KOON HOLDINGS LIMITED KOON DELIVERING GROWTH THROUGH TRANSFORMATION KOON HOLDINGS LIMITED ANNUAL REPORT 2012 ANNUAL REPORT ANNUAL REPORT 2012 Company Registration No. 200303284M For personal use only ARBN 105 734 709 11 Sixth Lok Yang Road Singapore 628109 Tel: (65) 6261 5788 Fax: (65) 6266 0117 Website: www.koon.com.sg Email: [email protected] GENERAL INFORMATION VISION & MISSION Board of Directors Australia Share Registrar 24 Kranji Way To be an innovative builder and developer Ang Sin Liu and Share Transfer Office Singapore 739434 (Non-Executive Chairman) Boardroom Pty Limited Size: 16,268 sq m creating value for all stakeholders Tan Thiam Hee Level 7, 207 Kent Street Title: Leasehold (Managing Director and Chief Executive Officer) Sydney NSW 2000, Australia Lot 1944 & Lot 1946 Yuen Kai Wing We are dedicated to providing quality (Chief Operating Officer and Executive Director) Mukim Jeram Batu Service excellence Auditors Bt 23 1/2 Pekan Nenas works, innovative solutions and effective We provide services exceeding Oh Keng Lim Deloitte & Touche LLP (Executive Director) 81500 Pekan Nenas customers’ expectations, safe Certified Public Accountants professional services to our customers. and timely delivery, and to adopt Johor, Malaysia Oh Koon Sun 6 Shenton Way #32-00 corporate social responsibility (Executive Director) Size: 48,539 sq m DBS Building Tower 2 Title: Freehold We strive to establish lasting relationships Ang Ah Nui Singapore 068809 with our customers by exceeding their (Non-Executive Director) Partnership – 11 & 15 Sixth Lok Yang Road expectations and gaining their trust Christopher Chong Meng Tak forge partnership (Non-Executive and Independent Director) Partner: Patrick Tan Hak Pheng Singapore 628109 & 628111 based on safety, quality, timely service Size: 16,965 sq m with stakeholders Glenda Mary Sorrell-Saunders (Appointed on June 1, 2008) and anticipation of their needs. We strive to develop lasting (Non-Executive and Independent Director) Title: Leasehold win-win relationship with our Ko Chuan Aun Principal Bankers We respect and treat all employees stakeholders. (Non-Executive and Independent Director) Land and Retail lot fairly and encourage them to be United Overseas Bank Limited Lot PTD 32161 80 Raffles Place #11-00 Mukim Plentong initiative, innovative and productive Innovation Singapore We always look for ways to do things UOB Plaza 1 Johor Bahru, Malaysia Company Secretary and nurture them to achieve cheaper, faster and better. Singapore 048624 Size: 1,448 sq m Ong Beng Hong, LLB (Hons) Title: Freehold their fullest potential. Tan Swee Gek, LLB (Hons) Resource – DBS Bank Limited people development Lot 68319 12 Marina Boulevard We believe everyone has their Australia Mukim Plentong Marina Bay Financial Centre Tower 3 strength and we strive to develop Company Secretary Johor Bahru, Malaysia Singapore 018982 our staff to their fullest potential to Leanne Ralph Size: 42,938 sq m achieve organisation goals. Title: Freehold Standard Chartered Bank Singapore Lot PTD 32151 to 32160 Integrity 8 Marina Boulevard We uphold ourselves with Registered Office Mukim Plentong Marina Bay Financial Centre Tower 1 professionalism, honesty and sincerity 11 Sixth Lok Yang Road Johor Bahru, Malaysia Level 24 CONTENTS and deliver what we promised through Singapore 628109 Size: 1,803.5 sq m adopting best practices. Singapore 018981 Corporate Profi le 01 Title: Freehold Financial Year Review 02 Teamwork and unity Australia Our Share Price 05 Registered Office Land & Building Lot No. G 08 We can achieve more together Kota Point Shopping Complex Message From Chairman & CEO 08 Level 5, 151 Castlereagh Street Office and Yards through mutual respect and trust, Kota Tinggi, Malaysia Infrastructure Construction and Civil Engineering 18 open sharing and communication. Sydney NSW 2000, Australia 26 Kranji Way Size: 36.3 sq m Precast 22 Singapore 739436 Size: 16,316 sq m Title: Freehold Property 24 Singapore Share Registrar Title: Leasehold For personal use only Electric Power Generation 26 and Share Transfer Office Our principal place of business is at Our People 28 Boardroom Corporate & 11 Sixth Lok Yang Road Board of Directors 32 Advisory Services Pte. Ltd. 16 Kranji Way Singapore 628109 Key Management 35 50 Raffles Place #32-01 Singapore 739442 Our telephone number is (65) 62615788 Singapore Land Tower Corporate Structure 38 Size: 5,102 sq m Our facsimile number is (65) 62660117 Singapore 048623 Title: Leasehold Our website address is www.koon.com.sg Corporate Governance Statement 39 i CORPORATE PROFILE Koon Holdings Limited (ASX stock code: KNH, SGX stock code: 5DL) is one of Singapore’s leading infrastructure and civil engineering service providers specialising in reclamation and shore protection works. With a history tracing back to 1975, we have accumulated more than 38 years of experience and expertise in providing comprehensive civil engineering and infrastructure solutions to our customers. Since we embarked on our transformation journey, Koon has grown from a construction company with single focus in civil engineering into an integrated construction player with businesses in civil engineering, precast, property and energy infrastructure. For personal use only KOON HOLDINGS LIMITED 01 ANNUAL REPORT 2012 FINANCIAL YEAR REVIEW Financial Performance (S$ million) FY2012 FY2011 REVENUE INCREASED Due to increase in Construction division project Revenue revenue, increase in Precast division business 212.72 88.06 activities, increase in Property division revenue Cost of sales (192.12) (79.83) and contribution from Tesla. Gross profit 20.60 8.23 GROSS PROFIT INCREASED Due to improved margin from Construction Other income 2.99 14.04 division, higher contribution from Property division and the maiden contribution from Tesla Distribution costs (3.43) (1.20) Administrative expenses (20.99) (13.13) OTHER INCOME DECREASED Due to FY2011 there was the gain on disposal of Finance costs (1.50) (0.24) leasehold property of S$5.6 million and dividend income received from Koon Zinckon of S$6.5 Share of loss of associate (0.08) (0.96) million. In FY2012 there was one-off gain on deemed disposal of previously held interest in (Loss) Profit before income tax (2.41) 6.74 associate, Tesla S$0.6 million. Income tax 2.43 0.80 DISTRIBUTION COSTS INCREASED PROFIT FOR THE YEAR 0.02 7.54 In line with the increase in turnover by Precast division and increase from Property division in line with the increase in its revenue for new property launches. ADMINISTRATIVE EXPENSES INCREASED Largely due to the inclusion of the property, Cashflow (S$ million) electric power generation (Tesla) business and FY2012 FY2011 allowance for doubtful trade receivable. Net cash (used in) from operating FINANCE COSTS INCREASED actitivities (9.34) 3.68 Due to the purchase of plant and equipment by Tesla, Construction and Precast division through Net cash used in investing activities (30.78) (10.65) bank borrowings and hire purchase fi nance arrangement. Net cash from financing activities 38.55 4.07 SHARE OF LOSS OF ASSOCIATE AROSE Net decrease in cash and cash From previously held interest of Tesla before it equivalents (1.57) (2.90) became a subsidiary of the Group. Cash and cash equivalents at INCOME TAX BENEFIT INCREASED January 1 19.62 22.52 Mainly due to recognition of deferred tax assets allowed to carry forward to offset against its Effects of exchange rate changes future assessable income by tax authority and under provision in prior year deferred tax assets. on balance of cash and cash equivalents held in foreign CASHFLOW REDUCED currencies 0.49 – Due to net cash used in operating activities due to increase in trade receivables, contract Cash and cash equivalents at work-in-progress, and inventories for Precast and Construction division in line with increase December 31 18.54 19.62 in activities. And acquisition of Malaysian Add: Pledged fixed deposits 3.89 0.07 properties for S$17million, Sixth Lok Yang road properties, gantry cranes, mould and construction of power plants. This was offset by Total cash at the end of the period 22.43 19.69 For personal use only net cash from fi nancing activities due to loan and trade fi nancing and proceeds from issuance of right shares to shareholders S$18.3 million. KOON HOLDINGS 02 LIMITED ANNUAL REPORT 2012 Financial Position (S$’ million) PLEDGED FIXED DEPOSITS INCREASED FY2012 FY2011 Due to the consolidation of Tesla which was ASSETS previously an associate became a subsidiary in March 2012. Current assets Cash and cash equivalents 18.54 19.62 TRADE RECEIVABLE INCREASED Due to higher sale volume of Precast concrete Pledged fixed deposits 3.89 0.07 components, increase in Construction progress Trade receivables 58.08 35.17 billing and higher commission receivable by the Other receivables 6.76 5.31 Property division. Inventories 14.12 10.55 INVENTORIES INCREASED Contract work-in-progress 20.95 8.43 Due to higher fi nished goods held for awarded Held for trading investments 0.02 0.04 contracts for Precast division and in line with increased in precast activities. Total current assets 122.36 79.19 OTHER RECEIVABLE Non-current assets (NON CURRENT) INCREASED Other receivables 8.38 6.15 Due to increase in shareholder loan receivable of Development properties S$0.7 million from HUGE Development Pte. Ltd. 16.97 – in the joint development of Pasir Ris executive Associates * 8.15 condominium project. Joint venture * – Property, plant and equipment DEVELOPMENT PROPERTIES INCREASED 76.08 25.68 Due to acquisition of Malaysian companies Available for sale investment 0.15 0.15 which own properties located in Johor. Goodwill on consolidation 5.44 1.90 Deferred income tax ASSOCIATES DECREASED 3.19 0.96 Due to the reversal of investment in an associate Total non-current assets 110.21 42.99 when Tesla became a subsidiary of the Group. PROPERTY, PLANT AND Total assets 232.57 122.18 EQUIPMENT INCRASED Due to acquisition of Tesla, purchase of 11&15 LIABILITIES AND EQUITY Sixth Lok Yang road properties and purchase of Current liabilities gantry cranes, moulds, excavators and motor Bank loan and bills payable vehicles.