Automotive • Property Development • Industrial Parks • Utilities • Resort Operations
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GALLANT VENTURE LTD | ANNUAL REPORT 2016 REPORT | ANNUAL GALLANT VENTURE LTD Annual Report 2016 Remain Focus, Deliver Value GALLANT VENTURE LTD 3 HarbourFront Place #16-01 HarbourFront Tower Two Singapore 099254 Tel: (65) 6389 3535 Fax: (65) 6396 7758 www.gallantventure.com Table of Contents 01 OUR PROFILE 02 OUR CORE BUSINESSES • AUTOMOTIVE • PROPERTY DEVELOPMENT • INDUSTRIAL PARKS • UTILITIES • RESORT OPERATIONS 07 LETTER TO SHAREHOLDERS 09 BUSINESS REVIEW 13 FINANCIAL REVIEW 15 GROUP STRUCTURE 18 FINANCIAL HIGHLIGHTS 19 BOARD OF DIRECTORS 22 KEY EXECUTIVES 23 CORPORATE INFORMATION 24 FINANCIAL CONTENTS GALLANT VENTURE LTD 01 Annual Report 2016 Our Profile Gallant Venture Ltd is an alliance between the Singapore and Indonesia Indonesia focused investment governments and close proximity to Singapore. holding company headquartered Continuously expanding our product offering, Lagoi in Singapore. We are an integrated Bay Development is our latest integrated project with resorts/hotels, commercial activities and residential automotive group with coverage plots in Bintan. Progressive completion of the Lagoi across Indonesia and a master Bay project will bring our Bintan Resorts to new planner for industrial parks and heights and significantly enhance the business prospects on the island. resorts in Batam and Bintan. With the successful integration of our acquired With vision and perseverance, we have successfully automotive arm – PT Indomobil Sukses Internasional developed Batam and Bintan into an investment and Tbk (“IMAS”), we have deepened our roots into tourist destination offering integrated businesses and Indonesia and diversified our portfolio from a single services such as industrial parks, utilities, property location-focused business to a country-focused development and resort operations. Our businesses investment holding company. are well-positioned to leverage on the strategic 02 GALLANT VENTURE LTD Annual Report 2016 Automotive Gallant Venture’s Automotive IMAS is Indonesia based integrated automotive business includes assembly and business with business lines covering sole agencies, vehicle sales distribution, after-sales service, vehicle distribution of passenger vehicles, ownership financing, spare parts distribution under vehicle and equipment financing the “IndoParts” brand, vehicle assembly, automotive services, distribution of trucks and parts/components manufacturing and other related heavy equipment and supply of parts supporting services. IMAS manages well-known and vehicle services. international brands such as Audi, Foton, Hino, Kalmar, Manitou, Nissan, Renault, Renault Trucks, Suzuki, Volkswagen, Volvo, Volvo Trucks, and Mack Trucks and has well-distributed sales and after-sales branch networks to capture higher sales penetration across Indonesia. GALLANT VENTURE LTD 03 Annual Report 2016 Property Development Gallant Venture is the master Located in Northern Bintan, Lagoi Bay Development planner and infrastructure provider is our latest integrated resort project. Covering approximately 1,300 hectares of land, when in Batam and Bintan. It master completed it will be home to resorts, residential planned land parcels for industrial, sites, shopping malls, restaurants, entertainment, commercial, residential and resort and sea-sport facilities. Some of the investors of projects on the Group’s land banks Lagoi Bay include the world’s leading resorts such in Bintan of approximately 18,000 as Alila Villas, The Sanchaya and Grand Lagoi Swiss-Belhotel. hectares. On completion of Phase 1, it will add over 150 new businesses, 10 new hotel properties, condominiums and housing compounds, contributing more than 3,000 keys to Bintan Resorts’ current 1,500 key count. 04 GALLANT VENTURE LTD Annual Report 2016 Industrial Parks Gallant Venture owns and These parks encompass net lettable area of manages the Batamindo Industrial 550,000 sqm in Batamindo Industrial Park and 100,000 sqm in Bintan Industrial Estate. Our industrial Park in Batam and the Bintan parks are designed with flexible layouts and ease of Industrial Estate in Bintan. We set-up. Separate areas are broadly designed for offer the convenience of one- offices, productions, as well as loading and unloading stop manufacturing environment of goods. To meet the needs of our investors with ready access to Singapore’s and tenants, whom may require specifications unique to their operations, the factories may be financial, infrastructure and customised so to achieve operational efficiency logistics network. Our activities and effectiveness. Our Batamindo Industrial Park is include the development of the the first industrial park in the Asia-Pacific to be industrial parks, sales or lease of certified ISO 9001:2000 and ISO 14001, hallmarks prepared industrial land as well of manufacturing site that is efficient, cost effective and environmentally friendly. as the provision of ready-built factories and dormitory. GALLANT VENTURE LTD 05 Annual Report 2016 Utilities Gallant Venture, a private Our facilities include 19 dual-fired generators at utilities provider in Batam and Batamindo Industrial Park, 6 generators at Bintan Industrial Estate, and 4 generators at Bintan Bintan, provides electricity, Resorts. The installed capacities of our generators telecommunications, water and are 130MW, 20MW, and 24MW respectively. waste management services to its Industrial Parks’ and Resorts’ In order to cope with any potential increase in customers. The Group has invested electricity consumption and provide steady power supply to its customers, we cater approximately approximately S$435 million in the 30% of our installed capacity as standby reserve. construction and development of utilities infrastructure and resources In addition, we maintain a strategic fuel reserve so including power generation and to ensure continuously and uninterrupted power distribution facilities, portable water generation even in the event of disruption in fuel supply. treatment facilities, sewage treatment plants and waste water treatment facilities and landfills. 06 GALLANT VENTURE LTD Annual Report 2016 Resort Operations Gallant Venture provides overall Bintan Resorts continue to be a popular tropical support facilities and services resort destination with Singapore residents and International travellers, famed for its pristine beaches to resorts located in Bintan. We and gorgeous scenery. With the opening of new undertake the overall planning, hotels and shopping malls in Lagoi Bay, we have development, operations and witnessed strong growth in tourist arrivals to Bintan marketing of Bintan Resorts and Resorts in 2016. provide services to the hotels and resorts located within Bintan Resorts that include ferry services and ferry terminal operations, tour operations, property rental, workers’ accommodation, medical support and estate and township maintenance such as road maintenance and drainage as well as operation of a 24-hour crisis centre. GALLANT VENTURE LTD 07 Annual Report 2016 Letter To Shareholders Mr Eugene Park Mr Lim Hock San Chief Executive Officer Non-Executive Chairman Executive Director Independent Director DEAR FELLOW SHAREHOLDERS, The global economy has had an interesting year, with concept for licenses and permits has also had a direct impact shifting political environments creating economic uncertainty. on our company, with our industrial parks being included Within this volatile environment, the Indonesian economy is among the 32 across the country to qualify for the KLIK recovering from its commodity price hangover, and except for program which streamlines the whole licensing process, some short-term volatility around the US elections, the rupiah and allows investors to commence construction even before and the Indonesian capital markets are relatively healthy. The completing the licensing formalities. The reduction in the Tax Amnesty not only filled a budget gap caused by lower negative list for strategic industries is also encouraging to than expected tax revenues due to lower oil and gas and foreign investors. Coupled with the significant fiscal support mining and manufacturing activity, but had the added benefit into infrastructure investments, we believe the future of the of bringing almost S$500 billion of previously undeclared Indonesian economy is strong. And your company is well assets and 800,000 tax payers into the regularised economy. placed to benefit. This will lead to a more effective, efficient, and transparent tax system, reducing leakages, and giving the government Our automotive business will benefit from the increasing additional future revenues to invest on its programs, especially demand for passenger vehicle as some 21 million people on improving infrastructure and education. join the consuming class over the 5 years to 2020 taking the number from 67 million to 88 million consumers. Our The outlook for Indonesia going forward is optimistic. The automotive financing business also benefits from this growing Economist now ranks Indonesia 3rd after China and India consumptive class, as does our vehicle leasing business. as preferred investment destination in Asia, and Indonesia Our logistics JV with the Japanese logistics company Seino attracted over $159 billion of direct investments in 2016. The positions us to capture a portion of the online economy, President’s efforts at reducing corruption and bureaucracy while complimenting our expertise in our core vehicle has also led the country to rise 15 places in the annual business. Our utilities business will