Fraser and Neave, Limited Enterprise Asia Enterprise Annual Report 2007 Integrity, the pursuit of excellence, and an entrepreneurial spirit – they are the hallmarks of F&N. These core principles are what make F&N the formidable multi-national enterprise that we are today, with an international reach in our core businesses of Food & Beverage, Properties and Publishing & Asia Printing, extending as far as the US, Europe and the Middle East. Yet we remain true to our heritage. As a long term investor rooted in Asia, F&N is as committed to contributing to her development today as we were over a century ago. Our F&B brands are household names in Asia, and our Properties segment is burgeoning both in numbers and scale throughout the region. Asia is primed for greatness, with economies ringing in hearty growth figures, and F&N is well positioned to capitalise on her growth and share in her future, which looks extraordinarily bright. As we commemorate our 125th anniversary in 2008, this milestone will be marked by our renewed commitment towards delivering on our promises of innovation and quality, so as to reinforce the trust and confidence that our customers and shareholders have placed in us. Even as we celebrate the past, we eagerly await the future. By holding fast and constant to our promises, we are confident that we can achieve sustainable and continued success. Fraser and Neave, Limited CONTENTS Group Financial Highlights 2 Chairman’s Statement 10 In Recognition of Dr Michael Fam 14 Board of Directors 16 Corporate Information 20 Corporate Structure 21 Group Financial Overview 22 Operating and Financial Review – Food & Beverage 24 – Properties 32 Annual Report 2007 Enterprise – Publishing & Printing 44 Building and Edifying People 50 Treasury Highlights 52 Enterprise-Wide Risk Management 54 Total Shareholder Returns 56 Corporate Governance Report 57 Design and production by Su Yeang Pte Ltd by Su Yeang Design and production Index to Financial Report 73 Asia Financial Calendar Food & Beverage A household name to many, F&N has established itself as a leader in the Food & Beverage arena in Singapore and Malaysia Vision since the 1930s. Beyond soft drinks, it has successfully To be a world-class multinational enterprise with an Asian base, ventured into beer brewing, glass manufacturing as well as providing superior returns with a focus on the Food & Beverage, dairy products. Through established distribution networks Properties and Publishing & Printing businesses. and joint partnerships, F&N looks to reinforce its foothold in the Food & Beverage industry geographically across the Asia Pacific region, further expand its portfolio of reputable brands and strengthen its research and development capabilities. FINANCIAL CALENDAR 31 January 2008 Properties Annual General Meeting 14 February 2008 Mission Our 3 Core A wholly-owned subsidiary of F&N, Frasers Centrepoint (after close of trading) (tentative) Limited is one of the leading Singapore-based property Announcement of 1st Quarter Results To be a world-class multinational enterprise providing superior companies with a strong foothold in property development, returns to our shareholders, excellent value for our customers and a Businesses property investment, serviced residences and investment 09 May 2008 rewarding career for our employees. funds. Its global footprint covers projects in Australia, China, (after close of trading) (tentative) Japan, Korea, New Zealand, Philippines, Thailand, UAE, UK Announcement of 2nd Quarter Results and Vietnam. Declaration of Interim Dividend 08 August 2008 (after close of trading) (tentative) Announcement of 3rd Quarter Results Publishing & Printing 14 November 2008 Singapore’s largest publishing and printing company, Times (after close of trading) (tentative) Publishing has a well established track record in the publishing, Strategies Announcement of Full Year Results F&N’s role as the parent company and entrepreneurial shareholder printing, direct sales, distribution and retailing of books and Declaration of Final Dividend magazines. It is also a major provider of educational services. of our core businesses will remain unchanged. We will play a It operates a global network of 20 international offices, 40 proactive and pivotal role, on the respective boards and board subsidiaries and four associated companies in key cities in committees, in charting the strategic directions of the individual Southeast Asia, East Asia, Australia, Europe, UK and USA. businesses, identifying and creating new opportunities of growth for our subsidiaries, and leveraging on our foundations, strengths and networks to steer the Group to even greater heights. Revenue PBIT PBIT = Profit before interest, taxation and exceptional items Unless otherwise stated, all figures in this report are quoted in Singapore dollars Revenue Profit before Net Asset Total Assets ($ million) Taxation and Value Employed Exceptional ($ million) ($ million) Items ($ million) 50.0 12,866 13.5 28.6 661 4,738 3.77 45.9 5,221 12.0 25.3 40.8 11.0 11.0 23.3 38.5 3.07 22.8 537 3,802 9,667 10.0 3,488 34.5 20.6 474 2.65 457 8,219 445 2.52 2.46 3,600 3,022 7,459 7,131 2,724 3,097 2,926 2,839 FY 03 FY 04 FY 05 FY 06 FY 07 FY 03 FY 04 FY 05 FY 06 FY 07 FY 03 FY 04 FY 05 FY 06 FY 07 FY 03 FY 04 FY 05 FY 06 FY 07 FY 03 FY 04 FY 05 FY 06 FY 07 FY 03 FY 04 FY 05 FY 06 FY 07 FY 03 FY 04 FY 05 FY 06 FY 07 FY 03 FY 04 FY 05 FY 06 FY 07 Group Financial Highlights 35% 35% 59% 61% 77% 77% 13% 11% 3% 4% 5% 35% 35% 7% 51% 53% 38% 34% 59% 61% 29% 25%77% 77% 13% 11% 1% 1% 1% -11% -9% FY06 FY07 FY06 FY07 FY06 FY07 3% 5% 5% 7% 53% Revenue 51% Profit Before Interest,Food Taxation & Beverage (includesAttributable Glass Packaging) Profit Before Publishing & Printing and Exceptional Items38% (PBIT)34% Exceptional Items29% (APBE)25% FY07: $4,738 million Properties FY06: $3,802 million FY07: $732 million Others FY07: $378 million 1% 1% FY06: $597 million FY06: $295 million-11% -9% FY06 FY07 FY06 FY07 FY06 FY07 Food & & Beverage Beverage (Including (includes Glass Glass Packaging) Packaging) By Business Segment (%) Publishing & &Printing Printing Properties Others 2 Profit before Attributable Net Asset Dividend – Net Taxation and Profit before Value (cents per share) Exceptional Exceptional ($ per share) Items Items (cents per share)* (cents per share)* 50.0 12,866 13.5 28.6 661 4,738 3.77 45.9 5,221 12.0 25.3 40.8 11.0 11.0 23.3 38.5 3.07 22.8 537 3,802 9,667 10.0 3,488 34.5 20.6 474 2.65 457 8,219 445 2.52 2.46 3,600 3,022 7,459 7,131 2,724 3,097 2,926 2,839 FY 03 FY 04 FY 05 FY 06 FY 07 FY 03 FY 04 FY 05 FY 06 FY 07 FY 03 FY 04 FY 05 FY 06 FY 07 FY 03 FY 04 FY 05 FY 06 FY 07 FY 03 FY 04 FY 05 FY 06 FY 07 FY 03 FY 04 FY 05 FY 06 FY 07 FY 03 FY 04 FY 05 FY 06 FY 07 FY 03 FY 04 FY 05 FY 06 FY 07 * Weighted average number of shares Group Financial Highlights 13% 18% 17% 16% 14% 21% 11% 10% 14% 11% 10% 16% 17% 8% 11% 16% 18% 7% 9% 13% 21% 14% 7% 20% 13% 13% 18% 18%17% 17% 16% 161%4% 14% 21% 21% 11% 11%10% 10% 58% 14% 14% 11% 11%10% 10% 46% 47% 16% 16% 39% 37% 41% 17% 17% 8% 8% 11% 11%16% 16% 18% 18% 7% 7% 9% 9% 13% 13% 7% 7% 21% 21%20% 20% 14% 14% FY06 FY07 FY06 FY07 FY06 FY07 58% 58% Revenue Profit Before Interest, Taxation Asset Allocation 47% 47% 41% 41%46% 46% FY07: $4,738 million39% 39%37% 37% and Exceptional Items (PBIT) FY07: $11,698 million FY06: $3,802 million FY07: $732 million FY06: $8,813 million FY06: $597 million FY06 FY06FY07 FY07 FY06 FY06FY07 FY07 FY06 FY06FY07 FY07 SingaporeSingaporeSingapore NorthNortheastNorth East Asia Asia East Asia By Geographical Segment (%) MalaysiaMalaysiaMalaysia OthersOthers Rest ofRestRest Southeast ofof Southeast Southeast Asia Asia Asia Fraser and Neave, Limited & Subsidiary Companies Annual Report 2007 3 Europe United States of America India Sri Lanka Enterprise Asia Embracing New Paradigms Mongolia Korea Japan Armed with a visionary outlook and China clear focus, F&N is poised to seize opportunities in untapped markets, and redefine traditional businesses for optimal Laos Taiwan performance. The adoption of an asset- Thailand Cambodia light property fund model is a classic example of our innovative approach Vietnam towards our core business, ensuring that Malaysia Singapore we continue to deliver high value and returns to our shareholders. Indonesia Papua New Guinea Australia Enterprise Asia Embracing New Paradigms New Zealand Fraser and Neave, Limited & Subsidiary Companies Annual Report 2007 5 Enterprise Asia Rising with Asia With our roots entrenched in Asia, F&N remains vested in the region’s rapid growth. Asia’s burgeoning middle class has generated an escalating demand for quality housing and lifestyle products – an opportunity that F&N is well positioned to capitalise on. Leveraging on our firm foundation, local knowledge and global networks, we are ready to contribute to and share in Asia’s wealth creation. Enterprise Asia Rising with Asia Fraser and Neave, Limited & Subsidiary Companies Annual Report 2007 7 Enterprise Asia Nurturing a Winning Culture An impeccable track record spanning 125 years speaks for the quality upheld by F&N in all of our businesses.