2011 - National University of Singapore

Transcription

ROXY-PA C IF IC HOL D ING S L IMIT E D
A NNUAL R E P O R T 2 011
TU RN I N G DR EA M S IN TO R E ALI TY
5 0 Eas t C o ast R o ad #0 3 - 11
Roxy S q uar e S ho p p i ng C en tre
Singap o r e 4 2 8 769
Tel: (65 ) 64 4 0 98 78
Fax: (65 ) 64 4 0 91 2 3
Regist rat i o n Num b e r : 1 9 6 7 0 0 13 5Z
Websit e : www. r o xy p ac i f i c . c om . s g
TURNING DREAMS
INTO REALITY
A NN UA L R E P O R T 2 0 1 1
CORPORATE PROFILE
Roxy-Pacific Holdings Limited is a homegrown specialty property and hospitality
group with a track record that extends back to 1967.
Listed on the SGX Mainboard in March 2008, the Group is principally engaged
in the development and sale of residential and commercial properties (“Property
Development”) and the ownership of Grand Mercure Roxy Hotel and other
investment properties (“Hotel Ownership and Property Investment”).
In Property Development, Roxy-Pacific is an established brand name for small and
medium size residential developments with unique design features. The Group’s
CONTENTS
developments offer desirable living environments which epitomise quality and
innovation and are targeted at middle to upper middle income buyers.
01
5-YEAR FINANCIAL HIGHLIGHTS
Between 2004 and 2011, the Group developed and launched 27 small to
02
CHAIRMAN’S STATEMENT
medium size developments comprising a total of more than 1,500 residential
06
FINANCIAL AND OPERATIONS REVIEW
and commercial units.
08
OUR NEWLY LAUNCHED PROPERTIES
10
BOARD OF DIRECTORS
13
GROUP STRUCTURE
14
SENIOR EXECUTIVE OFFICERS
16
CORPORATE SOCIAL RESPONSIBILITY
20
CORPORATE INFORMATION
The Group also owns the Grand Mercure Roxy Hotel, managed by the
international hotel operator, Accor Group. Strategically located in the East Coast
area, the hotel is close to the CBD, the Changi airport and the Marina Bay Resort
Casino. In 2011, the hotel enjoyed a healthy Average Occupancy Rate (“AOR”)
and Average Room Rate (“ARR”) and is poised to benefit from the high visitors’
Designed and produced by
arrivals with the strong economy.
(65) 6578 6522
ROXY-PACIFIC HOLDINGS LIMITED
ANNUAL REPORT 2011
Profit Attributable To Shareholders
Turnover
250,000
150,000
SGD'000
SGD'000
200,000
100,000
50,000
0
2007
2008
2009
2010
60,000
50,000
40,000
30,000
20,000
10,000
0
2007
2011
Financial Year
2009
2010
2011
Financial Year
Return On Equity (ROE)
NAV
SGD (cents)
2008
40.00%
35.00%
30.00%
25.00%
20.00%
15.00%
10.00%
5.00%
0.00%
40.00
30.00
20.00
10.00
0.00
2007
2008
2009
2010
2011
2007
Financial Year
2008
2009
2010
2011
Financial Year
Full Year
Full Year
Full Year
Full Year
Full Year
Dec-07
Dec-08
Dec-09
Dec-10
Dec-11
102,707
(4,354)
–
23,940
19,291
130,065
(4,233)
–
30,365
24,691
163,510
(3,774)
–
36,248
27,910
216,877
(4,470)
55
53,232
42,782
183,651
(4,650)
288
58,524
49,659
No. Of Ordinary Shares Issued (‘000)
Share Capital
Retained earnings
Total Equity
Long Term Liabilities
Current Liabilities
508,560
11,114
44,559
55,673
82,486
170,474
308,633
636,560
47,399
62,884
110,283
82,219
217,704
410,206
636,560
47,399
86,020
133,419
91,621
200,489
425,529
636,560
47,399
122,436
169,835
99,676
332,115
601,626
636,560
47,399
162,547
209,946
105,137
433,522
748,605
Fixed Assets
Intangible Assets
Investments
Other Non-Current Assets
Current Assets
65,597
2,040
30,640
–
210,356
308,633
65,958
1,672
32,428
–
310,148
410,206
64,515
1,672
56,138
–
303,204
425,529
70,421
1,672
80,402
–
449,131
601,626
73,928
1,672
47,105
–
625,900
748,605
3.79
10.95
6.25
34.65
3.94
303.19
3.88
17.32
6.02
22.39
1.71
324.44
4.38
20.96
6.56
20.92
1.38
302.40
6.72
26.68
7.11
25.19
1.61
426.90
7.80
32.98
6.63
23.65
1.48
554.10
59.62
0.65
1.00
50.97
0.48
0.75
47.50
0.47
1.00
67.06
0.51
1.50
87.05
0.46
2.00
Period
PROFIT & LOSS (SGD’000)
Revenue
Finance Costs
Share Of Profits Of Associates
Profit Before Taxation
Profit Attributable To Shareholders
BALANCE SHEET (SGD‘000)
FINANCIAL RATIOS (SGD)
Earnings Per Share (cents)
Net Asset Value Per Share (cents)
Return On Asset (%)
Return On Equity (%)
Debt to Equity Ratio (times)
Revalued Net Assets Value (S$m)
Revalued Net Assets Value per share
(cents)
Net Debt to RNAV (times)
Gross Dividend Per Share (cents)
1
ANNUAL REPORT 2011
Dear Valued Shareholders,
On behalf of the Board of Directors, I take pleasure
in declaring yet another year of commendable
improvement in our Group’s performance for
the financial year ended 31 December 2011
(“FY2011”). This further enhances our business
standing and reputation in the industry.
In FY2011, we delivered our seventh consecutive
year of record earnings since the financial year
2004. This is especially encouraging given that
the results were achieved against the backdrop
of an uncertain global economy.
Our full year net profit increased by 16% to $49.7
million on the back of revenue of $183.7 million
in FY2011. The improved bottomline was lifted
by an increase in the Group’s other operating
income of $14.5 million, due to higher fair
value gains on retail shops in Roxy Square and
the transfer of Kovan Centre from investment
property to development property.
SEGMENT HIGHLIGHTS
For the full year ended 31 December 2011,
our Group achieved a total revenue of $183.7
million. Revenue from our Property Development
segment contributed $132.6 million or 72% of
our Group’s turnover. The remaining 28% of
the Group’s turnover in FY2011 was attributable
to our Group’s Hotel Ownership segment and
Property Investment segment which registered
revenue of $48.4 million and $2.6 million
respectively during the year.
Property Development: This segment remained
the core focus of our Group. We continued to
develop quality boutique projects that appeal
to the masses. Due to the absence of revenue
recognised from three development projects
which were completed in the year earlier, revenue
from our Property Development segment was
22% lower at $132.6 million in FY2011. On a
brighter note, this segment has accumulated a
balance attributable progress billings of $598.6(1)
million, which will be recognised from FY2012 to
FY2015. This is more than four times the revenue
recorded by the segment in FY2011.
Hotel Ownership: In line with the continual
high number of visitor arrivals to Singapore, our
(1)
Group’s Hotel Ownership segment registered
a 9% increase in revenue to $48.4 million in
FY2011. This was largely attributed to the
increase in our hotel’s average occupancy rate
(AOR) and average room rate (ARR) which
climbed to 94.6% and $188.3 respectively during
the year. Consequently, revenue per available
room (RevPar) of our hotel was lifted by 13.7%
to $178.1 in FY2011.
Property Investment: Revenue contributed by
our Group’s Property Investment segment fell
by 19% to $2.6 million in FY2011 as a result of
the redevelopment of Kovan Centre. The lower
rental income from Kovan Centre in FY2011
was partially offset by higher rental income from
our Roxy Square retail shops which continued
to enjoy high occupancy rate of close to 100%
during the year.
.
FINANCIAL POSITION
As at the end of FY2011, our Group maintained
our strong financial position with a healthy cash
and cash equivalent position that stood at $228.2
million. Net Asset Value per share was also
reportedly higher by 23.6% to 32.98 cents per
share. Correspondingly, revalued net asset value
was lifted by 29.8% to 87.05 cents per share
after adjusting for the fair value of our hotel and
office premises as at 31 December 2011.
OUTLOOK
Despite a challenging economic outlook at the
Europe front, Singapore registered a year-on-year
economic growth of 4.9% in 2011. However,
the Government is expecting the country’s GDP
growth to decrease to 1% to 3% in 2012 in
view of the prolonged European debt crisis and
uncertain economic recovery in the US.
Property Development
In 4Q2011, the Singapore Government
announced the latest round of property cooling
measures, the most significant of which was the
introduction of the Additional Buyer’s Stamp Duty
(“ABSD”) on certain categories of residential
property purchases, ranging from 3% to 10%.
Following the several rounds of Government
measures rolled out last year, property prices
Based on Option to Purchase granted up to 15th February 2012
2
ANNUAL REPORT 2011
Teo Hong Lim
Executive Chairman and
Chief Executive Officer
3
ANNUAL REPORT 2011
4
ANNUAL REPORT 2011
have continued to slow down in 4Q2011. Based
on the latest statistics released by the Urban
Redevelopment Authority, the rate of property
price increase continued to moderate for nine
consecutive quarters since 4Q2009. As such,
we expect more price moderation to take place
going forward as a slowdown in the Singapore
economy and uncertainties in the global
economic outlook begin to set in.
Notwithstanding the economic downturn and
ongoing policy intervention headwinds in the
property market, our Group is confident that
we will be able to ride through this challenging
environment as we enjoy high earning visibility
from our progress billings of $598.6(1) million
accumulated from 12 development projects –
The Verte, Nova 88, Haig 162, Straits Residences,
Studios@Tembeling, Jupiter 18, Spottiswoode 18,
Space@Kovan, Nottinghill Suites, Wis@Changi,
Centropod@Changi and Treescape – launched
over the past year or so. Of these, Centropod@
Changi and Treescape were launched in
December 2011 and February 2012 respectively,
both of which saw positive take up rates of more
than 75% as of to-date.
The progress billings will be recognised from
FY2012 through to FY2015, thus providing our
Group with a healthy cash flow and contributing
to our Group’s bottom-line in the years to come.
Together with a landbank of approximately
14,184 sqm and a focused and experienced
management team, we are in a buoyant position
to prudently seize future suitable opportunities
in the residential, commercial and mixed-use
development segments.
Hotel Ownership
According to the Singapore Tourism Board’s
latest figures, visitor arrivals to Singapore surged
to a new record high of 13.2 million in 2011,
exceeding the year’s forecast range of 12–13
million.
As Singapore remains to be an attractive
destination for business travellers and recreational
tourists, the overall hotel industry has been
greatly boosted by the swelling number of
visitors arriving in Singapore during the past year.
With our hotel located in a key strategic area,
(1)
with close proximity to the Integrated Resort
and business district, our Group believes that we
should continue to reap the benefit of this strong
tourism momentum as demand for hotel rooms
remain stable in 2012.
Property Investment
With the redevelopment of Kovan Centre in
FY2011, our rental income is expected to be lower
in FY2012. Having a strong cash holdings, we are
in a good position to seize future opportunities
and acquire suitable investment properties to
boost our recurring income.
AWARDS AND RECOGNITION
During the year, our Group is proud to be the
recipient of two widely recognised regional and
local awards, namely, the Best Small Cap Company
in Singapore as compiled by FinanceAsia, the
authoritative Asia Pacific financial magazine;
and the “Fastest Growing 50” Corporates as
credited by DP Information Group, Singapore’s
veteran information and credit bureau. This is
the second consecutive year that our Group has
been awarded the “Fastest Growing 50” title.
These accolades are a testament of our strength
and achievements in the industry and serve as
an impetus for us to continue to deliver stellar
performance in the years to come.
DIVIDEND
In view of our positive performance, we would like
to share our achievements with our shareholders.
As a form of appreciation for their unwavering
support and faith in our Group, the Board of
Directors will be proposing a final cash dividend
of 2.0 cents per ordinary share, which is 33%
higher than the previous year, at the next Annual
General Meeting.
ACKNOWLEDGEMENTS
On behalf of the Board of Directors, I would
like to extend our gratitude towards our Board
members, management and staff for their
contribution and faith in the Group, which has
propelled us to new heights. I would also like to
thank our shareholders, customers and business
partners for their continuous support and
commitment towards the Group’s cause over the
years.
Based on Option to Purchase granted up to 15th February 2012
5
ANNUAL REPORT 2011
FINANCIAL & OPERATIONS REVIEW
TURNOVER REVIEW
In FY2011, the Group reported revenue earnings
of $183.7 million, 15% lower compared to
$216.9 million in FY2010. This was mainly
due to 22% and 19% fall in revenue from the
Property Development segment and the Property
Investment segment respectively. However, the
decline was partially offset by a 9% increase in
revenue contributed by the Hotel Ownership
segment.
Property Development: 72% of the Group’s
turnover in FY2011 was attributed to this core
segment. Revenue for this segment dipped 22%
to $132.6 million for the full year ended 31
December 2011 against $169.1 million registered
for the same period in the previous year. This was
largely due to the absence of revenue recognised
from three development projects (The Ambrosia,
The Adara and The Ambra) that were completed
in the previous year. The Group recorded revenue
from 10 other development projects, namely, The
Florentine, Nova 88, Nova 48, The Lucent, The
Azzuro, The Verte, Studios@Tembeling, Jupiter
18, Straits Residences and Spottiswoode 18 in
FY2011.
Hotel Ownership: Revenue from this segment
rose by 9% from $44.5 million in FY2010 to
$48.4 million in FY2011 on the back of strong
Average Occupancy Rate (“AOR”) and Average
Room Rate (“ARR”). Our hotel AOR and ARR
improved by 0.4% to 94.6% and 13.2% to
$188.3 respectively during the year under
review. As a result, revenue per available room
(“RevPAR”) surged by 13.7% from $156.7
in FY2010 to $178.1 in FY2011. The hotel
ownership segment constituted 26% of the
Group revenue in FY2011.
Property Investment: Revenue from this
segment contributed to the remaining 2% of
the Group’s turnover in the reporting year. The
Group reported a 19% decrease in this segment
to $2.6 million in FY2011 as a result of the expiry
or termination of leases on or before 3Q2011,
led by the redevelopment of Kovan Centre.
GROSS PROFIT
In line with the lower revenue generated during
the year, the Group’s total gross profit slipped
6
by 10% from $70.5 million in FY2010 to $63.3
million in FY2011. Despite this, our Group’s
gross profit margin improved 2% from 32% in
FY2010 to 34% in FY2011 as a result of higher
percentage revenue contribution from the
Hotel Ownership segment which has a higher
gross profit margin than that of the Property
Development segment.
In FY2011, gross profit from the Property
Development segment accounted for 43% of
the Group’s total gross profit, while the Hotel
Ownership segment and Property Investment
segments contributed the remaining 57%.
Gross profit margin for the Property Development
segment decreased slightly by 1% from 22% in
FY2010 to 21% in FY2011, whereas the gross
profit margin from the Hotel Ownership segment
held steady at 70% in FY2010 and FY2011.
PBT AND NPAT
During the year, the Group’s pre-tax profit grew
10% or $5.3 million to $58.5 million in FY2011
against $53.2 million in the previous year. The
Group also registered a higher share of results
of associates in the reporting year due to profit
recognition from a joint venture development
project, Haig 162.
Additionally, the Group reported a higher fair
value gain of $13.4 million on our investment
properties in FY2011 as compared to $10.0 million
in the same period last year. We also reported
a fair value gain of $9.6 million arising from
the transfer of Kovan Centre from investment
property to development property in 3Q2011.
As our hotel’s turnover increased, our distribution
expenses also increased by 8% to $2.0 million in
FY2011 due to a rise in marketing expenses.
Administrative expenses rose from $10.8 million
in FY2010 to $11.5 million in FY2011 mainly due
to higher staff costs which is in line with higher
profitability.
Overall, the Group’s Net Profit after Tax was
boosted by 16% to $49.7 million, while Earnings
per Share was lifted from 6.72 to 7.80 cents per
share.
ANNUAL REPORT 2011
7
ANNUAL REPORT 2011
NOTTINGHILL SUITES WIS@CHANGI
Name
Nottinghill Suites
(A Joint Venture
Development)
Name
Wis@Changi
29A Toh Tuck Road
Location
116 Changi Road
No. of units (residential) 124
No. of units (commercial)
83
Units sold*
Units sold*
21
Location
74
CENTROPOD@CHANGI TREESCAPE
Name
Treescape
Location
103 Lorong N
Telok Kurau
Name
Centropod@Changi
Location
80 Changi Road
192
Units sold*
146
Units sold*
* Based on Sale and Purchase Agreement signed and Option to Purchase granted up to 7 March 2012.
8
29
ANNUAL REPORT 2011
OUR UPCOMING PROJECTS
EON SHENTON
MILLAGE
Name
Millage (A Joint
Venture Development)
Location
55 Changi Road
No. of units (residential)
70
86
NATURA@HILLVIEW
Name
Location
Eon Shenton
(A Joint Venture
Development)
Name
Natura@Hillview
(A Joint Venture
Development)
Location
12 Hillview Terrace
70 Shenton Way
No. of units (commercial) 121
9
ANNUAL REPORT 2011
BOARD OF DIRECTORS
Left to right:
Winston Tan Tien Hin
Chris Teo Hong Yeow
Edmund Lee Yu Chiang
Tay Kah Poh
Teo Hong Lim
Koh Seng Geok
Hew Koon Chan
Michael Teo Hong Wee
Teo Hong Hee
10
ANNUAL REPORT 2011
Teo Hong Lim, our Executive Chairman and Chief Executive
Michael Teo Hong Wee has been our Executive Director since
Officer and a Director since 20 May 1993 sets our Group’s
14 November 1991 and was last re-elected as Director on 9 April
strategies and leads the overall management. He was last re-
2009. He has played, and continues to play, an important role in
elected as Director on 9 April 2009. Mr Teo graduated from
the architectural conceptualisation, design and planning of all of
the National University of Singapore with an honours degree in
our development projects. In particular, he was heavily involved in
Accountancy. He worked for three years as assistant treasurer in
the development of the second phase of Roxy Square and of our
DBS Bank Ltd before joining our Company.
hotel, Grand Mercure, from their respective pre-construction stage
to completion. Currently, he heads our Property Development
Chris Teo Hong Yeow joined our Group in 1993 and his main
arm and oversees the progress of all our development projects.
task is in the planning and facilities design of Grand Mercure. He
Mr Teo graduated from the University of Southern California with
has been an Executive Director since 4 January 1999 and was
a Bachelor of Architecture degree and had previously worked as a
appointed as our Managing Director on 16 July 2001. He was
design architect trainee with Quek Associates.
last re-elected as Director on 31 March 2010. Mr Teo is primarily
responsible for all aspects of our Hotel Ownership business,
Teo Hong Hee joined our Group in 1988 and has been an
including ongoing evaluation, investment and improvement of
Executive Director since 30 August 1989. He was last re-elected
the hotel. Mr Teo graduated from Michigan State University with a
as Director on 31 March 2010. He currently heads our Property
Bachelor of Arts (Hotel, Restaurant and Institutional Management)
Investment division. Apart from overseeing the management of
degree. Mr Teo has more than 20 years of experience in the
our investment properties, his other areas of responsibility are in
hospitality industry. He previously held managerial appointments
human resource management and administration for the Group.
in international hotels in Asia, such as the Oriental Hotel in
Mr Teo graduated from the University of Southern California with
Singapore, the Amanpuri in Phuket, Thailand and the Amandari
a Bachelor of Science (Business Administration) degree.
in Bali, Indonesia.
Winston Tan Tien Hin has been a Non-executive Director of
Koh Seng Geok joined our Group in February 2000 as the
our Company since 14 December 2006 and was last re-elected
Financial Controller of Grand Mercure. He has been an Executive
as Director on 9 April 2009. Mr Tan was re-designated from
Director since 1 September 2001 and was last re-elected as Director
the position of Non-Executive and Non Independent Director to
on 31 March 2011. He is also our Chief Financial Officer and one
Independent Non-Executive Director on 12 January 2012. He is
of our Company Secretaries. Mr Koh is primarily responsible for
a Member of Roxy-Pacific Holdings Limited’s Audit Committee,
the financial, banking and accounting aspects of our Group. He
Nominating Committee and Remuneration Committee. Mr Tan
also oversees our Group’s corporate secretarial and legal matters.
is an Independent non-executive Director of Plastoform Holdings
Mr Koh graduated from the National University of Singapore with
Limited and serves on the Board of Singapore Technologies Kinetics
a Bachelor of Accountancy degree and he is a non-practising
Limited and AETOS Security Management Pte Ltd. He is also
member of the Institute of Certified Public Accountants. He also
currently the Managing Director for both Winmark Investments
holds a Masters in Business Administration from the University of
Pte. Ltd. and Corporate Brokers International Pte. Ltd., which are
Leicester. Prior to joining our Group, Mr Koh worked as an auditor
involved in Angel and Private Equity investments with high growth
in Deloitte and Touche and Haw Par Brothers International Limited,
needs. Amongst others, his previous appointments include that as
and held appointments as the finance manager of Goldtron
an Independent non-executive Director of Singapore Technologies
Electronics Pte Ltd and Equant Integration Services Pte Ltd.
Engineering Ltd., Director of Ascendas Pte. Ltd., General Manager
of Deutsche Bank AG (Singapore Branch) and that as a VicePresident in Citibank N.A. Mr Tan graduated from the University
of Singapore with a Bachelor of Science (Physics) degree.
11
ANNUAL REPORT 2011
BOARD OF DIRECTORS
Hew Koon Chan was appointed as our Company’s Lead Independent
Director on 17 December 2007 and was last re-elected as Director on 31 March
2010. He is Chairman of Roxy-Pacific Holdings Limited’s Audit Committee and
a Member of Nominating Committee. Mr Hew is an Independent Director
of Far East Group Limited and Nordic Group Limited. He is also currently the
Managing Director of Integer Capital Pte Ltd, a company which is in the business
of business advisory and consultancy services. Mr Hew’s previous appointments
include that as an investment director in Seavi Venture Services Pte Ltd which is
a private equity firm. He was also previously an Independent Director of Action
Asia Limited and a process engineer in Texas Instruments Singapore (Pte) Ltd.
Mr Hew graduated from the National University of Singapore with a Bachelor
of Engineering (Mechanical) degree and he also holds a Certified Diploma in
Accounting and Finance conferred by the Chartered Association of Certified
Accountants.
Tay Kah Poh was appointed as an Independent Director of our Company on
17 December 2007 and was last re-elected as Director on 31 March 2011. He
is Chairman of Roxy-Pacific Holdings Limited’s Nominating Committee and a
Member of Audit Committee and Remuneration Committee. He is currently
Director of Reyfern Real Estate Consultancy Pte Ltd, and an Adjunct Associate
Professor at the NUS Dept of Real Estate. He was previously Executive Vice
President at the Pacific Star Group, and also held positions as Executive Director
at Knight Frank Pte Ltd, Singapore. Mr Tay holds a Master of Arts in Business
Administration from the University of Georgia (Athens), United States of
America and a Bachelor of Science (Honours) degree in Estate Management
from the National University of Singapore.
Edmund Lee Yu Chiang has been an Independent Director of our Company
since 17 December 2007 and was last re-elected as Director on 31 March 2011.
He is Chairman of Roxy-Pacific Holdings Limited’s Remuneration Committee.
He is also currently the chairman and chief executive officer of DBS Vickers
Securities (Singapore) Pte Ltd. Prior to this appointment, he was the president
and chief executive officer of Vickers Ballas Holdings Pte Ltd (now known as
DBS Vickers Securities Holdings Pte Ltd) from February 2001 to October 2001.
Mr Lee was also the managing director of Vickers Ballas & Co. Pte Ltd from June
1999 to October 2001. Before joining the DBS group, Mr Lee was a corporate
banking account manager with Algemene Bank Nederland NV, Singapore and a
credit analyst with Banque Nationale de Paris, Singapore. He was previously an
Independent Director of Bright World Precision Machinery Ltd. Mr Lee graduated
with a Bachelor of Arts in Economics from the University of California.
12
ANNUAL REPORT 2011
GROUP STRUCTURE
100.00%
100.00%
RH Central Pte. Ltd.
RL Developments Pte. Ltd.
100.00%
RH Changi Pte. Ltd.
100.00%
RH East Pte. Ltd.
100.00%
RL Central Pte. Ltd.
100.00%
RL Properties Pte. Ltd.
20.00%
70 Shenton Pte. Ltd.
100.00%
Roxy Homes Pte Ltd
100.00%
Roxy Hotels Pte Ltd
100.00%
Roxy Land Pte. Ltd.
45.00%
Mequity Pte. Ltd.
45.00%
Mequity Two Pte. Ltd.
100.00%
Roxy-Pacific Developments Pte Ltd
100.00%
Roxy Residential Pte. Ltd.
100.00%
RP Changi Pte Ltd
100.00%
RP East Pte. Ltd.
100.00%
RP North Pte. Ltd.
100.00%
RP Properties Pte. Ltd.
100.00%
RP Ventures Pte. Ltd.
49.00%
Mequity (Hillview) Pte. Ltd.
48.00%
Mequity Assets Pte. Ltd.
13
ANNUAL REPORT 2011
Left to right:
Steve Foo Yong Kit
Shermin Chan Poh Choo
Dominique Armand Albero
Angela Khoo Ying Hui
Melvin Poon Tuck Meng
14
ANNUAL REPORT 2011
Dominique Armand Albero joined us in April 2011 as the
as construction and maintenance administration. He also heads the
General Manager of our hotel, Grand Mercure, and is responsible
Construction & Cost Management Committee. Mr Foo has more
for the overall operations of our hotel. Mr Albero has more
than 28 years of experience in the field of construction (including
than 23 years of experience in the international hotel industry,
construction maintenance). Prior to joining our Group, Mr. Foo
having worked for major hotels operator in Europe and Asia:
was employed with Keppel Club as manager (maintenance).
Intercontinental Hotels in Paris, Accor Hotels in Bangkok, Bogor,
Mr. Foo holds, among others, a certificate in Architectural
Jakarta, Paris, Yangon. He first located to Asia in 1996 for the
Draughtsmanship and a Diploma in Building from the Singapore
launching of the Novotel Bogor, Indonesia, then held positions of
Polytechnic and a certificate in Common Examination for Housing
General Manager in Myanmar (Novotel) and Bangkok (Associated
Agents from the Singapore Institute of Surveyor and Valuer.
Sofitel). Mr Albero then joined the prestigious Hotel Scribe in Paris
(Associated Sofitel) as Director of Operations. His second location
Shermin Chan Poh Choo is the Group Finance Manager. She
to Asia and last postings prior to joining the Group were with
joined the Group in May 2007 as Assistant Finance Manager. Her
Hotel Grand Mahakam Jakarta (Associated Sofitel) and Novotel
duties and responsibilities have since been expanded to include
Jakarta Mangga Dua Square as the position of General Manager.
management of the Group’s financial and accounting function,
Mr Albero graduated from the Toulouse Hotel & Catering School
as well as corporate reporting, secretarial and banking matters.
& University, France.
Prior to joining our Group, Ms Chan was trained and worked
as an auditor in a small and medium sized Public Accounting
Melvin Poon Tuck Meng is the Finance and Administration
Firm in Singapore for 10 years from 1996 to 2006. In 2006,
Director of Grand Mercure, and mainly oversees our hotel’s
she joined Xpress Print Pte Ltd as an accountant responsible for
finance and accounting department. Mr Poon joined our hotel
the accounting and finance function. Ms Chan obtained her
in 2002 as a financial controller and was subsequently promoted
professional qualification in accountancy from The Association of
to finance and administration director. Mr Poon has more than
Chartered Certified Accountants and is a non-practising member
20 years of experience in hotel financial management and
of the Institute of Certified Public Accountants of Singapore.
administration. Prior to joining our Group, he was the executive
assistant manager of Yuda Palace Hotel in Zhengzhou, China.
Angela Khoo Ying Hui is the Sales and Marketing Manager.
Previously, he held appointments as the financial or accounts
Her responsibilities include implementing and managing the sales
controller of other hotels in Singapore, namely Golden Landmark
and marketing of projects, focusing on successful project launches
Hotel, Boulevard Hotel and Orchard Parade Hotel. A holder of
and also overseeing the leasing of the company’s investment
a Master of International Business degree from the University
properties. Prior to joining our Group, Ms Khoo was employed
of Wollongong, Australia, Mr Poon has also obtained a Master
with Knight Frank Pte Ltd as Residential Tenancy/Leasing Manager
of Business in Accounting degree from Victoria University of
in-charged of various MNCs portfolios. She was also previously
Technology, Melbourne, Australia.
working in the United States of America Embassy. Ms Khoo holds
an honours degree in Business Management from the University
Foo Yong Kit Steve is the Director – Projects, of Roxy
of Bradford (UK) and also has a Diploma in Building and Real
Homes Pte Ltd (“Roxy Homes”), a subsidiary of our Group. He
Estate Management from the Ngee Ann Polytechnic.
joined Roxy Homes in May 2007 and is currently responsible for
the management of all of our development projects, including
overseeing the review of building plans, tender evaluation as well
15
ANNUAL REPORT 2011
Roxy-Pacific Holdings Group is a conscientious corporate
Resource Recycling and Energy-saving
organisation that is committed to a social responsibility towards
Recycling the Earth’s limited resources is another integral part of
the society and the world. We pride ourselves in our environmental
our business philosophy. All our staff have been educated on the
efforts to preserve the world’s limited resources through
importance of recycling materials such as used card boxes, plastics
sustainable practices, as well as contribute to the community at
and paper. Such efforts include practicing double-sided printing,
large by doing our part in bridging the world’s poverty gap. Even
minimizing the amount of printing by converting documents into
as we achieve new milestones in our business ventures, we strive
digital files, communicating to our hotel guests that tap water is
to deliver beyond our corporate promises. Leading by example,
safe for consumption, and investing in a heat exchange system
we seek to bring the world together in our common quest for a
to return heat energy to hotel chillers.
better tomorrow.
We have also incorporated our environmental efforts into some
Diligent Green Efforts
of our new development projects. Two of our latest commercial
projects in eastern Singapore, WiS@Changi and Centropod@
Maintaining a green and sustainable environment has become
Changi, will have solar panels installed on the attic roof that can
more than just a campaign.It calls for concerted efforts that are
help reduce energy cost for the common areas and timber deck
thoughtfully integrated into a responsible business framework.
flooring that is made up of durable recycled materials.
Even as we pursue our business objectives, we take utmost
care to ensure that our operations are in line with the proper
Compassionate Community Efforts
environmental guidelines. Over the years, we have participated
in several environmental-specific programmes to do our part in
It is our belief that redistributing wealth back to the community
preserving resources from our delicate Earth.
and helping the underprivileged is a compassionate social concept
that can help us strengthen our ties with the society. As such, we
Tree Planting
have embarked on a series of meaningful activities to help better
We are a participating hotel in the “Plant for the Planet” project
the lives of our fellow people in Singapore.
launched by our hotel operator Accor in 2008.
Under this
program, our hotel undertook the financing of tree planting
Hospice Care
exercise with the laundry savings generated when our customers
We have been supporting the fund-raising activities of Dover
keep their bath towels for more than one night. Our hotel guests
Park Hospice since 2009, the most recent being the Dover Park
have also been properly educated on the purpose behind this
Hospice Sunflower Ball in 2011. This is our way of helping to
meaningful programme to further propagate the notion of caring
provide good palliative care to the terminally ill patients who are
for the environment. Funds saved from the recycling efforts have
unable to afford their hospital bills. We believe that this is a very
been used to plant trees in support of a worldwide United Nations
worthwhile cause to support as it is about ensuring that every
environment programme known as Billion Tree Campaign.
stage of life, no matter how much time there is left, is lived well
and surrounded by those we love and cherish.
Our other efforts to create a greener environment include
organising the “Earth Guest Day”. In April 2011, our staff
planted 25 trees at the Nanyang Polytechnic during the Group’s
half-day sports event.
16
ANNUAL REPORT 2011
ESM Goh Chok Tong was the Guest-of-Honour at the “Children are our Hope for the Future 2011” event
17
ANNUAL REPORT 2011
18
ANNUAL REPORT 2011
Youth Programmes
Senior Citizen Programmes
The youths are our hope for the future. That is why, since 2008,
Besides the young, we have not forgotten our elderly too. This
we have put in much effort to nurture and help these children to
year, we sponsored 15 tables for TOUCH Community to hold a
become the best that they can be. During the year, in conjunction
Chinese New Year Reunion dinner for the lonely senior citizens in
with the National Family Celebration 2011, we organised a
Singapore. It is our hope that even the elderly who do not have
charity dinner in June 2011 endearingly known as “Children
their families with them can enjoy and bask in the warmth of this
are our Hope for the Future 2011” in collaboration with Marine
very special season.
Parade Citizens Consultative Committee, Novotel Singapore
Clarke Quay, Ibis Singapore and Accor Asia Pacific Singapore.
Other Contributions
Through this programme, we engaged the community actively
During the year, we have contributed to the local community
to raise funds for more than 100 underprivileged children.
through various non-profit organisations’ activities such as the
Touch Community Services banquet,
We have also chaperoned 75 kids from
donation to Singapore Table Tennis
the TOUCH Community to a movie
Association for their 80th anniversary
and lunch as part of our “Movie for a
fund raising dinner at Shangri-La Hotel,
Child” activity, which was carried out
donation for Lutheran Community
in November 2011. We hope that such
Care Services Charity Golf Tournament
gesture would lighten the day of these
cum dinner, donation for the Mother
children and enable them to at least
and
enjoy a part of their childhood.
donation to the National Junior College
Child
Project
charity
dinner,
in support of their Parents-in-Action
Additionally, some of our ongoing projects include a Nanyang
(PAACT) programme to fund students’ Community Involvement
Polytechnic Scholarship with an annual value of $4,000 and our
Programme to Cambodia, and donation for the National
“Make a Wish for a Child” Christmas event whereby tags are
University of Singapore Tenured chair of real estate.
sold to raise funds to support a local non-government and nonprofit organisation.
Our other fund raising related activities include a car wash
programme at Grand Mercure Roxy Hotel in May 2011 which
In April 2011, we have also participated in the inaugural Boys’
was aimed at helping the less fortunate children of our society via
Town Ball event at the Marriott Hotel in aid of the Catholic
the “Children are our Hope for the Future 2011” theme. For this
Boys’ Town “Build A New Future” campaign. The shelter and
particular event, we have successfully raised $31,000.
vocational training ground for youths needed funds to build new
dormitories and facilities for youth-at-risk in Singapore. The event
All these fund raising activities are targeted towards helping
was graced by the then His Excellency President SR Nathan.
other members of the society achieve more opportunities in life.
This is our way of returning back some of what the society has
given us.
19
ANNUAL REPORT 2011
BOARD OF DIRECTORS:
Teo Hong Lim
(Executive Chairman and Chief Executive Officer)
Chris Teo Hong Yeow
(Executive Director and Managing Director)
Teo Hong Hee
(Executive Director)
Koh Seng Geok
(Executive Director and Chief Financial Officer)
Hew Koon Chan
(Lead Independent Director)
(Independent Director)
Tay Kah Poh
COMPANY SECRETARIES:
Foo Soon Soo
FCIS, FCPA (Singapore), FCPA (Australia),
LLB (Hons) (London)
Koh Seng Geok
CPA
REGISTERED OFFICE:
50 East Coast Road #03-11
Roxy Square Shopping Centre
Singapore 428769
Tel: (65) 6440 9878
Fax: (65) 6440 9123
COMPANY REGISTRATION NUMBER:
196700135Z
SHARE REGISTRAR AND
SHARE TRANSFER OFFICE:
KCK CorpServe Pte. Ltd.
333 North Bridge Road #08-00
KH KEA Building
Singapore 188721
20
AUDIT COMMITTEE:
Hew Koon Chan (Chairman)
Tay Kah Poh
NOMINATING COMMITTEE:
Tay Kah Poh (Chairman)
Hew Koon Chan
REMUNERATION COMMITTEE:
Edmund Lee Yu Chiang (Chairman)
Tay Kah Poh
AUDITORS:
Foo Kon Tan Grant Thornton LLP
Certified Public Accountants
47 Hill Street #05-01
Singapore Chinese Chamber of Commerce &
Industry Building
Singapore 179365
Audit Partner-in-charge
Toh Kim Teck, CPA
(appointed on 1 January 2011)
PRINCIPAL BANKERS:
DBS Bank Limited
Hong Leong Finance Limited
Malayan Banking Berhad
Overseas-Chinese Banking Corporation Limited
Standard Chartered Bank
United Overseas Bank Limited
ANNUAL REPORT 2011
CONTENTS
22
STATEMENT OF CORPORATE GOVERNANCE
35
DIRECTORS’ REPORT
39
STATEMENT BY DIRECTORS
40
INDEPENDENT AUDITOR’S REPORT
42
STATEMENTS OF FINANCIAL POSITION
43
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
44
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
45
CONSOLIDATED STATEMENT OF CASH FLOWS
46
NOTES TO THE FINANCIAL STATEMENTS
91
SHAREHOLDINGS STATISTICS
93
NOTICE OF ANNUAL GENERAL MEETING
PROXY FORM
21
ANNUAL REPORT 2011
FINANCIAL YEAR ENDED 31 DECEMBER 2011
The Company is committed to ensuring and maintaining a high standard of corporate governance, which is essential to protect
the interest of the shareholders. This report outlines the corporate governance framework and practices of the Company with
specific reference to the Code of Corporate Governance 2005 (“Code”)
BOARD MATTERS
Board’s Conduct of its Affairs
Principle 1: Every company should be headed by an effective Board to lead and control the company. The Board is collectively
responsible for the success of the company. The Board works with Management to achieve this outcome, and the Management
remains accountable to the Board.
The primary role of the Board is that of stewardship, to protect and enhance long-term shareholders’ value. It sets the corporate
strategies of the Group, and directions and goals for the Management. It supervises the Management and monitors performance
of these goals. The Board is responsible for the overall corporate governance of the Group.
The Board meets regularly to deliberate the strategic policies of the Group including significant acquisitions and disposals, the
annual budgets, the Group’s financial performance, risk management and approval for the release of quarterly, half-yearly
and year-end results announcements.
In carrying out and discharging its duties and responsibilities efficiently and effectively, the Board is assisted by various Board
Committees namely, the Audit Committee, the Nominating Committee and the Remuneration Committee.
These Committees function within clearly defined terms of references and operating procedures, which are reviewed on a
regular basis. The Board also constantly reviews the effectiveness of each Committee.
The table below sets out the number of Board and Board Committee meetings which were convened during the financial year
2011, as well as the attendance of each Board member at these meetings;
Board
Number of meetings held
4
Name of directors
Audit
Remuneration
Nominating
4
1
1
Number of meetings attended
Teo Hong Lim
4
N/A
N/A
N/A
Chris Teo Hong Yeow
3
N/A
N/A
N/A
Teo Hong Hee
4
N/A
N/A
N/A
4
N/A
N/A
N/A
Koh Seng Geok
4
N/A
N/A
N/A
4
4
1
1
Hew Koon Chan
4
4
N/A
1
Tay Kah Poh
4
4
1
1
4
N/A
1
N/A
While the Board considers Directors’ attendance at Board meetings to be important, it is not the only criterion to measure
their contributions. The Board also takes into account the contributions by board members in other forms including periodic
review, provision of guidance and advice on various matters relating to the Group.
22
ANNUAL REPORT 2011
Board Composition and Guidance
Principle 2: There should be a strong and independent element on the Board, which is able to exercise objective judgment
on corporate affairs independently, in particular, from Management. No individual or small group of individuals should be
allowed to dominate the Board’s decision making.
As at the date of this Report, the Board of Directors comprises nine members; of whom four are independent:
Teo Hong Lim
Executive Chairman and Chief Executive Officer
Chris Teo Hong Yeow
Executive Director and Managing Director
Teo Hong Hee
Executive Director
Executive Director
Koh Seng Geok
Executive Director, Chief Financial Officer and Company Secretary
Hew Koon Chan
Lead Independent Director
Tay Kah Poh
Independent Director
The criterion for independence is based on the definition given in the revised Code of Corporate Governance (“Code”). The
Board considers an “Independent” Director as one who has no relationship with the Company, its related companies or its
officers that could interfere, or be reasonably perceived to interfere, with the exercise of the director’s independent judgment
of the conduct of the Group’s affairs. The independence of each Director is reviewed annually by the Nominating Committee,
based on the definition of independence as stated in the Code.
Mr Winston Tan was re-designated from the position of Non-Executive and Non Independent Director to Independent NonExecutive Director on 12 January 2012. In determining Mr Tan’s independent status, the Board had taken into consideration,
inter alia, the recommendation of the Nominating Committee of the Company and criterion of independence and in particular,
the termination by mutual agreement on 31 December 2009 of the consultancy engagement between the Company and
Corporate Brokers International Pte Ltd, a company of which Mr Tan is the Managing Director.
The Board is of the view that the current Board members comprise persons whose diverse skills, experience and attributes that
provide for effective direction for the Group. The composition of the Board is reviewed on an annual basis by the Nominating
Committee to ensure that the Board has the appropriate mix of expertise and experience, and collectively possess the necessary
core competencies for effective functioning and informed decision-making.
Key information regarding the Directors is given in the ‘Board of Directors’ section of the Annual Report.
Particulars of interests of Directors who held office at the end of the financial year in shares, debentures, warrants and share
options in the Company and in related corporations (other than wholly-owned subsidiaries) are set out in the Directors’
Report.
23
ANNUAL REPORT 2011
Chairman and Chief Executive Officer
Principle 3: There should be a clear division of responsibilities at the top of the Company – the working of the Board and the
executive responsibility of the company’s business – which will ensure a balance of power and authority, such that no one
individual represents a considerable concentration of power.
The Company has adopted the recommendation in Commentary 3.3 of the Code to appoint a lead independent Director where
the Chairman and the Chief Executive Officer (“CEO”) is the same person. The Executive Chairman, Teo Hong Lim, who is also
the Group’s CEO, leads the Board and is also responsible for the executive responsibilities for the Group’s performance. He
ensures that the responsibilities as set out in the Code are properly discharged. In assuming his roles and responsibilities, Mr
Teo consults with the Board and Board Committees on major issues. The Board believes that there are adequate safeguards
in place against having a concentration of power and authority in a single individual.
Board Membership
Principle 4: There should be a formal and transparent process for the appointment of new Directors to the Board.
The Nominating Committee (“NC”) comprises the following three members:
Tay Kah Poh
Chairman
Hew Koon Chan
Member
Member
All the members, including the Chairman are independent non-executive Directors.
One of the primary functions of the NC is to determine the criteria for identifying candidates and reviewing nominations for the
appointment of directors to the Board, ensuring that the process of Board appointments and re-nominations are transparent,
and to assess the effectiveness of the Board as a whole taking into consideration the contribution of individual Directors to
the effectiveness of the Board as well as to affirm annually the independence of Directors.
The NC functions under the terms of reference which sets out its responsibilities as follows:
(a)
To recommend to the Board on all board appointments, re-appointments and re-nominations;
(b)
To ensure that Independent Directors meet SGX-ST’s guidelines and criteria; and
(c)
To assess the effectiveness of the Board as a whole and the effectiveness and contribution of each Director to the
Board
The Directors submit themselves for re-election at regular intervals of at least once every three years in accordance with the
Articles.
24
ANNUAL REPORT 2011
Board Performance
Principle 5: There should be a formal assessment of the effectiveness of the Board as a whole and the contribution by each
director to the effectiveness of the Board.
The NC examines the Board’s size to satisfy that it is appropriate for effective decision making, taking into account the nature
and scope of the Company’s operations.
The NC has reviewed and evaluated the performance of the Board as a whole, taking into consideration the attendance record
at the meetings of the Board and Board Committees and also the contribution of each Director to the effectiveness of the
Board.
The NC has also discussed the findings of the evaluation and made appropriate recommendations to the Board on steps to
take to address specific issues.
Access to Information
Principle 6: In order to fulfill their responsibilities, Board members should be provided with complete, adequate and timely
information prior to board meetings and on an on-going basis.
All Directors are from time to time furnished with information concerning the Company to enable them to be fully cognisant
of the decisions and actions of the Company’s executive management. The Board has unrestricted access to the Company’s
records and information.
Management provides Directors with information whenever necessary and board papers are sent to Directors before each
Board and Board Committee meetings. The Board has separate and independent access to the Company Secretaries and senior
management of the Company and of the Group at all times in carrying out their duties. The Company Secretaries attend all
Board meetings and meetings of the Committees of the Company and ensure that Board procedures are followed and that
applicable rules and regulations are complied with.
The Board takes independent professional advice as and when necessary, at the Company’s expense, concerning any aspect
of the Group’s operations or undertakings in order to discharge its responsibilities effectively.
REMUNERATION MATTERS
Procedures for Developing Remuneration Policies
Principle 7: There should be a formal and transparent procedure for developing policy on executive remuneration and for
fixing the remuneration packages of individual Directors. No director should be involved in deciding his own remuneration.
25
ANNUAL REPORT 2011
The Remuneration Committee (“RC”) comprises the following three members:
Tay Kah Poh
Chairman
Member
Member
All the members, including the Chairman, are independent non-executive Directors.
The RC recommends to the Board a framework of remuneration for the Directors and Executive Officers, and determines
specific remuneration package for each Executive Director. The RC’s recommendations will be submitted for endorsement by
the Board.
All aspects of remuneration, including but not limited to Directors’ fee, salaries, allowances, bonuses and benefits in kind, will
be reviewed by the RC. No member of the RC or any Director is involved in the deliberations in respect of any remuneration,
compensation, options or any form of benefits to be granted to him.
The RC functions under the terms of reference that sets out its responsibilities as follows:
(a)
To recommend to the Board a framework for remuneration for the Directors and key executives of the Company;
(b)
To determine specific remuneration packages for each Executive Director; and
(c)
To review the appropriateness of compensation for Non-Executive Directors.
The RC is provided access to expert professional advice on remuneration matters as and when necessary. The expense of such
services shall be borne by the Company.
Level and Mix of Remuneration
Principle 8: The level of remuneration should be appropriate to attract, retain and motivate the Directors needed to run the
company successfully but companies should avoid paying more than is necessary for this purpose. A significant proportion of
Executive Directors’ remuneration should be structured so as to link rewards to corporate and individual performance.
In setting remuneration packages, the Remuneration Committee will take into consideration the pay and employment conditions
within the industry and in comparable companies.
The Company will submit the quantum of Directors’ fee of each year to the shareholders for approval at each AGM.
Executive directors do not receive Directors’ fees. They are paid a basic salary and a performance-related profit sharing bonus
pursuant to their respective service agreements.
Non-executive directors has no service contract and are compensated based on a fixed annual fee taking into considerations
their respective contributions and attendance at meetings.
26
ANNUAL REPORT 2011
Disclosure on Remuneration
Principle 9: Each company should provide clear disclosure of its remuneration policy, level and mix of remuneration,
and the procedure for setting remuneration in the company’s annual report. It should provide disclosure in relation to its
remuneration policies to enable investors to understand the link between remuneration paid to Directors and key executives,
and performance.
Remuneration of Directors
2011
Above $1,500,000 to $1,750,000
Teo Hong Lim
Executive Chairman and
Chief Executive Officer
Salary
%
Performancebased Bonus Directors’ Fee
%
%
Allowances
and other
benefits
%
Total
compensation
%
24
74
–
2
100
23
75
–
2
100
Koh Seng Geok
Executive Director, Chief Financial
Officer and Company Secretary
22
76
–
2
100
Executive Director
23
75
–
2
100
25
72
–
3
100
–
–
100
–
100
Tay Kah Poh
–
–
100
–
100
–
–
100
–
100
–
–
100
–
100
Above $1,250,000 to $1,500,000
Chris Teo Hong Yeow
Executive Director and
Managing Director
Above $750,000 to $1,000,000
Teo Hong Hee
Executive Director
Up to $250,000
Hew Koon Chan
27
ANNUAL REPORT 2011
Remuneration of top 5 key Executives (who are not directors) for the year ended 31 December 2011
Allowances
and other
Total
Salary
Bonus
Directors’ Fee
benefits
compensation
%
%
%
%
%
43
16
–
41
100
54
23
–
23
100
73
21
–
6
100
58
34
–
8
100
61
29
–
10
100
60
26
–
14
100
Up to $250,000
Kevin Glenn Bossino
(Left the Group on 14 April 2011)
General Manager, Hotel
Dominique Armand Albero
(Joined the Group on 16 April 2011)
General Manager, Hotel
Melvin Poon Tuck Meng
Finance and Administration
Director, Hotel
Steve Foo Yong Kit
Director-Projects
Shermin Chan Poh Choo
Group Finance Manager
Angela Khoo Ying Hui
Sales and Marketing Manager
During the financial year ended 31 December 2011, there were no employees of the Group who are immediate family members
of the Directors and the Substantial Shareholders whose remuneration exceed $150,000.
For the financial year ended 31 December 2011, the aggregate remuneration (including CPF contributions thereon and benefits)
of employees who are related to our Directors is $192,804.
28
ANNUAL REPORT 2011
These employees are Teo Kok Thye, Loh Kwang Chew, Cheong Kwai Fun, Phua Lay Leng and Tan Jee May. Teo Kok Thye and
Loh Kwang Chew are the uncles of four of our Executive Directors, namely Teo Hong Lim, Chris Teo Hong Yeow, Michael Teo
Hong Wee and Teo Hong Hee. Cheong Kwai Fun and Phua Lay Leng are their cousins. Tan Jee May is the niece of Michael
Teo Hong Wee. Tan Jee May left the Group on 24 September 2011.
ACCOUNTABILITY AND AUDIT
Accountability
Principle 10: The Board should present a balanced and understandable assessment of the company’s performance, position
and prospects.
The Board is accountable to the shareholders and is mindful of its obligations to furnish timely, reliable and full disclosure of
material information to shareholders in compliance with statutory requirements and the Listing Manual of the SGX-ST.
Price sensitive information will be publicly released either before the Company meets with any group of investors or analysts
or simultaneously with such meetings. Financial results and annual reports are announced or issued within legally prescribed
periods.
Audit Committee
Principle 11: The Board should establish an Audit Committee with written terms of reference which clearly set out its authority
and duties.
The Audit Committee (“AC”) comprises the following three members:
Hew Koon Chan
Chairman
Tay Kah Poh
Member
Member
All the members, including the Chairman, are independent non-executive Directors.
The AC’s composition of members complies with Guideline 11.1 of the CCG.
29
ANNUAL REPORT 2011
The AC functions under the terms of reference that sets out its responsibilities as follows:
(a)
To review the financial statements of the Company and the Group before submission to the Board;
(b)
To review the audit plans of the Company with the external auditors and the external auditors’ reports;
(c)
To review the effectiveness and adequacy of the internal function (including adequacy of the finance functions and the
quality of finance staff) and co-operation given by the Company’s management to the external auditors;
(d)
To review and discuss with the external auditors any suspected fraud or irregularity, or suspected infringement of any
relevant laws, rules or regulations;
(e)
To make recommendations to the Board on the appointment, re-appointment and removal of the external auditors;
(f)
To review interested person transactions and potential conflicts of interest;
(g)
To undertake such other reviews and projects as may be requested by the Board, and report to the Board its findings
from time to time on matters arising;
(h)
To generally undertake such other functions and duties as may be required by statute, regulations or the Listing Manual,
or by such amendments as may be made thereto from time to time; and
(i)
To review arrangements by which the staff of the Company may, in confidence, raise concerns about possible
improprieties in matters of financial reporting.
The AC has the power to conduct or authorise investigations into any matter within the AC’s scope of responsibility. The
AC is authorised to obtain independent professional advice if it deems necessary in the discharge of its responsibilities. Such
expenses are to be borne by the Company. No member of the AC or any Director is involved in the deliberations and voting
on any resolutions in respect of matters he is interested in.
The AC has full access to and co-operation of the Management and has full discretion to invite any Director or Executive Officer
to attend its meetings, and has been given reasonable resources to enable it to discharge its functions.
The AC meets with both the external and internal auditors without the presence of the Management at least once a year.
30
ANNUAL REPORT 2011
The Company confirms compliance with Rule 712 and Rule 715 of the Listing Manual in engaging Foo Kon Tan Grant Thornton
LLP (“FKTGT”), as the external auditors of the Company which is registered with the Accounting and Corporate Regulatory
Authority. FKTGT are the external auditors of the Company and of its Singapore subsidiaries and significant associated
companies. The Audit Committee has reviewed the amount of non-audit services rendered to the Group by the external
auditors. During the year, the fees paid to the external auditors of the Company for non-audit services amounted to S$8,500
or 2.9% of the audit fee. Being satisfied that the nature and extent of such services will not prejudice the independence and
objectivity of the external auditors, the Audit Committee has recommended their re-nomination to the Board.
The Company has in place a whistle-blowing framework where staff of the Company can access the Audit Committee Chairman
to raise concerns about improprieties.
INTERNAL CONTROLS AND RISK MANAGEMENT
Principle 12: The Board should ensure that the Management maintains a sound system of internal controls to safeguard the
shareholders’ investments and the company’s assets.
The Company’s internal and external auditors conduct an annual review of the effectiveness of the Company’s material internal
controls, including financial, operational and compliance controls, and risk management. Any material non-compliance or
failures in internal controls and recommendations for improvements are reported to the Audit Committee (“AC”). The AC also
reviews the effectiveness of the actions taken by management on the recommendations made by the internal and external
auditors in this respect.
The Group’s system of internal controls has a key role in the identification and management of risks that are significant to the
achievement of its business objectives. The process of business risk management has been integrated throughout the Group
into business planning and monitoring process. Management continuously evaluates and monitors the significant risks. The
Board reviews the overall risk management process to ensure that there are adequate controls and other processes in place
to manage the significant risks identified.
During the financial year, the AC on behalf of the Board, has reviewed the effectiveness of the Group’s system of internal
controls in light of key business and financial risks affecting the operations.
The Group’s financial risk management objectives and policies are discussed under Note 30 of the Financial Statements.
Based on the Internal Auditor’s report and the various controls put in place by Management, the Board with the concurrence
of the AC is satisfied with the adequacy of the internal controls addressing financial, operational and compliance risks.
31
ANNUAL REPORT 2011
Internal Audit
Principle 13: The Company should establish an internal audit function that is independent of the activities it audits.
The Company has engaged Baker Tilly Consultancy (S) Pte Ltd as its internal auditor. The internal auditor reports directly to
the Chairman of the Audit Committee on all internal audit matters.
The primary functions of internal audit are to help:–
(a)
assess if adequate systems of internal controls are in place to protect the assets of the Group and to ensure control
procedures are complied with;
(b)
assess if operations of the business processes under review are conducted efficiently and effectively; and
(c)
identify and recommend improvement to internal control procedures, where required.
During the year, Group Internal Audit adopted a risk-based auditing approach that focuses on material internal controls,
including financial, operational and compliance controls. Audits were carried out on all significant business units in the
Company. All Group Internal Audit’s reports are submitted to the Audit Committee for deliberation with copies of these
reports extended to the Chairman & Chief Executive Officer, Executive Directors and the relevant senior management officers.
In addition, Group Internal Audit’s summary of findings and recommendations are discussed at the Audit Committee meetings.
To ensure timely and adequate closure of audit findings, the status of implementation of the actions agreed by management
is tracked and discussed with the Committee.
COMMUNICATION WITH SHAREHOLDERS
Principle 14: Companies should engage in regular, effective and fair communication with shareholders.
Principle 15: Companies should encourage greater shareholder participation at AGM’s and allow shareholders the opportunity
to communicate their views on various matters affecting the Company.
In line with continuous obligations of the Company pursuant to the SGX-ST’s Listing Rules, the Board’s policy is that all
shareholders be informed of all major developments that impact the Group.
32
ANNUAL REPORT 2011
Information is disseminated to shareholders on a timely basis through:
(a)
SGXNET announcements and news release;
(b)
Annual Report prepared and issued to all shareholders;
(c)
Press releases on major developments of the Group;
(d)
Notices of and explanatory memoranda for AGM and extraordinary general meetings (“EGM.”); and
(e)
Company’s Investor Relations website at http://roxypacific.com.sg/, where shareholders can access timely information
on the Group.
The Company’s AGMs are the principal forums for dialogue with shareholders. The Chairman of each Board Committee as
well as external auditors are normally present at the AGMs to address shareholders’ queries, if any.
Shareholders are encouraged to attend the AGMs/EGMs to ensure a high level of accountability and to stay apprised of the
Group’s strategy and goals. Notice of the AGM/EGM will be advertised in newspapers and announced on SGXNET.
For the forthcoming AGM, all resolutions will be put to vote by poll to allow greater transparency and more equitable
participation by shareholders.
Dealing in Securities
The Company has issued an Internal Compliance Code (the “Code”) to all employees of the Group setting out the implications
of insider trading.
Under this Code, Directors and Key Executive Officers of the Group are prohibited in dealing in the Company’s securities
two weeks before the release of the quarterly results or one month before the release of the half-yearly and full year results
to the SGX-ST, as the case may be, and ending on the date of the announcement of the results. Circulars are issued to all
Directors and employees of the Group to remind them of, inter alia, laws of insider trading and the importance of not dealing
in the shares of the Company and within the Group on short-term consideration and during the prohibitive periods. Directors
and employees are expected to observe the insider trading laws at all times even when dealing in securities within permitted
trading period.
33
ANNUAL REPORT 2011
Interested Person Transactions
When a potential conflict of interest arises, the director concerned does not participate in discussions and refrains from
exercising any influence over other members of the Board.
The Company has established review and approval procedures to ensure that interested person transactions entered into by the
Group are conducted on normal terms and are not prejudicial to the interest of the shareholders. The Board meets quarterly
to review if the Company will be entering into any interested person transaction.
The Audit Committee has reviewed the rationale and terms of the Group’s interested person transactions and is of the
view that the interested person transactions are on normal commercial terms and are not prejudicial to the interests of the
shareholders.
Disclosure of interested person transactions is set out as follows:
Aggregate value of all interested
person transactions conducted
Aggregate value of all interested
(excluding transactions less
person transactions conducted
than $100,000 and transactions
under shareholders’ mandate
conducted under shareholders’
pursuant to Rule 920 (excluding
Name of Interested Person
mandate pursuant to Rule 920)
transactions less than $100,000)
NIL
NIL
NA
Material Contracts
There was no material contract entered into by the Company or any of its subsidiary companies involving the interest of the
Chief Executive Officer, any Director, or controlling shareholder during the financial year ended 31 December 2011.
Use of IPO Proceeds
The Company makes periodic announcements on the use of the IPO proceeds as and when the funds from the IPO are materially
disbursed. A status report on the use of the IPO proceeds is set out on page 90.
34
ANNUAL REPORT 2011
DIRECTORS’ REPORT
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2011
The directors submit this annual report to the members together with the audited consolidated financial statements for the
financial year ended 31 December 2011 and statement of financial position of the Company as at 31 December 2011.
Names of directors
The directors in office at the date of this report are:
Teo Hong Lim
Chris Teo Hong Yeow
Teo Hong Hee
Koh Seng Geok
Hew Koon Chan
Tay Kah Poh
(Executive Chairman and Chief Executive Officer)
(Executive Director and Managing Director)
(Executive Director and Chief Financial Officer)
(Lead Independent Director)
Arrangements to acquire shares or debentures
During and at the end of the financial year, neither the Company nor any of its subsidiaries was a party to any arrangement
the object of which was to enable the directors to acquire benefits through the acquisition of shares in or debentures of the
Company or of any other corporate body other than as disclosed in this report.
Directors’ interest in shares or debentures
According to the Register of Directors’ Shareholdings kept by the Company under Section 164 of the Companies Act, Cap.
50, the following directors who held office at the end of the financial year were interested in shares of the Company and its
related corporations as follows:
Number of ordinary shares
Holdings registered
in the name of director
or nominees
The Company – Roxy-Pacific Holdings Limited
Teo Hong Lim
Chris Teo Hong Yeow
Teo Hong Hee
Koh Seng Geok
Hew Koon Chan
Tay Kah Poh
Holdings in which director is
deemed to have an interest
As at
1.1.2011
As at
31.12.2011
and
21.1.2012
As at
1.1.2011
As at
31.12.2011
As at
21.1.2012
60,755,000
15,310,000
14,780,000
16,314,000
4,188,000
200,000
–
800,000
200,000
61,670,000
15,329,000
14,780,000
16,314,000
4,328,000
200,000
–
800,000
200,000
299,870,000
–
–
90,000
–
–
13,492,000
–
–
300,563,000
–
–
90,000
–
–
13,517,000
–
–
303,063,000
–
–
90,000
–
–
11,017,000
–
–
35
ANNUAL REPORT 2011
DIRECTORS’ REPORT
Directors’ interest in shares or debentures (Continued)
Number of ordinary shares
Holdings registered
Holdings in which director is
in the name of director
deemed to have an interest
As at
As at
31.12.2011
31.12.2011
As at
and
As at
and
1.1.2011
21.1.2012
1.1.2011
21.1.2012
Teo Hong Lim
6,101
6,101
–
–
Chris Teo Hong Yeow
3,101
3,101
–
–
Teo Hong Hee
3,101
3,101
–
–
3,101
3,101
–
–
Teo Hong Lim
3,390
3,390
182,000
182,000
Chris Teo Hong Yeow
3,390
3,390
–
–
Teo Hong Hee
3,390
3,390
–
–
3,390
3,390
–
–
The holding company – Kian Lam Investment Pte Ltd
Related company – Sen Lee Development Pte Ltd
Mr Teo Hong Lim, by virtue of the provisions of Section 7 of the Companies Act, Cap. 50, is deemed to be interested in the
whole of the issued share capital of all the wholly-owned subsidiaries of the Company.
Mr Winston Tan Tien Hin is deemed to be interested in the shares of the Company held by Winmark Investments Pte Ltd, a
company wholly-owned by Mr Winston Tan Tien Hin and his wife.
There are no changes to the above shareholdings between the end of the financial year and 21 January 2012 other than as
disclosed above.
Directors’ benefits
Since the end of the previous financial year, no director has received or has become entitled to receive a benefit under a
contract which is required to be disclosed under Section 201(8) of the Companies Act, Cap. 50 other than as disclosed in the
financial statements.
36
ANNUAL REPORT 2011
DIRECTORS’ REPORT
Share options
a)
Options to take up unissued shares
No options were granted during the financial year to take up unissued shares of the Company or of its subsidiaries.
b)
Options exercised
No shares were issued during the financial year to which this report relates by virtue of the exercise of options to take
up unissued shares of the Company or any subsidiaries.
c)
Unissued shares under option
There were no unissued shares of the Company and of the subsidiaries under option at the end of the financial year.
Audit Committee
The Audit Committee comprises the following members:
Hew Koon Chan (Chairman)
Tay Kah Poh
The Audit Committee performs the functions set out in Section 201B(5) of the Companies Act, Cap. 50, the SGX Listing Manual
and the revised Code of Corporate Governance 2005 (“Revised Code”). In performing its functions, the Audit Committee
reviewed the following:
(i)
overall scope of both the internal and external audits and the assistance given by the Company’s officers to the auditors.
It met with the Company’s internal and external auditors to discuss the results of their respective examinations and
their evaluation of the Company’s system of internal accounting controls;
(ii)
the quarterly financial information and the statement of financial position of the Company and the consolidated financial
statements of the Group for the financial year ended 31 December 2011 as well as the auditors’ report thereon; and
(iii)
interested person transactions (as defined in Chapter 9 of the Listing Manual of the Singapore Exchange).
The Audit Committee has full access to management and is given the resources required for it to discharge its functions. It
has full authority and the discretion to invite any director or executive officer to attend its meetings. The Audit Committee
also recommends the appointment of the external auditors and reviews the level of audit and non-audit fees.
The Audit Committee is satisfied with the independence and objectivity of the external auditors and has recommended to
The Board of Directors that the auditor, Foo Kon Tan Grant Thornton LLP, be nominated for re-appointment as auditor at the
forthcoming Annual General Meeting of the Company.
37
ANNUAL REPORT 2011
DIRECTORS’ REPORT
Auditor
The auditor, Foo Kon Tan Grant Thornton LLP, Certified Public Accountants, have expressed their willingness to accept
appointment.
On behalf of the Directors
TEO HONG LIM
KOH SENG GEOK
Dated: 9 March 2012
38
ANNUAL REPORT 2011
STATEMENT BY DIRECTORS
In the opinion of the directors, the accompanying statements of financial position, consolidated statement of comprehensive
income, consolidated statement of changes in equity and consolidated statement of cash flows, together with the notes
thereon, 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 2011 and of the results of the business, changes in equity and cash flows of the Group for the financial year ended
on that date; and at the date of this statement there are reasonable grounds to believe that the Company will be able to pay
its debts as and when they fall due.
On behalf of the Directors
TEO HONG LIM
KOH SENG GEOK
Dated: 9 March 2012
39
ANNUAL REPORT 2011
TO THE MEMBERS OF ROXY-PACIFIC HOLDINGS LIMITED
Report on the financial statements
We have audited the accompanying financial statements of Roxy-Pacific Holdings Limited (“the Company”) and its subsidiaries
(“the Group”), which comprise the statements of financial position of the Group and of the Company as at 31 December
2011, the statement of comprehensive income, statement of changes in equity and statement of cash flow of the Group for
the year then ended, and a summary of significant accounting policies and other explanatory notes.
Managements’ responsibility for the financial statements
Management is responsible for the preparation 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; and 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 judgment, including the assessment of the risks of material misstatement of
the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control
relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s
internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of
accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
40
ANNUAL REPORT 2011
TO THE MEMBERS OF ROXY-PACIFIC HOLDINGS LIMITED
Opinion
In our opinion, the consolidated financial statements of the Group and the statement of financial position of the Company
are properly drawn up in accordance with the provisions of the Act and Singapore Financial Reporting Standards to give a
true and fair view of the state of affairs of the Company and of the Group as at 31 December 2011 and the results, changes
in equity and the 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 auditor have been properly kept in accordance with the provisions of the
Act.
Foo Kon Tan Grant Thornton LLP
Public Accountants and
Certified Public Accountants
Singapore, 9 March 2012
41
ANNUAL REPORT 2011
STATEMENTS OF FINANCIAL POSITION
AS AT 31 DECEMBER 2011
Note
ASSETS
Non-Current
Goodwill
Property, plant and equipment
Investments in subsidiaries
Investments in associates
Investment properties
The Company
31 December 31 December
2011
2010
$’000
$’000
1,672
73,928
–
2,413
44,692
1,672
70,421
–
1,635
78,767
–
63
43,443
–
–
–
83
40,443
–
–
122,705
152,495
43,506
40,526
–
329,912
139
37,952
28,488
137,484
91,925
985
235,305
141
24,846
29,249
75,700
82,905
–
–
–
10
32,423
–
25,686
–
–
–
19
25,513
–
10,087
625,900
449,131
58,119
35,619
748,605
601,626
101,625
76,145
47,399
162,547
47,399
122,436
47,399
28,906
47,399
22,785
209,946
169,835
76,305
70,184
85,741
19,396
84,733
14,943
–
–
–
–
105,137
99,676
–
–
9,381
22,313
5,835
395,993
7,740
26,190
7,074
291,111
21
21,203
96
4,000
360
5,551
50
–
433,522
332,115
25,320
5,961
Total liabilities
538,659
431,791
25,320
5,961
Total equity and liabilities
748,605
601,626
101,625
76,145
Current
Developed property for sale
Properties for sale under development
Inventories
Trade receivables
Other receivables
Project accounts
Cash and bank balances
4
5
6
7
8
The Group
31 December 31 December
2011
2010
$’000
$’000
9
10
11
12
13
14
15
Total assets
EQUITY
Capital and Reserves
Share capital
Retained earnings
16
Equity attributable to owners of the Company
LIABILITIES
Non-Current
Bank borrowings (secured)
Deferred tax liabilities
Current
Trade payables
Other payables
Provision for taxation
Bank borrowings (secured)
17
18
19
20
17
The annexed notes form an integral part of and should be read in conjunction with these financial statements.
42
ANNUAL REPORT 2011
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Note
Revenue
3
Cost of sales
Gross profit
Other operating income
Year ended
31 December
2011
2010
$’000
$’000
183,651
216,877
(120,392)
(145,985)
63,259
22
Distribution and selling expenses
Administrative expenses
Fair value gain on investment properties
23
Share of profits of associates (net of income tax)
70,892
1,900
454
(2,019)
(1,507)
(11,547)
(10,826)
23,015
Other operating expenses
Finance costs
Year ended
31 December
9,951
(11,722)
(11,317)
(4,650)
(4,470)
288
55
Profit before taxation
24
58,524
53,232
Tax expense
25
(8,865)
(10,450)
49,659
42,782
–
–
49,659
42,782
7.80
6.72
Profit for the year
Other comprehensive income:
Other comprehensive income, net of tax
Total comprehensive income for the year attributable
to owners of the Company
Earnings per share – Basic/Diluted (cents)
26
43
ANNUAL REPORT 2011
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Share
Retained
Total
capital
earnings
equity
$’000
$’000
$’000
47,399
86,020
133,419
Total comprehensive income for the year
–
42,782
42,782
Dividend (Note 33)
–
(6,366)
(6,366)
Balance at 31 December 2010
47,399
122,436
169,835
Balance at 1 January 2011
Balance at 1 January 2010
47,399
122,436
169,835
Total comprehensive income for the year
–
49,659
49,659
Dividend (Note 33)
–
(9,548)
(9,548)
Balance at 31 December 2011
47,399
162,547
209,946
44
ANNUAL REPORT 2011
CONSOLIDATED STATEMENT OF CASH FLOWS
Note
Cash Flows from Operating Activities
Adjustments for:
Depreciation of property, plant and equipment
Share of profits of associates
Fair value gain on investment properties
Fair value loss on interest rate swaps
Interest income
Interest expense on bank loans
Impairment loss on advances to an associate
Year ended
31 December
2011
$’000
Year ended
31 December
2010
$’000
58,524
53,232
2,073
(288)
(23,015)
449
(335)
4,638
220
1,934
(55)
(9,951)
73
(221)
4,333
–
42,266
985
(38,537)
2
1,536
(2,685)
49,345
–
(103,846)
(2)
19,405
10,654
Cash generated from/(used in) operations
Income tax paid
3,567
(5,651)
(24,444)
(6,947)
Net cash used in operating activities
(2,084)
(31,391)
Cash Flows from Investing Activities
Advances to associates
Acquisition of property, plant and equipment
Acquisition of investment properties
Interest received
(490)
(14,100)
(4,560)
–
335
(1,130)
(11,451)
(1,970)
(18,998)
221
Net cash used in investing activities
(18,815)
(33,328)
Cash Flows from Financing Activities
Proceeds from bank borrowings
Repayment of bank borrowings
Fixed deposits pledged to financial institutions
Dividends paid
Interest paid
157,868
(51,979)
(546)
(9,548)
(4,638)
197,615
(72,164)
(409)
(6,366)
(4,333)
Net cash generated from financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents at beginning of year (Note 15)
91,157
70,258
157,939
114,343
49,624
108,315
Cash and cash equivalents at end of year (Note 15)
228,197
157,939
Operating profit before working capital changes
Decrease in developed properties for sale
Increase in properties for sale under development
Decrease/(Increase) in inventories
Decrease in operating receivables
(Decrease)/Increase in operating payables
5
8
24
22
23
24
45
ANNUAL REPORT 2011
1
General information
The financial statements of the Group for the year ended 31 December 2011 were authorised for issue in accordance
with a resolution of the directors on the date of the Statement by Directors.
The Company (Registration Number 196700135Z) is incorporated and domiciled in the Republic of Singapore. The place
of business and registered office is located at 50 East Coast Road #03-11, Roxy Square Shopping Centre, Singapore
428769.
The Company was listed on the Singapore Exchange Securities Trading Limited on 12 March 2008.
The principal activities of the Company are those relating to investment holding. The principal activities of the subsidiaries
are disclosed in Note 6 to the financial statements.
The holding company is Kian Lam Investment Pte Ltd which is domiciled in Singapore.
2(a)
Basis of preparation
The financial statements are prepared in accordance with Singapore Financial Reporting Standards (“FRS”) including
related Interpretations promulgated by the Accounting Standards Council. The financial statements have been prepared
under the historical cost convention, except as disclosed in the accounting policies below.
The financial statements are presented in Singapore dollars which is the Company’s functional currency. All financial
information has been presented in Singapore dollars, unless otherwise stated.
The accounting policies set out below have been applied consistently to all periods presented in these financial
statements, and have been applied consistently by Group entities.
Significant accounting estimates and judgements
The preparation of the financial statements in conformity with FRS requires the use of judgements, estimates and
assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities
at the date of the financial statements and the reported amounts of revenues and expenses during the financial year.
Although these estimates are based on management’s best knowledge of current events and actions, actual results
may differ from those estimates.
Critical assumptions used and accounting estimates in applying accounting policies are described below:
Profit from development properties
The Group enters into sale and purchase agreement with buyers of its properties prior to completion of construction.
For sales of properties where the control and risk and rewards of the properties are transferred to the buyers as
construction progresses, revenue is recognised based on the percentage of completion method. The Group accounts for
revenue on its residential properties and mixed development properties (combination of residential units and commercial
units) using the percentage of completion method. The cost of sales charged to profit or loss is measured by reference
to the stage of completion as certified by the architects and quantity surveyors and estimated total development costs.
Significant judgement is required in determining the estimated total development costs which includes an estimation of
the variation works from the main contractor. The Group estimates the total project costs based on contracts awarded,
if any, and the experience of qualified project managers.
46
ANNUAL REPORT 2011
2(a)
Basis of preparation (Continued)
Significant accounting estimates and judgements (Continued)
Carrying value of properties for sale under development
Significant judgement is required in assessing the recoverability of the carrying value of properties for sale under
development. Analysis has been carried out based on assumptions regarding the selling price and costs of properties.
Significant judgement is required in determining total costs of properties, including construction costs and variation
orders. The Group estimates total construction costs based on contracts awarded and the experience of qualified project
managers. Barring unforeseen circumstances, the carrying amount of the properties for sale under development as
reflected in the consolidated statement of financial position will be recoverable. The Group will closely monitor the
property price index and market sentiment, and adjustments will be made if future market activity indicates that such
adjustments are appropriate.
Significant judgement is also required to assess allowance made for foreseeable losses, if any, where the total estimated
construction costs exceeds estimated selling price.
Carrying value of developed properties for sale
Developed properties held for sale are stated at the lower of cost and net realisable value. Net realisable value is the
estimated selling price less cost to be incurred in selling the properties.
Management judgment is required in accessing the estimated selling price which may differ from the price at which
the properties could be sold at a particular time, since actual selling prices are negotiated between willing buyers and
sellers.
Impairment of goodwill
Goodwill is tested for impairment annually and whenever there is indication that the goodwill may be impaired. This
requires an estimation of the value in use of the cash-generating unit to which the goodwill is allocated. Estimating
the value in use requires the Group to make an estimate of the expected future cash flows from the cash-generating
unit and also to choose a suitable discount rate in order to calculate the present value of those cash flows.
47
ANNUAL REPORT 2011
2(a)
Impairment of property, plant and equipment
Property, plant and equipment are reviewed to determine whether there is any indication that the carrying value of
these assets may not be recoverable and have suffered an impairment loss. If any such indication exists, the assets are
tested for impairment. The recoverable amounts of the assets are estimated in order to determine the extent of the
impairment loss, if any. The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use.
Such impairment loss is recognised in profit or loss.
Management judgement is required in the area of asset impairment, particularly in assessing: (1) whether an event has
occurred that may indicate that the related asset values may not be recoverable; (2) whether the carrying value of an
asset can be supported by the net present value of future cash flows which are estimated based upon the continued use
of the asset in the business; and (3) the appropriate key assumptions to be applied in preparing cash flow projections
including whether these cash flow projections are discounted using an appropriate rate. Changing the assumptions
selected by management to determine the level, if any, of impairment, including the discount rates or the growth rate
assumptions in the cash flow projections could materially affect the net present value used in the impairment test and
as a result affects the Group’s results.
Impairment of investments in subsidiaries and associates
Determining whether investment in subsidiaries and associates are impaired requires an estimation of the value-in-use
of that investment. The value-in-use calculation requires the Group to estimate the future cash flows expected from
the cash-generating units and an appropriate discount rate in order to calculate the present value of the future cash
flows. Management has evaluated the recoverability of the investment based on such estimates.
Property, plant and equipment are depreciated on a straight-line basis over their estimated useful lives. Management
estimates the useful lives of property, plant and equipment to be within 3 to 50 years. Changes in the expected level of
usage and technological developments could impact the economic useful lives and the residual values of these assets,
therefore future depreciation charges could be revised. A 5% (2010 : 5%) difference in the expected useful lives of
these assets from management’s estimates would result in approximately 0.2% (2010 : 0.2%) variance in the Group’s
profit for the financial year.
Valuation of investment properties
The Group’s investment properties are stated at estimated fair value based on the valuation performed by an independent
firm of professional valuers. The estimated fair value may differ from the price at which the Group’s assets could be sold
at a particular time, since actual selling prices are negotiated between willing buyers and sellers. Also, in determining
a fair value, the valuers have based on a method of valuation which involves certain estimates, including comparison
with recent sale transactions of similar neighbouring properties.
48
ANNUAL REPORT 2011
2(a)
Allowance for bad and doubtful debts
Allowances for bad and doubtful debts are based on an assessment of the recoverability of trade and other receivables.
Allowances are applied to trade and other receivables where events or changes in circumstances indicate that the
balances may not be collectible. The identification of bad and doubtful debts requires the use of judgement and
estimates. Where the expected outcome is different from the original estimate, such difference will impact carrying value
of trade and other receivables and doubtful debt expenses in the period in which such estimate has been changed.
Allowance for inventories
A review is made periodically on inventories for excess inventories and decline in net realisable value below cost and
a provision will be made against the inventory balance for any such decline. These reviews require management to
estimate future demand for products. Possible changes in these estimates could result in revisions to the valuation of
inventories.
Income tax
Significant judgement is involved in determining the provision for income taxes. The Group recognises liabilities for
expected tax issues based on estimates of whether additional taxes will be due. Where the final tax outcome of these
matters is different from the amounts that were initially recognised, such differences will impact the income tax and
deferred tax provisions in the period in which such determination is made.
2(b)
New accounting standards and interpretations
Adoption of new or revised FRS
On 1 January 2011, the Group adopted the new or amended FRS and Interpretations to FRS (“’INT FRS”) that are
mandatory for application from that date.
FRS 102
INT FRS 115
INT FRS 119
Improvements to FRSs 2010
Group Cash-settled Share-based Payment Transactions (Amendments to FRS 102)
Agreements for the Construction of Real Estate
Extinguishing Financial Liabilities with Equity Instruments
INT FRS 115 Agreements for the Construction of Real Estate
INT FRS 115 clarifies when revenue and related expenses from a sale of a real estate unit should be recognised if an
agreement between a developer and a buyer is reached before the construction of the real estate is completed. INT FRS
115 determines that contracts which are not classified as construction contracts in accordance with FRS 11 can only
be accounted for under the percentage of completion method if the entity continuously transfers to the buyer control
and the significant risks and rewards of the work in progress in its current state as construction progresses.
The adoption of these new/revised FRSs and INT FRSs did not result in substantial changes to the Group’s accounting
policies nor any significant impact on these financial statements.
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ANNUAL REPORT 2011
2(b)
New accounting standards and interpretations (Continued)
FRS not effective
At the date of authorisation o f these financial statements, the following FRSs and INT FRSs were issued but not yet
effective:
FRS
FRS
FRS
FRS
FRS
12
19 (revised)
27 (revised)
28 (revised)
101
FRS
FRS
FRS
FRS
FRS
107
110
111
112
113
Amendments to FRS 12 Deferred Tax: Recovery of Underlying Assets
Employee Benefits
Consolidated and Separate Financial Statements
Investments in Associates and Joint Ventures
Amendments to FRS 101 Severe Hyperinflation and Removal of Fixed Dates for
First-time Adopters
Amendments to FRS 107 Disclosures – Transfers of Financial Assets
Consolidated Financial Statements
Joint Arrangements
Disclosure of Interests in Other Entities
Fair Value Measurements
The directors do not anticipate that the adoption of other FRSs and INT FRSs in future periods will have a material
impact on the consolidated financial statements of the Group.
2(c)
Summary of significant accounting policies
Consolidation
Business combinations
The consolidated financial statements relate to the Company and its subsidiaries (together referred to as the “Group”).
The results of subsidiaries acquired or disposed of during the year are included in the consolidated statement of
comprehensive income from the effective date of acquisition or up to the effective date of disposal, as appropriate.
Business combinations are accounted for using the acquisition method as at the acquisition date, which is the date
on which control is transferred to the Group. Control is the power to govern the financial and operating policies of
an entity so as to obtain benefits from its activities. In assessing control, the Group takes into consideration potential
voting rights that are currently exercisable.
The consideration transferred does not include amounts related to the settlement of preexisting relationships. Such
amounts are generally recognised in profit or loss.
Costs related to the acquisition, other than those associated with the issue of debt or equity securities, that the Group
incurs in connection with a business combination are expensed as incurred.
Any contingent consideration payable is recognised at fair value at the acquisition date. If the contingent consideration
is classified as equity, it is not remeasured and settlement is accounted for within equity.
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ANNUAL REPORT 2011
2(c)
Summary of significant accounting policies (Continued)
Consolidation (Continued)
Business combinations (Continued)
Otherwise, subsequent changes to the fair value of the contingent consideration are recognised in profit or loss.
When share-based payment awards (replacement awards) are required to be exchanged for awards held by the
acquiree’s employees (acquiree’s awards) and relate to past services, then all or a portion of the amount of the
acquirer’s replacement awards is included in measuring the consideration transferred in the business combination. This
determination is based on the market-based value of the replacement awards compared with the market-based value
of the acquiree’s awards and the extent to which the replacement awards relate to past and/or future service.
Goodwill is stated after separate recognition of identifiable intangible assets. It is calculated as the excess of the sum
of a) fair value of consideration transferred, b) the recognised amount of any non-controlling interest in the acquiree
and c) acquisition-date fair value of any existing equity interest in the acquiree, over the acquisition-date fair values of
identifiable net assets. If the fair values of identifiable net assets exceed the sum calculated above, the excess amount
(ie gain on a bargain purchase) is recognised in profit or loss immediately.
Subsidiaries
Subsidiaries are entities controlled by the Group. Control exists when the Group has the power to govern the financial
and operating policies of an entity so as to obtain benefits from its activities. In assessing control, potential voting rights
that presently are exercisable or convertible are taken into account. The financial statements of subsidiaries are included
in the consolidated financial statements from the date that control commences until the date that control ceases.
Upon the loss of control, the Group derecognises the assets and liabilities of the subsidiary, any non-controlling interests
and the other components of equity related to the subsidiary. Any surplus or deficit arising on the loss of control is
recognised in profit or loss. If the Group retains any interest in the previous subsidiary, then such interest is measured
at fair value at the date that control is lost. Subsequently it is accounted for as an equity-accounted investee or as an
available-for-sale financial asset depending on the level of influence retained.
Investments in subsidiaries are stated in the Company’s statement of financial position at cost less accumulated
impairment losses. The accounting policies for subsidiaries are adjusted to be consistent with the policies adopted by
the Group.
Transactions eliminated on consolidation
All inter-company balances and significant inter-company transactions and resulting unrealised profits or losses are
eliminated on consolidation and the consolidated financial statements reflect external transactions and balances only.
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ANNUAL REPORT 2011
2(c)
Property, plant and equipment and depreciation
Property, plant and equipment are stated at cost less accumulated depreciation and accumulated impairment losses,
if any.
The cost of property, plant and equipment includes expenditure that is directly attributable to the acquisition of the
items. Dismantlement, removal or restoration costs are included as part of the cost of property, plant and equipment
if the obligation for dismantlement, removal or restoration is incurred as a consequence of acquiring or using the
asset.
Depreciation on property, plant and equipment is calculated using the straight-line method to allocate their depreciable
amounts over their estimated useful lives as follows:
Building
Other assets
50 years
3 to 10 years
Other assets comprise furniture, fittings, plant and equipment and improvements.
No depreciation is computed on freehold land.
The residual values, depreciation methods and useful lives of property, plant and equipment are reviewed and adjusted
as appropriate at the reporting date.
Subsequent expenditure relating to property, plant and equipment that has already been recognised is added to the
carrying amount of the asset when it is probable that future economic benefits, in excess of the standard of performance
of the asset before that expenditure was made, will flow to the Group and the cost can be reliably measured. Other
subsequent expenditure is recognised as an expense during the financial year in which it is incurred.
For acquisitions and disposals during the financial year, depreciation is provided from the month of acquisition and to
the month before disposal respectively. Fully depreciated property, plant and equipment are retained in the books of
accounts until they are no longer in use.
The gain or loss arising on disposal or retirement of an item of plant and equipment is determined as the difference
between the sales proceeds and the carrying amounts of the asset and is recognised in profit or loss.
Goodwill
Goodwill is initially recognised at cost and is subsequently measured at cost and tested for impairment. On disposal
of a subsidiary, the amount of goodwill attributable to the disposed subsidiary is included in the determination of the
profit or loss on disposal.
Investment properties, principally comprising shop units, are held for long-term rental yields and are not occupied
by the Group. Investment properties are treated as non-current investments and are initially recognised at cost and
subsequently carried at fair value, representing open market value determined on annual basis by an independent firm
of professional valuers. Gross changes in fair values and the related tax impact are recognised in profit or loss.
Investment properties are subject to renovations or improvements at regular intervals. The cost of major renovations
and improvements is capitalised as additions and the carrying amounts of the replaced components are written off to
profit or loss. The cost of maintenance, repairs and minor improvement is charged to profit or loss when incurred.
On disposal of an investment property, the difference between the net disposal proceeds and the carrying amount is
recognised in profit or loss.
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ANNUAL REPORT 2011
2(c)
Transfers
Transfers to, or from, investment properties are made when there is a change in use, evidenced by:
•
commencement of owner occupation, for a transfer from investment properties to property, plant and
equipment;
•
commencement of development with a view to sell, for a transfer of investment properties to development
properties; and
•
end of owner occupation, for a transfer from property, plant and equipment to investment properties.
Inventories
Inventories, comprising food and beverage and other hotel related consumable stocks, are carried at the lower of cost
and net realisable value. Cost is determined on a first-in first-out basis and includes freight and handling charges.
Write-down is made, where necessary, for obsolete, slow-moving or defective inventories in arriving at the net realisable
value. Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs
necessary to make the sale. The amount of any reversal of any write-down of inventories, arising from an increase in
net realisable value, is recognised as a reduction in the amount of inventories recognised as an expense in the period
in which the reversal occurs.
Financial assets
Financial assets can be divided into the following categories: financial assets at fair value through profit or loss, heldto-maturity investments, loans and receivables and available-for-sale financial assets. Financial assets are assigned to
the different categories by management on initial recognition, depending on the purpose for which the investments
were acquired. The designation of financial assets is re-evaluated and classification may be changed at the reporting
date with the exception that the designation of financial assets at fair value through profit or loss is not revocable.
All financial assets are recognised on their trade date – the date on which the Group commits to purchase or sell the
asset. Financial assets are initially recognised at fair value, plus directly attributable transaction costs except for financial
assets at fair value through profit or loss, which are recognised at fair value.
Derecognition of financial instruments occurs when the rights to receive cash flows from the investments expire or
are transferred and substantially all of the risks and rewards of ownership have been transferred. An assessment for
impairment is undertaken at least at each reporting date whether or not there is objective evidence that a financial
asset or a group of financial assets is impaired.
53
ANNUAL REPORT 2011
2(c)
Financial assets (Continued)
Non-compounding interest and other cash flows resulting from holding financial assets are recognised in profit or loss
when received, regardless of how the related carrying amount of financial assets is measured.
The Group does not hold any financial assets at fair value through profit or loss, held-to-maturity investments or
available-for-sale financial assets.
Cash and cash equivalents comprise cash and bank balances, bank deposits and monies held in project accounts.
Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in
an active market. They arise when the Group provides money, goods or services directly to a debtor with no intention
of trading the receivables. They are included in current assets, except for maturities greater than 12 months after the
reporting date which are classified as non-current assets.
Loans and receivables are recognised initially at fair value plus any directly attributable transaction costs. Subsequent
to initial recognition, loans and receivables are measured at amortised cost using the effective interest method, less
provision for impairment. Any change in their value is recognised in profit or loss. Any reversal shall not result in a
carrying amount that exceeds what the amortised cost would have been had any impairment loss not been recognised
at the date the impairment is reversed. Any reversal is recognised in profit or loss.
Receivables are provided against when objective evidence is received that the Group will not be able to collect all
amounts due to it in accordance with the original terms of the receivables. The amount of the write-down is determined
as the difference between the asset’s carrying amount and the present value of estimated future cash flows.
Loans and receivables comprise cash and cash equivalents and trade and other receivables.
Properties for sale
Properties for sale under development are recorded as current assets and are stated at specifically identified cost,
including capitalised borrowing costs directly attributable to the development of the properties and other related
expenditure.
Capitalisation of borrowing costs is suspended during extended periods in which active development is interrupted.
Capitalisation of borrowing costs ceases on issue of Temporary Occupation Permit. The capitalisation rate is determined
by reference to the actual rate payable on borrowings for properties for sale under development, weighted as
applicable.
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ANNUAL REPORT 2011
2(c)
Properties for sale (Continued)
Properties for sale under development are stated at the lower of cost plus, where appropriate, a portion of attributable
profit, and their estimated net realisable value, net of progress billings. Net realisable value is the estimated selling price
less costs to be incurred in selling the properties.
When it is probable that the total development costs will exceed the total revenue, the expected loss is recognised as
an expense immediately. The aggregated costs incurred and the profit/loss recognised in each development property
that has been sold are compared against progress billings up to the financial year end.
Associates
An associate is defined as a company, not being a subsidiary or jointly controlled entity, in which the Group has
significant influence, but not control, over its financial and operating policies. Significant influence is presumed to exist
when the Group holds between 20% and 50% of the voting power of another entity.
Investments in associates at Company level are stated at cost. Allowance is made for any impairment losses on an
individual company basis.
The Group’s share of the post-acquisition results of associates, based on the latest available audited financial statements,
is included in the consolidated statement of comprehensive income using the equity method of accounting. In applying
the equity method, unrealised gains on transactions between the Group and its associates are eliminated to the extent
of the Group’s interest in the associates. Unrealised losses are eliminated unless the transactions provide evidence of
an impairment of the asset transferred.
When the Group’s share of losses of an associate equals or exceeds the carrying amount of an investment, the Group
ordinarily discontinues including its share of further losses. The investment is reported at nil value. Additional losses
are provided for to the extent that the Group has incurred obligations or made payments on behalf of the associate to
satisfy obligations of the associate that the Group has guaranteed or otherwise committed, for example, in the forms
of loans. When the associate subsequently reports profits, the Group resumes including its share of those profits only
after its share of profits equal the share of net losses recognised.
The Group’s share of the net assets and post-acquisition retained profits and reserves of associates is reflected in the
book values of the investments in the consolidated statement of financial position.
Where the accounting policies of an associate do not conform with those of the Company, adjustments are made on
consolidation when the amounts involved are considered significant to the Group.
55
ANNUAL REPORT 2011
2(c)
Associates (Continued)
On acquisition of the investment, any difference between the cost of acquisition and the Group’s share of the fair
values of the net identifiable assets of the associate is accounted for in accordance with the accounting policies on
“Consolidation” and “Goodwill”.
When financial statements of associates with different reporting dates are used (not more than three months apart),
adjustments are made for the effects of any significant events or transactions between the investor and the associates
that occur between the date of the associates’ financial statements and the reporting date.
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.
Dividends
Final dividends proposed by the directors are not accounted for in shareholders’ equity as an appropriation of retained
profit, until they have been approved by the shareholders in a general meeting. When these dividends have been
approved by the shareholders and declared, they are recognised as a liability.
Interim dividends are simultaneously proposed and declared, because of the articles of association of the Company
grant the directors the authority to declare interim dividends. Consequently, interim dividends are recognised directly
as a liability when they are proposed and declared.
Financial liabilities
The Group’s financial liabilities include bank borrowings and trade and other payables. They are included in the
statement of financial position items “non-current financial liabilities”, “current financial liabilities” and “trade and
other payables”.
Financial liabilities are recognised when the Group becomes a party to the contractual agreements of the instrument.
All interest-related charges are recognised as an expense in “finance costs” in profit or loss. Financial liabilities are
derecognised if the Group’s obligations specified in the contract expire or are discharged or cancelled.
56
ANNUAL REPORT 2011
2(c)
Financial liabilities (Continued)
Borrowings are recognised initially at fair value of proceeds received less attributable transaction costs, if any. Borrowings
are subsequently stated at amortised cost which is the initial fair value less any principal repayments. Any difference
between the proceeds (net of transaction costs) and the redemption value is taken to profit or loss over the period of
the borrowings using the effective interest method. The interest expense is chargeable on the amortised cost over the
period of borrowing using the effective interest method.
Gains and losses are recognised in profit or loss when the liabilities are derecognised as well as through the amortisation
process.
Borrowings which are due to be settled within twelve months after the reporting date are included in current borrowings
in the statement of financial position even though the original terms were for a period longer than twelve months
and an agreement to refinance, or to reschedule payments, on a long-term basis is completed after the reporting
date. Borrowings to be settled within the Group’s normal operating cycle are considered as current. Borrowings with
agreements incorporating an overriding repayment on demand clause, which gives the lenders the right to demand
repayment at any time, at their sole discretion and irrespective of whether a default event has occurred are considered
as current. Other borrowings due to be settled more than twelve months after the reporting date are included in noncurrent borrowings in the statement of financial position.
Trade payables are initially measured at fair value, and subsequently measured at amortised cost, using the effective
interest method.
Derivative financial instruments, including hedge accounting
The Group holds derivative financial instruments to hedge its interest rate risk exposures. Embedded derivatives are
separated from the host contract and accounted for separately if the economic characteristics and risks of the host
contract and the embedded derivative are not closely related, a separate instrument with the same terms as the
embedded derivative would meet the definition of a derivative, and the combined instrument is not measured at fair
value through profit or loss.
Derivatives are recognised initially at fair value; attributable transaction costs are recognised in profit or loss as incurred.
Subsequent to initial recognition, derivatives are measured at fair value, and changes therein are accounted for as
described below.
57
ANNUAL REPORT 2011
2(c)
Derivative financial instruments, including hedge accounting (Continued)
Cash flow hedges
When a derivative is designated as the hedging instrument in a hedge of the variability in cash flows attributable to a
particular risk associated with a recognised asset or liability or a highly probable forecast transaction that could affect
profit or loss, the effective portion of changes in the fair value of the derivative is recognised in other comprehensive
income and presented in the hedging reserve in equity. Any ineffective portion of changes in the fair value of the
derivative is recognised immediately in profit or loss.
When the hedged item is a non-financial asset, the amount accumulated in equity is included in the carrying amount
of the asset when the asset is recognised. In other cases the amount accumulated in equity is reclassified to profit
or loss in the same period that the hedged item affects profit or loss. If the hedging instrument no longer meets the
criteria for hedge accounting, expires or is sold, terminated or exercised, or the designation is revoked, then hedge
accounting is discontinued prospectively. If the forecast transaction is no longer expected to occur, then the balance
in equity is reclassified in profit or loss.
Other non-trading derivatives
When a derivative financial instrument is not designated in a hedge relationship that qualifies for hedge accounting,
all changes in its fair value are recognised immediately in profit or loss.
Financial guarantees
The Company has issued corporate guarantees to banks for bank borrowings of certain of its subsidiaries and associates.
These guarantees are financial guarantee contracts as they require the Company to reimburse the banks if the
subsidiaries fail to make principal or interest payments when due in accordance with the terms of their borrowings.
Financial guarantee contracts are initially recognised at fair value and are classified as financial liabilities. Subsequent
to initial measurement, the financial guarantees are stated at the higher of the initial fair value less cummulative
amortisation and the amount that would be recognised if they were accounted for as contingent liabilities. When
financial guarantees are terminated before their original expiry date, the carrying amount of the financial guarantee
is transferred to profit or loss.
58
ANNUAL REPORT 2011
2(c)
Operating leases
Where the Group is a lessor
Assets leased out under operating leases are included in investment properties and are stated at fair value and not
depreciated. Rental income (net of any incentives given to lessee) is recognised on a straight-line basis over the lease
term.
Where the Group is a lessee
Assets held under finance leases are recognised as assets of the Group at their fair value at the inception of the lease
or, if lower, at the present value of the minimum lease payments. Lease payments are apportioned between finance
charges and reduction of the lease obligation so as to achieve a constant periodic rate of interest on the remaining
balance of the liability. Finance charges are charged directly to profit or loss.
Rentals payable under operating leases are charged to profit or loss on a straight-line basis over the term of the relevant
lease unless another systematic basis is more representative of the time pattern in which economic benefits from the
leased asset are consumed. Contingent rentals arising under operating leases are charged to profit or loss in the period
in which they are incurred.
In the event that lease incentives are received to enter into operating leases, such incentives are recognised as a liability.
The aggregate benefit of incentives is recognised as a reduction of rental expense on a straight- line basis, except
where another systematic basis is more representative of the time pattern in which economic benefits from the leased
asset are consumed.
Revenue recognition
Revenue of the Group comprises the fair value of the consideration received or receivable for the rendering of services,
net of goods and services tax, rebates and discounts. Revenue is recognised as follows:
(a)
Rendering of services
Revenue from hotel operations is recognised over the period in which the services are rendered.
(b)
Interest income
Interest income is recognised on a time proportion basis using the effective interest method.
59
ANNUAL REPORT 2011
2(c)
Revenue recognition (Continued)
(c)
Dividend income
Dividend income is recognised when the right to receive payment is established.
(d)
Rental income
Rental income is recognised on a straight-line basis over the lease term.
(e)
Revenue from properties for sale under development
The Group enters into sale and purchase agreement with buyers of its properties prior to completion of
construction.
For sales of properties where the control and risk and rewards of the properties are transferred to the buyers
as construction progresses, revenue is recognised based on the percentage of completion method. The Group
accounts for revenue on its residential properties and mixed development properties (combination of residential
units and commercial units) using the percentage of completion method.
For sales of properties where the control and risk and rewards of the properties are transferred to the buyers in
its entirety at a single time (eg at completion, upon or after delivery), revenue is recognised when the properties
are delivered to the buyers.
Income taxes
Income tax expense comprises current and deferred tax. Income tax expense is recognised in profit or loss except to
the extent that it relates to items recognised directly in equity, in which case it is recognised in equity.
Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively
enacted at the reporting date, and any adjustment to tax payable in respect of previous years.
Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities
for financial reporting purposes and the amounts used for taxation purposes.
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ANNUAL REPORT 2011
2(c)
Income taxes (Continued)
Deferred tax is not recognised for the following temporary differences: the initial recognition of goodwill, the initial
recognition of an asset or liability in a transaction that is not a business combination and that affects neither accounting
nor taxable profit, and differences relating to investments in subsidiaries and jointly-controlled entities to the extent
that the timing of the reversal of the temporary difference can be controlled and it is probable that the temporary
difference will not reverse in the foreseeable future.
Deferred tax is measured at the tax rates that are expected to be applied to the temporary differences when they
reverse, based on the laws that have been enacted or substantively enacted at the reporting date.
Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and
assets and they relate to income taxes levied by the same tax authorities on the same taxable entity, or on different tax
entities, provided they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities
will be realised simultaneously.
Impairment of non-financial assets
The carrying amounts of non-financial assets subject to impairment are reviewed at each reporting date to determine
whether there is any indication of impairment. If any such indication exists, the asset’s recoverable amount is
estimated.
If it is not possible to estimate the recoverable amount of the individual asset, then the recoverable amount of the
cash-generating unit to which the assets belong will be identified.
For the purpose of assessing impairment, assets are grouped at the lowest levels for which there are separately
identifiable cash flows (cash-generating units). As a result, some assets are tested individually for impairment and
some are tested at cash-generating unit level. Goodwill is allocated to those cash-generating units that are expected
to benefit from synergies of the related business combination and represent the lowest level within the Group at which
management controls the related cash flows.
Individual assets or cash-generating units that include goodwill and other intangible assets with an indefinite useful life
or those not yet available for use are tested for impairment at least annually or more often if there are indicators of
impairment. All other individual assets or cash-generating units are tested for impairment whenever events or changes
in circumstances indicate that the carrying amount may not be recoverable.
An impairment loss is recognised if the carrying amount of an asset or its cash-generating unit exceeds its recoverable
amount. The recoverable amount is the higher of fair value, reflecting market conditions less costs to sell, and value in
use, based on an internal discounted cash flow evaluation. Impairment losses recognised for cash-generating units, to
which goodwill has been allocated, are credited initially to the carrying amount of goodwill. Any remaining impairment
loss is charged pro rata to the other assets in the cash-generating unit. With the exception of goodwill, all assets are
subsequently reassessed for indications that an impairment loss previously recognised may no longer exist.
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ANNUAL REPORT 2011
2(c)
Impairment of non-financial assets (Continued)
Any impairment loss is charged to profit or loss unless it reverses a previous revaluation in which case it is charged to
equity.
With the exception of goodwill,
•
An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable
amount or when there is an indication that the impairment loss recognised for the asset no longer exists or
decreases.
•
An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying
amount that would have been determined if no impairment loss had been recognised.
•
A reversal of an impairment loss on a revalued asset is credited directly to equity under the heading revaluation
surplus. However, to the extent that an impairment loss on the same revalued asset was previously recognised
in profit or loss, a decrease in that impairment loss is reversed through profit or loss.
An impairment loss in respect of goodwill is not reversed, even if it relates to an impairment loss recognised in an
interim period that would have been reduced or avoided had the impairment assessment been made at a subsequent
reporting date.
Provisions
Provisions are recognised when there is a present obligation (legal or constructive) as a result of a past event, it is
probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a
reliable estimate can be made of the amount of the obligation. Present obligations arising from onerous contracts
are recognised as provisions. The directors review the provisions annually and where in their opinion, the provision is
inadequate or excessive, due adjustment is made.
Foreign currency
Transactions in foreign currencies are translated to the respective functional currencies of Group entities at exchange
rates at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies at the reporting
date are retranslated to the functional currency at the exchange rate at that date. The foreign currency gain or loss
on monetary items is the difference between amortised cost in the functional currency at the beginning of the year,
adjusted for effective interest and payments during the year, and the amortised cost in foreign currency translated at
the exchange rate at the end of the year.
Non-monetary items in a foreign currency that are measured in terms of historical cost are translated using the exchange
rate at the date of the transaction. Foreign currency differences arising on retranslation are recognised in profit or
loss.
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ANNUAL REPORT 2011
2(c)
Operating Segments
An operating segment is a component of the Group that engages in business activities from which it may earn
revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Group’s other
components. Operating segments are reported in a manner consistent with the internal reporting provided to the chief
operating decision-maker. The chief operating decision-maker has been identified as the Chief Executive Officer who
makes strategic resources allocation decisions.
Employee benefits
Pension obligations
The Group contributes to the Central Provident Fund, a defined contribution plan regulated and managed by the
Government of Singapore, which applies to the majority of the employees. Contributions to defined contribution plans
are charged to profit or loss in the period to which the contributions relate.
Employee leave entitlements
Employee entitlements to annual leave are recognised when they accrue to employees. Accrual is made for the
unconsumed leave as a result of services rendered by employees up to the reporting date.
Key management personnel
Key management personnel are those persons having the authority and responsibility for planning, directing and
controlling the activities of the entity. Directors and certain key executive officers are considered key management
personnel.
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ANNUAL REPORT 2011
3
Revenue
The Group
Property development
Hotel operations
Rental income from investment properties
4
2011
2010
$’000
$’000
132,596
169,128
48,420
44,484
2,635
3,265
183,651
216,877
Goodwill
2011
2010
The Group
$’000
$’000
Balance at beginning and end of year
1,672
1,672
Impairment testing for cash-generating unit containing goodwill
For the purpose of impairment testing, goodwill is allocated to the Group’s operating divisions which represent the
lowest level within the Group at which the goodwill is monitored for internal management purposes, which is not
higher than the Group’s operating segments as reported in Note 21.
At 31 December 2011, the carrying amount of goodwill of approximately $1,672,000 was wholly attributable to the
Hotel Ownership business a cash-generating unit (CGU). The recoverable amount was estimated to be higher than the
carrying amount of the CGU, and no impairment was required. The recoverable amount was determined based on
projected cash flows derived from the most recent financial budgets approved by the management covering a five-year
period ending 31 December 2016, a pre-tax discount rate of 12.0 % (2010: 14.0%) and a long-term growth rate of 5%
(2010: 5%) from 2017. The growth rate used was based on historical growth and past experience and did not exceed
the currently estimated long-term average growth rate for the business in which the cash-generating unit operates.
Sensitivity to changes in assumptions
Management considers that it is not likely for the assumptions used to change so significantly as to eliminate the excess
of the recoverable amount of the CGU over its carrying amount. The two key assumptions identified by management
are the pre-tax discount rate and budgeted earnings before interest, taxes, depreciation and amortisation (EBITDA).
Assuming a 30% decrease in the budgeted EBITDA growth rate for the five-year budget period and a 30% increase in
the pre-tax discount rate, the recoverable amount is estimated to be higher than the carrying amount of the CGU.
64
ANNUAL REPORT 2011
5
Property, plant and equipment
Freehold
land
$’000
Building
$’000
Other
assets
$’000
Total
$’000
Cost
At 1 January 2010
Transfer from investment properties (Note 8)
Additions
9,302
–
–
65,628
5,870
1,648
6,193
–
322
81,123
5,870
1,970
At 31 December 2010
Transfer from investment properties (Note 8)
Additions
9,302
–
–
73,146
1,020
3,873
6,515
–
687
88,963
1,020
4,560
At 31 December 2011
9,302
78,039
7,202
94,543
Accumulated depreciation
At 1 January 2010
Depreciation for the year
–
–
11,505
1,425
5,103
509
16,608
1,934
At 31 December 2010
–
–
12,930
1,707
5,612
366
18,542
2,073
At 31 December 2011
–
14,637
5,978
20,615
Net book value
At 31 December 2011
9,302
63,402
1,224
73,928
At 31 December 2010
9,302
60,216
903
70,421
Cost
At 1 January 2010
Additions
–
–
–
–
–
84
–
84
At 31 December 2010
Additions
–
–
–
–
84
9
84
9
At 31 December 2011
–
–
93
93
Accumulated depreciation
At 1 January 2010
–
–
–
–
–
1
–
1
At 31 December 2010
–
–
–
–
1
29
1
29
At 31 December 2011
–
–
30
30
Net book value
At 31 December 2011
–
–
63
63
At 31 December 2010
–
–
83
83
The Group
The Company
65
ANNUAL REPORT 2011
5
Property, plant and equipment (Continued)
(a)
The freehold land and building are mortgaged to secure bank borrowings. At 31 December 2011, the market
value of the freehold land together with the building was estimated to be $416,901,550 (2010: $326,642,074).
The valuation was carried out by an independent firm of professional valuers, on an open market value and
existing use basis.
(b)
Freehold land and building comprise:
(i)
The Grand Mercure Roxy Hotel comprises a 17-storey building and a basement with a floor area of 35,336
sq metres at 50 East Coast Road, Singapore; and
(ii)
office units and premises for hotel operations with a floor area of 1,071 sq metres at 50 East Coast Road,
Singapore.
6
Investments in subsidiaries
2011
2010
The Company
$’000
$’000
Unquoted equity investments, at cost
43,443
40,443
66
ANNUAL REPORT 2011
6
Investments in subsidiaries (Continued)
Details of the subsidiaries are:
Name of subsidiary
Country of
incorporation
Equity interest held
by the Group
2011
2010
Principal activities
Held by the company
Roxy-Pacific Developments Pte Ltd
Singapore
100%
100%
Hotel owner and development and
property investment
Roxy Homes Pte Ltd
Singapore
100%
100%
Roxy Land Pte. Ltd.
Singapore
100%
100%
RP Properties Pte. Ltd.
Singapore
100%
100%
Property investment and property
development
RP North Pte. Ltd.
Singapore
100%
100%
Property investment and property
development
RH Central Pte. Ltd.
Singapore
100%
100%
Investment holding
RH Changi Pte. Ltd.
Singapore
100%
100%
RL Properties Pte. Ltd.
Singapore
100%
100%
Investment holding
RP Ventures Pte. Ltd.
Singapore
100%
100%
Investment holding
RP Changi Pte. Ltd.
Singapore
100%
100%
Roxy Hotels Pte. Ltd.
Singapore
100%
100%
Hotel owner and development and
property investment
Roxy Residential Pte. Ltd.
Singapore
100%
–
RP East Pte. Ltd.
Singapore
100%
–
RL Central Pte. Ltd.
Singapore
100%
–
RH East Pte. Ltd.
Singapore
100%
–
Singapore
100%
100%
Held by a subsidiary
RL Developments Pte. Ltd.
All subsidiaries were audited by Foo Kon Tan Grant Thornton LLP.
67
ANNUAL REPORT 2011
7
2011
2010
The Group
$’000
$’000
Unquoted equity investments, at cost
2,070
1,580
343
55
2,413
1,635
Share of post-acquisition profit
Details of the associates are:
Name of associate
Country of
Equity interest held
incorporation
by the Group
Principal activities
2011
2010
Singapore
45%
45%
Singapore
45%
45%
Singapore
20%
20%
Singapore
49%
45%
Singapore
48%
48%
Held by the Group
Mequity Two Pte. Ltd.
Mequity Pte. Ltd.
(1)
(2)
70 Shenton Pte. Ltd.
(1)
Mequity (Hillview) Pte Ltd
Mequity Assets Pte. Ltd.
(1)
(2)
(1)
Audited by Foo Kon Tan Grant Thornton LLP.
(2)
Audited by PG Wee & Partners. These associates are not significant as defined under Listing Rule 718 of the Singapore Exchange
Listing Manual.
68
ANNUAL REPORT 2011
7
Investments in associates (Continued)
Summarised financial information in respect of the associates is set out below:
2011
$’000
2010
$’000
Current assets
Non-current assets
420,505
–
242,255
–
Total assets
420,505
242,255
Current Liabilities
Non-current Liabilities
(415,722)
(380)
238,300
–
Total Liabilities
(416,102)
238,300
Net assets
Revenue
Expenses
4,403
17,959
(16,973)
1,377
(1,316)
Profit before tax
Income tax expense
986
(387)
61
(106)
Profit/(loss) after tax
599
(45)
156,481
87,343
–
19,397
Group’s share of associates’ contingent liabilities in respect of proportionate
corporate guarantee on bank borrowings (Note 35)
Group’s proportionate interest in the capital commitments of an associate
for the purchase of freehold properties for development
8
3,955
The Group
2011
$’000
2010
$’000
At beginning of year
Additions
Transfer to property, plant and equipment (Note 5)
Transfer to properties for sale under development
Fair value gain recognised in profit or loss
78,767
–
(1,020)
(56,070)
23,015
55,688
18,998
(5,870)
–
9,951
44,692
78,767
At end of year
The fair value of investment properties is determined by an independent firm of professional valuers who has appropriate
recognised professional qualification and recent experience in the location and category of the investment properties
being valued. The valuation is based on the income method which takes into consideration the estimated net rent
(using the current and projected average rental rates and occupancy), and a capitalisation rate applicable to the nature
and type of asset in question.
69
ANNUAL REPORT 2011
8
Investment properties (Continued)
The investment properties are leased to third parties under operating leases.
The investment properties are mortgaged to certain financial institutions to secure bank borrowings of the Group
(Note 17).
The following amounts related to investment properties are recognised in profit or loss:
9
The Group
2011
$’000
2010
$’000
Rental income (Note 3)
Direct operating expenses
2,635
842
3,265
893
2011
$’000
2010
$’000
The Group
–
985
Information on developed property for sale is as follows:
Location (Singapore)
8 Shan Road
Project name
The Marque @
Irrawaddy
Description
Gross floor area
(sq. metres)
Group’s effective
interest in the property
1 apartment unit
135
100%
The above property was sold during the year ended 31 December 2011.
10
Properties for sale under development
2011
$’000
2010
$’000
Land cost
Development costs
380,695
75,269
239,301
70,015
Attributable profit
455,964
37,579
309,316
25,784
(A)
493,543
335,100
(B)
(C)
–
–
–
(163,631)
(750)
750
–
(99,795)
329,912
235,305
3,988
3,178
The Group
Allowance for foreseeable losses
– At 1 January
– Allowance utilised
– At 31 December
Progress billings
At 31 December (A)+(B)+(C)
Loan interest capitalised as cost of development properties during the year
Properties for sale under development are pledged as security for bank borrowings (Note 17).
70
ANNUAL REPORT 2011
10
Properties for sale under development (Continued)
Properties for sale under development as at 31 December 2011 are as follows:
Location
Project
(Singapore)
name
The Verte
118 Lorong H Telok
Kurau
Approximate
Gross floor
Group’s effective
Stage of
Expected date
land area
area
interest in
Description
completion
of completion
(sq. metres)
(sq. metres)
the property
35 apartment units
94%
Jan 12
3,094
4,332
100%
and 1 townhouse
8 Bhamo Road
156 Joo Chiat
Place
Nova 88
88 apartment units
91%
Dec 14
2,637
7,385
100%
Straits
30 apartment units
12%
Dec 13
1,150
1,610
100%
25 apartment units
56%
Dec 13
947
1,326
100%
Residences
233 Tembeling
Studios@
Road
Tembeling
18 Lorong 102
18 Jupiter
53 apartment units
15%
Dec 13
1,857
2,600
100%
9/11 Yio Chu
Space@
140 apartment units
*
Dec 16
3,767
11,300
100%
Kang Road
Kovan
and 56 commercial
5%
Dec 15
4,030
11,285
100%
*
Dec 15
1,576
4,728
100%
*
Dec 15
2,587
7,761
100%
*
Feb 16
1,313
1,839
100%
Changi
units
18 Spottiswoode
Park Road
116 Changi Road
Spottiswoode 251 apartment units
18
WiS@Changi
7 shops, 16
restaurants, 60
offices
80 Changi Road
Centropod@
108 shops, 9
Changi
restaurants, 75
offices
103 Lorong N Telok
Treescape
30 apartment units
Kurau
*
Construction of the properties has yet to commence as of 31 December 2011.
71
ANNUAL REPORT 2011
11
Inventories
The Group
Hotel supplies, at cost
12
2011
2010
$’000
$’000
139
141
Trade receivables
The Group
Trade receivables
Accrued receivables
Impairment losses
The Company
2011
2010
$’000
$’000
2011
$’000
2010
$’000
7,295
30,671
(14)
14,550
10,309
(13)
10
–
–
19
–
–
37,952
24,846
10
19
Movements in allowance for impairment loss:
Balance at beginning of year
Allowance made
Allowance utilised
Allowance written back
13
5
–
(4)
35
–
(5)
(17)
–
–
–
–
–
–
–
–
Balance at end of year
14
13
–
–
Accrued receivables represent mainly the remaining balances of sales consideration for development properties to be
billed. Upon receipt of the Temporary Occupation Permit, the balance of sales consideration to be billed is included as
accrued receivables.
The ageing analysis of trade receivables is as follows:
The Group
Not past
Past due
Past due
Past due
due
0 to 3 months but not impaired
3 to 6 months but not impaired
over 6 months but not impaired
The Company
2011
2010
$’000
$’000
2011
$’000
2010
$’000
37,191
585
50
126
24,403
342
83
18
1
2
2
5
1
1
2
15
37,952
24,846
10
19
Trade receivables are denominated in Singapore dollars.
Trade receivables are granted credit term of 30 days. The Group does not require collateral in respect of trade
receivables.
72
ANNUAL REPORT 2011
13
Other receivables
The Group
2011
2010
2011
2010
$’000
$’000
$’000
$’000
Amounts due from subsidiaries (non-trade)
Deposits
Advances to associates
The Company
–
–
32,283
25,460
373
15,874
26
5
27,020
12,920
12
6
Prepayments
195
206
18
28
Receivable from contractors
728
113
–
–
77
55
72
14
375
141
12
–
28,768
29,309
32,423
25,513
Fixed deposit interest receivable
Other receivables
(A)
Allowance for impairment losses:
(60)
(60)
–
–
– Impairment loss recognised
– At 1 January
(220)
–
–
–
– At 31 December (B)
(280)
(60)
–
–
29,249
32,423
25,513
(60)
(60)
–
–
(220)
–
–
–
(280)
(60)
–
–
(A) – (B)
28,488
Allowance for impairment loss comprises:
– Other receivables
– Advances to associates
During the year ended 31 December 2011, an impairment loss of $220,000 was recognised in respect of advances to
an associate which has been incurring losses. This associate is expected to commerce property development in 2012.
The ageing analysis of other receivables is as follows:
The Group
Not past due
The Company
2011
2010
2011
2010
$’000
$’000
$’000
$’000
28,488
29,249
32,423
25,513
The non-trade amounts due from subsidiaries comprise mainly advances and management fees charged by the
Company.
Amounts due from subsidiaries and associates are unsecured, interest-free and repayable on demand.
Other receivables are denominated in Singapore dollars.
73
ANNUAL REPORT 2011
14
Project accounts
The project accounts consist of monies held in accordance with the Housing Developers (Project Account) Rules 1997.
Withdrawals of monies from the project accounts are restricted to payments for development expenditure incurred on
development of properties for sale. Monies held in project accounts comprise:
The Group
2011
$’000
2010
$’000
Cash at bank
Fixed deposits
58,984
78,500
36,500
39,200
137,484
75,700
Note 15
Monies in the project accounts are denominated in Singapore dollars.
15
2011
$’000
The Group
2010
$’000
The Company
2011
2010
$’000
$’000
60,321
31,604
38,754
44,151
22,585
3,101
9,069
1,018
91,925
82,905
25,686
10,087
2011
$’000
2010
$’000
91,925
82,905
Project accounts (Note 14)
137,484
75,700
Cash and cash equivalents
229,409
158,605
Fixed deposits
Fixed deposits pledged #
(1,212)
(666)
Cash and cash equivalents in the consolidated
statement of cash flows
#
228,197
157,939
Fixed deposits are pledged to secure banker guarantees in respect of the hotel’s electricity supply and car park space and
property development projects.
At the reporting date, the weighted average effective interest rate of these fixed deposits of the Company and the
Group was 0.487% (2010 – 0.613%) and 0.509% (2010 – 0.508%) per annum, respectively.
74
ANNUAL REPORT 2011
16
Share capital
Ordinary shares issued and fully paid,
with no par value
Balance at beginning and end of year
The Company
2011
2010
2011
Number of Ordinary Shares
$’000
2010
$’000
636,560,000
47,399
636,560,000
47,399
The holders of ordinary shares are entitled to receive dividends from time to time and are entitled to one vote per share
at meetings of the Company. All shares rank equally with regard to the Company’s residual assets.
17
Bank borrowings
Year of
maturity
The Group
2011
2010
$’000
$’000
The Company
2011
2010
$’000
$’000
Bank loans (unsecured)
Repayable:
– Within one year or less, or on demand
2012
4,000
–
4,000
–
4,000
–
4,000
–
146,243
149,218
–
–
245,750
141,893
–
–
391,993
291,111
–
–
(A)
Bank loans (secured)
Repayable:
– Within one year or less, or on demand
– After one year but within the normal
operating cycle
– After one year
2012
2013 to
2015
2016 to
2032
85,741
84,733
–
–
(B)
477,734
375,844
–
–
Total (A) + (B)
481,734
375,844
4,000
–
The bank loans are secured by:
(a)
freehold land and building in Note 5;
(b)
proceeds from sale of investment properties in Note 8;
(c)
rental income from investment properties in Note 8;
(d)
joint guarantee of four directors and the Company;
(e)
developed property for sale in Note 9; and
(f)
Properties for sale under development in Note 10
At the reporting date, the bank loans bear interest at varying rates from 1.38% to 2.98% (2010 – 1.55% to 3.25%)
per annum. Interest is repriced within 12 months.
75
ANNUAL REPORT 2011
17
Bank borrowings (Continued)
The bank loans are denominated in Singapore dollars.
The Company has provided guarantees in respect of banking facilities amounting to $779,417,000 (2010: $563,600,000)
granted to certain subsidiaries which expire between January 2012 and January 2032. At the reporting date, the amount
of the loan drawdown under the facilities was $477,734,000 (2010: $375,844,000). At the reporting date, the Company
does not consider it probable that a claim will be made against the Company under the guarantees.
18
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 statement of financial position as follows:
2011
$’000
2010
$’000
At 1 January
Recognised in profit or loss (Note 25)
14,943
4,453
11,026
3,917
At 31 December
19,396
14,943
The Group
Deferred tax assets and liabilities are attributable to the following:
The Group
19
2011
Properties
Property,
for sale
plant and
Investment
under
development equipment properties
$’000
$’000
$’000
Total
$’000
2010
Properties
Property,
for sale
plant and
Investment
under
development equipment properties
$’000
$’000
$’000
Total
$’000
At 1 January
Recognised in profit
or loss (Note 25)
6,074
5,759
3,110
14,943
4,333
5,241
1,452
11,026
291
558
3,604
4,453
1,741
518
1,658
3,917
At 31 December
6,365
6,317
6,714
19,396
6,074
5,759
3,110
14,943
Trade payables
The Group
Trade payables
Retention sums payable
The Company
2011
2010
$’000
$’000
2011
$’000
2010
$’000
5,367
4,014
4,284
3,456
21
–
360
–
9,381
7,740
21
360
Trade payables have credit terms between 30 to 60 days. Trade payables and retention sums payable are denominated
in Singapore dollars.
76
ANNUAL REPORT 2011
20
Other payables
The Group
2011
$’000
Amounts due to subsidiaries (non trade)
Booking fees for pre-sale of properties
Accrued directors’ performance bonus
Accrued unbilled progress claims from
contractors
Accrued construction costs for completed
projects
Accrued operating expenses
Accrued payroll and related expenses
(including staff bonuses)
Hotel management fees payable
Rental deposits
Other deposits
Other creditors
Interest rate swaps
2010
$’000
The Company
2011
2010
$’000
$’000
–
–
4,956
–
5,811
5,281
15,094
–
5,368
–
–
5,281
2,384
4,072
–
–
4,500
3,260
3,266
2,548
–
123
–
111
2,018
1,836
724
497
1,617
521
2,112
1,615
762
469
181
73
250
–
–
–
368
–
159
–
–
–
–
–
22,313
26,190
21,203
5,551
Other payables are denominated in Singapore dollars.
The non-trade amounts due to subsidiaries comprising mainly advances, are unsecured, interest-free and repayable on
demand.
Details of interest rate swaps at 31 December 2010 and 31 December 2011 are as follows:
The Group
Contractual
notional
amount
Fair value
$’000
$’000
The Company
Contractual
notional
amount
Fair value
$’000
$’000
2010
Interest rate swaps
27,688
73
–
–
2011
Interest rate swaps
32,401
521
–
–
The interest rate swaps were entered into by the Group to hedge cash flow interest rate risk arising from floating rate
Singapore dollar bank loans. The interest rate swaps will mature in 2013. Fair value gains and losses on the interest
rate swaps are accounted as fair value through profit and loss as they do not qualify for hedge accounting.
77
ANNUAL REPORT 2011
21
Operating segments
For management reporting purposes, the Group is organised into the following reportable operating segments which
are the Group’s strategic business units as follows:
1)
Hotel ownership segment is involved in hotel operations
2)
Property development segment relates to the development of properties for sale
3)
Property investment segment relates to the business of investing in properties to earn rental and for capital
appreciation
4)
Investment holding segment
The Group chief executive officer (“Group CEO”) monitors the operating results of its operating segments for the
purpose of making decisions about resource allocation and performance assessment.
Information regarding the results of each reportable segment is included below. Performance is measured based on
segment profit before income tax, as included in the internal management reports that are reviewed by the Group CEO.
Segment profit is used to measure performance as management believes that such information is the most relevant in
evaluating the results of certain segments relative to other entities that operate within these industries. Inter-segment
pricing is determined on an arm’s length basis.
The Group’s income taxes are managed on a group basis and are not allocated to operating segments.
78
ANNUAL REPORT 2011
21
Operating segments (Continued)
Hotel
Property
Property
Investment
Ownership
development
investment
holding
Group
2011
2010
2011
2010
2011
2010
2011
2010
2011
2010
$’000
$’000
$’000
$’000
$’000
$’000
$’000
$’000
$’000
$’000
– External
48,420
44,484
132,596
169,128
2,635
3,265
–
–
183,651
216,877
Total revenue
48,420
44,484
132,596
169,128
2,635
3,265
–
–
183,651
216,877
Segment results
15,784
13,428
22,235
32,647
1,102
1,473
–
–
39,121
47,548
Interest income
229
113
93
93
13
15
–
–
335
221
–
–
1,084
–
–
–
–
–
1,084
–
Revenue
Rental income
Impairment loss on
advances to
an associate
Finance costs
–
(2,291)
–
(220)
–
(2,132)
(2,185)
(2,110)
–
(174)
–
–
–
(220)
–
(228)
–
–
(4,650)
(4,470)
9,951
–
–
23,015
9,951
(73)
–
–
(449)
(73)
Fair value gain on
investment properties
–
–
–
–
23,015
–
–
–
–
–
–
288
55
–
–
–
–
288
55
13,722
11,409
21,295
30,685
23,507
11,138
–
–
58,524
53,232
105,557
79,802
552,773
374,650
48,431
93,839
41,844
53,335
748,605
601,626
748,605
601,626
513,428
409,774
538,659
431,791
Fair value loss on
interest rate swaps
(449)
Share of profits
of associates
Other information
Segment assets
Total assets
Segment liabilities
130,166
124,837
363,751
227,712
9,380
51,314
10,131
5,911
Total liabilities
Capital expenditure
4,512
1,875
2
11
37
84
9
–
4,560
1,970
1,966
1,930
5
3
73
1
29
–
2,073
1,934
Depreciation
of property,
plant and equipment
79
ANNUAL REPORT 2011
21
Operating segments (Continued)
The Group’s revenue is solely generated in Singapore. Therefore, no geographical information is presented.
Reconciliation of reportable segment liabilities:
The Group
Total liabilities for reportable segment
Income tax liabilities
Total liabilities
22
2011
2010
$’000
$’000
513,428
409,774
5,835
7,074
19,396
14,943
538,659
431,791
Other operating income
The Group
Interest income
Car park fees
Management fees charged to an associate
Income from hotel’s money exchange operations
Option fees for aborted property sales
2011
2010
$’000
$’000
335
221
79
76
120
65
26
38
200
21
7
7
Management fees charged to entities in which certain directors have financial
interest
Management fees charged to a corporate shareholder
Rental income
Others
2
2
1,084
–
47
24
1,900
454
The Group acquired properties for re-development. Prior to commencement of development of properties, rental income
earned from on-going operating leases at the properties is included within other operating income.
23
Finance costs
2011
2010
The Group
$’000
$’000
Interest expense on bank loans
4,638
4,333
12
137
4,650
4,470
Loan commitment fees
80
ANNUAL REPORT 2011
24
The Group
Note
2011
2010
$’000
$’000
288
238
9
10
Profit before taxation is arrived at
after charging:
Auditors’ remuneration
– Audit fees
– Non-audit services
Directors fees
5
Fair value loss on interest rate swaps
Bad debts written off
Impairment loss on trade receivables
12
Impairment loss on advances to an associate
156
142
2,073
1,934
449
73
2
–
5
–
220
–
6,559
6,078
60
56
779
787
43
38
8,935
8,226
Staff costs
Directors
– Salaries and other related costs
– CPF contributions
Key management personnel (other than Directors)
– Salaries, wages and other related costs
Other than directors and key management personnel:
– Salaries, wages and other related costs
– other personnel expenses
698
724
1,178
911
18,252
16,820
4
17
and crediting:
Write-back of allowance for doubtful debts on trade receivables
12
81
ANNUAL REPORT 2011
25
Tax expense
The Group
Current tax expense
(Over)/under provision in respect of prior years
2011
$’000
6,167
(1,755)
2010
$’000
6,413
120
4,412
6,533
4,453
3,917
8,865
10,450
58,524
53,232
9,949
9,050
Expenses not deductible for tax purposes
757
1,318
Tax incentives
(86)
(38)
(1,755)
120
Deferred tax expense (Note 18)
Reconciliation of effective tax rate
Tax at statutory rate of 17% (2010 – 17%)
(Over)/under provision of current tax expense in respect of prior years
8,865
26
10,450
Earnings per share
The basic earnings per share is calculated by dividing the profit attributable to ordinary shareholders by the weighted
average number of ordinary shares outstanding during the financial year. The Company did not have any stock options
or dilutive potential ordinary shares during the years ended 31 December 2010 and 2011.
The Group
Net profit after taxation ($’000)
Weighted average number of ordinary shares in issue during the year (’000)
Earnings per share – Basis/Diluted (cents)
27
2011
$’000
2010
$’000
49,659
636,560
7.80
42,782
636,560
6.72
2011
$’000
2010
$’000
–
–
233
31,950
–
19,397
Capital commitments
At the reporting date, the Group had the following capital commitments:
The Group
Hotel upgrading
Purchase of freehold properties for development
Group’s proportionate interest in the capital commitments of an associate
for the purchase of freehold properties for development
82
ANNUAL REPORT 2011
28
Operating lease commitments (non-cancellable)
(A)
Where Group is a lessee
At the reporting date, the Group was committed to making the following rental payments in respect of operating
leases of office equipment, motor vehicle, car park and warehouse storage:
The Group
Not later than one year
Later than one year but not later than five years
Later than five years
2011
$’000
2010
$’000
117
111
–
93
171
–
228
264
These operating leases expire between December 2012 and October 2016 and contain renewal options.
(B)
Where Group is a lessor
At the reporting date, the Group had the following rentals receivable under non-cancellable operating leases
mainly from the investment properties:
The Group
2011
$’000
2010
$’000
Not later than one year
Later than one year but not later than five years
1,935
427
2,552
947
2,362
3,499
The operating leases of these commercial premises expire between January 2012 and April 2014 and contain
renewal options.
29
Significant related party transactions
Other than those disclosed elsewhere in the financial statements, significant transactions with related parties are as
follows:
The Group
Aggregate remuneration (including CPF contributions thereon and benefits)
of employees who are related to the directors
2011
$’000
2010
$’000
193
295
These employees are Teo Kok Thye, Loh Kwang Chew, Cheong Kwai Fun, Phua Lay Leng and Tan Jee May. Teo Kok
Thye and Loh Kwang Chew are the uncles of four of our executive directors, namely Teo Hong Lim, Chris Teo Hong
Yeow, Michael Teo Hong Wee and Teo Hong Hee. Cheong Kwai Fun and Phua Lay Leng are their cousins. Tan Jee May
is the niece of Michael Teo Hong Wee. Tan Jee May left the Group on 24 September 2011.
83
ANNUAL REPORT 2011
30
Financial risk management
The Group has documented financial risk management policies. These policies set out the Group’s overall business
strategies and its risk management philosophy. The Group is exposed to financial risks arising from its operations and
the use of financial instruments. The key financial risks include credit risk, liquidity risk and market risk. The Group’s
overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise adverse
effects from the unpredictability of financial markets on the Group’s financial performance.
30.1
Credit risk
Credit risk refers to the risk that counterparties may default on their contractual obligations resulting in financial loss
to the Group. The Group’s exposure to credit risk arises primarily from trade and other receivables.
The Group’s objective is to seek continual growth while minimising losses arising from credit risk exposure. For trade
receivables, the Group adopts the policy of dealing only with customers of appropriate credit history, and obtaining
sufficient security where appropriate to mitigate credit risk. The Group closely monitors and avoid any significant
concentration of credit risk on any of its development properties sold. In addition, receivable balances and payment
profile of the debtors are monitored on an on-going basis with the result that the Group’s exposure to bad debts
is not significant. For other financial assets, the Group adopt the policy of dealing only with high credit quality
counterparties.
The Group establishes an allowance for impairment that represents its estimate of incurred losses in respect of trade
and other receivables. The allowance account in respect of trade and other receivables is used to record impairment
losses unless the Group is satisfied that no recovery of the amount owing is possible. At that point, the financial asset
is considered irrecoverable and the amount charged to the allowance account is written off against the carrying amount
of the impaired financial asset.
At the reporting date, other than as disclosed in Note 12 and Note 13, no allowance for impairment is necessary in
respect of trade and other receivables past due and not past due.
At the reporting date there is no significant concentration of credit risk. The maximum exposure to credit risk is
represented by the carrying amount of each financial asset.
84
ANNUAL REPORT 2011
30
Financial risk management (Continued)
30.2
Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of the Group’s and the Company’s financial
instruments will fluctuate because of changes in market interest rates.
The Group’s exposure to interest rate risk arises from its variable rate bank borrowings and fixed deposits. The bank
borrowings are repriced between 1 to 12 months.
The Group has entered into interest rate swap contracts to swap floating interest rates for fixed interest rates for certain
loans to minimise its cash flow interest rate risk exposure.
Cash flow sensitivity analysis for variable rate instruments
An increase and a decrease of 100 basis points (bp) in the interest rates of the variable rate bank loans and interest
rate swaps and an increase and a decrease of 10 basis points in interest rates of the fixed deposits at the reporting
date would have increased (decreased) equity and profit before tax by the amounts shown below. The magnitude
represents management’s assessment of the likely movement in interest rates under normal economic conditions. This
analysis has not taken into account the associated tax effects and assumes that all other variables, in particular foreign
currency rates, remain constant.
The Group
31 December 2011
Fixed deposits
Variable rate bank loans
Interest rate swaps
Profit before tax
10 bp*/100 bp# 10 bp*/100 bp#
increase
decrease
$’000
$’000
Equity
10 bp*/100 bp# 10 bp*/100 bp#
increase
decrease
$’000
$’000
60
(3,414)
571
(60)
3,414
(571)
60
(3,414)
571
(60)
3,414
(571)
(2,783)
2,783
(2,783)
2,783
39
(3,191)
766
(39)
3,191
(766)
39
(3,191)
766
(39)
3,191
(766)
(2,386)
2,386
(2,386)
2,386
31 December 2010
Fixed deposits
Interest rate swaps
85
ANNUAL REPORT 2011
30
30.2
Interest rate risk (Continued)
Cash flow sensitivity analysis for variable rate instruments (Continued)
The Company
Profit before tax
10 bp*/100 bp
#
Equity
10 bp*/100 bp
#
10 bp*/100 bp#
10 bp*/100 bp#
decrease
increase
decrease
increase
$’000
$’000
$’000
$’000
Fixed deposits
23
(23)
23
(23)
(4)
4
(4)
4
19
(19)
19
(19)
Fixed deposits
9
(9)
9
(9)
–
–
–
–
9
(9)
9
(9)
31 December 2011
31 December 2010
*
#
30.3
Fixed deposits
Variable rate bank loans and interest rate swaps
Currency risk
Currency risk is the risk that the value of a financial instrument will fluctuate due to changes in foreign exchange
rates.
The Group’s operational activities are carried out in Singapore dollars, which is the functional currency. There is minimal
exposure to risk arising from movements in foreign currencies exchange rates as the Group has no transactions in
foreign currencies.
86
ANNUAL REPORT 2011
30
30.4
Liquidity risk
Liquidity or funding risk is the risk that an enterprise will encounter difficulty in meeting financial obligations due to
shortage of funds. Liquidity risk may result from an inability to sell a financial asset quickly at close to its fair value.
The Company’s and the Group’s exposure to liquidity risk arises primarily from mismatches of the maturities of financial
assets and liabilities. The Company’s and the Group’s objective is to maintain a balance between continuity of funding
and flexibility through the use of stand-by credit facilities.
The table below analyses the maturity profile of the Company’s and the Group’s financial liabilities based on contractual
undiscounted cash flows.
The Group
At 31 December 2011
Bank borrowings (Note 17)
Trade and other payables (Note 19 and 20)
– Trade and other payables
– Interest rate swaps
– outflow
– inflow
At 31 December 2010
– Trade and other payables
– Interest rate swaps
– outflow
– inflow
The Company
At 31 December 2011
At 31 December 2010
Contractual cash flows
Less than
Between 2
1 year
and 5 years
$’000
$’000
Carrying
amount
$’000
Total
$’000
481,734
496,270
159,191
255,447
81,632
31,173
31,173
31,173
–
–
521
–
1,878
(1,006)
939
(503)
Over
5 years
$’000
939
(503)
–
–
513,428
528,315
190,800
255,883
81,632
375,844
418,472
157,546
171,280
89,646
33,857
33,857
33,857
–
–
73
–
2,406
(1,287)
802
(429)
1,604
(858)
–
–
409,774
453,448
191,776
172,026
89,646
Contractual cash flows
Less than
Between 2
1 year
and 5 years
$’000
$’000
Carrying
amount
$’000
Total
$’000
Over
5 years
$’000
4,000
21,224
4,027
21,224
4,027
21,224
–
–
–
–
25,224
25,251
25,251
–
–
5,911
5,911
5,911
–
–
5,911
5,911
5,911
–
–
87
ANNUAL REPORT 2011
31
Fair values of financial instruments
Fair value hierarchy
The table below analyses financial instruments carried at fair value, by valuation method. The different levels have
been defined as follows:
Level 1:
Level 2:
quoted prices (unadjusted) in active markets for identical assets or liabilities;
inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either
directly (i.e. as prices) or indirectly (i.e. derived from prices); and
Level 3:
inputs for the assets or liability that are not based on observable market data (unobservable inputs).
The Group
Level 1
Level 2
Level 3
Total
$’000
$’000
$’000
$’000
–
521
–
521
–
73
–
73
31 December 2011
Interest rate swaps
31 December 2010
Interest rate swaps
Other financial assets and liabilities
The carrying amounts of financial assets and liabilities with a maturity of less than one year (including trade and other
receivables, balances with related parties, cash and cash equivalents and trade and other payables) approximate their
fair values because of the short period to maturity.
32
Capital management
The Group’s objectives when managing capital are:
(a)
To safeguard the Group’s ability to continue as a going concern;
(b)
To support the Group’s stability and growth;
(c)
To provide capital for the purpose of strengthening the Group’s risk management capability; and
(d)
To provide an adequate return to shareholders.
88
ANNUAL REPORT 2011
32
Capital management (Continued)
The Group regularly reviews and manages its capital structure to ensure optimal capital structure and shareholder
returns, taking into consideration the future capital requirements of the Group and capital efficiency, prevailing and
projected profitability, projected operating cash flows, projected capital expenditures and projected strategic investment
opportunities. The Group currently does not adopt any formal dividend policy.
The Board of Directors monitors capital based on the net debt to adjusted net assets value ratio. Net debt comprises
total borrowings less cash and cash equivalents. Adjusted net assets value comprises total equity and the excess of
the fair values of the Group’s hotel and office premises over their net book values. The Group’s hotel and office
premises are measured at historical cost. For the purpose of capital management, the fair values of the Group’s hotel
and office premises are used. The fair value of the hotel and office premises are determined by an independent firm
of professional valuers.
There were no changes in the Group’s approach to capital management during the year.
The Company and its subsidiaries are not subject to externally imposed capital requirements.
2011
$’000
2010
$’000
Total borrowings (Note 17)
Less: Cash and cash equivalents (Note 15)
481,734
228,197
375,844
157,939
Net debt (A)
253,537
217,905
Net assets
Excess of fair values of hotel and office premises over net book values
209,946
344,198
169,835
257,106
Adjusted net assets value (B)
554,144
426,941
0.46
0.51
Net debt to adjusted net assets value ratio (times) (A)/(B)
33
Dividends
Group
2011
$’000
Final dividend paid in respect of the previous financial year of 1.5 cents
(2010: 1 cent) per share
Final proposed dividend in respect of the current financial year of 2 cents
(2010: 1.5 cents) per share
2010
$’000
9,548
6,366
12,731
9,548
The final dividend is proposed by the Directors after the balance sheet date and subject to the approval of shareholders
at the next annual general meeting of the Company.
89
ANNUAL REPORT 2011
34
Disclosure on use of proceeds from Initial Public Offering
On 11 March 2008, 128,000,000 new ordinary shares were issued pursuant to the initial public offering (“IPO”) of
the Company.
The net proceeds raised from the IPO of the Company (after deducting the IPO issue expenses in relation to the
invitation, comprising listing fees, underwriting and placement commission, professional fees and other expenses of
$2.1 million) was $36.3 million.
As at the date of this Report, the Company has utilised $32.5 million of the net proceeds as follows:
$’000
1)
Repayment of short-term bank borrowings
5,003
2)
Repayment of revolving working capital loans
6,282
3)
Acquisition of a residential development land plot
4)
Maintaining, furnishing and upgrading of the hotel building
15,000
6,178
32,463
35
Contingent liabilities
At the reporting date, the company had provided:
(i)
Corporate guarantees in respect of banking facilities amounting to $779,417,000 (2010 – $563,600,000)
granted to certain subsidiaries. The amount of the loan drawdown under the facilities was $477,734,000 (2010:
$375,844,000); and
(ii)
guarantees of approximately $156,481,000 (2010 – $87,343,000) to banks in respect of bank loans of certain
associates. These guarantees represent the Company’s share of the contingent liabilities of the associates incurred
jointly with other investors.
90
ANNUAL REPORT 2011
AS AT 24 FEBRUARY 2012
Issued and Fully Paid-Up Capital
Number of Shares
Class of Shares
Voting Rights
–
–
–
–
S$47.399 million
636,560,000
Ordinary
One Vote Per Share
Distribution of Shareholdings as at 24 February 2012
Size of Shareholdings
No. of Shareholders
1 – 999
1,000 – 10,000
10,001 – 1,000,000
1,000,001 and above
Total
%
No. of Shares
%
1
762
638
34
0.07
53.10
44.46
2.37
541
4,698,500
49,041,959
582,819,000
0.00
0.74
7.70
91.56
1,435
100.00
636,560,000
100.00
Percentage of shareholdings in the hands of public (Public Float)
As at 24 February 2012, approximately 23.47% of the Company’s shares are held in the hands of public. Accordingly, the
Company has complied with Rule 723 of the Listing Manual of the Singapore Exchange Securities Trading Limited.
Twenty Largest Shareholders
List of 20 Largest Shareholders as at 24 February 2012
NO.
NAME
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
#
NO. OF SHARES
%
KIAN LAM INVESTMENT PTE LTD
SEN LEE DEVELOPMENT PTE LTD
TEO HONG LIM#
HONG LEONG FINANCE NOMINEES PL
CHEONG FUNG FAI
SUTANTIO
TJANDRAWATI
KOH WEE MENG
TEO HONG HEE
TEO KOK LEONG
TEO HONG YEOW
LIM SWEE HAH
FRAGRANCE GROUP LIMITED
TEO KOK THYE
TEO HONG WEE
CHEONG KWAI FUN (ZHANG GUIFEN)
BANK OF S’PORE NOMS PTE LTD
CITIBANK NOMS S’PORE PTE LTD
UOB KAY HIAN PTE LTD
SOON LI HENG CIVIL ENGINEERING PTE LTD
232,852,000
70,930,000
60,570,000
24,087,000
20,020,000
18,958,000
17,962,000
17,000,000
14,780,000
12,600,000
10,329,000
9,960,000
8,000,000
7,000,000
5,314,000
5,010,000
5,000,000
4,863,000
4,595,000
4,400,000
36.58
11.14
9.52
3.78
3.15
2.98
2.82
2.67
2.32
1.98
1.62
1.56
1.26
1.10
0.83
0.79
0.79
0.76
0.72
0.69
TOTAL
554,230,000
87.06
The number of shares does not include 180,000 shares bought on 22 February 2012 which were not credited to his accounts as at 24
February 2012.
91
ANNUAL REPORT 2011
AS AT 24 FEBRUARY 2012
Substantial shareholders as shown in the Register of Substantial Shareholders as at 24 February 2012
Number of Shares
Substantial shareholders
Direct Interest
%
232,852,000
36.58
Sen Lee Development Private Limited
70,930,000
11.14
–
–
Teo Hong Lim(2) (3)
60,750,000
9.54
305,382,000
47.97
Sutantio(4)
18,958,000
2.98
17,962,000
2.82
Tjandrawati(4)
17,962,000
2.82
18,958,000
2.98
Kian Lam Investment Pte Ltd
(1)
Deemed Interest
70,930,000
%
11.14
Note:
(1)
Kian Lam Investment Pte Ltd (“Kian Lam”) holds more than 50% of the issued share capital of Sen Lee Development Private Limited
(“Sen Lee”) and is deemed to be interested in the shares of the Company held by Sen Lee.
(2)
Teo Hong Lim holds more than 20% of the issued share capital of Kian Lam. In this respect, pursuant to Section 7 of the Companies
Act, Cap. 50, Teo Hong Lim is deemed to be interested in the shares of the Company held by Kian Lam and Sen Lee.
(3)
1,600,000 shares held by Teo Hong Lim are registered in the name of a nominee.
(4)
Sutantio is the husband of Tjandrawati. Each of them is deemed to be interested in the shares held by each other.
92
ANNUAL REPORT 2011
NOTICE IS HEREBY GIVEN that the Annual General Meeting of Roxy-Pacific Holdings Limited (the “Company”) will be held at
Frankel Room, 3rd Floor, Grand Mercure Roxy Hotel, Marine Parade Road, Roxy Square, Singapore 428769 on Friday, 30 March
2012 at 10.00 a.m. for the following purposes:–
AS ORDINARY BUSINESS
1.
To receive and adopt the Audited Financial Statements of the Company for the financial year ended 31 December 2011
together with the Reports of the Directors and Auditors thereon.
2.
To declare a Final Dividend (tax exempt one-tier) of 2.0 cents per ordinary share for the financial year ended 31 December
2011.
3.
(Resolution 2)
To approve Directors’ fees of S$156,200 (2011: S$156,200) for the financial year ending 31 December 2012 and the
payment thereof on a quarterly basis.
4.
(Resolution 1)
(Resolution 3)
To re-elect Mr Teo Hong Wee(1), a Director retiring under Article 103 of the Articles of Association of the Company.
(Resolution 4)
5.
To re-elect Mr Teo Hong Lim(1), a Director retiring under Article 103 of the Articles of Association of the Company.
(Resolution 5)
6.
To re-elect Mr Winston Tan Tien Hin(1), a Director retiring under Article 103 of the Articles of Association of the
Company.
(Resolution 6)
Mr Winston Tan Tien Hin will, upon re-election as an Independent Director of the Company, remain as a member of
the Audit Committee and will be considered independent for the purposes of Rule 704(8) of the Listing Manual of the
Singapore Exchange Securities Trading Limited (SGX-ST). He will remain as a member of the Nominating Committee
and a member of the Remuneration Committee.
7.
To re-appoint Foo Kon Tan Grant Thornton LLP as Auditors of the Company and to authorise the Directors to fix their
remuneration.
(Resolution 7)
Note:
(1)
Detailed information on these Directors can be found under ‘Board of Directors’ and ‘Statement of Corporate Governance Report’ in
the Company’s Annual Report 2011.
AS SPECIAL BUSINESS
To consider, and if thought fit, to pass the following Ordinary Resolution with or without modifications:–
8.
Authority to allot and issue shares
“That pursuant to Section 161 of the Companies Act, Cap. 50, and the listing rules of the Singapore Exchange Securities
Trading Limited, approval be and is hereby given to the Directors of the Company at any time to such persons and upon
such terms and for such purposes as the Directors may in their absolute discretion deem fit, to:
(a)
(i)
issue shares in the capital of the Company whether by way of rights, bonus or otherwise;
93
ANNUAL REPORT 2011
(ii)
make or grant offers, agreements or options that might or would require shares to be issued or other
transferable rights to subscribe for or purchase shares (collectively, “Instruments”) including but not
limited to the creation and issue of warrants, debentures or other instruments convertible into shares;
(iii)
issue additional Instruments arising from adjustments made to the number of Instruments previously
issued in the event of rights, bonus or capitalisation issues; and
(b)
(notwithstanding the authority conferred by the shareholders may have ceased to be in force) issue shares in pursuance
of any Instrument made or granted by the Directors while the authority was in force; provided always that:
(i)
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, of which the aggregate number of shares
(including shares to be issued in pursuance of Instruments made or granted pursuant to this resolution)
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, and for the purpose of this
resolution, the total number of issued shares excluding treasury shares shall be the Company’s total number
of issued shares excluding treasury shares at the time this resolution is passed, after adjusting for;
(a)
new shares arising from the conversion or exercise of convertible securities, or
(b)
new shares arising from exercising share options or vesting of share awards outstanding or
subsisting at the time this resolution is passed provided the options or awards were granted in
compliance with Part VIII of Chapter 8 of the Listing Manual of the SGX-ST, and
(c)
(ii)
any subsequent bonus issue, consolidation or subdivision of the Company’s shares, and
such authority shall, unless revoked or varied by the Company at a general meeting, continue in force
until the conclusion of the next annual general meeting or the date by which the next annual general
meeting of the Company is required by law to be held, whichever is the earlier.”
(Resolution 8)
(See Explanatory Note)
ANY OTHER BUSINESS
9.
To transact any other business that may be properly transacted at an Annual General Meeting.
BY ORDER OF THE BOARD
Koh Seng Geok
Foo Soon Soo
Company Secretaries
94
ANNUAL REPORT 2011
Explanatory Notes on Special Business to be transacted:
Resolution 8, if passed, will empower the Directors of the Company from the date of the above Meeting until the next Annual General Meeting
to issue shares and convertible securities in the Company up to an amount not exceeding in aggregate fifty per cent (50%) of the total number
of issued shares excluding treasury shares of the Company of which the total number of shares and convertible securities issued other than
on a pro rata basis to existing shareholders shall not exceed twenty per cent (20%) of the total number of issued shares excluding treasury
shares of the Company at the time the resolution is passed, for such purposes as they consider would be in the interests of the Company. The
total number of issued shares excluding treasury shares of the Company for this purpose shall be the total number of issued shares excluding
treasury shares at the time this resolution is passed (after adjusting for new shares arising from the conversion of convertible securities or
share options on issue at the time this resolution is passed and any subsequent bonus issues consolidation or subdivision of the Company’s
shares). This authority will, unless revoked or varied at a general meeting, expire at the next Annual General Meeting of the Company.
Notes:
1.
A member of the Company entitled to attend and vote at the Meeting is entitled to appoint a proxy in his stead.
2.
A proxy need not be a member of the Company.
3.
If the appointor is a corporation, the proxy must be executed under seal or the hand of its duly authorised officer or attorney.
4.
The instrument appointing a proxy must be deposited at the registered office of the Company at 50 East Coast Road #03-11, Roxy
Square Shopping Centre, Singapore 428769 not later than 48 hours before the time appointed for the Meeting.
NOTICE OF BOOKS CLOSURE
NOTICE IS HEREBY GIVEN that the Share Transfer Books and Register of Members of Roxy-Pacific Holdings Limited (the
“Company”) will be closed from 10 April 2012 after 5.00 p.m. to 11 April 2012 for the preparation of dividend warrants.
Duly completed registrable transfers received by the Company’s Share Registrar, KCK CorpServe Pte. Ltd. of 333 North
Bridge Road #08-00, KH KEA Building, Singapore 188721 up to 5:00 p.m. on 10 April 2012 will be registered to determine
shareholders’ entitlements to the said proposed final dividend. Members whose securities accounts with The Central Depository
(Pte) Limited are credited with shares at 5:00 p.m. on 10 April 2012 will be entitled to the abovementioned dividends.
Payment of the proposed dividends, if approved by shareholders at the Annual General Meeting to be held on 30 March 2012
will be paid on 23 April 2012.
BY ORDER OF THE BOARD
Koh Seng Geok
Foo Soon Soo
Company Secretaries
95
This page has been intentionally left blank.
Co. Registration No. 196700135Z
(Incorporated in the Republic of Singapore)
IMPORTANT
1. For investors who have used their CPF monies to
buy ROXY-PACIFIC HOLDINGS LIMITED shares, the
Annual Report is forwarded to them at the request
of their CPF Approved Nominees, and is sent FOR
INFORMATION ONLY.
PROXY FORM
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.
I/We,
of
being a member/members of ROXY-PACIFIC HOLDINGS LIMITED (the “Company”), hereby appoint
Name
Address
NRIC/
Passport No.
Proportion of shareholdings to
be represented by proxy (%)
and/or (delete as appropriate)
as my/our proxy/proxies, to vote for me/us on my/our behalf and, if necessary, to demand a poll at the Annual General
Meeting of the Company to be held at Frankel Room, 3rd Floor, Grand Mercure Roxy Hotel, Marine Parade Road, Roxy
Square, Singapore 428769 on Friday, 30 March 2012 at 10.00 a.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 Annual General Meeting as indicated
with an “X” in the spaces provided hereunder. If no specified directions as to voting are given, the proxy/proxies will
vote or abstain from voting at his/their discretion.
To be used on
a show of hands
For*
Against*
No Ordinary Resolutions
To be used in the
event of a poll
For**
Against**
Ordinary Business
1.
To receive and adopt the Audited Financial Statements of the
Company for the financial year ended 31 December 2011
together with the Reports of the Directors and Auditors
thereon.
2.
To declare a Final Dividend (tax exempt one-tier) of 2.0 cents
per ordinary share for the financial year ended 31 December
2011.
3.
To approve Directors’ fees of S$156,200 (2011: S$156,200)
for the financial year ending 31 December 2012 and the
payment thereof on a quarterly basis.
4.
To re-elect Mr Teo Hong Wee, a Director retiring under Article
103 of the Articles of Association of the Company.
5.
To re-elect Mr Teo Hong Lim, a Director retiring under Article
103 of the Articles of Association of the Company.
6.
To re-elect Mr Winston Tan Tien Hin, a Director retiring under
Article 103 of the Articles of Association of the Company.
7.
To re-appoint Foo Kon Tan Grant Thornton LLP as Auditors
of the Company and to authorise the Directors to fix their
remuneration.
Special Business
8.
To authorize Directors to issue shares pursuant to Section 161
of the Companies Act, Chapter 50.
* Please indicate your vote “For” or “Against” with a “√” within the box provided.
** If you wish to exercise all your votes “For” or “Against”, please tick (√) within the box provided.
Alternatively, please indicate the number of votes as appropriate.
Dated this
day of
2012
Total Number of Shares Held
Signature(s) of Member(s)/Common Seal
IMPORTANT: PLEASE READ NOTES BEFORE COMPLETING THIS PROXY FORM
NOTES:
1.
A member of the Company entitled to attend and vote at the Annual General Meeting is entitled to appoint not more than
two proxies to attend and vote on his stead. Such proxy need not be a member of the Company.
2.
Where a member of the Company appoints two proxies, he shall specify the proportion of his shareholding (expressed as a
percentage of the whole) to be represented by each such proxy.
3.
This instrument appointing a proxy or proxies must be under the hand of the appointor or his attorney duly authorized in writing.
Where the instrument appointing a proxy or proxies is executed by a corporation, it must be executed under its common seal
or under the hand of its attorney or duly authorised officer.
4.
A corporation which is a member of the Company may authorize by resolution of its directors or other governing body such
person as it thinks fit to act as its representative at the Annual General Meeting, in accordance with its Articles of Association
and Section 179 of the Companies Act, Chapter 50 of Singapore.
5.
The instrument appointing proxy or proxies, together with the power of attorney or other authority (if any) under which it is
signed, or notarially certified copy thereof, must be deposited at the registered office of the Company at 50 East Coast Road
#03-11, Roxy Square Shopping Centre, Singapore 428769 not later than 48 hours before the time set for the Annual General
Meeting.
6.
A member should insert the total number of shares held. If the member has shares entered against his name in the Depository
Register (as defined in Section 130A of the Companies Act, Chapter 50 of Singapore), he should insert that number of shares.
If the member has shares registered in his name in the Register of Members of the Company, he should insert the number of
shares. If the member has shares entered against his name in the Depository Register and shares registered in his name in the
Register of Members of the Company, he should insert the aggregate number of shares. If no number of shares is inserted, this
form of proxy will be deemed to relate to all the shares held by the member of the Company.
7.
The Company shall be entitled to reject the instrument appointing a proxy or proxies if it is incomplete, improperly completed
or illegible or where the true intentions of the appointor are not ascertainable from the instructions of the appointor specified
in the instrument appointing a proxy or proxies. In addition, in the case of members of the Company whose shares are entered
against their names in the Depository Register, the Company may reject any instrument appointing a proxy or proxies lodged if
such members are not shown to have shares entered against their names in the Depository Register 48 hours before the time
appointed for holding the Annual General Meeting as certified by The Central Depository (Pte) Limited to the Company.
8.
A Depositor shall not be regarded as a member of the Company entitled to attend the Annual General Meeting and to speak
and vote thereat unless his name appears on the Depository Register 48 hours before the time set for the Annual General
Meeting.
fold here
Affix
Postage
Stamp
The Company Secretary
50 East Coast Road #03-11
Roxy Square Shopping Centre
Singapore 428769
fold here
CORPORATE PROFILE
Roxy-Pacific Holdings Limited is a homegrown specialty property and hospitality
group with a track record that extends back to 1967.
Listed on the SGX Mainboard in March 2008, the Group is principally engaged
in the development and sale of residential and commercial properties (“Property
Development”) and the ownership of Grand Mercure Roxy Hotel and other
investment properties (“Hotel Ownership and Property Investment”).
In Property Development, Roxy-Pacific is an established brand name for small and
medium size residential developments with unique design features. The Group’s
CONTENTS
developments offer desirable living environments which epitomise quality and
innovation and are targeted at middle to upper middle income buyers.
01
Between 2004 and 2011, the Group developed and launched 27 small to
02
medium size developments comprising a total of more than 1,500 residential
06
FINANCIAL AND OPERATIONS REVIEW
and commercial units.
08
10
BOARD OF DIRECTORS
13
GROUP STRUCTURE
14
16
20
The Group also owns the Grand Mercure Roxy Hotel, managed by the
international hotel operator, Accor Group. Strategically located in the East Coast
area, the hotel is close to the CBD, the Changi airport and the Marina Bay Resort
Casino. In 2011, the hotel enjoyed a healthy Average Occupancy Rate (“AOR”)
and Average Room Rate (“ARR”) and is poised to benefit from the high visitors’
Designed and produced by
arrivals with the strong economy.
(65) 6578 6522
ROXY-PA C IF IC HOL D ING S L IMIT E D
A NNUAL R E P O R T 2 011
TU RN I N G DR EA M S IN TO R E ALI TY
5 0 Eas t C o ast R o ad #0 3 - 11
Roxy S q uar e S ho p p i ng C en tre
Singap o r e 4 2 8 769
Tel: (65 ) 64 4 0 98 78
Fax: (65 ) 64 4 0 91 2 3
Regist rat i o n Num b e r : 1 9 6 7 0 0 13 5Z
Websit e : www. r o xy p ac i f i c . c om . s g
TURNING DREAMS
INTO REALITY
A NN UA L R E P O R T 2 0 1 1

2011 - National University of Singapore

Transcription

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