tt international 2011 annual report

8/2/2019 TT International 2011 Annual Report

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Corporate Information

9

Board of Directors : Sng Sze Hiang Chairman and CEO

Tong Jia Pi Julia Executive Director

Yap Hock Soon Executive Director

Raymond Koh Bock Swi Independent Director

Ng Leok Cheng Independent Director

Yo Nagasue Independent Director

Audit Committee : Raymond Koh Bock Swi (Chairman)

Ng Leok Cheng

Yo Nagasue

Nominating Committee : Yo Nagasue (Chairman)

Ng Leok Cheng

Raymond Koh Bock Swi

Tong Jia Pi Julia

Remuneration Committee : Ng Leok Cheng (Chairman)

Raymond Koh Bock Swi

Yo Nagasue

Tong Jia Pi Julia

Executive Committee : Sng Sze Hiang (Chairman)

Tong Jia Pi Julia

Yap Hock Soon

Company Secretary : Koh Sock Tin, CPA

Registrars and Transfer Office : M&C Services Private Limited

138 Robinson Road

#17-00 The Corporate Office

Singapore 068906

Registered Office : 47 Sungei Kadut Avenue

Singapore 729670

Tel: 6793 0110Fax: 6668 0797

Auditors : KPMG LLP

Public Accountants and

Certified Public Accountants

16 Raffles Quay

#22-00 Hong Leong Building

Singapore 048581

Partner-in-charge: Adrian Tan

(commencing FYE 31 March 2011)


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Corporate Governance Report

TT International Limited (the Company) is committed to ensure that the highest standards of corporategovernance are practised throughout the Company and its subsidiaries, as a fundamental part of itsresponsibilities to protect and enhance shareholder value.

In compliance with the Listing Manual of the Singapore Exchange Securities Trading Limited (SGX-ST),the following report describes the Companys corporate governance practices with specific referenceto the revised Code of Corporate Governance, which was issued in July 2005 (the 2005 Code). TheBoard will review these practices from time to time to ensure that they address the specific needs ofbusiness demands and circumstances and evolving corporate governance issues.

Each section of the Code is classified into Principles and Guidance Notes. The Company recognises

and supports the Principles and the spirit of the Code. The Guidance Notes will serve to guide theCompany in this aspect and the Company is committed in complying with the substance and spirit ofthe Principles of the Code.

Boards Conduct of its AffairsPrinciple 1: Effective Board to lead and control the Company

The Boards primary role is to protect and enhance long-term shareholder value. It sets the corporatestrategy and directions of the Group and ensures effective management leadership and proper conductof the Groups business by supervising the executive management.

The Board has established a number of committees to assist in the execution of the Boardsresponsibilities. These committees include an Audit Committee (AC), an Executive Committee, aNominating Committee (NC) and a Remuneration Committee (RC).

Matters which require the approval of the Board for decision include corporate strategy, periodic resultsannouncements, audited financial statements, proposal of final dividends and authorisation of majorand interested person transactions. Other matters are delegated by the Board to committees which theBoard monitors.

The Board has adopted a set of internal controls which sets out approval limits for capital expenditures,investments and divestments and bank borrowings at Board level. To ensure efficient and effectiverunning of the business, approval sub-limits are set for the Executive Committee which comprises theexecutive directors of the Company.

The Board conducts regular scheduled meetings. When circumstances require, ad-hoc meetings arearranged or exchange of views are held outside the formal environment of Board meetings. Boardmeetings are conducted in Singapore and tele-conferencing is used when necessary. The Directorsattendance at Board and Board Committee meetings held for the year ended 31 March 2011 aredisclosed below.

Name of DirectorBoard

Meetings

AuditCommitteeMeetings

NominationCommittee

Meeting

RemunerationCommitteeMeetings

Sng Sze Hiang 4

Tong Jia Pi Julia 5 1 2

Raymond Koh Bock Swi 5 5 1 2

Ng Leok Cheng 5 5 1 2

Yo Nagasue 2 2 1 1

Yap Hock Soon 5

No. of meetings held 5 5 1 2


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To ensure that the directors keep pace with regulatory changes that have important bearing on theCompanys or directors disclosure obligations, the directors are briefed on such changes during Boardmeetings or specially-convened sessions by professionals. All directors are also updated regularlyconcerning any changes in the Companys major policies. The non-executive directors are also welcometo request further explanations, briefings or informal discussions on any aspect of the Companysoperations or business issues from the management. The executive directors will make the necessaryarrangements for the briefings, informal discussions or explanations required.

Newly-appointed directors are briefed by management on the business activities of the Group and its

strategic directions. All directors are also provided with relevant information on the Companys policiesand procedures relating to governance issues including disclosure of interests in securities, prohibitionson dealings in the Companys securities and restrictions on disclosure of price sensitive information.

Board Composition and BalancePrinciple 2: Strong and independent element on the Board

The Board consists of three non-executive independent directors and three executive directors. Theindependence of each director is reviewed annually by the NC. The NC adopts the Codes definition ofwhat constitutes an independent director in its review. As a result of the NCs review of the independenceof each director, the NC is of the view that the non-executive directors of the Company are independentdirectors and further, no individual or small group of individuals dominate the Boards decision making

process.

The Board reviews the size of the Board on an annual basis, and considers the present Board size asappropriate for the current scope and nature of the Groups operations.

The NC is of the view that the current Board comprises persons who as a group, provide corecompetencies necessary to meet the Groups targets. The NC is also of the view that the currentboard size of six directors is appropriate, taking into account the nature and scope of the Groupsoperations.

Key information regarding the directors and key management personnel of the Group is set out in thesection Profile of Directors and Key Management Personnel on pages 19 to 20.

Role of Chairman and Chief Executive OfficerPrinciple 3: Clear division of responsibilities at the Board level to ensure a balance ofpower and authority

Mr. Sng Sze Hiang serves as both the Companys Chairman and Chief Executive Officer (CEO). As theindependent directors formed half of the composition of the Board, the Company believes that there isa good balance of power and authority within the Board and no individual or small group can dominatethe Boards decision-making process. In addition, the independent directors have demonstrated theircommitment in their role and are expected to act in good faith and in the interest of the Company. Inaddition, the AC, NC and RC are chaired by independent directors.


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The Chairman and CEO, being the most senior executive in the Company, bears executive responsibilityfor the Companys business, and for the workings of the Board. The Chairman and CEO ensures thatBoard meetings are held when necessary and sets the Board meeting agenda in consultation with thedirectors. The Chairman and CEO reviews Board papers before they are presented to the Board andensures that Board members are provided with accurate, timely and clear information. As a generalrule, Board papers are sent to directors in advance in order for directors to be adequately prepared forthe meeting. Management staff who have prepared the papers, or who can provide additional insightinto the matters to be discussed, are invited to present the paper or attend at the relevant time duringthe Board meeting.

The Chairman and CEO monitors communications and relations between the Company and itsshareholders, between the Board and Management, and between independent and non-independentdirectors, with a view to encourage constructive relations and dialogue amongst them. The Chairmanand CEO works to facilitate the effective contribution of non-executive directors. He is also responsiblefor ensuring compliance with the Companys guidelines on corporate governance.

Board MembershipPrinciple 4: Formal and transparent process for appointment of new Directors

The NC is set up to assist the Board on all Board appointments and re-appointments and to assess theeffectiveness of the Board as a whole and the contribution of each director. The Chairman of the NC,Mr. Yo Nagasue, is an independent director. There are three other members in the NC:

Mr. Raymond Koh Bock Swi, Independent Director Mr. Ng Leok Cheng, Independent Director Ms. Tong Jia Pi Julia, Executive Director

The main terms of reference of the NC are:

(1) make recommendations to the Board on new appointments to the Board;

(2) make recommendations to the Board on the re-nomination of retiring directors standing for re-election at the Companys annual general meeting, having regard to the directors contributionand performance;

(3) determine annually whether or not a director is independent;

(4) review the size and composition of the Board with the objective of achieving a balanced Board interms of the mix of experience and expertise;

(5) formulate and implement a succession plan for directors and senior management;

(6) decide on how the Boards performance may be evaluated and recommend objective performancecriteria to the Board; and

(7) assess the effectiveness of the Board as a whole and the contribution by each individual directorto the effectiveness of the Board.


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Board PerformancePrinciple 5: Formal assessment of the effectiveness of the Board as a whole andperformance of individual directors

The NC is delegated with the responsibilities of assessing the effectiveness of the Board as a wholeand the contribution by each director to the effectiveness of the Board, with inputs from the Chairman &CEO. On an annual basis, the NC will assess each directors contribution to the Board. The assessmentparameters include attendance record at meetings of the Board and Board committees, intensity andquality of participation at meetings and special contributions.

Objective performance criteria used to assess the performance of the Board include both quantitative andqualitative criteria, such as revenue and profit growth, return on equity, the success of the strategic andlong-term objectives set by the Board, and the effectiveness of the Board in monitoring managementsperformance against the goals that have been set by the Board.

The NC is also responsible for determining annually, the independence of directors. In doing so, theNC takes into account the circumstances set forth in Guideline 2.1 of the 2005 Code and any othersalient factors. Following its annual review, the NC has endorsed the following independence status ofthe directors:

Mr. Sng Sze Hiang (Non-independent)Ms. Tong Jia Pi Julia (Non-independent)Mr. Raymond Koh Bock Swi (Independent)Mr. Ng Leok Cheng (Independent)Mr. Yo Nagasue (Independent)Mr. Yap Hock Soon (Non-independent)

Access to InformationPrinciple 6: Board members to have complete, adequate and timely information

To assist the Board in the discharge of its duties, the management provides the Board with periodicaccounts of the Company and the Groups financial performance and position. The directors receiveBoard papers in advance of Board and Committee meetings and have separate and independent accessto the Companys senior management and company secretary. There is a procedure whereby any directormay in the execution of his duties, take independent professional advice.

The company secretary attends all Board meetings and is responsible to ensure that Board proceduresare followed. It is the company secretarys responsibility to ensure that the Company complies with therequirements of the Companies Act. Together with the other management staff, the company secretary isresponsible for compliance with all other rules and regulations which are applicable to the Company.

Remuneration Committee (RC)Procedures for Developing Remuneration PoliciesPrinciple 7: Formal and transparent procedure for fixing the remuneration packages ofdirectors

Level and Mix of RemunerationPrinciple 8: Remuneration of directors should be adequate but not excessive


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Disclosure on RemunerationPrinciple 9: Disclosure on remuneration policy, level and mix of remuneration, and theprocedure for setting remuneration

The RC is chaired by Mr. Ng Leok Cheng, an independent director. There are three other members inthe RC:

Mr. Raymond Koh Bock Swi, Independent Director Mr. Yo Nagasue, Independent Director Ms. Tong Jia Pi Julia, Executive Director

Out of four members of the RC, three of them are non-executive independent directors and they as wellas the board of directors are of the view that Ms. Tong Jia Pi Julia, an executive director should remaina member of the RC as her valued contribution is important to the RCs decision making process.

The main terms of reference of the RC are:

(1) make recommendations to the Board on the framework of remuneration for the directors and seniormanagement of the Company and its subsidiaries;

(2) make recommendations to the Board on specific remuneration packages for each executive directorand CEO (or executive of equivalent rank) of the Company and its subsidiaries;

(3) review all benefits and long-term incentive schemes (including share schemes) and compensationpackages for the directors and senior management of the Company and its subsidiaries;

(4) review service contracts for the directors and senior management of the Company and itssubsidiaries;

(5) administer the employees share option scheme (ESOS) and performance share plan (SharePlan) adopted by the Company; and

(6) review remuneration packages of group employees who are immediate family members (spouse,child, adopted child, step-child, sibling or parent) of any of the directors or substantial shareholdersof the company.

The Groups remuneration policy is to provide competitive remuneration packages at market rates

which reward successful performance and attract, retain and motivate directors and staff. The executivedirectors remuneration packages include a variable bonus element which is performance-related. TheRC determines the remuneration of executive directors based on the performance of the Group and theindividual. Non-executive directors are paid directors fees, subject to approval at the Annual GeneralMeeting. Executive directors do not receive directors fees. The remuneration of the directors of theCompany for the year ended 31 March 2011 is as follows:


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Name BandFees(%)

Salary(%)

Bonus(%)

Others(%)

Sng Sze Hiang S$500,000 to S$1,000,000 55.9 12.7 31.4

Tong Jia Pi Julia S$500,000 to S$1,000,000 52.0 11.8 36.2

Raymond Koh Bock Swi Below S$250,000 100.0

Ng Leok Cheng Below S$250,000 100.0

Yo Nagasue Below S$250,000 100.0

Yap Hock Soon Below S$250,000 90.6 7.2 2.2

The Group adopts a remuneration policy for staff comprising a fixed component and a variablecomponent. The fixed component is in the form of a base salary. The variable component is in the formof a variable bonus that is linked to the performance of the individual companies in the Group and ofthe individual staff. Staff appraisals are conducted at least once a year.

To align the interests of staff with that of the shareholders, the Company has also implemented the TTInternational Employees Share Option Scheme, and Performance Share Plan as another element ofthe variable component of the staff remuneration. The Company will seek the approval of independentshareholders prior to any granting of options and/or shares to the controlling shareholders of theCompany. To date, the Company has not granted any options to directors, staff and the controllingshareholders.

The Company is of the view that disclosure of the remuneration of key management staff who arenot directors, will be detrimental to the Groups interest because of the very competitive nature of theindustry the Group operates in.

Other than the Companys executive director, Mr. Yap Hock Soon who is a brother-in-law of the Chairmanand CEO, there are no other family members that are holding managerial position in the Group.

Accountability and AuditPrinciple 10: The Board is accountable to the shareholders while the management isaccountable to the Board

The Board believes in conducting itself in ways that deliver the maximum sustainable value to the

shareholders. In presenting the financial statements and periodic results announcements to theshareholders, it is the Boards aim to provide a balanced and comprehensive assessment of the Groupsperformance and prospects. The management provides the Board with periodic accounts of the Companyand the Groups performance and position.

Audit CommitteePrinciple 11: Establishment of an Audit Committee (AC) with written terms ofreference

The AC comprises three members, all of whom are independent directors. The chairman of the AC isMr. Raymond Koh Bock Swi and the other members of the AC are:

Mr. Ng Leok Cheng

Mr. Yo Nagasue


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The members of the AC have many years of experience in business management and finance. The Boardconsiders that the members of the AC have sufficient financial management expertise and experienceto discharge the ACs responsibilities.

The main terms of reference of the AC are:

(1) review the periodic results announcements and annual financial statements and submit to theBoard for approval;

(2) recommend to the Board the appointment and re-appointment of auditors and their fees for

shareholders approval;

(3) review with the external auditors the adequacy of internal control systems;

(4) review the audit plans and findings of the external auditors; and

(5) review transactions falling within the scope of the Listing Manual, in particular, matters pertainingto interested person transactions and acquisitions and realisations.

The AC:

has full access to and co-operation from management as well as full discretion to invite any directoror personnel to attend its meetings;

has been given reasonable resources to enable it to complete its functions properly; and

has reviewed findings and evaluation of the system of internal controls with external auditors.

The AC met a total of 5 times during the year ended 31 March 2011. The Executive Directors, CompanySecretary and the external auditors normally attend the meetings.

The AC, having reviewed the volume of non-audit services to the Group by the external auditors,and being satisfied that the nature and extent of such services will not prejudice the independenceand objectivity of the external auditors, has recommended their re-nomination. The AC reviews theindependence of the external auditors annually.

In accordance to Rule 716 of The Singapore Exchange Securities Trading Limited with respect to theappointment of the different external auditors for different subsidiaries, the Audit Committee and theBoard confirmed that they are satisfied that such arrangement would not compromise the standard and

effectiveness of the external audit of the Company.

Internal ControlsPrinciple 12: Sound system of internal controls

The Board is responsible for ascertaining that management maintains a sound system of internal controlsto safeguard the shareholders investments and the Groups assets. The Board believes that the systemof internal controls that has been maintained by management throughout the financial year is adequateto meet the needs of the Group in its current business environment. The system of internal controls isdesigned to manage rather than eliminate the risk of failure to achieve business objectives. It can onlyprovide reasonable and not absolute assurance against material misstatement or loss.


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During the year, the AC, on behalf of the Board, has reviewed the effectiveness of the Groups materialinternal controls. The processes used by the AC to review the effectiveness of the system of internalcontrol and risk management include:

discussions with management on risks ident ified by management;

the audit process;

the review of external audit plans; and

the review of significant issues arising from external audits.

Internal AuditPrinciple 13: Independent internal audit function

Currently, the Group does not have a separate department dedicated to carry out internal audit function.Its Corporate Control Department comprising several staff performs continuous monitoring and reviewto ensure compliance with the Groups policies, internal controls and procedures designed to managerisk and safeguard the business and assets of the Group. The reports arising from such reviews arereviewed by management and appropriate measures are implemented on which the AC is kept apprisedof. The Board is of the opinion that the continuous monitoring and review by the Corporate Control staffis sufficient for the current needs of the Group. The Board will review the need for a separate internalaudit department on an on-going basis, taking into account any changing circumstances.

Communication with ShareholdersPrinciple 14: Regular, effective and fair communication with shareholders

Greater Shareholder ParticipationPrinciple 15: Greater shareholder participation at annual general meetings

The Company believes in regular and timely communication with shareholders and it is the Boards policyto inform all shareholders on all major developments that has an impact on the Group.

The Groups quarterly results are published through the SGXNET, news releases and the Companyswebsite and Shareinvestor.com investor relations website. All information on the Companys newinitiatives are disseminated via SGXNET and/or by a news release. Price sensitive information isfirst publicly released, either before the Company meets with any group of investors or analysts or

simultaneously with such meetings. Results are announced and annual reports are issued within themandatory period and are available on the Companys website, except where extensions have beengranted by the relevant authorities. All shareholders of the Company receive the annual report andnotice of general meetings. The notice is also advertised in newspapers and made available on theSGXNET.

The Board regards the annual general meeting as an opportunity to communicate directly withshareholders and encourages participative dialogue. The members of the Board will attend the annualgeneral meeting and are available to answer questions from shareholders present. Key managementpersonnel and external auditors are also present to assist directors in addressing relevant queries byshareholders.


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Dealings in Securities

The Group has adopted an internal code to provide guidance to its directors and officers in relationto the dealings in the Companys securities. A system of reporting of security dealing to the companysecretary by directors has been established to effectively monitor the dealings of these parties in thesecurities of the Company. In addition, a circular is issued before the start of each period to remindofficers to refrain from dealing in the Companys securities during the period of two weeks prior to therelease of the quarterly, or one month prior to the release of the year-end announcements of the Groupsfinancial results.

Material ContractsSave for the service agreements between the Executive Directors and the Company, there were nomaterial contracts entered into by the Company and its subsidiaries involving the interest of the ChiefExecutive Officer, directors or controlling shareholders of the Company for the financial year ended 31March 2011.

Interested Person Transactions

There were no interested person transactions with a value exceeding S$100,000 entered into by theCompany and its subsidiaries for the financial year ended 31 March 2011.

Risk Management

The Group is continually reviewing and improving the business and operational activities to takeinto account the risk management perspective. This includes reviewing management and manpowerresources, updating work flows, process and procedures to meet the current and future market conditions.The Group has also considered the various financial risk, details of which are found on pages 81 to 84of the Annual Report.


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Profile of Directors and Key Management Personnel

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DIRECTORS

SNG SZE HIANGChairman and CEO

Mr Sng is the Chairman, CEO and Founder of the Company. He is the Chairman of the ExecutiveCommittee and is responsible for the formulation of business policies, setting the directions andstrategies of the Group as well as managing our overall business. He has over 26 years of experiencein trading electrical and electronics products with emerging markets.

Mr Sng holds a Certificate in Marine Communications from the Singapore Polytechnic.

TONG JIA PI JULIAExecutive Director

Ms Tong is an Executive Director and co-founder of the Company. Ms Tong is a member of the Executive,Nominating and Remuneration Committees and has over 27 years trading experience in a wide range ofconsumer products in emerging markets. She is responsible for the administrative functions of the Groupand in ensuring the efficiency of the Groups operations as well as corporate planning and implementationof business strategies. In addition, she is also involved in new business development.

Ms Tong holds a Bachelor of Arts from the Institute of Education in Yangon, Myanmar.

YAP HOCK SOONExecutive Director

Mr Yap was appointed as an Executive Director in December 2002 and is a member of the ExecutiveCommittee. He has over 20 years of experience in logistics management in the manufacturing andtrading industry. He has been with the Group for more than 15 years. Prior to joining the Company, hewas the Regional Project Manager for MHE Demag.

Mr Yap holds a Masters of Science (Engineering) from University of Newcastle upon Tyne, UnitedKingdom.


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Profile of Directors and Key Management Personnel

INDEPENDENT DIRECTORS

KOH BOCK SWI, RAYMONDIndependent Director

Mr Koh was appointed as an Independent Director in May 2000. He is the Chairman of the AuditCommittee and is a member of both the Nominating and Remuneration Committees. Mr Koh has over30 years of experience in banking and has retired in March 2008.

Mr Koh graduated from the University of Singapore with a Bachelor of Business Administration.

NG LEOK CHENGIndependent Director

Mr Ng was appointed as an Independent Director in May 2000. He is the Chairman of the RemunerationCommittee and is a member of the Audit and Nominating Committees. Mr Ng is currently the ManagingDirector of Datapulse Technology Limited.

Mr Ng holds an Honours degree in Business Administration from National University of Singapore.

YO NAGASUEIndependent Director

Mr Nagasue was appointed as an Independent Director in October 2002. He is the Chairman of theNominating Committee and is a member of the Audit and Remuneration Committees. Mr Nagasue servedwith TDK Japan and TDK Australia for more than 20 years and his last appointment held was ManagingDirector in TDK (Australia) Pty Ltd.

Mr Nagasue holds a Bachelor of Economics from Gakushuin University, Tokyo, Japan.

KEY MANAGEMENT PERSONNEL

GOH CHONG THENGFinance Director/CFO

Mr Goh was appointed as Finance Director/Chief Financial Officer of the Company in June 2010 and isa member of the Executive Committee. He is responsible for the accounts, finance and control functionswith special focus on fund raising exercises for the Group. He has more than 30 years of experience asa senior corporate/investment banker for some of the large international banks operating in Singaporeand the region. In the last four years prior to joining the Company, he had CEO responsibility for thebusiness and support functions of the bank in Singapore and SEA regional offices.

Mr Goh holds a Masters of Business Administration from McGill University in Montreal, Canada.


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Directors Report

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We are pleased to submit this annual report to the members of the Company together with the auditedfinancial statements for the financial year ended 31 March 2011.

Directors

The directors in office at the date of this report are as follows:

Sng Sze HiangTong Jia Pi Julia

Raymond Koh Bock SwiNg Leok ChengYo NagasueYap Hock Soon

Directors interests

According to the register kept by the Company for the purposes of Section 164 of the SingaporeCompanies Act, Chapter 50 (the Act), particulars of interests of directors who held office at the endof the financial year in shares in the Company and in related corporations, other than wholly ownedsubsidiaries, are as follows:

Shareholdings in which the directorhas a direct interest

At beginningof the year

At endof the year

As at21 April 2011

Name of director and corporationin which interests are held

The Company

Ordinary shares

Sng Sze Hiang^@ 255,963,583 255,963,583 255,963,583

Tong Jia Pi Julia^ 100,454,245 100,454,245 100,454,245

Raymond Koh Bock Swi 195,000 195,000 195,000Ng Leok Cheng 195,000 195,000 195,000

Yap Hock Soon*> 1,628,000 1,628,000 1,628,000

@ Include shares held in the name ofSng Sze Hiangs nominee 131,000,000 131,000,000 131,000,000

* Include shares held in the name ofYap Hock Soons wife 688,000 688,000 688,000

^ Tong Jia Pi Julia is the wife ofSng Sze Hiang.

> Yap Hock Soon is the brother-in-law of SngSze Hiang.


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Directors Report

By virtue of Section 7 of the Companies Act, Chapter 50, Sng Sze Hiang and Tong Jia Pi Julia aredeemed to have interests in those subsidiaries of the Company, which are wholly-owned by the Companyor the Group, at the beginning and at the end of the financial year and in the following subsidiaries whichare not wholly-owned by the Group:

Shareholdings in which the directoris deemed to have an interest


At endof the year

Related Corporations

T.T. International LimitedOrdinary shares of MMK1,000 each

Sng Sze Hiang 533 533

Tong Jia Pi Julia 533 533

T.T. Electrical Electronics Corporation (M) Sdn. Bhd.

Ordinary shares of RM1 each

Sng Sze Hiang 3,000,000 3,000,000

Tong Jia Pi Julia 3,000,000 3,000,000

Akira Middle East L.L.C

Ordinary shares of AED1,000 each



TTC Sales and Marketing (SA) (Proprietary) Limited

Ordinary shares of ZAR1 each

Sng Sze Hiang 420,292 420,292

Tong Jia Pi Julia 420,292 420,292

ITL (Middle East) L.L.C

Ordinary shares of AED1,000 each



AIMS Trading (Private) Limited

Ordinary shares of LKR10 each

Sng Sze Hiang 1,320,000 1,320,000

Tong Jia Pi Julia 1,320,000 1,320,000

Akira Electric Corporation Holdings Ltd

Ordinary shares of BAHT100 each



Athletic AGD Sp. z.o.o.

Ordinary shares of PLN500 each

Sng Sze Hiang 1,020 1,020



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Directors Report

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Shareholdings in which the directoris deemed to have an interest


At endof the year

Related Corporations

Athletic International S.A.


Sng Sze Hiang 5,728,422 5,728,422

Tong Jia Pi Julia 5,728,422 5,728,422

A & D Sp. z.o.o.




A-Beyond Tex Sp. z.o.o.




Brahma (Polska) Sp. z.o.o.Ordinary shares of PLN500 each



Athletic Manufacturing Sp. z.o.o.




TTA Holdings Ltd

Ordinary shares

Sng Sze Hiang 117,500,000 117,500,000

Tong Jia Pi Julia 117,500,000 117,500,000

TEAC Australia Pty Ltd

Ordinary shares

Sng Sze Hiang 3,000,000 3,000,000

Tong Jia Pi Julia 3,000,000 3,000,000

Akira Iberia

Ordinary shares

Sng Sze Hiang 1,020

Tong Jia Pi Julia 1,020


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Directors Report

Except as disclosed in this report, no director who held office at the end of the financial year had interests

in shares, debentures, warrants or share options of the Company, or of related corporations, either at

the beginning or at the end of the f inancial year.

Except as disclosed under 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 arrangement whose objects are, or one of

whose objects is, to enable the directors of the Company to acquire benefits by means of the acquisition

of shares in or debentures of the Company or any other body corporate.

Except for salaries, bonuses, fees and benefits that are disclosed in note 28 to the financial statements,

since the end of the last 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.

Share options

The TT International Employees Share Option Scheme (the Option Scheme) and the TT International

Performance Share Plan (the Share Plan) of the Company were approved and adopted by its members

at an Extraordinary General Meeting held on 8 August 2002. The Option Scheme and Share Plan are

administered by the Remuneration Committee, comprising four directors, Ng Leok Cheng (Chairman),Raymond Koh Bock Swi, Yo Nagasue and Tong Jia Pi Julia.

Other information regarding the Option Scheme and the Share Plan are set out below:

(i) Option Scheme

The Remuneration Committee shall have the absolute discretion to grant the options with a

subscription price at no discount, or at a discount of up to a maximum of 20% of the market

price, being the average of the last dealt price of the Companys shares on the Singapore

Exchange Trading Limited (SGX-ST) on the five market days immediately preceding the

date of grant of such options.

Subject to the rules and such other conditions as may be imposed by the Remuneration

Committee from time to time, the options granted are exercisable in whole or in part at any

time:

(a) after the first anniversary of the date of grant of the option if the subscription price of

the option granted was at market price; and

(b) after the second anniversary of the date of grant of the option if the subscription price

of the option granted was at a discount to the market price,


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Directors Report

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provided always that an option that is granted to an eligible employee shall be exercised

before the tenth anniversary of the date of grant of the option and an option which is granted

to a non-executive director shall be exercised before the fifth anniversary of the date of

grant of that option.

The options granted by the Company do not entitle the holders of the options, by virtue of

such holding, to any rights to participate in any share issue of any other company.

(ii) Share Plan

The Remuneration Committee may award an eligible participant with fully paid shares in the

Company, their equivalent cash value or combinations thereof, free of charge, upon the participant

achieving prescribed performance target(s). There are no vesting periods beyond the performance

achievement periods.

The total number of shares issued and issuable in respect of all options and awards pursuant to the

Option Scheme and Share Plan shall not exceed 15% of the total issued share capital of the Company

on the day preceding the relevant date of the option or award.

Since the commencement of the Option Scheme and Share Plan:

(i) no options have been granted pursuant to the Option Scheme to any person to take up unissued

shares in the Company or its subsidiaries;

(ii) no shares in the Company have been awarded to any person pursuant to the Share Plan; and

(iii) no shares have been issued by virtue of any exercise of option to take up unissued shares of the

Company or its subsidiaries.

As at the end of the financial year, there were no unissued shares of the Company and its subsidiaries

under option.

Audit committee

The members of the Audit Committee during the financial year and at the date of this report are:

Raymond Koh Bock Swi (Chairman)

Ng Leok Cheng

Yo Nagasue

The Audit Committee has held four meetings since the last directors report. Specific functions of

the Audit Committee include reviewing the scope of work of the external auditors, and receiving and

considering the auditors reports. The Audit Committee also recommends the appointment of the externalauditors and reviews the level of audit fees.


27/98

26

Directors Report

In addition, the Audit Committee has, in accordance with Chapter 9 of the Singapore Exchange Listing

Manual, reviewed the requirements of approval and disclosure of interested person transactions,

reviewed the internal procedures set up by the Company to identify and report and where necessary,

seek approval for interested person transactions and reviewed interested person transactions.

The Audit Committee is satisfied with the independence and objectivity of the external auditors and has

recommended to the Board of Directors that the auditors, KPMG LLP, be nominated for re-appointment

as auditors at the forthcoming Annual General Meeting of the Company.

Auditors

The auditors, KPMG LLP, have indicated their willingness to accept re-appointment.

On behalf of the Board of Directors

Sng Sze Hiang

Director

Tong Jia Pi Julia

Director

1 September 2011


28/98

Statement by Directors

27

The Company is being restructured under a Scheme of Arrangement (the Scheme) sanctioned by theCourt of Appeal in Singapore on 13 October 2010, with an effective date of 19 April 2010. At the date ofthis statement, the process of ascertaining the amounts of the claims of certain related party creditors isstill on-going. In addition, there are claims that are currently contingent in nature, for which the amountshave not yet been determined.

The ability of the Group and the Company to continue in operation in the foreseeable future and tomeet their financial obligations as and when they fall due depend on the matters set out in note 2 tothe financial statements.

The directors consider that different possibilities regarding the future exist and that the differing outcomescan cause the financial position as at 31 March 2011, together with profit or loss, other comprehensiveincome and changes in equity for the year then ended, to be very different from what is currentlypresented in the financial statements. The directors also consider that there are no practical meansavailable to resolve such difficulties, due to the effect of such differing outcomes, in the preparationof these financial statements. Accordingly, the directors are of the opinion that, notwithstanding thesedifficulties, the preparation of these financial statements on a going concern basis provides sufficientinformation to serve the interests of shareholders and other stakeholders who may use these financialstatements. Further details on the basis of preparation of these financial statements are set out in note2 to the financial statements.

In our opinion:

(a) having regard to and taking into consideration the matters disclosed in the financial statements,

in particular note 2 to the financial statements, the financial statements set out on pages 30 to88 are drawn up so as to give a true and fair view of the state of affairs of the Group and of theCompany as at 31 March 2011 and the results, changes in equity and cash flows of the Group forthe year ended on that date in accordance with the provisions of the Singapore Companies Act,Chapter 50 and Singapore Financial Reporting Standards; and

(b) at the date of this statement, subject to the matters referred to in note 2 to the financial statements,there are reasonable grounds to believe that the Company will be able to pay its debts as andwhen they fall due.

The Board of Directors has, on the date of this statement, authorised these financial statements forissue.

On behalf of the Board of Directors

Sng Sze HiangDirector

Tong Jia Pi JuliaDirector

1 September 2011


29/98

28

Independent Auditors ReportMembers of the Company TT International Limited

Report on the financial statements

We were engaged to audit the accompanying financial statements of TT International Limited (the

Company) and its subsidiaries (collectively, the Group), which comprise the balance sheets of the

Group and the Company as at 31 March 2011, the income statement, statement of comprehensive

income, statement of changes in equity and statement of cash flows of the Group for the year then

ended, and a summary of significant accounting policies and other explanatory information, as set out

on pages 30 to 88.

Managements responsibility for the financial statements

Management is responsible for the preparation of financial statements that give a true and fair view in

accordance with the provisions of the Singapore Companies Act, Chapter 50 (the Act) and Singapore

Financial Reporting Standards, and for devising and maintaining a system of internal accounting controls

sufficient to provide a reasonable assurance that assets are safeguarded against loss from unauthorised

use or disposition; and transactions are properly authorised and that they are recorded as necessary

to permit the preparation of true and fair profit and loss accounts and balance sheets and to maintain

accountability of assets.

Auditors responsibili ty

Our responsibility is to express an opinion on these financial statements based on conducting the audit

in accordance with Singapore Standards on Auditing. Because of the matters described in the Basis

for disclaimer of opinion paragraphs, however, we were not able to obtain sufficient appropriate audit

evidence to provide a basis for an audit opinion.

Basis for disclaimer of opinion

The Group incurred a net loss of $37,138,000 for the year ended 31 March 2011. In addition, as

at 31 March 2011, the Group and the Company had negative shareholders equity of $96,936,000

and $121,955,000, respectively, and the Groups current liabilities exceeded its current assets by

$13,967,000. These factors, together with the matters described below, indicate the existence of a

material uncertainty which may cast significant doubt about the Groups and the Companys ability to

continue as a going concern.

The Company is being restructured under a Scheme of Arrangement (the Scheme) sanctioned on 13

October 2010 by the Court of Appeal in Singapore. The Groups and the Companys ability to continue

as a going concern is dependent on the success of the restructuring, the profitability of future operations

and the ability to secure financing as and when required.

The status of implementation of the Scheme has also resulted in significant uncertainty in estimating:

(i) the amounts at which assets and liabilities should be recorded as at 31 March 2011; and (ii) the

accuracy and completeness of the prior year adjustments which the directors considered necessary for

presentation in these financial statements.


30/98

29

Independent Auditors ReportMembers of the Company TT International Limited

In addition, due to the on-going restructuring of the Company, the directors assessments of the valuation

of the Companys investments in subsidiaries and the recoverability of amounts due from its subsidiaries

are subject to significant uncertainty.

The above and other matters are discussed in greater detail in note 2 (and other notes) to these financial

statements.

Disclaimer of opinion

Because of the significance of the matters described in the Basis for disclaimer of opinion paragraphs,

we have not been able to obtain sufficient appropriate audit evidence to provide a basis for an audit

opinion. Accordingly, we do not express an opinion on the consolidated financial statements of the Group

or the financial position of the Company.

Report on other legal and regulatory requirements

In our opinion, except for the effect of the matters described in the Basis for disclaimer of opinion

paragraphs, the accounting and other records required by the Act to be kept by the Company and by

those subsidiaries incorporated in Singapore of which we are the auditors have been properly kept in

accordance with the provisions of the Act.

KPMG LLP

Public Accountants and

Certified Public Accountants

Singapore

1 September 2011


31/98

30

Balance SheetsAs at 31 March 2011

Group Company

Note 2011 2010 2011 2010

$000 $000 $000 $000

(Restated) (Restated)

Non-current assets

Property, plant and equipment 5 124,148 123,399 88,432 87,239

Investment properties 6 7,979 6,777

Subsidiaries 7 17,852 17,752

Intangible assets 8 14,735 15,652

Other investments 9 2,492 2,957 Deferred tax assets 10 3,725 4,097

153,079 152,882 106,284 104,991

Current assets

Inventories 11 51,836 74,411 19 19

Trade and other receivables 12 89,296 120,403 104,366 136,019

Cash and cash equivalents 13 15,912 11,139 244 358

157,044 205,953 104,629 136,396

Total assets 310,123 358,835 210,913 241,387

Equity

Share capital 14 140,563 140,563 140,563 140,563

Reserves 15 (237,499) (210,500) (262,518) (240,992)

Equity attributable to owners of the Company (96,936) (69,937) (121,955) (100,429)

Non-controlling interests 691 3,690

Total equity (96,245) (66,247) (121,955) (100,429)

Non-current liabilities

Financial liabilities 16 235,202 3,103 251,895 301

Other payables 739

Deferred tax liabilities 10 155 174

235,357 4,016 251,895 301

Current liabilities

Trade and other payables 18 134,517 109,358 78,591 68,716

Financial liabilities 16 30,075 305,939 209 270,481

Provisions 17 3,668 3,133 2,142 2,142

Current tax payable 2,751 2,636 31 176

171,011 421,066 80,973 341,515

Total liabilities 406,368 425,082 332,868 341,816

Total equity and liabilities 310,123 358,835 210,913 241,387

The accompanying notes form an integral part of these financial statements.


32/98

31

Consolidated Income StatementYear ended 31 March 2011


Note 2011 2010

$000 $000

(Restated)

Revenue 426,452 539,860

Other operating income 295 43,031

426,747 582,891

Changes in inventories of finished goods (22,575) (9,090)

Purchase of goods (328,952) (420,984)

Staff costs (33,446) (39,752)

Depreciation 5 (6,023) (6,955)

Other operating expenses (139,691) (96,674)

(Loss)/Profit from operations (103,940) 9,436

Finance income 75,862 1,660

Finance expense (9,232) (7,599)

Net finance income/(expense) 20 66,630 (5,939)

(Loss)/Profit before income tax (37,310) 3,497Income tax credit/(expense) 21 172 (4,217)

Loss for the year 19 (37,138) (720)

Attributable to:

Owners of the Company (33,963) 450

Non-controlling interests (3,175) (1,170)

Loss for the year (37,138) (720)

2011 2010

Cents CentsEarnings per share

Basic and diluted 22 (4.16) 0.06


33/98

32

Consolidated Statement of Comprehensive IncomeYear ended 31 March 2011


Note 2011 2010

$000 $000

(Restated)

Loss for the year (37,138) (720)

Changes in fair value of available-for-sale investments 665 1,382

Reclassification of impairment loss on available-for-sale

investments to income statement 4,556

Translation differences relating to financial statements of

foreign subsidiaries 2,573 (9,478)

Net surplus on revaluation of property, plant and equipment 5 4,201 3,550

Income tax on other comprehensive income

Other comprehensive income for the year,

net of income tax 7,439 10

Total comprehensive income for the year (29,699) (710)

Total comprehensive income attributable to:

Owners of the Company (26,999) (257)

Non-controlling interests (2,700) (453)

Total comprehensive income for the year (29,699) (710)


34/98

33

Consolidated Statement of Changes in EquityYear ended 31 March 2011

Note

Share

capital

Capital

reserves

Fairva

lue

and

revalua

tion

reserv

es

Foreign

currency

translation

reserve

Accumulated

profits/

(losses)

Total

attributable

toequity

holdersof

theCompany

Non-

controlling

interests

Total

equity

Group

$000

$000

$000

$000

$000

$000

$000

$000

At1April2009

140

,563

54

18,526

(17

,250)

(210

,648)

(68

,755)

4,3

16

(64

,439)

Totalcomprehensiveincomefortheyear

Lossfo

rtheyear,asprev

ious

lyreporte

d

(4,1

20)

(4,1

20)

(1,1

70)

(5,2

90)

Priory

eara

djus

tmen

ts

29

4,5

70

4,5

70

4,5

70

Pro

fit/(

Loss

)for

theyear,asres

tated

450

450

(1,1

70)

(720)

Other

comprehensiveincome

Changes

infairva

lueo

fava

ila

blefor-sa

le

inves

tmen

ts

1,3

82

1,3

82

1,3

82

Reclas

sificationofimpairmentlosson

avai

lable-for-sa

leinves

tmen

tsto

incomes

tatemen

t

4,5

56

4,5

56

4,5

56

Translationdifferencesrelatingtofinancial

state

men

tso

ffore

ignsu

bs

idiaries

(10

,195)

(10

,195)

717

(9,4

78)

Netsurplusonrevaluationofproperty,

plan

tan

dequ

ipmen

t

3,5

50

3,5

50

3,5

50

To

talo

thercompre

hens

ive

income

9,4

88

(10

,195)

(707)

717

10

Totalcomprehensiveincomefortheyear,

asrestated

9,4

88

(10

,195)

450

(257)

(453)

(710)

Rea

lisa

tiono

ffairva

luereservesupon

liquidationofsubsidiaries

(2,6

78)

(925)

2,6

78

(925)

(925)

Dispos

alofproperty,plantandequipment

(3,6

49)

3,6

49

Dispos

alofinvestmentproperties

(2,6

18)

2,6

18

Transactionswithowners,recorded

directlyinequity

Distrib

utionstoowners

Dividendpaymentstonon-controlling

inter

estofsubsidiaries

(173)

(173)

Totaldistributionstoowners

(173)

(173)

At31M

arch2010

,asrestated

140

,563

54

19

,069

(28

,370)

(201

,253)

(69

,937)

3,6

90

(66

,247)

Theac

companyingnotesforma

nintegral

partofthesefinancialstatements.


35/98

34

Consolidated Statement of Changes in EquityYear ended 31 March 2011

Note

Share

capital

Capital

reserves

Fairva

lue

and

revalua

tion

reserv

es

Foreign

currency

translation

reserve

Accumulated

profits/

(losses)

Total

attributable

toequity

holdersof

theCompany

Non-

controlling

interests

Total

equity

Group

$000

$000

$000

$000

$000

$000

$000

$000

At1Ap

ril2010

,asprev

ious

lys

tated

140

,563

54

19,069

(28

,370)

(205

,823)

(74

,507)

3,6

90

(70

,817)

Priory

eara

djus

tmen

ts

29

4,5

70

4,5

70

4,5

70

At1Apri

l2010

,asres

tated

140

,563

54

19,069

(28

,370)

(201

,253)

(69

,937)

3,6

90

(66

,247)


Lossfo

rtheyear

(33

,963)

(33

,963)

(3,1

75)

(37

,138)

Other

comprehensiveincome

Changes

infairva

lueo

fava

ila

ble-for-sa

le

investments

665

665

665

Transla

tion

differencesre

lating

tofinanc

ial

state

mentsofforeignsubsidiaries

2,0

98

2,0

98

475

2,5

73

Netsurplusonrevaluationofproperty,

plan

tan

dequ

ipmen

t

4,201

4,2

01

4,2

01

To

talo

thercompre

hens

ive

income

4,866

2,0

98

6,9

64

475

7,4

39


4,866

2,0

98

(33

,963)

(26

,999)

(2,7

00)

(29

,699)

Transactionswithowners,recorded

directlyinequity

Distrib

utionstoowners

Dividendpaymentstonon-controlling

inter

es

to

fsu

bs

idiaries

(299)

(299)

Totaldistributionstoowners

(299)

(299)

At31M

arch2011

140

,563

54

23,935

(26

,272)

(235

,216)

(96

,936)

691

(96

,245)

Theac

companyingnotesforma

nintegral

partofthesefinancialstatements.


36/98

35

Consolidated Statement of Cash FlowsYear ended 31 March 2011

Note 2011 2010$000 $000

(Restated)Operating activitiesLoss for the year (37,138) (720)

Adjustments for:(Gain)/Loss on disposal of property, plant and equipment (23) 3,282Loss on disposal of investment properties 636Gain on disposal of available-for-sale investments (1,204) Impairment loss on goodwill 861 Impairment loss on available-for-sale investments 4,556Loss on liquidation of subsidiaries 2,964

Changes in fair value of investment properties (1,430) (47)Depreciation and amortisation 6,079 7,013

Addi tional provision for potentia l l iabili ties arising from disputedcontingent claims as defined under the Scheme of Arrangementand other Scheme-related expenses 63,000

Finance income (75,862) (1,660)Finance expense 9,232 7,599Income tax (credit)/expense (172) 4,217Unrealised exchange loss/(gain) 7,291 (6,911)

Operating (loss)/profit before changes in working capital (29,366) 20,929Changes in working capital:Inventories 18,410 (448)Trade and other receivables 25,049 5,693Trade and other payables 7,424 (2,583)Bills payable and trust receipts 4,618 (24,376)Provisions 535 610Deposits from customers 2,369 (1,268)

Cash generated from operations 29,039 (1,443)Income tax refunded/(paid) 166 (1,156)Interest income received 687 1,660Interest paid on bills payable and trust receipts (5,361) (1,107)

Net cash from/(used in) operating activities 24,531 (2,046)

Investing activitiesPurchase of property, plant and equipment and intangible assets (3,843) (9,333)Net proceeds from disposal of property, plant and equipment 992 2,617Net proceeds from disposal of investment properties 8,735Proceeds from disposal of available-for-sale investments 2,334 Proceeds from liquidation of subsidiaries, net of cash 24 4,501

Net cash (used in)/from investing activities (517) 6,520

Financing activities

Dividend payments to non-controlling interests of subsidiaries (299) (173)Interest paid on borrowings (5,728) (2,071)Proceeds from interest-bearing borrowings 535 1,399Proceeds from finance leases 126 98Repayment of debts under the Reverse Dutch Auction of the Scheme

of Arrangement (14,750) Repayment of interest-bearing borrowings (3,277) (16,431)Payment of obligations under finance leases (372) (695)

Net cash used in financing activities (23,765) (17,873)

Net increase/(decrease) in cash and cash equivalents 249 (13,399)Cash and cash equivalents at 1 April (15,666) (3,979)Effect of foreign exchange rate changes on balances held in foreign

currencies (423) 1,712Adjustments for bank overdrafts and other liabil ities admitted as

Scheme Creditors 23,962

Cash and cash equivalents at 31 March 13 8,122 (15,666)



37/98

36

Notes to the Financial Statements

These notes form an integral part of the financial statements.

The financial statements were authorised for issue by the Board of Directors on 1 September 2011.

1 DOMICILE AND ACTIVITIES

TT International Limited (the Company) is incorporated in Singapore and has its registered officeat 47 Sungei Kadut Avenue, Singapore 729670.

The principal activities of the Company are those relating to trading and distribution of a widerange of electrical and electronics products, and investment holding. The principal activities of thesubsidiaries are set out in note 7 to the financial statements.

The consolidated financial statements relate to the Company and its subsidiaries (collectivelyreferred to as the Group).

2 SCHEME OF ARRANGEMENT AND GOING CONCERN

On 21 January 2009, the Company filed an application with the High Court to propose a schemeof arrangement (the Scheme) between the Company and its creditors (the Scheme Creditors)to restructure its liabilities. The Scheme was eventually sanctioned by the Court of Appeal on 13October 2010, with an effective date of 19 April 2010 (the Scheme Effective Date).

On 1 June 2010, the Company announced the results of its first Reverse Dutch Auction (RDA)pursuant to the Scheme. The Company paid $14,750,000 and irrevocably, unconditionally andpermanently extinguished $89,925,000 of debts under the RDA.

The remaining debts under the Scheme, amounting to $251,794,000, which include the claims ofcertain related party creditors of $22,054,000, are presented as sustainable and non-sustainabledebts at their carrying amounts (see notes 16 and 25) for the purpose of these financial statements,without discounting the amounts to their estimated present values or fair values. At the date ofthese financial statements, the process of ascertaining the amounts of the claims of certain relatedparty creditors is still on-going. In addition, there are claims that are currently contingent in nature,

for which the amounts have not yet been determined. Under the terms of the Scheme, the non-sustainable debts will be converted into Redeemable Convertible Bonds (RCBs).

Based on these financial statements, the Group incurred a net loss of $37,138,000 for the yearended 31 March 2011 and, as at 31 March 2011, the Group and the Company had negativeshareholders equity of $96,936,000 and $121,955,000, respectively. The Groups current liabilitiesexceeded its current assets by $13,967,000.

The ability of the Group and the Company to continue in operation in the foreseeable future andto meet their financial obligations as and when they fall due is, therefore, dependent on:

(i) the successful implementation of the Scheme;

(ii) the profitability of future operations of the Company and its subsidiaries;


38/98

37


2 SCHEME OF ARRANGEMENT AND GOING CONCERN (contd)

(iii) the controlling shareholders and key management personnel of the Company remainingsubstantially unchanged;

(iv) the ability to secure financing as and when required; and

(v) the continuing support of bank and other creditors, suppliers and other parties.

The financial statements of the Group and the Company have been prepared on a going concern

basis, which assumes that the Group and the Company will continue in operation at least for aperiod of twelve months from the reporting date.

The financial statements do not include any adjustments relating to the recoverability andclassification of recorded asset amounts or to the amounts and classification of liabilities that maybe necessary if the Group and the Company are unable to continue in operation in the foreseeablefuture.

Should the going concern assumption be inappropriate, adjustments would have to be made toreflect the situation that assets may need to be realised other than in the normal course of businessand at amounts which could differ significantly from the amounts at which they are recorded in thebalance sheet. In addition, the Group and the Company may have to provide for further liabilitiesthat might arise, and to reclassify non-current assets and non-current liabilities as current assetsand current liabilities, respectively.

The status of implementation of the Scheme has also resulted in significant uncertainty inestimating: (i) the amounts at which assets and liabilities should be recorded as at 31 March2011; and (ii) the accuracy and completeness of the prior year adjustments which the directorsconsidered necessary for presentation in these financial statements (see note 29).

The amount of assets and liabilities currently recorded in the accounting records of the Companyand its subsidiaries, including amounts recoverable from or payable to group companies, are basedon claims and payables which have arisen in the ordinary course of business.

Accordingly, the amounts at which assets are currently recorded (including the carrying amountsof property, plant and equipment, intangible assets, investments in group companies and amountsrecoverable from external parties and group companies) assume that the Group and the Companywill, amongst other things, be able to operate profitably in the future. It is currently difficult toassess and estimate with any degree of certainty the amounts that will ultimately be realised orrecovered due to the uncertainties caused by the current difficult operating conditions and thestatus of the Scheme. Further, as of the Scheme Effective Date and as of the reporting date,the amounts at which the liabilities (including amounts due to Scheme Creditors, claims fromrelated party creditors, potential liabilities arising from disputed contingent claims as definedunder the Scheme, and other Scheme-related expenses) should be recorded cannot be reliablyestimated and, accordingly, no adjustments have been made for the purposes of these financialstatements.

The directors of the Company have taken note of the current status of the Scheme and the

Groups ability to generate positive cash flows from its continuing operations, particularly in thepast financial year.


39/98

38


2 SCHEME OF ARRANGEMENT AND GOING CONCERN (contd)

The directors consider that different possibilities regarding the future exist and that the differingoutcomes can cause the financial position as at 31 March 2011, together with profit or loss, othercomprehensive income and changes in equity for the year then ended, to be very different fromwhat is currently presented in the financial statements. The directors also consider that there areno practical means available to resolve such difficulties, due to the effect of the differing outcomes,in the preparation of these financial statements. Accordingly, the directors are of the opinion that,notwithstanding these difficulties, the preparation of these financial statements on a going concern

basis provides sufficient information to serve the interests of shareholders and other stakeholderswho may use these financial statements.

3 BASIS OF PREPARATION

(a) Statement of compliance

The financial statements have been prepared in accordance with Singapore FinancialReporting Standards (FRS).

The basis of preparation (including the basis of measurement and the use of estimates andjudgements) of these financial statements is affected by the matters described in note 2

above.

(b) Basis of measurement

The financial statements have been prepared on the historical cost basis except for certainfinancial assets and financial liabilities which are measured at fair value.

(c) Functional and presentation currency

The financial statements are presented in Singapore dollars which is the Companysfunctional currency and has been rounded to the nearest thousand, unless otherwisestated.

(d) Use of estimates and judgements

The preparation of the financial statements in conformity with FRSs requires managementto make judgements, estimates and assumptions that affect the application of accountingpolicies and the reported amounts of assets, liabilities, income and expenses. Actual resultsmay differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions toaccounting estimates are recognised in the period in which the estimates are revised andin any future periods affected.


40/98

39


3 BASIS OF PREPARATION (contd)

(d) Use of estimates and judgements (contd)

In particular, information about significant areas of estimation uncertainty and criticaljudgements in applying accounting policies that have the most significant effect on theamount recognised in the financial statements is included in note 2 and the followingnotes:

Note 4(h) classification of leases

Notes 5 and 8 assumptions of recoverable amounts relating to property, plant andequipment and impairment of goodwill, trademarks and rights

Notes 9 and 12 impairment loss on other investments and trade and otherreceivables

Note 17 measurement of provisions

Note 25 valuation of financial instruments

Note 27 measurement of contingent liabilities

Note 28 related parties

(e) Changes in accounting policies

(i) Accounting for business combinations

From 1 April 2010, the Group has applied FRS 103 Business Combinations (2009) inaccounting for business combinations. Business combinations are now accounted forusing the acquisition method as at the acquisition date (see note 4(a)(i)).

Previously, business combinations were accounted for under the purchase method.The cost of an acquisition was measured at the fair value of the assets given, equityinstruments issued and liabilities incurred or assumed at the date of exchange, pluscosts directly attributable to the acquisition. Goodwill represents the excess of thecost of acquisition over the fair value of the Groups share of the identifiable assets,liabilities and contingent liabilities of the acquired subsidiary and is assessed forimpairment annually. The excess of the Groups interest in the net fair value of theidentifiable assets, liabilities and contingent liabilities over the cost of acquisition wascredited to profit or loss in the period of the acquisition. For business acquisitionsthat were achieved in stages, any existing equity interests in the acquiree were notre-measured to their fair value. Contingent consideration was recognised as anadjustment to the cost of acquisition only when it was probable and can be measuredreliably.

The change in accounting policy has been applied prospectively to new businesscombinations occurring on or after 1 January 2010 and has no material impact onearnings per share.


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40


3 BASIS OF PREPARATION (contd)

(e) Changes in accounting policies (contd)

(ii) Accounting for acquisitions of non-controlling interests

From 1 April 2010, the Group has applied FRS 27 Consolidated and Separate FinancialStatements (2009) in accounting for acquisitions of non-controlling interests. See note4(a)(iii) for the new accounting policy.

Previously, goodwill was recognised on the acquisition of non-controlling interests ina subsidiary, which represented the excess of the cost of the additional investmentover the carrying amount of the interest in the net assets acquired at the date of thetransaction.

The change in accounting policy has been applied prospectively and has no impacton earnings per share.

4 SIGNIFICANT ACCOUNTING POLICIES

The accounting policies set out below have been applied consistently to all periods presented

in these financial statements, and have been applied consistently by Group entities, except asexplained in note 3(e), which addresses changes in accounting policies.

(a) Basis of consolidation

(i) Business combinations

Business combinations are accounted for using the acquisition method as at theacquisition date, which is the date on which control is transferred to the Group. Controlis the power to govern the financial and operating policies of an entity so as to obtainbenefits from its activities. In assessing control, the Group takes into considerationpotential voting rights that are currently exercisable.

The consideration transferred does not include amounts related to the settlement ofpre-existing relationships. Such amounts are generally recognised in profit or loss.

Costs related to the acquisition, other than those associated with the issue of debtor equity securities, that the Group incurs in connection with a business combinationare expensed as incurred.

Any contingent consideration payable is recognised at fair value at the acquisitiondate. If the contingent consideration is classified as equity, it is not remeasured andsettlement is accounted for within equity. Otherwise, subsequent changes to the fairvalue of the contingent consideration are recognised in profit or loss.


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4 SIGNIFICANT ACCOUNTING POLICIES (contd)

(a) Basis of consolidation (contd)

(ii) Subsidiaries

Subsidiaries are entities controlled by the Group. Control exists when the Group hasthe power to govern the financial and operating policies of an entity so as to obtainbenefits from its activities. In assessing control, potential voting rights that presently

are exercisable are taken into account. The financial statements of subsidiaries areincluded in the consolidated financial statements from the date that control commencesuntil the date that control ceases. The accounting policies of subsidiaries have beenchanged where necessary to align them with the policies adopted by the Group.

(iii) Acquisition of non-controlling interests

Acquisitions of non-controlling interests are accounted for as transactions with ownersin their capacity as owners and therefore no goodwill is recognised as a result of suchtransactions. The adjustments to non-controlling interests are based on a proportionateamount of the net assets of the subsidiary.

(iv) Transactions eliminated on consolidation

Intra-group balances and transactions, and any unrealised income or expenses arisingfrom intra-group transactions, are eliminated in preparing the consolidated financialstatements.

(v) Accounting for subsidiaries by the Company

Investments in subsidiaries are stated in the Companys balance sheet at cost lessaccumulated impairment losses.

(b) Foreign currencies

Foreign currency transactions

Transactions in foreign currencies are translated to the respective functional currencies ofGroup entities at exchange rate at the date of the transactions. Monetary assets and liabilitiesdenominated in foreign currencies at the reporting date are retranslated to the functionalcurrency at the exchange rate at the reporting date. Non-monetary assets and liabilitiesdenominated in foreign currencies that are measured at fair value are retranslated to thefunctional currency at the exchange rate at the date on which the fair value was determined.Non-monetary items in a foreign currency that are measured in terms of historical cost aretranslated using the exchange rate at the date of the transaction.

Foreign currency differences arising on retranslation are recognised in profit or loss, except

for differences arising on the retranslation of monetary items that in substance form part ofthe Groups net investment in a foreign operation (see below) and available-for-sale equityinstruments.


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(b) Foreign currencies (contd)

Net investment in a foreign operation

Exchange differences arising from monetary items that in substance form part of theCompanys net investment in a foreign operation, are recognised in the Companys incomestatement. Such exchange differences are reclassified to equity in the consolidated financialstatements. When the hedged net investment is disposed of, the cumulative amount in

equity is transferred to the income statement as an adjustment to the profit or loss arisingon disposal.

Foreign operations

The assets and liabilities of foreign operations, excluding goodwill and fair value adjustmentsarising on the acquisition of foreign operations, are translated to Singapore dollars atexchange rates at the end of the reporting period. The income and expenses of foreignoperations are translated to Singapore dollars at exchange rates prevailing at the dates ofthe transactions.

Foreign currency differences are recognised in the foreign currency translation reserve.When a foreign operation is disposed of, in part or in full, the relevant amount in the foreignexchange translation reserve is transferred to the income statement.

(c) Property, plant and equipment

Property, plant and equipment are stated at cost less accumulated depreciation andimpairment losses except for completed land and buildings, which are stated at theirrevalued amounts. The revalued amount is the fair value at the date of revaluation less anysubsequent accumulated depreciation and subsequent accumulated impairment losses.Revaluations are carried out by independent professional valuers regularly such thatthe carrying amount of these assets does not differ materially from that which would bedetermined using fair values at the balance sheet date.

Any increase in the revaluation amount is credited to the revaluation reserve unless it offsetsa previous decrease in value of the same asset that was recognised in the income statement.A decrease in value is recognised in the income statement where it exceeds the increasepreviously recognised in the revaluation reserve. Upon disposal, any related revaluationreserve is transferred from the revaluation reserve to accumulated profits and is not takeninto account in arriving at the gain or loss on disposal.

Cost includes expenditure that is directly attributable to the acquisition of the asset. Thecost of self-constructed assets includes the cost of materials and direct labour, any othercosts directly attributable to bringing the asset to a working condition for its intended use,and the cost of dismantling and removing the items and restoring the site on which they arelocated. Purchased software that is integral to the functionality of the related equipment iscapitalised as part of that equipment.

When parts of an item of property, plant and equipment have different useful lives, they areaccounted for as separate items (major components) of property, plant and equipment.


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(c) Property, plant and equipment (contd)

The gain and loss on disposal of an item of property, plant and equipment is determinedby comparing the proceeds from disposal with the carrying amount of property, plant andequipment, and is recognised net within other income/other expenses in profit or loss.

The cost of replacing a component of an item of property, plant and equipment is recognisedin the carrying amount of the item if it is probable that the future economic benefits embodied

within the part will flow to the Group and its cost can be measured reliably. The carryingamount of the replaced component is derecognised. The costs of the day-to-day servicingof property, plant and equipment are recognised in profit or loss as incurred.

Freehold land and leasehold land and buildings under construction are not depreciated.Depreciation is recognised in profit or loss on a straight-line basis over the estimated usefullives of each component of an item of property, plant and equipment.

The estimated useful lives for the current and comparative years are as follows:

Freehold buildings 50 years

Leasehold land and buildings 18 to 50 years

Plant and machinery 2 to 10 yearsRenovations 3 to 10 years

Furniture, f ittings and office equipment 2 to 10 years

Computers 3 to 5 years

Motor vehicles 5 years

Depreciation methods, useful lives and residual values are reviewed, and adjusted asappropriate, at each reporting date.

When the use of a property changes from owner-occupied to investment property, theproperty is remeasured to fair value and reclassified as investment property. Any gainarising on remeasurement is recognised in profit or loss to the extent that the gain reverses

a previous impairment loss on the specific property, with any remaining gain recognised inother comprehensive income and presented in the revaluation reserve in equity. Any lossis recognised in other comprehensive income and presented in the revaluation reserve tothe extent that an amount had previously been included in the revaluation reserve relatingto the specific property, with any remaining loss recognised immediately in profit or loss.

(d) Investment properties

Investment property is property held either to earn rental income or capital appreciation orboth. It does not include properties held for sale in the ordinary course of business, used inthe production or supply of goods or services, or for administrative purposes.

Investment property is measured at fair value, with any change recognised in the income

statement. Rental income from investment properties is accounted for in the mannerdescribed in note 4(m).


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(d) Investment properties (contd)

When the Group holds a property interest under an operating lease to earn rental incomeor capital appreciation, the interest is classified and accounted for as investment propertieson a property-by-property basis. Any such property interest which has been classified asinvestment properties is accounted for as if it is held under finance lease (see note 4(h)),and is accounted for in the same way as other investment properties leased under finance

leases. Lease payments are accounted for as described in note 4(h).

(e) Intangible assets

Goodwill

Goodwill represents the excess of:

the fair value of the consideration transferred; plus

the recognised amount of any non-controlling interests in the acquiree; plus

if the business combination is achieved in stages, the fair value of the existing equityinterest in the acquiree,

over the net recognised amount (generally fair value) of the identifiable assets acquiredand liabilities assumed.

When the excess is negative, a bargain purchase gain is recognised immediately in profitor loss.

Goodwill is measured at cost less accumulated impairment losses. In respect of equity-accounted investees, the carrying amount of goodwill is included in the carrying amountof the investment, and an impairment loss on such an investment is not allocated to anyasset, including goodwill, that forms part of the carrying amount of the equity-accounted

investee.

Trademarks

Trademarks recorded in the financial statements are amortised over their estimated usefullives, taking into account the ability to renew the trademarks in their respective jurisdictionsand after adjusting for impairment losses, if any. It is tested for impairment annually asdescribed in note 4(g).

Distribution rights

Distribution rights for brands or products are stated at cost less accumulated amortisation

and impairment loss and are tested for impairment annually as described in note 4(g).Amortisation is charged to the income statement on a straight-line basis over their estimateduseful lives of 20 years.


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(f) Financial instruments

(i) Non-derivative financial assets

The Group has the following non-derivative financial assets: investments in equitysecurities, trade and other receivables, and cash and cash equivalents.

The Group initially recognises loans and receivables and deposits on the date thatthey are originated. All other financial assets (including assets designated at fair valuethrough profit or loss) are recognised initially on the trade date at which the Groupbecomes a party to the contractual provisions of the instrument.

The Group derecognises a financial asset when the contractual rights to the cashflows from the asset expire, or it transfers the rights to receive the contractual cashflows on the financial asset in a transaction in which substantially all the risks andrewards of ownership of the financial asset are transferred. Any interest in transferredfinancial assets that is created or retained by the Group is recognised as a separateasset or liability.

Financial assets and liabilities are offset and the net amount presented in the balancesheet when, and only when, the Group has a legal right to offset the amounts andintends either to settle on a net basis or to realise the asset and settle the liabilitysimultaneously.

Loans and receivables

Loans and receivables are financial assets with fixed or determinable payments thatare not quoted in an active market. Such assets are recognised initially at fair valueplus any directly attributable transaction costs. Subsequent to initial recognition, loansand receivables are measured at amortised cost using the effective interest method,less any impairment losses.

Loans and receivables comprise cash and cash equivalents and trade and otherreceivables.

Cash and cash equivalents comprise cash balances and bank deposits. Bankoverdrafts that are repayable on demand and form an integral part of the Groupscash management are included as a component of cash and cash equivalents for thepurpose of the statement of cash flows.

tt international 2011 annual report

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