Building Values Building

PURSUING INTEGRATION BUILDING VALUES GALLANT VENTURE LTD ANNUAL REPORT 2015 Gallant Venture Ltd 991A Alexandra Road #02-06/07 Singapore 119969 Tel: (65) 6389 3535 Fax: (65) 6396 7758 www.gallantventure.com TABLE OF CONTENTS 01 OUR PROFILE 03 OUR PRESENCE 04 OUR CORE BUSINESSES • AUTOMOTIVE • PROPERTY DEVELOPMENT • INDUSTRIAL PARKS • UTILITIES • RESORT OPERATIONS 14 LETTER TO SHAREHOLDERS 16 BUSINESS REVIEW 20 FINANCIAL REVIEW 22 GROUP STRUCTURE 24 FINANCIAL HIGHLIGHTS 25 BOARD OF DIRECTORS 28 KEY EXECUTIVES 29 CORPORATE INFORMATION 30 STATEMENT OF CORPORATE GOVERNANCE 45 DIRECTORS’ STATEMENT 49 INDEPENDENT AUDITOR’S REPORT 50 STATEMENTS OF FINANCIAL POSITION 51 CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME 52 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY 53 CONSOLIDATED STATEMENT OF CASH FLOWS 55 NOTES TO THE FINANCIAL STATEMENTS 159 STATISTICS OF SHAREHOLDINGS 161 NOTICE OF ANNUAL GENERAL MEETING PROXY FORM ANNUAL REPORT 2015 GALLANT VENTURE LTD 01 OUR PROFILE Gallant Venture Ltd is an Indonesia focused investment holding company headquartered in Singapore. We are an integrated automotive group with coverage across Indonesia and master planner for industrial parks and resorts in Batam and Bintan. Since our establishment in the 1990s, we have been an important innovator in four key business segments – utilities, industrial parks, resort operations and property development. Our businesses are well-positioned to leverage on the strategic proximity of Singapore and the strategic alliance between the Singapore and Indonesia governments. Our landmark development projects include the Batamindo Industrial Park, the Bintan Industrial Estate and Bintan Resorts, with more prime developments in the pipeline slated for completion in the near future. 02 GALLANT VENTURE LTD ANNUAL REPORT 2015 SINGAPORE BATAM Batamindo Industrial Park ANNUAL REPORT 2015 GALLANT VENTURE LTD 03 OUR PRESENCE GALLANT VENTURE LTD is headquartered in Singapore which aims to maximise shareholders’ value. Its strategy is to build a diversified Indonesia focused portfolio. Its investments in Batam and Bintan, located just across the Singapore Straits, leverage on strategic alliance between Singapore and Indonesia governments. With well planned co-development of the region, we are pleased to witness the transformation of both islands from a fishing village into an industrial and resorts island having a combined population of around 1.8 million. With vision and perseverance, we have successfully developed Batam and Bintan into an investment and tourist destination offering integrated businesses and services such as industrial parks, utilities, property development, and resort operations. Continuously expanding our product offering, Lagoi Bay Development is our latest integrated project with resorts/hotels, commercial activities and residential plots in Bintan. Progressive completion of the Lagoi Bay project will bring our Bintan Resorts to new heights and significantly enhance the business prospects on the island. On a separate note, the Group has successfully integrated with its newly acquired automotive arm – PT Indomobil Sukses Internasional Tbk (“IMAS”). IMAS is the second largest integrated automotive groups in Indonesia, managing brands such as Nissan, Hino, Volvo, Volkswagen, Renault Trucks and so on. With IMAS, the Group has deepened its roots into Indonesia and diversified the Group’s portfolio from a single location-focused business to a country-focused investment holding company. Bintan Resorts Bintan Industrial Estate BINTAN JAVA 04 GALLANT VENTURE LTD ANNUAL REPORT 2015 AUTOMOTIVE Gallant Venture’s Automotive business includes assembly and distribution of passenger vehicles, vehicle and equipment financing services, distribution of trucks and heavy equipment and supply of parts and vehicle services. IMAS is the second largest integrated automotive business in Indonesia. Its primary business line covers sole agencies, vehicle sales distribution, after-sales service, vehicle ownership financing, spare parts distribution under the “IndoParts” brand, vehicle assembly, automotive parts/components manufacturing and other related supporting services. IMAS manages well-known international brands such as Audi, Foton, Hino, Kalmar, Manitou, Nissan, Renault, Renault Trucks, Suzuki, Volkswagen, Volvo, Volvo Trucks, and Mack Trucks and has well-distributed sales and after-sales branch networks to capture higher sales penetration across Indonesia. 06 GALLANT VENTURE LTD ANNUAL REPORT 2015 PROPERTY DEVELOPMENT Gallant Venture is the master planner and infrastructure provider in Batam and Bintan. It master planned land parcels for industrial, commercial, residential and resort projects on the Group’s land banks in Bintan of approximately 18,000 hectares. Located in Northern Bintan, Lagoi Bay Development is earmarked as an integrated resort project. Measuring approximately 1,300 hectares, its features when completed will include resorts, residential sites, shopping malls, restaurants, entertainment, and sea-sport facilities. Some of the investors of Lagoi Bay include the world’s leading resorts such as Alila Villas, The Sanchaya, Grand Lagoi Swiss-Belhotel, and Treasure Bay. On completion of Phase 1, it will add over 150 new businesses, 10 new hotel properties, condominiums and housing compounds, contributing more than 3,000 keys to Bintan Resorts’ current 1,500 key count. 08 GALLANT VENTURE LTD ANNUAL REPORT 2015 INDUSTRIAL PARKS Gallant Venture owns and manages the Batamindo Industrial Park in Batam and the Bintan Industrial Estate in Bintan. We offer the convenience of one-stop manufacturing environment with ready access to Singapore’s financial, infrastructure and logistics network. Our activities include the development of the industrial parks, sales or lease of prepared industrial land as well as the provision of ready-built factories and dormitory. These parks encompass net lettable area of 550,000 sqm in Batamindo Industrial Park and 100,000 sqm in Bintan Industrial Estate. Our industrial parks are designed with flexible layouts and ease of set-up. Separate areas are broadly designed for offices, productions, as well as loading and unloading of goods. To meet the needs of our investors and tenants, whom may require specifications unique to their operations, the factories may be customised so to achieve operational efficiency and effectiveness. Our Batamindo Industrial Park is the first industrial park in the Asia-Pacific to be certified ISO 9001:2000 and ISO 14001, hallmarks of manufacturing site that is efficient, cost effective and environmentally friendly. 10 GALLANT VENTURE LTD ANNUAL REPORT 2015 UTILITIES Gallant Venture, a private provider of utilities in Batam and Bintan, provides electricity, telecommunications, water and waste management services to its Industrial Parks’ and Resorts’ customers. The Group has invested approximately S$435 million in the construction and development of utilities infrastructure and resources including power generation and distribution facilities, portable water treatment facilities, sewage treatment plants and waste water treatment facilities and landfills. Our facilities include 19 dual-fired generators at Batamindo Industrial Park, 6 generators at Bintan Industrial Estate, and 4 generators at Bintan Resorts. The installed capacities of our generators are 130MW, 20MW, and 24MW respectively. In order to cope with any potential increase in electricity consumption and provide steady power supply to its customers, we cater approximately 30% of our installed capacity as standby reserve. In addition, we maintain a strategic fuel reserve so to ensure continuously and uninterrupted power generation even in the event of disruption in fuel supply. 12 GALLANT VENTURE LTD ANNUAL REPORT 2015 RESORT OPERATIONS Gallant Venture provides overall support facilities and services to resorts located in Bintan. We undertake the overall planning, development, operations and marketing of Bintan Resorts and provide services to the hotels and resorts located within Bintan Resorts that include ferry services and ferry terminal operations, tour operations, property rental, workers’ accommodation, medical support and estate and township maintenance such as road maintenance and drainage as well as operation of a 24-hour crisis centre. Bintan Resorts continue to be a popular tropical resort destination with Singapore residents and International travellers, famed for its pristine beaches and gorgeous scenery. With the opening of new hotels and shopping malls in Lagoi Bay in 2015, we expect an increase in tourist arrivals to Bintan Resorts. 14 GALLANT VENTURE LTD ANNUAL REPORT 2015 LETTER TO SHAREHOLDERS Mr Eugene Park Mr Lim Hock San Chief Executive Officer Non-Executive Chairman Executive Director Independent Director DEAR FELLOW SHAREHOLDERS, 2015 was a difficult year for our company. The most important long term strategy and will continue to implement it in the story must be the continued weakness in the Indonesia face of these down times, albeit, perhaps at a slightly slower economy and its knock on effects to our Automotive pace, until our results are better or we have reduced our debt businesses. Combined with poor land sales this year in Bintan, levels, or both. our numbers are not pleasant to see or oversee. AUTOMOTIVE The Indonesia economy continued its hangover from the Our reported results from Automotive differ from the results commodities crash. In addition, the inability of the government published by our listed subsidiary IMAS primarily

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