover (Million)
15
Turnover
As Special Business
2010 Turnover
To consider and, if thought fit, to pass with or without amendments, the following resolutions as Ordinary Resolutions:
Resolution 10
12
“That authority be and is hereby given to the Directors of the Company to:
(a)
(i)
issue shares in the capital of the Company (“shares”) whether by way of rights,
bonus or otherwise; and/or
9
(ii)
make or grant offers, agreements or options (collectively, “Instruments”) that might
or would require shares to be issued, including but not limited to the creation
and issue of (as well as adjustments to) warrants, debentures or other instruments
convertible into shares;
6
at any time and upon such terms and conditions and for such purposes and to such
persons as the Directors may in their absolute discretion deem fit; and
(b)
3
(notwithstanding the authority conferred by this Resolution may have ceased to be in
force) issue shares in pursuance of any Instrument made or granted by the Directors
while this Resolution was in force,
JAN
FEB
MAR
APR
MAY
JUN
JUL
AUG
SEP
OCT
NOV
DEC
JAN
FEB
MAR
APR
MAY
JUN
JUL
AUG
SEP
OCT
NOV
DEC
JAN
FEB
MAR
APR
MAY
JUN
JUL
AUG
SEP
OCT
NOV
DEC
JAN
FEB
MAR
APR
MAY
JUN
JUL
AUG
SEP
OCT
NOV
DEC
JAN
FEB
MAR
APR
MAY
JUN
JUL
AUG
SEP
OCT
NOV
DEC
0
2006
2007
2008
2009
2010
ANNUAL REPORT 2010
156
157
provided that:
(1)
(2)
Resolution 11
the aggregate number of shares to be issued pursuant to this Resolution (including
shares to be issued in pursuance of Instruments made or granted pursuant to this
Resolution) does not exceed fifty per cent (50%) of the total number of issued shares
(excluding treasury shares) in the capital of the Company (as calculated in accordance
with paragraph (2) below), of which the aggregate number of shares to be issued other
than on a pro rata basis to shareholders of the Company (including shares to be issued in
pursuance of Instruments made or granted pursuant to this Resolution) does not exceed
twenty per cent (20%) of the total number of issued shares (excluding treasury shares) in
the capital of the Company (as calculated in accordance with paragraph (2) below);
(subject to such manner of calculation as may be prescribed by the Singapore Exchange
Securities Trading Limited (“SGX-ST”)) for the purpose of determining the aggregate
number of shares that may be issued under paragraph (1) above, the percentage of
issued shares shall be based on the total number of issued shares (excluding treasury
shares) in the capital of the Company at the time this Resolution is passed, after
adjusting for:
(i)
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
(ii)
any subsequent consolidation or subdivision of shares;
(3)
in exercising the authority conferred by this Resolution, the Company shall comply with
the provisions of the Listing Manual of the SGX-ST for the time being in force (unless
such compliance has been waived by the SGX-ST) and the Articles of Association for the
time being of the Company; and
(4)
(unless revoked or varied by the Company in general meeting) the authority conferred
by this Resolution shall continue in force until the conclusion of the next Annual General
Meeting of the Company or the date by which the next Annual General Meeting of the
Company is required by law to be held, whichever is the earlier.”
(4)
the Directors of the Company and each of them be hereby authorised to complete and
do all such acts and things (including executing all such documents as may be required)
as they or he may consider expedient or necessary or in the interests of the Company to
give effect to the Shareholders’ IPT Mandate and/or this Resolution.”
BY ORDER OF THE BOARD
Foo Thiam Fong Wellington
Yeong Sien Seu
Secretaries
Singapore, 28 March 2011
“That:
(1)
approval be and is hereby given for the purposes of Chapter 9 of the Listing Manual
(the “Listing Manual”) of the SGX-ST for the Company and its entities at risk (as defined
in Chapter 9 of the Listing Manual) or any of them to enter into any of the transactions
falling within the types of interested person transactions set out in the Appendix to the
Company’s Letter to Shareholders dated 28 March 2011 (the “Letter”), with any party
who is of the classes of interested persons described in the Letter, provided that such
interested person transactions are carried out on normal commercial terms and will not
be prejudicial to the interests of the Company and its minority Shareholders and are
carried out in accordance with the review procedures for interested persons transactions
as set out in the Appendix to the Letter (the “Shareholders’ IPT Mandate”);
(2)
the Shareholders’ IPT Mandate shall, unless revoked or varied by the Company in general
meeting, continue in force until the conclusion of the next Annual General Meeting of the
Company or until the date on which the next Annual General Meeting of the Company
is required by law to be held, whichever is the earlier;
(3)
the Audit Committee of the Company be and is hereby authorised to take such action
as it deems proper in respect of the procedures and/or to modify or implement such
procedures as may be necessary to take into consideration any amendment to Chapter
9 of the Listing Manual which may be prescribed by the SGX-ST from time to time; and
ANNUAL REPORT 2010
PROXY FORM
158
IMPORTANT: FOR CPF INVESTORS ONLY
Annual General Meeting
1.For investors who have used their CPF monies to buy Pan Pacific Hotels Group
Limited’s shares, this Report is sent to them at the request of the CPF Approved
Nominee 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.
Notes
I/We, A member entitled to attend and vote at the Meeting is entitled to appoint not more than two proxies to attend and
vote in his stead. A proxy need not be a member of the Company.
of The instrument appointing a proxy must be deposited at the Registered Office of the Company at 101 Thomson
Road, #33-00 United Square, Singapore 307591 not less than 48 hours before the time for holding the Meeting.
Notes to Resolutions
1.
2.
3.
In relation to Resolution 4, Dr Wee Cho Yaw will, upon re-appointment, continue as the Chairman of the
Board of Directors and the Executive Committee, and as a member of the Remuneration and Nominating
Committees. He is considered a non-independent director.
In relation to Resolution 5, Mr Alan Choe Fook Cheong will, upon re-appointment, continue as the Chairman
of the Nominating Committee and as a member of the Executive, Audit and Remuneration Committees. He
is considered an independent director.
In relation to Resolution 6, Mr Gwee Lian Kheng will, upon re-appointment, continue as a Member of the
Executive Committee. He is considered a non-independent director.
(Incorporated in the Republic of Singapore)
(Company Registration No. 196800248D)
3.CPF investors who wish to attend the Meeting as observerS have to submit
their requests through their respective Agent Banks so that their Agent Banks may
register with the Company’s Registrar (Please see Note. 9 on the reverse).
(Name)
(Address)
being a member/members of Pan Pacific Hotels Group Limited (the “Company”), hereby appoint:
Name
NRIC/Passport No.
Proportion of Shareholdings
No. of Shares
%
Address
and/or (delete as appropriate)
Name
NRIC/Passport No.
Proportion of Shareholdings
No. of Shares
%
Address
4.
In relation to Resolution 7, Mr Low Weng Keong will, upon re-election, continue as a Member of the Audit
Committee. He is considered an independent director.
or failing him/her, the Chairman of the Meeting as my/our proxy/proxies to attend and vote for me/us on my/our
behalf and, if necessary, to demand a poll, at the 42nd Annual General Meeting of the Company (the “AGM”) to be
held at Pan Pacific Singapore, Ocean 1-3, Level 2, 7 Raffles Boulevard, Marina Square, Singapore 039595 on Tuesday,
19 April 2011 at 3.00 p.m. and at any adjournment thereof. I/We direct my/our proxy/proxies to vote for or against the
Resolutions to be proposed at the AGM as indicated below. If no specific direction as to voting is given, the proxy/
proxies will vote or abstain from voting at his/their discretion, as he/they will on any other matter arising at the AGM.
The authority herein includes the right to demand or to join in demanding a poll and to vote on a poll.
5.
In relation to Resolution 8, Mr James Koh Cher Siang is considered an independent director.
No. Resolutions
6.
Resolution 10 is to empower the Directors from the date of that meeting until the next Annual General
Meeting to issue, or agree to issue shares and/or grant instruments that might require shares to be issued,
up to an amount not exceeding fifty per cent (50%) of the total number of issued shares (excluding treasury
shares) in the capital of the Company (calculated as described) of which the total number of shares to be
issued other than on a pro rata basis to shareholders of the Company does not exceed twenty per cent (20%)
of the total number of issued shares (excluding treasury shares) in the capital of the Company (calculated as
described).
Note: Dr Lim Kee Ming who retires at the conclusion of this AGM pursuant to Section 153(6) of the Companies
Act, Cap. 50, and although eligible, has indicated that he is not offering himself for re-appointment. Dr Lim
Kee Ming will step down as the Chairman of the Audit and Remuneration Committees, and as a member of
the Nominating Committee.
7. Resolution 11 is to renew the Shareholders’ IPT Mandate to allow the Company and its entities at risk (as
defined in Chapter 9 of the Listing Manual) or any of them to enter into any of the transactions falling within
the types of interested person transactions set out in the Appendix to the Letter.
To be used on a show of hands To be used in the event of a poll
No. of Votes
No. of Votes
For*
Against*
For**
Against**
Ordinary Business
1 Adoption of Financial Statements and
Reports of the Directors and the Auditors
2 Declaration of First and Final Dividend
3 Approval of Directors’ Fees
4 Re-appointment (Dr Wee Cho Yaw)
5 Re-appointment (Mr Alan Choe Fook Cheong)
6 Re-appointment (Mr Gwee Lian Kheng)
7 Re-election (Mr Low Weng Keong)
8 Re-election (Mr James Koh Cher Siang)
9 Re-appointment of PricewaterhouseCoopers
LLP as Auditors
Special Business
10 Authority for Directors to Issue Shares
11 Renewal of Shareholders’ IPT Mandate
*
Please indicate your vote “For” or “Against” with a tick within the box provided.
**If you wish to exercise all your votes “For” or “Against”, please tick within the box provided. Otherwise, please
indicate the number of votes as appropriate.
Dated this
day of
2011
Shares in:
(a) Depository Register
(b) Register of Members
Signature(s) or Common Seal of Member(s)
IMPORTANT: Please read Notes on the reverse
Total No. of Shares Held
Notes :
1.Save for members which are nominee companies, a member of the Company entitled to attend and vote at the AGM is entitled to appoint not more than two proxies
to attend and vote in his/her stead. A proxy need not be a member of the Company. Where a member appoints two proxies, the appointments shall be invalid unless
he/she specifies the proportion of his/her shareholdings (expressed as a percentage of the whole) to be represented by each proxy.
2.This instrument of proxy must be signed by the appointor or his/her duly authorised attorney or, if the appointor is a body corporate, signed by its duly authorised
officer or attorney or executed under its common seal.
3.A body corporate which is a member may also appoint by resolution of its directors or other governing body, an authorised representative or representatives in accordance
with its Articles of Association and Section 179 of the Companies Act, Chapter 50 of Singapore, to attend and vote on behalf of such body corporate.
4.Please insert the total number of shares held by you. If you have Shares entered against your name in the Depository Register (as defined in Section 130A of the
Companies Act, Chapter 50 of Singapore), you should insert that number of Shares. If you have Shares registered in your name in the Register of Members, you should
insert that number of Shares. If you have Shares entered against your name in the Depository Register and Shares registered in your name in the Register of Members,
you should insert the aggregate number of Shares entered against your name in the Depository Register and registered in your name in the Register of Members. If no
number is inserted, the instrument appointing a proxy or proxies shall be deemed to relate to all the Shares held by you.
5.Completion and return of this instrument appointing a proxy shall not preclude a member from attending and voting at the AGM. Any appointment of a proxy or proxies
shall be deemed to be revoked if a member attends the AGM in person, and in such event, the Company reserves the right to refuse to admit any person or persons
appointed under this instrument of proxy, to the AGM.
6.This instrument appointing a proxy or proxies (together with the power of attorney (if any) under which it is signed or a certified copy thereof) must be deposited at the
registered office of the Company at 101 Thomson Road, #33-00 United Square, Singapore 307591, not less than 48 hours before the time fixed for holding the AGM.
Corporate
Information
7.Any alteration made in this form must be initialed by the person who signs it.
8.The Company shall be entitled to reject this instrument of proxy 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 this instrument of proxy. In addition, in the case of a member whose Shares are entered against his/
her name in the Depository Register, the Company shall be entitled to reject any instrument of proxy lodged if such member, being the appointor, is not shown to have
Shares entered against his/her name in the Depository Register as at 48 hours before the time appointed for holding the AGM, as certified by The Central Depository
(Pte) Limited to the Company.
9.Agent Banks acting on the request of the CPF Investors who wish to attend the AGM as Observers are requested to submit in writing, a list with details of the investors’
names, NRIC/passport numbers, addresses and number of shares held. The list, signed by an authorised signatory of the Agent Bank, should reach the Company’s
Registrar, Boardroom Corporate & Advisory Services Pte. Ltd. at 50 Raffles Place, Singapore Land Tower, #32-01, Singapore 048623, at least 48 hours before the time
fixed for holding the AGM.
BOARD OF DIRECTORS
MANAGEMENT
Chairman
Dr Wee Cho Yaw
Mr Gwee Lian Kheng
President &
Chief Executive Officer
Mr Gwee Lian Kheng
1st fold here
Proxy Form
Please affix
postage
stamp
Mr Alan Choe Fook Cheong
Dr Lim Kee Ming
Mr Wee Ee Chao
Mr Low Weng Keong
Ms Wee Wei Ling
Mr James Koh Cher Siang
Mr Wee Ee Lim
Mr Amedeo Patrick Imbardelli
EXECUTIVE COMMITTEE
The Company Secretary
101 THOMSON ROAD
#33-00 UNITED SQUARE
Singapore 307591
Chairman
Dr Wee Cho Yaw
Mr Gwee Lian Kheng
Mr Wee Ee Chao
AUDIT COMMITTEE
Chairman
Dr Lim Kee Ming
Mr Low Weng Keong
2nd fold here
NOMINATING COMMITTEE
Mr Amedeo Patrick
Imbardelli
Executive Director,
Asset Management
Ms Wee Wei Ling
Company Secretary
Mr Foo Thiam Fong
Wellington
Chief Financial Officer
Mr Neo Soon Hup
Senior Vice President,
Marketing & Sales
Mr Kevin Croley
Hotel Operations
Mr Dean Schreiber
Growth & Development
Mr Eric Levy
Human Capital & Development
Mrs Melody King
Chairman
INTERNAL AUDIT
Dr Wee Cho Yaw
Dr Lim Kee Ming
Mr Yeo Bin Hong
Deputy General Manager,
Internal Audit
Dr Lim Kee Ming
COMPANY SECRETARIES
Mr Foo Thiam Fong
Wellington
Mr Yeong Sien Seu
Dr Wee Cho Yaw
GENERAL COUNSEL
Mr Yeong Sien Seu
REMUNERATION
COMMITTEE
Chairman
This report is printed on recycled paper.
3rd fold here and seal
AUDITORS
PricewaterhouseCoopers LLP
8 Cross Street, #17-00
PWC Building
Singapore 048424
Partner-in-charge:
Mr Sim Hwee Cher
Year of appointment: 2008
PRINCIPAL BANKERS
United Overseas Bank Limited
Far Eastern Bank Limited
Public Bank Berhad
Malayan Banking Berhad
Australia and New Zealand
Banking Group Limited
REGISTERED OFFICE
101 Thomson Road
#33-00 United Square
Singapore 307591
T (65) 6255 0233
F (65) 6252 9822
PRINCIPAL PLACE
OF BUSINESS
238A Thomson Road
#08-00 Novena Square
Office Tower A
Singapore 307684
T (65) 6808 1180
F (65) 6821 8001
Wpphg.com
SHARE REGISTRAR
Boardroom Corporate &
Advisory Services Pte. Ltd.
50 Raffles Place, #32-01
Singapore Land Tower
Singapore 048623
T (65) 6536 5355
F (65) 6536 1360
Company Registration No. 196800248D
REGISTERED OFFICE
101 Thomson Road #33-00 United Square
Singapore 307591
T (65) 6255 0233 F (65) 6252 9822
PRINCIPAL PLACE OF BUSINESS
238A Thomson Road #08-00 Novena Square
Office Tower A, Singapore 307684
T (65) 6808 1180 F (65) 6821 8001
pphg.com

a Brand neW era - Pan Pacific Hotels Group

Transcription

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