wt tai... · 2019. 1. 16. · annual report 01 top ... attractive site in the upper bukit timah...
TRANSCRIPT
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the art of
the matterannual report
01 Top Elevation
Chairman’s Message
04Perimeter
Property
07 Sensibilities
Hospitality
08 Urban Ensemble
Retail
10 Cross Section
Corporate Data
11 Composition
Board of Directors
1 4Interconnecting
Key Management
15 Framework
Corporate Governance
20 Refl ections
Calendar of Events
21For the Year 2011
Financial Reports
Contents
Chairman’s Message
Top
Elevation
OVERVIEW
The Singapore economy grew by 14.5% in 2010. Given
the ongoing global economic uncertainty, the Singapore
economy is expected to grow at a range of 5 to 6% in 2011,
based on offi cial forecast.
Property cooling off measures announced by the Singapore
Government in January 2011 have had the eff ect of moderating
the rapid rise in residential property prices. Growth in private
residential property prices has since continued to be moderated.
Th e URA residential property price index increased by 2.0%
in the second quarter of 2011, lower than the 2.2% increase
in the previous quarter. Th is has been the seventh consecutive
quarter in which the rate of increase in residential property
prices had moderated. Th e total number of new residential
units sold island-wide was 8,039 units in the fi rst half of 2011,
comparable to the number of new units sold in the fi rst half
of 2010. For the second half of 2011, 30 sites under confi rmed
and reserve lists, have been planned for release under the
Government Land Sales Programme, potentially yielding
14,200 private residential units.
01
GROUP PERFORMANCE
For the fi nancial year ended 30 June 2011, the Group recorded
a total revenue of S$649.1 million. Th is was 21% lower than
the S$821.9 million revenue recorded in the previous year.
Revenue from development properties for the current year was
mainly attributable to the progressive sales recognised from
Helios Residences and the additional units sold in Belle Vue
Residences in Singapore.
Th e Group’s operating profi t rose 10% from S$254.4 million
to S$281.1 million. In the current year, the Group’s operating
profi t includes fair value gains of S$74.6 million from
investment properties, as compared to S$5.1 million gained
in the previous year. Th e Group’s share of profi ts of associated
and joint venture companies increased from S$51.7 million
to S$164.2 million in the current year. Th is 218% increase is
primarily attributable to the higher contributions from Wing
Tai Properties Limited in Hong Kong and the Floridian project
in Singapore. Th e Group’s net profi t attributable to shareholders
for the current year is S$314.2 million, an increase of 95% over
the net profi t of S$160.8 million recorded in the previous year.
Th e Group’s net asset value per share as at 30 June 2011 was
S$2.46 as compared to S$2.18 as at 30 June 2010. Th e Group’s
net gearing ratio has been reduced from 0.44 times as at
30 June 2010 to 0.35 times as at 30 June 2011. Th e Board
of Directors recommended a fi rst and fi nal dividend of 3 cents
per share and a special dividend of 4 cents per share for the
current year.
In the current year, the Group sold a total of 683 residential
units in Singapore and Malaysia, with a total sales value of
S$899 million. Th e Group has always been disciplined in its
land acquisition, exercising care in selecting sites that would
add value to its portfolio.
In October 2010, a choice residential site at Petir Road in the
Bukit Timah precinct was successfully acquired through the
Group’s narrow 2% winning margin in the land tender bid.
Th e leasehold development, Foresque Residences, was launched
in May 2011, attracting good response. To date, 86% of the 220
units released in the fi rst phase have been sold.
In Malaysia, the Group acquired a freehold residential site
along Jalan Langgak Golf within the U-Th ant/Ampang Hilir
vicinity in January 2011, while in Hong Kong, we acquired two
prime residential sites in Mid-levels West and Causeway Bay
in the second half of 2010. In China, the Group entered
into a joint venture with Singbridge Guangzhou Pte Ltd
in April 2011, for residential property development in the
Sino-Singapore Guangzhou Knowledge City, a premier
landmark development that will become China’s leading
model of eco-smart city development.
Th e Group’s investment properties comprising commercial
developments and serviced apartments fared well, contributing
S$37.1 million for the current year. In retail, the Group
performed well, with 13% increase in revenue and a higher
increase in operating profi t over the previous year.
CORPORATE BRANDING
In line with elevating the Group’s focus and commitment as
an integrated property developer, in November 2010 DNP
Holdings Berhad in Malaysia was renamed Wing Tai Malaysia
Berhad, following the rebranding of Wing Tai Properties
Limited in Hong Kong in the previous year. Th e Group’s
network of companies are now better aligned to capitalise on
the Wing Tai Asia branding and to strengthen their presence
in key markets.
PROSPECTS
Th e Group shall closely watch the market, and continue to
build its landbank with selective site acquisition and to market
its high-end properties such as Helios Residences, Belle Vue
Residences and L’VIV. Preview and release of two luxury
developments viz. the Le Nouvel Ardmore and Nouvel 18 will
be paced with market sentiments.
APPRECIATION
I would like to thank our shareholders, customers, bankers
and business partners for their support and confi dence in the
Group. I would also like to thank Directors on the Board for
their counsel and dedication. To the management and staff ,
I would like to acknowledge their commitment to growing
the Group’s business.
CHENG WAI KEUNG
Chairman
20 September 2011
02
A sanctuary of
sophistication for
the affl uent class
03
Property
PerimeterSINGAPORE
Master architect Toyo Ito’s fi rst and
only residential condominium project
in Asia, the freehold Belle Vue Residences
on Oxley Walk, has continued to receive
strong interest from homebuyers, with
approximately 80% of the total of 176 units
sold as of 30 June 2011. In September
2010, Mr Ito joined Mr Edmund Cheng in
presenting the nature-themed development
at a media event hosted for top media
representatives from the region on the
luxuriously lush grounds of the residences.
Nature’s
waywardness
and soulfulness
captured in
Belle Vue’s
curved geometry
04
Helios Residences, a 140-unit freehold
development at Cairnhill Circle in Singapore’s
prime District 9 obtained its Temporary
Occupation Permit in January 2011. Over 70
units have been sold and vacant possession
of the apartments has commenced since
the third quarter of 2011. L’VIV, a 147-unit
freehold development at Newton Road sold
over 100 units, more than 70% of the available
units. Construction has commenced for this
development. Floridian, a 336-unit freehold
development at Bukit Timah has continued
to receive positive response from homebuyers,
and was 84% sold as of 30 June 2011.
In May 2011, the Group commenced the
Phase 1 launch of Foresque Residences, an
attractive site in the Upper Bukit Timah
precinct acquired in October 2010. Th e 496-
unit leasehold development on Petir Road was
welcomed by buyers; of the 200 units released,
163 were sold in just two months. Ascentia Sky
by Tanglin, a 373-unit leasehold development
launched in July 2009 sold 316 units as of June
2011. Th e 85% take-up rate of this leasehold
development has been positively regarded, in
consideration of its relatively larger apartment
size and higher quantum sum.
Construction of two high-end developments
designed by eminent Pritzker Prize laureate
Jean Nouvel has also commenced. Th e preview
and release of the Le Nouvel Ardmore at
Ardmore Park and Nouvel 18 at Anderson
Road will be paced in accordance to market
sentiments. Exclusive private previews have
commenced for the Le Nouvel Ardmore, with
the sale of one unit in June 2011.
Singapore continues to see strong demand
for offi ce space with an excellent economic
performance of 14.5% growth rate achieved
last year. Occupancy rates remained healthy
despite the completion of 2.2 million square
feet new offi ce space during the year. Th e
Group’s investment properties fared well, with
Winsland House I and II, and Burlington
Square achieving an average occupancy of 90%.
MALAYSIA
Th e Group’s property business activities in
Malaysia are conducted through its subsidiary
company, Wing Tai Malaysia Berhad, formerly
known as DNP Holdings Berhad. Th e name
change eff ective 12 November 2010 was part
of the company’s corporate rebranding and a
major step towards elevating the company’s
focus and commitment as an integrated
property developer.
In Kuala Lumpur, Verticas Residences,
a 423-unit freehold development at Bukit
Ceylon, is 64% sold and currently under
construction, with completion expected in
the middle of 2012. Nobleton Crest, U-Th ant,
a 25-unit development located at Jalan
U-Th ant is launch-ready. Construction works
are on-going, with completion targeted at the
end of 2013. At Sering Ukay, Phase 3, which
comprises 130 units of semi-detached and 22
units of detached houses, is pending layout
approval from the Malaysian authorities. Th e
Le Nouvel@KLCC, a high-end twin-tower
development at Jalan Ampang is currently
under construction.
Th e Group acquired the Bandar Sunway site
in April 2010, to build 76 units of semi-
detached houses. Th e project is currently
pending layout approval from the Malaysian
authorities and is expected to be launch-ready
by early 2012. In January 2011, the Group
further acquired a freehold residential site
along Jalan Langgak Golf within the U-Th ant/
Ampang Hilir vicinity.
In Penang, Phases 4 and 5 of Taman Seri
Impian, comprising 123 units of 2-storey
terrace and semi-detached houses, are
completed and fully sold. Phase 2 of Taman
BM Utama, comprising 215 units of 2-storey
terrace and semi-detached houses, is 99%
05
Th is page:
Enchanting ambience
of outdoor terrace and
private pool at the
majestic Forfar
Opposite page:
A private world
away from home
completed and 91% sold, while 7 units of
2-storey commercial shops have recently
been completed and made available for lease.
Phase 3, comprising 138 units of 2 & 3-storey
terrace houses, is under construction, and
25% sold. BM Jesselton in Alma, a high-
end development, is 13% sold. Impiana
Commercial Hub, comprising 2-storey and
3-storey shop offi ces along Impiana Boulevard
and Impiana Avenue are 80% and 30%
completed, respectively.
HONG KONG
Th e Group’s property interests in Hong Kong
are represented by investments in its associated
company, Wing Tai Properties Limited.
Forfar, a 43-unit development at Forfar Road
in Kowloon is 93% sold and units have been
handed over to homeowners since the fourth
quarter of 2010. Seymour, an 82-unit high-end
development at Seymour Road in the Mid-
levels is 85% sold, with expected completion
in the second half of 2011. Providence Bay, the
Pak Shek Kok development at Tai Po Town is
expected to be completed in phases by 2012.
Two prime residential sites in Mid-levels West
and Causeway Bay were acquired in the second
half of 2010. Th ese two sites, totaling a gross
fl oor area of approximately 108,000 square
feet, will be developed into low-density, luxury
boutique towers. Both projects are expected to
be completed between 2013 and 2014. Th e
two investment properties viz. Landmark East
in Kowloon East and W Square in Wan Chai
fared well, achieving occupancy of 89% and
87% respectively.
CHINA
Th e Group’s property business activities in
China are conducted through its subsidiary
company, Jiaxin (Suzhou) Property
Development Co., Ltd.
In April 2011, the Group entered into a joint
venture with Singbridge Guangzhou Pte
Ltd, a subsidiary of Singbridge International
Singapore Pte Ltd, for a residential property
development in the Sino-Singapore
Guangzhou Knowledge City. Designed by
world-renowned architect Foster + Partners,
the 10-hectare site adjacent to the Jiulong
Dadao will be developed in phases over
fi ve years. Th e Group holds a 40% stake in
the project.
Th e Group will continue to strengthen
its China networks and seek investment
and marketing opportunities in the key
growth cities.
06
Hospitality
The Group continues to expand its Lanson Place chain of
branded hospitality services in strategic locations in Asia.
In Hong Kong, Lanson Place Hotel achieved healthy
occupancy of 81% and won top awards for its design and
service. Th ese included the “2010 Best Design Hotel” at the
Annual Travel Awards by Travel & Leisure magazine in January
2011 and “Highly Commended Hotel” at the inaugural Asia
Pacifi c Hotel Awards in association with Bloomberg Television
in June 2011.
In China, Lanson Place Central Park in Beijing and Lanson
Place Jinlin Tiandi in Shanghai Puxi achieved high occupancy
of 95% and 92% respectively, and held their place as the market
leaders in both cities. Lanson Place Jin Qiao in Shanghai
Pudong was fully opened in September 2010, having bagged
the “Best Serviced Apartment of China 2010” award in March
2011 for its excellent service and hospitality.
Singapore’s Lanson Place Winsland also recorded a high
occupancy of about 80%. In Malaysia, Lanson Place
Ambassador Row performed relatively well, despite the soft
conditions in a competitive market. Lanson Place Bukit Ceylon,
a brand new premier project in Kuala Lumpur with over
100 units, is currently under construction and scheduled to
operate by the end of 2012.
Sensibilities
07
Urban Ensemble
The Group’s retail division anchored its
pole position among Singapore fashion
retailers, through a national recognition
awarded to it in June 2011, identifying Wing
Tai as one of four service excellence icons
handpicked by the GEMS (Go the Extra Mile
for Service) Up Committee comprising Spring
Singapore, NTUC, Workforce Development
Agency, Singapore Tourism Board and
Institute of Service Excellence at SMU,
in praise of its breakthroughs in achieving
customer service excellence.
Wing Tai Retail, the only retailer in Singapore
that is recognised as an Iconic Service
Organisation, presented a national showcase of
its Customer Centric Initiatives to the media,
government and industry partners. Minister for
Prime Minister’s Offi ce and NTUC Secretary-
General Mr Lim Swee Say, who attended
the event, lauded Wing Tai’s commitment
to seek for continuous breakthroughs in the
transformations of its retail management
and people development. One example of
such is the initiative of creating a culture of
fashion consciousness and knowledge through
equipping all staff with the latest fashion and
product knowledge. Wing Tai Retail is also
the fi rst retailer who will be collaborating
with Fashion Institute of Technology in
New York with a customised certifi cation
programme on fashion styling which aims to
bring both service and professional standards
to new heights. Following the success of the
pilot programmes, similar customer-centric
programmes will also be rolled out to other
retail brands, such as Yoshinoya, which will
be introducing a customer self-ordering
kiosk system, targeted for launch in the
third quarter of 2011.
As of 30 June 2011, the Group’s retail square
footage exceeded 400,000 square feet with
over 200 stores across Singapore and Malaysia.
Its portfolio of leading fashion and lifestyle
brands – 18 in Singapore and 11 in Malaysia
– were boosted by the opening of two street-
fronting Topshop/Topman fl agship store on
Singapore’s Orchard Road in December 2010,
and the popular Japanese label Uniqlo in
Kuala Lumpur’s new mall Fahrenheit 88
in Bukit Bintang in November 2010.
Besides achieving positive results in its
customer satisfaction audits conducted
internally and by external media, the retail
division performed well fi nancially, with 13%
increase in revenue and a higher increase in
operating profi t over the previous year.
Retail08
Th is page:
Standing out as
the singular girl
Opposite page:
Th e colour palette of
the fashion authority
09
Corporate Data
Cross Section
BOARD OF
DIRECTORS
Executive
Cheng Wai KeungChairman/Managing Director
Edmund Cheng Wai WingDeputy Chairman/
Deputy Managing Director
Tan Hwee BinExecutive Director
Chng Chee BeowProperty Director
Non-Executive
Boey Tak HapIndependent
Cheng Man Tak
Tan Sri Dato’ Mohamed
Noordin bin HassanIndependent
Lee Han YangIndependent
Lee Kim Wah
Loh Soo EngIndependent
Phua Bah LeeIndependent
Paul Tong Hon ToIndependent
AUDIT COMMITTEE
Paul Tong Hon ToChairman
Boey Tak Hap
Lee Han Yang
Phua Bah Lee
REMUNERATION
COMMITTEE
Lee Han YangChairman
Boey Tak Hap
Tan Sri Dato’ Mohamed
Noordin bin Hassan
Loh Soo Eng
NOMINATING
COMMITTEE
Loh Soo EngChairman
Cheng Wai Keung
Tan Sri Dato’ Mohamed
Noordin bin Hassan
Phua Bah Lee
COMPANY
SECRETARIES
Gabrielle Tan
Ooi Siew Poh
EXECUTIVE OFFICERS
Len Siew LianGeneral Manager, Property
Ng Kim Huat Chief Financial Offi cer
Karine LimGeneral Manager
Group Human Resource
SUBSIDIARY
COMPANIES
Wing Tai Malaysia Berhad
Dato’ Roger Chan
Wan ChungExecutive Director
Wing Tai Property
Management Pte Ltd
Helen ChowDirector
Wing Tai Retail Pte Ltd
Helen KhooExecutive Director
REGISTERED OFFICE
3 Killiney Road
#10-01 Winsland House Singapore 239519
Tel: 6280 9111
Fax: 6732 9956
www.wingtaiasia.com.sg
REGISTRAR &
TRANSFER OFFICE
Tricor Barbinder Share
Registration Services
(A division of Tricor
Singapore Pte. Ltd.)
8 Cross Street
#11-00 PWC Building
Singapore 048424
AUDITORS
PricewaterhouseCoopers
LLP
Public Accountants and
Certifi ed Public Accountants
8 Cross Street
#17-00 PWC Building
Singapore 048424
Audit Partner:
Choo Eng Beng
(Year of Appointment: 2011)
PRINCIPAL BANKERS
DBS Bank Limited
6 Shenton Way
DBS Building
Singapore 068809
Th e Hongkong and
Shanghai Banking
Corporation Limited
21 Collyer Quay
HSBC Building
Singapore 049320
Malayan Banking Berhad
2 Battery Road
Maybank Tower
Singapore 049907
Overseas-Chinese Banking
Corporation Limited
65 Chulia Street
OCBC Centre
Singapore 049513
Th e Bank of Tokyo-
Mitsubishi UFJ, Ltd
9 Raffl es Place
#01-01 Republic Plaza
Singapore 048619
United Overseas
Bank Limited
80 Raffl es Place
UOB Plaza
Singapore 048624
10
Board of Directors
Composition
CHENG WAI KEUNG is Chairman of the Board of Wing
Tai Holdings Limited (the “Company”), appointed since 1994.
He is also Managing Director of the Company and a member
of the Nominating Committee. Mr Cheng is Chairman of
Neptune Orient Lines Limited, a company listed on the
SGX-ST, Vice Chairman of Singapore-Suzhou Township
Development Pte Ltd and Managing Director of Wing Tai
Malaysia Berhad, a company listed on the Bursa Malaysia
Securities Berhad. He holds directorships in public and private
companies, including Temasek Holdings (Private) Limited and
has served on the boards of several government organisations.
He was awarded the Distinguished Service Order (DUBC) by
the Singapore Government in August 2007, and received the
Public Service Star (Bar) (BBM-Lintang) in 1997 and Public
Service Star (BBM) in 1987. He has been appointed Justice of
Th e Peace by the Singapore President since 2000. Mr Cheng
graduated with Masters of Business Administration from the
University of Chicago, after obtaining his Bachelor of Science
degree from Indiana University. Mr Cheng was re-elected
director on 28 October 2009.
EDMUND CHENG WAI WING has served as Deputy
Chairman and Deputy Managing Director of the Company,
and as Executive Director of Wing Tai Malaysia Berhad since
1984. He is also Chairman of SATS Limited, a company listed
on the SGX-ST; Mapletree Investments Pte Ltd; Singapore’s
National Arts Council; and DesignSingapore International
Advisory Panel. He is a member of Nanyang Technological
University’s Board of Trustees; Th e Esplanade Co Ltd; and
International Council for Asia Society. He was President of
REDAS (Real Estate Developers’ Association of Singapore)
and now serves as a member on its Presidential Council. For
his contribution to public service, he was awarded the Public
Service Star Award (Bar) in 2010, Public Service Star Award
(BBM) in 1999 and Outstanding Contributor to Tourism
Award in 2002 by the Singapore Government. Mr Cheng
graduated from Northwestern University and Carnegie
Mellon University in USA, with a Bachelor’s degree in Civil
Engineering and Master’s in Architecture, respectively.
Mr Cheng was re-elected director on 30 October 2008.
BOEY TAK HAP has served as a non-executive director since
2 May 1997. He is a member of both the Audit Committee
and Remuneration Committee. Mr Boey was formerly the
Chief of Army, Singapore Armed Forces and President and
CEO of Singapore Power Group. He was also President and
CEO of SMRT Corporation as well as Chief Executive of the
Public Utilities Board. Mr Boey graduated from the University
of Manchester Institute of Science and Technology with a
Bachelor of Science degree in Automatic Control and System
Engineering with Management Sciences. In January 2002, he
was conferred Honorary Doctor of Engineering by his alma
mater. He also holds a Diploma in Business Administration
from the National University of Singapore and has attended
the Harvard Business School’s Advanced Management
Programme in Boston, USA. Mr Boey was re-elected director
on 28 October 2009.
CHENG MAN TAK has served as a non-executive director
since 11 May 1981. He is Vice-Chairman of Federation of
Hong Kong Industries – Group 24, director of the Federation
of Hong Kong Garment Manufacturers and a member of
the Occupational Safety and Health Council of Hong Kong.
He is also a member of the Advisory Committee of Poly
University (Institute of Textile and Clothing Industries) and
a committee member of Federation of Hong Kong Industries
in Hong Kong. Mr Cheng graduated from the University of
Southern California with a Bachelor of Science degree and
holds a Masters in Business Administration from Pepperdine
University, USA. Mr Cheng was re-elected director on
25 October 2010.
11
TAN SRI DATO’ MOHAMED NOORDIN
BIN HASSAN has served as a non-executive director since
27 September 2002 and is a member of both the Nominating
Committee and Remuneration Committee. He has more than
40 years’ experience with the Malaysia Government, serving at
district, state and federal levels including as Deputy Secretary
General at the Ministry of Trade and Industry; Secretary
General at Ministry of Science, Technology and Environment;
and Secretary General at the Ministry of Education. After
retiring from the Malaysian civil service in September 1994,
he joined Petronas Berhad, as Vice President of Group Human
Resource and Vice President of Education until 31 August
2000. He is currently Chairman of Wing Tai Malaysia Berhad,
a company listed on the Bursa Malaysia Securities Berhad,
and also sits on the Board of several subsidiaries of Wing Tai
Malaysia Berhad as well as other companies in Malaysia. He
graduated from the University of Malaya with a Bachelor of
Arts (Honours) degree in Economics, and holds a Master’s
in Public and International Aff airs from the University of
Pittsburgh, USA. Tan Sri Dato’ Mohamed Noordin was
re-elected director on 25 October 2010.
LEE HAN YANG has served as a non-executive director
since 3 January 1989. He is Chairman of the Remuneration
Committee and a member of the Audit Committee. He is a
Barrister-at-Law of Lincoln’s Inn, London and an Advocate
and Solicitor of the Supreme Court of Singapore. Mr Lee
currently sits on the Board of Low Keng Huat (Singapore)
Ltd, a company listed on the SGX-ST. He is also a director of
Tan Chong International Ltd, a company listed on the Stock
Exchange of Hong Kong. Mr Lee is an active member of the
Law Society of Singapore and has served on several committees
of the Law Society. He also serves on the Board of the Society
for the Physically Disabled and until recently he was on the
board of the National Council of Social Service. In August
2006, he was awarded the Public Service Star (BBM) by the
President of Singapore. Mr Lee was re-elected director on
25 October 2010.
LEE KIM WAH has been appointed Senior Advisor to
the Company since 5 December 2008 and remains on the
board as a non-executive director. He serves as a treasurer of
the Singapore National Employers’ Federation. Educated in
Accountancy in Australia, Mr Lee was a manager in a public
accounting fi rm before joining the Company, where he has
served for over 40 years, as Finance Director from May 1977
to December 2008. Mr Lee was conferred the Public Service
Medal (PBM) by the Singapore Government in 2000. In 2009,
he was awarded the prestigious Medal of Commendation
(Gold) for his signifi cant contribution towards the Singapore
Labour Movement. Mr Lee was re-elected director on
25 October 2010.
LOH SOO ENG has served as a non-executive director
since 1 June 2004, after retiring as Director-Property. He
is Chairman of the Nominating Committee and a member
of the Remuneration Committee. Mr Loh is currently a
director of Wing Tai Properties Limited, a company listed
on the Stock Exchange of Hong Kong. He has experience in
power, oil, shipbuilding and ship repair industries, as well as in
banking, where he had been for 17 years with the DBS Group,
as Executive Director of Raffl es City Pte Ltd and General
Manager of DBS Land. Mr Loh has served on Government
committees, including SAFTI Military College and Temasek
Polytechnic. He was Chairman of SLF Properties Pte Ltd and
SLF Management Services Pte Ltd and was President of Real
Estate Developers’ Association of Singapore (REDAS) from
2001 to 2003. He graduated with a Bachelor of Engineering
(Mechanical) degree from the University of Adelaide, Australia.
Mr Loh was re-elected director on 25 October 2010.
12
PHUA BAH LEE has served as a non-executive director
since 11 January 1989 and is a member of both the Audit
Committee and Nominating Committee. Mr Phua is currently
a director of GP Industries Limited, Metro Holdings Limited,
Singapura Finance Limited and Pan-United Corporation
Limited, all companies are listed on the SGX-ST. He also
holds directorships in a number of private companies. He
was the Singapore Parliamentary Secretary of the Ministry of
Communications from 1968 to 1971; Senior Parliamentary
Secretary of the Ministry of Defence from 1972 to 1988;
and an elected Member of Parliament for the Tampines
Constituency from 1968 to 1988. He graduated from
the Nanyang University in Singapore with a Bachelor of
Commerce degree. Mr Phua was re-elected director on
25 October 2010.
PAUL TONG HON TO has served as a non-executive
director since 16 August 2007 and is a Chairman of the
Audit Committee. He is currently a non-executive director
of Chinney Investments, Limited, publicly listed on the
Stock Exchange of Hong Kong. Mr Tong has many years of
senior management experience in manufacturing and trading
businesses with global operations. He was formerly Executive
Vice President and General Counsel of Johnson Electric
Holdings Limited. He also served as a member on the Inland
Revenue Board of Review in Hong Kong. Mr Tong obtained
his Bachelor of Science (Economics) degree and postgraduate
Certifi cate of Management Studies from the University of
London and the University of Oxford in England, respectively.
He was admitted as Barrister of the Middle Temple in England,
the Supreme Court of Hong Kong, and the High Court of
Australia. He is also a CPA of The Hong Kong Institute of
Certifi ed Public Accountants; and an Associate Member of
The Institute of Chartered Secretaries and Administrators.
Mr Tong was re-elected director on 25 October 2010.
TAN HWEE BIN has been appointed Executive Director
of the Company since 5 December 2008. Prior to her
appointment to the board, she was the Chief Operating
Offi cer. Ms Tan is a Certifi ed Public Accountant and graduated
with a Bachelor of Accountancy degree from the National
University of Singapore. In 2005, she completed the Advanced
Management Program at Harvard Business School. Ms Tan is
Chairman of NTUC Healthcare Co-operative Ltd. She is also
director of Singapore Labour Foundation, NTUC FairPrice
Co-operative Ltd and Agency for Integrated Care Pte Ltd. She
is a member of the Finance and Establishment Committee of
Chinese Development Assistance Council and Middle East
Business Group Singapore. She was awarded the Public Service
Medal (PBM) in 2011. Ms Tan was re-elected director on
28 October 2009.
CHNG CHEE BEOW has served as Property Director
of the Company since 5 December 2008. He has been with
the Company since October 1987 and sits on the boards of
several subsidiaries of the Company. A registered Architect
by profession, he is Honorary Assistant Secretary of REDAS
Management Committee. He is also a member of the BCA
Universal Design Awards Assessment Panel, Professional
Engineer Board Investigation Panel, BCA BIM Steering
Committee and MND Planning Appeal Inspector. Mr Chng
graduated with a Bachelor of Architecture degree and has a
postgraduate Diploma in Building Science from the National
University of Singapore. Mr Chng was re-elected director on
28 October 2009.
13
Key Management
Interconnecting
DATO’ ROGER CHAN WAN CHUNG joined Wing Tai
Malaysia Berhad (“WTMB”) as General Manager in
June 1971 and he is one of the pioneer staff of WTMB.
With over 40 years’ experience in the garment business, he
assists the Managing Director in overseeing the day-to-day
operation of the WTMB Group. He was appointed to the
WTMB Board on 18 August 1988 and currently sits on the
Board of several subsidiaries of WTMB Group and other
private limited companies.
HELEN CHOW is Director of Wing Tai Property
Management Pte Ltd appointed since November 1991, having
held various positions in the Company since 1975. She is
responsible for marketing and sales functions in the property
division. She develops and implements strategies to achieve
optimal marketing mix for property products, as well as
manages sales operations across geographies to achieve revenue
goals. She holds a Bachelor of Arts degree from Mills College,
Oakland, California, USA.
HELEN KHOO is Executive Director of Wing Tai
Retail Pte Ltd and oversees the Company’s retail and food
businesses. With close to 30 years of experience in retail and
F&B businesses, Mrs Khoo drives the growth and expansion
of the Company’s portfolio of retail brands and continually
leads her team to winning industry awards. She was conferred
the International Management Action Award (IMAA)
in 2007 and Retail Leadership Award in 2008. In 2011,
she was awarded by WDA as Singapore Workforce Skills
Qualifi cations Champion and chairing WDA’s Retail
Industry Skills and Training Council in the new 2011 term.
She is also appointed as a member of the Policy Advisory
Committee of Spring Singapore. As Honorary Secretary
of the Singapore Retailers Association and the Honorary
Treasurer of Orchard Road Business Association, she has
been involved in national committees to develop the local
retail industry. She graduated with a Bachelor of Arts
degree from the University of Hong Kong.
LEN SIEW LIAN is General Manager (Property) of
Wing Tai Holdings Limited. In addition to the portfolio
of residential marketing and project launches of development
properties for sale, she also oversees the asset management of
the commercial/investment properties. She joined the Company
in September 1989 where she was involved in commercial
leasing of both offi ce and retail, having spent her early career
with an international property consultancy fi rm. Ms Len
graduated with a Bachelor of Science (Estate Management)
degree from the National University of Singapore and, in 2008,
completed the Advanced Management Program at Harvard
Business School.
NG KIM HUAT is Chief Financial Offi cer, Wing Tai
Holdings Limited. He has been with the Company since
December 2003, having more than 10 years of auditing
experience with an international public accounting fi rm in
Singapore as a Certifi ed Public Accountant. He graduated
with a Bachelor of Accountancy (Honours) degree from the
National University of Singapore.
KARINE LIM is General Manager, Group Human Resource
and has been with the Company since March 2004, having
more than 18 years of human resource management experience
in the retail, property and public transport industries. She
graduated with a Bachelor of Arts (Honours) degree from the
National University of Singapore and has acquired a Diploma
in Human Resource Management from the Singapore Human
Resource Institute.
14
Corporate Governance
Framework
Th e Company believes that good corporate governance is vital
to its overall business integrity and performance. Th e Company
is committed to complying and maintaining high standards of
corporate governance to ensure corporate transparency and to
safeguard shareholders’ interests. Th e principles, structures and
processes of corporate governance as adopted by the Company
are set out in this report which is in line with the principles and
guidelines of the Code of Corporate Governance 2005.
BOARD MATTERS | Th e Board’s Conduct of its Aff airs
Th e principal functions of the Board include approving
strategic business plans and major acquisitions or disposal of
assets, reviewing Management performance, reviewing the
Group’s corporate policies and fi nancial performance, approving
quarterly and annual fi nancial results of the Group, and
establishing a framework of prudent and eff ective controls to
assess and manage risk. Th e Board is responsible for the overall
management of the Company, and the Directors objectively
take decisions in the interests of the Company. Th e Board
continues to set the Company’s values and standards to ensure
obligations to shareholders and other stakeholders are properly
understood and met.
Th e Board conducts regular meetings on a quarterly basis and
as necessary when circumstances arise. A total of four Board
meetings were held in the current fi nancial year. Details of
attendance of the directors at the Board and Board Committee
meetings for the year are as follows:
Name BoardAudit
CommitteeRemuneration
CommitteeNominating Committee
MeetingsHeld: 4
Meetings Held: 4
MeetingsHeld: 3
Meetings Held: 1
Cheng Wai Keung 4 1
Edmund Cheng Wai Wing
4
Boey Tak Hap 4 4 3
Cheng Man Tak 4
Tan Sri Dato’ Mohamed Noordin bin Hassan
4 3 1
Lee Han Yang 4 4 3
Lee Kim Wah 4
Loh Soo Eng 4 3 1
Phua Bah Lee 4 4 1
Paul Tong Hon To 4 4
Tan Hwee Bin 4
Chng Chee Beow 4
Matters which require the Board’s approval include those
involving material acquisitions and disposal of assets, dividends
and other returns to shareholders, fund raising exercises,
corporate and fi nancial restructuring and interested person
transactions of a material nature.
A director’s contribution may extend beyond the confi nes
of formal Board meetings, through sharing of views, advice,
experience, and strategic networking relationships which would
further the interests of the Company.
Th e Board is responsible for the overall strategy and direction
of the Group and is regularly updated on changes to regulations
and accounting standards. Where regulatory changes have an
important bearing on the Company’s or directors’ disclosure
obligations, directors are briefed during Board meetings. Newly
appointed directors are given briefi ngs by Management on the
Group’s business, directions and policies.
It is important that every director receives further relevant
training, particularly on relevant new laws, regulations and
changing commercial risks from time to time. Th e Company
Secretary keeps the Directors informed as and whenever
there are appropriate courses, conferences and seminars such
as those conducted by the Singapore Institute of Directors.
Th e Directors are encouraged to attend such training at the
Company’s expense. During FY2011, the seminars attended by
Directors were “Risk Management Essentials” and “Practical
Guide for Achieving Board Eff ectiveness”.
Board Composition and Balance | Th e Board currently
comprises a majority of non-executive directors, with one-half
of the Board being independent directors. Th e Nominating
Committee (“NC”) reviews the independence of each director
annually based on the defi nition of independence as stated in
the Code of Corporate Governance 2005 (“Code”) to ensure
that there is a strong and independent element on the Board.
According to the Code, an “independent” director is one who
has no relationship with the company, its related companies
or its offi cers that could interfere, or be reasonably perceived
to interfere, with the exercise of the director’s independent
business judgement with a view to the best interests of the
company. In addition, an independent director should have no
relationship with any substantial shareholder of the Company.
When considering the independence of the Directors, the
NC also reviews the annual declaration by the independent
non-executive Directors regarding their independence and the
Directors’ disclosures of interests in transactions. Th ere are 12
15
members on the Board, four of whom are executive directors
and eight are non-executive directors (inclusive of six
independent directors).
Th e Board considers its current size and members whose core
competencies, qualifi cations, skills and experience are extensive
and complementary, to be appropriate. Th e Board will examine
its size and composition whenever circumstances require it. No
individual or smaller group of individuals dominates the Board’s
decision-making process.
Chairman and Managing Director | Th e Chairman is also
the Managing Director (“MD”) of the Group and has overall
responsibility for the management and operation of the Group
supported by the respective Heads of Departments. Th ere is
adequate accountability and transparency as refl ected by the
internal controls established within the Group. Th e Board is
also well balanced with a strong and independent group of non-
executive directors to maintain its independence.
Mr Cheng Wai Keung’s primary role as Chairman is to assist
the Board in developing policies and strategies and ensuring
that they are implemented eff ectively. Mr Cheng also provides
leadership to the Board and ensuring that Board meetings are
held when necessary and that Board members are provided with
complete, adequate and timely information. As MD, he makes
key decisions on the management and operations of the Group
and is responsible for the conduct of the business and aff airs of
the Group, supported by the respective Heads of Departments.
Th e sustained growth of the Company under Mr Cheng’s
leadership shows his ability to discharge the responsibilities of
both roles eff ectively.
BOARD COMMITTEES | To assist the Board in the
execution of its responsibilities, the Board delegates specifi c
functions to the various Board committees in execution of its
responsibilities, namely, Audit, Nominating and Remuneration
Committees. Each of these committees has its own terms of
reference and reports its activities regularly to the Board.
Nominating Committee | Board Membership
Th e NC comprises four members, namely, Mr Loh Soo Eng
– Chairman of NC, Tan Sri Dato’ Mohamed Noordin bin
Hassan, Mr Phua Bah Lee (all of whom are independent
non-executive directors) and Mr Cheng Wai Keung.
Th e NC has adopted specifi c written terms of reference. Th e
principal functions of the NC are to make recommendations to
the Board for the appointment and re-appointment of directors
to the Board and to review the independence of each director
annually. Th e NC will review the composition of the Board from
time to time and to search and identify suitable candidates with
the right qualifi cations, expertise and experience. Each candidate
will be evaluated based on his ability to enhance the Board
through his contributions in his area of expertise and to improve
the Group’s business strategies, controls or corporate governance.
All directors are required to submit themselves for re-nomination
and re-election once every three years. At least one-third of the
directors retire at each Annual General Meeting (“AGM”) subject
to re-election annually. Directors above the age of 70 are also
required under the Companies Act to retire and off er themselves for
re-appointment by the shareholders at every AGM.
Key information on the directors are set out on pages 11 to 13
of this Annual Report.
Board Performance | Th e NC’s assessment of the eff ectiveness
and performance of the Board as a whole is conducted on
an annual basis taking into account the level of participation
and contribution of individual directors towards the Board’s
eff ectiveness and competencies, strategic insight, fi nancial
literacy, business judgment, sense of accountability and
maintenance of expertise relevant to the Group. Th e aim of the
evaluation is to assess if each director continues to contribute
eff ectively and demonstrate commitment to their respective
roles. When a director serves on multiple boards, that director
is to ensure that suffi cient time and eff orts are allocated to the
aff airs of each company with assistance from Management, who
provides relevant and complete information on a regular basis
for eff ective discharge of his/her duties.
Access to Information | Prior to each meeting and when the
need arises, the Board is furnished with timely and adequate
information to enable full deliberation of issues to be considered.
To ensure that the Board is able to fulfi ll its responsibilities, the
Management provides the Board with periodic management
reports, forecasts/budgets, fi nancial statements and other
relevant information of the Group.
Th e Board has independent access to the Management and the
Company Secretary at all times. Th e Board seeks independent
professional advice as and when necessary to enable it to
discharge its responsibilities eff ectively.
Th e Company Secretary attends all Board meetings and ensures
that Board procedures are followed. Th e Company Secretary
together with the Management also ensure that the Company
complies with all applicable statutory and regulatory rules.
16
REMUNERATION MATTERS | Remuneration Committee
Th e Remuneration Committee (“RC”) comprises four
members, all of whom are independent non-executive directors.
Th e RC members are Mr Lee Han Yang - Chairman of RC,
Mr Boey Tak Hap, Tan Sri Dato’ Mohamed Noordin bin
Hassan and Mr Loh Soo Eng.
Th e RC reviews the remuneration of directors and key
executives of the Group and obtains advice on remuneration
matters as and when required from human resource advisers
or consultants within and outside the Group. Th e RC approves
the structure of the remuneration package for the Directors
and key executives to ensure that the package is competitive
and suffi cient to attract, retain and motivate key executives.
No director is involved in deciding his/her own remuneration.
Directors who participate in Board Committees receive higher
fees for the additional responsibilities. All directors’ fees are
approved by shareholders at the Annual General Meeting of
the Company before they are paid.
Other than the restricted shares and performance shares
(“Shares”) granted to Ms Tan Hwee Bin and Mr Chng Chee
Beow, no Shares nor share options were granted to the rest of
the directors during the fi nancial year.
Th e breakdown (in percentage terms) of the directors’
remuneration for FY2011 are as follows:-
Remuneration Bands
Fees (%)
Salary (%)
Bonus, Allowance &
Other Benefi ts (%)
Shares granted
during the year
$3,000,000 to $3,250,000 Cheng Wai Keung – 36 64# –
Edmund Cheng Wai Wing – 35 65# –
$1,250,001 to $1,500,000 Tan Hwee Bin – 31 69^ 282,000
$1,000,000 to $1,250,000 Chng Chee Beow – 30 70^ 210,000
Below $250,000 Boey Tak Hap 100 – – –
Cheng Man Tak 100 – – –
Tan Sri Dato’ Mohamed Noordin bin Hassan
66# – 34# –
Lee Han Yang 100 – – –
Lee Kim Wah 91 – 9^ –
Loh Soo Eng 100 – – –
Phua Bah Lee 100 – – –
Paul Tong Hon To 100 – – –
# Includes fees, allowance and other benefi ts from Wing Tai Malaysia Berhad.^ Includes the cost of the fair value of share options, restricted shares and performance
shares (where applicable).
Th e breakdown of the remuneration of the top six key executives
(one of whom is related to the Managing Director) for FY2011
is set out below. A signifi cant portion of the key executives’
remuneration is linked to corporate and individual performance.
Remuneration
Bands
Salary
(%)
Bonus, Allowance
& Other Benefi ts (%)
Above $750,000
Helen Chow 46 54
Helen Khoo 28 72^
$500,000 to $750,000
Dato’ Roger Chan Wan Chung 51 49#
Len Siew Lian 39 61^
Ng Kim Huat 46 54^
Karine Lim 45 55^
# Includes allowance and other benefi ts from Wing Tai Malaysia Berhad.^ Includes the cost of the fair value of share options, restricted shares and performance
shares (where applicable).
ACCOUNTABILITY AND AUDIT | Accountability
Shareholders are provided with the Company’s performance,
fi nancial position and prospects on a quarterly basis, while
periodic management reports of the Company and its
businesses are furnished to the Board.
Audit Committee | Th e Audit Committee (“AC”) comprises
four members, all of whom are independent non-executive
directors. Th e AC members are Mr Paul Tong Hon To -
Chairman of AC, Mr Boey Tak Hap, Mr Lee Han Yang and
Mr Phua Bah Lee.
Members of the AC have suffi cient fi nancial management
expertise and experience to discharge its functions. It held
four meetings in FY2011. Th e functions of the AC include the
review of annual audit plan, internal audit process, the adequacy
of internal controls and interested person transactions. Th e AC
recommends to the Board the external auditors to be appointed
or re-appointed taking into account the independence and
objectivity of such external auditors as well as to review the
scope, results and cost eff ectiveness of their audit procedures.
Th e AC also reviews the quarterly and annual fi nancial
statements before submitting to the Board for approval.
Th e key function of the AC is to maintain a high standard of
corporate governance and risk management. Th e AC
has full access to and co-operation of the Management.
Th e AC meetings are held with the internal and external
auditors without the presence of the Management once
during the year. It has the discretion to invite any director
and executive offi cer to attend its meetings. Having reviewed
the value of non-audit services by the external auditors to the
Group, the AC is satisfi ed that the nature and extent of such
services will not prejudice the independence and objectivity of
the external auditors.
17
Internal Controls | Th e Board recognises the importance
of sound internal controls and risk management practices
in relation to good corporate governance. Th e Group’s
internal controls provide reasonable assurance that assets
are safeguarded, proper accounting records are maintained,
reliability of fi nancial information and compliance with
applicable laws and regulations. Regular management meetings
are held to report and monitor the performance of each
department. Management assists the Board in monitoring and
managing risks and internal controls of the Group.
Th e internal auditors report directly to the Chairman of the
Audit Committee. Th e Audit Committee ensures that the
internal auditors are adequately resourced and has appropriate
standing within the Company and ensures, on an annual basis,
the adequacy of the internal audit function.
Th e Board is satisfi ed that based on the information furnished
to it and on its own observations, the internal controls
(including fi nancial, operational and compliance controls) and
risk management processes are adequate for the nature and size
of the Group’s operations and business.
Interested Person Transaction | Th e Company has established
an internal policy for transactions with interested persons
and has set out the procedures for review and approval of the
Company’s interested person transactions (IPT).
During FY2011, the AC reviewed the following IPT:-
Name of Interested Person Aggregate Value of all IPT during FY2011
Sale of one condominium unit
Ressington Company Limited
S$’000
$16,715
Th e above IPT was entered into at arm’s length and on
normal commercial terms. Recurring IPTs are disclosed in the
Financial Statements.
Internal Audit | Th e Company has out-sourced its internal
audit function to KPMG Services Pte Ltd (“KPMG”) in May
2011. Prior to the appointment of KPMG, the Company’s
internal audit department carried out a review of the Group’s
property and retail operations as well as audit on the system
of internal controls and reports to the AC. In addition, the
Group’s external auditors also carry out a review of the internal
controls in the course of their statutory audit. Th e internal
auditors (“IA”) carry out their work based on the standards
for the Professional Practice of Internal Auditing set by the
Institute of Internal Auditors.
A set of internal controls which sets out approval limits for
expenditure, investments and divestments and cheque signatory
arrangements is adopted by the Company. Th e IA assists the
AC in its functions by reporting their audit fi ndings to the AC
and to the Management.
Th e scope of the internal auditors is to perform detailed work
to assist the Audit Committee and Board in the evaluation of
internal controls and risk management. Th e IA submits its plans
and recommendations to the AC for approval. Th e AC reviews
the adequacy of the internal audit function through a review of
activities carried out by the IA on a quarterly basis and is satisfi ed
that there are adequate internal controls in the Company.
WHISTLEBLOWING POLICY | As part of the eff ort
in promoting good corporate governance practices amongst
its employees, the Group has put in place a policy on whistle-
blowing to facilitate the reporting of activities or practices which
are in violation of the Group’s work rules. Th e policy, with clearly
defi ned processes, conforms to the guidelines set out in the
Code of Corporate Governance which encourages employees to
raise concerns, in confi dence, about possible irregularities to the
employees’ supervisors, IA or AC Chairman.
Th e AC has the responsibility of overseeing this policy, which
is administered with the assistance of the IA. Th e process of
raising the concerns has been communicated to all employees.
Th e Group assures that the whistle-blower’s identity will be kept
confi dential unless required by the court or other regulatory
authorities to disclose the identity. Anonymous reports will be
reviewed and investigated on the basis of their merits.
Upon receipt of report of any violation of the Group’s work
rules or any unethical or unlawful business conduct or
dealings, the concerns raised and information provided
will be investigated in a timely manner.
RISK MANAGEMENT | Risk management plays an
essential role in the Group’s business activities and forms a key
component in its planning process. Th e Board is responsible in
ascertaining the nature of its business risks and ensures that risks
in existing and new businesses are properly managed, business
plans and strategies are in line with the risks appetite of the
Group to achieve its corporate objectives. Th e Board has the
AC to assist in its risk management oversight via reporting on
matters relating to the risk management policies of the Group.
Th e Group has a risk management framework to provide
the Board with a Group-wide view of the risks involved in
property development, investment and management, hospitality
management, apparel retailing and food franchise operations.
As part of the framework, a risk register was set up to identify
the risks and risk management objectives and to monitor
the overall risks positions. Th e risk management framework
18
specifi es the signifi cant business risks to be identifi ed, assessed,
evaluated, monitored and managed. Th e procedures and
processes within the framework allow the Group to regularly
review its signifi cant strategic business risks, consider the
eff ectiveness of the Group’s system of internal controls to limit,
mitigate and monitor identifi ed risks and the implementation
of further action plans to manage strategic business risks.
Th e key risks below are managed within the Group’s risk
management framework:-
Business / Strategic Risks | In the course of its activities, the
Group is exposed to business risks relating to business factors
such as customers’ demand, growth, macro-economic conditions,
competition and regulatory environment. It is the Group’s
primary consideration to evaluate such risks to achieve overall
corporate growth. Th ese risks include macro and project specifi c
risks analysis, fi nancial modeling and sensitivity analysis on key
investment assumptions. Each investment proposal is evaluated
according to the corporate strategies and investment objectives.
Potential joint venture business risks are evaluated to ensure
joint venture partnership objectives and visions are aligned.
Operational Risks | Th e Group is exposed to operational risks
relating to product and service quality assurance, cost control,
sales and marketing, leasing, fi nancial control and regulatory
compliances. Identifi cation and assessment of such risks are
essential for the management and mitigation of these risks. Th e
implementation and use of a system of internal controls, operating,
reporting and monitoring processes and procedures, supported by
information technology systems and human resource skills, are
important elements of the risk management framework.
Financial Risks | Th e Group’s operations and the use of
fi nancial instruments exposed it to fi nancial risks, including
currency risk, interest rate risk, credit risk, liquidity risk
and capital risk. Th e Group seeks to minimise any adverse
eff ects from the unpredictability of fi nancial markets through
identifying and evaluating such exposures and establishing
policies to monitor and manage these fi nancial risks. Further
details on fi nancial risk management are stipulated in the notes
to fi nancial statements under “Financial Risk Management”.
Human Resource Risks | Th e Group recognises human
resource is an imperative factor towards the sustainable
growth of the organisation. Eff orts are taken to enhance the
recruitment processes, compensation packages, employees’
training and development. Core competencies are identifi ed
through the employee selection and development processes,
performance assessment as well as career development and
training programs. Th e Group’s human resource strategy aims to
improve the overall work performance, optimise competencies,
enhance staff commitment and retention and develop an
eff ective succession plan. In addition, the Group supports work-
life harmony programs as part of its eff orts to help employees
achieve a balanced life between work and family.
Crisis Risks | Th e Group’s operating environment exposed it
to risks arising from potential threats of terrorism, epidemic
outbreaks and information systems failure. Th e Group has
put in place a disaster recovery plan to mitigate the risks
of interruption and catastrophic loss to its operations and
information database arising from such potential threats.
COMMUNICATION WITH SHAREHOLDERS | In
line with the disclosure obligations under the SGX-ST Listing
Rules and the Companies Act, the Company promptly informs
shareholders of all major developments that impact the Group.
Shareholders are updated on the business and aff airs of the
Company through the quarterly release of the Company’s
results. Material and price-sensitive information is publicly
released by the Company via SGXNET on an immediate
basis where required by the Singapore Exchange Securities
Trading Limited (SGX-ST). Th e Company does not practise
selective disclosure. Timely and detailed disclosure of pertinent
corporate information is communicated via SGXNET and the
Company’s website.
All shareholders receive the summary fi nancial report and/or
annual report of the Company and notice of the AGM. Th e
notice (also advertised in the press) and results are published
via SGXNET. Th e Company also conducts media and analysts
briefi ng for its full-year results.
Shareholders are given the opportunity to raise relevant questions
and communicate their views at general meetings. A shareholder
can vote in person or by way of proxy at general meetings.
DEALINGS IN SECURITIES | Th e Company has adopted
and implemented an internal guideline on share dealings in
the Company’s securities in compliance with Rule 1207(18)
(c) of the Listing Manual of the SGX-ST. All the offi cers of
the Company are prohibited from dealing in securities of the
Company while in possession of price-sensitive information.
Th ey are also prohibited from dealing in securities of the
Company during the closed period, which is two weeks before
the date of announcement of results for each of the fi rst three
quarters of the Company’s fi nancial year and one month before
the date of announcement of the full-year fi nancial results.
19
April 2011
Joint venture agreement
signed with Singbridge
International Singapore to
develop residential project in
Sino-Singapore Guangzhou
Knowledge City, China
BCBG’s
appointed
franchisee in
Singapore and
Malaysia
UK high-street
brand Wallis
introduced in
Malaysia, and
in Singapore
in June
May 2011
Foresque Residences launched
for sale, Singapore
Won BCI Asia Top 10
Developers Award 2011,
Singapore
Belle Vue Residences won
11th SIA Architectural Design
Awards 2011 for Residential-
Apartments/Condominium
Category Honourable
Mention, Singapore
June 2011
Awarded Iconic Service
Organisation by the GEMS
(Go the Extra Mile for
Service) Up Committee for
pioneering Customer-Centric
Initiatives, Singapore
Calendar of Events
Refl ections
July 2010
Helios Residences Topping
Out, Singapore
L’VIV Groundbreaking,
Singapore
August 2010
Announcement of full year
results for year ended
30 June 2010
September 2010
Belle Vue Residences
launch, Singapore
Associate of the Arts Award
conferred by National Arts
Council, Singapore
October 2010
46th Annual General
Meeting, Singapore
Won over 130 Excellent
Service Awards (EXSA),
Singapore
November 2010
Rebranded Wing Tai
Malaysia Berhad, from DNP
Holdings Berhad, Malaysia
First Uniqlo fl agship store
opened in Kuala Lumpur,
Malaysia
December 2010
Largest outside the UK
and US, Topshop/Topman
fl agship store opened at
Knightsbridge, Singapore
January 2011
Helios Residences obtained
Temporary Occupation
Permit, Singapore
Won Hurun Recommended
Singapore Luxury Property
Developer Award,
Shanghai, China
Jalan Langgak Golf site
acquired, Malaysia
March 2011
Foresque Residences
Groundbreaking, Singapore
Wing Tai Retail participated
in Singapore’s and Malaysia’s
Red Cross donation drive,
setting up donation boxes
in retail stores, and pledging
100% of March retail profi t
from Uniqlo Singapore and
Uniqlo Malaysia, 1% of sales
turnover in March in all
stores in Isetan towards Japan
Disaster 2011
Participated in Earth
Hour Singapore 2011 in
demonstrated support towards
sustainable environment
20
Financial Reports
For the Year 2011
22 / Five-Year Financial Summary
23 / Directors’ Report
29 / Statement by Directors
30 / Independent Auditor’s Report
31 / Consolidated Income Statement
32 / Consolidated Statement
of Comprehensive Income
33 / Balance Sheets
34 / Consolidated Statement
of Changes in Equity
36 / Consolidated Statement of Cash Flows
38 / Notes to the Financial Statements
103 / Shareholding Statistics
22 Five-Year Financial Summary
2011 2010 2009 2008 2007 $’000 $’000 $’000 $’000 $’000
Revenue 649,073 821,851 501,843 428,173 981,634
Property 438,149 626,709 324,605 197,340 787,540
Retail 202,350 179,683 160,934 161,654 135,216
Investment and others 8,574 15,459 16,304 69,179 58,878
Profi t before income tax 405,494 274,823 39,960 300,354 499,906
Profi t after income tax but
before non-controlling interests 357,401 222,018 28,995 255,234 441,751
Profi t attributable to equity
holders of the Company 314,180 160,750 20,982 229,355 381,835
Shareholders’ equity 1,919,095 1,694,673 1,575,916 1,605,524 1,489,349
Total assets 3,765,833 3,673,958 3,268,935 3,232,634 3,133,185
Total liabilities and non-controlling interests 1,846,738 1,979,285 1,693,019 1,627,110 1,643,836
Earnings per share* (cents) 40.32 20.66 2.68 30.11 52.08
Net tangible assets per share ($) 2.46 2.18 2.03 2.03 2.07
Dividends per share (cents)
– Cash dividends 7.00 5.00 4.00 6.00 8.00
– Special rights dividends – – – – 25.00
* Th e number of shares used for this purpose are as follows:
’000
2011 779,181
2010 777,945
2009 782,796
2008 761,618
2007 733,173
23Directors’ Reportfor the financial year ended june
Th e directors present their report to the members together with the audited fi nancial statements of the Group for the fi nancial year
ended 30 June 2011 and the balance sheet of the Company as at 30 June 2011.
DIRECTORS
Th e directors of the Company at the date of this report are:
Cheng Wai Keung (Chairman and Managing Director)
Edmund Cheng Wai Wing (Deputy Chairman and Deputy Managing Director)
Boey Tak Hap
Cheng Man Tak
Tan Sri Dato’ Mohamed Noordin bin Hassan
Lee Han Yang
Lee Kim Wah
Loh Soo Eng
Phua Bah Lee
Paul Tong Hon To
Tan Hwee Bin
Chng Chee Beow
ARRANGEMENTS TO ENABLE DIRECTORS TO ACQUIRE SHARES AND DEBENTURES
Except as disclosed in the “Share Options” and “Share Plans” sections of this report, neither at the end of nor at any time during the
fi nancial year was the Company a party to any arrangement, whose object was to enable the directors of the Company to acquire
benefi ts through the acquisition of shares in, or debentures of, the Company or any other body corporate.
24 Directors’ Reportfor the financial year ended june
DIRECTORS’ INTERESTS IN SHARES OR DEBENTURES
(a) Th e interests of the directors holding offi ce at the end of the fi nancial year in the shares, share options and share plans of the
Company and related corporations according to the register of the directors’ shareholdings were as follows:
Holdings registered in Holdings in which a director the name of director is deemed to have an interest
As at As at As at As at
Name of directors 01.07.2010 30.06.2011 01.07.2010 30.06.2011
Ordinary Shares
Cheng Wai Keung – – 318,156,564 325,856,564
Edmund Cheng Wai Wing – – 310,601,664 310,601,664
Lee Han Yang 330,000 330,000 – –
Lee Kim Wah 937,600 937,600 – –
Loh Soo Eng 412,800 412,800 – –
Phua Bah Lee 275,000 275,000 – –
Tan Hwee Bin 90,000 219,900 – –
Chng Chee Beow 318,400 412,900 15,800 15,800 Share Options
Lee Kim Wah 409,200 409,200 – –
Tan Hwee Bin 390,500 390,500 – –
Chng Chee Beow 234,300 234,300 – – Restricted Share Plan
Tan Hwee Bin 343,000 444,100 – –
Chng Chee Beow 249,600 311,100 – – Performance Share Plan*
Tan Hwee Bin 42,000 93,000 – –
Chng Chee Beow 46,000 100,000 – –
RELATED CORPORATION
Wing Tai Malaysia Berhad Ordinary Shares
Loh Soo Eng 40,000 – – – Share Options
Cheng Wai Keung 800,000 800,000 – –
Edmund Cheng Wai Wing 800,000 800,000 – –
* Shares awarded are contingent upon achievement of threshold targets.
(b) By virtue of Section 7 of the Companies Act (Cap. 50), Cheng Wai Keung and Edmund Cheng Wai Wing, who by virtue of
their interest of not less than 20% in the issued capital of the Company, are also deemed to have an interest in the shares of the
various subsidiary companies held by the Company.
(c) Th ere is no change in any of the above mentioned interest between 30 June 2011 and 21 July 2011.
25
DIRECTORS’ CONTRACTUAL BENEFITS
Since the end of the preceding fi nancial year, no director has received or become entitled to receive a benefi t by reason of a contract
made by the Company or a related corporation with the director or with a fi rm of which he is a member or with a company in which
he has a substantial fi nancial interest, except as disclosed in Note 33 to the fi nancial statements.
SHARE OPTIONS
(a) Th e Wing Tai Holdings Limited (2001) Share Option Scheme (the “Scheme”)
Th e Scheme was approved and adopted by the members of the Company at an Extraordinary General Meeting (“EGM”)
held on 31 August 2001. Th e Scheme was terminated by the members of the Company at an EGM held on 30 October 2008
(without prejudice to the rights of holders of options thereunder in respect of options which have been granted).
Th e Scheme is administered by a committee comprising two directors, namely Cheng Wai Keung and Tan Hwee Bin.
No option was granted under the Scheme during the fi nancial year. No controlling shareholder of the Company or his associate
participated in the Scheme.
Th e aggregate number of options granted since the commencement of the Scheme to the end of the fi nancial year is as follows:
Aggregate options since commencement of the Scheme to 30.06.2011 Aggregate number of outstanding Number of Number of Number of options as at Name of participants options granted options exercised options forfeited 30.06.2011
Directors of the Company
Lee Kim Wah 877,200 468,000 – 409,200
Tan Hwee Bin 645,500 255,000 – 390,500
Chng Chee Beow 616,300 382,000 – 234,300
2,139,000 1,105,000 – 1,034,000
Group Executives 11,070,300 5,025,500 2,910,800 3,134,000
Total 13,209,300 6,130,500 2,910,800 4,168,000
Other than Lee Kim Wah, none of the participants of the Scheme received 5% or more of the total number of options granted
under the Scheme.
Details of the movement in the options granted under the Scheme on the unissued ordinary shares of the Company
during the year were as follows:
Number Number As at of options of options As at Exercise Date of grant 01.07.2010 exercised forfeited 30.06.2011 price ($) Expiry date
02.11.2001 22,000 – – 22,000 0.616 01.11.2011
19.11.2004 294,800 7,700 – 287,100 0.849 18.11.2014
30.09.2005 668,900 23,100 6,600 639,200 1.300 29.09.2015
05.09.2006 1,269,300 17,500 12,100 1,239,700 1.645 04.09.2016
06.09.2007 2,024,000 – 44,000 1,980,000 3.136 05.09.2017
Total 4,279,000 48,300 62,700 4,168,000
Directors’ Reportfor the financial year ended june
26 Directors’ Reportfor the financial year ended june
SHARE OPTIONS (continued)
(b) Th e Wing Tai Malaysia Berhad (“WTM”) Employees’ Share Option Scheme (the “ESOS”)
WTM, a subsidiary company of the Group, implemented the ESOS approved by the shareholders of WTM at an EGM held
on 11 May 2005.
Th e directors (including non-executive directors) and employees of WTM who as at the date of off er are confi rmed with at
least one year of continuous service in WTM and its subsidiary companies are eligible to participate in the scheme. Th e ESOS
will allow granting of options to all eligible directors and employees by giving them the right to subscribe for new shares of
RM1.00 each, subject to the terms and conditions of the by-laws of the ESOS. Th e details of the ESOS have been disclosed in
the Directors’ Report of WTM.
Details of the movement in the options granted under the ESOS on the unissued ordinary shares of WTM during the year
were as follows:
Number Number As at of options of options As at Exercise Date of grant 01.07.2010 exercised forfeited 30.06.2011 price (RM) Expiry date
01.12.2005 2,055,400 1,026,000 – 1,029,400 1.00 15.05.2015
31.01.2007 895,800 609,000 – 286,800 1.00 15.05.2015
19.05.2010 3,021,000 993,700 74,200 1,953,100 1.20 15.05.2015
Total 5,972,200 2,628,700 74,200 3,269,300
Except for the above, no other options were granted by the Company or any subsidiary companies during the fi nancial year and there
were no unissued shares under options at the end of the fi nancial year.
SHARE PLANS
Th e Wing Tai Performance Share Plan (“Wing Tai PSP”) and the Wing Tai Restricted Share Plan (“Wing Tai RSP”) (collectively
referred to as the “Share Plans”) were adopted by the members of the Company at an EGM held on 30 October 2008.
Th e Share Plans are administered by a committee (the “Committee”) comprising two directors, namely Cheng Wai Keung and
Tan Hwee Bin.
(a) Wing Tai PSP
One of the primary objectives of the Wing Tai PSP is to increase the Company’s fl exibility and eff ectiveness in its continuous
eff orts to reward, retain and motivate key management staff . Th e Wing Tai PSP is primarily targeted at executives in key
positions who are able to drive the growth of the Company through innovation, creativity and superior performance.
Full-time executives (including executive directors) of the Company, its subsidiary companies or associated companies who
hold such rank as may be designated by the Committee from time to time are eligible to participate in the Wing Tai PSP.
Under the Wing Tai PSP, performance conditions are set over a three-year performance period. A specifi ed number of shares
will be released by the Committee to the participants at the end of the performance period, provided the threshold targets
are achieved.
27
SHARE PLANS (continued)
(a) Wing Tai PSP (continued)
During the fi nancial year, awards were granted by the Company pursuant to the Wing Tai PSP in respect of 175,000 shares,
of which 51,000 and 54,000 shares were granted to two executive directors, namely Tan Hwee Bin and Chng Chee Beow
respectively and 70,000 shares were granted to 4 executives of the Group.
Details of the movement in the awards of the Company during the year were as follows:
As at Number of As at Date of grant 01.07.2010 shares granted 30.06.2011
03.09.2009 146,000 – 146,000
01.09.2010 – 175,000 175,000
Total 146,000 175,000 321,000
(b) Wing Tai RSP
Th e objective of the Wing Tai RSP is to serve as an additional motivational tool to recruit and retain employees.
Full-time executives (including executive directors) of the Company, its subsidiary companies or associated companies who
hold such rank as may be designated by the Committee from time to time and non-executive directors are eligible to participate
in the Wing Tai RSP.
Under the Wing Tai RSP, performance conditions are set over a one-year performance period. A specifi ed number of shares
will be awarded to eligible participants at the end of the performance period depending on the extent of achievement of the
performance conditions established. Th e shares have a vesting schedule of three years. Th e participant will receive fully paid
shares, without any cash consideration payable by the participant.
During the fi nancial year, awards were granted by the Company pursuant to the Wing Tai RSP in respect of 2,125,000 shares,
of which 231,000 and 156,000 shares were granted to two executive directors, namely Tan Hwee Bin and Chng Chee Beow
respectively and 1,738,000 shares were granted to 42 executives of the Group.
Details of the movement in the awards of the Company during the year were as follows:
As at Number of Number of Number of As at Date of grant 01.07.2010 shares granted shares released shares forfeited 30.06.2011
18.05.2009 1,474,900 – 632,100 – 842,800
03.09.2009 1,257,000 – 377,100 9,100 870,800
01.09.2010 – 2,125,000 – 22,000 2,103,000
Total 2,731,900 2,125,000 1,009,200 31,100 3,816,600
Directors’ Reportfor the financial year ended june
28
AUDIT COMMITTEE
Th e Audit Committee consists of four non-executive independent directors. Th e members of the Committee at the date of this
report are:
Paul Tong Hon To (Chairman)
Boey Tak Hap
Lee Han Yang
Phua Bah Lee
Th e Audit Committee reviewed the Group’s accounting policies and system of internal controls on behalf of the Board of Directors
and performed the functions specifi ed in Section 201B(5) of the Companies Act (Cap. 50). In performing its functions, the
Committee reviewed:
(a) the audit plans of the Company’s internal and external auditors and their evaluation of the system of internal controls arising
from their audit examinations;
(b) the scope and results of internal audit procedures; and
(c) the quarterly results and the full year consolidated fi nancial statements of the Group for the fi nancial year ended 30 June 2011
before their submission to the Board of Directors for approval and the auditor’s report on these fi nancial statements.
Th e Audit Committee has nominated PricewaterhouseCoopers LLP for re-appointment as auditor of the Company at the
forthcoming Annual General Meeting.
INDEPENDENT AUDITOR
Th e independent auditor, PricewaterhouseCoopers LLP, has expressed its willingness to accept re-appointment.
On behalf of the directors
CHENG WAI KEUNG EDMUND CHENG WAI WING
Director Director
20 September 2011
Directors’ Reportfor the financial year ended june
29
In the opinion of the directors,
(a) the balance sheet of the Company and the consolidated fi nancial statements of the Group as set out on pages 31 to 102 are
drawn up so as to give a true and fair view of the state of aff airs of the Company and of the Group as at 30 June 2011 and of
the results of the business, changes in equity and cash fl ows of the Group for the fi nancial year then ended; and
(b) at the date of this statement, there are reasonable grounds to believe that the Company will be able to pay its debts as and
when they fall due.
On behalf of the directors
CHENG WAI KEUNG EDMUND CHENG WAI WING
Director Director
20 September 2011
Statement by Directorsfor the financial year ended june
30
REPORT ON THE FINANCIAL STATEMENTS
We have audited the accompanying fi nancial statements of Wing Tai Holdings Limited (the “Company”) and its subsidiary
companies (the “Group”) set out on pages 31 to 102, which comprise the consolidated balance sheet of the Group and the balance
sheet of the Company as at 30 June 2011, the consolidated income statement, the consolidated statement of comprehensive income,
the consolidated statement of changes in equity and the consolidated statement of cash fl ows of the Group for the fi nancial year then
ended, and a summary of signifi cant accounting policies and other explanatory information.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation of fi nancial statements that give a true and fair view in accordance with the provisions
of the Singapore Companies Act (the “Act”) and Singapore Financial Reporting Standards, and for devising and maintaining a
system of internal accounting controls suffi cient to provide a reasonable assurance that assets are safeguarded against loss from
unauthorised use or disposition that transactions are properly authorised and that they are recorded as necessary to permit the
preparation of true and fair profi t and loss accounts and balance sheets and to maintain accountability of assets.
Auditor’s Responsibility
Our responsibility is to express an opinion on these fi nancial statements based on our audit. We conducted our audit in accordance
with Singapore Standards on Auditing. Th ose Standards require that we comply with ethical requirements and plan and perform the
audit to obtain reasonable assurance about whether the fi nancial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the fi nancial statements.
Th e procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the
fi nancial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal controls relevant
to the entity’s preparation of fi nancial statements that give a true and fair view in order to design audit procedures that are appropriate
in the circumstances, but not for the purpose of expressing an opinion on the eff ectiveness of the entity’s internal controls. An audit
also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by
management, as well as evaluating the overall presentation of the fi nancial statements.
We believe that the audit evidence we have obtained is suffi cient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the consolidated fi nancial statements of the Group and the balance sheet of the Company are properly drawn up in
accordance with the provisions of the Act and Singapore Financial Reporting Standards so as to give a true and fair view of the state
of aff airs of the Group and of the Company as at 30 June 2011, and the results, changes in equity and cash fl ows of the Group for
the fi nancial year ended on that date.
REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS
In our opinion, the accounting and other records required by the Act to be kept by the Company and by those subsidiary companies
incorporated in Singapore of which we are the auditors, have been properly kept in accordance with the provisions of the Act.
PRICEWATERHOUSECOOPERS LLP
Public Accountants and Certifi ed Public Accountants
Singapore
20 September 2011
Independent Auditor’s Report To the Members of Wing Tai Holdings Limited
for the financial year ended june
31Consolidated Income Statement for the financial year ended june
Group 2011 2010 Note $’000 $’000
Revenue 3 649,073 821,851
Cost of sales (274,867) (430,464)
Gross profi t 374,206 391,387
Other gains – net 4 80,837 20,417
Expenses
– Distribution (89,507) (81,875)
– Administrative and other (84,395) (75,481)
Operating profi t 281,141 254,448
Finance costs 7 (39,868) (31,295)
Share of profi ts of associated and joint venture companies 164,221 51,670
Profi t before income tax 405,494 274,823
Income tax expense 8(a) (48,093) (52,805)
Total profi t 357,401 222,018
Attributable to:
Equity holders of the Company 314,180 160,750
Non-controlling interests 43,221 61,268
357,401 222,018
Earnings per share attributable to equity holders of the Company (cents)
Basic 9(a) 40.32 20.66
Diluted 9(b) 40.03 20.57
32 Consolidated Statement of Comprehensive Income for the financial year ended june
Group 2011 2010 Note $’000 $’000
Total profi t 357,401 222,018
Other comprehensive (expense)/income:
Cash fl ow hedges (5,403) (3,674)
Currency translation diff erences (69,085) (13,736)
Revaluation gains on property, plant and equipment 8,446 2,639
Share of other comprehensive (expense)/income
of associated and joint venture companies (1,396) 6,108
Other comprehensive expense, net of tax 8(a) (67,438) (8,663)
Total comprehensive income 289,963 213,355
Attributable to:
Equity holders of the Company 254,763 146,550
Non-controlling interests 35,200 66,805
289,963 213,355
33Balance Sheets as at june
Group Company 2011 2010 2011 2010 Note $’000 $’000 $’000 $’000
ASSETS
Current assets
Cash and cash equivalents 10 504,235 594,054 188,991 331,807
Trade and other receivables 12 212,651 42,821 277,284 271,072
Inventories 13 18,784 16,466 – –
Development properties 14 1,275,151 1,423,002 – –
Tax recoverable 5,758 2,967 – –
Other current assets 15 48,644 38,089 2,615 2,887
2,065,223 2,117,399 468,890 605,766
Non-current assets
Available-for-sale fi nancial assets 16 7,170 7,170 3,189 3,189
Trade and other receivables 17 197,790 222,689 618,554 496,070
Investment in an associated company 18 554,027 514,662 – –
Investments in joint venture companies 19 189,769 149,457 – –
Investments in subsidiary companies 20 – – 252,392 252,392
Investment properties 21 560,210 486,028 – 82,000
Property, plant and equipment 22 191,644 176,553 6,951 14,937
1,700,610 1,556,559 881,086 848,588
Total assets 3,765,833 3,673,958 1,349,976 1,454,354
LIABILITIES
Current liabilities
Trade and other payables 23 222,338 152,061 162,128 161,932
Current income tax liabilities 81,808 45,787 3,506 5,214
Borrowings 24 167,126 110,655 – 100,000
471,272 308,503 165,634 267,146
Non-current liabilities
Derivative fi nancial instruments 11 34,116 28,475 6,286 6,607
Borrowings 24 1,012,091 1,225,017 245,000 265,000
Deferred income tax liabilities 8(b) 85,665 97,241 – 2,342
Other non-current liabilities 26 48,819 123,618 9,655 9,844
1,180,691 1,474,351 260,941 283,793
Total liabilities 1,651,963 1,782,854 426,575 550,939
NET ASSETS 2,113,870 1,891,104 923,401 903,415
EQUITY Capital and reserves attributable to
equity holders of the Company
Share capital 27 838,250 838,200 838,250 838,200
Other reserves 28 (65,412) (8,800) (12,750) (8,713)
Retained earnings 29 1,146,257 865,273 97,901 73,928
1,919,095 1,694,673 923,401 903,415Non-controlling interests 194,775 196,431 – –
TOTAL EQUITY 2,113,870 1,891,104 923,401 903,415
34 Consolidated Statement of Changes in Equityfor the financial year ended june
Attributable to equity holders of the Company Non- Share Other Retained controlling Total capital reserves earnings Total interests equity Note $’000 $’000 $’000 $’000 $’000 $’000
2011
Beginning of fi nancial year 838,200 (8,800) 865,273 1,694,673 196,431 1,891,104
Total comprehensive
(expense)/income – (59,417) 314,180 254,763 35,200 289,963
Realisation of reserves – (264) 264 – – –
Cost of share-based payment 28(a) – 3,254 – 3,254 159 3,413
Issue of shares on exercise of
share options 27 50 – – 50 – 50
Reissuance of treasury shares – 15 – 15 – 15
Ordinary and special dividends paid 25 – – (38,957) (38,957) – (38,957)
Dividends paid by subsidiary
companies to non-controlling interests – – – – (5,139) (5,139)
Issue of shares by a subsidiary company
to non-controlling interests – – (874) (874) 2,065 1,191
Acquisition of additional interest
in a subsidiary company – – 6,371 6,371 (18,081) (11,710)
Liquidation of subsidiary companies – 335 – 335 (15,261) (14,926)
Liquidation of joint venture companies – (535) – (535) (599) (1,134)
End of fi nancial year 838,250 (65,412) 1,146,257 1,919,095 194,775 2,113,870
35Consolidated Statement of Changes in Equityfor the financial year ended june
Attributable to equity holders of the Company Non- Share Other Retained controlling Total capital reserves earnings Total interests equity Note $’000 $’000 $’000 $’000 $’000 $’000
2010
Beginning of fi nancial year 837,690 2,883 735,343 1,575,916 139,758 1,715,674
Total comprehensive
(expense)/income – (14,200) 160,750 146,550 66,805 213,355
Realisation of reserves – (290) 290 – – –
Cost of share-based payment 28(a) – 2,807 – 2,807 12 2,819
Issue of shares on exercise of
share options 27 510 – – 510 – 510
Ordinary and special dividends paid 25 – – (31,110) (31,110) – (31,110)
Dividends paid by subsidiary companies
to non-controlling interests – – – – (9,834) (9,834)
Issue of shares by a subsidiary company
to non-controlling interests – – – – 846 846
Acquisition of additional interest
in a subsidiary company – – – – (1,156) (1,156)
End of fi nancial year 838,200 (8,800) 865,273 1,694,673 196,431 1,891,104
An analysis of the movements in each category within “Other reserves” is presented in Note 28.
36 Consolidated Statement of Cash Flowsfor the financial year ended june
Group 2011 2010 Note $’000 $’000
Cash fl ows from operating activities
Total profi t 357,401 222,018
Adjustments for:
Income tax expense 48,093 52,805
Depreciation of property, plant and equipment 11,100 12,149
Write-off of property, plant and equipment 389 411
Write-back of impairment on property, plant and equipment (59) (188)
Dividend income (81) (73)
Fair value gains on investment properties (74,616) (5,140)
Fair value losses on derivative fi nancial instruments 238 68
Allowance for foreseeable losses on development properties 14,840 –
Dilution loss on interest in an associated company 1,824 135
Gain on disposal of property, plant and equipment (957) (949)
Gain on liquidation of joint venture companies (1,062) –
Loss on liquidation of subsidiary companies 335 –
Gain on capital reduction of joint venture companies (10,201) –
Reversal of tax indemnity (795) –
Interest income (7,915) (9,938)
Interest expense 39,868 31,295
Share of profi ts of associated and joint venture companies (164,221) (51,670)
Share-based payment 3,413 2,819
Translation diff erences 5,591 (6,218)
Operating cash fl ow before working capital changes 223,185 247,524
Changes in operating assets and liabilities:
Balances with associated and joint venture companies 11,958 (18,538)
Development properties 128,225 (162,420)
Inventories (2,589) 450
Trade and other receivables and other current assets (173,833) 17,700
Trade and other payables 21,107 43,334
Cash generated from operations 208,053 128,050
Income tax paid (27,927) (8,580)
Net cash generated from operating activities 180,126 119,470
37Consolidated Statement of Cash Flowsfor the financial year ended june
Group 2011 2010 Note $’000 $’000
Cash fl ows from investing activities
Acquisition of additional interest in a subsidiary company (10,027) (819)
Subscription of rights issue of an associated company – (35,187)
Acquisition of interest in joint venture companies (9,963) –
Additional expenditure on investment property (4,438) –
Additional expenditure on property, plant and equipment (6,920) –
Purchases of property, plant and equipment (13,967) (11,943)
Proceeds from disposal of property, plant and equipment 1,997 3,452
Distribution to non-controlling interests upon liquidation
of a subsidiary company (261) –
Proceeds from liquidation of joint venture companies 2,129 67
Proceeds from capital reduction of joint venture companies 12,201 –
Repayment of loans by joint venture companies 17,753 18,394
Dividends received 20,706 53,065
Interest received 2,701 2,464
Net cash generated from investing activities 11,911 29,493
Cash fl ows from fi nancing activities
Proceeds from issue of ordinary shares 50 510
Proceeds from issue of ordinary shares by a subsidiary company
to non-controlling interests 1,191 478
Reissuance of treasury shares 15 –
(Repayment)/advancement of the loans from non-controlling interests (44,156) 2,687
Proceeds from borrowings 213,907 286,438
Repayment of borrowings (346,199) (140,655)
Ordinary and special dividends paid (38,957) (31,110)
Dividends paid to non-controlling interests (5,139) (9,834)
Interest paid (52,189) (51,679)
Net cash (used in)/generated from fi nancing activities (271,477) 56,835
Net (decrease)/increase in cash and cash equivalents (79,440) 205,798
Cash and cash equivalents at beginning of fi nancial year 594,054 389,574
Eff ects of currency translation on cash and cash equivalents (10,379) (1,318)
Cash and cash equivalents at end of fi nancial year 10 504,235 594,054
38 Notes to the Financial Statements for the financial year ended june
Th ese notes form an integral part of and should be read in conjunction with the accompanying fi nancial statements.
1. GENERAL INFORMATION
Wing Tai Holdings Limited (the “Company”) is incorporated and domiciled in Singapore and is listed on the Singapore
Exchange Securities Trading Limited. Th e address of its registered offi ce is 3 Killiney Road, #10-01 Winsland House I,
Singapore 239519.
Th e principal activity of the Company is that of an investment holding company. Th e principal activities of the Company’s
subsidiary companies are shown in Note 35.
2. SIGNIFICANT ACCOUNTING POLICIES
2.1 BASIS OF PREPARATION
Th ese fi nancial statements have been prepared in accordance with Singapore Financial Reporting Standards (“FRS”).
Th e fi nancial statements have been prepared under the historical cost convention, except as disclosed in the accounting
policies below.
Th e preparation of fi nancial statements in conformity with FRS requires management to exercise its judgement in the process
of applying the Group’s accounting policies. It also requires the use of accounting estimates and assumptions that aff ect
the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the fi nancial
statements, and the reported amounts of revenues and expenses during the fi nancial year. Although these estimates are based
on management’s best knowledge of current events and actions, actual results may ultimately diff er from those estimates. Th e
areas involving a higher degree of judgement or complexity are disclosed in Notes 2.7, 2.8 and 8.
Amendment to published standards eff ective in 2011
On 1 July 2010, the Group adopted the amended FRS that is mandatory for application from that date. Changes to the Group’s
accounting policies have been made as required, in accordance with the transitional provisions in the respective FRS.
Th e amended FRS that is relevant to the Group is as follows:
Amendment to FRS 7 Statement of Cash Flows
Th e adoption of this amended FRS has not resulted in any substantial changes to the Group’s and Company’s accounting
policies and had no material eff ect on the amounts reported for the current or prior fi nancial years.
2.2 REVENUE RECOGNITION
Revenue for the Group comprises the fair value of the consideration received or receivable for the sale of goods in the ordinary
course of the Group’s activities. Revenue is presented, net of goods and services tax, rebates and discounts, and after eliminating
sales within the Group.
Th e Group recognises revenue when the amount of revenue and related cost can be reliably measured, it is probable that future
economic benefi ts will fl ow to the entity and when the specifi c criteria for each of the Group’s activities are met as follows:
(a) Sale of goods
Revenue from the sale of goods is recognised when a Group entity has delivered the products to the customer, the customer
has accepted the products and collectability of the related receivable is reasonably assured, except for income from the sale
of development properties, which is recognised using the percentage of completion method as disclosed in Note 2.8.
39Notes to the Financial Statements for the financial year ended june
2. SIGNIFICANT ACCOUNTING POLICIES (continued)
2.2 REVENUE RECOGNITION (continued)
(b) Rental income
Rental income from operating leases (net of any incentives given to the lessees) is recognised on a straight-line basis over
the lease term.
(c) Management fee
Management fee comprises charges for the management and maintenance of properties and fi nance and administration
fees. Revenue from management fee is recognised when management services are rendered.
(d) Dividend income
Dividend income is recognised when the right to receive payment is established.
(e) Interest income
Interest income is recognised using the eff ective interest method.
2.3 GROUP ACCOUNTING
(a) Subsidiary companies
(i) Consolidation
Subsidiary companies are entities over which the Group has power to govern the fi nancial and operating policies,
generally accompanied by a shareholding of more than one half of the voting rights. Th e existence and eff ect of
potential voting rights that are currently exercisable or convertible are considered when assessing whether the Group
controls another entity. Subsidiary companies are consolidated from the date on which control is transferred to the
Group. Th ey are de-consolidated from the date on which control ceases.
In preparing the consolidated fi nancial statements, transactions, balances and unrealised gains on transactions between
group entities are eliminated. Unrealised losses are also eliminated but are considered an impairment indicator of
the asset transferred. Accounting policies of subsidiary companies have been changed where necessary to ensure
consistency with the accounting policies adopted by the Group.
Non-controlling interests are that part of the net results of operations and of net assets of a subsidiary company
attributable to the interests which are not owned directly or indirectly by the equity holders of the Company. Th ey are
shown separately in the consolidated income statement, consolidated statement of comprehensive income, consolidated
balance sheet and consolidated statement of changes in equity. Total comprehensive income is attributed to the
non-controlling interests based on their respective interests in a subsidiary company, even if this results in the non-
controlling interests having a defi cit balance.
(ii) Acquisition of businesses
Th e acquisition method of accounting is used to account for business combinations by the Group.
Th e consideration transferred for the acquisition of a subsidiary company comprises the fair value of the assets
transferred, the liabilities incurred and the equity interests issued by the Group. Th e consideration transferred also
includes the fair value of any contingent consideration arrangement and the fair value of any pre-existing equity
interest in the subsidiary company.
40
2. SIGNIFICANT ACCOUNTING POLICIES (continued)
2.3 GROUP ACCOUNTING (continued)
(a) Subsidiary companies (continued)
(ii) Acquisition of businesses (continued)
Acquisition-related costs are expensed as incurred.
Identifi able assets acquired and liabilities and contingent liabilities assumed in a business combination are, with limited
exceptions, measured initially at their fair values at the acquisition date.
On an acquisition-by-acquisition basis, the Group recognises any non-controlling interest in the acquiree at the date
of acquisition either at fair value or at the non-controlling interest’s proportionate share of the acquiree’s identifi able
net assets.
Th e excess of the consideration transferred, the amount of any non-controlling interest in the acquiree and the
acquisition-date fair value of any previous equity interest in the acquiree over the fair value of the identifi able net assets
acquired is recorded as goodwill. Please refer to Note 2.4 for the accounting policy on goodwill on acquisitions.
(iii) Disposals of subsidiary companies or businesses
When a change in the Company’s ownership interest in a subsidiary company results in a loss of control over the
subsidiary company, the assets and liabilities of the subsidiary company including any goodwill are derecognised.
Amounts recognised in other comprehensive income in respect of that entity are also reclassifi ed to the income
statement or transferred directly to retained earnings if required by a specifi c FRS.
Any retained interest in the entity is remeasured at fair value. Th e diff erence between the carrying amount of the
retained investment at the date when control is lost and its fair value is recognised in the income statement.
Please refer to Note 2.5 for the accounting policy on investments in subsidiary companies in the separate fi nancial statements
of the Company.
(b) Transactions with non-controlling interests
Changes in the Company’s ownership interest in a subsidiary company that do not result in a loss of control over the
subsidiary company are accounted for as transactions with equity owners of the Group. Any diff erence between the change
in the carrying amounts of the non-controlling interest and the fair value of the consideration paid or received is recognised
in a separate reserve within equity attributable to the equity holders of the Company.
(c) Associated and joint venture companies
Associated companies are entities over which the Group has signifi cant infl uence, but not control, generally accompanied
by a shareholding of between and including 20% and 50% of the voting rights. Joint venture companies are entities over
which the Group has contractual arrangements to jointly share the control over the economic activity of the entities with
one or more parties.
Investments in associated and joint venture companies are accounted for in the consolidated fi nancial statements using the
equity method of accounting less impairment losses, if any.
Notes to the Financial Statements for the financial year ended june
41
2. SIGNIFICANT ACCOUNTING POLICIES (continued)
2.3 GROUP ACCOUNTING (continued)
(c) Associated and joint venture companies (continued)
Investments in associated and joint venture companies are initially recognised at cost. Th e cost of an acquisition is measured
at the fair value of the assets given, equity instruments issued or liabilities incurred or assumed at the date of exchange, plus
costs directly attributable to the acquisition. Goodwill on associated and joint venture companies represents the excess of the
cost of acquisition of the associated and joint venture companies over the Group’s share of the fair value of the identifi able
net assets of the associated and joint venture companies and is included in the carrying amount of the investments. Please
refer to Note 2.4 for the accounting policy on goodwill on acquisitions.
In applying the equity method of accounting, the Group’s share of its associated and joint venture companies’ post-
acquisition profi ts or losses are recognised in the income statement and its share of post-acquisition other comprehensive
income is recognised in other comprehensive income. Th ese post-acquisition movements and distributions received from
the associated and joint venture companies are adjusted against the carrying amount of the investments. When the Group’s
share of losses in an associated or joint venture company equals or exceeds its interest in the associated or joint venture
company, including any other unsecured non-current receivables, the Group does not recognise further losses, unless it has
obligations or has made payments on behalf of the associated or joint venture company.
Unrealised gains on transactions between the Group and its associated and joint venture companies are eliminated to the
extent of the Group’s interest in the associated and joint venture companies. Unrealised losses are also eliminated unless
the transaction provides evidence of an impairment of the asset transferred. Th e accounting policies of associated and joint
venture companies have been changed where necessary to ensure consistency with the accounting policies adopted by
the Group.
Gains and losses arising from partial disposals or dilutions in investments in associated and joint venture companies are
recognised in the income statement.
Investments in associated and joint venture companies are derecognised when the Group loses signifi cant infl uence. Any
retained interest in the entity is remeasured at its fair value. Th e diff erence between the carrying amount of the retained
investment at the date when signifi cant infl uence is lost and its fair value is recognised in the income statement.
Please refer to Note 2.5 for the accounting policy on investments in associated and joint venture companies in the separate
fi nancial statements of the Company.
2.4 GOODWILL ON ACQUISITIONS
Goodwill on acquisitions of subsidiary companies on or after 1 July 2009 represents the excess of the consideration transferred,
the amount of any non-controlling interest in the acquiree and the acquisition-date fair value of any previous equity interest in
the acquiree over the fair value of the identifi able net assets acquired.
Goodwill on acquisitions of subsidiary companies prior to 1 July 2009 and on acquisitions of associated and joint venture
companies represents the excess of the cost of the acquisitions over the fair value of the Group’s share of the identifi able net
assets acquired.
Goodwill on subsidiary companies is recognised separately as intangible assets and carried at cost less accumulated impairment
losses. Goodwill on associated and joint venture companies is included in the carrying amount of the investments.
Notes to the Financial Statements for the financial year ended june
42
2. SIGNIFICANT ACCOUNTING POLICIES (continued)
2.4 GOODWILL ON ACQUISITIONS (continued)
Gains and losses on the disposal of subsidiary, associated and joint venture companies include the carrying amount of goodwill
relating to the entity sold, except for goodwill arising from acquisitions prior to 1 July 2001. Such goodwill was adjusted against
retained earnings in the year of acquisition and is not recognised in the income statement on disposal.
2.5 INVESTMENTS IN SUBSIDIARY, ASSOCIATED AND JOINT VENTURE COMPANIES
Investments in subsidiary, associated and joint venture companies are carried at cost less accumulated impairment losses in
the Company’s balance sheet. On disposal of investments in subsidiary, associated and joint venture companies, the diff erence
between disposal proceeds and the carrying amounts of the investments are recognised in the income statement.
2.6 PROPERTY, PLANT AND EQUIPMENT
(a) Measurement
(i) Land and buildings
Land and buildings are initially recognised at cost.
Freehold and 999-year leasehold land are subsequently carried at the revalued amounts less accumulated impairment
losses. Buildings and leasehold land are subsequently carried at the revalued amounts less accumulated depreciation
and accumulated impairment losses.
Land and buildings are revalued by independent professional valuers once every three years and whenever their carrying
amounts are likely to diff er materially from their revalued amounts. When an asset is revalued, any accumulated
depreciation at the date of revaluation is eliminated against the gross carrying amount of the asset. Th e net amount is
then restated to the revalued amount of the asset.
Increases in carrying amounts arising from revaluation, including currency translation diff erences, are recognised in
other comprehensive income, unless they off set previous decreases in the carrying amounts of the same asset, in which
case, they are recognised in the income statement. Decreases in carrying amounts that off set previous increases of the
same asset are charged against other comprehensive income. All other decreases in carrying amounts are recognised in
the income statement.
(ii) Other property, plant and equipment
All other items of property, plant and equipment are initially recognised at cost and subsequently carried at cost less
accumulated depreciation and accumulated impairment losses.
(iii) Components of costs
Th e cost of an item of property, plant and equipment initially recognised includes its purchase price and any cost that
is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating
in the manner intended by management, including borrowing costs that are directly attributable to the acquisition,
construction or production of a qualifying asset. Th e projected cost of dismantlement, removal or restoration is also
recognised as part of the cost of property, plant and equipment if the obligation for the dismantlement, removal or
restoration is incurred as a consequence of either acquiring the asset or using the asset for purposes other than to
produce inventories.
Notes to the Financial Statements for the financial year ended june
43
2. SIGNIFICANT ACCOUNTING POLICIES (continued)
2.6 PROPERTY, PLANT AND EQUIPMENT (continued)
(b) Depreciation
Freehold and 999-year leasehold land are not depreciated. Depreciation on other items of property, plant and equipment is
calculated using the straight-line method to allocate their depreciable amounts over their estimated useful lives. Th e annual
depreciation rates are as follows:
Buildings and leasehold land 1 – 3% or over the remaining lease period, whichever is shorter
Motor vehicles 20%
Offi ce equipment 10 – 33%
Furniture and fi ttings 10% or over the remaining lease period, whichever is shorter
Th e residual values, estimated useful lives and depreciation method of property, plant and equipment are reviewed, and
adjusted as appropriate, at each balance sheet date. Th e eff ects of any revision are recognised in the income statement when
the changes arise.
(c) Subsequent expenditure
Subsequent expenditure relating to property, plant and equipment that has already been recognised is added to the carrying
amount of the asset only when it is probable that future economic benefi ts associated with the item will fl ow to the Group
and the cost of the item can be measured reliably. All other repair and maintenance expenses are recognised in the income
statement when incurred.
(d) Disposal
On disposal of an item of property, plant and equipment, the diff erence between the disposal proceeds and its carrying
amount is recognised in the income statement. Any amount in the asset revaluation reserve relating to that asset is transferred
to retained earnings directly.
2.7 INVESTMENT PROPERTIES
Investment properties are held for long-term rental yields and/or for capital appreciation and are not occupied substantially by
the Group.
Investment properties are initially recognised at cost and subsequently carried at fair value, determined annually by independent
professional valuers. Signifi cant assumptions are required to determine the fair value. Changes in fair values are recognised in
the income statement.
If an investment property becomes substantially owner-occupied, it is reclassifi ed as property, plant and equipment and its fair
value at the date of reclassifi cation becomes its cost for accounting purposes.
Investment properties are subject to renovations or improvements at regular intervals. Th e cost of major renovations and
improvements is capitalised. Th e cost of maintenance, repairs and minor improvements is charged to the income statement
when incurred.
On disposal of an investment property, the diff erence between the disposal proceeds and the carrying amount is recognised in
the income statement.
Notes to the Financial Statements for the financial year ended june
44
2. SIGNIFICANT ACCOUNTING POLICIES (continued)
2.8 DEVELOPMENT PROPERTIES
(a) Properties under development
Properties under development are stated at cost plus attributable profi ts, less foreseeable losses and progress payments
received and receivable. An allowance is made where the estimated net realisable value of the properties has fallen below
their carrying value.
Cost includes cost of land and other direct and related expenditure, including interest on borrowings incurred in developing
the properties. Interest and other related expenditure are capitalised as and when the activities that are necessary to get the
asset ready for its intended development are in progress.
Revenue and cost on the sale of properties under development are recognised in the income statement using the percentage-
of-completion method based on the stage of completion as certifi ed by the architects or quantity surveyors for the individual
units sold. When it is probable that the total development costs will exceed the total revenue, the expected loss is recognised
in the income statement immediately.
Signifi cant assumptions are required to estimate the total contract costs. In making this estimate, management has relied
on past experience and the work of specialists.
(b) Properties held for sale
Properties held for sale are stated at the lower of cost and net realisable value. Net realisable value is the estimated selling
price in the ordinary course of business less selling expenses.
2.9 IMPAIRMENT OF NONFINANCIAL ASSETS
(a) Goodwill
Goodwill recognised separately as an intangible asset is tested for impairment annually and whenever there is indication
that the goodwill may be impaired.
For the purpose of impairment testing of goodwill, goodwill is allocated to each of the Group’s cash generating units
(“CGU”) expected to benefi t from synergies arising from the business combination.
An impairment loss is recognised when the carrying amount of a CGU, including the goodwill, exceeds the recoverable
amount of the CGU. Th e recoverable amount of a CGU is the higher of the CGU’s fair value less cost to sell and value-in-
use. Th e total impairment loss of a CGU is allocated fi rst to reduce the carrying amount of goodwill allocated to the CGU
and then to the other assets of the CGU pro-rata on the basis of the carrying amount of each asset in the CGU.
An impairment loss on goodwill is recognised in the income statement and is not reversed in a subsequent period.
(b) Property, plant and equipment
Investments in subsidiary, associated and joint venture companies
Property, plant and equipment and investments in subsidiary, associated and joint venture companies are tested for
impairment whenever there is any objective evidence or indication that these assets may be impaired.
For the purpose of impairment testing, the recoverable amount (i.e. the higher of the fair value less cost to sell and the
value-in-use) is determined on an individual asset basis unless the asset does not generate cash infl ows that are largely
independent of those from other assets. If this is the case, the recoverable amount is determined for the CGU to which the
asset belongs.
Notes to the Financial Statements for the financial year ended june
45
2. SIGNIFICANT ACCOUNTING POLICIES (continued)
2.9 IMPAIRMENT OF NONFINANCIAL ASSETS (continued)
(b) Property, plant and equipment
Investments in subsidiary, associated and joint venture companies (continued)
If the recoverable amount of the asset (or CGU) is estimated to be less than its carrying amount, the carrying amount of
the asset (or CGU) is reduced to its recoverable amount. Th e diff erence between the carrying amount and the recoverable
amount is recognised as an impairment loss in the income statement, unless the asset is carried at revalued amount, in
which case, such impairment loss is treated as a revaluation decrease. Please refer to Note 2.6 for the treatment of a
revaluation decrease.
An impairment loss for an asset other than goodwill is reversed if, and only if, there has been a change in the estimates used
to determine the asset’s recoverable amount since the last impairment loss was recognised. Th e carrying amount of this
asset is increased to its revised recoverable amount, provided that this amount does not exceed the carrying amount that
would have been determined (net of any accumulated depreciation) had no impairment loss been recognised for the asset in
prior years.
A reversal of impairment loss for an asset other than goodwill is recognised in the income statement, unless the asset is
carried at revalued amount, in which case, such reversal is treated as a revaluation increase. However, to the extent that
an impairment loss on the same revalued asset was previously recognised in the income statement, a reversal of that
impairment is also recognised in the income statement.
2.10 FINANCIAL ASSETS
(a) Classifi cation
Th e Group classifi es its fi nancial assets in the following categories: at fair value through profi t or loss, loans and receivables
and available-for-sale. Th e classifi cation depends on the nature of the assets and the purpose for which the assets were
acquired. Management determines the classifi cation of its fi nancial assets at initial recognition.
(i) Financial assets, at fair value through profi t or loss
Financial assets designated as at fair value through profi t or loss at inception are those that are managed and their
performances are evaluated on a fair value basis, in accordance with a documented Group investment strategy.
Derivatives are categorised as fi nancial assets at fair value through profi t or loss unless they are designated as hedges.
Assets in this category are presented as current assets if they are expected to be realised within 12 months after the
balance sheet date.
(ii) Loans and receivables
Loans and receivables are non-derivative fi nancial assets with fi xed or determinable payments that are not quoted in an
active market. Th ey are presented as current assets, except for those expected to be realised later than 12 months after
the balance sheet date which are presented as non-current assets. Loans and receivables are presented as “cash and cash
equivalents” and “trade and other receivables” on the balance sheet and also includes deposits and sundry receivables
classifi ed as “other current assets”.
(iii) Available-for-sale fi nancial assets
Available-for-sale fi nancial assets are non-derivatives that are either designated in this category or not classifi ed in any
of the other categories. Th ey are presented as non-current assets unless management intends to dispose of the assets
within 12 months after the balance sheet date.
Notes to the Financial Statements for the financial year ended june
46
2. SIGNIFICANT ACCOUNTING POLICIES (continued)
2.10 FINANCIAL ASSETS (continued)
(b) Recognition and derecognition
Regular way purchases and sales of fi nancial assets are recognised on trade-date – the date on which the Group commits to
purchase or sell the asset.
Financial assets are derecognised when the rights to receive cash fl ows from the fi nancial assets have expired or have been
transferred and the Group has transferred substantially all risks and rewards of ownership. On disposal of a fi nancial asset,
the diff erence between the carrying amount and the sale proceeds is recognised in the income statement. Any amount in
the fair value reserve relating to that asset is transferred to the income statement.
(c) Initial measurement
Financial assets are initially recognised at fair value plus transaction costs except for fi nancial assets at fair value through
profi t or loss, which are recognised at fair value. Transaction costs for fi nancial assets at fair value through profi t or loss are
recognised immediately in the income statement.
(d) Subsequent measurement
Financial assets, both available-for-sale and at fair value through profi t or loss are subsequently carried at fair value. Loans
and receivables are subsequently carried at amortised cost using the eff ective interest method.
Changes in the fair values of fi nancial assets at fair value through profi t or loss including the eff ects of currency translation,
interest and dividends are recognised in the income statement when the changes arise.
Interest and dividend income on available-for-sale fi nancial assets are recognised separately in the income statement. Changes
in the fair values of available-for-sale equity securities (i.e. non-monetary items) are recognised in other comprehensive
income, together with the related currency translation diff erences.
(e) Impairment
Th e Group assesses at each balance sheet date whether there is objective evidence that a fi nancial asset or a group of
fi nancial assets is impaired and recognises an allowance for impairment when such evidence exists.
(i) Loans and receivables
Signifi cant fi nancial diffi culties of the debtor, probability that the debtor will enter bankruptcy, and default or signifi cant
delay in payments are objective evidence that these fi nancial assets are impaired.
Th e carrying amount of these assets is reduced through the use of an impairment allowance account which is calculated
as the diff erence between the carrying amount and the present value of estimated future cash fl ows, discounted at
the original eff ective interest rate. When the asset becomes uncollectible, it is written off against the allowance
account. Subsequent recoveries of amounts previously written off are recognised against the same line item in the
income statement.
Th e allowance for impairment loss account is reduced through the income statement in a subsequent period when the
amount of impairment loss decreases and the related decrease can be objectively measured. Th e carrying amount of the
asset previously impaired is increased to the extent that the new carrying amount does not exceed the amortised cost
had no impairment been recognised in prior periods.
Notes to the Financial Statements for the financial year ended june
47
2. SIGNIFICANT ACCOUNTING POLICIES (continued)
2.10 FINANCIAL ASSETS (continued)
(e) Impairment (continued)
(ii) Available-for-sale fi nancial assets
A signifi cant or prolonged decline in the fair value of an equity security below its cost is considered as an indicator that
the available-for-sale fi nancial asset is impaired.
If any evidence of impairment exists, the cumulative loss that was recognised in the fair value reserve is transferred
to the income statement. Th e cumulative loss is measured as the diff erence between the acquisition cost (net of any
principal repayments and amortisation) and the current fair value, less any impairment loss previously recognised in
the income statement. Th e impairment losses recognised in the income statement on equity securities are not reversed
through the income statement.
2.11 FINANCIAL GUARANTEES
Th e Company has issued corporate guarantees to banks for borrowings of its subsidiary and joint venture companies. Th ese
guarantees are fi nancial guarantees as they require the Company to reimburse the banks if the subsidiary and joint venture
companies fail to make principal or interest payments when due in accordance with the terms of their borrowings.
Financial guarantees are initially recognised at their fair values plus transaction costs in the Company’s balance sheet.
Financial guarantees are subsequently amortised to the income statement over the period of the subsidiary and joint venture
companies’ borrowings, unless it is probable that the Company will reimburse the bank for an amount higher than the
unamortised amount. In this case, the fi nancial guarantees shall be carried at the expected amount payable to the bank in the
Company’s balance sheet.
Intra-group transactions are eliminated on consolidation.
2.12 INVENTORIES
Inventories are carried at the lower of cost and net realisable value. Cost is determined using the weighted average method. Th e
cost of fi nished goods and work-in-progress comprises raw materials, direct labour, other direct costs and related production
overheads (based on normal operating capacity) but excludes borrowing costs. Net realisable value is the estimated selling price
in the ordinary course of business less applicable variable selling expenses.
2.13 BORROWINGS AND BORROWING COSTS
Borrowings are presented as current liabilities unless the Group has an unconditional right to defer settlement for at least 12
months after the balance sheet date.
Borrowings are initially recognised at fair value (net of transaction costs) and subsequently carried at amortised cost. Any
diff erence between the proceeds (net of transaction costs) and the redemption value is recognised in the income statement over
the period of the borrowings using the eff ective interest method.
Borrowing costs are recognised in the income statement using the eff ective interest method except for those costs that are
directly attributable to borrowings acquired specifi cally for the construction or development of properties. Th e actual borrowing
costs incurred during the period up to the issuance of the temporary occupation permit less any investment income on temporary
investment of these borrowings, are capitalised in the cost of the property under development.
Notes to the Financial Statements for the financial year ended june
48
2. SIGNIFICANT ACCOUNTING POLICIES (continued)
2.14 DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES
A derivative fi nancial instrument is initially recognised at its fair value on the date the contract is entered into and is subsequently
carried at its fair value. Th e method of recognising the resulting gain or loss depends on whether the derivative is designated as
a hedging instrument, and if so, the nature of the item being hedged.
Fair value changes on derivatives that are not designated or do not qualify for hedge accounting are recognised in the income
statement when the changes arise.
Th e Group documents at the inception of the transaction the relationship between the hedging instruments and hedged items,
as well as its risk management objective and strategies for undertaking various hedge transactions. Th e Group also documents
its assessment, both at hedge inception and on an ongoing basis, on whether the derivatives designated as hedging instruments
are highly eff ective in off setting changes in cash fl ows of the hedged items.
Th e carrying amount of a derivative designated as a hedge is presented as a non-current asset or liability if the remaining
expected life of the hedged item is more than 12 months, and as a current asset or liability, if the remaining expected life of the
hedged item is less than 12 months.
Th e Group has entered into interest rate and cross currency swaps that are cash fl ow hedges for the Group’s exposure to interest
rate and currency risks on its borrowings. Th ese contracts entitle the Group to receive interest at fl oating rates on notional
principal amounts and oblige the Group to pay interest at fi xed rates on the notional principal amounts that are denominated
in the same or diff erent currency, thus allowing the Group to raise borrowings at fl oating rates and swap them into fi xed rates
that are lower than those available if they borrowed at fi xed rates directly.
Th e fair value changes on the eff ective portion of interest rate and cross currency swaps designated as cash fl ow hedges are
recognised in other comprehensive income and transferred to the income statement when the interest expense on the borrowings
are recognised in the income statement. Th e fair value changes on the ineff ective portion of the interest rate and cross currency
swaps are recognised immediately in the income statement.
Currency forwards are entered into to manage exposure to fl uctuations in foreign currency exchange rates on highly probable
forecast transactions. Th ese contracts do not qualify for hedge accounting.
2.15 FAIR VALUE ESTIMATION OF FINANCIAL ASSETS AND LIABILITIES
Th e fair values of fi nancial instruments traded in active markets (such as exchange-traded and over-the-counter securities and
derivatives) are based on quoted market prices at the balance sheet date. Th e quoted market prices used for fi nancial assets are
the current bid prices; the appropriate quoted market prices for fi nancial liabilities are the current asking prices.
Th e fair values of fi nancial instruments that are not traded in an active market are determined by using valuation techniques.
Th e Group uses a variety of methods and makes assumptions that are based on market conditions existing at each balance sheet
date. Where appropriate, quoted market prices or dealer quotes for similar instruments are used. Valuation techniques, such as
discounted cash fl ow analyses, are also used to determine the fair values of the fi nancial instruments.
Th e fair values of interest rate and cross currency swaps are calculated as the present value of the estimated future cash fl ows
discounted at actively quoted interest and forward exchange rates. Th e fair values of currency forwards are determined using
actively quoted forward exchange rates.
Notes to the Financial Statements for the financial year ended june
49
2. SIGNIFICANT ACCOUNTING POLICIES (continued)
2.15 FAIR VALUE ESTIMATION OF FINANCIAL ASSETS AND LIABILITIES (continued)
Th e fair values of fi nancial liabilities carried at amortised cost are estimated by discounting the future contractual cash fl ows at
the current market interest rates that are available to the Group for similar fi nancial liabilities.
Th e fair values of current fi nancial assets and liabilities carried at amortised cost approximate their carrying amounts.
2.16 OPERATING LEASES
(a) When the Group is the lessee:
Leases where substantially all risks and rewards incidental to ownership are retained by the lessors are classifi ed as operating
leases. Payments made under operating leases (net of any incentives received from the lessors) are recognised in the income
statement on a straight-line basis over the period of the lease.
Contingent rents are recognised as an expense in the income statement when incurred.
(b) When the Group is the lessor:
Leases of investment properties where the Group retains substantially all risks and rewards incidental to ownership are
classifi ed as operating leases. Rental income from operating leases (net of any incentives given to the lessees) is recognised
in the income statement on a straight-line basis over the lease term.
2.17 INCOME TAXES
Current income tax for current and prior periods is recognised at the amount expected to be paid to or be recovered from the
tax authorities, using the tax rates and tax laws that have been enacted or substantively enacted by the balance sheet date.
Deferred income tax is recognised for all temporary diff erences arising between the tax bases of assets and liabilities and
their carrying amounts in the fi nancial statements except when the deferred income tax arises from the initial recognition of
goodwill or an asset or liability in a transaction that is not a business combination and aff ects neither accounting nor taxable
profi t or loss at the time of the transaction.
A deferred income tax liability is recognised on temporary diff erences arising on investments in subsidiary, associated and joint
venture companies, except where the Group is able to control the timing of the reversal of the temporary diff erence and it is
probable that the temporary diff erence will not reverse in the foreseeable future.
A deferred income tax asset is recognised to the extent that it is probable that future taxable profi t will be available against
which the deductible temporary diff erences and tax losses can be utilised.
Deferred income tax is measured:
(a) at the tax rates that are expected to apply when the related deferred income tax asset is realised or the deferred income
tax liability is settled, based on tax rates and tax laws that have been enacted or substantively enacted by the balance sheet
date; and
(b) based on the tax consequence that will follow from the manner in which the Group expects, at the balance sheet date, to
recover or settle the carrying amounts of its assets and liabilities.
Notes to the Financial Statements for the financial year ended june
50
2. SIGNIFICANT ACCOUNTING POLICIES (continued)
2.17 INCOME TAXES (continued)
Current and deferred income taxes are recognised as income or expense in the income statement, except to the extent that the
tax arises from a business combination or a transaction which is recognised directly in equity. Deferred income tax arising from
a business combination is adjusted against goodwill on acquisition.
2.18 PROVISIONS
Provisions are recognised when the Group has a present legal or constructive obligation as a result of past events, it is more
likely than not that an outfl ow of resources will be required to settle the obligation and the amount has been reliably estimated.
2.19 EMPLOYEE COMPENSATION
(a) Defi ned contribution plans
Defi ned contribution plans are post-employment benefi t plans under which the Group pays fi xed contributions into
separate entities such as the Central Provident Fund on a mandatory, contractual or voluntary basis. Th e Group has no
further payment obligations once the contributions have been paid.
(b) Share-based payment
Th e Group operates an equity-settled, share-based payment plan. Th e value of the employee services received in exchange
for the grant of shares and share options is charged to the income statement with a corresponding increase in the share-
based payment reserve over the vesting period. Th e total amount to be recognised over the vesting period is determined by
reference to the fair value of the shares and share options granted on the date of the grant. Non-market vesting conditions
are included in the estimation of the number of shares and share options that are expected to vest on the vesting date. At
each balance sheet date, the Group revises its estimates of the number of shares and share options that are expected to vest
on the vesting date and recognises the impact of the revision of the estimates in the income statement, with a corresponding
adjustment to the share-based payment reserve over the remaining vesting period.
2.20 CURRENCY TRANSLATION
(a) Functional and presentation currency
Items included in the fi nancial statements of each entity in the Group are measured using the currency of the primary
economic environment in which the entity operates (“functional currency”). Th e fi nancial statements are presented in
Singapore Dollars, which is the functional currency of the Company.
(b) Transactions and balances
Transactions in a currency other than the functional currency (“foreign currency”) are translated into the functional currency
using the exchange rates at the dates of the transactions. Currency translation diff erences resulting from the settlement
of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies at the
closing rates at the balance sheet date are recognised in the income statement, unless they arise from borrowings in foreign
currencies qualifying as net investment in foreign operations. Th ose currency translation diff erences are recognised in other
comprehensive income in the consolidated fi nancial statements and transferred to the income statement as part of the gain
or loss on disposal of the foreign operation.
Non-monetary items measured at fair values in foreign currencies are translated using the exchange rates at the date when
the fair values are determined.
Notes to the Financial Statements for the financial year ended june
51
2. SIGNIFICANT ACCOUNTING POLICIES (continued)
2.20 CURRENCY TRANSLATION (continued)
(c) Translation of Group entities’ fi nancial statements
Th e results and fi nancial position of all the Group entities that have a functional currency diff erent from the presentation
currency are translated into the presentation currency as follows:
(i) Assets and liabilities are translated at the closing exchange rates at the date of the balance sheet;
(ii) Income and expenses are translated at average exchange rates (unless the average is not a reasonable approximation of
the cumulative eff ect of the rates prevailing on the transaction dates, in which case income and expenses are translated
using the exchange rates at the dates of the transactions); and
(iii) All resulting currency translation diff erences are recognised in other comprehensive income.
Goodwill and fair value adjustments arising on the acquisition of foreign operations on or after 1 July 2005 are treated
as assets and liabilities of the foreign operations and translated at the closing rates at the date of the balance sheet. For
acquisitions prior to 1 July 2005, the exchange rates at the dates of acquisition are used.
2.21 SEGMENT REPORTING
Operating segments are reported in a manner consistent with the Group’s principal activities and internal reporting provided
to management who are responsible for allocating resources and assessing the performance of the operating segments.
Sales between segments are carried out at arm’s length. Th e revenue from external parties reported to management is measured
in a manner consistent with that in the income statement.
Management assesses the performance of the operating segments based on a measure of Earnings/(Losses) before interest and
tax (“EBIT”). Interest income and fi nance costs are not allocated to the segments.
Th e amounts provided to management with respect to total assets and liabilities are measured in a manner consistent with
that of the fi nancial statements. Th ese assets and liabilities are allocated based on the operations of the segment. All assets and
liabilities are allocated to reportable segments other than tax recoverable and current and deferred income tax.
Segment capital expenditure is the total cost incurred during the fi nancial year to acquire property, plant and equipment and
investment properties.
2.22 CASH AND CASH EQUIVALENTS
For the purpose of presentation in the consolidated statement of cash fl ows, cash and cash equivalents include interest-bearing
bank accounts, fi xed deposits with fi nancial institutions and cash and bank balances, which are subject to an insignifi cant risk
of change in value.
2.23 SHARE CAPITAL AND TREASURY SHARES
Ordinary shares are classifi ed as equity. Incremental costs directly attributable to the issuance of new ordinary shares are
deducted against the share capital account.
Notes to the Financial Statements for the financial year ended june
52
2. SIGNIFICANT ACCOUNTING POLICIES (continued)
2.23 SHARE CAPITAL AND TREASURY SHARES (continued)
When any entity within the Group purchases the Company’s ordinary shares (“treasury shares”), the consideration paid
including any directly attributable incremental cost is presented as a component within equity attributable to the Company’s
equity holders, until they are cancelled, sold or reissued.
When treasury shares are subsequently cancelled, the cost of treasury shares are deducted against the share capital account if the
shares are purchased out of capital of the Company, or against the retained earnings of the Company if the shares are purchased
out of earnings of the Company.
When treasury shares are subsequently sold or reissued pursuant to the employee share plans and share option scheme, the cost
of the treasury shares is reversed from the treasury share account.
2.24 DIVIDENDS TO EQUITY HOLDERS OF THE COMPANY
Dividends to equity holders of the Company are recognised when the dividends are approved for payment.
2.25 TRADE AND OTHER PAYABLES
Trade and other payables are initially recognised at fair value, and subsequently carried at amortised cost, using the eff ective
interest method.
3. REVENUE Group 2011 2010 $’000 $’000
Revenue from sale of:
– development properties 401,094 589,894
– goods 205,895 186,452
Rental income 37,055 36,815
Management fees 4,948 8,617
Dividend income 81 73
649,073 821,851
Notes to the Financial Statements for the financial year ended june
53
4. OTHER GAINS/LOSSES NET Group 2011 2010 $’000 $’000
Interest income from:
– joint venture companies 5,257 7,544
– banks 2,658 2,394
Gain on disposal of property, plant and equipment 957 949
Fair value gains on investment properties 74,616 5,140
Allowance for foreseeable losses on development properties (14,840) –
Gain on capital reduction of joint venture companies 10,201 –
Other miscellaneous gains 1,988 4,390
80,837 20,417
5. EXPENSES BY NATURE Group 2011 2010 $’000 $’000
Depreciation of property, plant and equipment 11,100 12,149
Employee compensation 75,892 68,575
Fair value losses on derivative fi nancial instruments 238 68
Write-back of impairment on property, plant and equipment (59) (188)
Write-down of inventory 1,108 508
Write-off of property, plant and equipment 389 411
Rental expense on operating leases 48,219 47,253
Foreign exchange loss 1,387 1,371
Development cost included in cost of sales 188,446 335,299
Raw materials and fi nished goods 78,863 70,305
Included in the Group’s rental expense on operating leases is contingent rent amounting to $3.1 million (2010: $3.8 million).
6. EMPLOYEE COMPENSATION Group 2011 2010 $’000 $’000
Wages and salaries (including directors’ remuneration) 66,750 60,364
Employer’s contribution to defi ned contribution plans
including Central Provident Fund 5,729 5,392
Share-based payment 3,413 2,819
75,892 68,575
Please refer to Note 33(b) for directors’ remuneration.
Notes to the Financial Statements for the financial year ended june
54
7. FINANCE COSTS Group 2011 2010 $’000 $’000
Interest expense to banks 39,868 31,295
8. INCOME TAXES
(a) Income tax expense Group 2011 2010 $’000 $’000
Tax expense attributable to profi t is made up of:
Current income tax
– Singapore 50,634 26,704
– Foreign 12,510 8,758
63,144 35,462
Deferred income tax (1,618) 17,829
61,526 53,291
(Over)/under provision in preceding fi nancial years
– Current income tax (2,161) (639)
– Deferred income tax (11,272) 153
48,093 52,805
Th e Group is subject to income taxes in numerous jurisdictions. Signifi cant judgement is required in estimating the
capital allowances and the deductibility of certain expenses in determining the provision for income taxes. Th ere are many
transactions and calculations during the ordinary course of business for which the ultimate tax determination is uncertain.
Th e Group recognises liabilities for anticipated tax audit issues based on estimates of whether additional taxes will be due.
Where the fi nal tax outcome of these matters is diff erent from the amounts that were initially recorded, such diff erences
will impact the current and deferred income tax provisions in the period in which such determination is made.
Th e income tax expense on profi t diff ers from the amount that would arise using the Singapore standard rate of income tax
as explained below:
Group 2011 2010 % %
Singapore standard rate of income tax 17.0 17.0
Diff erent tax rates in other countries 1.0 1.0
Expenses not deductible for tax purposes 3.9 3.6
Income not subject to tax (7.4) (2.8)
Tax losses not recognised 0.8 0.9
Utilisation of previously unrecognised tax losses and capital allowances (0.1) (0.3)
15.2 19.4
Notes to the Financial Statements for the financial year ended june
55
8. INCOME TAXES (continued)
(a) Income tax expense (continued)
Th e tax charge relating to each component of other comprehensive (expense)/income is as follows:
Group
Before tax Tax charge After tax $’000 $’000 $’000
2011
Cash fl ow hedges (5,403) – (5,403)
Currency translation diff erences (69,085) – (69,085)
Revaluation gains on property, plant and equipment 10,340 (1,894) 8,446
Share of other comprehensive expense of associated and
joint venture companies (1,396) – (1,396)
(65,544) (1,894) (67,438)
2010
Cash fl ow hedges (3,674) – (3,674)
Currency translation diff erences (13,736) – (13,736)
Revaluation gains on property, plant and equipment 4,186 (1,547) 2,639
Share of other comprehensive income of associated and
joint venture companies 6,108 – 6,108
(7,116) (1,547) (8,663)
(b) Deferred income taxes
Deferred income tax assets and liabilities are off set when there is a legally enforceable right to off set current income tax
assets against current income tax liabilities and when the deferred income taxes relate to the same fi scal authority. Th e
amounts, determined after appropriate off setting, are shown on the balance sheet as follows:
Group Company 2011 2010 2011 2010 $’000 $’000 $’000 $’000
Deferred income tax liabilities to be settled
after one year 85,665 97,241 – 2,342
Deferred income tax assets are recognised for tax losses carried forward to the extent that realisation of the related
tax benefi ts through future taxable profi ts is probable. Th e Group had unrecognised tax losses of $179.0 million
(2010: $176.4 million) at the balance sheet date which can be carried forward and used to off set against future taxable
income subject to meeting certain statutory requirements by those companies with unutilised tax losses in their respective
countries of incorporation. Th ese tax losses have no expiry date.
Notes to the Financial Statements for the financial year ended june
56
8. INCOME TAXES (continued)
(b) Deferred income taxes (continued)
Th e movement in deferred income tax assets and liabilities (prior to off setting of balances within the same tax jurisdiction)
during the fi nancial year is as follows:
Deferred income tax liabilities – Group
Recognition of profi ts on Accelerated tax Revaluation percentage of depreciation gains completion Others Total $’000 $’000 $’000 $’000 $’000
2011
Beginning of fi nancial year 4,898 49,181 44,197 358 98,634
Currency translation diff erences (75) (521) – (4) (600)
Charged/(credited) to:
– other comprehensive income – 1,894 – – 1,894
– income statement 1,508 1,292 (16,451) (198) (13,849)
End of fi nancial year 6,331 51,846 27,746 156 86,079
2010
Beginning of fi nancial year 4,713 46,328 27,307 230 78,578
Currency translation diff erences 21 541 – 7 569
Charged to:
– other comprehensive income – 1,547 – – 1,547
– income statement 164 765 16,890 121 17,940
End of fi nancial year 4,898 49,181 44,197 358 98,634
Deferred income tax assets – Group
Accelerated tax Tax depreciation Provisions losses Others Total $’000 $’000 $’000 $’000 $’000
2011
Beginning of fi nancial year 1,126 20 247 – 1,393
Currency translation diff erences – (1) (17) (2) (20)
(Charged)/credited to income statement (1,126) – 101 66 (959)
End of fi nancial year – 19 331 64 414
2010
Beginning of fi nancial year 992 19 354 57 1,422
Currency translation diff erences – 1 11 1 13
Credited/(charged) to income statement 134 – (118) (58) (42)
End of fi nancial year 1,126 20 247 – 1,393
Notes to the Financial Statements for the financial year ended june
57
8. INCOME TAXES (continued)
(b) Deferred income taxes (continued)
Deferred income tax liabilities – Company
Revaluation gains/ (losses) Others Total $’000 $’000 $’000
2011
Beginning of fi nancial year 3,310 158 3,468
Credited to income statement (3,310) (158) (3,468)
End of fi nancial year – – –
2010
Beginning of fi nancial year 2,960 158 3,118
Charged to:
– other comprehensive income 312 – 312
– income statement 38 – 38
End of fi nancial year 3,310 158 3,468
Deferred income tax assets – Company
Accelerated tax depreciation $’000
2011
Beginning of fi nancial year 1,126
Charged to income statement (1,126)
End of fi nancial year –
2010
Beginning of fi nancial year 992
Credited to income statement 134
End of fi nancial year 1,126
Notes to the Financial Statements for the financial year ended june
58
9. EARNINGS PER SHARE
(a) Basic earnings per share
Basic earnings per share is calculated by dividing the net profi t attributable to equity holders of the Company by the
weighted average number of ordinary shares in issue during the fi nancial year.
Group 2011 2010
Net profi t attributable to equity holders of the Company ($’000) 314,180 160,750
Weighted average number of ordinary shares in issue for basic earnings per share (’000) 779,181 777,945
Basic earnings per share (cents) 40.32 20.66
(b) Diluted earnings per share
Diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares in issue to assume
issuance of all dilutive potential ordinary shares from share plans and share options. A calculation is done to determine
the number of shares that could have been acquired at fair value (determined as the average share price of the Company’s
shares for the fi nancial year) based on the monetary value of the subscription rights attached to outstanding share options.
Th e number of shares calculated as above is compared with the number of shares that would have been issued assuming the
exercise of the share options. Th e diff erence is added to the denominator as an issue of ordinary shares for no consideration.
Group 2011 2010 $’000 $’000
Net profi t attributable to equity holders of the Company 314,180 160,750
Adjustments for share options of:
– a subsidiary company (77) (23)
– an associated company (568) (62)
Net profi t used to determine diluted earnings per share 313,535 160,665
’000 ’000
Weighted average number of ordinary shares in issue for basic earnings per share 779,181 777,945
Adjustments for:
– share plans 3,758 2,644
– share options 287 386
Number of ordinary shares used to determine diluted earnings per share 783,226 780,975
Diluted earnings per share (cents) 40.03 20.57
Notes to the Financial Statements for the financial year ended june
59
10. CASH AND CASH EQUIVALENTS Group Company 2011 2010 2011 2010 $’000 $’000 $’000 $’000
Fixed deposits with fi nancial institutions 411,818 540,254 173,971 327,364
Cash and bank balances 92,417 53,800 15,020 4,443
504,235 594,054 188,991 331,807
Included in cash and cash equivalents of the Group are amounts held under Housing Developers (Project Account)
(Amendment) Rules 1997, totalling $70.9 million (2010: $45.2 million), the use of which is subject to restrictions imposed by
the aforementioned rules.
Th e carrying amounts of cash and cash equivalents approximated their fair values.
11. DERIVATIVE FINANCIAL INSTRUMENTS Group Company Contract Fair Contract Fair notional value notional value amount liability amount liability $’000 $’000 $’000 $’000
2011
Cash fl ow hedges
– Interest rate and cross currency swaps 530,252 (33,817) 125,000 (6,286)
Non-hedging instruments
– Currency forwards 10,331 (299) – –
(34,116) (6,286)
2010
Cash fl ow hedges
– Interest rate and cross currency swaps 655,940 (28,414) 125,000 (6,607)
Non-hedging instruments
– Currency forwards 10,503 (61) – –
(28,475) (6,607)
As at 30 June 2011, the fi xed interest rate on HKD interest rate swap is 4.4% (2010: 4.4%) per annum, the fi xed interest rate on
USD interest rate swap is 2.8% (2010: 2.8%) per annum and the fi xed interest rates on SGD interest rate swaps vary from 2.4%
to 5.5% (2010: 2.4% to 5.5%) per annum. Th e main fl oating rates are Hong Kong Interbank Off ered Rate, London Interbank
Off ered Rate and Singapore Swap Off ered Rate.
Interest rate swaps are entered into to hedge fl oating rate borrowings that will mature between March 2012 to October
2014. Fair value gains and losses on the interest rate swaps recognised in the cash fl ow hedge reserve are reclassifi ed to the
income statement as part of fi nance costs or capitalised in the costs of the properties under development over the period of
the borrowings.
Please refer to Note 2.14 for details of the fi nancial instruments and hedging policies.
Notes to the Financial Statements for the financial year ended june
60
12. TRADE AND OTHER RECEIVABLES CURRENT Group Company 2011 2010 2011 2010 $’000 $’000 $’000 $’000
Trade receivables 187,749 27,088 – 40
Allowance for impairment of receivables (920) (1,704) – –
186,829 25,384 – 40
Due from subsidiary companies
– non-trade [Note 12(i)] – – 436,749 424,040
Allowance for impairment of receivables – – (159,821) (153,327)
– – 276,928 270,713
Due from associated and joint venture
companies - non-trade [Note 12(ii)] 18,144 17,437 356 319
Due from non-controlling interests
– non-trade [Note 12(ii)] 4,892 – – –
Dividend receivable 2,786 – – –
Total current receivables 212,651 42,821 277,284 271,072
(i) Amounts due from subsidiary companies are unsecured and repayable on demand. Included in the amounts due from subsidiary companies are fi xed interest rate receivables of $223.7 million (2010: $231.9 million).
(ii) Amounts due from associated and joint venture companies and non-controlling interests are unsecured, interest-free and repayable on demand.
Th e carrying amounts of current trade and other receivables approximated their fair values.
13. INVENTORIES Group 2011 2010 $’000 $’000
Raw materials 918 1,204
Work-in-progress 68 392
Finished goods 17,798 14,870
18,784 16,466
Th e cost of inventories recognised as expense and included in “cost of sales” amounted to $78.9 million (2010: $70.3 million).
Notes to the Financial Statements for the financial year ended june
61
14. DEVELOPMENT PROPERTIES Group 2011 2010 $’000 $’000
Properties under development
Land, at cost 1,011,084 919,307
Development costs 531,074 455,178
Overhead expenditure capitalised 142,269 128,329
1,684,427 1,502,814
Attributable profi ts 504,880 407,673
Allowance for foreseeable losses (75,200) (67,687)
2,114,107 1,842,800
Progress payments received and receivable (980,440) (438,737)
1,133,667 1,404,063
Properties held for sale 141,484 18,939
1,275,151 1,423,002
Value of properties under development mortgaged to secure long term
banking facilities granted (Note 24) 894,205 1,147,841
Total interest capitalised during the fi nancial year 11,071 21,618
Th e major development properties are as follows:
% of Gross Group’s completion Expected Land fl oor interest in Type of at completion area area property Location development Tenure 30.06.2011 date (Sq m) (Sq m) (%)
Singapore
Helios Residences at 140 units of Freehold 100 n/a 7,399 20,717 100
Cairnhill Circle apartments
Belle Vue Residences 176 units of Freehold 100 n/a 23,004 32,205 60
at Oxley Walk condominium
housing
L’VIV 147 units of Freehold 15 2013 3,984 11,156 100
at Newton Road apartments
Le Nouvel 43 units of Freehold 7 2013 5,624 15,746 100
Ardmore at 1A, condominium
Ardmore Park housing
Foresque Residences 496 units of Leasehold 5 2014 22,744 47,763 100
at Petir Road condominium
housing
Notes to the Financial Statements for the financial year ended june
62
14. DEVELOPMENT PROPERTIES (continued)
% of Gross Group’s completion Expected Land fl oor interest in Type of at completion area area property Location development Tenure 30.06.2011 date (Sq m) (Sq m) (%)
Malaysia
Sering Ukay at 187 units of Freehold Phase 3 – – 188,151 68,655 60.4
Mukim of semi-detached
Ulu Klang, houses and
Gombak, bungalows
Selangor
Verticas Residences 423 units of Freehold Towers 36 2012 9,764 91,748 60.4
at Section 57, Town condominium A, B, C, D
of Kuala Lumpur housing
Kondominium 197 units of Freehold – 2014 6,084 50,033 60.4
Le Nouvel at condominium
Section 43, Town housing
of Kuala Lumpur
Kondominium 25 units of Freehold – 2013 4,047 12,935 60.4
Nobleton Crest condominium
at Jalan U-Th ant, housing
Town of
Kuala Lumpur
Taman Seri Impian 34 units of Freehold Phase 6 32 2012 4,517 8,140 60.4
at Mukim 14 and 15, terrace and semi-
Daerah Seberang detached houses,
Perai Tengah, bungalows and
Pulau Pinang shop offi ces
Taman Nagasari 310 units of Freehold Blocks A, B – – 27,883 19,068 60.4
at Mukim 6, fl ats and
Province Wellesley vacant land
Central, 13600
Pulau Pinang
Taman Bukit 492 units of Freehold Phase 1A 78 2011 118,164 113,989 60.4
Minyak Utama terrace and Phase 2 96 2011
at Mukim 14, semi-detached Phase 3 14 2013
Daerah Seberang houses and Phase 4 – 2014
Perai Tengah, shop houses
Pulau Pinang
Notes to the Financial Statements for the financial year ended june
63
14. DEVELOPMENT PROPERTIES (continued)
% of Gross Group’s completion Expected Land fl oor interest in Type of at completion area area property Location development Tenure 30.06.2011 date (Sq m) (Sq m) (%)
Malaysia (continued)
Sentral Greens 54 units of Freehold 100 n/a 18,666 14,035 60.4
at Mukim 13, terrace and
Tempat Relau, semi-detached
Daerah Timur houses
Laut, Pulau Pinang
Plaza DNP at 594 units of Freehold Phase 1 100 n/a 37,367 265,139 60.4
14-A and 59 Jalan apartment and Phase 2 – –
Dato Abdullah commercial
Tahir, 80300 podium
Johor Bahru, Johor
Impiana Commercial 83 units of Freehold 58 2012 41,578 69,921 60.4
Hub at Mukim 14, shop houses
Daerah Seberang
Perai Tengah,
Pulau Pinang
Vacant land – 99-year – – 38,155 n/a 60.4
at Pekan Penaga, lease expiring
District of Petaling, 2093
Selangor
Vacant land at – Freehold – – 8,645 n/a 60.4
Section 89A,
Town of
Kuala Lumpur
Vacant land – Freehold – – 707,011 n/a 60.4
at Mukim 14 - 16,
Daerah Seberang
Perai Tengah,
Pulau Pinang
Vacant land at – Freehold – – 2,282 n/a 60.4
Mukim 17,
Batu Ferringhi,
Pulau Pinang
Notes to the Financial Statements for the financial year ended june
64
14. DEVELOPMENT PROPERTIES (continued)
% of Gross Group’s completion Expected Land fl oor interest in Type of at completion area area property Location development Tenure 30.06.2011 date (Sq m) (Sq m) (%)
Th e People’s Republic of China
Th e Lakeview at 190 units 70-year Phase 3 60 2011 9,740 31,528 75
No. 63 Xinggang of apartments lease
Street, Suzhou expiring
Industrial Park 2066
Th e Lakeside Mixed 70-year Phase 2 – – 19,518 18,990 75
at No.1 Xingzhou development lease
Street, Suzhou comprising expiring
Industrial Park townhouses, 2066
bungalows and
apartments
n/a: not applicable
15. OTHER CURRENT ASSETS Group Company 2011 2010 2011 2010 $’000 $’000 $’000 $’000
Deposits 10,704 9,832 49 163
Prepayments 29,045 22,197 543 697
Sundry receivables 8,895 6,060 2,023 2,027
48,644 38,089 2,615 2,887
Th e carrying amounts of deposits and sundry receivables approximated their fair values.
16. AVAILABLEFORSALE FINANCIAL ASSETS Group Company 2011 2010 2011 2010 $’000 $’000 $’000 $’000
Beginning and end of fi nancial year 7,170 7,170 3,189 3,189
Th e available-for-sale fi nancial assets comprised unquoted equity shares in Singapore.
Notes to the Financial Statements for the financial year ended june
65
17. TRADE AND OTHER RECEIVABLES NONCURRENT
Group Company 2011 2010 2011 2010 $’000 $’000 $’000 $’000
Loans to subsidiary companies [Note 17(i)] – – 631,936 507,178 Allowance for impairment of receivables – – (13,382) (11,108)
– – 618,554 496,070
Loans to joint venture companies [Note 17(ii)] 205,739 213,587 – – Allowance for impairment of receivables (11,928) (12,541) – –
193,811 201,046 – –
Loans to non-controlling interests [Note 17(iii)] 3,979 21,643 – –
Total non-current receivables 197,790 222,689 618,554 496,070
(i) Loans to subsidiary companies are unsecured, have no fi xed terms of repayment and are not expected to be repayable within the next 12 months. Included in the loans to subsidiary companies are fi xed interest rate receivables of $210.1 million (2010: $277.6 million).
Th e interest-free loans to subsidiary companies are intended to be a long-term source of additional capital for the subsidiary companies. As a result, management considers such loans to be in substance part of the Company’s net investment in these subsidiary companies and has accounted for these loans in accordance with Note 2.5.
(ii) Loans to joint venture companies are unsecured, have no fi xed terms of repayment and are not expected to be repayable within the next 12 months. Included in the loans to joint venture companies are fi xed interest rate receivables of $204.2 million (2010: $211.9 million).
Th e interest-bearing loans to joint venture companies amounting to $186.4 million (2010: $191.1 million) are subordinated to banking facilities of $893.8 million (2010: $893.8 million) granted by banks to the said joint venture companies.
(iii) Loans by certain subsidiary companies to non-controlling interests are made proportionate to the shareholders’ equity stake in the subsidiary companies on a pari passu basis. Th e loans are unsecured, interest-free, have no fi xed terms of repayment and are not expected to be repayable within the next 12 months.
Th e carrying amounts of non-current trade and other receivables approximated their fair values.
Notes to the Financial Statements for the financial year ended june
66
18. INVESTMENT IN AN ASSOCIATED COMPANY Group 2011 2010 $’000 $’000
Carrying amount of quoted investment in an associated company 554,027 514,662
Th e above carrying amount included the following: – Share of an associated company’s other comprehensive income 7,379 6,390 – Share of an associated company’s net profi t 105,761 24,177
Th e summarised fi nancial information of an associated company, not adjusted for the proportionate ownership interest held by the Group, is as follows:
Group 2011 2010 $’000 $’000
Assets 3,127,945 3,072,658 Liabilities (1,188,076) (1,308,648) Revenue 306,043 445,928 Net profi t 384,865 115,907
Share of an associated company’s contingent liabilities incurred jointly with other investors – 26,469
Market value of quoted equity shares 231,200 187,199
As at 30 June 2011, the carrying value of quoted equity shares is higher than the market value. Th e directors consider the
carrying value of investment in the associated company appropriate, after having evaluated various qualitative and quantitative factors including the historical fi nancial performance of the associated company.
Details of the Group’s associated company are listed in Note 35 to the fi nancial statements.
Notes to the Financial Statements for the financial year ended june
67
19. INVESTMENTS IN JOINT VENTURE COMPANIES Th e following amounts represent the Group’s share of the assets, liabilities, revenue and expenses of the joint venture companies
which are included in the consolidated balance sheet and consolidated income statement using equity accounting.
Group 2011 2010 $’000 $’000
Assets – Current assets 725,492 686,650 – Non-current assets 40,504 28,666
765,996 715,316
Liabilities – Current liabilities (142,609) (163,636) – Non-current liabilities (433,618) (402,223)
(576,227) (565,859)
Net assets 189,769 149,457
Revenue 262,447 150,581 Expenses (191,703) (118,024) Income tax expense (12,284) (5,064)
Net profi t 58,460 27,493
Th e Group’s share of the capital commitments of the joint venture companies were as follows:
Group 2011 2010 $’000 $’000
Contracted but not provided for 147,122 179,651
Details of the Group’s joint venture companies are listed in Note 35 to the fi nancial statements.
20. INVESTMENTS IN SUBSIDIARY COMPANIES Company 2011 2010 $’000 $’000
Beginning of fi nancial year 252,392 250,369 Write-back of allowance for impairment – 2,023
End of fi nancial year 252,392 252,392
Details of the Group’s subsidiary companies are listed in Note 35 to the fi nancial statements.
Notes to the Financial Statements for the financial year ended june
68
21. INVESTMENT PROPERTIES Group Company 2011 2010 2011 2010 $’000 $’000 $’000 $’000
Beginning of fi nancial year 486,028 480,883 82,000 82,000 Fair value gains recognised in income statement 74,616 5,140 – – Transfer from/(to) property, plant and equipment 701 (2,075) – – Transfer to development properties (1,856) – – – Additional expenditure 4,438 – – – Disposals – – (82,000) – Currency translation diff erences (3,717) 2,080 – –
End of fi nancial year 560,210 486,028 – 82,000
Th e major investment properties are as follows:
Lettable Group’s interest area in property Location Description Tenure (Sq m) (%)
Singapore
105 Tampines Road 9-storey warehouse Freehold 9,257 100
and offi ce building
Winsland House I 10-storey 99-year 13,287 100
at 3 Killiney Road commercial lease
(1st to 9th fl oor) building expiring 2082
Winsland House II 8-storey 99-year 7,287 100
at 163 Penang Road commercial lease
building expiring 2093
Winsland House II Conservation 99-year 534 100
at 165 Penang Road house lease
expiring 2093
Lanson Place 9-storey serviced 99-year 6,030 100
Winsland Residences apartments lease
at 167 Penang Road expiring 2093
Malaysia
Lanson Place 132 units of Freehold 22,702 60.4
Kondominium No. 8 condominium
at Section 89A, housing
Town of Kuala Lumpur
Th e People’s Republic of China
Singa Plaza 8-storey 50-year lease 8,255 75
at No. 8 Jinji Hu Road, commercial expiring 2046
Suzhou Industrial Park building
Notes to the Financial Statements for the financial year ended june
69
21. INVESTMENT PROPERTIES (continued)
Investment properties are carried at fair values at the balance sheet date as determined by independent professional valuers based on the Direct Market Comparison Method and Investment Method.
Investment properties are leased to third parties under operating leases (Note 30).
Investment properties with a total valuation of $508.4 million (2010: $443.8 million) were mortgaged to banks to secure long term banking facilities granted to the subsidiary companies (Note 24).
Th e following amounts are recognised in the income statement:
Group 2011 2010 $’000 $’000
Rental income 31,584 33,366 Direct operating expenses arising from investment properties that generated rental income (9,998) (9,812)
Notes to the Financial Statements for the financial year ended june
70
22. PROPERTY, PLANT AND EQUIPMENT
Freehold land Leasehold land Motor Offi ce Furniture and buildings and buildings vehicles equipment and fi ttings Total $’000 $’000 $’000 $’000 $’000 $’000
GROUP
2011
Cost or valuation
Beginning of fi nancial year
Cost – 1,147 4,676 16,230 40,741 62,794
Valuation 101,278 49,473 – – – 150,751
101,278 50,620 4,676 16,230 40,741 213,545
Transfer to investment properties – (701) – – – (701)
Additions 1 2 1,496 2,837 9,631 13,967
Additional expenditure on property 6,920 – – – – 6,920
Disposals (898) – (616) (442) (361) (2,317)
Write-off – – – (146) (2,798) (2,944)
Revaluation (losses)/gains (1,056) 7,615 – – – 6,559
Currency translation diff erences (2,169) (507) (208) (755) (1,241) (4,880)
End of fi nancial year 104,076 57,029 5,348 17,724 45,972 230,149
Representing:
Cost – – 5,348 17,724 45,972 69,044
Valuation 104,076 57,029 – – – 161,105
104,076 57,029 5,348 17,724 45,972 230,149
Accumulated depreciation
and impairment losses
Beginning of fi nancial year 1,925 1,342 2,141 7,189 24,395 36,992
Depreciation charge 698 1,082 1,011 2,135 6,174 11,100
Disposals (342) – (506) (318) (111) (1,277)
Impairment loss 67 – – – – 67
Write-off – – – (119) (2,436) (2,555)
Revaluation adjustments (1,835) (2,072) – – – (3,907)
Currency translation diff erences (63) (40) (142) (709) (961) (1,915)
End of fi nancial year 450 312 2,504 8,178 27,061 38,505
Net book value
End of fi nancial year 103,626 56,717 2,844 9,546 18,911 191,644
Notes to the Financial Statements for the financial year ended june
71
22. PROPERTY, PLANT AND EQUIPMENT (continued)
Freehold land Leasehold land Motor Offi ce Furniture and buildings and buildings vehicles equipment and fi ttings Total $’000 $’000 $’000 $’000 $’000 $’000
GROUP
2010
Cost or valuation
Beginning of fi nancial year
Cost – 491 4,237 13,118 40,485 58,331
Valuation 99,462 49,066 – – – 148,528
99,462 49,557 4,237 13,118 40,485 206,859
Transfer from investment properties – 2,075 – – – 2,075
Additions – 874 1,039 3,032 6,998 11,943
Disposals (55) (3,000) (701) (125) (22) (3,903)
Write-off – – (41) (429) (7,602) (8,072)
Revaluation gains 306 734 – – – 1,040
Currency translation diff erences 1,565 380 142 634 882 3,603
End of fi nancial year 101,278 50,620 4,676 16,230 40,741 213,545
Representing:
Cost – 1,147 4,676 16,230 40,741 62,794
Valuation 101,278 49,473 – – – 150,751
101,278 50,620 4,676 16,230 40,741 213,545
Accumulated depreciation
and impairment losses
Beginning of fi nancial year 3,549 1,428 1,569 5,522 23,634 35,702
Depreciation charge 696 1,033 1,008 2,125 7,287 12,149
Disposals – (765) (529) (103) (3) (1,400)
Impairment loss/(write-back
of impairment) – 366 – (595) 41 (188)
Write-off – – – (368) (7,293) (7,661)
Revaluation adjustments (2,368) (778) – – – (3,146)
Currency translation diff erences 48 58 93 608 729 1,536
End of fi nancial year 1,925 1,342 2,141 7,189 24,395 36,992
Net book value
End of fi nancial year 99,353 49,278 2,535 9,041 16,346 176,553
Notes to the Financial Statements for the financial year ended june
72
22. PROPERTY, PLANT AND EQUIPMENT (continued)
Freehold land Motor Offi ce Furniture and buildings vehicles equipment and fi ttings Total $’000 $’000 $’000 $’000 $’000
COMPANY
2011
Cost or valuation
Beginning of fi nancial year
Cost – 1,659 4,935 2,401 8,995
Valuation 8,400 – – – 8,400
8,400 1,659 4,935 2,401 17,395
Additions – 755 628 – 1,383
Disposals (8,400) (292) (145) (329) (9,166)
End of fi nancial year – 2,122 5,418 2,072 9,612
Representing:
Cost – 2,122 5,418 2,072 9,612
Accumulated depreciation
Beginning of fi nancial year – 957 735 766 2,458
Depreciation charge 9 349 82 205 645
Disposals (9) (292) (43) (98) (442)
End of fi nancial year – 1,014 774 873 2,661
Net book value
End of fi nancial year – 1,108 4,644 1,199 6,951
Notes to the Financial Statements for the financial year ended june
73
22. PROPERTY, PLANT AND EQUIPMENT (continued)
Freehold land Motor Offi ce Furniture and buildings vehicles equipment and fi ttings Total $’000 $’000 $’000 $’000 $’000
COMPANY
2010
Cost or valuation
Beginning of fi nancial year
Cost – 2,184 3,439 7,445 13,068
Valuation 8,094 – – – 8,094
8,094 2,184 3,439 7,445 21,162
Additions – – 1,721 – 1,721
Disposals – (525) (20) (88) (633)
Write-off – – (205) (4,956) (5,161)
Revaluation gain 306 – – – 306
End of fi nancial year 8,400 1,659 4,935 2,401 17,395
Representing:
Cost – 1,659 4,935 2,401 8,995
Valuation 8,400 – – – 8,400
8,400 1,659 4,935 2,401 17,395
Accumulated depreciation
Beginning of fi nancial year 1,505 947 799 5,352 8,603
Depreciation charge 45 411 144 253 853
Disposals – (401) (4) – (405)
Write-off – – (204) (4,839) (5,043)
Revaluation adjustment (1,550) – – – (1,550)
End of fi nancial year – 957 735 766 2,458
Net book value
End of fi nancial year 8,400 702 4,200 1,635 14,937
Th e freehold and leasehold land and buildings of the Group and the Company were valued by independent professional valuers
based on the Direct Market Comparison Method and Investment Method at the balance sheet date.
If the freehold and leasehold land and buildings stated at valuation were included in the fi nancial statements at cost less
accumulated depreciation, their net book values would be as follows:
Group Company 2011 2010 2011 2010 $’000 $’000 $’000 $’000
Freehold land and buildings 43,574 39,948 – 718 Leasehold land and buildings 45,852 48,334 – –
Notes to the Financial Statements for the financial year ended june
74
22. PROPERTY, PLANT AND EQUIPMENT (continued)
Th e major properties included in freehold and leasehold land and buildings are as follows:
Lettable Location Description Tenure area (Sq m)
Singapore 107 Tampines Road 10-storey warehouse and offi ce Freehold 18,043 building and a 5-storey canteen 19 Valley Road 16 units of apartments Freehold 1,665 in a 4-storey building
Winsland House I 10-storey commercial building 99-year lease 2,764 at 3 Killiney Road (Basement 1 and 10th fl oor) expiring 2082
Malaysia
166-A, Rifl e Range Road, 11400 Pulau Pinang 5-storey commercial building 99-year lease 11,136 expiring 2109
Lanson Place Ambassador Row Residences 221 units of serviced apartments Freehold 17,452 at 1 Jalan Ampang Hilir, 55000 Kuala Lumpur in a 20-storey building
Property, plant and equipment with net book values amounting to $78.2 million (2010: $74.9 million) were mortgaged to banks to secure long term banking facilities granted to subsidiary companies (Note 24).
23. TRADE AND OTHER PAYABLES Group Company 2011 2010 2011 2010 $’000 $’000 $’000 $’000
Due to subsidiary companies – non-trade [Note 23(i)] – – 152,385 150,105
Due to associated and joint venture companies – non-trade [Note 23(ii)] 22,766 4,843 – –
Due to an investee company – non-trade [Note 23(ii)] 4,378 4,378 – –
Due to non-controlling interests – non-trade [Note 23(iii)] 34,933 – – –
Accrued project costs 58,308 39,369 – – Accrued operating expenses 57,667 48,930 8,046 9,832 Trade creditors 29,171 28,785 – – Other creditors 12,649 22,767 1,697 1,801 Tenancy deposits 2,466 2,989 – 194
160,261 142,840 9,743 11,827
Total trade and other payables 222,338 152,061 162,128 161,932
(i) Non-trade amounts due to subsidiary companies are unsecured and repayable on demand. Included in the amounts due to subsidiary companies are fi xed interest rate payables of $29.4 million (2010: $40.7 million) and fl oating interest rate payables of $17.7 million (2010: $19.7 million).
Notes to the Financial Statements for the financial year ended june
75
23. TRADE AND OTHER PAYABLES (continued)
(ii) Non-trade amounts due to associated, joint venture and investee companies are unsecured, interest-free and repayable on demand.
(iii) Non-trade amounts due to non-controlling interests are unsecured and repayable on demand. Included in the amounts due to non-controlling interests are fi xed interest rate payables of $11.4 million (2010: Nil).
Th e carrying amounts of trade and other payables approximated their fair values.
24. BORROWINGS Group Company 2011 2010 2011 2010 $’000 $’000 $’000 $’000
Current
– Secured term loans 160,239 2,906 – – – Unsecured bank loans 6,887 7,749 – – – Unsecured medium term notes due 2011 – 100,000 – 100,000
167,126 110,655 – 100,000
Non-current
– Secured bank loans 588,871 761,623 – – – Unsecured bank loans 303,220 343,394 125,000 145,000 – Unsecured medium term notes due 2015 120,000 120,000 120,000 120,000
1,012,091 1,225,017 245,000 265,000
Total borrowings 1,179,217 1,335,672 245,000 365,000
Th e carrying amounts of borrowings approximated their fair values.
(a) Interest rate risks
Th e exposure of the borrowings of the Group and of the Company to interest rate changes and the contractual repricing
dates at the balance sheet date are as follows:
Group Company 2011 2010 2011 2010 $’000 $’000 $’000 $’000
Less than one year 556,997 491,093 – 120,000 Between one and two years 166,654 – 100,000 – Between two and fi ve years 386,566 844,579 145,000 245,000 Over fi ve years 69,000 – – –
1,179,217 1,335,672 245,000 365,000
(b) Security granted
Th e Group’s secured borrowings are generally secured by mortgages on certain development properties (Note 14), investment
properties (Note 21) and property, plant and equipment (Note 22) and assignment of all rights, titles and benefi ts with
respect to the properties.
Notes to the Financial Statements for the financial year ended june
76
25. DIVIDENDS Group and Company 2011 2010 $’000 $’000
Dividends paid in respect of the preceding fi nancial year First and fi nal dividend of 3 cents per share (2010: 3 cents per share) 23,374 23,332 Special dividend of 2 cents per share (2010: 1 cent per share) 15,583 7,778
38,957 31,110
Th e directors have recommended a fi rst and fi nal dividend in respect of the fi nancial year ended 30 June 2011 of 3 cents per share and a special dividend of 4 cents per share. Th ese fi nancial statements do not refl ect these proposed dividends, which will be accounted for in the shareholders’ equity as an appropriation of retained earnings in the fi nancial year ending 30 June 2012.
Th e proposed fi rst and fi nal dividend and special dividend in respect of the fi nancial year ended 30 June 2010 have been accounted for in the shareholders’ equity as an appropriation of retained earnings in the current fi nancial year.
26. OTHER NONCURRENT LIABILITIES Group Company 2011 2010 2011 2010 $’000 $’000 $’000 $’000
Tenancy deposits 4,948 3,874 – 189 Loans from non-controlling interests 28,559 105,636 – – Retention payable 8,042 11,042 – – Others 7,270 3,066 9,655 9,655
48,819 123,618 9,655 9,844
Loans from non-controlling interests are unsecured, have no fi xed terms of repayment and are not expected to be repayable within the next 12 months. Included in the loans from non-controlling interests are fi xed interest rate amounts of Nil (2010: $52.5 million).
Th e carrying amounts of other non-current liabilities approximated their fair values.
27. SHARE CAPITAL Group and Company Issued share capital Number of ordinary shares Amount ’000 $’000
2011 Beginning of fi nancial year 793,889 838,200 Issue of shares on exercise of share options 38 50
End of fi nancial year 793,927 838,250
2010 Beginning of fi nancial year 793,460 837,690 Issue of shares on exercise of share options 429 510
End of fi nancial year 793,889 838,200
Notes to the Financial Statements for the financial year ended june
77
27. SHARE CAPITAL (continued)
Th e issued and paid up capital increased due to the issuance of 38,500 (2010: 428,300) new ordinary shares upon the exercise of employee share options. Th e newly issued shares rank pari passu in all respects with the previously issued shares.
All issued ordinary shares are fully paid. Th ere is no par value for these ordinary shares.
(a) Th e Wing Tai Holdings Limited (2001) Share Option Scheme (the “Scheme”) Th e Scheme was approved and adopted by the members of the Company at an Extraordinary General Meeting (“EGM”)
held on 31 August 2001. Th e Scheme was terminated by the members of the Company at an EGM held on 30 October 2008 (without prejudice to the rights of holders of options thereunder in respect of options which have been granted).
Details of the movement in the options granted under the Scheme on the unissued ordinary shares of the Company during the year were as follows:
Number Number As at of options of options As at Exercise Expiry Date of grant 01.07.2010 exercised forfeited 30.06.2011 price ($) date
2011
02.11.2001 22,000 – – 22,000 0.616 01.11.2011
19.11.2004 294,800 7,700 – 287,100 0.849 18.11.2014
30.09.2005 668,900 23,100 6,600 639,200 1.300 29.09.2015
05.09.2006 1,269,300 17,500 12,100 1,239,700 1.645 04.09.2016
06.09.2007 2,024,000 – 44,000 1,980,000 3.136 05.09.2017
Total 4,279,000 48,300 62,700 4,168,000
Number Number As at of options of options As at Exercise Expiry Date of grant 01.07.2009 exercised forfeited 30.06.2010 price ($) date
2010
02.11.2001 22,000 – – 22,000 0.616 01.11.2011
19.11.2004 480,700 185,900 – 294,800 0.849 18.11.2014
30.09.2005 808,900 132,300 7,700 668,900 1.300 29.09.2015
05.09.2006 1,419,000 110,100 39,600 1,269,300 1.645 04.09.2016
06.09.2007 2,079,000 – 55,000 2,024,000 3.136 05.09.2017
Total 4,809,600 428,300 102,300 4,279,000
Out of the outstanding options on 4,168,000 (2010: 4,279,000) shares, options on 4,168,000 (2010: 3,429,000) shares are
exercisable. Options exercised during the fi nancial year resulted in 38,500 (2010: 428,300) new ordinary shares being issued
and 9,800 (2010: Nil) treasury shares being reissued at an average price of $1.35 (2010: $1.19) per share. Th e weighted
average share price at the time of exercise was $1.73 (2010: $1.84) per share.
(b) Share Plans
Th e Wing Tai Performance Share Plan (“Wing Tai PSP”) and the Wing Tai Restricted Share Plan (“Wing Tai RSP”) (collectively
referred to as the “Share Plans”) were adopted by the members of the Company at an EGM held on 30 October 2008.
Notes to the Financial Statements for the financial year ended june
78
27. SHARE CAPITAL (continued)
(b) Share Plans (continued)
Wing Tai PSP
On 1 September 2010, awards were granted by the Company to qualifying employees pursuant to the Wing Tai PSP in
respect of 175,000 shares of the Company. Under the Wing Tai PSP, performance conditions are set over a three-year
performance period. A specifi ed number of shares will be released by the Committee to the participants at the end of the
performance period, provided the threshold targets are achieved.
Details of the movement in the awards of the Company during the year were as follows:
As at Number of Number of As at Date of grant 01.07.2010 shares granted shares forfeited 30.06.2011
2011 03.09.2009 146,000 – – 146,000 01.09.2010 – 175,000 – 175,000
Total 146,000 175,000 – 321,000
As at Number of Number of As at Date of grant 01.07.2009 shares granted shares forfeited 30.06.2010
2010 03.09.2009 – 163,000 17,000 146,000
Wing Tai RSP
On 1 September 2010, awards were granted by the Company to qualifying employees pursuant to the Wing Tai RSP in
respect of 2,125,000 shares of the Company. Under the Wing Tai RSP, performance conditions are set over a one-year
performance period. A specifi ed number of shares will be awarded to eligible participants at the end of the performance
period depending on the extent of achievement of the performance conditions established. Th e shares have a vesting schedule
of three years. Th e participant will receive fully paid shares, without any cash consideration payable by the participant.
Details of the movement in the awards of the Company during the year were as follows:
As at Number of Number of Number of As at Date of grant 01.07.2010 shares granted shares released shares forfeited 30.06.2011
2011 18.05.2009 1,474,900 – 632,100 – 842,800 03.09.2009 1,257,000 – 377,100 9,100 870,800 01.09.2010 – 2,125,000 – 22,000 2,103,000
Total 2,731,900 2,125,000 1,009,200 31,100 3,816,600
As at Number of Number of Number of As at Date of grant 01.07.2009 shares granted shares released shares forfeited 30.06.2010
2010 18.05.2009 2,246,000 - 663,300 107,800 1,474,900 03.09.2009 - 1,344,000 - 87,000 1,257,000
Total 2,246,000 1,344,000 663,300 194,800 2,731,900
Notes to the Financial Statements for the financial year ended june
79
27. SHARE CAPITAL (continued)
(b) Share Plans (continued)
Th e fair values of the awards granted pursuant to the Wing Tai PSP and the Wing Tai RSP on 1 September 2010
(2010: 3 September 2009) determined using the Monte Carlo simulation model was $0.2 million (2010: $0.2 million) and
$3.2 million (2010: $2.2 million) respectively. Th e signifi cant inputs into the model were share price at grant date of
$1.61 (2010: $1.71) per share, standard deviation of expected share price returns of 58.3% (2010: 58.5%), dividend yield of
3.4% (2010: 2.1%) and annual risk-free interest rates of 0.4% [one-year], 0.5% [two-years] and 0.5% [three-years] (2010:
0.4% [one-year], 0.5% [two-years] and 0.6% [three-years]). Th e volatility measured at the standard deviation of expected
share price returns is based on the statistical analysis of monthly share prices over the past three years.
28. OTHER RESERVES Group Company 2011 2010 2011 2010 $’000 $’000 $’000 $’000
Share-based payment reserve 9,829 7,705 9,359 7,433 Cash fl ow hedge reserve (33,817) (28,414) (6,286) (6,607) Asset revaluation reserve 89,294 82,181 – 7,429 Share of capital reserves of associated and joint venture companies 18,840 20,476 – – Currency translation reserve (134,707) (74,752) – – Treasury shares reserve (15,823) (16,968) (15,823) (16,968) Statutory reserve 972 972 – –
(65,412) (8,800) (12,750) (8,713)
(a) Share-based payment reserve Beginning of fi nancial year 7,705 5,641 7,433 5,383 Employee share plans and share option scheme: – Value of employee services (Notes 6 and 27) 3,413 2,819 3,056 2,793 – Reissuance of treasury shares (1,130) (743) (1,130) (743) Attributable to non-controlling interests (159) (12) – –
End of fi nancial year 9,829 7,705 9,359 7,433
(b) Cash fl ow hedge reserve Beginning of fi nancial year (28,414) (24,740) (6,607) (3,226) Fair value losses (21,411) (19,581) (3,095) (6,679) Transfer to: – development properties 3,382 4,509 – – – income statement 12,626 11,398 3,416 3,298
End of fi nancial year (33,817) (28,414) (6,286) (6,607)
Notes to the Financial Statements for the financial year ended june
80
28. OTHER RESERVES (continued)
Group Company 2011 2010 2011 2010 $’000 $’000 $’000 $’000
(c) Asset revaluation reserve Beginning of fi nancial year 82,181 79,855 7,429 5,885 Revaluation gains on property, plant and equipment 10,466 4,186 – 1,856 Deferred income tax charged to equity [Note 8(b)] (1,894) (1,547) – (312) Transfer to retained earnings upon realisation (317) (879) (7,429) – Reversal of impairment loss to income statement (126) – – – Attributable to non-controlling interests (1,016) 566 – –
End of fi nancial year 89,294 82,181 – 7,429
(d) Share of capital reserves of associated and joint venture companies Beginning of fi nancial year 20,476 14,576 – – Share of capital reserves of: – an associated company 7,379 6,390 – – – joint venture companies (8,775) (282) – – Attributable to non-controlling interests (240) (208) – –
End of fi nancial year 18,840 20,476 – –
(e) Currency translation reserve Beginning of fi nancial year (74,752) (55,512) – – Translation of fi nancial statements of foreign subsidiary, associated and joint venture companies (61,783) (3,329) – – Translation of foreign currency denominated loans which form part of net investment in subsidiary companies (7,302) (10,407) – – Liquidation of joint venture companies (819) – – – Liquidation of subsidiary companies 335 – – – Attributable to non-controlling interests 9,614 (5,504) – –
End of fi nancial year (134,707) (74,752) – –
(f ) Treasury shares reserve Beginning of fi nancial year (16,968) (17,711) (16,968) (17,711) Reissuance of treasury shares 1,145 743 1,145 743
End of fi nancial year (15,823) (16,968) (15,823) (16,968)
Notes to the Financial Statements for the financial year ended june
81
28. OTHER RESERVES (continued)
Group Company 2011 2010 2011 2010 $’000 $’000 $’000 $’000
(g) Statutory reserve Beginning of fi nancial year 972 774 – – Liquidation of a joint venture company (315) – – – Transfer from retained earnings – 264 – – Attributable to non-controlling interests 315 (66) – –
End of fi nancial year 972 972 – –
Total other reserves (65,412) (8,800) (12,750) (8,713)
Capital reserves of associated and joint venture companies arise from currency translation and other reserves which are
not distributable.
Included in the issued ordinary shares of the Company as at 30 June 2011 was 14,139,700 (2010: 15,158,700) treasury
shares held by the Company.
Th e Company reissued 1,019,000 (2010: 663,300) treasury shares during the fi nancial year pursuant to the Wing Tai RSP
and share options. Th e purchase cost of the treasury shares reissued amounted to $1.1 million (2010: $0.7 million). Th e total
consideration for the treasury shares reissued which comprised the value of employee services amounted to $1.1 million
(2010: $0.7 million).
29. RETAINED EARNINGS
(a) Retained earnings of the Group are distributable except for accumulated retained earnings of associated and joint venture
companies amounting to $326.1 million (2010: $185.5 million), and the amount of $15.8 million (2010: $17.0 million)
utilised to purchase treasury shares. Retained earnings of the Company are distributable except for the amount of $15.8 million
(2010: $17.0 million) utilised to purchase treasury shares.
(b) Movement in retained earnings for the Company were as follows:
Company 2011 2010 $’000 $’000
Beginning of fi nancial year 73,928 73,242 Net profi t 55,501 31,796 Realisation of reserves 7,429 – Dividends paid (Note 25) (38,957) (31,110)
End of fi nancial year 97,901 73,928
Notes to the Financial Statements for the financial year ended june
82
30. COMMITMENTS
(a) Capital commitments Capital expenditures contracted for at the balance sheet date but not recognised in the fi nancial statements, excluding those
relating to investments in joint venture companies (Note 19), are as follows:
Group 2011 2010 $’000 $’000
Commitments in respect of contracts placed 289,073 102,621
(b) Operating lease commitments – where the Group is a lessee
Th e Group leases various retail units under non-cancellable operating lease agreements. Th e leases have varying terms,
escalation clauses and renewal rights.
Th e future minimum lease payables under non-cancellable operating leases contracted for at the balance sheet date but not
recognised as liabilities, are as follows:
Group 2011 2010 $’000 $’000
Not later than one year 39,903 36,080 Between one and fi ve years 55,988 65,518
95,891 101,598
(c) Operating lease commitments – where the Group is a lessor
Th e Group and the Company lease out offi ce units and serviced apartments under non-cancellable operating lease agreements.
Th e leases have varying terms, escalation clauses and renewal rights.
Th e future minimum lease receivables under non-cancellable operating leases contracted for at the balance sheet date but not
recognised as receivables, are as follows:
Group Company 2011 2010 2011 2010 $’000 $’000 $’000 $’000
Not later than one year 23,338 18,245 – 1,175 Between one and fi ve years 33,192 12,986 – 826
56,530 31,231 – 2,001
Notes to the Financial Statements for the financial year ended june
83
31. CONTINGENT LIABILITIES
Th e details and estimates of maximum amounts of contingent liabilities, excluding those relating to investment in an associated
company (Note 18), are as follows:
Group Company 2011 2010 2011 2010 $’000 $’000 $’000 $’000
Financial guarantees issued to banks for credit facilities granted to: – subsidiary companies – – 221,120 251,938 – joint venture companies 8,280 16,912 8,280 16,912
8,280 16,912 229,400 268,850
Th e Company has given fi nancial guarantees for all liabilities incurred under a tender bond facility of a subsidiary company
amounting to $15.0 million (2010: $15.0 million) granted by a bank to the subsidiary company.
32. FINANCIAL RISK MANAGEMENT
FINANCIAL RISK FACTORS
Th e Group’s activities expose it to market risk (including currency risk and interest rate risk), credit risk and liquidity risk. Th e
Group’s overall risk management strategy seeks to minimise any adverse eff ects from the unpredictability of fi nancial markets
on the Group’s fi nancial performance. After identifying and evaluating its exposure to the fi nancial risks, the Group establishes
policies to monitor and manage these risks in accordance with its risk management philosophy. Th e Group uses fi nancial
instruments such as currency forwards, cross currency swaps, interest rate swaps and foreign currency borrowings to hedge
certain fi nancial risk exposures.
(a) Market risk
(i) Currency risk
Th e Group operates in Asia with dominant operations in Singapore, Malaysia, Hong Kong SAR and the People’s
Republic of China. Entities in the Group may transact in currencies other than their respective functional currencies.
Currency risk arises within entities in the Group when transactions are denominated in foreign currencies. To manage
the currency exposure, the Group enters into currency forwards with banks.
Th e Group also holds long-term overseas investments and its net assets are exposed to currency translation risk. Th e
Group uses natural hedging opportunities, like borrowing in the currency of the country in which these investments are
located whenever practicable. Th e exchange diff erences arising from such translations are captured under the currency
translation reserve. Th ese translation diff erences are reviewed and monitored on a regular basis.
Notes to the Financial Statements for the financial year ended june
84
32. FINANCIAL RISK MANAGEMENT (continued)
(a) Market risk (continued)
(i) Currency risk (continued)
Th e Group’s currency exposure is as follows:
SGD RM USD HKD Other Total $’000 $’000 $’000 $’000 $’000 $’000
2011
Financial assets
Cash and cash equivalents 391,557 35,419 46,594 1,373 29,292 504,235
Available-for-sale fi nancial assets 7,170 – – – – 7,170
Trade and other receivables
(current and non-current) 367,634 34,745 695 7,366 1 410,441
Other fi nancial assets 16,843 2,498 2 16 240 19,599
783,204 72,662 47,291 8,755 29,533 941,445
Financial liabilities
Trade and other payables (174,593) (36,290) (3,006) (1,801) (6,648) (222,338)
Borrowings (931,962) (90,035) (30,895) (126,325) – (1,179,217)
Other fi nancial liabilities (33,037) (4,249) (4,263) – – (41,549)
(1,139,592) (130,574) (38,164) (128,126) (6,648) (1,443,104)
Net fi nancial (liabilities)/assets (356,388) (57,912) 9,127 (119,371) 22,885 (501,659)
Net fi nancial liabilities/(assets)
denominated in the respective
entities’ functional currencies 334,917 59,810 26,342 (7,193) (25,673) 388,203
Firm commitments and highly
probable forecast transactions
in foreign currencies – – (735) – (5,136) (5,871)
Currency forwards and
cross currency swaps (60,015) – 3,100 60,015 6,970 10,070
Currency exposure (81,486) 1,898 37,834 (66,549) (954) (109,257)
Notes to the Financial Statements for the financial year ended june
85
32. FINANCIAL RISK MANAGEMENT (continued)
(a) Market risk (continued)
(i) Currency risk (continued)
SGD RM USD HKD Other Total $’000 $’000 $’000 $’000 $’000 $’000
2010
Financial assets
Cash and cash equivalents 467,670 36,466 51,890 1,108 36,920 594,054
Available-for-sale fi nancial assets 7,170 – – – – 7,170
Trade and other receivables
(current and non-current) 239,667 22,524 1,256 2,059 4 265,510
Other fi nancial assets 12,248 3,010 116 16 502 15,892
726,755 62,000 53,262 3,183 37,426 882,626
Financial liabilities
Trade and other payables (105,709) (33,716) (2,805) (2,330) (7,501) (152,061)
Borrowings (1,113,723) (44,555) (34,830) (142,564) – (1,335,672)
Other fi nancial liabilities (112,214) (2,974) (5,364) – – (120,552)
(1,331,646) (81,245) (42,999) (144,894) (7,501) (1,608,285)
Net fi nancial (liabilities)/assets (604,891) (19,245) 10,263 (141,711) 29,925 (725,659)
Net fi nancial liabilities/(assets)
denominated in the respective
entities’ functional currencies 581,849 28,337 1,670 (1,744) (32,867) 577,245
Firm commitments and highly
probable forecast transactions
in foreign currencies – – (2,433) – (4,247) (6,680)
Currency forwards and
cross currency swaps (68,009) – 4,486 68,009 5,820 10,306
Currency exposure (91,051) 9,092 13,986 (75,446) (1,369) (144,788)
Notes to the Financial Statements for the financial year ended june
86
32. FINANCIAL RISK MANAGEMENT (continued)
(a) Market risk (continued)
(i) Currency risk (continued)
Th e Company’s currency exposure is as follows:
SGD RM USD HKD Total $’000 $’000 $’000 $’000 $’000
2011
Financial assets
Cash and cash equivalents 185,382 1,100 1,289 1,220 188,991
Available-for-sale fi nancial assets 3,189 – – – 3,189
Trade and other receivables
(current and non-current) 799,143 2,674 50,194 43,827 895,838
Other fi nancial assets 2,068 – 1 3 2,072
989,782 3,774 51,484 45,050 1,090,090
Financial liabilities
Trade and other payables (120,679) – (4,623) (36,826) (162,128)
Borrowings (245,000) – – – (245,000)
(365,679) – (4,623) (36,826) (407,128)
Net fi nancial assets 624,103 3,774 46,861 8,224 682,962
Net fi nancial assets denominated in
the Company’s functional currency (624,103) – – – (624,103)
Currency exposure – 3,774 46,861 8,224 58,859
2010
Financial assets
Cash and cash equivalents 330,769 – 9 1,029 331,807
Available-for-sale fi nancial assets 3,189 – – – 3,189
Trade and other receivables
(current and non-current) 675,631 – 32,407 59,104 767,142
Other fi nancial assets 2,185 – 2 3 2,190
1,011,774 – 32,418 60,136 1,104,328
Financial liabilities
Trade and other payables (96,890) – (3,539) (61,503) (161,932)
Borrowings (365,000) – – – (365,000)
Other fi nancial liabilities (189) – – – (189)
(462,079) – (3,539) (61,503) (527,121)
Net fi nancial assets/(liabilities) 549,695 – 28,879 (1,367) 577,207
Net fi nancial assets denominated in
the Company’s functional currency (549,695) – – – (549,695)
Currency exposure – – 28,879 (1,367) 27,512
Notes to the Financial Statements for the financial year ended june
87
32. FINANCIAL RISK MANAGEMENT (continued)
(a) Market risk (continued)
(i) Currency risk (continued)
If the RM, USD and HKD change against the SGD by 1% (2010: 1%) each with all other variables including tax rate
being held constant, the eff ects arising from the net fi nancial asset/liability position will be as follows:
Increase/(Decrease) Profi t after tax 2011 2010 $’000 $’000
Group
RM against SGD
– strengthened 19 91
– weakened (19) (91)
USD against SGD
– strengthened 386 164
– weakened (386) (164)
HKD against SGD
– strengthened (665) (754)
– weakened 665 754
Company
RM against SGD
– strengthened 38 –
– weakened (38) –
USD against SGD
– strengthened 469 289
– weakened (469) (289)
HKD against SGD
– strengthened 82 (14)
– weakened (82) 14
(ii) Cash fl ow and fair value interest rate risks
Cash fl ow interest rate risk is the risk that the future cash fl ows of a fi nancial instrument will fl uctuate because of
changes in market interest rates. Fair value interest rate risk is the risk that the fair value of a fi nancial instrument will
fl uctuate due to changes in market interest rates.
Th e Group’s and the Company’s exposure to cash fl ow interest rate risks arises mainly from fl oating rate borrowings. Th e
Group manages these cash fl ow interest rate risks by maintaining a prudent mix of fi xed and fl oating rate borrowings
and using fl oating-to-fi xed interest rate swaps.
Notes to the Financial Statements for the financial year ended june
88
32. FINANCIAL RISK MANAGEMENT (continued)
(a) Market risk (continued)
(ii) Cash fl ow and fair value interest rate risks (continued)
Th e Group’s borrowings at fl oating rates on which eff ective hedges have not been entered into are denominated mainly
in SGD and RM. If the SGD and RM interest rates increase/decrease by 1% (2010: 1%) with all other variables
including tax rate being held constant, the profi t after tax would have been lower/higher by $1.5 million (2010: $2.0
million) as a result of higher/lower interest expense on these borrowings. Other comprehensive income would have
been higher by $10.5 million (2010: $16.3 million) or lower by $10.5 million (2010: $16.4 million) mainly as a result of
higher/lower fair value of interest rate swaps designated as cash fl ow hedges of fl oating rate borrowings.
Th e Company’s borrowings at fl oating rates on which eff ective hedges have been entered into are denominated in SGD.
If the SGD interest rates increase/decrease by 1% (2010: 1%) with all other variables including tax rate being held
constant, other comprehensive income would have been higher/lower by $2.3 million (2010: $3.5 million) as a result of
higher/lower fair value of interest rate swaps designated as cash fl ow hedges of fl oating rate borrowings.
(b) Credit risk
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in fi nancial loss to
the Group. Th e major classes of fi nancial assets of the Group and of the Company are bank deposits and trade and other
receivables. Th e Group has no signifi cant concentration of credit risk with any single entity. Th e Group has policies in place
to ensure that the sales of products and the rendering of services are to customers with acceptable credit standing. Derivative
counterparties and cash transactions are limited to high credit quality fi nancial institutions. Th e Group has policies that
limit the amount of credit exposure to any fi nancial institution.
As the Group and the Company do not hold any collateral, the maximum exposure to credit risk for each class of fi nancial
instruments is the carrying amount of that class of fi nancial instruments presented on the balance sheet, except as disclosed
in Note 31.
Th e credit risk for trade receivables is as follows:
Group Company 2011 2010 2011 2010 $’000 $’000 $’000 $’000
By business segments Development properties 182,048 20,270 – – Investment properties 742 965 – – Retail 2,407 2,281 – – Others 1,632 1,868 – 40
186,829 25,384 – 40
(i) Financial assets that are neither past due nor impaired
Bank deposits that are neither past due nor impaired are mainly deposits with banks with high credit-ratings assigned by
international credit-rating agencies. Trade and other receivables that are neither past due nor impaired are substantially
companies with a good collection track record with the Group.
(ii) Financial assets that are past due and/or impaired
Th ere is no other class of fi nancial assets that is past due and/or impaired except for trade and other receivables.
Notes to the Financial Statements for the financial year ended june
89
32. FINANCIAL RISK MANAGEMENT (continued)
(b) Credit risk (continued)
Th e age analysis of trade receivables past due but not impaired is as follows:
Group Company 2011 2010 2011 2010 $’000 $’000 $’000 $’000
Past due less than 3 months 4,925 7,218 – 40 Past due 3 to 6 months 606 174 – – Past due over 6 months 1,154 1,185 – –
6,685 8,577 – 40
Th e carrying amount of trade and other receivables individually determined to be impaired and the movement in the related
allowance for impairment are as follows:
Group Company 2011 2010 2011 2010 $’000 $’000 $’000 $’000
Gross amount 12,848 14,245 296,863 360,321 Less: Allowance for impairment (12,848) (14,245) (173,203) (164,435)
– – 123,660 195,886
Beginning of fi nancial year 14,245 9,963 164,435 157,469 Allowance (written back)/made (1,239) 4,337 8,768 6,966 Allowance utilised (6) – – – Currency translation diff erences (152) (55) – –
End of fi nancial year 12,848 14,245 173,203 164,435
Th e impaired trade and other receivables arose mainly from loans to subsidiary and joint venture companies for which
recoverability is uncertain.
(c) Liquidity risk
Th e Group actively manages its debt maturity profi le, operating cash fl ows and the availability of funding so as to ensure that
all refi nancing, repayment and funding needs are met. Th e Group adopts prudent liquidity risk management by maintaining
suffi cient cash and the availability of funding through an adequate amount of committed credit facilities. Th e Group raises
committed funding from both capital markets and fi nancial institutions and prudently balances its portfolio with short
term funding so as to achieve overall cost eff ectiveness.
Notes to the Financial Statements for the financial year ended june
90
32. FINANCIAL RISK MANAGEMENT (continued)
(c) Liquidity risk (continued)
Th e table below analyses the maturity profi le of the Group’s and the Company’s fi nancial liabilities (including derivative
fi nancial liabilities) based on contractual undiscounted cash fl ows. Balances due within 12 months equal their carrying
amounts as the impact of discounting is not signifi cant.
Less than Between 1 Between 2 Over 5 1 year and 2 years and 5 years years $’000 $’000 $’000 $’000
GROUP 2011 Net-settled interest rate swaps 12,553 8,602 2,581 – Gross-settled cross currency swap – Receipts (1,915) (1,909) (62,182) – – Payments 3,724 3,713 72,586 – Gross-settled currency forwards – Receipts (10,070) – – – – Payments 10,331 – – – Trade and other payables 222,855 – – – Borrowings 192,699 201,220 791,822 89,479 Other fi nancial liabilities – 37,212 4,294 43
430,177 248,838 809,101 89,522
2010 Net-settled interest rate swaps 14,292 13,650 12,469 – Gross-settled cross currency swap – Receipts (2,120) (2,097) (73,674) – – Payments 3,714 3,673 78,794 – Gross-settled currency forwards – Receipts (10,409) – – – – Payments 10,556 – – – Trade and other payables 152,061 – – – Borrowings 142,745 390,622 890,599 8,014 Other fi nancial liabilities – 115,013 6,355 1,283
310,839 520,861 914,543 9,297
Notes to the Financial Statements for the financial year ended june
91
32. FINANCIAL RISK MANAGEMENT (continued)
(c) Liquidity risk (continued)
Less than Between 1 Between 2 1 year and 2 years and 5 years $’000 $’000 $’000
COMPANY 2011 Net-settled interest rate swaps 3,520 3,494 166 Trade and other payables 163,860 – – Borrowings 5,846 105,823 152,708
173,226 109,317 152,874
2010 Net-settled interest rate swaps 3,333 3,342 3,562 Trade and other payables 163,676 – – Borrowings 109,663 26,365 259,196 Other fi nancial liabilities – 110 79
276,672 29,817 262,837
In addition to the above, the Group and the Company issued fi nancial guarantees of $8.3 million (2010: $16.9 million) and $229.4 million (2010: $268.9 million) respectively (Note 31).
(d) Capital risk
Th e Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern and to
maintain an optimal capital structure so as to maximise shareholder value. In order to maintain or achieve an optimal capital
structure, the Group may adjust the amount of dividend payment, return capital to shareholders, issue new shares, buy back
issued shares, obtain new borrowings or sell assets to reduce borrowings.
Management monitors capital based on debt-equity ratio. Th e debt-equity ratio is calculated as net debt divided by
shareholders’ equity. Net debt is calculated as borrowings less cash and cash equivalents.
Group Company 2011 2010 2011 2010 $’000 $’000 $’000 $’000
Borrowings 1,179,217 1,335,672 245,000 365,000 Less: Cash and cash equivalents (504,235) (594,054) (188,991) (331,807)
Net debt 674,982 741,618 56,009 33,193
Shareholders’ equity 1,919,095 1,694,673 923,401 903,415
Debt-equity ratio 35% 44% 6% 4%
Th e Group and the Company are required by some banks to maintain a certain level of the debt-equity ratio. Th e Group and
the Company are in compliance with all externally imposed capital requirements for the fi nancial years ended 30 June 2010
and 2011.
Notes to the Financial Statements for the financial year ended june
92
32. FINANCIAL RISK MANAGEMENT (continued)
(e) Fair value measurements
Th e following table presents assets and liabilities measured at fair value and classifi ed by level of the following fair value
measurement hierarchy:
(i) quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1);
(ii) inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly
(i.e. as prices) or indirectly (i.e. derived from prices) (Level 2); and
(iii) inputs for the asset or liability that are not based on observable market data (unobservable inputs) (Level 3)
Level 1 Level 2 Level 3 Total $’000 $’000 $’000 $’000
GROUP 2011 Assets Available-for-sale fi nancial assets – – 7,170 7,170
Liabilities Derivative fi nancial instruments – 34,116 – 34,116
2010 Assets Available-for-sale fi nancial assets – – 7,170 7,170
Liabilities Derivative fi nancial instruments – 28,475 – 28,475
COMPANY 2011 Assets Available-for-sale fi nancial assets – – 3,189 3,189
Liabilities Derivative fi nancial instruments – 6,286 – 6,286
2010 Assets Available-for-sale fi nancial assets – – 3,189 3,189
Liabilities Derivative fi nancial instruments – 6,607 – 6,607
Th e fair value of interest rate and cross currency swaps is calculated as the present value of the estimated future cash
fl ows. Th e fair value of currency forwards is determined using quoted forward currency rates at the balance sheet date.
Th ese instruments are classifi ed as Level 2 and comprise derivative fi nancial instruments. Th e valuation technique for
available-for-sale fi nancial assets is based on unobservable inputs, as such, these assets are classifi ed as Level 3. Any changes
to these unobservable inputs will not have a material impact on the fair value of these available-for-sale fi nancial assets.
Notes to the Financial Statements for the financial year ended june
93
32. FINANCIAL RISK MANAGEMENT (continued)
(f ) Financial instruments by category Th e carrying amount of the diff erent categories of fi nancial instruments is as disclosed on the face of the balance sheets and
in Notes 11 and 16 to the fi nancial statements, except for the following:
Group Company 2011 2010 2011 2010 $’000 $’000 $’000 $’000
Loans and receivables 934,275 875,456 1,086,901 1,101,139 Financial liabilities at amortised cost 1,443,104 1,608,285 407,128 527,121
33. RELATED PARTY TRANSACTIONS In addition to the related party information disclosed elsewhere in the fi nancial statements, the following signifi cant transactions
took place between the Group and related parties during the fi nancial year at terms agreed between the parties:
(a) Rendering of services Group 2011 2010 $’000 $’000
Commission income received from joint venture companies 1,965 4,465
Management and service fees received from joint venture companies 2,708 3,877
Management fees paid to an associated company 835 885
Payments on behalf of joint venture companies 9,551 7,442
(b) Key management personnel compensation
Key management personnel compensation is as follows:
Group 2011 2010 $’000 $’000
Salaries and other short term employee benefi ts 11,698 9,346
Share-based payment 1,330 1,220
13,028 10,566
Included in the above is compensation to directors of the Company which amounted to $8.1 million (2010: $6.6 million).
Notes to the Financial Statements for the financial year ended june
94
34. SEGMENT INFORMATION
Th e Group is organised into three main business segments – development properties, investment properties and retail. Other
operations of the Group comprise mainly garment manufacturing and investment holding, neither of which constitutes a
separately reportable segment. Th e segment information for the reportable segments is as follows:
Development Investment properties properties Retail Others Group 2011 $’000 $’000 $’000 $’000 $’000
Revenue 401,094 37,055 202,350 8,574 649,073
EBIT 187,648 97,911 19,900 (32,233) 273,226
Interest income 7,915
Operating profi t 281,141
Finance costs (39,868)
Share of profi ts/(losses) of associated and joint
venture companies 68,115 97,746 2,448 (4,088) 164,221
Profi t before income tax 405,494
Income tax expense (48,093)
Total profi t 357,401
Segment assets 1,886,061 730,709 66,609 120,945 2,804,324
Investment in an associated company 166,523 352,669 4,923 29,912 554,027
Investments in joint venture companies 141,119 12,743 23,573 12,334 189,769
Due from associated and joint venture companies 178,546 6,563 1,221 25,625 211,955
2,372,249 1,102,684 96,326 188,816 3,760,075
Tax recoverable 5,758
Consolidated total assets 3,765,833
Segment liabilities 119,209 16,431 30,052 139,581 305,273
Borrowings 532,505 223,492 – 423,220 1,179,217
651,714 239,923 30,052 562,801 1,484,490
Current income tax liabilities 81,808
Deferred income tax liabilities 85,665
Consolidated total liabilities 1,651,963
Capital expenditure 625 12,524 10,066 2,110 25,325
Depreciation 255 1,816 5,549 3,480 11,100
Notes to the Financial Statements for the financial year ended june
95
34. SEGMENT INFORMATION (continued)
Development Investment properties properties Retail Others Group 2010 $’000 $’000 $’000 $’000 $’000
Revenue 589,894 36,815 179,683 15,459 821,851
EBIT 235,971 30,702 15,818 (37,981) 244,510
Interest income 9,938
Operating profi t 254,448
Finance costs (31,295)
Share of profi ts/(losses) of associated and joint
venture companies 29,671 21,262 1,654 (917) 51,670
Profi t before income tax 274,823
Income tax expense (52,805)
Total profi t 222,018
Segment assets 1,958,955 542,643 50,516 236,275 2,788,389
Investment in an associated company 187,147 300,108 2,932 24,475 514,662
Investments in joint venture companies 106,891 10,357 15,277 16,932 149,457
Due from associated and joint venture companies 187,448 7,884 954 22,197 218,483
2,440,441 860,992 69,679 299,879 3,670,991
Tax recoverable 2,967
Consolidated total assets 3,673,958
Segment liabilities 153,762 15,303 28,080 107,009 304,154
Borrowings 558,360 213,918 – 563,394 1,335,672
712,122 229,221 28,080 670,403 1,639,826
Current income tax liabilities 45,787
Deferred income tax liabilities 97,241
Consolidated total liabilities 1,782,854
Capital expenditure 525 1,222 6,628 3,568 11,943
Depreciation 201 1,690 6,833 3,425 12,149
Notes to the Financial Statements for the financial year ended june
96
34. SEGMENT INFORMATION (continued)
Th e Group’s three main business segments operate in three main geographical areas – Singapore, Malaysia and the People’s
Republic of China (“PRC”)/Hong Kong SAR. Revenue Non-current assets 2011 2010 2011 2010 $’000 $’000 $’000 $’000
Singapore 487,025 667,926 1,018,880 917,117 Malaysia 161,149 145,099 106,658 106,119 PRC/Hong Kong SAR 899 8,826 575,072 533,323
649,073 821,851 1,700,610 1,556,559
35. COMPANIES IN THE GROUP
Information relating to the companies in the Group is given below, with the exception of inactive and dormant
companies. Singapore-incorporated subsidiary and joint venture companies are audited by PricewaterhouseCoopers LLP,
Singapore unless otherwise indicated. Equity held Country of by the Group incorporation/ Principal 2011 2010 Name of companies place of business activities % %
(a) Wing Tai Holdings Limited Singapore-Quoted on Investment holding n/a n/a Singapore Exchange Securities Trading Limited
(b) Subsidiary companies
Wing Tai Malaysia Berhad ! Malaysia-Quoted on Investment holding 60.4 55.5 (formerly known as DNP Bursa Malaysia Holdings Berhad) Securities Berhad
Angel Wing (M) *, ! Malaysia Property development 60.4 55.5 Sdn. Bhd.
Angkasa Indah Sdn. Bhd. *, ! Malaysia Property development 60.4 55.5
Brave Dragon Ltd *, % British Virgin Islands Investment holding 89.4 89.4 (“BVI”)/Hong Kong SAR
Chanlai Sdn Bhd *, ! Malaysia Property development 60.4 55.5
Crossbrook Group Ltd # BVI/Hong Kong SAR Investment holding 100 100
DNP Clothing Sdn. Bhd. *, ! Malaysia Retailing of garments 60.4 55.5
DNP Fashion Sdn. Bhd. *, ! Malaysia Retailing of garments 60.4 55.5
DNP Hartajaya Sdn. Bhd. *, ! Malaysia Property development 60.4 55.5
DNP Jaya Sdn. Bhd. *, ! Malaysia Property investment 60.4 55.5
DNP Land Sdn. Bhd. *, ! Malaysia Property development 60.4 55.5
Notes to the Financial Statements for the financial year ended june
n/a: not applicable
97
35. COMPANIES IN THE GROUP (continued)
Equity held Country of by the Group incorporation/ Principal 2011 2010 Name of companies place of business activities % %
(b) Subsidiary companies (continued)
DNP Property *, ! Malaysia Project management and 60.4 55.5 Management Sdn. Bhd. maintenance of properties
D & P-Ejenawa Sdn. Bhd. *, ! Malaysia Property development 60.4 55.5
Fox Fashion Apparel * Singapore Retailing of garments 100 100 (S) Pte Ltd
Grand Eastern Realty *, ! Malaysia Property development 60.4 55.5 & Development Sdn. Bhd.
Harta-Aman Sdn. Bhd. *, ! Malaysia Property development 60.4 55.5
Hartamaju Sdn. Bhd. *, ! Malaysia Property development 60.4 55.5
Jiaxin (Suzhou) Property *, > PRC Property development, 75 75 Development Co., Ltd investment and management
Quality Frontier Sdn. Bhd. *, ! Malaysia Property development 60.4 55.5
Seniharta Sdn. Bhd. *, ! Malaysia Property investment 60.4 55.5
Sri Rampaian Sdn. Bhd. *, ! Malaysia Manufacture of 60.4 55.5 textile garments
Starpuri Development *, ! Malaysia Property development 60.4 55.5 Sdn. Bhd.
Suzhou Property * Singapore Property development and 75 75 Development Pte Ltd investment holding
Tanahnaga Sdn. Bhd. *, ! Malaysia Property development 60.4 55.5
Winace Investment Pte Ltd * Singapore Investment holding 100 100
Wincharm Investment Pte Ltd * Singapore Investment holding 100 100
Wincheer Investment Pte Ltd * Singapore Property investment 100 100 and development
Windeal Investment Pte Ltd * Singapore/PRC Property investment 100 100
Wingold Investment Pte Ltd * Singapore Investment holding 100 100
Notes to the Financial Statements for the financial year ended june
98
35. COMPANIES IN THE GROUP (continued)
Equity held Country of by the Group incorporation/ Principal 2011 2010 Name of companies place of business activities % %
(b) Subsidiary companies (continued)
Winglow Investment Pte. Ltd * Singapore Investment holding 100 100
Winmax Investment Pte Ltd * Singapore Property investment 100 100
Winnervest Investment * Singapore Property investment 100 100 Pte Ltd and development
Winnorth Investment * Singapore Property investment 100 100 Pte Ltd and development
Winquest Investment * Singapore Property investment 60 60 Pte Ltd and development
Winrose Investment * Singapore Property investment 100 100 Pte Ltd and development
Winshine Investment * Singapore Property investment 100 100 Pte Ltd
Winsland Investment * Singapore Property investment 100 100 Pte Ltd
Winsmart Investment * Singapore Property investment 100 100 Pte Ltd and development
Winswift Investment * Singapore Investment holding 60.4 55.5 Pte Ltd
Wintrust Investment * Singapore Property investment and 100 100
Pte Ltd development and
investment holding
Winworth Investment * Singapore Property investment 85 85
Pte Ltd and development
Wing Mei (M) Sdn. Bhd. *, ! Malaysia Property investment 60.4 55.5
Wing Tai (China) * Singapore Investment holding 100 100
Investment Pte. Ltd.
Wing Tai Branded * Singapore Café operator 100 100
Lifestyle Pte. Ltd.
Wing Tai Clothing Pte Ltd * Singapore Retailing of garments 100 100
Notes to the Financial Statements for the financial year ended june
99
35. COMPANIES IN THE GROUP (continued)
Equity held Country of by the Group incorporation/ Principal 2011 2010 Name of companies place of business activities % %
(b) Subsidiary companies (continued)
Wing Tai Investment Singapore Investment holding 100 100 & Development Pte Ltd
Wing Tai Investment * Singapore Management of 100 100 Management Pte Ltd investment properties
Wing Tai Land Pte Ltd Singapore Investment holding 100 100
Wing Tai Property * Singapore Project management and 100 100 Management Pte Ltd maintenance of properties
Wing Tai Retail Pte. Ltd. Singapore Investment holding 100 100
Wing Tai Retail * Singapore Management of 100 100 Management Pte. Ltd. retail operations
Yoshinoya (S) Pte Ltd * Singapore Restaurant operator 100 100
(c) Associated company Wing Tai Properties *, % Bermuda-Quoted Property development, 33.8 33.9 Limited on Th e Stock property investment and Exchange of Hong management, hospitality Kong Limited/ investment and management, Hong Kong SAR garment manufacturing, branded products distribution and investing activities
(d) Joint venture companies Choice Homes Beta *, ^ Singapore Property investment 30 30 Pte Ltd and development
Orwin Development * Singapore Property investment 40 40 Limited and development
Summervale Properties *, & Singapore Property investment 50 50 Pte Ltd and development
Winpride Investment * Singapore Property investment 40 40 Pte. Ltd. and development Burlington Square *, & Singapore Property investment 50 50 Investment Pte Ltd
Burlington Square *, & Singapore Property trading 50 50
Properties Pte Ltd
Notes to the Financial Statements for the financial year ended june
100
35. COMPANIES IN THE GROUP (continued)
Equity held Country of by the Group incorporation/ Principal 2011 2010 Name of companies place of business activities % %
(d) Joint venture companies (continued)
G2000 Apparel (S) * Singapore Retailing of garments 45 45 Pte Ltd
Uniqlo (Singapore) *, ~ Singapore Retailing of garments 49 49 Pte. Ltd.
Uniqlo (Malaysia) *, ! Malaysia Retailing of garments 27.2 – Sdn. Bhd.
* Held by Group companies.
! Audited by Ernst and Young, Malaysia.
# Th ese companies are not required to be audited by law in the country of incorporation.
% Audited by PricewaterhouseCoopers, Hong Kong.
& Audited by KPMG LLP, Singapore.
^ Audited by Deloitte & Touche LLP, Singapore.
~ Audited by Ernst and Young LLP, Singapore.
> Audited by RSM, China.
In accordance to Rule 716 of the Singapore Exchange Securities Trading Limited – Listing Rules, the Audit Committee and the Board of Directors of the Company confi rmed that they are satisfi ed that the appointment of diff erent auditors for its signifi cant subsidiary and associated companies would not compromise the standard and eff ectiveness of the audit of
the Company.
36. EVENTS OCCURRING AFTER BALANCE SHEET DATE
On 5 August 2011, DNP Land Sdn. Bhd., a subsidiary company of the Group, has entered into a conditional Sale and Purchase
Agreement with Aeon Co. (M) Bhd for the disposal of 2 pieces of freehold land under GRN 83570, Lot No. 1379 and GRN
3282, Lot 14344 of Mukim 15, Daerah Seberang Perai Tengah, Pulau Pinang, Malaysia with a total land area of approximately
78,000 square metres for a total cash consideration of $20.4 million (RM50.1 million).
37. NEW OR REVISED ACCOUNTING STANDARDS AND INTERPRETATIONS
Below are the mandatory standards and amendments to existing standards that have been published, and are relevant for the
Group’s accounting periods beginning on or after 1 July 2011 or later periods and which the Group has not early adopted:
(a) Amendments to FRS 24 Related Party Disclosures (eff ective for annual periods beginning on or after 1 January 2011)
Amendments to FRS 24 clarifi es and simplifi es the defi nition of a related party. However, the revised defi nition of a related
party will mean that some entities will have more related parties and will be required to make additional disclosures.
Management is currently considering the revised defi nition to determine whether any additional disclosures will be required.
It is therefore not possible to disclose the fi nancial impact, if any, of the amendment on the related party disclosures.
Notes to the Financial Statements for the financial year ended june
101
37. NEW OR REVISED ACCOUNTING STANDARDS AND INTERPRETATIONS (continued)
(b) INT FRS 115 Agreements for the Construction of Real Estate (eff ective for annual periods beginning on or after 1 January 2011)
On 26 August 2010, the Accounting Standards Council issued INT FRS 115 with an accompanying note that explains the
application of the Interpretation to property development sales in Singapore by considering the Singapore legal framework.
INT FRS 115 supersedes RAP 11 Pre-Completion Contracts for the Sale of Development Property and becomes eff ective for
annual periods beginning on or after 1 January 2011. When adopted, INT FRS 115 is to be applied retrospectively.
INT FRS 115 clarifi es when revenue and related expenses from a sale of real estate unit should be recognised if an
agreement between a developer and a buyer is reached before the construction of real estate is completed. INT FRS
115 determines that contracts which are not classifi ed as construction contracts in accordance with FRS 11 can only
be accounted for using the percentage-of-completion (“POC”) method if the entity continuously transfers to the buyer
control and the signifi cant risks and rewards of ownership of the work in progress in its current state as construction
progresses. For residential projects under deferred payment scheme in Singapore and overseas residential projects, the
revenue and related expenses will be accounted for under the completion of construction (“COC”) method as stipulated in
INT FRS 115, where applicable.
Th e Group’s current accounting policy for all residential property sales is to recognise revenue using the POC method as
construction progresses. When the Group applies INT FRS 115 in 2012 retrospectively, the 2011 comparatives for revenue
and net profi t are expected to increase by approximately $102.0 million and $57.1 million respectively. Th e development
properties as at 30 June 2011 is expected to decrease by approximately $36.5 million.
RAP 11 Pre-Completion Contracts for the Sale of Development Property
For the current fi nancial year, RAP 11 is still applicable in Singapore. In the RAP, it is mentioned that a property
developer’s sales and purchase agreement is not a construction contract as defi ned in FRS 11 Construction Contract and
the POC method of recognising revenue, which is allowed under FRS 11 for construction contract, may not be applicable
for property developers. Th e relevant standard for revenue recognition by property developers is FRS 18 Revenue, which
addresses revenue recognition generally for all types of entities. However, there is no clear conclusion in FRS 18 whether
the POC method or the COC method is more appropriate for property developers.
Th e Group uses the POC method for recognising revenues from partially completed residential projects which are held for
sale. Had the COC method been adopted, the impact on the fi nancial statements of the Group will be as follows:
Group 2011 2010 $’000 $’000
(Decrease)/increase in: – opening retained earnings (100,398) (148,678) – revenue recognised for the fi nancial year 117,404 121,415 – net profi t attributable to equity holders of the Company 13,248 48,280 – carrying value of development properties (36,498) (108,858) – carrying value of investments in associated and joint venture companies (69,375) (18,351)
Notes to the Financial Statements for the financial year ended june
102
37. NEW OR REVISED ACCOUNTING STANDARDS AND INTERPRETATIONS (continued)
(c) Amendments to FRS 12 Income Taxes (eff ective for annual periods beginning on or after 1 January 2012)
Th e amendment introduces a presumption that an investment property is recovered entirely through sale. Accordingly,
unless the presumption is rebutted, the measurement of the deferred tax liability or deferred tax asset shall refl ect the
tax consequences of recovering the carrying amount of the investment property entirely through sale. Th is presumption
is rebutted if the investment property is depreciable and is held within a business model whose objective is to consume
substantially all of the economic benefi ts embodied in the investment property over time, rather than through sale.
Currently, the Group recognises deferred tax liability on its investment properties on the basis that the carrying amount of
its investment properties are recovered through use.
Management is still in the process of assessing the amendment to FRS 12 to determine the impact on the fi nancial
statements and whether additional disclosures will be required. It is therefore not possible to disclose the fi nancial impact
of the amendment to FRS 12.
38. AUTHORISATION OF FINANCIAL STATEMENTS
Th ese fi nancial statements have been authorised for issue in accordance with a resolution of the Board of Directors on
20 September 2011.
Notes to the Financial Statements for the financial year ended june
103Shareholding Statisticsas at september
SHARE CAPITAL
No. of Issued Shares: 793,927,260
No. of Issued Shares (excluding Treasury Shares): 780,791,660
No./percentage of Treasury Shares: 13,135,600 (1.68%)
Class of Shares: Ordinary Shares
Voting Rights (excluding Treasury Shares): 1 vote per share
DISTRIBUTION OF SHAREHOLDERS
Size of Shareholdings No. of Shareholders % No. of Shares %
1 to 999 454 3.26 147,912 0.02
1,000 to 10,000 10,702 76.78 45,018,506 5.77
10,001 to 1,000,000 2,752 19.74 87,536,072 11.21
1,000,001 and above 31 0.22 648,089,170 83.00
Total 13,939 100.00 780,791,660 100.00
TWENTY LARGEST SHAREHOLDERS
Name No. of Shares %
1 Wing Sun Development Private Limited 222,235,490 28.46
2 Citibank Nominees Singapore Pte Ltd 85,714,399 10.98
3 DBS Nominees Pte Ltd 76,864,376 9.84
4 Winlyn Investment Pte Ltd 72,717,436 9.31
5 HSBC (Singapore) Nominees Pte Ltd 49,875,621 6.39
6 DBSN Services Pte Ltd 23,716,562 3.04
7 UOB Kay Hian Pte Ltd 22,574,130 2.89
8 United Overseas Bank Nominees Pte Ltd 15,312,540 1.96
9 Empire Gate Holdings Limited 12,119,572 1.55
10 Raffl es Nominees (Pte) Ltd 9,252,586 1.19
11 Liu Hing Yuen Patricia 8,293,069 1.06
12 DBS Vickers Securities (Singapore) Pte Ltd 6,132,312 0.79
13 OCBC Nominees Singapore Pte Ltd 5,389,933 0.69
14 Winway Investment Pte Ltd 3,529,166 0.45
15 Mayban Nominees (Singapore) Pte Ltd 3,315,603 0.42
16 OCBC Securities Private Ltd 3,101,338 0.40
17 Kim Eng Securities Pte Ltd 3,087,500 0.40
18 Morgan Stanley Asia (Singapore) Securities Pte Ltd 2,393,072 0.31
19 CIMB Securities (Singapore) Pte Ltd 2,279,275 0.29
20 Hong Leong Finance Nominees Pte Ltd 2,188,000 0.28
Total 630,091,980 80.70
PERCENTAGE OF SHAREHOLDING HELD IN THE HANDS OF PUBLIC
As at 9 September 2011, approximately 52.17% of the issued ordinary shares of the Company are held by the public. Rule 723 of the
Listing Manual of the Singapore Exchange Securities Trading Limited has accordingly been complied with.
104
SUBSTANTIAL SHAREHOLDERS AS SHOWN IN THE REGISTER OF SUBSTANTIAL SHAREHOLDERS
Name Interest (No. of Ordinary Shares)
Cheng Wai Keung 326,831,5641
Edmund Cheng Wai Wing 310,601,6642
Christopher Cheng Wai Chee 307,194,9983
Edward Cheng Wai Sun 307,072,4984
Deutsche Bank International Trust Co. (Cayman) Limited 307,072,4984
Deutsche Bank International Trust Co. ( Jersey) Limited 307,072,4984
Wing Sun Development Private Limited 222,235,490
Wing Tai Asia Holdings Limited 234,355,0625
Winlyn Investment Pte Ltd 72,717,436
Terebene Holdings Inc 72,717,4366
Metro Champion Limited 72,717,4367
European Investors, Inc. 39,801,470
1 Includes 326,831,564 shares benefi cially owned by Wing Sun Development Private Limited, Winlyn Investment Pte Ltd,
Winway Investment Pte Ltd, Empire Gate Holdings Limited and Wilma Enterprises Limited.
2 Includes 310,601,664 shares benefi cially owned by Wing Sun Development Private Limited, Winlyn Investment Pte Ltd,
Winway Investment Pte Ltd and Empire Gate Holdings Limited.
3 Includes 307,072,498 shares benefi cially owned by Wing Sun Development Private Limited, Winlyn Investment Pte Ltd and
Empire Gate Holdings Limited and 122,500 shares owned by a nominee, DBS Vickers Securities (S) Pte Ltd.
4 Includes 307,072,498 shares benefi cially owned by Wing Sun Development Private Limited, Winlyn Investment Pte Ltd and
Empire Gate Holdings Limited.
5 Includes 234,355,062 shares benefi cially owned by Wing Sun Development Private Limited and Empire Gate Holdings Limited.
6 Shares benefi cially owned by Winlyn Investment Pte Ltd in which Terebene Holdings Inc is deemed to have an interest.
7 Shares benefi cially owned by Winlyn Investment Pte Ltd in which Metro Champion Limited is deemed to have an interest.
Shareholding Statisticsas at september
Integral to Wing Tai’s culture is its care for the community, with an appreciation for heritage, design and the arts. Ever attentive to the harmony between people and their environments, Wing Tai believes in giving back.
Its commitment to building trust and long-term winning relationships has inspired partners to join Wing Tai in enabling individuals to live up to the unbounded potential of the community.
A heart for giving, a flair for living.
TO GIVE IS TO GROW.
Helios Residences as captured in light, shadow and form.