Reaching New Heights
Wing Tai Holdings Limited
Annual Report 06 Outfit & accessories: Topshop Sculpture: Guardian Figure by Gregory Scott Johns Location: Draycott 8 wing tai editorial fa 28 sep 9/29/06 5:47 PM Page 1
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Reaching New Heights
Wing Tai Holdings Limited
Annual Report 06
Reaching New Heights This financial year, Wing Tai Holdings Limited achieved the highest revenue in the Group’s history with an astounding 216% increase from the previous year. Positive market sentiments and a confident management outlook are poised to fuel the Group’s advancement in all sectors. From property investments, development and management of upscale projects to expansive plans in its fashion & lifestyle retail sector, the Group is set to reach even greater heights of achievement in the years ahead. COVER Photography by Wee Khim Model Catherine Charest by Mannequin Studio Clothes & accessories by Topshop Styling by Johnny Khoo Make-up by Cindy Goh Hair by Dexter Ng Location at Draycott 8
CONTENTS 02 06 REDEFINING CHAIRMAN’S LUXURY & STYLE MESSAGE 10 20 24 Operations Review – PROPERTY Operations Review – Operations Review – PRIME TIME HOSPITALITY APPAREL & LIFESTYLE DELIVERING TOP DRESSED FOR SUCCESS SERVICE 30 34 35 Calendar of Events Corporate Board of OH, WHAT A HIT & HIP YEAR! Data Directors 40 41 Key Corporate Management Staff Governance
INSIDE (Facing page, pages 2-5, 12 & 13) Photography by Wee Khim Models Catherine Charest and Ricky Anderson by Mannequin Studio Styling by Johnny Khoo Make-up by Cindy Goh Hair by Dexter Ng
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Redefining Luxury
A brand name synonymous with premier developments in Singapore and the region, WingTai Asia’s impressive portfolio includes the iconic Draycott 8 and The Light at Cairnhill in Singapore’s prime districts, The Meritz in Kuala Lumpur, The Waterfront in Hong Kong and The Lakeview in Suzhou, China. More than a purveyor of posh properties, WingTai Asia is upping the ante for what it means to live in the lap of luxury.
Luxe Redux
On Her: Faux fur trench coat by Karen Millen.
On Him: Smart black dress shirt and grey flannel pants from Topman.
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Redefining Style
The WingTai Asia brand has always been in vogue since its beginnings as a garment manufacturer over 5 decades ago. As a major fashion retailer in Asia today, its portfolio of fashion labels includes some of the most du jour names in fashion. From the couture glam of Karen Millen and MAXSTUDIO.COM to hot-off-the- catwalk trends of Topshop, Topman and Miss Selfridge to the street culture chic of Fox Fashion and the urban flair of G2000 and U2. Quality finish, value pricing and trend-leading designs puts Wing Tai Retail a cut above the rest.
Uber Cool
On Her: Sensuous low-back satin cocktail dress by Topshop.
On Him: Casual shirt, grey cotton sweater and skinny denims by Topman.
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Chairman’s Message
The Singapore economy has grown strongly by 9.4% in The Group’s net gearing ratio has been reduced to the first half of 2006 and is forecast to achieve a growth 0.7 times as at 30 June 2006 from 1.0 time as at 30 of 6.5% to 7.5% for the whole year. The URA residential June 2005. This has been brought about by the property price index has risen for nine consecutive quarters proceeds from the sale of Park Mall and the cash with an increase of 3.3% in the first half of 2006. The generated from the sale of residential property units Singapore property market sentiment has been positive in the current year. and the demand, particularly for high-end prime residential projects, has remained strong. The Group’s net asset value per ordinary share increased to S$1.60 as at 30 June 2006 from S$1.42 I am pleased to report that for the financial year ended as at 30 June 2005. This increase is mainly attributable 30 June 2006, the Group’s revenue has hit a historic to the substantially higher net profit achieved by the high of S$889.3 million, representing a 216% increase Group in the current year. The return on shareholders’ over the previous year. The higher contribution from equity has also increased significantly to 11.1% from the development properties as more property units 2.4% in the previous year. were sold is the main reason for this increase. As a result of the improved performance, the Board Revenue was recognised from the units sold in of Directors has recommended a first and final dividend Draycott 8 and The Light at Cairnhill as well as the of three cents per ordinary share less tax plus a percentage completion of Kovan Melody. This special dividend of three cents per ordinary share resulted in the Group’s operating profit increasing less tax for the current year. The total net dividend from S$17.0 million in the previous year to S$102.1 amount to S$34.5 million. million in the current year. The Group’s net profit attributable to shareholders for the current year During the year in review, the Group sold 855 homes increased from S$24.4 million to S$128.0 million. with a total sales value of more than S$1.3 billion. This is an increase of 424%. Apart from the better The Group officially launched two residential projects performance of the Group, the year also saw higher in Singapore, namely VisionCrest Residences and contributions from the associated companies in The Nexus. VisionCrest Residences has 265 units Hong Kong. and is strategically located near to the Dhoby Ghuat
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Chairman’s Message
“I am pleased to report that for the financial year ended 30 June 2006, the Group’s revenue has hit a historic high of S$889.3m, representing a 216% increase over the previous year.”
MRT Interchange Station. It is seen as an attractive will have a total gross floor area of approximately property investment opportunity for locals and 0.8 million square feet. Together with the Group’s foreigners alike. The Nexus, which has a total of 242 interests in The Floridian and the Tanah Merah site, units, is located minutes away from the cosmopolitan the Group has residential development portfolio in hub of Orchard Road and Holland Village. Both Singapore with a combined gross floor area of projects have received very good response. approximately 1.2 million square feet.
The Group has also released for sale two new The Group will continue to benefit from the positive luxury residential properties in Singapore – sentiment in Singapore and is looking to market three Draycott 8 and The Grange. Draycott 8 is attractively new residential projects, namely Phoenix Mansion, located on an elevated site along Draycott Drive Kallang Road riverside and Belle Vue sites in the with just a few minutes’ walk from Orchard Road. coming financial year. This 136-unit development registered strong interests among savvy home buyers and investors In line with the strategy to develop and expand its and has currently achieved around 60% sales. core business activities in the region, the Group acquired additional shares in DNP Holdings in the The Grange is an exclusive 95-unit condominium current year and raising its stake in the company to located along Grange Road, which is close to the 51%. Accordingly, DNP Holdings has become a excitement of bustling shopping and entertainment subsidiary company of the Group. belt of Orchard Road and yet a world apart in a quiet enclave of tranquility. This project has also enjoyed In Kuala Lumpur, The Meritz, a 31-storey luxury great success with 92 units already snapped up by condominium development by DNP Holdings home buyers and investors. was well received by home buyers and investors. It is conveniently located directly opposite the Kuala Since July 2005, the Group has acquired four freehold Lumpur City Centre Twin Towers and is within walking residential development sites in Singapore – Phoenix distance to the LRT station. To-date, more than 50% Mansion, Belle Vue, Newton Meadows and Kallang of this development, which consist of 110 units of Road riverside site. These four development sites 2 and 3-bedroom apartments, has been sold.
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DNP Holdings has another freehold residential Going forward, the Group will embark on a Pan-Asian site in Kuala Lumpur – The Bukit Ceylon. This drive to increase its overseas earnings. We will focus project is situated in the serene Jalan Ceylon and build on the two core property and apparel and residential area and will be developed into an lifestyle businesses to generate profitable and exclusive 420-unit condominium. Apart from sustainable growth for all the shareholders. The Kuala Lumpur, DNP Holdings has more than Group will also develop and leverage on the brand 4 million square feet on gross floor area of name of Wing Tai Asia, which is synonymous with residential land banks in Penang. premier developments, quality products and attention to detail services. On the investment property segment, the Group’s portfolio of investment properties is currently Finally, I would like to express my heartfelt thanks spread over Singapore, Malaysia and China. to our shareholders, customers, bankers and These properties have continued to perform well business associates for their continued support and as higher occupancies were achieved across all my warm gratitude to our Directors and staff for their the investment properties in the current year. The commitment and dedication throughout the year. Group’s three Lanson Place serviced apartments in Singapore and Malaysia have also performed strongly in the current year with average occupancy rates of about 90%.
The Group’s apparel and lifestyle retailing business has been expanding rapidly and since 1999 to date, this division has achieved a growth of 247% in revenue to S$163 million. The Group currently has Cheng Wai Keung 17 brands in Singapore and Malaysia and is operating Chairman a total of 133 outlets, of which 108 units are located in Singapore. 18 September 2006
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BUOYED BY BRISK DEMAND FOR UPSCALE RESIDENTIAL DEVELOPMENTS IN SINGAPORE, IN PARTICULAR THE STELLAR SALES OF DRAYCOTT 8, THE GRANGE AND THE LIGHT AT CAIRNHILL, OUR PROPERTY BUSINESS RAKED IN THE LION’S SHARE OF THE EARNINGS WITH TOTAL SALES OF MORE THAN S$1 BILLION FOR THE FINANCIAL YEAR.
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A multi million-dollar view overlooking Singapore's prime Orchard Road area from the prized perch of Wing Tai’s Draycott 8 residential development.
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Operations Review – PROPERTY
Fashionably Suited for Draycott 8 Sky Suites
On Her: Tailored satin dress shirt and sleek pencil skirt by Karen Millen.
On Him: Sharp mod dress shirt and suit by Topman.
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PROPERTY – Singapore conserved 2-storey colonial style clubhouse The improved performance of the Singapore set against ultra luxurious contemporary private residential market during the year residential blocks with professional concierge in review was led by sales of luxury homes. services and modern facilities. To date, about During this period, the Group sold 855 60% of the units have been snapped up by homes with a total sales value of more than savvy investors and home buyers. S$1.3 billion. The surge in demand for high- end properties was driven mainly by foreign The Grange, an ultra exclusive 95-unit freehold buyers and high net worth individuals who were condominium located along Grange Road, undeterred by rising home loan rates. The enjoyed similar success with 92 units already Group capitalised on this trend by officially snapped up by highly discerning home buyers launching VisionCrest Residences and The to date while The Light at Cairnhill, another of Nexus, two luxury developments located within Wing Tai’s high-end freehold residential prime districts while the other upmarket projects development located within the prime Cairnhill such as Draycott 8, The Grange and The Light neighbourhood also reported brisk sales with at Cairnhill continued to register robust sales more than 80% of the units taken up. during the financial year. VisionCrest Residences, an exclusive freehold Draycott 8 is Wing Tai’s latest high-end development with its strategic location condominium attractively located along Draycott within the prime Orchard Road area near the Drive, one of Singapore’s premium residential Dhoby Ghaut MRT Interchange Station, was areas given its proximity to Orchard Road and launched in September 2005 and is viewed as nearby social and recreational clubs. This 136- an attractive property investment opportunity unit development registered strong interest with both local and foreign buyers. The Nexus, among savvy property investors and jaded the other elegant 242-unit freehold development home buyers with its inimitable offering of old located within the popular Bukit Timah world charm found within its expansive residential enclave close to popular educational
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Operations Review – PROPERTY With recovery of the property market underway, Wing Tai continued to seek opportunities to further enhance its portfolio with prime sites.
institutions and amenities was launched in May Newton Meadows located along Newton Road 2006. Both these projects were well received in May 2006. Strategically sited between the by home buyers and investors. Newton and Novena MRT Stations, the MRT Stations are just within walking distance from With recovery of the property market underway, this 3,984 square metres site. In addition, Wing Tai continued to seek opportunities to Orchard Road is just a mere 5-minute drive further enhance its portfolio with prime sites. away while many distinguished social and recreational clubs, and excellent schools are In October 2005, the Group won the tender also within the vicinity. for the freehold site of Belle Vue. Situated in the exclusive residential area of District 9, this Singapore’s office market has seen rising 22,649 square metres site is a stone’s throw rents over the past months and this trend away from major shopping malls such as is likely to continue, with the tightening Singapore Shopping Centre and Plaza supply of office space anticipated in the next Singapura while Orchard Road is just a short few years. walk away. Both the Somerset MRT Station and Dhoby Ghaut MRT Interchange Station The Group continued to benefit from the are also located nearby. sector’s improved performance with Winsland House I and II, as well as Burlington Square In April 2006, the Group together with NTUC reporting average occupancies of over 90% Choice Homes Co-operative Limited as at end of the financial year. The sale of Park successfully tendered for a prime 99-year Mall to Suntec REIT, which was announced in leasehold suburban site strategically June 2005, was completed in October 2005. located near the Tanah Merah MRT Station. The 21,876 square metres site is also With more than 25% of the leases up for conveniently located close to amenities and renewal in these properties and the anticipated Bedok Town Centre. completion of VisionCrest Commercial in the first half of 2007, the Group stands to benefit The Group also entered into a contract for from the upward movement of office rentals in the collective purchase of the freehold site of the coming financial year.
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Operations Review – PROPERTY
PROPERTY – Malaysia The Meritz, a study in urbane sophistication. The luxurious 31-storey The Group’s property business activities in Malaysia are conducted glass-encased tower houses well- through its listed subsidiary company, DNP Holdings Berhad. appointed living areas made with an artisan-quality finishing. All this, right in the heart of the Kuala Lumpur’s In Kuala Lumpur, The Meritz, a 31-storey luxury condominium consisting magnificent Golden Triangle. of 110 units of 2 and 3-bedroom types, is conveniently located directly opposite the prime Kuala Lumpur City Centre (KLCC) Twin Towers, Suria KLCC and within walking distance to the LRT station. The development was well received by home buyers and investors with more than 50% of the units being taken up.
The Bukit Ceylon freehold site, which is situated in the serene and tranquil Jalan Ceylon residential area, was acquired in 2005 and will be developed into an exclusive 420-unit condominium. The site is also strategically located within walking distance to the busy commercial area of Jalan Raja Chulan and close to the Bintang Walk shopping and entertainment hub while the lush Bukit Nenas Forest Reserve is also conveniently located nearby. The development will be designed by Guida
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In Kuala Lumpur, The Meritz, a 31-storey luxury condominium consisting of 110 units of 2 and 3-bedroom types, is conveniently located directly opposite the prime Kuala Lumpur City Centre (KLCC) Twin Towers, Suria KLCC and within walking distance to the LRT station.
Moseley Brown (GMB) Architects, an award winning Australian Minyak Indah, another similar mixed housing development, is 100% architectural firm, with planning approval expected in the last quarter completed with sales status at 90%. of 2006. In Johor Bahru, piling works for Phase 2 of Plaza DNP were Sering Ukay, which is a landed housing project covering over completed in May 2006. It has been approved as a 38-storey residential 5.4 million square feet of freehold land, is located a mere 9 km away tower and is located within the up and coming commercial district of from KLCC and its surrounding amenities. The soft launch of Johor Bahru city. Phase 1, which comprises 176 units of 2 and 2 -storey terrace houses, was held in September 2005 and sales have been very PROPERTY – Suzhou, China positive with 119 units being taken up out of 121 units released. The Group’s property business activities in China are conducted through The on-going construction works of Phase 1 is targetted to be its associated company, Jiaxin (Suzhou) Property Development Co., completed by September 2006. Ltd. Against the backdrop of slower market conditions affected by the central government’s macro control policies and measures to stabilise In Penang, Phase 2 of Taman Seri Impian, a development comprising the residential real estate market, our projects in Suzhou have continued a mixture of double-storey terrace and semi-detached houses, has to perform well. been completed with sales status at 91%. Phase 3, with a show village, was launched in June 2006. Sales have been encouraging with 22 The Lakeview is one of Suzhou’s most prestigious residential projects. units being taken up out of 41 units released. Phase 3 of Taman Bukit Comprising 453 apartment units, it is located in the heart of the mega
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Operations Review – PROPERTY
industrial town set up by the Singapore and China governments, the PROPERTY – Hong Kong China-Singapore Suzhou Industrial Park. Overlooking the peaceful Jinji The Group’s property interests in Hong Kong are represented by investments Lake, the Phase 1 launch was well received by home buyers and in USI Holdings Limited and Winsor Properties Holdings Limited. investors. To date, 90% of the 101 apartment units released have been taken up. Work will begin soon on Phase 2 with the launch date Hong Kong’s property market began to consolidate in the third expected in 2007. quarter of 2005 after two years of increases in both prices and transactions. The market started to pick up again in the last quarter Another exclusive residential development, The Lakeside, sits just next of 2005 and remained relatively stable in the first half of 2006. to the scenic Jinji Lake. The Lakeside provide residents with the most beautiful landscapes and top class clubhouse services and facilities USI Holdings successfully launched the sale of The Giverny, a 63-villa luxury such as an indoor heated swimming pool, gymnasium, mini-theatre, development in Hebe Haven, Sai Kung in October 2005. 20 units of The billiard rooms, sauna and steam rooms, roof-top tennis courts, mini- Giverny were sold during the launch, fetching benchmark prices ranging golf putting green, barbecue area and children’s playground. In Phase from HK$12,000 to HK$20,000 per square feet. This is certainly a good 1, 98% of the 64 apartments were sold while the timely launch of 20 reflection of the market’s recognition of the WingTai Asia brand name. double-storey bungalows and 5 townhouses was also well received. Work on Phase 2, another 4 apartment blocks of 84 units, is expected Occupation permit for The Grandville, an exclusive development in to start in 2007. Shatin, was issued in January 2006 and the profit for the pre-sold
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apartments (over 90% of the development) was recognised in accordance with USI Holding’s accounting policies.
As the commercial property market in Hong Kong was very strong in 2005, USI Holdings expanded into the office building rental business. It acquired the former Bank of East Asia Building in Wan Chai which has a gross floor area of approximately 120,000 square feet. The building will be refurbished into a grade A office building with an upscale retail podium to serve the rapidly changing Wan Chai area.
Winsor Properties holds many quality residential, commercial and industrial buildings in Hong Kong. One of the key assets of Winsor Properties is a prime office site in Kwun Tong. It will be developed into two grade A office towers with a gross area of approximately 1,300,000 square feet. The company also successfully completed the sale of the lower portion of Global Gateway (Hong Kong) in August 2005.
The Lakeview is one of Suzhou’s most prestigious residential projects. Comprising 453 apartment units, it is located in the heart of the mega industrial town set up by the Singapore and China governments, the China- Singapore Suzhou Industrial Park.
The Lakeview in Suzhou, China, as its name suggests, offers calming views of the picturesque Jinji Lake. This prestigious 2-phase development is making waves as among the most desired residential investments in the city.
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INDUSTRY AWARDS AND RECOGNITION FOR STAFF PERFORMANCE AND TRAINING DURING THE YEAR BOLSTERED OUR COMPANY-WIDE COMMITMENT TO DELIVERING TOP-NOTCH SERVICE AT ALL LEVELS. OUR CUSTOMER-CENTRIC CULTURE CONTINUES TO LIFT OUR HOSPITALITY BUSINESS TO NEW LEVEL OF EXCELLENCE.
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Operations Review – HOSPITALITY
Over the years, the Group had extended its high standard of quality and dedicated attention-to-detail hospitality service to develop and manage the Lanson Place chain of serviced residences. In 2005, Lanson Place made its foray into boutique hotel operation in Hong Kong as well as the serviced residences market in China. Today, Lanson Place Residences and Lanson Place Hotels are being represented in Singapore, Kuala Lumpur, Hong Kong and Shanghai. The Group will continue to search for promising opportunities in strategic cities in China and other parts of Asia.
In Singapore, Lanson Place Winsland continued to report a high occupancy rate of 95%. In light of the positive business and economic outlook for Singapore, the service apartment market, which is dominated mainly by expatriates, is poised for a boost.
In Kuala Lumpur, Lanson Place Ambassador Row remained popular with both corporate expatriates and business travellers while Lanson Place Kondominium 8 Ampang Hilir maintained its position as one of the leading condominiums in the Ampang area, continuing to outperform the market with 96% occupancy in the first half of 2006.
In Hong Kong, the renovation of the development at 133 Leighton Road was completed and Lanson Place Boutique Hotel and Residences became fully operational in March 2006. The boutique hotel and residences comprises 194 suites and is strategically located in the heart of Causeway Bay. The performance of the boutique hotel and residences has far exceeded the investment budget and enjoyed 60% occupancy in the second quarter of 2006.
Similarly, Lanson Place Jinlin Tiandi in Shanghai, China, with its 106 apartments has also been soft launched and the initial response to this development has been very encouraging in terms of rental rates and occupancy. Within three months of opening, it achieved 50% occupancy and has one of the highest rental rates in Shanghai. With demand for high-end service apartment continuing to be keen in Shanghai, the performance of this development looks promising.
In light of the positive business and economic outlook for Singapore, the service apartment market, which is dominated mainly by expatriates, is poised for a boost.
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DRESSED
FOR SUCCESS
THE GROUP’S APPAREL AND LIFESTYLE RETAILING BUSINESS HAS PUT IN AN ULTRA-FASHIONABLE SHOWING OF 247% GROWTH IN REVENUE FROM FY1999 TO THE CURRENT YEAR. THE GROUP’S AGGRESSIVE PLANS TO FURTHER EXPAND THIS BUSINESS IN THE REGION SUGGESTS THAT THIS HANDSOME GROWTH TREND IS HERE TO STAY.
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Operations Review – APPAREL & LIFESTYLE
MAXSTUDIO.COM’s Fall/Winter 2006 Collection The Group’s apparel reveals more of the label’s intuitive fabric of creativity and understanding that addresses the fashion desires and lifestyle division of the modern woman. in Singapore has reported strong revenue growth of around 40% in the financial year under review.
APPAREL & LIFESTYLE – Singapore The Group’s apparel division manages a wide portfolio of fashion brands which include G2000 and U2; trendy UK fashion labels such as Topshop, Topman, Dorothy Perkins, Warehouse and Karen Millen; sports brands such as Nike Women and Nike Sports Culture as well as Fox Fashion, the popular casual lifestyle brand from Israel.
With the regional economies maintaining steady growth and promising improvement in consumer spending, the Group achieved high growth in both revenue and profit, generated from like-for-like store growth as well as new stores and brands expansion.
In terms of existing brand portfolio of G2000, U2, Topshop, Topman, Dorothy Perkins, Warehouse, Karen Millen, Nike Women and Nike Sports Culture, a total of nine new outlets were added. Three new brands that were introduced to the market, namely MAXSTUDIO.COM, Miss Selfridge and Adidas, also contributed to another eight new stores.
The Group’s apparel and lifestyle division in Singapore has reported strong revenue growth of around 40% in the financial year under review.
The Group continued to be committed to people development, nurturing talent and grooming leaders with a view to always provide customers with quality-plus service and product. It participates and supports the pilot project of CCI (Customer Centric Initiative) organised by SPRING Singapore, aiming to spur interests and support to elevate the overall service culture of the industry. One of the shop managers from U2 was selected from a huge pool of applicants and awarded a Scholarship from the SRA Institute of Retailing for a Diploma in Retail Management.
Business in the fast food segment continued to be challenging. Locations in suburban malls however, showed encouraging improvements in both revenue and profitability. The total number of Yoshinoya outlets remains at 16 island wide.
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Operations Review – APPAREL & LIFESTYLE
Fox Kids Fall/Winter 2006 Collection plays up style and wearability for today’s fashion-savvy little tykes.
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U2 Casual Ladieswear for Fall/Winter 2006 Collection takes a note from the warm and spirited tones of a breezy Autumn’s stroll.
APPAREL & LIFESTYLE – Malaysia The Group’s apparel and lifestyle business activities in Malaysia are conducted through its subsidiary company, DNP Clothing Sdn Berhad.
Against the backdrop of steady GDP growth, rapid retail development and high traffic of tourist arrivals, the retail business in Malaysia has registered good incremental in revenue and profits.
Shop expansion outside of Klang Valley commenced in January 2006, with the opening of three outlets (Topshop, Topman and Dorothy Perkins) in Tebrau City in Johor Bahru. The total number of fashion outlets now stands at 22.
At the same time, major store enhancement works were executed in a few key stores including Kuala Lumpur City Centre (KLCC), Mid Valley Megamall and Sunway Pyramid. This had resulted in healthy like-for- like revenue and profit growth. Plans are also underway to make inroads to Penang by end of the year. More new retail brands introduction have also been planned.
Yoshinoya in Malaysia is currently operating with four outlets, with one unit operating out of Tebrau City, Johor Bahru.
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FROM SPECTACULAR PROPERTY ACQUISITIONS AND LAUNCHES TO RECOGNITION OF SERVICE AND TRAINING EXCELLENCE AND ROARING AND ROBUST GROWTH IN OUR APPAREL BUSINESS, IT’S BEEN A RECORD-BREAKING YEAR OF UPS AND UPS.
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July 2005 Wing Tai launched VisionCrest G2000 Apparel and Wing Tai The Giverny, a 63-villa luxury Draycott 8, an exclusive Residences, a 265-unit freehold Clothing participated in the development by USI Holdings condominium attractively located development strategically Customer Centric Initiative in Sai Kung, Hong Kong was on an elevated site along Draycott located within the prime Orchard (CCI). This national tripartite successfully launched with 20 Drive, with just a few minutes’ walk Road area and near the Dhoby programme spearheaded by units sold. Perched on a verdant from Orchard Road obtained its Ghaut MRT Interchange Station. SPRING Singapore, NTUC, peninsula overlooking Hebe Temporary Occupation Permit. The development is seen as an Singapore Workforce Development Haven, this luxury residence attractive property investment Agency (WDA) and Singapore offers scenery that becomes opportunity for both local and National Employers Federation more entrancing with every foreign buyers. (SNEF) aim at transforming service change of light and seasons. quality in Singapore. Wing Tai Clothing successfully Four training modules of secured exclusive rights to Wing Tai Retail were accredited operate the leading-edge brand, by Singapore Workforce MAXSTUDIO.COM in Singapore. Development Agency (WDA) Highly sought after for its excellent under National Skills Recognition value, innovative fabrics and System and Singapore Workforce fresh styles, the first boutique is Qualification System. The located at Wisma Atria Shopping accreditation acknowledged Centre along Orchard Road. Wing Tai Retail’s effort in giving its retail staff quality training with national standard.
August 2005 October 2005 Announcement of the Group’s The 41st Annual General Meeting full year results for the year ended was held at Raffles Hotel. 30 June 2005. Wing Tai was awarded the tender for the freehold site of Belle Vue September 2005 The soft launch of Sering Ukay located along Oxley Walk at a price Wing Tai received the Associate (Phase One) in Malaysia received of S$227.3 million. Situated in the of the Arts Award during the overwhelming response with 98% exclusive residential area of District 2005 Patron of the Arts Award of the 121 units offered being 9, this site is a stone’s throw away ceremony organised by the taken up. Located just a mere 9 from major shopping malls such National Arts Council. The award kilometres from Kuala Lumpur as Singapore Shopping Centre and ceremony was held at The City Centre (KLCC), this freehold Plaza Singapura while Orchard Esplanade and the award is in development is also within close Road is just a short walk away. recognition of the company’s proximity to neighbourhood This 22,649 square metres site contribution to Singapore arts shopping centres, hypermarkets will be developed into a residential scene for the year 2004. and international schools. development.
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Calendar of Events
Singapore Fashion Festival 2006 sizzled to the theme of “Feel the Brazilian Heat” showcasing Fox Fashion’s Spring/Summer 2006 Collection.
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November 2005 Wing Tai Clothing was awarded May 2006 Wing Tai posted interim results the franchise rights to operate Wing Tai posted interim results for the three months ended 30 Adidas stores in Singapore. With for the nine months ended 31 September 2005. six outlets conveniently located March 2006. island wide, athletes and fitness A special preview of The Meritz fanatics can choose from its Wing Tai entered into a contract was held at the Regent Singapore. exciting Sport Performance for the collective purchase of the Conveniently located opposite range of apparel, footwear and freehold site of Newton Meadows Kuala Lumpur City Centre (KLCC) sport accessories. located along Newton Road at and Petronas Twin Towers, this a price of S$73 million. Sited exclusive freehold condominium between the Newton and Novena was well received by buyers with Wing Tai Clothing is proud to bring MRT Stations, this 3,984 square more than 50% of the 110 units back Miss Selfridge to Singapore. metres site has one of the most being taken up. Relaunched with a brand new strategic locations and will be look, this popular London High redeveloped into a residential G2000 Apparel clinched 8 Star, Street label is repositioned to development. 18 Gold and 28 Silver awards become even more distinctive, while Wing Tai Clothing bagged individualised, feminine and sassy The official launch of The Nexus 7 Star, 5 Gold and 11 Silver and is located at Marina Square. was well received by property awards at the prestigious buyers looking for quality Excellent Service Award 2005. During the Singapore Fashion developments. Located along This impressive figure does Festival (SFF) held at Ngee Ann Bukit Timah Road, this 242- not come as a surprise as City Civic Plaza, Wing Tai Retail unit freehold condominium is Wing Tai Retail’s focus has presented trendy statement minutes away from the always been on staff development pieces from Fox Fashion, Topman cosmopolitan hub of Orchard and training. and Topshop. The Brazilian Theme Road and Holland Village; February 2006 fashion show featured by Fox and within close proximity to Wing Tai posted interim results Fashion was declared the “Best reputable schools and amenities. December 2005 for the six months ended 31 Show” by The Straits Times and Two exclusive serviced December 2005. dubbed as the “Most Energetic apartments/hotels by USI Show” by The New Paper. June 2006 Holdings, namely Lanson Place As part of its annual community Boutique Hotel and Residences March 2006 programme, Wing Tai proudly and Lanson Place Jinlin Tiandi, An employee with G2000 April 2006 sponsored a two-night soft-opened for business in Apparel, Cindy Poh Chin Choo, Wing Tai, together with NTUC performance by the internationally December 2005. The former is emerged as one of the Top 5 Choice Homes, successfully won acclaimed Nederlands Dans a 194-unit serviced residence Finalists in the prestigious 20th the tender for a prime 99-year Theater I (NDT I) in this year strategically located in the middle Tourism Award 2005, under leasehold suburban site Singapore Arts Festival. The of Causeway Bay, the heart of Tourism Host of the Year – Retail strategically located near the performance of “Bella Figura” Hong Kong island while the latter Award category. The award by Tanah Merah MRT Station. by this dance powerhouse is ideally located at the heart of Singapore Tourism Board (STB) This 21,876 square metres site is troupe was a stunning visually Shanghai, consisting of 106-unit recognises individuals who also conveniently sited close to exhilarating display of balletic of 3-bedroom apartments. excels in the Retail Industry. amenities and Bedok Town Centre. finesse.
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CORPORATE DATA
BOARD OF NOMINATING SUBSIDIARY PRINCIPAL DIRECTORS COMMITTEE COMPANIES BANKERS Cheng Wai Keung Tan Sri Dato’ Mohamed DNP HOLDINGS BERHAD DBS BANK LIMITED Chairman Noordin bin Hassan Dato’ Roger Chan Wan Chung 6 Shenton Way Chairman Executive Director DBS Building Edmund Cheng Wai Wing Singapore 068809 Deputy Chairman Cheng Wai Keung WING TAI LAND Chng Chee Beow THE HONGKONG AND Boey Tak Hap Phua Bah Lee Executive Director SHANGHAI BANKING Cheng Man Tak CORPORATION LIMITED WING TAI CLOTHING 21 Collyer Quay COMPANY FOX FASHION APPAREL Tan Sri Dato’ Mohamed HSBC Building SECRETARIES YOSHINOYA Noordin bin Hassan Singapore 049320 Ooi Siew Poh Helen Khoo Christopher Patrick Langley, OBE Executive Director MALAYAN BANKING BERHAD Gabrielle Tan 2 Battery Road Lee Han Yang WING TAI PROPERTY Maybank Tower MANAGEMENT Lee Kim Wah Singapore 049907 EXECUTIVE Len Siew Lian Loh Soo Eng DIRECTORS General Manager (Marketing) OVERSEAS-CHINESE BANKING CORPORATION LIMITED Ne Chen Duen Cheng Wai Keung 65 Chulia Street Phua Bah Lee Managing Director REGISTERED OFFICE OCBC Centre Edmund Cheng Wai Wing 107 Tampines Road Singapore 049513 AUDIT COMMITTEE Deputy Managing Director Singapore 535129 STANDARD Tel: 6280 9111 Lee Kim Wah CHARTERED BANK Phua Bah Lee Fax: 6383 8940 Finance Director 6 Battery Road #07-00 Chairman Website: www.wingtaiasia.com.sg Singapore 049909 Ne Chen Duen Boey Tak Hap Director (Apparel) UNITED OVERSEAS Lee Han Yang REGISTRAR & BANK LIMITED TRANSFER OFFICE 80 Raffles Place EXECUTIVE OFFICERS UOB Plaza TRICOR BARBINDER SHARE REMUNERATION Singapore 048624 Tan Hwee Bin REGISTRATION SERVICES COMMITTEE Chief Operating Officer (A division of Tricor Singapore Pte. Ltd.) Boey Tak Hap 8 Cross Street ADVOCATES & Karine Lim Chairman #11-00 PWC Building SOLICITORS Assistant General Manager Singapore 048424 Lee Han Yang Human Resource LEE & LEE 168 Robinson Road Phua Bah Lee AUDITORS #25-01 Capital Tower Singapore 068912 PRICEWATERHOUSECOOPERS Certified Public Accountants 8 Cross Street #17-00 PWC Building Singapore 048424 Quek Bin Hwee Audit Partner (Year of appointment: 2006)
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BOARD OF DIRECTORS
CHENG WAI KEUNG Chairman/Managing Director
Mr Cheng Wai Keung is the Chairman of the Board of Wing Tai Holdings Limited (the “Company”) and has served as the Chairman since 2 December 1994. He is also the Managing Director of the Company and serves as a member of the Nominating Committee.
Mr Cheng is concurrently the Chairman of Neptune Orient Lines Ltd and Raffles Holdings Limited and Vice-Chairman of Singapore-Suzhou Township Development Pte Ltd. He also holds directorships in several public and private companies, including GP Batteries International Ltd and Media Asia Entertainment Group Ltd.
Mr Cheng was awarded the Public Service Star (BBM) in 1987 and the Public Service Star (Bar) (BBM-Lintang) in 1997 by the Government of Singapore. He was re-appointed Justice of The Peace (JP) by the President of the Republic of Singapore in the year 2005.
Mr Cheng graduated with a Bachelor of Science degree from Indiana University and holds a Masters in Business Administration from the University of Chicago, USA.
Mr Cheng was last re-elected as a director on 18 November 2003.
EDMUND CHENG WAI WING Deputy Chairman/Deputy Managing Director
Mr Edmund Cheng is the Deputy Chairman and Deputy Managing Director of the Company. He joined the Company since 1984 and is responsible for the property development, investment and management activities of the Group.
Currently, Mr Cheng is also the Chairman of Singapore Airport Terminal Services Ltd, Mapletree Investments Pte Ltd, National Arts Council, DesignSingapore Council and The Old Parliament House Limited. Mr Cheng is a board member of a number of public and private companies, including SNP Corporation Ltd, CIH Limited, SNP Leefung Holdings Ltd and DNP Holdings Berhad.
Mr Cheng has previously served as Chairman of the Singapore Tourism Board from 1993-2001 and The Esplanade Co Ltd. He was a board member of Singapore Airlines Ltd (SIA), Urban Redevelopment Authority (URA) and Construction Industry Development Board (CIDB). He was also President of Real Estate Developers’ Association of Singapore (REDAS) and he is currently a member of the Presidential Council of REDAS. He was awarded the Public Service Star Award (PBB) in 1999.
He graduated with a Bachelor of Science degree in Civil Engineering from Northwestern University and a Masters in Architecture from Carnegie Mellon University, USA.
Mr Cheng was last re-elected as a Director on 13 October 2005.
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BOARD OF DIRECTORS
BOEY TAK HAP
Mr Boey Tak Hap has been a non-executive director since 2 May 1997. He is currently the Chairman of the Remuneration Committee and a member of the Audit Committee.
Mr Boey was formerly the Chief of Army, Singapore Armed Forces and the President & CEO of Singapore Power Group. He was also the President & CEO of SMRT Corporation as well as Chief Executive of the Public Utilities Board.
Currently, Mr Boey is a director of Creative Master Bermuda Limited.
Mr Boey graduated from the University of Manchester Institute of Science and Technology with a Bachelor of Science degree in Automatic Control & System Engineering with Management Sciences. In January 2002, he was conferred the Honorary Doctorate of Doctor of Engineering by his alma mater. He also holds a Diploma in Business Administration from the National University of Singapore and has attended the Harvard Business School’s Advanced Management Programme in Boston, USA.
Mr Boey was last re-elected as a director on 18 November 2003.
CHENG MAN TAK
Mr Cheng Man Tak has been a non-executive director since 11 May 1981. He serves as a director of the Federation of Hong Kong Garment Manufacturers and is a member of the Occupational Safety & Health Council of Hong Kong and an authority member of Clothing Industry Training Authority. He is also a member of the Advisory Committee of Poly University (Institute of Textile and Clothing Industries) in Hong Kong.
Mr Cheng graduated from the University of Southern California with a Bachelor of Science degree and holds a Masters in Business Administration from Pepperdine University, USA.
Mr Cheng was last re-elected as a director on 13 October 2005.
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TAN SRI DATO’ MOHAMED NOORDIN BIN HASSAN
Tan Sri Dato’ Mohamed Noordin bin Hassan has been a non-executive director since 27 September 2002 and is currently the Chairman of the Nominating Committee.
Tan Sri Dato’ Mohamed Noordin has at least 40 years of working experience with the government of Malaysia and the private sector and has served in various government departments at District, State and Federal levels including as (i) Deputy Secretary General, Ministry of Trade and Industry, (ii) Secretary General, Ministry of Science, Technology and Environment, and (iii) Secretary General, Ministry of Education. He retired from the Malaysian Civil Service in September 1994.
Between September 1994 to August 2000, he was Vice-President of Petronas Berhad in charge of Group Human Resource and subsequently of Education.
Tan Sri Dato’ Mohamed Noordin is currently the Chairman of DNP Holdings Berhad in Malaysia. He is also on the board of directors of several subsidiaries of DNP Holdings Berhad.
Tan Sri Dato’ Mohamed Noordin graduated from the University of Malaya with an Honours degree in Bachelor of Arts (Economics) and holds a Masters in Public & International Affairs from the University of Pittsburgh, USA.
Tan Sri Dato’ Mohamed Noordin was re-elected as a director on 13 October 2005.
CHRISTOPHER PATRICK LANGLEY, OBE
Mr Christopher Patrick Langley has been a non-executive director since 25 June 2003.
Mr Langley began his career with the HSBC Group in 1961 at The Mercantile Bank of India Ltd in London. He subsequently worked for the HSBC Group in Mauritius, India, the Channel Islands, Saudi Arabia, Malaysia and Hong Kong. In September 1993, Mr Langley was appointed HSBC Group General Manager and in 1994, Deputy Chairman of Hongkong Bank Malaysia Berhad (now known as HSBC Bank Malaysia Berhad). In 1996, Mr Langley assumed responsibility for The Hongkong and Shanghai Banking Corporation’s business in Mainland China and the Special Administrative Regions of Hong Kong and Macau.
Mr Langley was appointed executive director of The Hongkong and Shanghai Banking Corporation Ltd in 1998 and retired from the HSBC Group in February 2000.
In July 1995, Mr Langley was awarded the Darjah Dato’ Setia Negeri Sembilan (DSNS) (Honorary) by the Yang Di Pertuan Besar of Negeri Sembilan State, who was serving as Yang Di Pertuan Agong (King) of Malaysia. Mr Langley therefore carries the title of Dato’ in Malaysia. Mr Langley was also made an Officer of the Order of the British Empire in the Queen’s 1996 New Year’s Honours List.
His current directorships include Dickson Concepts (International) Ltd, Gieves & Hawkes plc., Lei Shing Hong Ltd, Techtronic Industries Co. Ltd and Winsor Properties Holdings Limited.
Mr Langley was re-elected as a director on 18 November 2003.
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BOARD OF DIRECTORS
LEE HAN YANG
Mr Lee Han Yang has served as a non-executive director since 3 January 1989 and is currently a member of both the Audit Committee and Remuneration Committee. He is a Barrister-at-Law of Lincoln’s Inn, London. He is an Advocate and Solicitor of the Supreme Court of Singapore and is a Consultant at Messrs Peter Low, Tang & Belinda Ang. He is also a director of several public and private companies in Singapore.
Mr Lee is an active member of the Law Society of Singapore and has served on several Committees of the Law Society. At present, he serves on the board of the National Council of Social Services and on the Society for the Physically Disabled. In August 2006, he was awarded the Public Service Star (BBM).
Mr Lee was last re-appointed as a director on 13 October 2005.
LEE KIM WAH
Mr Lee Kim Wah has served as an executive director since 2 May 1977. He is responsible for the finance, human resource and administrative functions of the Group.
Educated in Accountancy in Australia, Mr Lee was a Manager of Messrs Goh Associates, a firm of Public Accountants, prior to joining the Company. He has been with the Group for more than 30 years.
Mr Lee is currently the Treasurer of the Singapore National Employers’ Federation.
Mr Lee was last re-elected as a director on 22 October 2004.
LOH SOO ENG
Mr Loh Soo Eng was an executive director for the property division of the Wing Tai Group since 1991. He retired as an executive director on 1 June 2004 and is currently serving as a non-executive director. His past experiences are in power station, oil company, shipbuilding and shiprepairing industries as well as banking.
Prior to joining the Company, Mr Loh was with the DBS Group for 17 years, holding the posts of Executive Director of Raffles City Pte Ltd, and General Manager of DBS Land. He has also served on a few Government committees, including SAFTI Military College and Temasek Polytechnic. He was a Chairman of SLF Properties Pte Ltd and SLF Management Services Pte Ltd and was President of Real Estate Developers’ Association of Singapore (REDAS) from 2001 to 2003.
Mr Loh graduated with a Bachelor of Engineering (Mechanical) from the University of Adelaide, Australia.
Mr Loh was last re-elected as a director on 22 October 2004.
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NE CHEN DUEN
Mr Ne Chen Duen has served as an executive director since 9 August 1963. He is one of the pioneer staff members of the Company. He has 40 years of experience in apparel business and provides support to management in the merchandising of its apparel products.
Mr Ne was last re-elected as a director on 22 October 2004.
PHUA BAH LEE
Mr Phua Bah Lee has served as a non-executive director since 11 January 1989 and is currently the Chairman of the Audit Committee and a member of both the Remuneration Committee and Nominating Committee.
Mr Phua currently holds directorships in a number of public and private companies. He was the Parliamentary Secretary of the Ministry of Communications (1968 to 1971), Senior Parliamentary Secretary of the Ministry of Defence (1972 to 1988) and a member of Parliament for the Tampines Constituency (1968 to 1988).
Mr Phua graduated from the Nanyang University in Singapore with a Bachelor of Commerce degree.
Mr Phua was last re-appointed as a director on 13 October 2005.
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KEY MANAGEMENT STAFF
TAN HWEE BIN CHNG CHEE BEOW
Ms Tan Hwee Bin is the Chief Operating Officer of Wing Tai Holdings Mr Chng Chee Beow is the Executive Director of Wing Tai Land and Limited and has been with the Group since November 2000. Prior to has been with the Group since October 1987. He is a registered joining the Group, she was the Asia Pacific Regional Finance & IT Director Architect by profession. Mr Chng is currently the Assistant Honorary for a business division of ICI and has worked in Hong Kong and Secretary of REDAS Management Committee and Chairman of SRP Guangzhou. She is currently a member of Central Singapore Community -Real Estate Management & Maintenance Industry (SRP-REMMI) Development Council and the Finance and Establishment Committee – Industry Lead Body. He is the President of International Alliance of Chinese Development Assistance Council. She is also a Director of for Interoperability (IAI) by Building Construction Authority (BCA), NTUC Fairprice Co-operative Limited. She has a Bachelor of Accountancy a member of the URA Design Advisory Committee and also an active degree from the National University of Singapore and has also attended member of several government and private bodies. He graduated management courses in INSEAD and Oxford University. She completed with a Bachelor of Architecture and has a post-graduate Diploma the Advanced Management Programme at Harvard Business School in Building Science from the National University of Singapore. in November 2005.
HELEN KHOO KARINE LIM Mrs Helen Khoo is the Executive Director of Wing Tai Clothing, Fox Ms Karine Lim is the Assistant General Manager of Human Resource Fashion Apparel and Yoshinoya and oversees the apparel and food for the Group since March 2004. Prior to joining the Group, she has business of the Group. She joined the Group in July 1995. Prior to more than 18 years of HR experience in the retail, property and public joining the Group, she was a senior executive with the Swire Group transport industries. She graduated with a Bachelor of Arts (Honours) in Hong Kong and has nearly 20 years of experience in the retail degree from the National University of Singapore and has acquired and fast food business. She has been an active council member of a Diploma in Human Resource Management from the Singapore the Singapore Retailers Association and Orchard Road Business Human Resource Institute. Association. She obtained a Bachelor of Arts degree from the University of Hong Kong.
DATO’ ROGER CHAN WAN CHUNG LEN SIEW LIAN Dato’ Roger Chan Wan Chung joined DNP Holdings Berhad as General Manager in June 1971 and he is one of the pioneer staff Ms Len Siew Lian is the General Manager (Marketing) of Wing Tai members of DNP Group. He has more than 30 years experience in the Property Management. She oversees the project launches of the garment business and is currently assisting the Managing Director to Group’s development properties for sale. She has been with the Group oversee the day-to-day operation of the DNP Group. since September 1989. In the initial years, she was mainly involved in the commercial leasing of both office and retail. Prior to joining He was appointed to the DNP Board on 18 August 1998 and sits on the Group, she was with Jones Lang Wootton. She graduated with the Board of several subsidiaries of DNP Group and other private a Bachelor of Science (Estate Management) degree from the limited companies. National University of Singapore.
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CORPORATE The Company believes in maintaining high standards of corporate governance to ensure continued GOVERNANCE growth and success as well as safeguarding the interests of its shareholders. The Company has adopted the principles, policies and practices of corporate governance as set out in this report.
BOARD MATTERS
The Board’s Conduct of its Affairs
The Board provides strategic guidance and entrepreneurial leadership for the Company. Its principal functions include approving strategic business plans and major acquisitions or disposal of assets, reviewing the Group’s corporate policies and the financial performance, approving the quarterly and annual financial results of the Group and reviewing the adequacy of internal control, financial reporting and compliance.
The Board conducts regular meetings on a quarterly basis and as necessary when circumstances arise. A total of four Board meetings were held in the current financial year. Details of attendance of the Directors at the Board and Board Committee meetings are set out on page 46 of this Report. The Board is of the view that the contribution of each Director should not be focused only on his attendance at Board and/or Committee meetings. A Director’s contribution may extend beyond the confines of formal Board meetings, through the sharing of views, advice, experience and strategic networking relationships which would further the interests of the Company.
The Board is responsible for the overall strategy and direction of the Group whilst the Management closely monitors changes to regulations and accounting standards and the Directors are informed of their disclosure obligations. New Directors will be given appropriate orientation and briefed on the Group’s business, directions and policies and provided with essential materials concerning the Company and the Group as well as information on relevant laws and regulations.
Board Composition and Balance
The Board comprises a majority of non-executive directors, with more than one-third independent directors. There are 11 Board members, four of whom are executive directors and seven are non- executive directors (inclusive of five independent directors). The Board considers its current size and members whose core competencies, qualifications, skills and experience are extensive and complementary, to be appropriate. The Board will examine its size and composition whenever circumstances require it.
The independence of each Director is reviewed annually by the Nominating Committee to ensure that there is a strong and independent element on the Board and that its size is appropriate to the scope and nature of the Group’s operations. No individual or smaller group of individuals dominate the Board’s decision-making process.
Chairman and Managing Director
There is no separation of roles between the Chairman and the Managing Director (“MD”) in the Company as there is adequate accountability and transparency as reflected by the internal controls established within the Group. The Board is of the opinion that it is well balanced with a strong and independent group of non-executive directors.
As Chairman, Mr Cheng Wai Keung assists the Board in developing policies and strategies as well as providing leadership to the Board and ensuring that Board meetings are held when necessary and that Board members are provided with complete, adequate and timely information.
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CORPORATE GOVERNANCE
As MD, he supervises the management of the business and affairs of the Group, reviews major acquisitions or disposals, investments, strategic plans and funding requirements and ensures that the Board’s decisions and strategies are properly and effectively carried out. The sustained growth of the Company under Mr Cheng Wai Keung’s leadership shows his ability to discharge the responsibilities of both roles effectively.
BOARD COMMITTEES
The Board has delegated specific functions to the Nominating, Remuneration and Audit Committees to assist in the execution of the Board’s duties.
Nominating Committee
Board Membership
The Nominating Committee (“NC”) comprises three members, namely, Tan Sri Dato’ Mohamed Noordin bin Hassan – Chairman of NC (an independent non-executive director), Mr Phua Bah Lee (an independent non-executive director) and Mr Cheng Wai Keung.
The principal functions of the NC are to make recommendations to the Board for the appointment and re-appointment of directors to the Board and to review the independence of each director annually.
All Directors are required to submit themselves for re-nomination and re-election at least once every three years. At least one-third of the Directors retire at each Annual General Meeting subject to re-election annually.
Directors above the age of 70 are also required under the Companies Act to retire and offer themselves for re-appointment by the shareholders at every Annual General Meeting.
Board Performance
The NC’s evaluation of each Director and the performance of the Board as a whole will be conducted on an annual basis taking into account the level of participation and contribution of individual Directors towards the Board’s effectiveness and competencies, strategic insight, financial literacy, business judgment, sense of accountability and maintenance of expertise relevant to the Group.
Access to Information
As and when the need arises and prior to each meeting, the Board is provided with timely and adequate information to enable full deliberation of the issues to be considered.
To ensure that the Board is able to fulfil its responsibilities, the Management provides the Board with periodic management reports, forecasts/budgets, financial statements and other relevant information of the Group.
The Board has independent access to the Management team and the Company Secretary at all times. The Board seeks independent advice as and when necessary to enable it to discharge its responsibilities effectively.
The Company Secretary attends all Board meetings and ensures that Board procedures are followed. The Company Secretary together with the Management team also ensure that the Company complies with all applicable statutory and regulatory rules.
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REMUNERATION MATTERS
Remuneration Committee
The Remuneration Committee (“RC”) comprises three members, all of whom are independent non- executive directors. The RC members are Mr Boey Tak Hap – Chairman of RC, Mr Lee Han Yang and Mr Phua Bah Lee.
The RC reviews the remuneration of Directors and key executives of the Group and obtains advice on remuneration matters as and when required from human resource advisers or consultants within and outside the Group. No Director is involved in deciding his own remuneration.
The RC makes recommendation on an appropriate framework of remuneration taking into account employment conditions within the industry and the Company’s performance to ensure that the package is competitive and sufficient to attract, retain and motivate key executives.
The Group's remuneration policy comprises a fixed component (in the form of base salary) and a variable component that is linked to the Company and individual performance.
As disclosed in the Directors’ Report on page 52, other than 120,000 share options granted to Mr Lee Kim Wah, no options were granted to the Directors of the Company during the financial year. Directors who participate in Board Committees receive higher fees for the additional responsibilities. All Directors’ fees are approved by shareholders at the Annual General Meeting of the Company before they are paid.
A breakdown (in percentage terms) of the Directors’ remuneration for FY2006 are as follows:
Remuneration Bands Fees (%) Salary (%) Bonus, Allowance & Other Benefits (%)
$1,250,001 to $1,500,000 Cheng Wai Keung – 68 32 #
$1,000,000 to $1,250,000 Edmund Cheng Wai Wing – 68 32 #
$500,001 to $750,000 Lee Kim Wah 64 36 ^
$250,000 to $500,000 Ne Chen Duen 2 # 92 6 #
Below $250,000 Boey Tak Hap 100 – – Cheng Man Tak 100 – – Tan Sri Dato’ Mohamed Noordin bin Hassan 85 # –15# Christopher Patrick Langley 100 – – Lee Han Yang 100 – – Loh Soo Eng 100 – – Phua Bah Lee 100 – –
# Includes fees, allowance and other benefits from DNP Holdings Berhad.
^ Other benefits include the cost of the fair value of share options granted in FY2006 in accordance with FRS102 – Share Based Payment which the Company adopted in FY2006.
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CORPORATE GOVERNANCE
Instead of setting out the names of the top five key executives who are not Directors of the Company, we have shown a Group-wide cross-section of executives’ remuneration (one of whom is related to the Managing Director) by number of employees within bands of $250,000. This gives a macro perspective of the remuneration pattern in the Group while maintaining confidentiality of employees’ remuneration:
Range of Remuneration No. of Key Executives
Above $500,000 2 $250,000 to $500,000 5
ACCOUNTABILITY AND AUDIT
Accountability
The Company has implemented quarterly reporting since FY2003. Shareholders are provided with the Company’s financial performance, position and prospects on a quarterly basis, whilst periodic management reports of the Company and its businesses are furnished to the Board.
Audit Committee
The Audit Committee (“AC”) comprises three members, all of whom are independent non-executive directors. The AC members are Mr Phua Bah Lee – Chairman of AC, Mr Boey Tak Hap and Mr Lee Han Yang.
Members of the AC have sufficient financial management expertise and experience to discharge its functions. It held four meetings in FY2006. The functions of the AC include the review of annual audit plan, internal audit process, the adequacy of internal controls and interested person transactions. The AC recommends to the Board the external auditors to be appointed or re-appointed taking into account the independence and objectivity of such external auditors as well as to review the scope, results and cost effectiveness of their audit procedures. The AC also reviews the quarterly and annual financial statements before submitting to the Board for approval.
The key function of the AC is to maintain a high standard of corporate governance. The AC has full access to and co-operation of the Management. The AC met with the internal and external auditors without the presence of the Management once during the year. Having reviewed the value of non-audit services by the external auditors to the Group, the AC is satisfied that the nature and extent of such services will not prejudice the independence and objectivity of the external auditors.
Internal Controls
The Group’s internal financial controls provide reasonable assurance that assets are safeguarded, proper accounting records are maintained, reliability of financial information and compliance with applicable laws and regulations. Regular management meetings are held to report and monitor the performance of each department.
The Board is satisfied that based on the information furnished to it and on its own observations, the internal controls and risk management processes are satisfactory for the nature and size of the Group’s operations and business.
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Interested Person Transaction
The Company has established an internal policy in respect of any transactions with interested persons and has set out the procedures for review and approval of the Company’s interested person transactions (“IPT”). During FY2006, the AC reviewed the following IPT:
Name of Interested Person Aggregate value of all IPT during FY2006
Investment in Winquest Investment Pte. Ltd. (Belle Vue Site) S$’000 - Winsor Properties Holdings Limited 29,600
The above IPT was entered into at arm’s length and on normal commercial terms.
Internal Audit
The Company has adopted a set of internal controls which sets out approval limits for expenditure, investments and divestments and cheque signatory arrangements. The internal audit function of the Group is carried out by Messrs Kan & Co (“IA”) and its approach is consistent with the standards as required by the Institute of Internal Auditors. The IA reports their audit findings to the AC and Management.
The function of the IA is to provide objective opinion and assurance to the AC and Management as to the adequacy of the internal processes and control, identify financial and operational risks and to recommend policies and plans for effective compliance control. The IA submits its plans and recommendations to the AC for approval. The AC reviews the activities of the IA on a quarterly basis and is satisfied that there are adequate internal controls in the Company.
COMMUNICATION WITH SHAREHOLDERS
Shareholders are updated on the business and affairs of the Company through the quarterly release of the Company’s results. Material and price-sensitive information is publicly released by the Company via SGXNET on an immediate basis where required by the Singapore Exchange Securities Trading Limited (SGX-ST). The Company does not practise selective disclosure. Timely and detailed disclosure of pertinent corporate information is communicated to shareholders via SGXNET and posted on the Company’s website.
All shareholders receive the summary financial report and/or the annual report of the Company and the notice of the AGM. The notice (also advertised in the press) and results are published via SGXNET. The Company also holds a press and analysts briefing for its full-year results.
Shareholders are given the opportunity to raise relevant questions and communicate their views at the AGM. A shareholder can vote in person or appoint up to two proxies to attend and vote at the AGM in his/her absence.
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CORPORATE GOVERNANCE
DEALINGS IN SECURITIES
The Company has adopted and implemented an internal guideline on share dealings in the Company’s securities in compliance with the recommendations of the SGX-ST as set out in its Best Practices Guide. All the officers of the Company are prohibited from dealing in securities of the Company while in possession of price-sensitive information and during the closed period, which is two weeks before the date of announcement of results for each of the first three quarters of the Company’s financial year and one month before the date of announcement of the full-year financial results.
Directors’ Attendance at Board and Board Committee Meetings for FY2006
Name Board Audit Remuneration Nominating Committee Committee Committee Meetings Meetings Meetings Meetings Held : 4 Held : 4 Held : 3 Held : 1 Meetings Meetings Meetings Meetings Attended Attended Attended Attended
Cheng Wai Keung * 4 1 1 Edmund Cheng Wai Wing 4 Boey Tak Hap 4 4 3 Cheng Man Tak 4 Tan Sri Dato’ Mohamed Noordin bin Hassan 3 1 Christopher Patrick Langley 2 Lee Han Yang ** 3 4 2 Lee Kim Wah 4 Loh Soo Eng 4 Ne Chen Duen 4 Phua Bah Lee 4 4 3 1
* Mr Cheng Wai Keung resigned from the Remuneration Committee on 8 May 2006. ** Mr Lee Han Yang was appointed to the Remuneration Committee on 8 May 2006.
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C M Y CM MY CY CMY K
Composite FINANCIAL REPORT
50 Five-Year Financial Summary
51 Directors’ Report
55 Statement by Directors
56 Auditors’ Report
57 Consolidated Income Statement
58 Balance Sheets
59 Consolidated Statement of Changes in Equity
61 Consolidated Cash Flow Statement
63 Notes to the Financial Statements
140 Notice of Annual General Meeting
143 Shareholding Statistics
PG 49
WT_Fin_29sepFA.indd 49 9/29/06 7:13:38 PM FIVE-YEAR FINANCIAL SUMMARY
Year Ended Year Ended Year Ended Year Ended Year Ended 30 June 2006 30 June 2005 30 June 2004 30 June 2003 30 June 2002 $’000 $’000 $’000 $’000 $’000
Revenue 889,258 281,569 274,455 455,441 250,527 Property 761,049 221,086 229,558 404,371 196,681 Trading & Retailing 89,476 58,296 44,574 50,492 53,140 Investment & others 38,733 2,187 323 578 706 Profit/(loss) before tax 156,905 26,939 8,930 1,688 (60,126) Profit/(loss) after tax but before minority interests 135,742 25,356 14,709 7,732 (72,637) Profit/(loss) attributable to shareholders 128,028 24,411 14,833 3,965 (69,153) Shareholders’ equity 1,149,881 1,021,453 946,963 923,470 934,273 Total assets 2,745,249 2,576,312 2,248,131 2,258,792 2,654,809 Total liabilities and minority interests 1,595,368 1,554,859 1,301,168 1,335,322 1,720,536 Earning/(loss) per share* (cents) 17.84 3.41 2.18 0.61 (10.70) Net tangible assets per share (S$) 1.60 1.42 1.32 1.51 1.53 Net dividend to ordinary shareholders 34,474 17,225 11,456 4,782 14,323 Gross dividends (cents) 6.00 3.00 2.00 1.00 3.00
* The number of shares used for this purpose are as follows:
2006 717,444,852 2005 715,959,519 2004 681,592,622 2003 646,468,558 2002 646,311,037
PG 50
WT_Fin_29sepFA.indd 50 9/29/06 7:13:38 PM DIRECTORS’ REPORT FOR THE FINANCIAL YEAR ENDED 30 JUNE 2006
The directors present their report to the members together with the audited financial statements of the Group for the financial year ended 30 June 2006 and the balance sheet of the Company at 30 June 2006.
DIRECTORS
The directors of the Company at the date of this report are:
Cheng Wai Keung (Chairman and Managing Director) Edmund Cheng Wai Wing (Deputy Chairman and Deputy Managing Director) Boey Tak Hap Cheng Man Tak Tan Sri Dato’ Mohamed Noordin bin Hassan Christopher Patrick Langley, OBE Lee Han Yang Lee Kim Wah Loh Soo Eng Ne Chen Duen Phua Bah Lee
ARRANGEMENTS TO ENABLE DIRECTORS TO ACQUIRE SHARES AND DEBENTURES
Except as disclosed in the “Share Options” section of this report, neither at the end of nor at any time during the financial year was the Company a party to any arrangements, whose object was to enable the directors of the Company to acquire benefits through the acquisition of shares in, or debentures of, the Company or any other body corporate.
DIRECTORS’ INTERESTS IN SHARES OR DEBENTURES
(a) According to the register of directors’ shareholdings, none of the directors holding office at the end of the financial year had any interest in the share capital or debentures of the Company and related corporations, except as follows:
Holdings registered Holdings in which a director Name of director in the name of director is deemed to have an interest As at As at As at As at 1.7.2005 30.06.2006 1.7.2005 30.06.2006
Ordinary shares Cheng Wai Keung – – 282,383,816 284,960,816 Edmund Cheng Wai Wing – – 282,381,150 282,381,150 Ne Chen Duen – – 85,551,203 85,551,203 Lee Han Yang 300,000 300,000 – – Lee Kim Wah 514,000 634,000 – – Loh Soo Eng 275,000 255,000 – – Phua Bah Lee 350,000 340,000 – –
Share options Lee Kim Wah 600,000 600,000 – – Loh Soo Eng 240,000 120,000 – –
PG 51
WT_Fin_29sepFA.indd 51 9/29/06 7:13:39 PM DIRECTORS’ REPORT FOR THE FINANCIAL YEAR ENDED 30 JUNE 2006
DIRECTORS’ INTERESTS IN SHARES OR DEBENTURES (CONTINUED)
(b) By virtue of Section 7 of the Companies Act (Cap. 50), Cheng Wai Keung and Edmund Cheng Wai Wing, who by virtue of their interest of not less than 20% in the issued capital of the Company, are also deemed to have an interest in the shares of the various subsidiary companies held by the Company as disclosed in Note 38 to the financial statements.
(c) There is no change in any of the above-mentioned interest between 30 June 2006 and 21 July 2006.
DIRECTORS’ CONTRACTUAL BENEFITS
Since the end of the previous financial year, no director has received or become entitled to receive a benefit by reason of a contract made by the Company or a related corporation with the director or with a firm of which he is a member or with a company in which he has a substantial financial interest, except as disclosed in Note 36 to the financial statements.
SHARE OPTIONS
(a) The Wing Tai Holdings Limited (2001) Share Option Scheme (the “2001 Scheme”)
The 2001 Scheme was approved and adopted by its members at an Extraordinary General Meeting held on 31 August 2001.
The Share Option Scheme Committee of the Company has been designated as the committee responsible for the administration of the 2001 Scheme. The Committee comprises the following members:
Mr Cheng Wai Keung Mr Ne Chen Duen
Pursuant to the 2001 Scheme, the full-time executives (including executive directors) of the Company or any of its subsidiary companies or associated companies and non-executive directors of the Company are eligible to participate in the 2001 Scheme. In addition, an executive or a non-executive director who is a controlling shareholder or his associate as defined in the Listing Manual of the SGX-ST shall be eligible to participate in the 2001 Scheme if (a) his participation in the 2001 Scheme and (b) the actual number of ordinary shares and the terms of the options to be granted have been approved by shareholders of the Company in separate resolutions for each such person.
There were no share options granted to the controlling shareholders or their associates.
During the financial year, options were granted by the Company pursuant to the 2001 Scheme in respect of 1,805,000 ordinary shares in the Company, of which 120,000 options were granted to a director Mr Lee Kim Wah, and 1,685,000 options were granted to 68 executives of the Group. There were no share options granted at a discount to the market price.
(b) The Wing Tai Holdings Limited Executives’ Share Option Scheme (the “1991 Scheme”)
The 1991 Scheme was approved by the members of the Company at the Extraordinary General Meeting held on 5 December 1991. The 1991 Scheme was terminated (without prejudice to the rights of holders of options in respect of whose offers of the options have been granted) and replaced by the 2001 Scheme at the Extraordinary General Meeting held on 31 August 2001. No option was granted under the 1991 Scheme during the financial year.
The 1991 Scheme is administered by a committee comprising 2 directors who are non-participants in the 1991 Scheme, namely Mr Cheng Wai Keung and Mr Ne Chen Duen. Other than Mr Lee Kim Wah and Mr Loh Soo Eng, none of the other directors of the Company participated in the 1991 Scheme. No controlling shareholder of the Company or his associate participated in the 1991 Scheme.
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WT_Fin_29sepFA.indd 52 9/29/06 7:13:39 PM DIRECTORS’ REPORT FOR THE FINANCIAL YEAR ENDED 30 JUNE 2006
SHARE OPTIONS (CONTINUED)
(c) None of the participants of the 2001 Scheme and 1991 Scheme received 5% or more of the total number of options available under the respective Scheme except for the following:
Aggregate options since Aggregate Options granted commencement of the options during the financial year Scheme to 30.06.2006 outstanding No. of Exercise Options Options Options as at Name of participants options granted price ($) granted exercised expired 30.06.2006
Directors of the Company
2001 Scheme Lee Kim Wah 120,000 1.43 600,000 – – 600,000 Loh Soo Eng – – 360,000 240,000 – 120,000
1991 Scheme Lee Kim Wah – – 960,000 468,000 492,000 – Loh Soo Eng – – 960,000 468,000 492,000 –
At 30 June 2006, the following options to subscribe for 4,289,000 ordinary shares in the Company were outstanding:
Number Number Number Number As at of options of options of options of options As at Exercise Date of grant 01.07.2005 granted exercised forfeited expired 30.06.2006 price ($) Expiry date
1991 Scheme 31.10.2000 1,005,000 – 508,000 15,000 482,000 – 1.379 30.09.2005 1,005,000 – 508,000 15,000 482,000 –
2001 Scheme 02.11.2001 741,000 – 455,000 – – 286,000 0.678 01.11.2011 05.11.2002 914,500 – 628,000 10,000 – 276,500 0.653 04.11.2012 28.11.2003 1,264,000 – 305,500 88,000 – 870,500 0.745 27.11.2013 19.11.2004 1,720,000 – 221,500 217,500 – 1,281,000 0.934 18.11.2014 30.09.2005 – 1,805,000 – 230,000 – 1,575,000 1.430 29.09.2015 4,639,500 1,805,000 1,610,000 545,500 – 4,289,000 Total 5,644,500 1,805,000 2,118,000 560,500 482,000 4,289,000
There were no unissued shares of any subsidiary company under option as at the end of the financial year.
Except for the above, no other options were granted by the Company or any subsidiary company during the financial year and there were no unissued shares under option at the end of the financial year.
PG 53
WT_Fin_29sepFA.indd 53 9/29/06 7:13:39 PM DIRECTORS’ REPORT FOR THE FINANCIAL YEAR ENDED 30 JUNE 2006
AUDIT COMMITTEE
The Audit Committee consists of three non-executive independent directors. The members of the Committee are:
Phua Bah Lee (Chairman) Boey Tak Hap Lee Han Yang
The Audit Committee reviewed the Group’s accounting policies and system of internal controls on behalf of the board of directors and performed the functions specified in Section 201B(5) of the Companies Act (Cap. 50). In performing its functions, the Committee reviewed:
(a) the audit plans of the Company’s internal and external auditors and their evaluation of the system of internal controls arising from their audit examinations;
(b) the scope and results of internal audit procedures; and
(c) the quarterly results and the full year consolidated financial statements of the Group for the financial year ended 30 June 2006 before their submission to the board of directors for approval and the auditors’ report on these financial statements.
The Audit Committee has nominated PricewaterhouseCoopers for re-appointment as auditors of the Company at the forthcoming Annual General Meeting.
AUDITORS
The auditors, PricewaterhouseCoopers, have expressed their willingness to accept re-appointment.
On behalf of the directors
CHENG WAI KEUNG NE CHEN DUEN Director Director
Singapore 18 September 2006
PG 54
WT_Fin_29sepFA.indd 54 9/29/06 7:13:39 PM STATEMENT BY DIRECTORS
In the opinion of the directors,
(a) the balance sheet of the Company and the consolidated financial statements of the Group as set out on pages 57 to 139 are drawn up so as to give a true and fair view of the state of affairs of the Company and of the Group at 30 June 2006 and of the results of the business, changes in equity and cash flows of the Group for the financial year then ended; and
(b) at the date of this statement, there are reasonable grounds to believe that the Company will be able to pay its debts as and when they fall due.
On behalf of the directors
CHENG WAI KEUNG NE CHEN DUEN Director Director
Singapore 18 September 2006
PG 55
WT_Fin_29sepFA.indd 55 9/29/06 7:13:39 PM AUDITORS’ REPORT TO THE MEMBERS OF WING TAI HOLDINGS LIMITED
We have audited the accompanying financial statements of Wing Tai Holdings Limited set out on pages 57 to 139 for the financial year ended 30 June 2006, comprising the balance sheet of the Company and the consolidated financial statements of the Group. These financial statements are the responsibility of the Company’s directors. 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 plan and perform our audit to obtain reasonable assurance whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the directors, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion,
(a) the accompanying balance sheet of the Company and consolidated financial statements of the Group are properly drawn up in accordance with the provisions of the Companies Act, Cap. 50 (“the Act”) and Singapore Financial Reporting Standards so as to give a true and fair view of the state of affairs of the Company and of the Group as at 30 June 2006 and the results, changes in equity and cash flows of the Group for the financial year ended on that date; and
(b) the accounting and other records required by the Act to be kept by the Company and by those subsidiary companies incorporated in Singapore of which we are the auditors have been properly kept in accordance with the provisions of the Act.
PRICEWATERHOUSECOOPERS Certified Public Accountants
Singapore 18 September 2006
PG 56
WT_Fin_29sepFA.indd 56 9/29/06 7:13:39 PM CONSOLIDATED INCOME STATEMENT FOR THE FINANCIAL YEAR ENDED 30 JUNE 2006
The Group Notes 2006 2005 $’000 $’000 (restated)
Revenue 4 889,258 281,569 Cost of sales (664,863) (200,274) Gross profit 224,395 81,295
Other gains (net) 4 13,804 4,640
Expenses – Distribution (40,370) (26,746) – Administrative (44,225) (23,775) – Other (41,950) (9,588)
Exceptional items 5 (1,534) (7,412) Operating profit 6 110,120 18,414
Finance costs 8 (40,297) (36,640)
Share of results of associated companies and joint venture companies 87,082 45,165 Profit before tax 156,905 26,939
Income tax 9 (21,163) (1,583) Total profit 135,742 25,356
Attributable to: Equity holders of the Company 128,028 24,411 Minority interests 7,714 945 135,742 25,356
Earnings per share attributable to the equity holders of the Company (cents) Basic 10 17.84 3.41 Diluted 10 17.81 3.41
The accompanying notes form an integral part of these financial statements. Auditors’ Report – Page 56 PG 57
WT_Fin_29sepFA.indd 57 9/29/06 7:13:39 PM BALANCE SHEETS AS AT 30 JUNE 2006
The Group The Company Notes 2006 2005 2006 2005 $’000 $’000 $’000 $’000 (restated) (restated)
ASSETS Current assets Cash and cash equivalents 11 308,538 138,075 168,425 37,858 Trade and other receivables 12 76,686 48,228 383,226 409,843 Inventories 13 23,717 5,577 – – Derivative financial instruments 15 1,851 – 1,874 – Development properties 16 1,056,906 943,375 – – Investment property held for sale 22 – 230,000 – – Tax recoverable 17,234 16,417 9,514 1,167 Other current assets 17 16,925 12,549 1,278 5,527 1,501,857 1,394,221 564,317 454,395
Non-current assets Trade and other receivables 18 238,701 233,870 660,293 687,260 Available-for-sale financial assets 14 7,774 3,853 3,793 3,793 Investments in subsidiary companies 19 – – 253,392 132,366 Investments in associated companies 20 371,749 455,971 – 121,026 Investments in joint venture companies 21 89,870 91,605 – – Investment properties 22 417,970 297,103 – – Property, plant and equipment 23 117,328 99,689 90,533 91,818 1,243,392 1,182,091 1,008,011 1,036,263
Total assets 2,745,249 2,576,312 1,572,328 1,490,658
LIABILITIES Current liabilities Trade and other payables 24 104,786 122,579 212,516 181,025 Borrowings 25(a) 246,368 170,335 50,000 100,000 Provision for current tax 11,732 5,369 2,275 1,813 362,886 298,283 264,791 282,838
Non-current liabilities Borrowings 25(e) 861,347 1,029,451 275,000 200,000 Deferred tax 9 7,444 1,777 158 158 Other non-current liabilities 27 251,695 245,308 77,029 74,660 1,120,486 1,276,536 352,187 274,818
Total liabilities 1,483,372 1,574,819 616,978 557,656
NET ASSETS 1,261,877 1,001,493 955,350 933,002
EQUITY Capital and reserves attributable to the Company’s equity holders Share capital 28 687,193 179,027 687,193 179,027 Share premium and other reserves 29 204,874 695,536 83,782 587,512 Revenue reserve 30 257,814 146,890 184,375 166,463 1,149,881 1,021,453 955,350 933,002 Minority interests 111,996 (19,960) – – Total equity 1,261,877 1,001,493 955,350 933,002
The accompanying notes form an integral part of these financial statements. Auditors’ Report – Page 56 PG 58
WT_Fin_29sepFA.indd 58 9/29/06 7:13:40 PM CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE FINANCIAL YEAR ENDED 30 JUNE 2006
Attributable to equity holders of the Company Share Share Asset revaluation Revenue Minority Notes capital premium and other reserves reserve interests Total equity $’000 $’000 $’000 $’000 $’000 $’000
Balance at 1 July 2005 179,027 501,600 193,470 141,331 (19,960) 995,468 Effect of adopting FRS 28 3.3 – – – 6,025 – 6,025 Effect of adopting FRS102 3.5 – – 466 (466) – – As restated 179,027 501,600 193,936 146,890 (19,960) 1,001,493 Effect of adopting FRS39 3.4 – – (5,922) – – (5,922) 179,027 501,600 188,014 146,890 (19,960) 995,571
Revaluation surplus 29 – – 5,219 – (605) 4,614 Deferred tax debited to equity 29 – – (41) – (41) (82) Currency translation differences 29 – – (12,646) – (1,006) (13,652) Cash flow hedges 29 – – 8,084 – – 8,084 Share of capital reserves of associated companies and joint venture companies 29 – – 11,091 – 4,784 15,875 Realisation of reserve upon sale of investment property and property, plant and equipment 29 – – 8,910 121 – 9,031 Net gains recognised directly in equity – – 20,617 121 3,132 23,870 Net profit – – – 128,028 7,714 135,742
Total recognised gains for the financial year – – 20,617 128,149 10,846 159,612
Cost of share-based payment – – 956 – – 956 Issue of shares 28,29(a) 771 1,082 – – – 1,853 Transfer to Share Capital upon commencement of Companies (Amendment) Act 2005 507,395 (502,682) (4,713) – – – Issue of shares by a subsidiary company to its minority shareholder – – – – 400 400 Dividend paid by a subsidiary company to the minority shareholder – – – – (5,590) (5,590) Ordinary dividends paid 26 – – – (17,225) – (17,225) Liquidation of subsidiary company – – – – (16,280) (16,280) Acquisition of a subsidiary company – – – – 142,580 142,580 Balance at 30 June 2006 687,193 – 204,874 257,814 111,996 1,261,877
The accompanying notes form an integral part of these financial statements. Auditors’ Report – Page 56 PG 59
WT_Fin_29sepFA.indd 59 9/29/06 7:13:40 PM CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE FINANCIAL YEAR ENDED 30 JUNE 2006
Attributable to equity holders of the Company Share Share Asset revaluation Revenue Minority Notes capital premium and other reserves reserve interests Total equity $’000 $’000 $’000 $’000 $’000 $’000
Balance at 1 July 2004 178,943 501,455 141,604 124,961 14,183 961,146 Effect of adopting FRS 28 – – – 9,048 – 9,048 Effect of adopting FRS 102 – – 74 (74) – – As restated 178,943 501,455 141,678 133,935 14,183 970,194
Revaluation deficit 29 – – (9,225) – – (9,225) Deferred tax credited to equity 29 – – 397 – – 397 Currency translation differences 29 – – (5,222) – 4,698 (524) Share of capital reserves of associated companies and joint venture companies 29 – – 65,916 – 599 66,515 Net gains recognised directly in equity – – 51,866 – 5,297 57,163 Net profit – – – 24,411 945 25,356 Total recognised gains for the financial year – – 51,866 24,411 6,242 82,519
Cost of share-based payment – – 392 – – 392 Issue of shares 28, 29(a) 84 145 – – – 229 Dividend paid by a subsidiary company to its minority shareholders – – – – (62) (62) Ordinary dividends paid 26 – – – (11,456) – (11,456) Acquisition of a subsidiary company – – – – (40,323) (40,323) Balance at 30 June 2005 179,027 501,600 193,936 146,890 (19,960) 1,001,493
An analysis of the movements in each category within “Asset revaluation and other reserves” is presented in Note 29.
The accompanying notes form an integral part of these financial statements. Auditors’ Report – Page 56 PG 60
WT_Fin_29sepFA.indd 60 9/29/06 7:13:40 PM CONSOLIDATED CASH FLOW STATEMENT FOR THE FINANCIAL YEAR ENDED 30 JUNE 2006
The Group Note 2006 2005 $’000 $’000 (restated)
Cash flows from operating activities Profit before tax 156,905 26,939 Adjustments for: Depreciation of property, plant and equipment 5,069 3,524 Impairment on property, plant and equipment 3,170 – Revaluation loss on property, plant and equipment and investment property 4,718 – Negative goodwill arising from additional shares in: – subsidiary company (1,636) (3,278) – associated company – (3,397) (Gain)/loss on disposal/liquidation of: – subsidiary company – (596) – associated company – 307 Loss/(gain) on sale of property, plant and equipment 5 (487) Interest income (8,040) (1,389) Interest expense 40,297 36,640 Share of results of associated companies and joint venture companies (87,082) (45,165) Cost of share based payments 956 392 Writeback of allowance for diminution in value of unquoted investment – (557) Provision for foreseeable losses on development properties 31,211 – Allowance for losses on investment property – 14,087 Translation difference 2,938 (1,376) Operating profit before working capital changes 148,511 25,644
Changes in operating assets and liabilities: Balances with associated companies and joint venture companies (1,564) 2,647 Development properties 10,513 45,089 Inventories 13,383 (693) Debtors (23,215) (14,891) Creditors (32,640) 35,497 Cash generated from operations 114,988 93,293
Restricted cash 16,475 10,859 Income tax paid (1,632) (246) Net cash generated from operating activities 129,831 103,906
The accompanying notes form an integral part of these financial statements. Auditors’ Report – Page 56 PG 61
WT_Fin_29sepFA.indd 61 9/29/06 7:13:40 PM CONSOLIDATED CASH FLOW STATEMENT FOR THE FINANCIAL YEAR ENDED 30 JUNE 2006
The Group Note 2006 2005 $’000 $’000
Cash flows from investing activities Acquisition of subsidiary companies, net of cash acquired 11 4,343 18,445 Acquisition of additional shares in an associated company – (1,556) Acquisition of property, plant and equipment (5,830) (5,259) Purchase of available-for-sale financial assets (3,921) – Dividends received 9,735 6,530 Interest received 11,097 1,369 Repayment of loans by associated companies, joint venture companies and investee companies 907 12,244 Proceeds from sale of investment property 230,000 – Proceeds from share reduction exercise in an investee company – 1,370 Proceeds from sale of property, plant and equipment 2,381 836 Proceeds from disposal/liquidation of associated companies – 513 Proceeds from disposal of a subsidiary company, net of cash disposed 11 – 238 Net cash generated from investing activities 248,712 34,730
Cash flows from financing activities Net proceeds from issue of shares 1,853 229 Loans from minority shareholders 151 25,880 Repayment of bank borrowings (124,284) (45,146) Dividends paid to minority shareholders (5,590) – Dividends paid to shareholders of holding company (17,225) (11,456) Issuance of shares by a subsidiary company to its minority shareholders 400 – Interest paid (46,948) (45,511)
Net cash used in financing activities (191,643) (76,004)
Net change in cash and cash equivalents 186,900 62,632 Effect of foreign exchange rate changes 38 (20) Cash and cash equivalents at the beginning of the financial year 116,614 54,002 Cash and cash equivalents at the end of the financial year 11 303,552 116,614
The accompanying notes form an integral part of these financial statements. Auditors’ Report – Page 56 PG 62
WT_Fin_29sepFA.indd 62 9/29/06 7:13:40 PM NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2006
These notes form an integral part of and should be read in conjunction with the accompanying financial statements.
1. GENERAL
The Company is incorporated and domiciled in Singapore and is listed on the Singapore Exchange. The address of its registered office is as follows:
107 Tampines Road Singapore 535129
The principal activity of the Company is that of an investment holding company. The principal activities of the Company’s subsidiary companies are shown in Note 38.
2. SIGNIFICANT ACCOUNTING POLICIES
2.1 Basis of preparation
The financial statements have been prepared in accordance with Singapore Financial Reporting Standards (“FRS”). The financial statements have been prepared under the historical cost convention, except as disclosed in the accounting policies below.
The preparation of financial statements in conformity with FRS requires management to exercise its judgment in the process of applying the Group’s accounting policies. It also requires the use of accounting 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 ultimately differ from those estimates.
In 2006, the Group and the Company adopted the new or revised FRS and Interpretations to FRS (INT FRS) that are applicable in the current financial year. The 2005 financial statements have been amended as required, in accordance with the relevant transitional provisions in the respective FRS and INT FRS.
The following are the new or revised FRS that are relevant to the Group:
FRS 1 (revised 2004) Presentation of Financial Statements FRS 2 (revised 2004) Inventories FRS 8 (revised 2004) Accounting Policies, Changes in Accounting Estimates and Errors FRS 10 (revised 2004) Events after the Balance Sheet Date FRS 16 (revised 2004) Property, Plant and Equipment FRS 17 (revised 2004) Leases FRS 21 (revised 2004) The Effects of Changes in Foreign Exchange Rates FRS 24 (revised 2004) Related Party Disclosures FRS 27 (revised 2004) Consolidated and Separate Financial Statements FRS 28 (revised 2004) Investments in Associates FRS 31 (revised 2004) Interests in Joint Ventures FRS 32 (revised 2004) Financial Instruments: Disclosure and Presentation FRS 33 (revised 2004) Earnings per Share FRS 36 (revised 2004) Impairment of Assets FRS 39 (revised 2004) Financial Instruments: Recognition and Measurement FRS 102 Share-based Payments FRS 103 Business Combinations FRS 105 Non-current Assets Held for Sale and Discontinued Operations
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WT_Fin_29sepFA.indd 63 9/29/06 7:13:41 PM NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2006
2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2.1 Basis of preparation (Continued)
There are no new or revised INT FRS that are relevant to the Group.
The adoption of the above new or revised FRS did not result in substantial changes to the Group’s accounting policies except as disclosed in Note 3.
2.2 Revenue recognition
Revenue for the Group comprises the fair value of the consideration received or receivable for the sale of properties and goods, rental income from operating leases and investment properties and rendering of services, net of goods and services tax, rebates and discounts, and after eliminating sales within the Group. Revenue is recognised as follows:
(a) Sale of goods
Revenue from sales of goods is recognised when a Group entity has delivered the products to the customer, the customer has accepted the products and collectibility of the related receivables is reasonably assured, except for income from sale of development properties, which is recognised using the percentage of completion method as disclosed in Note 2.8.
(b) Rendering of services
Revenue from rendering of services is recognised over the period in which the services are rendered, by reference to completion of the specific transaction assessed on the basis of the actual service provided as a proportion of the total services to be performed.
(c) Interest income
Interest income is recognised on a time-proportion basis using the effective interest method.
(d) Dividend income
Dividend income is recognised when the right to receive payment is established.
(e) Rental income
Rental income from operating leases on investment properties is recognised on a straight-line basis over the lease term.
(f) Management fee
Management fee comprises charges for the management and maintenance of properties, finance and administration fees.
Revenue from management fee is recognised over the period in which the management services are rendered.
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2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2.3 Group accounting
(a) Subsidiary companies
Subsidiary companies are entities over which the Group has power to govern the financial and operating policies, generally accompanying a shareholding of more than one half of the voting rights. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the Group controls another entity.
The purchase method of accounting is used to account for the acquisition of subsidiary companies. The cost of an acquisition is measured as the fair value of the assets given, equity instruments issued or liabilities incurred or assumed at the date of exchange, plus costs directly attributable to the acquisition. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values on the date of acquisition, irrespective of the extent of any minority interest. Please refer to Note 2.4 for the accounting policy on goodwill on acquisition of subsidiary companies.
Subsidiary companies are consolidated from the date on which control is transferred to the Group to the date on which that control ceases. In preparing the consolidated financial statements, intercompany transactions, balances and unrealised gains on transactions between group companies are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. Where necessary, adjustments are made to the financial statements of subsidiaries to ensure consistency of accounting policies with those of the Group.
Minority interest is that part of the net results of operations and of net assets of a subsidiary company attributable to interests which are not owned directly or indirectly by the Group. It is measured at the minorities’ share of the fair value of the subsidiary companies’, identifiable assets and liabilities at the date of acquisition by the Group and the minorities’ share of changes in equity since the date of acquisition, except when the losses applicable to the minority in a subsidiary company exceed the minority interest in the equity of that subsidiary company. In such cases, the excess and further losses applicable to the minority are attributed to the equity holders of the Company, unless the minority has a binding obligation to, and is able to, make good the losses. When that subsidiary company subsequently reports profits, the profits applicable to the minority are attributed to the equity holders of the Company until the minority’s share of losses previously absorbed by the equity holders of the Company has been recovered.
Please refer to Note 2.7 for the Company’s accounting policy on investments in subsidiary companies.
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2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2.3 Group accounting (Continued)
(b) Associated companies and joint venture companies
Associated companies are entities over which the Group has significant influence, but not control, generally accompanying a shareholding of between and including 20% and 50% of the voting rights. Joint venture companies are entities over which the Group has contractual arrangements to jointly share the control with one or more parties.
Investments in associated companies and joint venture companies are accounted for in the consolidated financial statements using the equity method of accounting. Investments in associated companies and joint venture companies in the consolidated balance sheet include goodwill (net of accumulated amortisation) identified on acquisition, where applicable. Please refer to Note 2.4 for the Group’s accounting policy on goodwill.
Equity accounting involves recording investments in associated companies and joint venture companies initially at cost, and recognising the Group’s share of its associated companies and joint venture companies’ post-acquisition results and its share of post-acquisition movements in reserves against the carrying amount of the investments. The amount used for equity accounting is based on the most recent audited financial statements of the associated companies and joint venture companies, and where the accounting period is not co-terminous with that of the Group, reference is made to the most recent audited or management statements of the companies concerned, made up to dates not more than three months prior to the end of the financial year of the Group.
When the Group’s share of losses in an associated company or joint venture company equals or exceeds its interest in the associated or joint venture company, including any other unsecured receivables, the Group does not recognise further losses, unless it has incurred obligations or made payments on behalf of the associated company or joint venture company.
In applying the equity method of accounting, unrealised gains on transactions between the Group and its associated companies and joint venture companies are eliminated to the extent of the Group’s interest in the associated companies and joint venture companies. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. Where necessary, adjustments are made to the financial statements of associated companies and joint venture companies to ensure consistency of accounting policies with those of the Group.
Please refer to Note 2.7 for the Company’s accounting policy on investments in associated companies and joint ventures companies.
(c) Transaction costs
Costs directly attributable to an acquisition are included as part of the cost of acquisition.
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2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2.4 Goodwill
Goodwill represents the excess of the cost of an acquisition of subsidiary companies, associated companies or joint venture companies over the fair value at the date of acquisition of the Group’s share of their identifiable net assets. Goodwill on acquisitions of subsidiary companies occurring on or after 1 January 2001 is included in intangible assets. Goodwill on acquisition of associated companies and joint venture companies occurring on or after 1 January 2001 is included in investments in associated companies and joint venture companies respectively. Goodwill on acquisition that occurred prior to 1 January 2001 has been taken in full to the revenue reserve; such goodwill has not been retrospectively capitalised and amortised.
Goodwill for acquisitions post 1 January 2005 is determined after deducting the Group’s share of their identifiable net assets and contingent liabilities. From 1 January 2005, goodwill recognised as intangible asset is tested at least annually for impairment and carried at cost less accumulated impairment losses (Note 2.10).
Gains and losses on the disposal of subsidiary companies, associated companies and joint ventures companies include the carrying amount of goodwill relating to the entity sold but exclude goodwill previously taken to revenue reserve (pre-January 2001 acquisition). Such goodwill previously adjusted against revenue reserve are not recognised in the income statement.
2.5 Property, plant and equipment
(a) Measurement
(i) Land and buildings
Land and buildings are initially recorded at cost.
Freehold and leasehold land are subsequently stated at fair value less accumulated impairment losses (Note 2.10). Buildings and leasehold land are subsequently stated at fair value less accumulated depreciation and accumulated impairment losses (Note 2.10).
Fair values of land and buildings are determined by an independent professional valuer once every three years and whenever their carrying amounts are likely to differ materially from their fair values. When an asset is revalued, any accumulated depreciation at the date of revaluation is eliminated against the gross carrying amount of the asset. The net amount is then restated to the revalued amount of the asset. Revaluation surpluses are taken to the asset revaluation reserve, unless they offset previous revaluation losses of the same asset that were taken to the income statement. Revaluation losses are taken to the asset revaluation reserve, to the extent that they offset previous revaluation surpluses of the same asset that were taken to the asset revaluation reserve. Other revaluation surpluses or losses are taken to the income statement.
(ii) Other property, plant and equipment
All other property, plant and equipment are stated at cost less accumulated depreciation and accumulated impairment losses (Note 2.10).
(iii) Components of cost
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.
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2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2.5 Property, plant and equipment (Continued)
(b) Depreciation
Freehold land and 999 years leasehold land is not depreciated. Depreciation on other property, plant and equipment is calculated using the straight line method to allocate their depreciable amounts over their estimated useful lives. The annual depreciation rates are as follows:
Buildings 2 – 3% Office equipment 10 – 33% Plant and machinery 10% Motor vehicles 20% Furniture and fittings 10% or over the remaining lease period whichever is shorter
The residual values and useful lives of property, plant and equipment are reviewed, and adjusted as appropriate, at each balance sheet date.
(c) Subsequent expenditure
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 the 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.
(d) Disposal
On disposal of an item of property, plant and equipment, the difference between the net disposal proceeds and its carrying amount is taken to the income statement. Any amount in revaluation reserve relating to that asset is transferred to retained earnings.
2.6 Investment properties
Investment properties of the Group are treated as long term investments and held for the primary purpose of producing rental income. They are not held for resale in the ordinary course of business.
Investment properties are stated at fair value based on their open market values on existing use basis. An independent professional valuation is carried out once every three years. During the intervening period, the investment properties are valued by the directors of the Company. Investment properties are not subjected to depreciation. Increases in carrying amount arising from the revaluation of each class of investment properties are taken to an asset revaluation reserve in shareholders’ equity, unless they are directly related to previous decreases in carrying amount that were taken to the income statement. Such increases are taken to income statement to the extent that they offset previously recorded decreases. Decreases in the carrying amount that offset previous increases of the same class of asset are taken to asset revaluation reserve; all other decreases are taken to the income statement.
On disposal of an investment property, the difference between the net disposal proceeds and carrying amount is taken to the income statement; any amount in asset revaluation reserve relating to that investment property are transferred to the income statement.
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2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2.7 Investments in subsidiary companies, associated companies and joint venture companies
Investments in subsidiary companies, associated companies and joint ventures companies are stated at cost less impairment losses (Note 2.10) in the Company’s balance sheet.
On disposal of investments in subsidiary companies, associated companies and joint ventures companies, the difference between net disposal proceeds and the carrying amount of the investment is taken to the income statement.
2.8 Development properties
Development properties are stated at cost plus attributable profits, less foreseeable losses, less progress payments received and receivable. An allowance is made where the estimated net realisable value of the development properties has fallen below their carrying value.
Cost includes cost of land and other direct and related expenditure, including interest on borrowings, incurred in developing the properties. Interest and other related expenditure are capitalised as and when the activities that are necessary to get the asset ready for its intended development are in progress.
The interest on borrowings capitalised is arrived at by reference, where appropriate, to the actual rate payable on borrowings for development purposes, and with regard to that part of the development cost financed out of general funds, at the average rate paid on funding the assets financed by the Group.
Where development properties are tenanted, and redevelopment cannot commence until existing tenancies have ended, rental income is set off against overhead expenditure capitalised as part of the cost of the properties.
Profit on the sale of properties under development is recognised in the financial statements using the percentage of completion method based on the stage of completion as certified by the architects or quantity surveyors for the individual units sold. Losses are provided for in full as soon as they are foreseeable. Significant assumptions are required in determining the percentage completion, the total estimated development costs and the estimated total revenue. In making the assumptions, the Group evaluates them by relying on past experience and the work of specialists. Revenue from development properties is disclosed in Note 4.
2.9 Properties held for sale
Properties held for sale are stated at the lower of cost and estimated net realisable value.
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2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2.10 Impairment of assets
(a) Goodwill
Goodwill is tested annually for impairment, as well as when there is any indication that the goodwill may be impaired. For the purpose of impairment testing of goodwill, goodwill is allocated to each of the Group’s cash- generating-units (“CGU”) expected to benefit from synergies of the business combination.
An impairment loss is recognised in the income statement when the carrying amount of CGU, including the goodwill, exceeds the recoverable amount of the CGU. Recoverable amount of the CGU is the higher of the CGU’s fair value less cost to sell and value in use. The total impairment loss is allocated first to reduce the carrying amount of goodwill allocated to the CGU and then to the other assets of the CGU pro-rata on the basis of the carrying amount of each asset in the CGU.
Impairment loss on goodwill is not reversed in a subsequent period.
(b) Property, plant and equipment Investments in subsidiary companies, associated companies and joint ventures companies.
Property, plant and equipment and investments in subsidiary companies, associated companies and joint ventures are reviewed for impairment whenever there is any indication that these assets may be impaired. If any such indication exists, the recoverable amount (i.e. the higher of the fair value less cost to sell and value in use) of the asset is estimated to determine the amount of impairment loss.
For the purpose of impairment testing of these assets, recoverable amount is determined on an individual asset basis unless the asset does not generate cash flows that are largely independent of those from other assets. If this is the case, recoverable amount is determined for the CGU to which the asset belongs to.
If the recoverable amount of the asset (or CGU) is estimated to be less than its carrying amount, the carrying amount of the asset (or CGU) is reduced to its recoverable amount. The impairment loss is recognised in the income statement unless the asset is carried at revalued amount, in which case, such impairment loss is treated as a revaluation decrease.
An impairment loss for an asset other than goodwill is reversed if, and only if, there has been a change in the estimates used to determine the assets’ recoverable amount since the last impairment loss was recognised. The carrying amount of an asset other than goodwill is increased to its revised recoverable amount, provided that this amount does not exceed the carrying amount that would have been determined (net of amortisation or depreciation) had no impairment loss been recognised for the asset in prior years. A reversal of impairment loss for an asset other than goodwill is recognised in the income statement, unless the asset is carried at revalued amount, in which case, such reversal is treated as a revaluation increase.
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2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2.11 Investments in financial assets
(a) Classification
The Group classifies its investments in financial assets in the following categories: financial assets at fair value through profit or loss, loans and receivables, held-to-maturity investments, and available-for-sale financial assets. The classification depends on the purpose for which the assets were acquired. Management determines the classification of its financial assets at initial recognition and re-evaluates this designation at every reporting date, with the exception that the designation of financial assets at fair value through profit or loss is not revocable.
(i) 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 receivable. They are included in current assets, except those maturing more than 12 months after the balance sheet date. These are classified as non-current assets. Loans and receivables are included in trade and other receivables on the balance sheet (Note 2.13).
(ii) Available-for-sale financial assets
Available-for-sale financial assets are non-derivatives that are either designated in this category or not classified in any of the other categories. They are included in non-current assets unless management intends to dispose of the assets within 12 months after the balance sheet date.
(b) Recognition and derecognition
Purchases and sales of investments are recognised on trade-date – the date on which the Group commits to purchase or sell the asset. Investments are derecognised when the rights to receive cash flows from the financial assets have expired or have been transferred and the Group has transferred substantially all risks and rewards of ownership.
(c) Initial measurement
Financial assets are initially recognised at fair value plus transaction costs except for financial assets at fair value through profit or loss, which are recognised at fair value.
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2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2.11 Investments in financial assets (Continued)
(d) Subsequent measurement
Available-for-sale financial assets and financial assets at fair value through profit or loss are subsequently carried at fair value. Loans and receivables and held-to-maturity investments are carried at amortised cost using the effective interest method.
Unrealised gains and losses arising from changes in the fair value of investments classified as available-for-sale are recognised in the fair value reserve within equity. When investments classified as available-for-sale are sold or impaired, the accumulated fair value adjustments in the fair value reserve within equity are included in the income statement.
(e) Determination of fair value
The fair values of quoted financial assets are based on current bid prices. If the market for a financial asset is not active, the Group establishes fair value by using valuation techniques. These include the use of recent arm’s length transactions, reference to other instruments that are substantially the same, discounted cash flow analysis, and option pricing models refined to reflect the issuer’s specific circumstances.
(f) Impairment
The Group assesses at each balance sheet date whether there is objective evidence that a financial asset or a group of financial assets is impaired. In the case of equity investments classified as available-for-sale, a significant or prolonged decline in the fair value of the investment below its cost is considered in determining whether the investments are impaired. If any such evidence exists for available-for-sale financial assets, the cumulative loss – measured as the difference between the acquisition cost and the current fair value, less any impairment loss on that financial asset previously recognised in profit or loss – is removed from the fair value reserve within equity and recognised in the income statement. Impairment losses recognised in the income statement on equity investments are not reversed through the income statement, until the equity investments are disposed of.
2.12 Inventories
Inventories are stated at the lower of cost and net realisable value. Cost is determined on a first-in, first-out basis. The cost of finished goods and work-in-progress comprises materials, direct labour, other direct costs and related production overheads but excludes borrowing costs. Net realisable value is the estimated selling price in the ordinary course of business, less the cost of completion and selling expenses.
Work-in-progress is stated at cost plus attributable profits, less progress payments received and receivable. Cost includes materials, direct labour and an appropriate proportion of production overhead expenditure.
Allowance is made where applicable for the total anticipated losses on long-term contracts on hand as soon as the possibility of loss is ascertained.
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2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2.13 Trade receivables
Trade receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method, less allowance for impairment. An allowance for impairment of trade receivables is established when there is objective evidence that the Group will not be able to collect all amounts due according to the original terms of the receivables. The amount of the allowance is the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the original effective interest rate. The amount of the allowance is recognised in the income statement.
2.14 Borrowings
Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are subsequently stated at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption value is taken to the income statement over the period of the borrowings using the effective interest method.
Borrowings which are due to be settled within twelve months after the balance sheet date are included in current borrowings in the balance sheet even though the original term was 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 balance sheet date and before the financial statements are authorised for issue. Other borrowings due to be settled more than twelve months after the balance sheet date are included in non-current borrowings in the balance sheet.
2.15 Derivative financial instruments and hedging activities
Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. The method of recognising the resulting gain or loss depends on whether the derivative is designated as a hedging instrument, and if so, the nature of the item being hedged.
The Group documents at the inception of the transaction the relationship between hedging instruments and hedged items, as well as its risk management objective and strategy for undertaking various hedge transactions. The Group also documents its assessment, both at hedge inception and on an ongoing basis, of whether the derivatives that are used in hedging transactions are highly effective in offsetting changes in cash flows of hedged items.
(a) Cash flow hedge
The Group has entered into interest rate swaps that are cash flow hedges for the Group’s exposure to interest rate risk on its borrowings. These contracts entitle the Group to receive interest at floating rates on notional principal amounts and oblige the Group to pay interest at fixed rates on the same notional principal amounts, thus allowing the Group to raise non-current borrowings at floating rates and swap them into fixed rates.
The effective portion of changes in the fair value of these interest rate swaps are recognised in the hedging reserve within equity and transferred to the income statement in the periods when the interest expense on the borrowings are recognised in the income statement. The gain or loss relating to the ineffective portion is recognised immediately in the income statement.
The Group also entered into foreign currency contracts to hedge anticipated purchase. These contracts do not qualify for hedge accounting and consequently, the changes in fair values of these contracts are included in the income statement in the period it arises [Note 2.15(b)].
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2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2.15 Derivative financial instruments and hedging activities (Continued)
(b) Derivatives that do not qualify for hedge accounting
Changes in the fair value of any derivative instruments that do not qualify for hedge accounting are recognised immediately in the income statement.
2.16 Fair value estimation
The fair value of financial instruments traded in active markets (such as exchange-traded and over-the-counter securities and derivatives) is based on quoted market prices at the balance sheet date. The quoted market price used for financial assets held by the Group is the current bid price; the appropriate quoted market price for financial liabilities is the current ask price. The fair value of interest-rate swaps is calculated as the present value of the estimated future cash flow, discounted at actively quoted interest rate. The fair value of forward foreign exchange contracts is determined using forward exchange market rates at the balance sheet date.
The carrying amount of current receivables and payables are assumed to approximate their fair values. The fair value of financial liabilities for disclosure purposes is estimated by discounting the future contractual cash flows at the current market interest rate that is available to the Group for similar financial instruments.
2.17 Leases
Operating leases
(a) When a group company is the lessee:
Leases of assets in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases (net of any incentives received from the lessor) are taken to the income statement on a straight-line basis over the period of the lease.
When an operating lease is terminated before the lease period has expired, any payment required to be made to the lessor by way of penalty is recognised as an expense in the period in which termination takes place.
(b) When a group company is the lessor:
Assets leased out under operating leases are included in investment properties and are stated at revalued amounts and not depreciated. Rental income (net of any incentives given to lessees) is recognised on a straight-line basis over the lease term.
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2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2.18 Deferred tax
Deferred tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. However, if the deferred tax arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss, it is not accounted for. Deferred tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the balance sheet date and are expected to apply when the related deferred tax asset is realised or the deferred tax liability is settled.
Deferred tax assets are recognised to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised.
Deferred tax is provided on temporary differences arising on investments in subsidiaries, associated companies and joint ventures, except where 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.
2.19 Provisions for other liabilities and charges
Provisions are recognised when the Group has a legal or constructive obligation as a result of past events, it is more likely than not that an outflow of resources will be required to settle the obligation and a reliable estimate of the amount can be made.
2.20 Employee benefits
(a) Defined contribution plans
Defined contribution plans are post-employment benefit plans under which the Group pays fixed contributions into separate entities such as the Central Provident Fund, and will have no legal or constructive obligation to pay further contributions if any of the funds do not hold sufficient assets to pay all employee benefits relating to employee services in the current and preceding financial years. The Group’s contribution to defined contribution plans are recognised in the financial year to which they relate.
(b) Employee leave entitlement
Employee entitlements to annual leave and long service leave are recognised when they accrue to employees. A provision is made for the estimated liability for annual leave and long-service leave as a result of services rendered by employees up to the balance sheet date.
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2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2.20 Employee benefits (Continued)
(c) Share-based compensation
The Group operates an equity-settled, share-based compensation plan. The fair value of the employee services received in exchange for the grant of the options is recognised as an expense in the income statement with a corresponding increase in the share option reserve over the vesting period. The total amount to be recognised over the vesting period is determined by reference to the fair value of the options granted, excluding the impact of any non-market vesting conditions (for example, profitability and sales growth targets), on the date of grant. Non- market vesting conditions are included in the assumptions about the number of options that are expected to become exercisable on vesting date. At each balance sheet date, the entity revises its estimates of the number of options that are expected to become exercisable on vesting date. It recognises the impact of the revision of original estimates, if any, in the income statement, and a corresponding adjustment to equity over the remaining vesting period.
The proceeds received net of any directly attributable transaction costs are credited to share capital when the options are exercised.
2.21 Currency translation
(a) Functional and presentation currency
Items included in the financial statements of each entity in the Group are measured using the currency of the primary economic environment in which the entity operates (“the functional currency”). The consolidated financial statements and balance sheet of the company are presented in Singapore Dollars, which is the Company’s functional and presentation currency.
(b) Transactions and balances
Transactions in a currency other than the functional currency (“foreign currency”) are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Currency translation gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the income statement, except for currency translation differences on net investment in foreign entities and borrowings and other currency instruments qualifying as net investment hedges for foreign operations in the consolidated financial statements [Note 2.21(d)].
Currency translation differences on non-monetary items, such as equity investments held at fair value through profit or loss, are reported as part of the fair value gain or loss. Currency translation differences on non-monetary items, such as equity investments classified as available-for-sale financial assets, are included in the fair value reserve within equity.
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2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2.21 Currency translation (Continued)
(c) Translation of Group entities’ financial statements
The results and financial position of all the group entities that have a functional currency different from the presentation currency are translated into the presentation currency as follows:
(i) Assets and liabilities for each balance sheet presented are translated at the closing rate at the date of the balance sheet;
(ii) Income and expenses for each income statement are translated at average exchange rate (unless this average is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated using the exchange rates at the dates of the transactions); and
(iii) All resulting exchange differences are taken to the foreign currency translation reserve within equity.
Goodwill and fair value adjustments arising on the acquisition of a foreign entity on or after 1 July 2005 are treated as assets and liabilities of the foreign entity and translated at the closing rate. For acquisitions prior to 1 July 2005, the exchange rates at the dates of acquisition were used.
(d) Consolidation adjustments
On consolidation, currency translation differences arising from the net investment in foreign entities and borrowings and other currency instruments designated as hedges of such investments are taken to the foreign currency translation reserve. When a foreign operation is disposed of, such currency translation differences are recognised in the income statement as part of the gain or loss on disposal.
2.22 Segment reporting
A business segment is a group of assets and operations engaged in providing products or services that are subject to risks and returns that are different from those of other business segments. A geographical segment is engaged in providing products or services within a particular economic environment that is subject to risks and returns that are different from those of segments operating in other economic environments.
2.23 Cash and cash equivalents
Cash and cash equivalents include interest-bearing bank accounts, fixed deposits with financial institutions and cash and bank balances.
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2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2.24 Share capital
Ordinary shares are classified as equity.
Incremental costs directly attributable to the issuance of new equity instruments other than for the acquisition of business are taken to equity as a deduction, net of tax, from the proceeds. Incremental costs directly attributable to the issuance of new equity instruments for the acquisition of businesses are included in the cost of acquisition as part of the purchase consideration.
2.25 Dividend
Interim dividends are recorded in the financial year in which they are declared payable. Final dividends are recorded in the financial year in which the dividends are approved by the shareholders.
2.26 Trade payables
Trade payables are initially measured at fair value, and subsequently measured at amortised cost, using the effective interest method.
3. EFFECTS ON FINANCIAL STATEMENTS ON ADOPTION OF NEW OR REVISED FRS
The effects on adoption of the following FRS in 2006 are set out below:
3.1 FRS 21 (revised 2004) The Effects of Changes in Foreign Exchange Rates
Translation differences on loans to subsidiary companies
Previously, translation differences on loans from the Company to its subsidiary companies which forms part of the Company’s net investment in the subsidiary companies were included in the currency translation reserve of the Company. FRS 21 (revised 2004) requires these exchange differences of the Company to be recognised in the income statement of the Company [Note 2.21(b)].
This change was effected retrospectively and consequently affected the following previously reported balances as at 30 June 2005:
The Company $’000
Increase/(decrease) in: Currency translation reserve [Note 29(b)(v)] (16,426) Retained earnings 16,426
This change has no impact on the Group’s financial statements.
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3. EFFECTS ON FINANCIAL STATEMENTS ON ADOPTION OF NEW OR REVISED FRS (CONTINUED)
3.2 FRS 27 (revised 2004) Consolidated and Separate Financial Statements
Previously, there was no requirement for the presentation of minority interests within equity. FRS 27 (revised 2004) requires minority interests to be presented with equity of the Group retrospectively.
3.3 FRS 28 (revised 2004) Investments in Associates
Previously, there was six months lag in equity accounting for associated companies. FRS 28 (revised 2004) requires the difference between the reporting date of an associated company and that of the investor to be no greater than three months.
The Group has also applied this requirement to its investments in joint venture companies where equity method is applied.
This change was effected retrospectively and consequently affected the following previously reported balances as at 30 June 2005:
The Group $’000
Increase/(decrease) in: Investments in associated companies (Note 20) 2,144 Investments in joint venture companies [Note 21(a)] 3,881 Retained earnings 6,025
Share of results of associated companies and joint venture companies (3,023)
Basic earnings per share (cents per share) (0.42) Diluted earnings per share (cents per share) (0.42)
3.4 FRS 32 (revised 2004) Financial Instruments: Disclosure and Presentation and FRS 39 (revised 2004) Financial Instruments: Recognition and Measurement
(a) Classification and consequential accounting for financial assets and financial liabilities
Previously, the investments in equity interests of other companies are classified in the “other investments” and they are stated at cost less allowance for dimunition in value based on a review at the balance sheet date.
Under FRS 39 (revised 2004), the investments in equity interests of other companies are classified in the “available-for-sale financial assets” and are initially recognised at fair value and subsequently measured to fair value at the balance sheet date with all gains and losses other than impairment loss taken to equity. Impairment losses are taken to the income statement in the period it arises. On disposal, gains and losses previously taken to equity are included in the income statement [Note 2.11(c), (d), (f)].
This change was effected prospectively from 1 July 2005 but it did not materially affect the balance sheet as at 1 July 2005.
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3. EFFECTS ON FINANCIAL STATEMENTS ON ADOPTION OF NEW OR REVISED FRS (CONTINUED)
3.4 FRS 32 (revised 2004) Financial Instruments: Disclosure and Presentation and FRS 39 (revised 2004) Financial Instruments: Recognition and Measurement (Continued)
(b) Accounting for derivative financial instruments and hedging activities
Cash flow hedge
The Group has entered into interest rate swaps to hedge the Group’s exposure to interest rate risk on its borrowings. Under the interest rate swaps, the Group agreed with other parties to exchange, at specified intervals (mainly quarterly), the difference between fixed rate and floating rate interest amount calculated by reference to the agreed notional principal amounts. Previously, the above-mentioned difference was taken to the income statement on an accrual basis. The excess of fixed rate interest payable over floating rate interest receivables was recorded as current payables; the excess of floating rate interest receivables over fixed rate interest payables was recorded as current receivables.
In accordance with FRS 39 (revised 2004), the effective portion of changes in the fair value of the interest rate swaps that are designated and qualify as cash flow hedges are recognised in equity. The gain or loss relating to the ineffective portion is recognised immediately in the income statement. Amounts accumulated in equity are recycled in the income statement in the periods when the hedged item will affect the income statement [Note 2.15(a)].
The Group has also entered into foreign currency contracts to hedge anticipated purchases. These contracts do not qualify for hedge accounting and consequently, the changes in fair values of these contracts are included in the income statement in the period it arises.
The changes described above were effected prospectively from 1 July 2005 and consequently affected the following balance sheet items as at 1 July 2005:
The The Group Company $’000 $’000
Increase in: Derivative financial instruments (Note 15) –Current liabilities (5,922) (3,485)
Increase in: Hedging reserve [Note 29 (b)(ii)] (5,922) (3,485)
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3. EFFECTS ON FINANCIAL STATEMENTS ON ADOPTION OF NEW OR REVISED FRS (CONTINUED)
3.5 FRS 102 Share-based Payments
Previously, the provision of share options to employees did not result in any charge in the income statement. The Group and Company recognised an increase in share capital and share premium when the options were exercised. On adoption of FRS 102, an expense is recognised in the income statement for share options issued with a corresponding increase in the share option reserve [Note 2.20(c)].
This change was effected retrospectively for share options granted after 22 November 2002 and not yet vested by 1 July 2005. Consequently, the following previously reported balances as at/for the financial year ended 30 June 2005 were adjusted.
The The Group Company $’000 $’000
Increase/(decrease) in: Retained earnings (466) (466) Share option reserve [Note 29(b)(i)] 466 466
Administrative expenses 392 392
Basic earnings per share (cents per share) (0.05) Diluted earnings per share (cents per share) (0.05)
3.6 Summary of effects on adoption of new or revised FRS on:
(a) Consolidated balance sheet items at 30 June 2006
Increase/(Decrease) $’000 FRS 28 FRS 39 FRS 102 Description of change (revised 2004) (revised 2004) Total Note 3.3 Note 3.4 Note 3.5
Cash flow hedge reserve – 2,162 – 2,162 Retained earnings 22,451 (311) (1,422) 20,718 Share option reserve – – 1,422 1,422 Derivative financial instrument (current) – 1,851 – 1,851 Investments in associated companies 21,676 – – 21,676 Investments in joint venture companies 775 – – 775 Available for sale financial assets – 7,774 – 7,774 Other investments – (7,774) – (7,774)
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3. EFFECTS ON FINANCIAL STATEMENTS ON ADOPTION OF NEW OR REVISED FRS (CONTINUED)
3.6 Summary of effects on adoption of new or revised FRS on: (Continued)
(b) Consolidated income statement for the financial year ended 30 June 2006
Increase/(Decrease) $’000 FRS 28 FRS 39 FRS 102 Description of change (revised 2004) (revised 2004) Total Note 3.3 Note 3.4 Note 3.5
Administrative expenses – 311 956 1,267 Share of results of associated companies and joint venture companies 16,426 – – 16,426
Total profit 16,426 (311) (956) 15,159
Basic earnings per share (cents) 2.29 (0.05) (0.14) 2.10
Diluted earnings per share (cents) 2.29 (0.05) (0.13) 2.12
(c) Company balance sheet as at 30 June 2006
Increase/(Decrease) $’000 FRS 21 FRS 39 FRS 102 Description of change (revised 2004) (revised 2004) Total Note 3.1 Note 3.4 Note 3.5
Currency translation reserve 11,188 – – 11,188 Cash flow hedge reserve – 1,874 – 1,874 Retained earnings (11,188) – (953) (12,141) Share option reserve – – 953 953 Derivative financial instruments (current) – 1,874 – 1,874 Available for sale financial assets – 3,793 – 3,793 Other investments – (3,793) – (3,793)
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4. REVENUE AND OTHER GAINS (NET)
The Group 2006 2005 $’000 $’000
Revenue from sale of: – development properties 727,865 185,380 – goods and services 121,588 58,056 Rental income 33,346 35,852 Management fees 1,610 1,946 Dividend Income 4,849 335 Total revenue 889,258 281,569
Other gains (net) – Leasing income 1,517 932 – Interest income from: – associated companies – 218 – joint venture companies 700 – – others 7,340 1,171 – Other miscellaneous gains 4,247 2,319 13,804 4,640 903,062 286,209
5. EXCEPTIONAL ITEMS
The Group 2006 2005 $’000 $’000
Impairment of property, plant and equipment in manfacturing facilities (Note 23) (3,170) – Allowance for losses on investment property held for sale – (14,087) Negative goodwill arising from additional shares in: – subsidiary company 1,636 3,278 – associated company – 3,397 (1,534) (7,412)
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6. OPERATING PROFIT
The Group 2006 2005 $’000 $’000
Charging/(crediting): Depreciation of property, plant and equipment (Note 23) 5,069 3,524 Employee benefits expense (Note 7) 44,611 22,907 (Write-back)/allowance for impairment loss on trade receivables (411) 988 Write-down of inventory 1,759 1,541 Rental expense – operating lease 35,337 18,635 Net exchange loss/(gain) 578 (1,580) Write-back of allowance for diminution in value of unquoted investment – (557) Provision for foreseeable losses on development properties 31,211 - Reversal of inventory write-down made in previous years (Note 13) (773) (409) Development cost included in cost of sales 579,251 173,469 Raw materials and finished goods 71,747 25,606
7. EMPLOYEE BENEFITS
The Group 2006 2005 $’000 $’000
Wages and salaries (including directors’ remuneration) 40,359 20,435 Employer’s contribution to defined contribution plans including Central Provident Fund 3,296 2,080 Share options granted to directors and employees 956 392 44,611 22,907
Please refer to Note 35(b) for directors’ remuneration.
8. FINANCE COSTS
The Group 2006 2005 $’000 $’000
Interest expense on: – joint venture companies 829 – – term loans 39,086 35,675 – other loans 382 808 Accrued bond premium – 157 40,297 36,640
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9. INCOME TAX
(a) Income tax expense
The Group 2006 2005 $’000 $’000
Tax (expense)/credit attributed to profit is made up of:
Current income tax provision – Singapore (5,173) (2,989) – Foreign (2,303) (100) (7,476) (3,089) Deferred tax [Note 9(b)] (5,845) 485 (13,321) (2,604) (Under)/over provision in preceding financial years – Current income tax (175) 1,042 – Deferred tax [Note 9(b)] (7,667) (21) (21,163) (1,583)
During the current financial year, the statutory tax rate was 20% (2005: 20%).
The Group is subject to income taxes in numerous jurisdictions. Significant judgement is required in determining the capital allowances and deductibility of certain expenses during the estimation of the provision for income taxes. There are many transactions and calculations for which the ultimate tax determination is uncertain during the ordinary course of business. The Group recognises liabilities for anticipated tax audit 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 recorded, such differences will impact the income tax and deferred income tax provisions in the period in which such determination is made.
The income tax expense on the profit for the financial year differs from the amount of income tax determined by applying the Singapore standard rate of income tax to profit before tax due to the following factors:
The Group 2006 2005 $’000 $’000
Singapore standard rate of income tax 20.0 20.0 Income not subjected to tax (10.0) (45.1) Expenses not deductible for tax purposes 12.0 41.3 Under/(over) provision in preceding financial years 5.0 (4.0) Utilisation of previously unrecognised temporary differences (14.0) (7.3) Effect of different tax rates in other countries 0.5 1.1 13.5 6.0
(b) Deferred taxes
Deferred tax assets are recognised for tax losses carried forward to the extent that realisation of the related tax benefits through the future taxable profits is probable. The Group has unutilised tax losses of $111.0 million (2005: $131.0 million) available for setoff against future taxable income subject to meeting certain statutory requirements by those companies with unutilised tax losses in their respective countries of incorporation. These tax losses have no expiry date.
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9. INCOME TAX (CONTINUED)
(b) Deferred taxes (Continued)
The movements in the Group’s deferred tax assets and liabilities (prior to offsetting of balances within the same tax jurisdiction) during the financial year are as follows:
Deferred tax liabilities – The Group
Recognition of profits on Accelerated tax Revaluation percentage- depreciation gains of-completion Others Total $’000 $’000 $’000 $’000 $’000
Balance at 1 July 2005 329 – 2,157 100 2,586 Currency translation 1 (15) – – (14) Acquisition of subsidiary 3,705 3,487 – – 7,192 Credited to equity [Note 29(b)(iii)] – 82 – – 82 Charged/(credited) to income statement [Note 9(a)] (3,022) (1,170) 3,115 – (1,077) Balance at 30 June 2006 1,013 2,384 5,272 100 8,769
Balance at 1 July 2004 310 397 2,661 100 3,468 Credited to equity [Note 29(b)(iii)] – (397) – – (397) Charged/(credited) to income statement [Note 9(a)] 19 – (504) – (485) Balance at 30 June 2005 329 – 2,157 100 2,586
Deferred tax assets – The Group
Unutilised Provisions Tax losses tax credit Others Total $’000 $’000 $’000 $’000 $’000
Balance at 1 July 2005 – – – 809 809 Currency translation (1) 8 14 – 21 Acquisition of subsidiary 877 6,404 7,803 – 15,084 Charged to income statement [Note 9(a)] (734) (6,029) (7,592) (234) (14,589) Balance at 30 June 2006 142 383 225 575 1,325
Balance at 1 July 2004 – – – 830 830 Charged to income statement [Note 9(a)] – – – (21) (21) Balance at 30 June 2005 – – – 809 809
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9. INCOME TAX (CONTINUED)
(b) Deferred taxes (Continued)
Deferred tax liabilities – The Company
Accelerated tax depreciation 2006 2005 $’000 $’000
Balance at beginning and end of financial year 158 158
Deferred tax assets and liabilities are offsetted when there is a legally enforceable right to set off tax assets against tax liabilities and when the deferred taxes relate to the same fiscal authority. The following amounts, determined after appropriate offsetting, are shown in the consolidated balance sheet:
The Group The Company 2006 2005 2006 2005 $’000 $’000 $’000 $’000
Deferred tax liabilities to be settled after more than 12 months 7,444 1,777 158 158
10. EARNINGS PER SHARE
(a) Basic earnings per share
Basic earnings per share is calculated by dividing the net profit attributable to members of Wing Tai Holdings Limited by the weighted average number of ordinary shares in issue during the financial year.
The Group 2006 2005 $’000 $’000
Net profit attributable to members of Wing Tai Holdings Limited 128,028 24,411
Weighted average number of ordinary shares in issue for basic earnings per share 717,445 715,960
Basic earnings per share (cents) 17.84 3.41
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10. EARNINGS PER SHARE (CONTINUED)
(b) Diluted earnings per share
The diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares in issue to assume conversion of all dilutive potential ordinary shares from share options. A calculation is done to determine the number of shares that could have been acquired at fair value (determined as the average annual market share price of the Company’s shares) based on the monetary value of the subscription rights attached to outstanding share options. The number of shares calculated as above is compared with the number of shares that would have been issued assuming the exercise of the share options. The difference is added to the denominator as an issue of ordinary shares for no consideration. No adjustment is made to earnings (numerator).
The Group 2006 2005 $’000 $’000
Net profit attributable to members of Wing Tai Holdings Limited for basic earnings per share 128,028 24,411 Adjustments for associated company share option (36) – Net profit used to determine diluted earnings per share 127,992 24,411
Weighted average number of ordinary shares in issue for basic earnings per share 717,445 715,960 Adjustments for assumed conversion of share options 1,214 725 Number of ordinary shares used to determine diluted earnings per share 718,659 716,685
Diluted earnings per share (cents) 17.81 3.41
The effect of changes in accounting policies on the basis and diluted earnings per share is set out in Note 3.6(b).
11. CASH AND CASH EQUIVALENTS
The Group The Company 2006 2005 2006 2005 $’000 $’000 $’000 $’000
Fixed deposits with financial institutions 276,362 106,863 167,133 32,000 Cash and bank balances 32,176 31,212 1,292 5,858 308,538 138,075 168,425 37,858
Cash and cash equivalents in the cash flow statement comprise:
The Group 2006 2005 $’000 $’000
Per above 308,538 138,075 Less: Balances held under the “Housing Developers’ (Project Account) Rules”, withdrawals from which are restricted to payments for expenditure incurred on development projects (2,752) (21,235)
Less: Amounts charged to banks as security for guarantees issued (2,234) (226) 303,552 116,614
The carrying amounts of cash and cash equivalents approximate their fair value.
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11. CASH AND CASH EQUIVALENTS (CONTINUED)
Cash and cash equivalents are denominated in the following currencies:
The Group The Company 2006 2005 2006 2005 $’000 $’000 $’000 $’000
Singapore Dollar 283,106 125,141 168,061 34,887 Malaysian Ringgit 21,038 8,745 5 5 United States Dollar 3,947 3,232 209 2,844 Others 447 957 150 122 308,538 138,075 168,425 37,858
The fixed deposits with financial institutions mature on varying date within 6 months (2005: 6 months) from the financial year end with the following weighted average effective interest rates:
The Group The Company 2006 2005 2006 2005
Singapore Dollar 3.3% 1.8% 3.3% 1.8% Malaysian Ringgit 3.0% 2.5% – – Others 3.7% – – –
The exposure of cash and cash equivalents to interest rate risks is disclosed in Note 33(c).
On 28 December 2005, the Group acquired additional 1% of the issued share capital of DNP Holdings Sdn Bhd (“DNP”) for a cash consideration of $871,000. The acquisition has increased the Group’s shareholding in DNP from 49.2% to 50.2% resulting in DNP becoming a subsidiary company of the Group.
As DNP holds 25% of P.T. Windas Development (“PT Windas”), the additional acquisition of 1% of DNP has resulted in the Group having an effective equity interest of 57.5% in PT Windas. PT Windas also became a subsidiary of the Group on 28 December 2005.
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11. CASH AND CASH EQUIVALENTS (CONTINUED)
Acquisition of subsidiary companies
The aggregate effect of acquisition of subsidiary companies are as follows:
The Group 2006 2005 Acquisition Acquisition Disposal $’000 $’000 $’000
Development properties 150,033 214,546 – Investment properties 120,694 –– Property, plant and equipment 23,958 –– Deferred tax assets 15,084 –– Other assets 63,616 736 956 Cash and cash equivalents 6,151 18,445 (18) Total assets 379,536 233,727 938
Bank overdraft (937) –– Borrowings (40,907) (200,000) (151) Trade and other payables (19,708) (14,045) (1,163) Provision for income tax (745) –– Deferred tax liabilities (7,192) –– Other non-current liabilities (20,760) (140,650) – Total liabilities (90,249) (354,695) (1,314)
Net identifiable assets/(liabilities) 289,287 (120,968) (376) Less: Minority interest (142,580) 40,323 – Additional loans acquired – 23,439 – Investment held prior to acquisition (144,200) 60,484 – Net identifiable assets acquired/(liabilities disposed) 2,507 3,278 (376) Negative goodwill arising from acquisition (1,636) (3,278) Total cash consideration paid 871 –
Total cash consideration paid (871) – Add: Cash and cash equivalents in subsidiary company acquired 5,214 18,445 Net cash inflow arising from acquisition of a subsidiary company 4,343 18,445
The cash inflow arising from disposal is as follows:
The Group $’000
Net identifiable liabilities disposed (as above) (376) Gain on disposal of subsidiary company 596 Cash proceeds from disposal 220 Add: Cash and cash equivalents in subsidiary company disposed 18 Net cash inflow from disposal of a subsidiary company 238
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12. TRADE AND OTHER RECEIVABLES – CURRENT
The Group The Company 2006 2005 2006 2005 $’000 $’000 $’000 $’000
Trade receivables 73,349 27,862 36 17 Less: Provision for impairment of receivables (1,391) (1,552) – – 71,958 26,310 36 17
Due from subsidiary companies – non-trade [Note 12(i)] – – 509,958 492,606 Less: Provision for impairment of receivables – – (128,260) (84,611) – – 381,698 407,995
Due from associated companies – trade 374 844 – – – non-trade [Note 12(ii)] 1,298 2,027 556 1,325 1,672 2,871 556 1,325 Less: Provision for impairment of receivables – (486) – – 1,672 2,385 556 1,325
Due from joint venture companies – trade 2 879 – – – non-trade [Note 12(ii)] 2,117 2,091 6 238 2,119 2,970 6 238
Loan to minority shareholders [Note 12(iii)] – 16,278 – – Dividends receivable (quoted) 937 17 930 – Dividends receivable (unquoted) – 268 – 268
Total current receivables 76,686 48,228 383,226 409,843
(i) Amounts due from subsidiary companies are unsecured and are repayable on demand. Included in the amounts due from subsidiary companies are fixed interest rate receivables of $220.0 million (2005: $205.3 million) and floating interest rate receivables of $Nil million (2005: $103.2 million). The weighted average effective interest rate at balance sheet date is disclosed in Note 18 to the financial statements.
(ii) Amounts due from associated companies and joint venture companies are unsecured, interest-free and are repayable on demand.
(iii) Loan by a subsidiary company to minority shareholders is made proportionate to the shareholder’s equity stake in the subsidiary company on a pari passu basis with no interest charge. The loan is unsecured, interest-free and is repayable on demand.
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12. TRADE AND OTHER RECEIVABLES – CURRENT (CONTINUED)
Concentrations of credit risk with respect to trade receivables are limited due to the Group’s large number of customers. Due to these factors, management believes that no additional credit risk beyond the amount of allowance for impairment made is inherent in the Group’s and Company’s trade receivables.
The carrying amounts of current trade and other receivables approximate their fair value. The currency denomination and exposure to interest rate risks of current trade and other receivables are disclosed in Note 18 together with non-current trade and other receivables.
13. INVENTORIES AND CONSTRUCTION WORK IN PROGRESS
The Group 2006 2005 $’000 $’000
Raw materials 7,993 273 Work-in-progress 3,386 – Finished goods 12,338 5,304 23,717 5,577
The cost of inventories recognised as expense and included in “cost of sales” amount to 71,747 25,606
During the financial year, the Group reversed $773,000 (2005: $409,000), part of an inventory write-down made in 2005, as the inventories were sold above the carrying amounts in 2006.
14. AVAILABLE-FOR-SALE FINANCIAL ASSETS
The Group The Company 2006 2005 2006 2005 $’000 $’000 $’000 $’000
Balance at beginning of financial year – At cost 3,853 5,163 3,793 5,163 – Effect of adoption of FRS 39 on 1 July 2005 [Note 3.4(a)] – – – – As restated 3,853 5,163 3,793 5,163
Currency translation differences (3) – – – Additions during the financial year 3,980 60 – – Disposals during the financial year (56) – – – Capital reduction by the investee – (1,370) – (1,370) Balance at end of financial year 7,774 3,853 3,793 3,793
Other investments as at 1 July 2004 and 30 June 2005 have been reclassified into “available-for-sale financial assets” so as to conform to the presentation adopted in 2006. Available-for-sale financial assets are measured in accordance with the accounting policy as set out in Note 2.11(a)(ii).
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14. AVAILABLE-FOR-SALE FINANCIAL ASSETS (CONTINUED)
Available-for-sale financial assets include the following:
The Group The Company 2006 2005 2006 2005 $’000 $’000 $’000 $’000 $’000 $’000 At fair value At cost At fair value At fair value At cost At fair value
Listed securities: – Equity securities – Overseas – 60 60 – ––
Unlisted equity shares: – Equity securities – Singapore 7,774 3,793 3,793 3,793 3,793 3,793 7,774 3,853 3,853 3,793 3,793 3,793
15. DERIVATIVE FINANCIAL INSTRUMENTS
The Group The Company 2006 2005 2006 2005 $’000 $’000 $’000 $’000
Balance at beginning of financial year – At cost – – – –
– Effect of adoption of FRS 39 on 1 July 2005 [Note 3.4(b)] (5,922) – (3,485) – As restated (5,922) – (3,485) –
Fair value gains/(losses) – Included in income statement (311) – – – – Included in hedging reserve 8,084 – 5,359 – Balance at end of financial year 1,851 – 1,874 –
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15. DERIVATIVE FINANCIAL INSTRUMENTS (CONTINUED)
Analysed as:
The Group The Company Contract/ Fair values Contract/ Fair Notional Assets/ Notional values Amount (liabilities) Amount Assets $’000 $’000 $’000 $’000
Cash-flow hedges – Interest-rate swaps 474,760 2,208 374,760 1,874 Non-hedging instruments – Currency forwards 30,101 (67) – – – Interest – rate swaps 13,129 (290) – – Total 1,851 1,874
Less: Current portion (1,851) (1,874)
Non-current portion ––
At 30 June 2006, the fixed interest rates on interest rate swaps vary from 2.1% to 3.3% (2005: 2.1% to 3.3%) per annum and the main floating rate is LIBOR.
Please refer to Note 34 for details of the financial instrument and hedging policies.
16. DEVELOPMENT PROPERTIES
The Group 2006 2005 $’000 $’000
(a) Properties under development 764,840 638,436 Properties held for sale [Note 16(c)] 292,066 304,939 1,056,906 943,375
(b) Properties under development – Land at cost 739,221 631,124 – Development costs 171,537 138,147 – Overhead expenditure capitalised 48,923 68,938 959,681 838,209 Add: Attributable profits 38,155 12,691 Less: Allowance for foreseeable losses (58,638) (132,379) 939,198 718,521 Less: Progress payments received and receivable (174,358) (80,085) 764,840 638,436
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16. DEVELOPMENT PROPERTIES (CONTINUED)
The Group 2006 2005 $’000 $’000
(b) Properties under development (Continued)
Value of properties under development mortgaged to secure long-term banking facilities granted 719,268 638,436
Value of properties held for sale mortgaged to secure long-term banking facilities granted 54,541 276,368
Total interest capitalised during the financial year 11,895 13,889
(c) Properties held for sale
Balance at the beginning of the financial year 300,917 41,234 Acquisition of a subsidiary company 12,809 – Transfer from properties under development 166,091 346,302 Less: Adjustment for development cost (2,705) – Less: Sale of properties during the financial year (185,046) (82,597) Balance at the end of the financial year [Note 16(a)] 292,066 304,939
(d) RAP 11 Pre-Completion Contracts for the Sale of Development Property
The Group uses the percentage of completion method for recognising revenue from partly completed residential projects. Had the completed contract method been adopted, the impact on the financial statements of the Group will be as follows:
The Group 2006 $’000
Decrease in opening revenue reserve (9,381) Decrease in revenue recognised for the year (198,965) Decrease in development costs recognised for the year (182,278) Decrease in profit for the year (15,636) Decrease in carrying value of development properties Balance as at 1 July 2005 (12,691) Balance as at 30 June 2006 (23,352) Decrease in deferred tax liabilities (5,272) Decrease in investments in joint-venture companies (2,064) Decrease in minority interest Balance as at 1 July 2005 (3,448) Share of profit for the year (5,526)
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16. DEVELOPMENT PROPERTIES (CONTINUED)
(e) The development properties are as follows:
% of Group’s completion Expected Land Gross interest in Type of at completion area floor area property Owned Location development Tenure 30.06.2006 date (Sq m) (Sq m) (%) by
Singapore
Lots 7-2, 9, 884 443 units of Freehold 100 Completed 28,549 59,097 90 Welwyn 5091, 5092, condominium Investment 639, Mukim 4 housing Pte Ltd Wilby Road (The Tessarina)
Lot 1067M 311 units of 99-year 100 Completed 12,411 34,920 75 Wingrove TS28 condominium lease Investment Newton Road housing From 1997 Pte Ltd (Amaryllis Ville)
Lot 1007PT, 136 units of 99-year 100 Completed 14,207 31,418 85 Winworth 12-06 and condominium lease Investment 1317PT TS25 at housing from 1997 Pte Ltd Draycott Park (Draycott 8)
Lots 698A, 700A, 118 units of Freehold 100 Completed 5,927 20,424 66.7 Richdeal 702C, 705C, condominium Investment 1039V, 886W, housing and Pte Ltd 885P, 99675P 3 units of and 1098C TS27 conservation at Cairnhill Road houses (The Light @ Cairnhill)
Lot 8988K 778 units of 99-year 86 2007 24,272 88,454 60 Winhome Mukim 22 condominium lease Investment Flower Road/ housing from 2004 Pte Ltd Kovan Road (Kovan Melody)
Lot 373C & 395T Condominium Freehold – 2009 23,004 32,205 60 Winquest of TS20 and housing Investment Lot 5701W – Pte Ltd Pt Mk 17
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16. DEVELOPMENT PROPERTIES (CONTINUED)
(e) The development properties are as follows: (Continued)
% of Group’s completion Expected Land Gross interest in Type of at completion area floor area property Owned Location development Tenure 30.06.2006 date (Sq m) (Sq m) (%) by
Singapore
Lot 440W, Condominium Freehold – 2009 7,437 20,825 100 Winnervest 441V, 99643V, housing Investment 99649X, Pte Ltd 99650K and 99651N of TS 27
Lot 726N of Condominium Freehold – 2010 3,984 11,156 100 Winnorth TS 28 housing Investment Pte Ltd
Malaysia
Lot 197 & 198, 110 units of Freehold 26 2007 2,713 23,831 50.2 Tanahnaga Section 43, condominium Sdn Bhd Town of Kuala Lumpur (The Meritz)
Lots 96,149, Mixed Freehold Phase 1 27 2008 504,683 120,421 50.2 Angel Wing 452-454, development Phase 2 – (M) Sdn Mukim of comprising Phase 3 – Bhd Ulu Klang double-storey 1 Gombak, and 2 /2 storey Selangor terrace, Darul Ehsan semi-detached (Sering Ukay) and bungalows (566 units)
Lot 3923-3933, Double storey Freehold Phase 1 100 2007 12,146 6,236 50.2 DNP Land 3936-3938, terrace, Phase 2 100 Sdn Bhd 3944-3950, 3973, semi-detached Flat 100 4023, 4024, 4036, and bungalows Phase 3 92 4200, 4201, 4196, (423 units) Future 4241 Mukim 13, development – Daerah Seberang Prai Tengah Pulau Pinang (Taman Bukit Minyak Indah)
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16. DEVELOPMENT PROPERTIES (CONTINUED)
(e) The development properties are as follows: (Continued)
% of Group’s completion Expected Land Gross interest in Type of at completion area floor area property Owned Location development Tenure 30.06.2006 date (Sq m) (Sq m) (%) by
Lot 12004-12030, Double storey Freehold Phase 1A 100 2010 50,780 100,614 50.2 DNP Land 11971-11988, terrace, Phase 1A(i) 100 Sdn Bhd 11991-12003, semi-detached Phase 2 92 Mukim 14, Lot and bungalows Phase 3 – 16835-16896, (755 units) Phase 4 – 17029-17053, Phase 5 – 17097-17101, Phase 6 – 17107-17110, 17117, 17127-17140, 17143-17168, 17171-17227, 17232, 17250, 17253, 17257-17295, 17299-17310, 18484 Mukim 15, Daerah Seberang Perei Tengah, Pulau Pinang (Taman Seri Impian)
Lot 1807, Double storey Freehold – 2008 9,409 4,459 50.2 DNP Land Mukim 15, semi-detached Sdn Bhd Daerah Seberang and bungalows Perai Tengah, (22 units) Pulau Pinang (Gems Gardens)
Lot No. 1315, Proposed Freehold – N/A 9,764 N/A 50.2 Starpuri Sek 57, Bandar condominium Development Kuala Lumpur Sdn Bhd
PT 484, 492, 3 blocks of Freehold – 2009 21,964 33,982 50.2 Grand Eastern 532-573 and flats (487 units) Realty & Lots 3665, and 15 units Development Mukim 6, 13600 shophouses Sdn Bhd Province Wellesley Central, Penang
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16. DEVELOPMENT PROPERTIES (CONTINUED)
(e) The development properties are as follows: (Continued)
% of Group’s completion Expected Land Gross interest in Type of at completion area floor area property Owned Location development Tenure 30.06.2006 date (Sq m) (Sq m) (%) by
Lots 266-269, Freehold – 270-271, 273-279, Proposed 1195-1198, mixed 1230-1232, development 1468-1469, comprising 1516-1517 double-storey 2012 226,993 114,417 50.2 DNP Land & 3 storey Sdn Bhd Lots 130 and 1515 terrace, 999-year – Mukim 14 semi-detached lease Daerah Seberang and shops expiring Perai Tengah (550 units) 2876 (BM Utama)
14-A, Proposed Freehold – 2012 4,715 59,075 50.2 Harta Aman Jalan Dato 270 units Sdn Bhd Abdullah Tahir apartment 80300 block Johor Bahru Johor
Lot 1130, 1133 Vacant land Freehold – – 384,273 N/A 50.2 DNP Land 1166, 1167, 1187, Sdn Bhd 1188 and 1255 Mukim 15 Daerah Seberang Perai Tengah Pulau Pinang (Alma 2)
1254 Mukim 15 Vacant land Freehold – – 24,306 N/A 50.2 DNP Land Daerah Seberang Sdn Bhd Perai Tengah Pulau Pinang (Alma 2)
Lot 1464, Mk 13, Vacant land Freehold – – 18,666 N/A 50.2 Quality Tempat Relau Frontier Daerah Timur Laut Sdn Bhd Pulau Pinang
Indonesia
Junction of JI 261 units of 30 years – 2009 16,080 88,980 57.6 PT. Windas Rasuna Said and serviced from 22 May Development JI Casablanca apartments 1996 and Jakarta can be extended
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17. OTHER CURRENT ASSETS
The Group The Company 2006 2005 2006 2005 $’000 $’000 $’000 $’000
Interest receivables 260 20 – – Deposits 5,970 2,516 14 25 Prepayments 1,877 4,952 434 4,480 Sundry debtors 8,818 5,061 830 1,022 16,925 12,549 1,278 5,527
The carrying amounts of other current assets approximate their fair value.
18. TRADE AND OTHER RECEIVABLES – NON-CURRENT
The Group The Company 2006 2005 2006 2005 $’000 $’000 $’000 $’000
Loans to subsidiary companies [Note 18(i)] – interest-bearing – – 130,801 85,435 – interest-free – – 534,118 584,986 – – 664,919 670,421 Less: Provision for impairment of receivables – – (4,626) (4,626) – – 660,293 665,795 Loans to associated companies [Note 18(ii)] – interest-bearing 4,286 4,145 – – – interest-free 16,661 636 – – Less: Provision for impairment of receivables (525) – – – 20,422 4,781 – – Loans to joint venture companies [Note 18(iii)] – interest-bearing 56,954 57,265 – 18,953 – interest-free 145,107 203,268 – 2,512 202,061 260,533 – 21,465 Less: Provision for impairment of receivables (25,483) (42,889) – – 176,578 217,644 – 21,465
Loans to investee companies [Note 18(iv)] 19,357 – – – Loans to minority shareholders [Note 18(v)] 22,344 11,445 – – 41,701 11,445 – –
Total non-current receivables 238,701 233,870 660,293 687,260
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18. TRADE AND OTHER RECEIVABLES – NON-CURRENT (CONTINUED)
(i) Loans to subsidiary companies are unsecured, repayable on demand, but are not repayable within 12 months from the balance sheet date. Included in the loans to subsidiary companies are fixed interest rate loans of $111.4 million (2005: $66.7 million) and floating interest rate loans of $Nil million (2005: $18.8 million). The weighted average effective interest rate of the loans to subsidiary companies at balance sheet date are disclosed in this note.
(ii) Loans to associated companies are unsecured, repayable on demand, but are not repayable within 12 months from the balance sheet date. Included in the loans to associated companies are fixed interest bearing amounts which bear a weighted average effective interest rate at balance sheet date disclosed below.
(iii) Included in the loans to joint venture companies are amounts of $88.7 million (2005: $212.4 million) which are subordinated to banking facilities of $230 million (2005: $768.7 million) granted by banks to the said joint venture companies.
The floating interest rate loans to joint venture companies bear a weighted average effective interest rate at balance sheet date disclosed below.
(iv) Loans to an investee are unsecured, interest free and repayable on demand. The amount are not expected to be repaid within twelve months from the balance sheet date.
(v) Loans by certain subsidiary companies to minority shareholders are made proportionate to the shareholders’ equity stake in the subsidiary companies on a pari passu basis with no interest charge. The loans are unsecured and interest- free, repayable on demand, but are not expected to be repayable within the next 12 months.
The carrying amounts of non-current trade and other receivables approximate their fair values.
Trade and other receivables [current (Note 12) and non-current] and other current assets (Note 17) are denominated in the following currencies:
The Group The Company 2006 2005 2006 2005 $’000 $’000 $’000 $’000
Singapore Dollar 258,401 209,812 970,760 1,013,979 Malaysian Ringgit 12,351 – – – United States Dollar 3,458 30,231 12,387 24,094 Hong Kong Dollar 57,291 54,604 61,650 64,557 Others 811 – – – 332,312 294,647 1,044,797 1,102,630
The weighted average effective interest rates at the balance sheet date were as follows:
The Group
2006 2005 SGD USD SGD USD % % % %
Non-current interest-bearing loans to associated companies [Note 18(ii)] 5.0 – 5.0 – Non-current interest-bearing loans to joint venture companies [Note 18(iii)] ––– 4.5
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18. TRADE AND OTHER RECEIVABLES – NON-CURRENT (CONTINUED)
The Company
2006 2005 SGD USD SGD USD % % % %
Current interest-bearing amounts due from subsidiary companies [Note 12(i)] 2.8 – 3.0 – Non-current interest-bearing loans to subsidiary companies [Note 18(i)] 3.8 6.0 4.1 – Non-current interest-bearing loans to joint venture companies [Note 18(iii)] ––– 4.5
19. INVESTMENTS IN SUBSIDIARY COMPANIES
The Company 2006 2005 $’000 $’000
Unquoted equity shares, at cost 253,392 132,366
Details of the Group’s subsidiary companies are listed in Note 38 to the financial statements.
Subsidiary companies
On the following dates, a wholly-owned subsidiary company, Wing Tai Land Pte Ltd (“WTL”), incorporated 100% of the issued share capital of the following companies in Singapore for a cash consideration of S$2 each:
Date Name of Company
19 July 2005 Wincove Investment Pte Ltd 24 August 2005 Wincrown Investment Pte Ltd 20 March 2006 Winnorth Investment Pte Ltd 28 March 2006 Wincheer Investment Pte Ltd 5 April 2006 Wing Tai (China) Investment Pte Ltd 17 April 2006 Winrose Investment Pte Ltd
On 5 January 2006, a wholly-owned subsidiary company, Wing Tai Investment and Development Pte Ltd (“WTID”) incorporated 100% of the issued share capital of Calderway Limited, a company incorporated in the British Virgin Islands, for a cash consideration of US$1.
On 31 August 2005, WTL acquired 100% of the issued share capital of Wincharm Investment Pte Ltd, a company incorporated in Singapore, for a cash consideration of S$2.
On 28 December 2005, WTID acquired an additional 1% of the issued capital of DNP Holdings Bhd (“DNP”) for a cash consideration of RM1,953,000. The acquisition has increased the Group’s shareholding in DNP from 49.2% to 50.2% resulting in DNP becoming a subsidiary company of the Group. DNP is involved in property investment and development.
As DNP holds 25% of P.T. Windas Development (“PT Windas”), the additional acquisition of 1% of DNP has resulted in the Group having an effective equity interest of 57.5% in PT Windas. PT Windas also becomes a subsidiary of the Group on 28 December 2005.
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19. INVESTMENTS IN SUBSIDIARY COMPANIES (CONTINUED)
The above acquisitions contributed revenue of $58.0 million and operating loss of $37 million to the Group for the period from 28 December 2005 to 30 June 2006.
If the above acquisitions had occurred on 1 July 2005, Group revenue would have been increased by $75.6 million. There would be a decrease of $28.8 million to Group profit after tax and minority interest.
The effect of the acquisition to the Group’s financial position is disclosed in Note 11.
20. INVESTMENTS IN ASSOCIATED COMPANIES
The Group The Company 2006 2005 2006 2005 $’000 $’000 $’000 $’000 (Restated)
Equity investment at cost – 121,026
Balance at beginning of financial year – as previously reported 453,827 359,278 – Effect of adopting FRS 28 adjusted retrospectively 2,144 – As restated 455,971 359,278 Currency translation differences (20,616) (6,941) Share of associates capital reserves 15,858 71,341 Share of associates net profits 60,954 33,594 Dividends received (6,735) (6,478) Associated companies of a subsidiary 1,963 – Acquisition of additional shares in associates – 4,954 Reclassify to subsidiary due to acquisition of controlling interest (136,138) – Others 492 223 Balance at end of financial year 371,749 455,971
The summarised financial information of associated companies are as follows:
The Group 2006 2005 $’000 $’000 (Restated)
Assets 2,247,252 1,987,760 Liabilities (783,099) (491,155) Revenues 876,110 759,650 Net profit 263,066 118,548
Share of associated companies contingent liabilities incurred jointly with other investors 6,606 36,054
Carrying amount for quoted equity shares 356,821 308,292
Fair value of quoted equity shares 237,514 231,228
Details of the Group’s associated companies are listed in Note 38 to the financial statements.
As at 30 June 2006, the carrying value of quoted equity shares is higher than its market value. The directors consider the carrying value of investment in associated companies appropriate and the impairment is temporary.
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21. INVESTMENTS IN JOINT VENTURE COMPANIES
(a) The Group 2006 2005 $’000 $’000 (Restated)
Balance at beginning of financial year – as previously reported 87,724 90,539 – Effect of adopting FRS 28 adjusted retrospectively 3,881 9,048 91,605 99,587 Currency translation differences 385 755 Share of joint venture capital reserves 17 (4,826) Share of joint venture net profits 26,128 11,571 Dividends received (3,000) – Reclassify to subsidiary due to acquisition of controlling interest (8,062) – Write-back of provision for loan to joint venture companies (Note 18) (17,406) (15,770) Other movements 203 288 Balance at end of financial year 89,870 91,605
(b) The following amounts represent the Group’s share of the assets and liabilities and income and expenses of the joint venture and are included in the consolidated balance sheet and income statement using equity accounting.
The Group 2006 2005 $’000 $’000 (Restated)
Assets: Current assets 447,629 515,936 Non-current assets 32,390 83,063 480,019 598,999 Liabilities: Current liabilities (38,367) (28,554) Non-current liabilities (351,782) (478,840) (390,149) (507,394)
Net assets 89,870 91,605
Sales 152,119 106,343 Expenses (121,966) (93,792) Profit before tax 30,153 12,551 Income tax (4,025) (980) Profit after tax 26,128 11,571
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21. INVESTMENTS IN JOINT VENTURE COMPANIES (CONTINUED)
The Group’s share of the capital commitments of the joint venture companies are as follows:
The Group 2006 2005 $’000 $’000
Contracted but not provided for 55,345 55,155
22. INVESTMENT PROPERTIES
The Group 2006 2005 $’000 $’000
Balance at beginning of the financial year 527,103 536,303 Exchange rate adjustment (953) – Acquisition of subsidiary 120,694 – Disposal during the financial year (230,000) – Additions during the financial year 60 – Impairment loss taken to income statement (3,361) – Revaluation gain/(deficit) 4,427 (9,200) Balance at end of the financial year 417,970 527,103
Classified as: – current assets – 230,000 – non-current assets 417,970 297,103 417,970 527,103
The investment properties at 30 June 2006, all of which are situated in Singapore unless otherwise specified, are as follows:
Group’s Land Floor interest in area area property Location Description Tenure (Sq m) (Sq m) (%) Owned by
(a) 3 Killiney Road 10-storey 99-year 3,709 16,569 100 Winsland (Winsland House) commercial lease Investment building from 1983 Pte Ltd
(b) 167 Penang Road 8-storey 99-year * 7,044 100 Winmax (Winsland House II) commercial lease Investment building from 1994 Pte Ltd
(c) 165 Penang Road Conservation 99-year * 584 100 Winmax (Winsland House II) house lease Investment from 1994 Pte Ltd
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22. INVESTMENT PROPERTIES (CONTINUED)
Group’s Land Floor interest in area area property Location Description Tenure (Sq m) (Sq m) (%) Owned by
(d) 163 Penang Road 9-storey 99-year lease * 6,259 100 Winshine (Lanson Place) service from 1994 Investment apartments Pte Ltd
(e) Lot 263, Section 132 units Freehold 14,535 31,091 50.2 Seniharta 89A, Town of Kuala condominium Sdn Bhd Lumpur, Malaysia
(f) Lot 262, Section 20 storey, 221 Freehold 3,849 22,766 50.2 Seniharta 89A, Town of Kuala units service Sdn Bhd Lumpur, Malaysia apartments
(g) Unit G2 Shop unit Freehold N/A 205 100 Wing Tai Holiday Plaza Clothing Johor Bahru, Pte Ltd Malaysia
(h) Lot 360, Mukim 17, Vacant land Freehold 2,282 – 50.2 DNP Realty Batu Ferringghi, Sdn Bhd Penang, Malaysia
(i) Lot 343, Mukim 3, Vacant land Freehold 27,275 – 50.2 Wing Mei Lot 1822,1823 and Sdn Bhd 1425, Mukim 4, 13600 Province Wellesley Central, Penang, Malaysia
(j) Lot 4868, Mukim Vacant land Freehold 483 – 50.2 Quality 14, Daerah Seberang Frontier Perai Tengah, Sdn Bhd Pulau Pinang, Malaysia
(k) Lot 247 Section 43 Vacant land Freehold 6,084 – 50.2 Harta Maju Town of Kuala Sdn Bhd Lumpur, Malaysia
* Total land area for 163, 165 & 167 Penang Road is 4,643 Sq. m.
Investment properties are valued on 30 June 2006 on the basis of directors’ valuations, resulting in a revaluation surplus of $5.2 million (2005: $9.2 million), net of minority interests, which was taken to the Group’s asset revaluation reserve [Note 29(b)(iii)].
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22. INVESTMENT PROPERTIES (CONTINUED)
Excluding the investment properties referred to from (g) to (i) above, the remaining investment properties with a total valuation of $384.6 million (2005: $526.0 million) are mortgaged to banks to secure long term banking facilities granted to the subsidiary companies (Note 25).
On 30 June 2005, the Group entered into a sale and purchase agreement to sell an investment property at $230.0 million to a third party. The sale was completed during the financial ended year ending 30 June 2006.
Investment properties are leased to third parties under operating leases (Note 31).
23. PROPERTY, PLANT AND EQUIPMENT
Freehold land andLeasehold Motor Office Plant and Furniture buildings buildings vehicles equipment machinery and fittings Total $’000 $’000 $’000 $’000 $’000 $’000 $’000
The Group
Cost or valuation At 1 July 2005 Cost – – 2,433 7,518 1,756 20,848 32,555 Valuation 89,360 1,507––––90,867 89,360 1,507 2,433 7,518 1,756 20,848 123,422 Exchange rate adjustments (195) (108) (41) (36) (287) (198) (865) Acquisition of new subsidiary 5,174 13,270 856 395 2,434 1,829 23,958 Reclassifications – (29) – – – 29 – Additions – 2 536 940 161 4,191 5,830 Disposals (1,182) (238) (856) (922) (1,108) (2,712) (7,018) Write-off, at cost – – – (16) – – (16) Revaluation gain 68 (2,735) – – (26) – (2,693) At 30 June 2006 93,225 11,669 2,928 7,879 2,930 23,987 142,618
Representing: Cost – 557 2,928 7,879 2,930 23,987 38,281 Valuation 93,225 11,112––––104,337 93,225 11,669 2,928 7,879 2,930 23,987 142,618
Accumulated depreciation At 1 July 2005 485 250 1,100 4,661 1,665 15,572 23,733 Exchange rate adjustments (11) (15) (35) (31) (241) (179) (512) Depreciation charge 516 220 575 660 363 2,735 5,069 Disposals (328) (135) (725) (593) (910) (1,941) (4,632) Impairment loss 627 313 2 715 1,169 344 3,170 Write-off – – – (16) – – (16) Adjustment on revaluation (133) (1,389) ––––(1,522) At 30 June 2006 1,156 (756) 917 5,396 2,046 16,531 25,290
Net book value At 30 June 2006 92,069 12,425 2,011 2,483 884 7,456 117,328
The impairment loss of $3,170,000 relates to the write-down in value of overseas assets used in garment manfacturing division, classified under “others” in the segment information (Note 37).
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23. PROPERTY, PLANT AND EQUIPMENT (CONTINUED)
Freehold land andLeasehold Motor Office Plant and Furniture buildings buildings vehicles equipment machinery and fittings Total $’000 $’000 $’000 $’000 $’000 $’000 $’000
The Group
Cost or valuation At 1 July 2004 Cost – – 2,919 7,594 1,891 18,074 30,478 Valuation 89,360 1,674––––91,034 89,360 1,674 2,919 7,594 1,891 18,074 121,512 Exchange rate adjustments – – – (10) – (7) (17) Disposal of subsidiary company – – (54) (560) – (271) (885) Additions, at cost – 156 818 899 59 3,327 5,259 Disposals, at cost – (298) (1,250) (405) (194) (275) (2,422) Adjustment on revaluation – (25) ––––(25) At 30 June 2005 89,360 1,507 2,433 7,518 1,756 20,848 123,422
Representing: Cost – – 2,433 7,518 1,756 20,848 32,555 Valuation 89,360 1,507––––90,867 89,360 1,507 2,433 7,518 1,756 20,848 123,422
Accumulated depreciation At 1 July 2004 – 195 2,010 4,522 1,789 13,923 22,439 Exchange rate adjustments –––––(2)(2) Disposal of subsidiary company – – (12) (86) – (57) (155) Depreciation charge 485 55 352 618 37 1,977 3,524 Disposals – – (1,250) (393) (161) (269) (2,073) At 30 June 2005 485 250 1,100 4,661 1,665 15,572 23,733
Net book value At 30 June 2005 88,875 1,257 1,333 2,857 91 5,276 99,689
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23. PROPERTY, PLANT AND EQUIPMENT (CONTINUED)
Freehold land Motor Office Furniture and buildings vehicles equipment and fittings Total $’000 $’000 $’000 $’000 $’000
The Company
Cost or valuation At 1 July 2005 Cost – 1,355 2,012 5,198 8,565 Valuation 89,360 – – – 89,360 89,360 1,355 2,012 5,198 97,925 Additions, at cost – – 157 42 199 Disposals, at cost (436) – (25) – (461) Write-off, at cost – – (16) – (16) Revaluation surplus/(deficit) (244) – – – (244) At 30 June 2006 88,680 1,355 2,128 5,240 97,403
Representing: Cost – 1,355 2,128 5,240 8,723 Valuation 88,680 – – – 88,680 88,680 1,355 2,128 5,240 97,403
Accumulated depreciation At 1 July 2005 485 533 423 4,666 6,107 Depreciation charge 483 215 47 83 828 Disposals (25) – (25) – (50) Write-off – – (15) – (15) At 30 June 2006 943 748 430 4,749 6,870
Net book value At 30 June 2006 87,737 607 1,698 491 90,533
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23. PROPERTY, PLANT AND EQUIPMENT (CONTINUED)
Freehold land Motor Office Furniture and buildings vehicles equipment and fittings Total $’000 $’000 $’000 $’000 $’000
The Company
Cost or valuation At 1 July 2004 Cost – 1,652 1,963 5,198 8,813 Valuation 89,360 – – – 89,360 89,360 1,652 1,963 5,198 98,173 Additions, at cost – 721 49 – 770 Disposals, at cost – (1,018) – – (1,018) At 30 June 2005 89,360 1,355 2,012 5,198 97,925
Representing: Cost – 1,355 2,012 5,198 8,565 Valuation 89,360 – – – 89,360 89,360 1,355 2,012 5,198 97,925
Accumulated depreciation At 1 July 2004 – 1,400 377 4,566 6,343 Depreciation charge 485 151 46 100 782 Disposals – (1,018) – – (1,018) At 30 June 2005 485 533 423 4,666 6,107
Net book value At 30 June 2005 88,875 822 1,589 532 91,818
The freehold and leasehold land and buildings of the Group and Company were last valued on the basis of open market value on existing use by independent professionally qualified valuers on 30 June 2004.
If the freehold and leasehold land and buildings stated at valuation had been included in the financial statements at cost less depreciation, the net written down amount would have been as follows:
The Group The Company 2006 2005 2006 2005 $’000 $’000 $’000 $’000
Freehold land and buildings 11,514 9,192 8,561 9,192 Leasehold buildings 8,640 1,135 – – 20,154 10,327 8,561 9,192
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23. PROPERTY, PLANT AND EQUIPMENT (CONTINUED)
The properties included in freehold and leasehold land and buildings, all of which are situated in Singapore unless otherwise specified, are as follows:
Land Floor area area Location Description Tenure (Sq m) (Sq m) Owned by
(a) Lots 2694 and 10-storey Freehold 5,777 19,072 Wing Tai 5163, Mukim 22 warehouse Holdings 107 Tampines Road and office building Ltd and a 5-storey canteen
(b) Lot 94-59 Mukim 22 9-storey warehouse Freehold 4,941 9,613 Wing Tai 105 Tampines Road and office building Holdings Ltd
(c) Lots 94-34, 94-72, 16 units of Freehold 2,431 1,665 Wing Tai 2248, 2250 and apartments in a Holdings Ltd 2278 Mukim 22 4-storey building 19 Valley Road
(d) HS(M) 1058 Factory for office 99-year lease N/A 1,201 Wing Tai Pt.No.6039 Mukim and warehouse from 1978 Clothing Batu, Kuala Lumpur Pte Ltd 3rd Floor, Binova Industrial Centre, Jalan 2/57B Segambut Bawah, 51200 Kuala Lumpur
(e) Units 7A and Two apartment 70-year lease N/A 632 Windeal 18A Jin Hua Tower units from 1992 Investment Suzhou Garden Villa, Pte Ltd 38 Shi Shan Road, Suzhou, Jiangsu People’s Republic of China
(f) 166-A, Rifle Range Road Industrial land Leasehold 5,846 14,983 DNP Holdings 11400 Penang and buildings 60 years Bhd Malaysia expiring 21.1.2033
(g) 523, Ayer Puteh Road Industrial land Freehold 9,535 6,156 DNP Holdings Balik Pulau, 11000 and buildings Bhd Penang, Malaysia
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23. PROPERTY, PLANT AND EQUIPMENT (CONTINUED)
Land Floor area area Location Description Tenure (Sq m) (Sq m) Owned by
(h) 57, Parit Buntar Industrial buildings Leasehold 1,722 1,722 DNP Holdings Industrial Complex 60 years Bhd 34200 Parit Buntar expiring Perak, Malaysia 13.3.2039
(i) 12A-06 & 02-02 2 units Freehold 218 218 DNP Holdings 72, Scotland Road, condominium Bhd 10450 Penang, Malaysia
(j) 57, Parit Buntar Industrial land Leasehold 32,467 13,953 Tanako Sdn Industrial Complex and buildings 60 years Bhd 34200 Parit Buntar expiring Perak, Malaysia 13.3.2039
(k) Lot 53, Jalan Cetak, Industrial land Leasehold 8,093 4,474 Tanako Sdn Tasek Industrial and buildings 99 years Bhd Estate, 31400 Ipoh, expiring Perak, Malaysia 1.7.2072
(l) Lot 583, Mukim Kota Industrial land Leasehold 20,234 10,517 Tanako Sdn Lama, 33000 Kuala and buildings 60 years Bhd Kangsar, Perak expiring Malaysia 9.7.2050
(m) Plot 832, Jejawi Industrial land Leasehold 18,208 11,635 Dragon & Industrial Estate and buildings 60 years Phoenix 02600 Arau, Kangsar expiring Serba Pakaian Perlis, Malaysia 14.7.2045 Sdn Bhd
(n) Plot 1522, Jejawi Industrial land Leasehold 4,049 562 Dragon & Industrial Estate and buildings 60 years Phoenix 02600 Arau, Kangsar expiring Serba Pakaian Perlis, Malaysia 7.9.2051 Sdn Bhd
(o) No. 33, Angulana Station Industrial land Freehold 12,153 7,269 DNP Garments Road, Moratuwa, and buildings Lanka (Pvt) Ltd Sri Lanka
(p) 83/14, Angulana Station Industrial land Freehold 3,194 3,609 DNP Garments Road, Moratuwa, and buildings Lanka (Pvt) Ltd Sri Lanka
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23. PROPERTY, PLANT AND EQUIPMENT (CONTINUED)
Land Floor area area Location Description Tenure (Sq m) (Sq m) Owned by
(q) 60, Maligawa Road, Industrial land Freehold 3,486 1,578 DNP Garments Ratmalana, and buildings Lanka (Pvt) Ltd Sri Lanka
(r) Lots 837-839, 870, 871, Vacant land Freehold 34,151 N/A Grand Eastern 1493 and 1617 Mukim 6, Realty & 13600 Province Wellesley Development Central, Penang, Malaysia Sdn Bhd
(s) Unit No. 2.04-2.08, Shop lots Leasehold 342 342 Wing Mei Level 2 KOMTAR, 99 years (M) Sdn Bhd Penang Road, expiring Penang, Malaysia 5.8.2083
At 30 June 2006, certain property, plant and equipment with net book value amounting to $492,000 (2005: $450,000) were secured under a debenture deed to a bank for long term banking facilities granted to subsidiary companies (Note 25).
24. TRADE AND OTHER PAYABLES
The Group The Company 2006 2005 2006 2005 $’000 $’000 $’000 $’000
(a) Due to associated companies – non-trade [Note 24(b)] 2,034 839 12 305
Due to subsidiary companies – non-trade [Note 24(c)] – – 209,861 178,479
Due to joint venture companies – non-trade [Note 24(d)] 6 – – –
Due to related companies – non-trade [Note 24(d)] 128 68 – –
Accrued project costs 32,931 80,004 – – Accrued operating expenses 26,570 17,748 2,247 1,907 Trade creditors 29,187 12,803 – – Other creditors 12,473 3,530 316 273 Tenancy deposits 1,457 3,378 80 61 Due to minority shareholders – 4,209 – – 102,618 121,672 2,643 2,241
Total trade and other payables 104,786 122,579 212,516 181,025
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24. TRADE AND OTHER PAYABLES (CONTINUED)
(b) Non-trade amounts due to associated companies are unsecured, interest-free and are repayable on demand.
(c) Non-trade amounts due to subsidiary companies are unsecured and are repayable on demand. Included in the amounts due to subsidiary companies are fixed interest rate payables of $34.4 million (2005: $32.8 million) and floating interest rate payables of $26.0 million (2005: $27.7 million).
(d) Non-trade amounts due to joint venture companies and related companies are unsecured, interest free and repayable on demand.
The carrying amounts of current trade and other payables approximate their fair value.
The weighted average effective interest rates at the balance sheet date were as follows:
The Company
2006 2005 SGD HKD SGD HKD %%%%
Due to subsidiary companies 3.5 – 3.0 4.0
(e) Trade and other payables and other non-current liabilities (Note 27) are denominated in the following currencies:
The Group The Company 2006 2005 2006 2005 $’000 $’000 $’000 $’000
Singapore Dollar 320,787 349,703 248,187 200,420 Malaysian Ringgit 18,652 – – – United States Dollar 5,731 7,551 2,558 16,037 Hong Kong Dollar 7,602 8,575 38,800 39,228 Others 3,709 2,058 – – 356,481 367,887 289,545 255,685
25. BORROWINGS
(a) Current borrowings
The Group The Company 2006 2005 2006 2005 $’000 $’000 $’000 $’000
Unsecured bank loans [Note 25(b)] 28,696 – – – Secured term loan [Note 25(c)] 161,000 68,835 – – Secured long term bank loans (current portion) [Note 25(f)(ii)] 6,672 1,500 – – Unsecured transferable loan facility [Note 25(d)] 50,000 – 50,000 – Unsecured medium term notes due 2006 (current portion) – 100,000 – 100,000 246,368 170,335 50,000 100,000
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25. BORROWINGS (CONTINUED)
(b) The unsecured bank loans of $28.7 million comprise of the following:
(i) a floating interest rate revolving credit facility of RM56.5 million equivalent to $24.7 million. The interest payable is based on money market rates ranging from 3.7% to 6.5% (2005: Nil) per annum, repriced within 1 month to 3 months; and
(ii) a floating interest rate on share foreign currency loan of US$2.3 million equivalent to $4 million. The interest payable is based on money market rates ranging from 4.6% to 5.6% (2005: Nil) per annum, repriced within 1 month to 3 months.
(c) The secured term loan of $161 million comprises:
(i) A floating interest rate term bank loan of $10.0 million secured on the following:
– legal mortgage over the development property of a subsidiary company (Note 16);
– assignment of the subsidiary company’s present and future rights, title, benefit and interest under the Tenancy Agreements and the Sale and Purchase Agreements relating to the development property; and
– corporate guarantees from shareholders.
The interest payable is based on money market rates ranging from 3.7% to 5.2% (2005: 2.7% to 3.9%) per annum, repriced within 1 month.
(ii) A floating interest rate term bank loan of $151.0 million secured on the following:
– legal mortgage over the development property of a subsidiary company (Note 16);
– assignment of all Borrower’s rights, titles, interest and benefits under sales and tenancies agreements, construction contracts, performance bonds and insurance arrangements relating to the development property; and
– subordination of shareholder’s loan.
The interest payable is based on money market rates ranging from 2.0% to 3.9% (2005: 0.8% to 2.1%) per annum, repriced within 1 week to 6 months.
(d) The floating interest rate Unsecured Transferable Loan Facility of $50 million is repayable on 30 June 2007.
The interest payable is based on money market rates ranging from 2.1% to 3.6% (2005: 2.1%) per annum, repriced within 3 months.
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25. BORROWINGS (CONTINUED)
(e) Non-current borrowings
The Group The Company 2006 2005 2006 2005 $’000 $’000 $’000 $’000
Secured long term bank loans [Note 25(f)] 408,184 644,691 – – Unsecured medium term notes due 2010 [Note 25(g)] 50,000 50,000 50,000 50,000 Unsecured medium term notes due 2011 [Note 25(h)] 100,000 – 100,000 – Unsecured transferable loan facility [Note 25(i)] 125,000 150,000 125,000 150,000 Unsecured bank loans [Note 25(j)] 178,163 184,760 – – 861,347 1,029,451 275,000 200,000
These are repayable as follows:
The Group The Company 2006 2005 2006 2005 $’000 $’000 $’000 $’000
Not later than 2 years 276,763 222,000 100,000 50,000 Later than 2 years but not more than 5 years 579,875 807,451 175,000 150,000 More than 5 years 4,709 – – – 861,347 1,029,451 275,000 200,000
(f) The secured bank loans comprise the following:
(i) Floating interest rate term loans of $100.0 million secured on two subsidiary companies’ property, plant and equipment (Note 23) and investment properties (Note 22). The interest payable is based on money market rates ranging from 2.1% to 3.6% (2005: 0.9% to 2.1%) per annum, repriced within 6 months.
(ii) A fixed interest rate term loan of $69.0 million and a floating interest rate term loan of $1.5 million which represents a $102.9 million (2005: $102.9 million) multi-currency five year syndicated loan facility secured on the following:
– legal mortgage over the investment property of the subsidiary company (Note 22);
– debenture creating a fixed and floating charge over the assets of a subsidiary company; and
– assignment of all the subsidiary company’s rights, titles, interest in all agreements and leases relating to the investment property.
(iii) A floating interest rate term loan of $148.0 million secured on the following:
– a legal mortgage over the development property (Note 16); and
– an assignment of the building agreement and proceeds.
The interest payable is based on money market rates of 4.7% (2005: Nil) per annum, repriced within 3 months.
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25. BORROWINGS (CONTINUED)
(f) The secured bank loans comprise the following: (Continued)
(iv) A floating interest rate term loan of $57.9 million secured on the following:
– a legal mortgage over the development property (Note 16); and
– an assignment of the building agreement and proceeds.
The interest payable is based on money market rates of 3.7% (2005: Nil) per annum, repriced within 3 months.
(v) Floating interest rate term loans of RM88 million equivalent to $38.5 million repayable in quarterly instalments secured by a lienholder’s caveat on two investment properties (Note 22) and a development property (Note 16). The interest payable is based on money market rates ranging from 3.3% to 4.1% (2005: Nil) per annum, repriced within 1 to 3 months.
(g) The fixed interest rate unsecured medium term note of $35.0 million and floating interest rate unsecured medium term notes of $15.0 million are redeemable on 24 May 2010. The interest payable is based on money market rates ranging from 2.1% to 3.6% (2005: 2.1%) per annum, repriced within 6 months.
(h) The fixed interest rate unsecured medium term note of $100.0 million is redeemable on 25 April 2011.
(i) The floating interest rate Unsecured Transferable Loan Facility comprised the following:
(i ) $100.0 million repayable on 30 June 2008. The interest payable is based on money market rates ranging from 2.0% to 3.6% (2005: 2.0%) per annum, repriced within 3 months.
(ii) $25.0 million repayable on 24 October 2009. The interest payable is based on money market rates of 3.6% (2005: Nil) per annum, repriced within 6 months.
(j) The floating interest rate unsecured term loans comprise of the following:
(i) A loan comprising of US$38.5 million equivalent to S$61.5 million and $36.6 million repayable on 31 August 2007. The US dollar loan is to be repaid in Singapore dollar equivalent based on the exchange rate at the time of the loan. The interest payable is based on money market rates ranging from 2.1% to 5.0% (2005: 1.5% to 3.2%) per annum, repriced within 6 months.
(ii) A loan comprising of US$39.5 million equivalent to S$63.1 million and $17.0 million repayable on 25 May 2010. The US dollar loan is to be repaid in Singapore dollar equivalent based on the exchange rate at the time of the loan. The interest payable is based on money market rates ranging from 2.1% to 5.3% (2005: 2.1% to 3.5%) per annum, repriced within 6 months.
(k) Maturity of borrowings
The current borrowings have an average maturity of 5 months (2005: 5 months) from the end of the financial year. The maturity period for the non-current borrowings are disclosed in Note 25(e).
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25. BORROWINGS (CONTINUED) (l) Currency risk
The carrying amounts of total borrowings are denominated in the following currencies:
The Group The Company 2006 2005 2006 2005 $’000 $’000 $’000 $’000
Singapore Dollar 1,040,549 1,160,690 325,000 300,000 Malaysian Ringgit 60,412 – – – United States Dollar 6,754 – – – Hong Kong Dollar – 39,096 – – 1,107,715 1,199,786 325,000 300,000
(m) Interest rate risks
The weighted average effective interest rates of total borrowings at the balance sheet date are as follows:
The Group
2006 2005 SGD RM USD SGD HKD
Unsecured bank overdraft – 7.8% – –– Secured term loan 4.4% – – 3.8% 5.0% Secured long term bank loans (current portion) 3.8% 4.8% – 3.8% - Unsecured short term bank loans – 4.4% 6.1% –– Unsecured transferable loan facility 5.5% – – –– Unsecured medium term notes due 2006 (current portion) –––5.3% – Long-term loans [Note 25(e)] – secured bank loans 4.6% 4.7% – 3.9% 5.3% – unsecured medium term notes due 2010 4.5% – – 4.2% – – unsecured medium term notes due 2011 5.0% – – –– – unsecured transferable loan facility 5.4% – – 4.1% – – unsecured term loans 6.2% – – 4.0% –
The Company
2006 2005 SGD SGD
Unsecured transferable loan facility 5.5% – Unsecured medium term notes due 2006 (current portion) – 5.3% Long-term loans [Note 25(e)] – Unsecured medium term notes due 2010 4.5% 4.2% – Unsecured medium term notes due 2011 5.0% – – Unsecured transferable loan facility 5.4% 4.1%
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25. BORROWINGS (CONTINUED)
(n) Undrawn borrowing facilities
The Group and the Company have the following undrawn borrowing facilities:
The Group The Company 2006 2005 2006 2005 $’000 $’000 $’000 $’000
Floating rates – Expiring within one year 62,500 62,500 62,500 62,500 – Expiring beyond one year 225,900 28,000 25,000 – 288,400 90,500 87,500 62,500
The facilities expiring within one year are annual facilities subject to review at various dates during 2006. The other facilities have been arranged to help finance the Group’s acquisition and proposed expansion in Asia.
26. DIVIDENDS
Ordinary dividends paid
The Group and The Company 2006 2005 $’000 $’000
First and final dividend on ordinary shares of 3 cents per share less tax in respect of financial year ended 30 June 2005 17,225 – First and final dividend on ordinary shares of 2 cents per share less tax in respect of financial year ended 30 June 2004 – 11,456 17,225 11,456
The directors have recommended a first and final dividend in respect of the financial year ended 30 June 2006 of 3 cents per share less tax amounting to a total of $17.2 million. The directors also recommended a special dividend in respect of the financial year ended 30 June 2006 of 3 cents per share less tax amounting to $17.2 million. These financial statements do not reflect these proposed dividend, which will be accounted for in the shareholders’ equity as an appropriation of revenue reserve in the financial year ending 30 June 2007.
The proposed first and final dividend in respect of the financial year ended 30 June 2005 has been accounted for in the shareholders’ equity as an appropriation of revenue reserve in the current financial year.
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27. OTHER NON-CURRENT LIABILITIES
(a) The Group The Company 2006 2005 2006 2005 $’000 $’000 $’000 $’000
Tenancy deposits 2,664 3,454 105 97 Loans from minority shareholders [Note 27(b)] 239,366 222,861 – – Loans from subsidiary companies [Note 27(c)] – – 70,251 69,037 Others 9,665 18,993 6,673 5,526 251,695 245,308 77,029 74,660
(b) Loans from minority shareholders are unsecured and are not expected to be repayable within the next 12 months from the balance sheet date. Included in the loans from minority shareholders are fixed interest rate amounts of $100.3 million (2005: $59.2 million) and floating interest rate amounts of $Nil million (2005: $13.0 million) which bear a weighted average effective interest rate of 3.7% (2005: 3.9%) per annum at balance sheet date.
(c) The loans from subsidiary companies are unsecured, interest-free and are not repayable within the next 12 months from the balance sheet date.
28. SHARE CAPITAL
No. of shares Amount Authorised Issued Authorised Issued Capital Total share share share share Shares redemption share capital capital capital capital premium reserve capital ’000 ’000 $’000 $’000 $’000 $’000 $’000
2006 Balance at beginning of financial year 1,350,000 716,110 251,786 179,027 501,600 4,713 685,340 Issue of shares under options – 2,118 – 771 1,082 – 1,853 Effect of Companies (Amendment) Act 2005 (1,350,000) – (251,786) 507,395 (502,682) (4,713) – Balance at end of financial year – 718,228 – 687,193 – – 687,193
No. of shares Amount Authorised Issued Authorised Issued share share share share capital capital capital capital ’000 ’000 $’000 $’000
2005 Balance at beginning of financial year 1,350,000 715,771 251,786 178,943 Issue of shares under options – 339 – 84 Balance at end of financial year 1,350,000 716,110 251,786 179,027
Under the Companies (Amendment) Act 2005 that came into effect on 30 January 2006, the concepts of par value and authorised share capital are abolished and the amount in the share premium and capital redemption reserve account as of 30 January 2006 is required to become part of the Company’s share capital.
All issued shares are fully paid. During the current financial year, the Company issued 2,118,000 (2005: 338,500) shares upon the exercise of employee share options at the exercise price of between $0.653 and $1.379 (2005: $0.68) per share. The newly issued shares rank pari passu in all respects with the previously issued shares.
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28. SHARE CAPITAL (CONTINUED)
(a) Share Option Schemes
The 1991 Scheme was approved by the members of the Company at the Extraordinary General Meeting held on 5 December 1991. The 1991 Scheme was terminated (without prejudice to the rights of holders of options in respect of whose offers of the options have been granted) and replaced by the 2001 Scheme at the Extraordinary General Meeting held on 31 August 2001. No option was granted under the 1991 Scheme during the financial year.
On 30 September 2005, pursuant to the 2001 Scheme, the Company granted options to qualifying employees to purchase 1,805,000 ordinary shares of the Company at the exercise price of $1.43 per share. These options can be exercised only after twelve months from the date of grant and not later than 10 years from such date. At 30 June 2006, the total number of options granted which remained outstanding under the schemes was 4,289,000.
(b) Movements in the number of ordinary shares outstanding under options at the end of the financial year and their exercise prices are as follows:
Number of ordinary shares under options outstanding Granted Forfeited Expired Exercised At beginning during during during during At end of The Group and of financial financial financial financial financial financial Exercise The Company year year year year year year price ($) Expiry date
2006
1991 Scheme 2000 Options 1,005,000 – 15,000 482,000 508,000 – 1.379 30.09.2005
2001 Scheme 2001 Options 741,000 – – – 455,000 286,000 0.678 01.11.2011 2002 Options 914,500 – 10,000 – 628,000 276,500 0.653 04.11.2012 2003 Options 1,264,000 – 88,000 – 305,500 870,500 0.745 27.11.2013 2004 Options 1,720,000 – 217,500 – 221,500 1,281,000 0.934 18.11.2014 2005 Options – 1,805,000 230,000 – – 1,575,000 1.430 29.09.2015 Total 5,644,500 1,805,000 560,500 482,000 2,118,000 4,289,000
2005
1991 Scheme 1999 Options 935,000 – 50,000 885,000 – – 1.638 10.10.2004 2000 Options 1,065,000 – 60,000 – – 1,005,000 1.379 30.09.2005
2001 Scheme 2001 Options 957,000 – 30,000 – 186,000 741,000 0.678 01.11.2011 2002 Options 1,088,500 – 67,500 – 106,500 914,500 0.653 04.11.2012 2003 Options 1,410,000 – 100,000 – 46,000 1,264,000 0.745 27.11.2013 2004 Options – 1,755,000 35,000 – – 1,720,000 0.934 18.11.2014 Total 5,455,500 1,755,000 342,500 885,000 338,500 5,644,500
Out of the outstanding options on 4,289,000 shares (2005: 5,644,500), options on 1,239,500 shares (2005: 2,579,000) are exercisable. Options exercised in 2006 resulted in 2,118,000 shares (2005: 338,500) being issued at an average price of $0.88 (2005: $0.68) each.
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28. SHARE CAPITAL (CONTINUED)
(b) Movements in the number of ordinary shares outstanding under options at the end of the financial year and their exercise prices are as follows: (Continued)
The fair value of options granted on 30 September 2005 determined using the Binomial valuation model was $1,397,000 (2005: $761,000). The significant inputs into the model were share price of $1.51 (2005: $0.94), at the grant date, exercise price shown above, standard deviation of expected share price returns of 41.5% (2005: 39.9%), option life shown above and annual risk-free interest rate of 2.5% (2005: 2.2%). The volatility measured at the standard deviation of expected share price returns is based on statistical analysis of daily share prices over the last ninety days.
29. SHARE PREMIUM AND OTHER RESERVES
The Group The Company 2006 2005 2006 2005 $’000 $’000 $’000 $’000
Share premium – 501,600 – 501,600 Other reserves 204,874 193,936 83,782 85,912 204,874 695,536 83,782 587,512
(a) Share premium
The Group The Company 2006 2005 2006 2005 $’000 $’000 $’000 $’000
Balance at beginning of the financial year 501,600 501,455 501,600 501,455 Share premium on issue of 2,118,000 (2005: 338,500) ordinary shares at an average price of S$0.88 (2005: $0.68) each through the exercise of share options 1,082 145 1,082 145 Effect of Companies (Amendment) Act 2005 (502,682) – (502,682) – Balance at end of the financial year – 501,600 – 501,600
(b) Other reserves
The Group The Company 2006 2005 2006 2005 $’000 $’000 $’000 $’000
Composition: Share option reserve 1,422 466 1,419 466 Cash flow hedge reserve 2,162 – 1,874 – Asset revaluation reserve 118,529 104,441 80,489 80,733 Share of capital reserve of associated companies and joint venture companies 98,493 87,252 – – Currency translation reserve (15,732) (2,936) – – Capital redemption reserve – 4,713 – 4,713 204,874 193,936 83,782 85,912
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29. SHARE PREMIUM AND OTHER RESERVES (CONTINUED)
The Group The Company 2006 2005 2006 2005 $’000 $’000 $’000 $’000
Movements:
(i) Share option reserve
Balance at beginning of financial year – As previously reported – – – – – Effects of adoption of FRS 102 adjusted retrospectively 466 74 466 74 – As restated 466 74 466 74 Employee share option scheme: – Value of employee services (Notes 7 and 28) 956 392 953 392 Balance at end of financial year 1,422 466 1,419 466
(ii) Cash flow hedge reserve
Balance at beginning of financial year – As previously reported – – – – – Effects of adoption of FRS 39 adjusted prospectively (5,922) – (3,485) – – As restated (5,922) – (3,485) – Fair value gains on cash flow hedges 8,084 – 5,359 – Balance at end of the financial year 2,162 – 1,874 –
(iii) Asset revaluation reserve:
Balance at beginning of the financial year 104,441 113,269 80,733 80,733 Surplus/(deficit) on revaluation of: – investment properties (Note 22) 4,427 (9,200) – – – property, plant and equipment (Note 23) 187 (25) – – Deferred tax (debited)/ credited to equity [Note 9(b)] (82) 397 – – Revaluation surplus realised and transferred to income statement upon disposal of properties 8,910 – (244) – Minority interests (646) – – – Balance at end of the financial year 118,529 104,441 80,489 80,733
(iv) Share of capital reserves of associated companies and joint venture companies:
Balance at beginning of the financial year 87,402 21,336 – – Share of capital reserves of associated companies and joint venture companies 15,875 66,515 – – Minority interests (4,784) (599) – – Balance at end of the financial year 98,493 87,252 – –
Capital reserves of associated companies and joint venture companies arise from asset revaluation reserves and they are not distributable.
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29. SHARE PREMIUM AND OTHER RESERVES (CONTINUED)
The Group The Company 2006 2005 2006 2005 $’000 $’000 $’000 $’000
(v) Currency translation reserve:
Balance at beginning of the financial year – As previously reported (3,086) 2,286 16,426 19,061 – Effects of adoption of FRS 21 adjusted retrospectively – – (16,426) (19,061) – As restated (3,086) 2,286 – – Translation of financial statements of foreign subsidiary companies, associated companies and joint venture companies (7,621) (2,484) – – Translation of foreign currency denominated loans which are quasi-equity in nature (6,031) (3,008) – – Minority interests 1,006 (4,698) – – Balance at end of the financial year (15,732) (2,936) – –
(vi) Capital redemption reserve
Balance at beginning of the financial year 4,713 4,713 4,713 4,713 Effect of Companies (Amendment) Act 2005 (4,713) – (4,713) – Balance at end of the financial year – 4,713 – 4,713
Total other reserves 204,874 193,936 83,782 85,912
30. RETAINED EARNINGS
(a) Retained profits of the Group and the Company are distributable except for accumulated retained profits of associated companies amounting to $86,715,000 (2005: $47,105,000) which are included in the Group’s retained profits.
(b) Movements in retained earnings for the Company are as follows:
The Comapny 2006 2005 $’000 $’000
Balance at beginning of financial year – As previously reported 150,503 133,730 – Effect of changes in accounting policies – Adjusted retrospectively (Notes 3.2 and 3.6) 15,960 18,987 – As restated 166,463 152,717
Total profit 35,137 25,202 Dividends paid (Note 26) (17,225) (11,456) Balance at end of financial year 184,375 166,463
Movement in retained earnings for the Group is shown in the Consolidated Statement of Changes in Equity.
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31. COMMITMENTS
(a) Capital commitments
Capital expenditures contracted for at the balance sheet date but not recognised in the financial statements (excluding those relating to investments in joint venture companies (Note 21) are as follows:
The Group 2006 2005 $’000 $’000
Capital and development expenditure not provided for in the financial statements:
Commitments in respect of contracts placed 38,139 94,083
Authorised but not contracted for 7,754 –
(b) Operating lease commitments – where a group company is a lessee
The Group leases various retail units under non-cancellable operating lease agreements. The leases have varying terms, escalation clauses and renewal rights. The lease expenditure charged to the income statement during the financial year is disclosed in Note 6.
The future aggregate minimum lease payments under non-cancellable operating leases contracted for at the reporting date but not recognised as liabilities, are as follows:
The Group 2006 2005 $’000 $’000
Within one year 28,368 20,038 Within two to five years 26,123 20,449 54,491 40,487
(c) Operating lease commitments – where a group company is a lessor
The future minimum lease payments receivable under non-cancellable operating leases contracted for at the reporting date but not recognised as receivables, are as follows:
The Group The Company 2006 2005 2006 2005 $’000 $’000 $’000 $’000
Within one year 14,752 17,147 533 732 Within two to five years 12,340 11,784 337 318 27,092 28,931 870 1,050
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32. CONTINGENT LIABILITIES(UNSECURED)
Details and estimates of maximum amounts of contingent liabilities are as follows:
The Group The Company 2006 2005 2006 2005 $’000 $’000 $’000 $’000
Guarantees issued to banks for credit facilities granted to: – subsidiary companies – – 59,506 340,870 – associated companies 8,280 8,280 8,280 8,280 – joint venture companies 62,452 72,000 62,452 72,000 70,732 80,280 130,238 421,150
The Company has given guarantees for all liabilities of a subsidiary company incurred under a tender bond facility amounting to $15.0 million (2005: $30.0 million) granted by a bank to the subsidiary company.
33. FINANCIAL RISKMANAGEMENT
Financial risk factors
The Group is exposed to foreign currency, interest rate, credit and liquidity risks arising from its diversified businesses. The Group’s risk management approach seeks to minimise potential adverse effects from these exposures on the financial performance of the Group. After identifying and evaluating its exposure to the financial risks, the Group establishes policies to monitor and manage these risks in accordance with its risk management philosophy.
(a) Price risk/Currency risk
The Group holds long-term overseas investments and its net assets are exposed to currency translation risk. The Group uses natural hedging opportunities, like borrowing in the currency of the country in which these investments are located whenever practicable. The exchange differences arising from such translations are captured under the currency translation reserve. These translation differences are reviewed and monitored on a regular basis.
(b) Cash flow and fair value interest rate risk
The Group is exposed to interest rate risk through the impact of rate changes on interest bearing liabilities and assets. The Group manages its interest rate exposure by maintaining a prudent mix of fixed and floating rate borrowings. The Group also uses hedging instruments such as interest rate swaps to minimise its exposure to interest rate volatility (see Note 34 for details).
(c) Credit risk
The Group has no significant concentration of credit risk with any single entity. The Group has policies in place to ensure that sales of products and services are made only to customers with acceptable credit standing. Derivative counterparties and cash transactions are limited to high credit quality financial institutions. The Group has policies that limit the amount of credit exposure to any financial institution.
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33. FINANCIAL RISKMANAGEMENT (CONTINUED)
(d) Liquidity risk
The Group actively manages its debt maturity profile, operating cash flows and the availability of funding so as to ensure that all refinancing, repayment and funding needs are met. The Group adopts prudent liquidity risk management by maintaining sufficient cash and the availability of funding through an adequate amount of committed credit facilities. The Group constantly raises committed funding from both capital markets and financial institutions and prudently balances its portfolio with short term funding so as to achieve overall cost effectiveness.
34. FINANCIAL INSTRUMENTS
In order to manage the risks arising from fluctuations in currency exchange rates and interest rates, the Company and the Group make use of the following derivative financial instruments:
Interest rate swaps
The Company and the Group have entered into interest rate swap contracts that entitle them to receive interest at floating rates on notional principal amounts and oblige them to pay interest at fixed rates on the same amounts. The interest rate swaps allow the Company and the Group to raise long-term borrowings at floating rates and swap them into fixed rates that are lower than those available if they borrowed at fixed rates directly. Under the interest rate swaps, the Company and the Group agree with other parties to exchange, at specified intervals (mainly quarterly), the difference between fixed rate and floating rate interest amounts calculated by reference to the agreed notional principal amounts. At 30 June 2006, the fixed interest rates vary from 2.1% to 3.3% (2005: 1.3% to 3.3%) per annum and the floating rates are linked to swap rates quoted by various banks and agencies.
The remaining terms and notional principal amounts of the outstanding interest rate swap contracts at the balance sheet date were as follows:
The Group The Company 2006 2005 2006 2005 $’000 $’000 $’000 $’000
Less than one year – – – – One to five years 487,889 449,760 374,760 349,760 487,889 449,760 374,760 349,760
Forward foreign exchange contracts
Forward foreign exchange contracts are entered into to manage exposure to fluctuations in foreign currency exchange rate on specific transactions. These contracts do not qualify for hedge accounting.
At 30 June 2006, the settlement dates on open forward contracts fall within 1 year from the balance sheet date.
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34. FINANCIAL INSTRUMENTS (CONTINUED)
The commitments in respect of the forward foreign exchange contracts entered into by the Company and the Group are as follows:
The Group The Company 2006 2005 2006 2005 $’000 $’000 $’000 $’000
Payable in local currency Forward contracts to receive foreign currency 30,101 17,782 – –
35. RELATED PARTY TRANSACTIONS
In addition to the related party information disclosed elsewhere in the financial statements, the following significant transactions between the Group and related parties took place during the financial year at terms agreed between the parties:
(a) Sales and purchases of goods and services
The Group 2006 2005 $’000 $’000
Purchases of goods by company related to a director 3,548 –
Commission income from: – associated companies 84 180 – joint venture companies 1,059 400
Management fees and service fees received from: – associated companies 2,590 524 – joint venture companies 900 150
Management fees paid to an associated company 353 –
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35. Related party transactions (CONTINUED)
(a) Sales and purchases of goods and services (Continued)
The Group 2006 2005 $’000 $’000
Rental paid to an associated company 19 54
Reimbursement of administrative costs and service fees from: – associated companies 615 1,932 – joint venture companies – 34
Reimbursement of administrative costs and service fees to: – associated companies 557 202 – joint venture companies 4 –
Financial, secretarial and administration fees received from: – associated companies 30 50 – joint venture companies 156 153
(b) Key management personnel compensation
Key management personnel compensation is as follows:
The Group 2006 2005 $’000 $’000
Salaries and other short-term employee benefits 7,619 5,143 Share options granted 90 52 7,709 5,195
Including in above, total compensation to directors of the Company amounted to $4,364,000 (2005: $2,856,000).
36. Directors’ interests
The Group 2006 2005 $’000 $’000
Property management fees received from companies in which some of the directors have a substantial interest – 27
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37. SEGMENT INFORMATION
(a) Primary reporting format – business segments
Development Investment properties properties Retail Others Group $’000 $’000 $’000 $’000 $’000
2006
Revenue 733,925 27,124 89,062 39,147 889,258
Segment result 113,630 9,072 1,533 (22,155) 102,080 Finance income 8,040 110,120 Share of results of associated companies and joint venture companies before tax 26,016 87 2,734 58,245 87,082 Finance costs (40,297) Profit before tax 156,905 Income tax expense (21,163) Profit after tax 135,742 Minority interests (7,714) Net profit for the financial year 128,028
Segment assets 1,263,775 457,319 37,256 282,726 2,041,076 Investment in associated companies 1,979 2,863 7,437 359,470 371,749 Investment in joint venture companies 89,845 – – 25 89,870 Due from associated companies and joint venture companies 121,661 – 6 103,653 225,320 1,477,260 460,182 44,699 745,874 2,728,015 Unallocated assets 17,234 Consolidated total assets 2,745,249
Segment liabilities 290,496 9,060 13,288 43,637 356,481 Borrowings 391,418 195,863 899 519,535 1,107,715 681,914 204,923 14,187 563,172 1,464,196 Unallocated liabilities 19,176 Consolidated total liabilities 1,483,372
Capital expenditure 9 348 4,504 959 5,820 Depreciation 32 400 2,799 1,836 5,067
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37. SEGMENT INFORMATION (CONTINUED)
(a) Primary reporting format – business segments (Continued)
Development Investment properties properties Retail Others Group $’000 $’000 $’000 $’000 $’000
2005
Revenue 190,760 30,293 56,130 4,386 281,569
Segment result 15,784 5,307 25 (4,091) 17,025 Finance income 1,389 18,414 Share of results of associated companies and joint venture companies before tax 11,445 128 2,190 31,402 45,165 Finance costs (36,640) Profit before tax 26,939 Income tax expense (1,583) Profit after tax 25,356 Minority interests (945) Net profit for the financial year 24,411
Segment assets 1,045,217 531,484 25,057 183,053 1,784,811 Investment in associated companies – 2,777 6,953 446,241 455,971 Investment in joint venture companies 91,585 – – 20 91,605 Due from associated companies and joint venture companies 220,347 636 750 6,047 227,780 1,357,149 534,897 32,760 635,361 2,560,167 Unallocated assets 16,145 Consolidated total assets 2,576,312
Segment liabilities 288,874 26,924 7,560 44,529 367,887 Borrowings 603,930 314,262 – 281,594 1,199,786 892,804 341,186 7,560 326,123 1,567,673 Unallocated liabilities 7,146 Consolidated total liabilities 1,574,819
Capital expenditure 7 959 3,394 899 5,259 Depreciation – 338 2,056 1,130 3,524
Revenue Total assets Capital expenditure 2006 2005 2006 2005 2006 2005 $’000 $’000 $’000 $’000 $’000 $’000
Singapore 831,241 280,591 2,022,124 2,012,117 4,396 5,141 People’s Republic of China/ Hong Kong SAR – 523 389,827 404,073 – – Malaysia 58,017 455 317,420 135,719 1,424 118 Other countries – – 15,878 24,403 – – 889,258 281,569 2,745,249 2,576,312 5,820 5,259
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37. SEGMENT INFORMATION (CONTINUED)
(b) Secondary reporting format – geographical segments
A segment is a distinguishable component of the Group that is engaged either in providing products or services (business segments), or in providing products or services within a particular economic environment (geographical segments), which is subject to risks and rewards that are different from those of other segments.
Segment information is presented in respect of the Group’s business in geographical segments. The primary format, business segments, is based on both the Group’s principal activities and the Group’s management and internal reporting structure.
Segment results, assets and liabilities include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. Unallocated items mainly comprise of loans to minority shareholders, provision for current tax and amount due to associated companies and joint venture companies.
Segment capital expenditure is the total cost incurred during the period to acquire segment assets that are expected to be used for more than one period.
38. COMPANIES IN THE GROUP
Information relating to the companies in the Group is given below, with the exception of inactive and dormant companies. Singapore-incorporated subsidiary companies and associated companies in which the Group has management control are audited by PricewaterhouseCoopers Singapore, unless otherwise indicated.
Cost of investment Country of Place of Equity held held by incorporation business Principal activities by the Group the Company 2006 2005 2006 2005 % % $’000 $’000
(a) Wing Tai Holdings Ltd Singapore Singapore Investment holding N/A N/A N/A N/A
(b) Subsidiary company – Quoted
DNP Holdings !,> Malaysia – Malaysia Manufacturing 50.2 – 121,106 – Berhad Quoted on the and trading of Bursa Malaysia garments, property Securities Berhad developments and investment holding
(c) Subsidiary companies – Unquoted
Angel Wing (M) !,* Malaysia Malaysia Property development 50.2 – – – Sdn Bhd
Brave Dragon Ltd *,% British Virgin Hong Kong Investment holding 89.4 89.4 – – Islands SAR
Bristona Pte Ltd * Singapore Singapore Investment holding 100 100 – –
Crossbrook # British Virgin Hong Kong Investment holding 100 100 ^ ^ Group Ltd Islands SAR
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38. COMPANIES IN THE GROUP (CONTINUED)
Cost of investment Country of Place of Equity held held by incorporation business Principal activities by the Group the Company 2006 2005 2006 2005 % % $’000 $’000
(c) Subsidiary companies – Unquoted (Continued)
DNP Clothing !,* Malaysia Malaysia Retailing of garments 50.2 – – – Sdn Bhd
DNP Commercial @,* Sri Lanka Sri Lanka Manufacture of 50.2 – – – Laundry Lanka textile garments (Private) Limited
DNP Garment !,* Malaysia Malaysia Manufacture of 50.2 – – – Manufacturing textile garments Sdn Bhd
DNP Garments @,* Sri Lanka Sri Lanka Manufacture of 50.2 – – – Lanka (Private) textile garments Limited
DNP Land Sdn Bhd !,* Malaysia Malaysia Property development 50.2 – – –
DNP Property !,* Malaysia Malaysia Project management 50.2 – – – Management and maintenance of Sdn Bhd properties
DNP Sportswear @,* Sri Lanka Sri Lanka Manufacture of 50.2 – – – Lanka (Private) textile garments Limited
Dragon & Phoenix !,* Malaysia Malaysia Property development 50.2 – – – Development Sdn Bhd
Dragon & Phoenix !,* Malaysia Malaysia Manufacture of 50.2 – – – Serba Pakaian textile garments Sdn Bhd
Evermore * Singapore Singapore Property investment 85 85 – – Investment Pte Ltd and development
Fox Fashion * Singapore Singapore Retailing of garments 100 100 – – Apparel (S) Pte Ltd
Grand Eastern !,* Malaysia Malaysia Property development 50.2 – – – Realty & Development Sdn Bhd
Harta-Aman !,* Malaysia Malaysia Property development 50.2 – – – Sdn Bhd
Hartamaju Sdn Bhd!,* Malaysia Malaysia Property investment 50.2 – – –
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38. COMPANIES IN THE GROUP (CONTINUED)
Cost of investment Country of Place of Equity held held by incorporation business Principal activities by the Group the Company 2006 2005 2006 2005 % % $’000 $’000
(c) Subsidiary companies – Unquoted (Continued)
La Eau Enterprises * Singapore Singapore Trading of 100 100 – – Pte Ltd building products
Nester Investments *,# British Virgin Hong Kong Investment holding 100 100 – – Limited Islands SAR
Nian Sheng @,* British Virgin Hong Kong Investment holding 50.2 – – – Investments Limited Islands SAR
P.T. Windas *,@,> Indonesia Indonesia Property Investment 57.6 – – – Development and development
Richdeal * Singapore Singapore Property investment 66.7 66.7 – – Investment Pte Ltd and development
Rondall Enterprises *,@ Hong Kong Hong Kong Investment holding 100 100 – – Limited SAR SAR
Sedi-Intan Sdn Bhd !,* Malaysia Malaysia Trading in garments 50.2 – – –
Seniharta Sdn Bhd !,* Malaysia Malaysia Property investment 50.2 – – –
Simtron Limited @,* Hong Kong Malaysia Investment holding 50.2 – – – SAR
Sri Rampaian !,* Malaysia Malaysia Manufacture of 50.2 – – – Sdn Bhd textile garments
Sediperak Sdn Bhd !,* Malaysia Malaysia Manufacture of textile 50.2 – – – garments
Tanahnaga Sdn Bhd !,* Malaysia Malaysia Property development 50.2 – – –
Tanako Sdn Bhd !,* Malaysia Malaysia Manufacture of textile 50.2 – – – garments
Welwyn * Singapore Singapore Property investment 90 90 – – Investment Pte Ltd and development
Winace * Singapore Singapore Investment holding 100 100 – – Investment Pte Ltd
Winbliss * Singapore Singapore Property investment 100 100 – – Investment Pte Ltd and development
Windeal * Singapore People’s Property investment 100 100 – – Investment Pte Ltd Republic of China
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38. COMPANIES IN THE GROUP (CONTINUED)
Cost of investment Country of Place of Equity held held by incorporation business Principal activities by the Group the Company 2006 2005 2006 2005 % % $’000 $’000
(c) Subsidiary companies – Unquoted (Continued)
Wingain * Singapore Singapore Property investment 66.7 66.7 – – Investment Pte Ltd
Wingold * Singapore Singapore Investment holding 100 100 – – Investment Pte Ltd
Wingrace * Singapore Singapore Property investment 100 100 – – Investment Pte Ltd and development
Wingrove * Singapore Singapore Property investment 75 75 – – Investment Pte Ltd and development
Winhome *,< Singapore Singapore Property investment 60 60 – – Investment Pte Ltd and development
Winquest * Singapore Singapore Property investment 60 100 – – Investment Pte Ltd and development
Winnervest * Singapore Singapore Property investment 100 100 – – Investment Pte Ltd and development
Winnorth * Singapore Singapore Property investment 100 100 – – Investment Pte Ltd and development
Winmax * Singapore Singapore Property investment 100 100 – – Investment Pte Ltd
Winshine * Singapore Singapore Property investment 100 100 – – Investment Pte Ltd
Winsland * Singapore Singapore Property investment 100 100 – – Investment Pte Ltd
Wintrust * Singapore Singapore Property investment, 100 100 – – Investment Pte Ltd property development and investment holding
Winwill * Singapore Singapore Investment holding 60 60 – – Investment Pte Ltd
Winwise * Singapore Singapore Property investment 60 60 – – Investment Pte Ltd and development
Winworth * Singapore Singapore Property investment 85 85 – – Investment Pte Ltd and development
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38. COMPANIES IN THE GROUP (CONTINUED)
Cost of investment Country of Place of Equity held held by incorporation business Principal activities by the Group the Company 2006 2005 2006 2005 % % $’000 $’000
(c) Subsidiary companies – Unquoted (Continued)
Wing Tai Building *,@ Hong Kong Hong Kong Trading of building 100 100 – – Products Ltd SAR SAR products
Wing Tai * Singapore Singapore Retailing of 100 100 – – Clothing Pte Ltd garments
Wing Tai Singapore Singapore Trading of architectural 100 100 1,000 1,000 Enterprises Pte Ltd products, accessories, and installation of building material
Wing Tai Garment Singapore Singapore Investment holding 100 100 22,877 22,877 Manufactory (Singapore) Pte Ltd
Wing Tai Investment & Singapore Singapore Management 100 100 ^ ^ Development Pte Ltd and administration of projects and investment holding
Wing Tai Investment * Singapore Singapore Management of 100 100 – – Management Pte Ltd investment properties
Wing Tai Land Pte Ltd Singapore Singapore Investment holding 100 100 107,489 107,489
Wing Tai Property * Singapore Singapore Project management 100 100 – – Management Pte Ltd and maintenance of properties
Wing Tai Retail Singapore Singapore Management of 100 100 1,000 1,000 Pte Ltd retail operations
Yoshinoya (S) Pte Ltd * Singapore Singapore Restaurant operator 100 100 – –
Wing Mei (M) !,* Malaysia Malaysia Property investment 50.2 – – – Sdn Bhd
Winswift * Singapore Singapore Investment holding 50.2 – – – Investment Pte Ltd
Yoshinoya Food !,* Malaysia Malaysia Restaurant operator 50.2 – – – Systems (M) Sdn Bhd 253,472 132,366
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38. COMPANIES IN THE GROUP (CONTINUED)
Cost of investment Country of Place of Equity held held by incorporation business Principal activities by the Group the Company 2006 2005 2006 2005 % % $’000 $’000
(d) Associated companies – Quoted
DNP Holdings !,> Malaysia – Malaysia Manufacturing and – 49.2 – 121,026 Berhad Quoted on the trading of garments, Bursa Malaysia property developments Securities Berhad and investment holding
USI Holdings Limited *,% Bermuda – Hong Kong Manufacturing 18.9 18.9 – – Quoted on the SAR and trading of Hong Kong garments, property Stock Exchange development and management and investment holding
Winsor Properties *,@ Cayman Hong Kong Property investment 27.7 27.7 – – Holdings Islands – SAR and development, Limited Quoted on the warehousing and Hong Kong investment holding Stock Exchange
(e) Associated companies – Unquoted
Burlington Square *,& Singapore Singapore Property trading 50 50 – – Properties Pte Ltd
Burlington Square *,& Singapore Singapore Property investment 50 50 – – Investment Pte Ltd
Claymore *,& Singapore Singapore Rental and sale 50 50 – – Properties Pte Ltd of properties
Cyber Cosmos *,@ British Virgin Hong Kong Investment in 37.6 25 – – Limited Islands technology – related companies
G2000 Apparel (S) * Singapore Singapore Retailing of garments 45 45 – – Pte Ltd
– 121,026
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38. COMPANIES IN THE GROUP (CONTINUED)
Cost of investment Country of Place of Equity held held by incorporation business Principal activities by the Group the Company 2006 2005 2006 2005 % % $’000 $’000
(f) Joint venture companies – Unquoted
Avondale Properties *,# British Virgin Hong Kong Investment holding 30 30 – – Limited Islands SAR
Orwin Development * Singapore Singapore Property investment 40 40 – – Limited and development
Chelshire Investment * Singapore Singapore Property investment 50 50 – – Pte Ltd and development
Chelville Investment * Singapore Singapore Property investment 50 50 – – Pte Ltd
P.T. Windas *,@, Suzhou Property * Singapore People’s Property development 35 35 – – Development Pte Ltd Republic of and investment China holding Winfame Investment * Singapore Singapore Property investment 50 50 – – Pte Ltd and development Wingem Investment * Singapore Singapore Property investment 45 45 – – Pte Ltd and development Winpeak Investment * Singapore Singapore Property investment 45 45 – – Pte Ltd and development Winwave Investment * Singapore Singapore Property investment 50 50 – – Pte Ltd and development – – PG 138 WT_Fin_29sepFA.indd 138 9/29/06 7:13:54 PM NOTES TO THE FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2006 38. COMPANIES IN THE GROUP (CONTINUED) * Held by Group companies. # These companies are not required to be audited by law in the country of incorporation, but the unaudited financial statements are reviewed by PricewaterhouseCoopers Singapore as part of the audit of the Group consolidated financial statements. @ Audited by other PricewaterhouseCoopers firms outside Singapore. ^ Denotes cost of investment of less than $1,000. % Audited by PricewaterhouseCoopers, Hong Kong. USI Holdings Limited (“USI”) is accounted for as an associated company although the Group holds less than 20% of interest as the Group has a board representation in USI and has ability to influence its financial decisions. ! Audited by Ernst and Young, Malaysia. & Audited by KPMG, Singapore. < The entity is 60% held by Winwill Investment Pte Ltd. Classified as a subsidiary company as entity is controlled by the Group. > DNP Holdings Berhad was an associated company in prior financial year and P.T. Windas Development (“PT Windas”) was accounted for as a joint venture company. Please see Note 11 for details. 39. NEW ACCOUNTING STANDARD AND FRS INTERPRETATIONS Certain new accounting standards and interpretations have been published that are mandatory for accounting periods beginning on or after 1 January 2006. The Group’s assessment of those standards and interpretations that are relevant to the Group is set out below. (a) FRS 40, Investment Property The Group will adopt FRS 40 on 1January 2007, which is the effective date of the Standard. Currently, investment properties are accounted for under FRS 25 Investments as set out in Note 2.6. Under FRS 40, changes in fair values of investment properties are required to be included in the income statement. On transition to FRS 40 on 1 July 2007, the asset revaluation reserve as at 30 June 2007 will be adjusted against the opening retained earnings at 1 July 2007; and correspondingly, for the comparative figures, the asset revaluation reserve as at 30 June 2006 of $54.6 million will be adjusted against the opening retained earnings at 1 July 2006. 40. AUTHORISATION OF FINANCIAL STATEMENTS These financial statements were authorised for issue in accordance with a resolution of the directors on 18 September 2006. Auditors’ Report – Page 56 PG 139 WT_Fin_29sepFA.indd 139 9/29/06 7:13:54 PM NOTICE OF ANNUAL GENERAL MEETING NOTICE IS HEREBY GIVEN that the 42nd Annual General Meeting of the Company will be held at the Moor Room, Level 4, Raffles City Convention Centre, Swissôtel The Stamford, 2 Stamford Road, Singapore 178882 on Thursday, 26 October 2006 at 10.30 a.m. to transact the following business: AS ORDINARY BUSINESS 1. To receive and adopt the Audited Accounts for the financial year ended 30 June 2006 and the Reports Resolution 1 of the Directors and Auditors thereon. 2. To declare a First and Final Dividend of 3 cents per share and a Special Dividend of 3 cents per share, Resolution 2 less 20% Singapore income tax for the financial year ended 30 June 2006. 3. To approve Directors’ fees for the financial year ended 30 June 2006. Resolution 3 4. (a) To note the retirement of Mr Christopher Patrick Langley who is retiring by rotation in accordance with Article 107 of the Company’s Articles of Association. Mr Langley has decided not to seek re-election. (b) To re-elect the following Directors who are retiring in accordance with the Company’s Articles of Association: (i) Mr Cheng Wai Keung (Retiring under Article 107) Resolution 4 (ii) Mr Boey Tak Hap (Retiring under Article 107) Resolution 5 Mr Boey Tak Hap upon re-election as a Director of the Company, remains as a member of the Audit Committee. Mr Boey will be considered independent for the purposes of Rule 704(8) of the Listing Manual of the Singapore Exchange Securities Trading Limited. 5. To re-appoint PricewaterhouseCoopers as auditors of the Company and to authorise the Directors to fix Resolution 6 their remuneration. AS SPECIAL BUSINESS 6. To re-appoint the following Directors to hold office until the next Annual General Meeting pursuant to Section 153(6) of the Companies Act (Chapter 50): (a) Mr Phua Bah Lee Resolution 7 (b) Mr Lee Han Yang Resolution 8 Mr Phua Bah Lee, a Non-Executive Director, will, upon re-appointment as Director of the Company, remain as Chairman 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. (See Explanatory Note 1) Mr Lee Han Yang, a Non-Executive Director, will, upon re-appointment as 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. (See Explanatory Note 2) PG 140 WT_Fin_29sepFA.indd 140 9/29/06 7:13:55 PM NOTICE OF ANNUAL GENERAL MEETING 7. To consider, and if thought fit, to pass the following Ordinary Resolutions with or without modifications: (a) “That pursuant to Section 161 of the Companies Act (Chapter 50), and the listing rules of the Resolution 9 Singapore Exchange Securities Trading Limited, authority be and is hereby given to the Directors of the Company to issue shares and convertible securities in the capital of the Company (whether by way of rights, bonus or otherwise) at any time to such persons and upon such terms and conditions and for such purposes as the Directors may in their absolute discretion deem fit, provided that: (i) the aggregate number of shares and convertible securities to be issued pursuant to this Resolution does not exceed 50% of the Company’s issued share capital, of which the aggregate number of shares and convertible securities to be issued other than on a pro rata basis to shareholders of the Company does not exceed 20% of the Company’s issued share capital; and for the purpose of this Resolution, the issued share capital shall be the Company’s issued share capital 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 consolidation or subdivision of the Company’s shares), and (ii) unless revoked or varied by the Company in general meeting, the authority conferred by this Resolution shall continue in force until the conclusion of the next Annual General Meeting of the Company or the date by which the next Annual General Meeting of the Company is required by law to be held, whichever is the earlier.” (See Explanatory Note 3) (b) “That pursuant to Section 161 of the Companies Act (Chapter 50), approval be and is hereby given to Resolution 10 the Directors of the Company to exercise full powers of the Company to issue and allot shares in the Company pursuant to the exercise of options granted in connection with or pursuant to the terms and conditions of the Wing Tai Holdings Limited (2001) Share Option Scheme approved by Shareholders of the Company in general meeting on 31 August 2001 and as may be amended from time to time (the “2001 Scheme”) and, pursuant to the 2001 Scheme, to make and grant offers, agreements and options which would or may require shares to be issued and allotted, whether during the continuance of this authority or thereafter, upon such terms and conditions as the Directors may in their absolute discretion deem fit.” (See Explanatory Note 4) 8. To transact any other business that may be transacted at an Annual General Meeting of the Company. By Order of the Board Gabrielle Tan Company Secretary Singapore 3 October 2006 PG 141 NOTICE OF ANNUAL GENERAL MEETING Notes: 1. A Shareholder of the Company entitled to attend and vote at the Meeting is entitled to appoint not more than two proxies to attend and vote in his stead. 2. A Shareholder of the Company which is a corporation is entitled to appoint its authorised representative or proxy to vote on its behalf. 3. A proxy need not be a Shareholder of the Company. 4. The instrument appointing a proxy must be deposited at the registered office of the Company at 107 Tampines Road, Singapore 535129 not less than 48 hours before the time fixed for holding the Meeting. Explanatory Notes: 1. The proposed Resolution 7 above, if passed, will authorise Mr Phua Bah Lee, who is over the age of 70, to continue in office as a Director of the Company until the next Annual General Meeting of the Company. 2. The proposed Resolution 8 above, if passed, will authorise Mr Lee Han Yang, who is over the age of 70, to continue in office as a Director of the Company until the next Annual General Meeting of the Company. 3. The proposed Resolution 9 above, if passed, will empower the Directors of the Company, from the date of the above Annual General Meeting until the next Annual General Meeting, to issue shares and convertible securities in the Company. The aggregate number of shares and convertible securities which the Directors may issue under this Resolution shall not exceed 50% of the issued share capital of the Company, of which the aggregate number of shares and convertible securities to be issued other than on a pro-rata basis to existing shareholders shall not exceed 20% of the issued share capital of the Company. The percentage of issued share capital is based on the Company’s issued share capital at the time this proposed Resolution is passed, after adjusting for (a) new shares arising from the conversion of convertible securities or share options on issue at the time this proposed Resolution is passed; and (b) any subsequent consolidation or subdivision of shares. 4. The proposed Resolution 10 above, if passed, will empower the Directors of the Company, from the date of the above Annual General Meeting until the conclusion of the next Annual General Meeting, to issue shares in connection with the 2001 Scheme and to grant offers, agreements and options which would require shares to be issued. This authority is in addition to the general authority to issue shares and convertible securities sought under Resolution 9. PG 142 WT_Fin_29sepFA.indd 142 9/29/06 7:13:55 PM SHAREHOLDING STATISTICS AS AT 8 SEPTEMBER 2006 SHARE CAPITAL Issued and fully paid-up capital : S$687,193,477.79 divided into 718,227,602 ordinary shares Voting rights : 1 vote per share DISTRIBUTION OF SHAREHOLDERS Size of Shareholdings No. of Shareholders % No. of Shares % 1 to 999 171 1.52 49,909 0.01 1,000 to 10,000 9,622 85.69 35,657,002 4.96 10,001 to 1,000,000 1,415 12.60 43,792,294 6.10 1,000,001 and above 21 0.19 638,728,397 88.93 Total 11,229 100.00 718,227,602 100.00 TWENTY LARGEST SHAREHOLDERS Name No. of Shares % 1 Wing Sun Development Private Limited 202,032,264 28.13 2 DBS Nominees Pte Ltd 94,130,791 13.11 3 Winlyn Investment Pte Ltd 66,106,760 9.20 4 HSBC (Singapore) Nominees Pte Ltd 63,205,321 8.80 5 Citibank Nominees Singapore Pte Ltd 55,281,649 7.70 6 United Overseas Bank Nominees Pte Ltd 28,651,275 3.99 7 Raffles Nominees Pte Ltd 26,002,375 3.62 8 DBS Vickers Securities (Singapore) Pte Ltd 22,196,666 3.09 9 DBSN Services Pte Ltd 19,235,017 2.68 10 Nu Chan Sing Pte Ltd 16,666,666 2.32 11 Empire Gate Holdings Limited 11,017,793 1.53 12 OCBC Nominees Singapore Pte Ltd 9,717,438 1.35 13 Merrill Lynch (Singapore) Pte Ltd 5,006,876 0.70 14 UOB Kay Hian Pte Ltd 4,951,833 0.69 15 Winway Investment Pte Ltd 3,208,333 0.45 16 Chow Helen 2,595,666 0.36 17 Morgan Stanley Asia (Singapore) Securities Pte Ltd 2,375,341 0.33 18 Oversea Chinese Bank Nominees Pte Ltd 2,347,833 0.33 19 DB Nominees (Singapore) Pte Ltd 1,568,000 0.22 20 Phillip Securities Pte Ltd 1,263,834 0.18 Total 637,561,731 88.78 PERCENTAGE OF SHAREHOLDING HELD IN THE HANDS OF PUBLIC As at 8 September 2006, approximately 52.11% of the issued ordinary shares of the Company are held by the public. Rule 723 of the Listing Manual of the Singapore Exchange Securities Trading Limited has accordingly been complied with. PG 143 WT_Fin_29sepFA.indd 143 9/29/06 7:13:55 PM SHAREHOLDING STATISTICS AS AT 8 SEPTEMBER 2006 SUBSTANTIAL SHAREHOLDERS AS SHOWN IN THE REGISTER OF SUBSTANTIAL SHAREHOLDERS Name Interest (No. of Ordinary Shares) Cheng Wai Keung 284,960,8161 Edmund Cheng Wai Wing 282,381,1502 Christopher Cheng Wai Chee 279,279,3173 Edward Cheng Wai Sun 279,156,8174 Ne Chen Duen 85,551,2037 Liu Hing Yuen, Patricia @ Liu Pui Yuk 85,566,2037 Deutsche Bank International Trust Co. (Cayman) Limited 279,156,8174 Deutsche Bank International Trust Co. (Jersey) Limited 279,156,8174 Wing Sun Development Private Limited 202,032,264 Wing Tai Asia Holdings Limited 213,050,0575 Winlyn Investment Pte Ltd 66,106,760 Terebene Holdings Inc 66,106,7606 Nu Chan Sing Pte Ltd 85,551,2038 HSBC Holding plc 37,870,113 1 Includes 282,365,150 shares beneficially owned by Wing Sun Development Private Limited, Winlyn Investment Pte Ltd, Winway Investment Pte Ltd and Empire Gate Holdings Limited and 2,595,666 shares beneficially held by Mdm Chow Helen. 2 Includes 282,365,150 shares beneficially owned by Wing Sun Development Private Limited, Winlyn Investment Pte Ltd, Winway Investment Pte Ltd and Empire Gate Holdings Limited and 16,000 shares beneficially held by Mrs Kit Heng Wong-Cheng. 3 Includes 279,156,817 shares beneficially owned by Wing Sun Development Private Limited, Winlyn Investment Pte Ltd and Empire Gate Holdings Limited and 122,500 shares owned by a nominee, DBS Vickers Securities (S) Pte Ltd. 4 Includes 279,156,817 shares beneficially owned by Wing Sun Development Private Limited, Winlyn Investment Pte Ltd and Empire Gate Holdings Limited. 5 Includes 213,050,057 shares beneficially owned by Wing Sun Development Private Limited and Empire Gate Holdings Limited. 6 Shares beneficially owned by Winlyn Investment Pte Ltd in which Terebene Holdings Inc is deemed to have an interest. 7 Includes 85,551,203 shares beneficially owned by Winlyn Investment Pte Ltd and Nu Chan Sing Pte Ltd. 8 Includes 66,106,760 shares beneficially owned by Winlyn Investment Pte Ltd and 2,777,777 shares owned by a nominee, Citibank Nominees Singapore Pte Ltd. PG 144 WT_Fin_29sepFA.indd 144 9/29/06 7:13:55 PM KAREN MILLEN