novena holdings limited

Transcription

The Art of Beauty
Novena Holdings Limited
ANNUAL REPORT 2008
This document has been prepared by the Company and its contents have been reviewed by the Company’s Sponsor, CIMB-GK Securities Pte
Ltd (“Sponsor”) for compliance with the relevant rules of the Singapore Exchange Securities Trading Limited (the “SGX-ST”). The Sponsor has not
independently verified the contents of this document.
This document has not been examined or approved by the SGX-ST and the SGX-ST assumes no responsibility for the contents of this document including
the correctness of any of the statements or opinions made or reports contained in this document.
The contact person for the Sponsor is Mr Benjamin Choy, Senior Vice President, Corporate Finance, CIMB-GK Securities Pte Ltd, 50, Raffles Place, #19-00
Singapore Land Tower, Singapore 048623, Telephone: (65) 6225-1228
Contents
1
2
3
4
5
About Novena
Corporate Structure
Our Philosophy
Corporate Information
CEO’s Message
6
7
8
9
10
Board of Directors
Key Management
Financial Highlights
Investments
FMCG Distribution
12
15
16
18
20
Shine @ Spring
Training
Community Development 2008
Achievements
Financial Contents
About Novena
Novena Holdings Limited is an integrated beauty and wellness provider who takes
care of consumers’ concerns from head to toe, offering choices through a diverse
range of products and services.
Our core business is in the Fast-Moving Consumers Goods (FMCG) distribution,
retail of products and services.
Community development and charity efforts continue to be our key priorities in the
realisation of our values.
Vision
The strong belief in branding
is behind Novena’s vision to be
the leading consumer lifestyle
group in providing products
and services of superior quality
and value to improve consumer
lifestyles, and in contributing to
the community development.
Mission
Continuous upgrading to offer
the best experience, products
and services of superior quality
and value to our consumers.
Values
We are creative, sincere and we care.
01
Corporate Structure
NOVENA HOLDINGS LIMITED
100%
Shine @ Spring Pte Ltd
(Formerly known as Beaute Spring Pte Ltd)
100%
NiClas International Pte Ltd
80%
Chuan Seng Leong Pte Ltd
Novena Strategic Investments
Pte Ltd
100%
02
Novena Investment Pte Ltd
100%
Suzhou Novena Furniture Co. Ltd
(China)
75%
100%
B.S.P. Global Pte Ltd
100%
Fasta International Pte Ltd
Our Philosophy
Novena’s growth and healthy prospects are represented
by the curves that point upward and forward, depicting
the Group’s push forward and its efforts to scale greater
heights of success.
The ripple effect of the curves represents Novena’s
extending reach. While the Group continues on its
growth path in the region, it will also endeavour to
achieve global status.
As we strive for excellence in our
day-to-day operations, we
understand that our success
is driven by our creativity,
sincerity and care for
our people and the
community. At the core
of these achievements is
the understanding and
need for compassion,
represented in each
stroke that forms the
image of a heart in our logo.
03
Corporate Information
BOARD OF DIRECTORS
REGISTERED OFFICE
Toh Soon Huat
Acting Chairman and CEO
Chong Hon Kuan Ivan
Independent Director
Tay Beng Chuan
Wong Meng Yeng
521 Bukit Batok St 23, Level 3, Singapore 659544
Tel: (65) 6899 0900 Fax: (65) 6899 0010
Email : admin@novenaholdings.com
Website:www.novenaholdings.com
Lien Kait Long
Non-Executive Director
Li Ling Xiu
SHARE REGISTRAR AND SHARE TRANSFER OFFICE
Chow Hock Meng
Alternate Director to Li Ling Xiu
M&C Services Private Limited
138 Robinson Road #17-00
AUDIT COMMITTEE
The Corporate Office,
Wong Meng Yeng
Singapore 068906
Chairman
Tay Beng Chuan
Chong Hon Kuan Ivan
AUDITOR
NOMINATING COMMITTEE
Ernst & Young LLP
Certified Public Accountant
1 Raffles Quay North Tower Level 18
Singapore 048583
Chong Hon Kuan Ivan
Chairman
Tay Beng Chuan
Wong Meng Yeng
PARTNER-IN-CHARGE
REMUNERATION COMMITTEE
Tay Beng Chuan
Ho Shyan Yan
(With effect from financial year ended 31 December 2008)
Chairman
Wong Meng Yeng
COMPANY’S SPONSOR
Chong Hon Kuan Ivan
CIMB-GK Securities Pte. Ltd.
50 Raffles Place #19-00
Singapore Land Tower
Singapore 048623
Telephone: (65) 6225 1228
Contact Person: Benjamin Choy
COMPANY SECRETARY
Low Mei Mei Maureen
BANKERS
United Overseas Bank Limited
DBS Bank Ltd
Oversea-Chinese Banking Corporation Limited
Standard Chartered Bank
Malayan Banking Berhad
RHB Bank Berhad
04
CEO’s Message
in FY 2007 was mainly due to a “one off”
capital gain of about S$15 million from
the sale of property, a “one off” capital
gain from the divestment of the furniture
business amounting to about S$25 million
and dividend income of S$12 million
from investment in quoted shares. The
current year loss was mainly attributed to
non-cash charges of S$44.9 million from
the impairment charge on the quoted
equity investments and S$0.45 million of
impairment loss of property owned by
one of the subsidiaries. However, it was
mitigated by a “one off” gain of about
S$5.2 million for land compensation
from an overseas subsidiary.
Dear Shareholders,
On behalf of the Board, I am pleased to
present the Group’s Annual Report for
the financial year ended 31 December
2008.
FY 2008 has been a difficult year with
the fallout from the global financial crisis
which has a tremendous impact on the
global economy as a whole. The Group’s
turnover for the year ended 31 December
2008 decreased by 30.4% from S$54.2
million to S$37.8 million in current year.
The decrease in gross profit margin is
partly due to the significant decline in
dividend income received during the
year.
The Group recorded a loss before tax of
S$ 45.1 million as compared to the prior
year where the Group recorded a profit
before tax of S$48.3 million. The profit
During the current year, shareholders
exercised 117,563,297 warrants for
conversion into ordinary shares, resulting
in an increase in share capital from S$35.2
million to S$44.6 million. However, an
amount of S$10.5 million was paid as
dividend during the year, resulting in
reduction in cash and bank balances.
In our ongoing process in building the
beauty business, the Group remains
committed to strengthening our products
branding and concepts, widening our
range of beauty products and sourcing
for products of the highest quality
to broaden our customer appeal. The
Group will also continue to grow its
distribution business by looking for new
agencies to represent and new brands to
distribute. Notwithstanding the poor
global economic conditions, we remain
cautious in our investments and continue
to explore new business opportunities to
enhance the value to our shareholders.
Corporate social responsibility has not
been neglected either especially in a
year remembered for the many natural
disasters that occurred around the world.
Community development and charity
efforts continue to be one of the Group’s
key priorities in the realization of the
core value of giving and caring for the
less fortunate. Of the many efforts, the
major event which Novena Group coorganised, “Sichuan Earthquake Charity
Show” telecast on 25 May 2008, raised
a total of S$10,249,954 from the public.
This fund is being used to build schools
and to provide education assistance. In
total, 7 primary and secondary schools
were constructed which indirectly will
benefit about 10,000 children every year.
During the year, the Group contributed
about S$175,500 in cash and in kind to
various charity events and organizations.
It is hoped that through our giving,
we do our part to encourage a spirit of
giving and to greater corporate social
responsibility and all the more so in these
economically and financially challenging
times.
On behalf of the Board of Directors, I
would like to express our gratitude for the
dedication, hard work and contribution
of each and every staff member. I would
also like to express my heartfelt gratitude
to all our loyal customers in supporting
our brands and products in both the
beauty and Fast Moving Consumer
Goods divisions. Last but not least,
my sincere thanks to all our business
associates, the Board of Directors and
our shareholders for their commitment
and support which they have rendered.
We look forward to your continuous and
valuable support in the year ahead.
Thank you for your continuous support.
Toh Soon Huat (PBM)
Acting Chairman / CEO
05
Board of Directors
from top to bottom, left to right
Toh Soon Huat
Acting Chairman and CEO
Toh Soon Huat is the Acting Chairman and Chief
Executive Officer. His responsibilities include
the management of the Group’s overall business,
particularly in the areas of business investments,
business developments and expansion. He
possesses more than 20 years of experience in
business development, especially in the area of
retail and branding.
Wong Meng Yeng
Wong Meng Yeng was appointed as our
Independent Director on 4 December 2000.
He graduated from the National University
of Singapore in 1983 with a Bachelor of Laws
(Honours) degree. He has been an advocate and
solicitor in Singapore for 25 years of which the
last 19 years were spent as a corporate lawyer.
He is currently a director of Alliance LLC, a law
corporation he cofounded and an independent
director of several companies listed on the
Singapore Exchange.
Tay Beng Chuan
Tay Beng Chuan was appointed as our
Independent Director on 4 December 2000. He
was also appointed as an Independent Director of
United Envirotech Ltd with effect 1 October 2008.
He was a Nominated Member of Parliament from
1 October 1997 till dissolution of Parliament on
18 October 2001. He is a Member of the Singapore
Parliamentary Society. A Board Member of the
Traditional Chinese Medicine Practitioners Board
since April 2005, he is now the Board’s Chairman
effective 7 February 2007. He was the President
of The Singapore Chinese Chamber of Commerce
and Industry from March 1997 till March 2001
and is currently the Honorary President of the
said Chamber. He is the Chairman of Premium
Funding Singapore Pte Ltd, which is an insurance
premium funding and licenced money-lending
company. He is also the Managing Director of
Winnow Investments Pte Ltd, Ocean Navigation
Pte Ltd and Alor Star Shipping Pte Ltd. These
companies are involved in general trading and
investments, ship chartering and shipping related
activities. He holds a Diploma of Commerce from
the Gordon Technical Institution in Geelong,
Victoria, Australia.
Chong Hon Kuan Ivan
Chong Hon Kuan Ivan was appointed as our
Non-Executive Director on 4 December 2000. On
1 June 2007, he became our Independent Director.
He is currently a member of the Executive
06
Committee of the Consumers Association of
Singapore (CASE) and chairs the Business Practice
Committee and concurrently, the advisor to the
Advertising Standards Authority of Singapore
(ASAS), the treasurer of CSR Singapore Compact,
and has been conferred “Friend of Labour” Award
by National Trade Union Congress. In the past,
he had served as President of the Association of
Accredited Advertising Agents and Chairman
of ASAS. On 5 June 2008, he was appointed as
a Non-Executive Director and has subsequently
been appointed as Executive Director of Rockeby
Biomed Ltd, an Australian listed, Singapore based
biotechnology company, with effect from 16
February 2009.
Lien Kait Long
Lien Kait Long was appointed as Non-Executive
Director to the Board in May 2008. He has
extensive experience in accounting and finance,
corporate management and business investments.
He is currently serving as an Independent Director
on the boards of several Singapore and Chinese
companies listed on the Singapore Exchange.
The listed companies that he has present and
prior experience in, are from diverse industries
including manufacturing, telecommunications,
oil and gas, textiles as well as food and beverage.
Apart from being an Independent Director, he also
holds a number of senior management positions
as well as executive directorships in various public
and private corporations in Singapore, Hong
Kong and China. Mr Lien holds a Bachelor’s
degree in Commerce from Nanyang University,
and is a fellow of the Institute of Certified Public
Accountants of Singapore and of CPA Australia.
Li Ling Xiu
Li Ling Xiu was appointed as Non-Executive
Director to the Board in April 2008. She is also
currently serving as Non-Executive Director to
Centillion Environment & Recycling Limited,
a company listed on the Singapore Exchange. In
addition, she also holds a number of directorships
in various private corporations in Australia, Hong
Kong and China. She is currently holding the
position as Chief Executive Officer in Chip Lian
Investments (HK) Limited since Apr 2001.
Chow Hock Meng
Alternate Director to Li Ling Xiu
Chow Hock Meng is an alternate director to Miss
Li Ling Xiu in Novena Holdings Limited and
Centillion Environment & Recycling Limited.
He is the General Manager of Oei Hong Leong
Foundation Pte Ltd and has about 25 years of
experience in corporate finance and investments.
He holds a degree in Banking and Finance from
Monash University.
Key Management
Lee Lai Chuan
Lee Lai Chuan is our Executive Director for the FastMoving Consumers’ Goods (FMCG) distribution
division. He founded Chuan Seng Leong Pte Ltd in
1976 and has been actively involved in the management
of the business. He was appointed as Executive Director
of Chuan Seng Leong after the acquisition by Novena in
2005. Mr Lee’s responsibilities include the management
of the overall operations, particularly in the areas of
strategic sourcing, business planning and development.
He possesses more than 30 years of business experience
in the FMCG industry, particularly in the areas of
merchandise sourcing and trading.
Chan Lay May Kathy
Chan Lay May Kathy is our Managing Director for
the beauty division. She joined the Group in May 1994
as a Project Manager cum Personal Assistant to the
CEO to undertake business expansion projects and
administrative operations. Prior to joining the Group,
she was with Richard Ellis Property Consultant Pte Ltd
as a Licensed Property Valuer & Marketing Executive
for 3 years. She was promoted to Director Corporate
Planning in September 2002 and Managing Director for
the beauty division in January 2006. She is currently
responsible for the branding, product development,
merchandise sourcing, and overseeing the operations
of the beauty division. She obtained her Bachelor of
Business from Curtin University of Western Australia
and Master of Business Administration from American
University of Hawaii.
Yeo Ngen Huay Serine
Yeo Ngen Huay Serine is our Group Financial
Controller. She joined the Group in July 2008. She
is responsible for the overall financial management
for the Group. Prior to joining the Group, she was
with Uniseal Waterproofing Pte Ltd as an Assistant
General Manager. She has acquired vast amount of
working experience working as Finance Manager with
various private and public corporations. She obtained
her Bachelor of Commerce (Major in Accounting &
Finance) from The University of Southern Queensland
of Australia and Diploma in Computer Studies from
The National Centre For Information Technology of
United Kingdom. She is also an Associate Member of
CPA, Australia.
Ang Song Len
Ang Song Len is our Assistant General Manager for the
FMCG distribution division. He joined the Group in
August 2006 as the Business Development Manager. He
was responsible for all aspects of business development,
including sales strategy and new business expansion.
He was promoted to Assistant General Manager in
2007 and he is currently responsible for all aspects of
sales operations, including sales strategy, new business
development and other operational strategies. Prior to
joining us, he was with Colgate-Palmolive (Eastern) Pte
Ltd as Business Account Manager for 31 years.
Chong Siew Lan Sheila
Chong Siew Lan Sheila is our Human Resource (HR)
/ Training & Development Manager. She joined the
beauty division in May 2004 as a Marketing & Training
Manager and was promoted to her current position
June 2007. She is responsible for all Human Resource
functions and management of intra-department
manpower matters. She is also involved in strategic
training and development planning to facilitate the
human capital management efforts of the organization.
She obtained her Bachelor of Engineering Degree
(Mechanical Engineering) from Nanyang Technological
University and Graduate Diploma in Training &
Development from the Singapore Human Resources
Institute (SHRI). She is also a certified therapist with
I.T.E.C (UK) (International Therapy Examination
Council).
07
Financial Highlights
2004
S$ ‘000
2005
S$ ‘000
for the year ended 31 dec 2008
2006#
S$ ‘000
2007#
S$ ‘000
2008
S$ ‘000
(restated)
Turnover
61,546
70,033
40,195
54,270
37,761
Profit/(loss) before tax
(1,330)
2,131
81
48,271
(45,189)
Profit/(loss) after tax
(1,397)
1,847
(76)
46,101
(46,006)
Total assets
44,080
46,214
57,224
71,689
41,613
Share capital and reserves
20,509
22,504
26,092
60,452
33,008
Net assets value per share
0.19
0.20
0.24
0.20
0.08
(1.15) cents
1.56 cents
(0.02) cents
16.80 cents
(12.26) cents
Gross dividend per share
-
1 cent
1 cent
0.5 cents
-
Special gross dividend per share
-
-
-
2.0 cents
-
Special rights issue gross dividend
per share
-
-
-
5.1 cents*
-
Earning per share
# excludes furniture division.
* in relations to right issue made during the year
08
Investments
The Group’s approach is to
manage investment returns and
equity price risk using a mix of
investment-grade shares with
steady and superior returns and
non-investment grade shares
with higher volatility. The
Group believes investments
would offer opportunities
for the Group to grow.
Henceforth, moving forward,
the Group will still continue to
invest in companies that have
potential growth. In view of
the current economic crisis,
the Group will be even more
prudent prior committing to
any investment.
In year 2008, the Group has received a total gross
dividend of S$ 210,664 and as at the date of this
report, the Group has substantial shareholdings in
the following listed companies:
1
2
3
4
5
TT International Limited
Tung Lok Restaurants 2000 Limited
United Envirotech Limited
Old Chang Kee Limited
Nico Steel Holdings Limited
(14.30%)
(14.29%)
(13.44%)
(11.03%)
( 8.86%)
09
FMCG Distribution
A leading distributor in the supply of Fast-Moving Consumers Goods
(FMCG) household and personal care essentials, Chuan Seng Leong
Pte Ltd began its humble beginnings in 1976.
Brands distributed by CSL include:
10
In 2005, amidst growing competition and the need
to achieve a stronger financial strength, Novena
Holdings Ltd successfully acquired the privately
owned decade-old family business and began to
expand its business operations. The company
has grown rapidly over the years and established
a network of over 1,200 distributions accounts
in Singapore, on top of exports business to
neighbouring countries.
Over the years, CSL has secured a portfolio of
household brandnames under its distribution
rights in Singapore.
CSL is continuously upgrading and expanding
its range of consumer essential merchandises and
services, so that it can continue to provide the best
products and value to all consumers.
Today, its distribution network is growing
island-wide, spanning supermarkets, hypermarts,
pharmacies,
mini-marts,
provision
shops,
convenience stores and petrol kiosks.
11
Shine @ Spring
Shine @ Spring Pte Ltd, formerly known as Beaute Spring Pte Ltd, was
renamed in December 2008 for the purpose of consolidation and rebranding the business activities at Beaute Spring Pte Ltd and BSP Global
Pte Ltd under one roof. After consolidation, Shine @ Spring business
activities comprise of beauty care products retail by Beaute Spring and
Kitoko Kalani, and beauty treatment services by Beaute Spring Professional
face and body.
Exclusive brands
Skin Care,
Professional Colours
Professional Skin Care
Skin Care, Body Care,
Accessories
Body Care
Professional
Skin Care, Hair Care
Personal Care
by
Health Food
Accessories
Make-up colours
Our R&D (research & development) efforts by NiClas International Pte
Ltd is committed to source the highest quality products at the best value
possible. The development of beauty care products includes skin care,
hair care, body care, make-up, accessories and health care supplements.
Holding exclusive distribution rights of brands from France, Japan, Korea,
Switzerland and Taiwan, NiClas is constantly seeking for new and latest
technology in beauty and health care products to provide greater selection
to the consumers. Brands distributed by NiClas include Biologie Pierre
Boutigny, Dale & Eke, Just@100, Kitoko Kalani, Mugens, mik@vonk,
Nozomi, O’ulla, PLUS, Putom, TSAIO and retail in Beaute Spring and
Kitoko Kalani chain stores.
Beaute Spring Retail Chain
by
Professional Hair Care
Skin Care
Skin Care, Body Care
Skin Care, Hair Care
Skin Care
Professional Skin Care
Beaute Spring with a retail network of 5 stores strategically located at the
major neighbourhood providing a wide variety of quality and great value
beauty and health care products. The chain retails more than 200 brands of
skin care, hair care, body care, fragrance, make-up, accessories and health
care products from a wide range of brand profiles, including exclusive
international brands and popular mass brands.
Locations:
Ang Mo Kio
Block 705 Ang Mo Kio Avenue 8, #01-2575
Bedok Central
Block 208 New Upper Changi Road #01-671 Tel: 6444 4544
Bugis Village
247 Victoria Street #01-247
Tel: 6333 0535
Toa Payoh
Block 183 Toa Payoh Central #01-272
Tel: 6251 5535
West Mall
1 Bukit Batok Central Link #02-20
Tel: 6862 2004
Operating Hours: 10am - 10pm
12
Tel: 65526883
Haircare
Skincare
Bodycare
Fragrance
accessories
Makeup
Color
13
Our Promise,
Quality & Effective
beauty care solutions
We believe looking good and feeling
confident is within reach. All it takes is right
products, basic knowledge, and daily simple
beauty care routine to look your best.
- from the beauty concept people
Kitoko Kalani Retail Chain
Kitoko Kalani is a new concept beauty care store dedicated to
deliver quality and effective beauty care solutions based on the
benefits of the botanical treasures. The first flagship store has been
set up at the end of 2008, targeting to reach out to consumers of all
age groups. Solutions for hair, face and body extending to beautify
with the professional make up range, Kitoko Kalani goes around
the world to bring you the best in beauty care products.
BSP Face & Body
Location:
Jurong Point, 63 Jurong West Central 3, #01-06
Jurong Point Shopping Mall
Operating Hours: 10am - 10pm
Telephone No:
6794 2239
Beaute Spring Professional Face & Body is a one-stop beauty
care center for face & body care excellence, where we pilot new
& effective treatments with strict safety and quality standards to
deliver total wellness in a tranquil setting.
Ɔ
Ɔ
Ɔ
Ɔ
Consolidate in one flagship salon, we offer comprehensive range
of beauty services by a team of trained professional therapists
and consultants, using the state-of-art technology such as the
ENERGIST ULTRA Variable Pulsed Light VPL system from
the United Kingdom and advanced bio-tech professional France
products from Biologie Pierre Boutigny to perform treatments
in the following main categories:
Location:
Bugis Village, 247 Victoria Street #02-00
Operating Hours: Mon - Fri: 12pm to 9pm
Sat, Sun & PH: 12pm to 7pm
Booking Hotline: 6336 0002
Ɔ VPL Skin Rejuvenation
Ɔ Face Enhancement
Ɔ Hand and Foot Care
Ɔ
Ɔ
Ɔ
VPL Hair Removal
Body Enhancement
Body Massage
Variable Pulsed Light is a non-laser, emitting light across a range
of wavelengths that are preferentially absorbed by the skin.
These variable pulses ensure more controlled absorption whilst
minimising heating of the surrounding skin. This means that a
greater range of hair and skin types can be safely and effectively
treated than was possible with other pulsed light technology.
The ENERGIST ULTRA is built to the highest international
quality standards and it has proven to be highly effective for:
14
Permanent hair reduction
Skin rejuvenation; improving the signs of ageing and sun damage to the skin
Thread vein and other red blemish treatments
Acne management
Training
As we grapple with unstable economic conditions and
embrace ourselves for the more difficult days ahead,
Novena Holdings will take on a different approach
to position ourselves to ride out the coming difficult
months. We shall continue to be committed to the
employees, customers and shareholders.
CONTINUOUS JOURNEY FOR
SERVICE EXCELLENCE
We continue to believe in service excellence. Consistent
efforts were dedicated towards improvement in
the management systems and processes in our
retail division, to deliver excellent customer service
standards. Our belief is further grounded by the
outstanding achievements of our award winners for
the national level Excellence Service Award (EXSA)
2008.
We are committed and continue to keep a consistent
training budget and intensity to groom and upgrade
our employees.
FOCUSED TRAININGS
For the past year, we focused on work skills
development for employees in the retail division,
using On-the-Job Training (OJT) framework in its
retail division, to provide skills development and
work experience for new employees and employees
who are deployed or promoted to perform a higher
level of job tasks.
This year, emphasis shall be on the development and
growth of the key performers and high potential
employees. As we strive for creativity and innovation,
we are adaptive to change the traditional role of training
via advanced learning techniques, such as NeuroLinguistics Programming (NLP), to create a dynamic
environment for learning and development of the
employees at a strategic level, to achieve astounding
results and make an impact on the business.
KEEPING EMPLOYEES
MOTIVATION HIGH
Keeping staff motivated in this challenging business
environment may be more difficult, but it is critical
for business to sail on. The promise of job security
and career advancement is the power tools for the
key management team to uphold the spirits of their
employees.
The group would continue to promote staff based
on individual performance and promote from within
the company as much as possible. The management
would also continue to engage with all levels of team
members and do frequent “ground visits” in order to
maintain a good understanding of employees’ needs
and to stay close with them to fight on this economic
turmoil together.
15
Community Development 2008
As part of our continuous efforts in community development and charity work, Novena
contributed approximately S$175,500 in cash and kind to various charity organizations in
FY 2008.
The major events of the year in review are as
follows:FEBRUARY 2008
China Snowstorm
S$30,000 was donated towards the
Relief Fund for China Snowstorm
Victims, a fund-raising event initiated
by Singapore Chinese Chamber of
Commerce and Industry (“SCCCI”).
Boon Lay CCC
S$5,000 was contributed towards Boon Lay
Lunar New Year Celebration Cum Hong
Baos Presentation event held on 25 February
2008 in Boon Lay CC where Hong Baos were
presented to more than 300 senior citizens
aged 70 & above.
16
MAY 2008
CSCDD Community Sports Festival
Sponsored S$10,000 in support of the CSCDD
Community Sports Festival.
Jurong Central Fund-raising Event
S$10,000 was donated towards Jurong Central
Fund Raising Golf Tournament. Donations raised
will be used to provide scholarship/busary awards
to children of Jurong Central residens, welfare
aid to the needy in the constituency and for
organizing meaningful activities for residents.
JUNE 2008
Sichuan Earthquake Charity Show
Apart from S$60,000 in donations,
Novena contributed time and effort in
organizing the Charity Show which was
telecast on 25 May 2008 on channel 8
and repeated on 1 June 2008. A total of
S$10,249,954 was raised and the funds
will be used for children’s education and
welfare.
JULY 2008
Radin Mas Oldies Nite
Novena contributed $30,000
towards organizing a concert for
1,400 senior citizens from Radin
Mas GRC.
rd
Ulu Pandan 43 National Day
Celebrations
S$5,000 was contributed towards Ulu
Pandan 43rd National Day Activity Fund.
AUGUST 2008
Kampong Chai Chee PCF Charity
Event
S$5,000 was donated towards Kampong
Chai Chee PCF Charity event where
proceeds were used to build a new
child care center for 100 children to be
operational in first quarter 2009.
Lions Club of Singapore West
S$5,000 was donated towards the
Lions Club of Singapore West charity
fund raising event to raise fund for the
Lions Community Service Foundation
Singapore (Lions Foundation). Lions
Foundation was registered as a charity in
2003 and its beneficiary charities are the
Lions Nursing Home, Lions Befrienders
Service Association, scholarships for poor
students and hardship cases caused by
the loss of income as a result of sudden
illness or premature death of the main
breadwinner of the family.
SEPTEMBER 2008
Industrial & Services Co-operative
Society Ltd (ISCOS)
S$3,000 was donated towards “Pledge
of Reintegration” in aid of the Yellow
Ribbon Project, to raised funds for their
various programmes and services.
“The Children’s Tomorrow”
S$2,000 was contributed towards “The
Children’s Tomorrow”, a human-interest
centric documentary which provide
insight into the lives of children who have
experienced great trauma, the 512 Sichuan
Earthquake. The documentary mainly
focus on the positive aspects of how
children are resilient and have overcome
physical/mental/emotional difficulties.
It portray more on the recovery and
rebuilding process that are ongoing as well
as the outcomes of these efforts.
Gala Premier Charity Hall Sponsorship
“Dragon Hunters”
S$2,500 was sponsored for a cinema hall
for Children Charities to attend the Gala
Premiere event of the movie “Dragon
Hunters”. Participating children charities
include: Children’s Cancer Foundation;
Asian Women’s Welfare Assocation
Headquarters; Beyond Social Services;
Children-At-Risk Empowerment
Association (CARE); Rainbow Centre;
Chen Su Lan Methodist Children’s Home;
SE CDC Metta Student Care (Bedok);
Salvation Army Gracehaven; Sun Beam
Place.
OCTOBER 2008
Victoria Junior College
Donations of S$2,000 was made towards
Victoria Junior College’s 25th Anniversary
to raise funds to give financial assistance to
needy students and upgrade existing nonstandard infra-structure in the college to
further enhance their capacity to provide
an all-round education to their students.
history with students. The main aim is
to tell younger Singaporeans about the
history of our education system. Novena
supported S$2,000 towards this event.
DECEMBER 2008
National Crime Prevention Council
(“NCPC”)
NCPC is a non-profit organization
committed to promote public awareness
and concern about crime and to propagate
the concept of self-help in crime
prevention. It is incorporated as a charity
and depends entirely on donations and
sponsorships to run its programmes and
activities. Novena sponsored S$2,000
towards part of NCPC fund-raising
activity.
Past Years’ Contributions
2002
2003
2004
2005
2006
2007
2008
Total
$100,000
$140,000
$150,000
$260,000
$192,000
$274,000
$175,500
$1,291,500
NOVEMBER 2008
Chinese Schools to Showcase Past
Exhibition by 20 schools’ alumni in
Malaysia and Singapore aims to share rich
17
Achievements
1998/1999
1999 Excellent Sales Award
Awarded for Novena group
outstanding performance by
FIRAC.
1998/99 Singapore 500 SME
Achievement Award
Castilla Design (subsidiary of
Novena Holdings) awarded
Singapore SME 500 Achievement
Award.
1998 Excellent Business
Development Award (Local and
Overseas)
Organised for the first time by the
Furniture & Interior Advisory
Committee (FIRAC), the Top Ten
Achievement Awards 1998 gives
recognition to top firms in the
furniture industry. Novena Group
was awarded for its innovative
business development projects
in the local and overseas market.
Other criteria for winning this
prestigious award include company
profitability, productivity and
management focus.
2000
Listed In SGX SESDAQ in 2000
Novena Group was successfully
admitted to the Official List of
the Stock Exchange of Singapore
Dealing and Automated Quotation
System (“SGX SESDAQ) on 18
December 2000.
2000 Enterprise 50 Award
Novena Group was ranked
32nd in the Enterprise 50 Award
(organized by Business Times and
Andersen Consulting).
2000 Quality Service Award
The White Collection (subsidiary
of Novena Holdings) was awarded
FIRAC Top Achievement –
Quality Service Award Year 2000.
The objective of this award is to
give recognition to those who
believe what FIRAC pledges: to
render quality products and service
to customers.
towards overall economic
development, promotes global cross
learning in the area of enterprise
management and networking.
2001
2003 Retail Courtesy Gold
Award
Awarded to Novena Group by
SPRING Singapore, Singapore
Retailers Association and Retail
Promotion Centre for a total of 35
winning outlets.
2001 Excellent Service Award
Being awarded Excellent Service
Award with 6 of our staff achieving
1 Star winner, 1 Gold winner and 4
Silver winners.
2001 Patron of the Arts Award
Being awarded Associate of the
Arts for having contributed
towards promoting the cultural and
artistic activities in Singapore.
29 of our staff will be receiving the
Excellent Service Award organized
by SPRING Singapore comprising
3 Star winners, 8 Gold winners and
18 Silver winners.
2002
2002 Retail Courtesy Award
Awarded to Novena Group by
SPRING Singapore, Singapore
Retailers Association and Retail
Promotion Centre. Winning
outlets comprises 10 outlets from
Novena, 2 outlets from Modern
Living, 7 outlets from The White
Collection, 2 outlets from Castilla,
2 outlets from Leewah Essentials
and 1 outlet from NC Essentials.
Excellent Service Award to Novena
Group by SPRING Singapore
(formerly PSB Singapore), with
21 of our staff achieving 12 Star
winners, 7 Gold winners and 2
Silver winners.
2002 5th Global Top Enterprise
Golden Earl Award
Organised by the Medium Business
Development Association of China,
the Golden Earl award is symbolic
of excellence in entrepreneurial
performance and business stability.
It aims to recognize outstanding
contributions made by enterprises
SINGAPORE
PROMISING
BRAND AWARD
18
2003
2003 Singapore Furniture
Industry Award
Organised by SFIC (Singapore
Furniture Industries Council),
the award seeks to promote
entrepreneurship within the
furniture industry, profile local
capabilities in internationalization
and retailing as well as recognize
the vital contributions to the
Singapore economy.
2003 Singapore Promising Brand
Award
Organised by ASME (The
Association of Small and Medium
Enterprises) and Lianhe Zaobao.
Recognising the significance of
branding to a business, ASME
inaugurated the award in 2002 to
promote branding as a strategic
tool and to recognize promising
local brands.
2002-2003 Superbrands Singapore
Superbrands is an award which
recognizes some of the world’s
greatest brands by the Superbrands
organization originated from
England for nearly a decade. The
Superbrands Council has set up
in Singapore to recognize the
strongest performing brands in
the market. The Novena Group
is proud to be included in this
prestigious list for the Singapore
edition which acknowledges
excellence in retail sales and
services.
2004
DP Credit Rating
Novena was certified as a DP
4 credit rated company by DP
Information Group. The certificate
is an affirmation of the company’s
excellent credit standing and
worthiness based on international
standard with Moody’s/ KMV
engine/methodology.
The President’s Social Service
Award (PSSA) 2004
Novena was a nominee in the
Corporate Category.
SIAS Investors Choice Awards
2004 – Singapore Corporate
Governance Award
Novena was nominated amongst
the SESDAQ companies for good
corporate governance practices.
SRA Awards 2004 – Best New
Entrant of the Year
A subsidiary of Novena Group,
Natural Living was awarded The
Best New Entrant of the Year. SRA
Awards seek to raise standards,
profile and image of the retail
industry by promoting innovation,
creativity and excellence, so as to
constantly add new and exciting
dimensions to retail and take the
industry to new heights.
2004 Arts Supporter Award
Novena was conferred the Arts
Supporter Award for having
contributed towards promoting
cultural and artistic activities in
Singapore.
BSEN ISO 9001:2000 Certified
A subsidiary of Novena Group,
The White Collection Pte
Ltd received ISO 9001:2000
certification.
38 of our staff received the
Excellent Service Award given out
by SPRING Singapore comprising
5 Star winners, 12 Gold winners
and 21 Silver winners.
2004 Singapore Promising Brand
Award
Novena received the Singapore
Promising Brand Award for the
second consecutive year. SPBA
is established to recognise SMEs
who have shown outstanding
performance in the communication
of their brands. The key objectives
are to enhance the awareness of
the importance of branding among
local SMEs and in turn stimulate
the growth of Singapore’s brands
and enterprises both locally and
regionally.
2004 Retail Asia-Pacific Top 500
This is the region’s first-ever
ranking of the top 500 retail
companies in 14 markets. Novena
Group has been ranked among
the top 500 retail companies in the
Asia-Pacific region based on sales
turnover.
2005
2005 Most Reliance Award
Suzhou Novena was awarded
one of the most reliable and
trustworthy organization by
Suzhou Consumer Association
which reflected the strong value of
Novena of being creative, sincere
and care for the products and
services we provide to our value
customers.
Environmental-Friendly Product
Award
An award was presented to Suzhou
Novena by Suzhou Quality
Control Association for achieving
the environment-friendly standard
on the bedroom series that they
had manufactured.
National Top 10 Quality
Enterprise Award & National
Top 10 Quality Products Award
2005
The National Top 10 Award –
Year 2005 organized by Chinese
Industry, Commerce, Economy,
Trade Science & Technology
Development Association.
The objectives is to recognize
and appreciate the outstanding
contributions and achievements
made by enterprises towards
overall economy and social
development, improvement
in corporate efficiency and
productivity, innovative products
and services, quality research and
development, as well as promoting
global enterprising networks.
Novena was awarded Arts
Supporter Award for having
contributed towards promoting
the cultural and artistic activities in
Singapore.
Excellent Service Award organized
by SPRING Singapore. These
include 5 Star winners, 12 Gold
winners and 21 Silver winners.
2004-2005 Superbrands Singapore
Novena received the Superbrands
Award for the second consecutive
year. This is an award which
greatest brands. Novena Group
prestigious list of winners which
acknowledges excellence in retail
sales.
2006
together with its subsidiaries,
Beaute Spring Pte Ltd and
Chuan Seng Leong Pte Ltd, were
awarded the Arts Supporter Award
for contributions towards the
promotion of cultural and artistic
activities in Singapore.
Excellent Service Award, given
out by SPRING Singapore. These
include 9 Star Award winners, 11
Gold Award winners & 15 Silver
Award winners.
Singapore Service Class (S-Class)
Castilla Design Pte Ltd was one
of 76 organisations to receive
the Singapore Service Class
Certification from SPRING
Singapore. The certification was
determined by the organisation’s
performance in the Service
Scorecard for Business Excellence.
People Developer Standard
Novena Holdings Limited was
among the list of 552 Organisations
to be certified as People Developer
in Singapore by SPRING
Singapore. People Developer
is a quality standard that gives
recognition to organisations that
invest in their people and having
a comprehensive system for
developing their staff.
2006 Superbrands Singapore
Novena received the superbrands
Award for the third consecutive
year. This is an award, which
greatest brands. Novena Group
prestigious list of winners, which
acknowledges excellence in retail
sales.
10th Golden Furniture Award
(New Millennium Award)
Novena Furnishing Centre Pte
Ltd, a subsidiary of Novena
Group, was awarded the Golden
Furniture Award. This award was
created in Europe to distinguish
companies with distinguished
quality of their products and
services.
The Golden Europe Award For
Quality and Commercial Prestige
Novena Furnishing Centre Pte
Ltd, a subsidiary of Novena
Group, was awarded due to
its exceptional brand image,
distinguished service quality and
capacity of innovation.
2007
18 of our staff from Beaute Spring
Pte Ltd & BSP Global Pte Ltd
received the Excellent Service
Award given out by SPRING
Singapore. These include 2 Star
Awards winners, 5 Gold Awards
winners & 11 Silver Award
winners.
May Day Model Workers Award
2007
Beaute Spring Pte Ltd has a
retail staff who was conferred
with this award. Organized by
National Trade Union Congress
(NTUC) to give recognition to
outstanding workers from all
categories (e.g. different sectors,
age groups, nationalities, etc.)
who have excellent performance,
conduct and attitudes, which bring
recognition to their employers.
Reliability & Environment-Friendly
Award
Suzhou Novena achieved 3
Star rating for Reliability &
Environment-Friendly Award
by Suzhou Quality Control
Association & Suzhou Furniture
Association.
2008
Novena Holdings was awarded
the Arts Supporter Award
for contributions towards the
promotion of cultural and artistic
activities in Singapore.
Singapore 1000 Company 2008
Novena Holdings was given
the Singapore 1000 Company
Achievement Award.
15 of our staffs received the
Excellent Service Award given
out by SPRING Singapore. These
include 1 Star Award winner, 5
Gold Award winners & 9 Silver
Award winners.
19
Financial Contents
21
30
35
36
38
39
41
Corporate Governance
Directors’ Report
Statement by Directors
Independent Auditors’ Report
Consolidated Income Statement
Balance Sheets
Statement of Changes in Equity
44
46
99
101
102
Consolidated Cash Flow Statement
Notes to the Financial Statements
Statistics of Shareholdings
Statistics of Warrantholdings
Notice of AGM
Proxy Form
The Board of Directors (the “Board”) of Novena Holdings Limited and its subsidiaries (the “Group”) is committed to
maintaining high standards of corporate governance and transparency in line with the spirit of the Code of Corporate
Governance 2005 (the “Code”) to protect the interest of shareholders. This report outlines the Company’s corporate
governance processes and structures with specific reference to the Code.
BOARD OF DIRECTORS
PRINCIPLE 1: BOARD’S CONDUCT OF ITS AFFAIRS
The principal functions of the Board are to:
1.
2.
3.
4.
5.
Approve the corporate direction and strategy of the Company and monitoring the performance of the management;
Approve the nomination of directors and appointment of key managerial personnel;
Approve annual budgets, major funding proposals and investment proposals;
Review the internal controls, risk management, financial performance and reporting compliance; and
Assume responsibility for corporate governance.
To facilitate effective management, certain functions have been delegated to various Board Committees, each of which has
its own written terms of reference.
The Board has delegated day-to-day operations to management while reserving certain key matters for its approval. Key
functions include approving the consolidated financial statements for the group, conflict of interest checks for directors,
disposal of assets, strategic planning and material acquisitions, share issuances, dividends and matters which require Board
approval as specified under the Company’s interested person transaction policy.
The Board conducts regular scheduled meetings. Ad-hoc meetings are convened when circumstances require. The Company’s
Articles of Association allow a Board meeting to be conducted by way of a tele-conference. The attendance of the directors at
meetings of the Board and Board Committees, as well as the frequency of such meetings, is disclosed in this Report.
The Company has an on-going budget for all directors to receive relevant training. Board members are encouraged to attend
seminars and receive training in connection with their duties as directors in areas such as accounting and legal knowledge,
particularly on latest developments to relevant laws, regulations and accounting standards.
21
DIRECTORS’ ATTENDANCE AT BOARD AND BOARD COMMITTEE MEETINGS FY2008
Novena Board
Name
Audit Committee
Nominating
Committee
Remuneration
Committee
No. of
No. of
No. of
No. of
No. of
No. of
No. of
No. of
Meetings Meetings Meetings Meetings Meetings Meetings Meetings Meetings
Held
Attended
Held
Attended
Held
Attended
Held
Attended
Toh Soon Huat
4
4
NA
NA
NA
NA
NA
NA
Chong Hon Kuan Ivan
4
4
4
4
2
2
2
2
Tay Beng Chuan
4
4
4
4
2
2
2
2
Wong Meng Yeng
4
4
4
4
2
2
2
2
Lien Kait Long*1
4
2
NA
NA
NA
NA
NA
NA
Li Ling Xiu**2
4
1
NA
NA
NA
NA
NA
NA
Chow Hock Meng***3
4
1
NA
NA
NA
NA
NA
NA
Notes:
*1.
Mr Lien Kait Long was appointed as a Non-Executive Director on 26 May 2008.
** 2. Ms Li Ling Xiu was appointed as a Non-Executive Director on 29 April 2008.
***3. Mr Chow Hock Meng was appointed as Alternate Director, to Ms Li Ling Xiu on 31 July 2008
PRINCIPLE 2 : BOARD COMPOSITION AND BALANCE
The Board comprises three Independent Directors, two Non-Executive Directors, one Alternate Director and one Executive
Director. The independence of each Director is reviewed annually by the Nominating Committee (“NC”). The NC adopts
the Code’s definition of what constitutes an independent director in its review. The NC is of the view that the Independent
Directors are independent, no individual or small group of individuals dominate the Board’s decision-making process and the
current composition of the Board possesses adequate competencies to meet the Company’s objectives.
The Board is of the opinion that the current board size of seven directors, one of whom is an Alternate Director is appropriate,
taking into account the nature and scope of the Company’s operations. The Board composition reflects the broad range of
experience, skills and knowledge for the effective stewardship of the Group.
Key information regarding the directors is provided in “Board of Directors” section of this Annual Report.
22
PRINCIPLE 3 : ROLE OF CHAIRMAN AND CHIEF EXECUTIVE OFFICER (“CEO”)
The Board is of the opinion that it is in the best interest of the Group to adopt a single leadership structure whereby the
Acting Chairman and Chief Executive Officer is the same person, so as to ensure that the decision-making process would not
be unnecessary hindered. The presence of a strong independent element and the participation of the Independent Directors
ensure that the Acting Chairman and the Chief Executive Officers does not have unfettered powers of decision.
The Group’s Acting Chairman and CEO, Mr Toh Soon Huat, plays an instrumental role in developing the business of the
Group and provides the Group with strong leadership and vision. He is responsible for day-to-day running of the Group
as well as the exercise of control over the timeliness of information flow between the Board and management. As the Acting
Chairman, he also ensures that Board meetings are held regularly and the Board is updated on the Group’s affairs, oversees
the preparation of the agenda for Board meetings and ensures the Group’s compliance with the Code.
All major decisions made by the Acting Chairman and CEO are reviewed by the Audit Committee. The Nominating
Committee reviews his performance and appointment to the Board and the Remuneration Committee reviews his
remuneration package periodically. Both the Nominating Committee and Remuneration Committee comprise a majority of
Independent Directors of the Company. As such, the Board believes that there are adequate safeguards in place against an
uneven concentration of power and authority in a single individual.
PRINCIPLE 6 : ACCESS TO INFORMATION
In order to ensure that the Board is able to fulfill its responsibilities, management provides the Board with a management
report containing complete, adequate and timely information prior to the Board meetings as well as a report of the group’s
activities on a regular basis.
The Company has approved an agreed procedure for Directors to take independent professional advice at the Company’s
expense of up to a maximum of S$25,000. Before incurring professional fees, the Director concerned must consult two other
Directors, one of whom must be independent. No such advice was sought by any director during FY2008.
The Company secretary attends Board meetings and meetings of the Board Committees of the Company and ensure that
Board procedures are followed and that applicable rules and regulations are complied with. The Minutes of all Board meetings
are circulated to the Board.
Please refer to the “Corporate Information” section of the annual report for the composition of the Company’s Board of
Directors and Board committees.
23
BOARD COMMITTEES
NOMINATING COMMITTEE (NC)
PRINCIPLE 4 : BOARD MEMBERSHIP
The NC comprises three Directors, all of them, including the Chairman are Independent Directors. The principal functions
are to:
1.
2.
3.
4.
5.
6.
7.
Establish procedures for and making recommendations to the Board on all board appointments;
Determine orientation programs for new Directors, and recommending opportunities for the continuing training of the
Directors;
Review and make recommendations to the Board for the re-nomination of Directors, having regard to the individual
director’s contribution and performance;
Assess annually whether or not a Director is independent;
Review the size and composition of the Board with the objective of achieving a balanced Board in terms of the mix of
experience and expertise;
Recommend to the Board the performance criteria and appraisal process to be used for the evaluation of individual
Directors as well as the effectiveness of the Board as a whole, which criteria and process shall be subject to Board
approval; and
Review the appointment of relatives of directors and/or substantial shareholders to managerial positions.
The Articles of Association of the Company currently require one-third of the directors to retire and subject themselves to
re-election by the shareholders in every Annual General Meeting. In addition, all directors of the Company shall retire from
office at least once every three years.
PRINCIPLE 5 : BOARD PERFORMANCE
The NC evaluates the effectiveness of the Board as a whole and the contribution by each director to the effectiveness of the
Board.
In evaluating the Board’s performance, the NC considers a set of quantitative and qualitative performance criteria such as
return on investment, return on equity, profitability on capital employed, the success of the strategic and long-term objectives
and the effectiveness of the Board in monitoring management’s performance against the targets set by the Board.
The NC, in considering the re-appointment of any Director, evaluates the performance of the director. On an annual basis,
the Chairman will assess each Director’s contribution to the Board, and discuss the results with the Chairman of the NC.
The criteria adopted in assessing the contribution of each individual Director include attendance at the Board and Committee
meetings, intensity of participation at meetings and special contributions.
24
AUDIT COMMITTEE (AC)
PRINCIPLE 11 : AUDIT COMMITTEE
The Audit Committee (AC) comprises three members; all of them including the Chairman are independent Directors. The
profile of the AC comprises professionals and businessman with financial, management and legal background. The Board is
of the view that the members of the AC have sufficient financial management expertise and experience to discharge the AC’s
function.
The AC, which has written terms of reference, performs the following delegated functions:
1.
2.
3.
4.
5.
6.
7.
8.
9.
Review the audit plans of the internal and external auditors of the Company and ensures the adequacy of the Company’s
system of accounting controls and the co-operation given by the Company’s management to the external and internal
auditors;
Review the interim and annual financial statements and the auditors’ report of the Company before their submission to
the Board of Directors;
Review with the management and the internal auditor the adequacy of the Company’s internal controls in respect of
management, business and services systems and practices;
Review legal and regulatory matters that may have a material impact on the financial statements, related compliance
policies and programs and any reports received from regulators;
Review the cost effectiveness and the independence and objectivity of the external auditors;
Review the nature and extent of non-audit services provided by the external auditors;
Review the assistance given by the Company’s officers to the auditors;
Nominate the external auditors; and
Review interested person transactions in accordance with the requirements of the listing rules of the Singapore
Exchange.
The AC has the express power to conduct or authorize investigations into any matter within its terms of reference. Minutes
of the AC meetings are regularly submitted to the Board for its information and review.
The AC, having reviewed all non-audit services provided by the external auditors to the Group, is satisfied that the nature
and extent of such services would not affect the independence of the external auditors. The AC also conducts a review of
interested person transactions and a review to ensure that there are no improper activities of the Company (if any).
The AC meets with the external and internal auditors, without the presence of the Company’s management, at least once a
year.
The Company has put in place a whistle-blowing framework, endorsed by the AC, where employees of the Company may,
in confidence, raise concerns about possible corporate improprieties in matters of financial reporting or other matters. To
ensure independent investigation of such matters and for appropriate follow up action, all whistle-blowing reports are to be
sent to Mr Wong Meng Yeng, Mr Tay Beng Chuan and Mr Ivan Chong. Details of Whistle-Blowing policy and arrangements
have been made available to all employees.
25
PRINCIPLE 12 : INTERNAL CONTROLS
The Board believes that, in the absence of any evidence to the contrary, the system of internal control maintained by the
Company’s management provides reasonable assurance against material financial misstatements or loss, and includes the
safeguarding of assets, the maintenance of proper accounting records, the reliability of financial information, compliance
with appropriate legislation, regulation and best practice, and the identification and management of business risks. The
Board notes that no system of internal control can provide absolute assurance against the occurrence of material errors, poor
judgments in decision-making, human error, fraud or other irregularities.
PRINCIPLE 13 : INTERNAL AUDITS (IA)
The Board recognizes that it is responsible for maintaining a system of internal control processes to safeguard shareholders’
investments and the Group’s business and assets. The internal audit function of the Group has been outsourced to a
professional service firm. The internal auditor reports directly to the AC on audit matters. The AC reviews the internal audit
report on a regular basis to ensure the adequacy of the internal audit function. The AC also reviews and approves the annual
IA plans.
REMUNERATION COMMITTEE (RC)
PRINCIPLE 7 : PROCEDURES FOR DEVELOPING REMUNERATION POLICIES
PRINCIPLE 8 : LEVEL AND MIX OF REMUNERATION
PRINCIPLE 9 : DISCLOSURE ON REMUNERATION
The Remuneration Committee comprises three Directors, all of them including the Chairman are Independent Directors.
The principal duties and responsibilities are to:
a.
b.
c.
d.
e.
26
Recommend to the Board an appropriate framework for remuneration of the Board and senior management to ensure
that it is competitive and sufficient to attract, retain and motivate personnel of the required quality;
Determine the policy for establishing the remuneration packages for executive directors and the CEO (or equivalent)
and review the service contracts of such employees;
Review the performance of key senior managers to enable the committee to determine their annual remuneration,
bonus rewards, etc.;
Ensure accountability and transparency in the Company’s policies and procedures for determining the remuneration of
its Directors and senior management; and
Review all matters concerning the remuneration of non-executive directors to ensure that the remuneration is
commensurate with the contribution and responsibilities of the directors.
The NC, together with RC reviews the CEO’s performance targets (including quantitative financial figures such as ROE and
revenue growth) for each financial year.
Directors’ fees are set in accordance with a remuneration framework. All the Independent Directors and Non-Executive
Directors are paid director’s fees, subject to approval at the AGM. The Acting Chairman does not receive director’s fees.
A breakdown, showing the level and mix of each individual director’s remuneration payable for FY2008 is as follows:
DIRECTORS’ REMUNERATION
Name
Fee*
Salary
Bonus
Allowance
-
78.7%
6. 6%
14.7%
Chong Hon Kuan Ivan**
100%
-
-
-
Tay Beng Chuan**
100%
-
-
-
Wong Meng Yeng**
100%
-
-
-
Lien Kait Long***
60%
-
-
-
Li Ling Xiu***
67%
-
-
-
-
76.7%
-
23.3%
Between $250,001 - $500,000
Toh Soon Huat
Up to $250,000
Manohar P. Sabnani #
*
**
these fees are subject to approval by the shareholders at the AGM for FY 2008.
Independent Directors have no service contracts and their terms are specified in the Articles. The CEO has a three-year
service contract that expires on 31 August 2009.
*** The director fees for both the Non-Executive Directors are pro-rated according to their appointment date for the
year.
#
Mr Manohar P.Sabnani resigned from the Board of Directors on 31 May 2008.
27
Disclosure of the top five executives’ remuneration (executives who are not on the Board of Directors) in bands of $250,000
is as below:
Gross remuneration less than $250,000:
1.
2.
3.
4.
5.
Lee Lai Chuan
Chan Lay May Kathy
Serine Yeo Ngen Huay
Ang Siong Lim
Chong Siew Lan Sheila
- Executive Director (CSL)
- Managing Director (Beauty Division)
- Group Financial Controller
- Assistant General Manager (CSL)
- Group Human Resource Manager
Key information regarding the above executives is provided in the “Key Management” section of this annual report.
Share Option Committee
The Share Option Committee comprises Directors, who are Executive and Independent Directors.
The Share Option Committee administers The Novena Holdings Limited Share Option Scheme (“NSOS”) established on 9
December 2000, in accordance with the rules as approved by shareholders. Non-Executive and Independent Directors have
not been granted share options under NSOS since establishment.
In FY 2008, no options were granted.
PRINCIPLE 10 : ACCOUNTABILITY AND AUDIT
PRINCIPLE 14 : COMMUNICATION WITH SHAREHOLDERS
PRINCIPLE 15 : GREATER SHAREHOLDER PARTICIPATION
In presenting the annual financial statements and announcements to shareholders, it is the aim of the Board to provide the
shareholders with a detailed analysis, explanation and assessment of the Group’s financial position and prospects. The
management provides the Board with management accounts of the Group’s performance, position and prospects on a regular
basis.
The Company will comply with The Listing Manual of the Singapore Exchange Securities Trading Limited on the disclosure
requirements of its financial results. Results will be published through the SGXNET, news releases and the Company’s
website. All information on the Company’s new initiatives is first disseminated via SGXNET. Results and annual reports are
announced or issued within the mandatory period and are available on the Company’s website.
28
The Board is mindful of the obligation to provide timely and fair disclosure of material information in accordance with the
Corporate Disclosure Policy of the Singapore Exchange.
All shareholders of the Company receive the annual report and notice of AGM, which notice is also published in either the
Straits Times or Business Times and made available on the website. At AGM, shareholders are given the opportunity to
express their views and ask directors or management questions regarding the Company.
The Board also welcomes the view of shareholders on matters affecting the Company, whether at shareholders’ meetings or
on an ad hoc basis.
DEALINGS IN SECURITIES
In accordance with the SGX-ST Best Practices Guideline, the Company has adopted an internal code on dealing in the
Company’s shares. The internal code prohibits any dealing in the Company’s shares during the period commencing one
month before the announcement of the Company’s results and ending on the date of the announcement of the results.
In addition, Directors and key executives are expected to observe insider trading laws at all times even when dealing in
securities within the permitted trading period. They are discouraged from dealing in the Company’s shares on shortterm considerations.
RISK MANAGEMENT
The Group regularly reviews and improves its business and operational activities to take into account the risk management
perspective. The Group seeks to identify areas of significant business risks as well as appropriate measures to control and
mitigate these risks.
MATERIAL CONTRACTS
There were no material contracts entered into by the Company and its subsidiaries involving the interests of its CEO,
Directors or controlling shareholders.
SPONSOR
No fees relating to non-sponsorship activities or services were paid to the Company’s sponsor for the financial year ended
31 December 2008
29
Directors’ Report
The directors are pleased to present their report to the members together with the audited consolidated financial statements
of Novena Holdings Limited (the “Company”) and its subsidiaries (collectively, the “Group”) and the balance sheet and
statement of changes in equity of the Company for the financial year ended 31 December 2008.
1.
Directors
The directors of the Company in office at the date of this report are:
Toh Soon Huat
Chong Hon Kuan Ivan
Tay Beng Chuan
Wong Meng Yeng
Li Ling Xiu
Lien Kait Long
Chow Hock Meng
2.
(Acting Chairman and Chief Executive Officer)
Arrangements to enable directors to acquire shares, debentures and warrants
Except as disclosed below, neither at the end of nor at any time during the financial year was the Company a party
to any arrangement whose objects are, or one of whose objects is, to enable the directors of the Company to acquire
benefits by means of the acquisition of shares, debentures or warrants of the Company or any other body corporate.
30
Directors’ Report
3.
Directors’ interests in shares and warrants
The following directors, who held office at the end of the financial year, had, accordingly to the register of directors’
shareholdings required to be kept under Section 164 of the Singapore Companies Act, Cap. 50, an interest in shares and
warrants of the Company and related corporations (other than wholly-owned subsidiaries) as stated below :
At 1
January
2008
Direct interest
At 31
At 21
December
January
2008
2009
At 1
January
2008
Deemed interest
At 31
At 21
December
January
2008
2009
Ordinary shares of the Company
Toh Soon Huat
Chong Hon Kuan Ivan
6,690,990
1,625,524
56,436,735
1,625,524
56,436,735
1,625,524
87,417,234
–
75,917,234
862,762
75,917,234
862,762
3,295,495
812,762
–
–
–
–
43,214,617
–
8,264,367
–
8,264,367
–
Warrants to subscribe for ordinary
shares of the company
Toh Soon Huat
Chong Hon Kuan Ivan
By virtue of Section 7 of the Singapore Companies Act, Cap. 50, Toh Soon Huat is deemed to have an interest in all of
the subsidiaries of Novena Holdings Limited.
Except as disclosed in this report, no other director who held office at the end of the financial year had an interest in
shares, share options, warrants or debentures of the Company or of related corporations, either at the beginning of the
financial year, or date of appointment if later, or the end of the financial year and on 21 January 2009.
4.
Directors’ contractual benefits
Except as disclosed in the financial statements, since the end of the previous financial year, no director of the Company
has received or become entitled to receive a benefit by reason of a contract made by the Company or a related corporation
with the director, or with a firm of which the director is a member, or with a Company in which the director has a
substantial financial interest.
31
Directors’ Report
5.
Share options
Neither at the end of nor at any time during the financial year were :
6.
(a)
options granted by the Company or its subsidiaries to any person to take up unissued shares in the Company or
its subsidiaries; and
(b)
shares issued by virtue of any exercise of options to take up unissued shares of the Company or its subsidiaries.
Warrants
At the end of the financial year, details of the outstanding warrants are as follow :
Date of issue
Warrants
outstanding
at 1.1.2008
Warrants
issued
Warrants
exercised
Warrants
expired
Warrants
outstanding
at 31.12.2008
Date of
expiration
16.11.2007
141,957,609
–
(117,563,297)
–
24,394,312
16.11.2010
Each warrant entitles the warrant holder to subscribe for one new ordinary share in the Company at the exercise price
of $0.08 per share. The warrants do not entitle the holders of the warrants, by virtue of such holdings, to any rights to
participate in any share issue of any other company. During the financial year, the Company issued 117,563,297 shares
pursuant to the exercise of warrants as disclosed above.
7.
Audit Committee
The Audit Committee (“AC”) carried out its functions in accordance with Section 201B(5) of the Singapore Companies
Act, Cap. 50.
The AC comprises three Board members, of which all of them are independent directors. The profile of the AC
members comprises professionals and businessman with financial, management and legal background. The Board is of
the view that the members of the AC have sufficient financial management expertise and experience to discharge the
AC’s function.
32
Directors’ Report
7.
Audit Committee (Cont’d)
The AC, which has written terms of reference, performs the following delegated functions:
(a)
review the audit plans of the internal and external auditors of the Company and ensures the adequacy of the Company’s
system of accounting controls and the co-operation given by the Company’s management to the external and
internal auditors;
(b)
review the interim and annual financial statements and the auditors’ report of the Company before their submission
to the Board of directors;
(c)
review with the management and the internal auditor the adequacy of the Company’s internal controls in respect
of management, business and services systems and practices;
(d)
review legal and regulatory matters that may have a material impact on the financial statements, related compliance
policies and programs and any reports received from regulators;
(e)
review the cost effectiveness and the independence and objectivity of the external auditors;
(f)
review the nature and extent of non-audit services provided by the external auditors;
(g)
review the assistance given by the Company’s officers to the auditors;
(h)
nominate the external auditor; and
(i)
review interested person transactions in accordance with the requirements of the Singapore Exchange Securities
Trading Limited (SGX-ST)’s Listing Manual.
The AC has the express power to conduct or authorize investigations into any matter within its terms of reference.
Minutes of the AC meetings are regularly submitted to the Board for its information and review.
The AC, having reviewed all non-audit services provided by the external auditors to the group, is satisfied that the
nature and extent of such services would not affect the independence of the external auditors. The AC also conducts a
review of interested person transactions and a review to ensure that there are no improper activities of the Company
(if any). The AC meets with the external and internal auditors, without the presence of the Company’s management, at
least once a year.
33
Directors’ Report
8.
Auditors
Ernst & Young LLP have expressed their willingness to accept reappointment as auditors.
On behalf of the board of directors,
Toh Soon Huat
Director
Lien Kait Long
Director
Singapore
20 March 2009
34
Statement by Directors
We, Toh Soon Huat and Lien Kait Long, being two of the directors of Novena Holdings Limited, do hereby state that, in the
opinion of the directors,
(a)
the accompanying balance sheets, consolidated income statement, statements of changes in equity, and consolidated
cash flow statement together with the notes thereto are drawn up so as to give a true and fair view of the state of affairs
of the Group and of the Company as at 31 December 2008, and the results of the business, changes in equity and cash
flows of the Group and the changes in equity of the Company for the 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 board of directors,
Toh Soon Huat
Director
Lien Kait Long
Director
Singapore
20 March 2009
35
To the members of Novena Holdings Limited
We have audited the accompanying financial statements of Novena Holdings Limited (the “Company”) and its subsidiaries
(collective, the “Group”), which comprise the balance sheets of the Group and the Company as at 31 December 2008, the
income statement and cash flow statement of the Group and the statements of changes in equity of the Group and the
Company for the year then ended, and a summary of significant accounting policies and other explanatory notes.
Management’s responsibility for the financial statements
Management is responsible for the preparation and fair presentation of these financial statements in accordance with
the provisions of the Singapore Companies Act, Cap. 50 (the “Act”) and Singapore Financial Reporting Standards. This
responsibility includes devising and maintaining a system of internal accounting controls sufficient to provide a reasonable
assurance that assets are safeguarded against loss from unauthorised use or disposition; and transactions are properly
authorised and that they are recorded as necessary to permit the preparation of true and fair profit and loss account and
balance sheet and to maintain accountability of assets; selecting and applying appropriate accounting policies; and making
accounting estimates that are reasonable in the circumstances.
Auditors’ responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in
accordance with Singapore Standards on Auditing. Those standards require that we comply with ethical requirements and plan
and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial
statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material
misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to
design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the entity’s internal control. 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 financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
36
To the members of Novena Holdings Limited
Opinion
In our opinion,
(i)
the consolidated financial statements of the Group and the balance sheet and statement of changes in equity 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 affairs of the Group and of the Company as at 31 December
2008 and the results, changes in equity and cash flows of the Group and the changes in equity of the Company for the
year ended on that date; and
(ii)
the accounting and other records required by the Act to be kept by the Company and by those subsidiaries incorporated
in Singapore of which we are the auditors have been properly kept in accordance with the provisions of the Act.
Ernst & Young LLP
Public Accountants and Certified Public Accountants
Singapore
20 March 2009
37
Consolidated Income Statement
For the year ended 31 December 2008
Continuing operations
Revenue
Cost of sales
Gross profit
Other items of income
Other income
Interest income – fixed deposits
Land compensation
Other items of expenses
Distribution and selling expenses
Administrative expenses
Other operating expenses
Other non-operating expenses
Finance expenses
Share of results of associate
(Loss)/profit before tax
Income tax expense
(Loss)/profit after tax from continuing operations
Note
2008
$
2007
$
4
37,761,287
(30,083,677)
7,677,610
54,270,511
(32,401,088)
21,869,423
6(a)
1,290,738
275,626
5,162,698
43,056,092
360,513
–
(2,285,861)
(8,554,640)
(764,199)
(47,806,038)
(155,477)
(29,595)
(45,189,138)
(817,263)
(46,006,401)
(2,789,940)
(9,651,880)
(1,571,012)
(2,619,418)
(401,174)
18,908
48,271,512
(2,170,144)
46,101,368
–
(46,006,401)
(506,448)
45,594,920
(47,065,206)
1,058,805
(46,006,401)
45,693,290
(98,370)
45,594,920
6(e)
6(b)
6(c)
8
6(d)
9
Discontinued operations
Loss after tax for the year from discontinued operations
(Loss)/profit for the year
Attributable to:
Equity holders of the Company
Minority interests
(Loss)/earnings per share (cents)
From continuing operations
- Basic
- Diluted
From discontinued operations
- Basic
- Diluted
10
(12.26)
(12.26)
10
–
–
The accompanying accounting policies and explanatory notes form an integral part of the financial statements.
38
16.80
15.82
(0.18)
(0.17)
Balance Sheets
As at 31 December 2008
Group
Company
Note
2008
$
2007
$
2008
$
2007
$
Non-current assets
Property, plant and equipment
Land occupancy rights
Investments in subsidiaries
Investment in associate
Quoted equity investments
Due from a subsidiary (non-trade)
11
12
13
14
15
16
3,154,243
–
–
–
14,190,918
–
17,345,161
4,504,807
498,127
–
29,595
26,264,832
–
31,297,361
198,942
–
5,125,806
–
14,190,918
2,360,000
21,875,666
254,461
–
10,746,455
–
26,264,832
2,360,000
39,625,748
Current assets
Inventories
Trade receivables
Other receivables, deposits and prepayments
Due from subsidiaries (non-trade)
Fixed deposits
Cash and bank balances
17
18
19
20
15
21
31
5,335,666
2,949,960
1,520,198
–
509,411
12,110,084
1,843,085
24,268,404
5,914,834
4,078,221
2,210,345
–
3,616,323
21,500,100
3,072,586
40,392,409
–
–
460,681
881,420
509,411
1,151,070
434,327
3,436,909
–
43,028
700,782
1,230,938
820,820
9,242,046
988,814
13,026,428
22
2,446,577
–
1,190,298
1,790,497
199,714
57,605
224,004
681,994
120,000
–
20,046
6,730,735
17,537,669
3,198,484
580,032
1,208,244
1,025,484
199,714
69,602
224,004
734,947
200,000
–
1,436,257
8,876,768
31,515,641
–
–
217,406
886,471
–
–
–
–
–
4,044,936
–
5,148,813
(1,711,904)
–
–
281,663
821,185
–
–
–
–
–
4,405,223
–
5,508,071
7,518,357
Current liabilities
Trade payables
Bills payable
Other payables and accruals
Tax payable
Deferred rental
Lease obligations
Term loans
Unearned revenue
Due to director of a subsidiary (non-trade)
Due to subsidiaries (non-trade)
Bank overdrafts
Net current assets/(liabilities)
23
24
25
26
23
20
20
27
39
Balance Sheets
As at 31 December 2008
Group
Note
Non-current liabilities
Deferred tax liability
Deferred rental
Lease obligations
Term loans
9
24
25
26
Net assets
Equity attributable to equity holders of
the Company
Share capital
Reserves
Minority interests
Total equity
28
2008
$
Company
2007
$
2008
$
65,679
832,143
118,093
858,662
1,874,577
46,483
1,031,857
199,981
1,082,662
2,360,983
21,919
–
–
–
21,919
21,919
–
–
–
21,919
33,008,253
60,452,019
20,141,843
47,122,186
44,615,340
(13,709,855)
30,905,485
2,102,768
33,008,253
35,210,275
24,266,680
59,476,955
975,064
60,452,019
44,615,340
(24,473,497)
20,141,843
–
20,141,843
35,210,275
11,911,911
47,122,186
–
47,122,186
40
2007
$
2008
Group
At 1 January 2008
Net change in fair value adjustment
reserve (Note 29 (b))
Net effect of exchange differences
(Note 29(a))
Net income recognised directly in equity
Net (loss)/profit for the year
Total recognised income and expenses
for the year
Warrants exercised
Dividends on ordinary shares (Note 30)
At 31 December 2008
Attributable to equity holders of the Company
Share
Other
capital Accumulated reserves
Total
(Note 28)
profits
(Note 29)
reserves
$
$
$
$
35,210,275
–
43,114,020 (18,847,340) 24,266,680
–
19,382,749
19,382,749
Minority
interests
Total
equity
$
$
975,064
60,452,019
–
19,382,749
–
–
–
–
210,947
210,947
– 19,593,696 19,593,696
(47,065,206)
– (47,065,206)
68,899
279,846
68,899 19,662,595
1,058,805 (46,006,401)
–
9,405,065
–
44,615,340
(47,065,206) 19,593,696 (27,471,510)
–
–
–
(10,505,025)
– (10,505,025)
(14,456,211)
746,356 (13,709,855)
1,127,704 (26,343,806)
–
9,405,065
– (10,505,025)
2,102,768 33,008,253
41
2007
Group
At 1 January 2007
Net change in fair value adjustment reserve
(Note 29(b))
(Note 29(a))
Net income recognised directly in equity
Net profit/(loss) for the year
Total recognised income and expenses for
the year
Issuance of ordinary shares for quoted
equity investment
Issuance of ordinary shares for cash
Issuance of shares for rights cum
warrants issue (Note 28)
Warrants exercised
At 31 December 2007
Share
Other
capital Accumulated reserves
Total
(Note 28)
profits
(Note 29)
reserves
$
$
$
$
17,764,108
4,865,594
2,350,571
7,216,165
Minority
interests
Total
equity
$
$
1,111,571 26,091,844
–
– (21,229,073) (21,229,073)
– (21,229,073)
–
–
–
–
31,162
31,162
– (21,197,911) (21,197,911)
45,693,290
– 45,693,290
(38,137)
(6,975)
(38,137) (21,236,048)
(98,370) 45,594,920
–
45,693,290 (21,197,911) 24,495,379
2,609,676
8,100,000
6,228,771
507,720
–
35,210,275
–
–
–
–
(136,507) 24,358,872
–
–
(6,228,771)
– (6,228,771)
–
–
–
(1,216,093)
– (1,216,093)
43,114,020 (18,847,340) 24,266,680
–
–
–
–
–
507,720
– (1,216,093)
975,064 60,452,019
42
2,609,676
8,100,000
2008
Company
At 1 January 2008
(Note 29 (b))
Loss for the year
Total recognised income and expenses for the year
Warrants exercised
At 31 December 2008
2007
Company
At 1 January 2007
(Note 29 (b))
Profit for the year
Total recognised income and expenses for the year
Issuance of ordinary shares for quoted equity
investment
Issuance of ordinary shares for cash
Issuance of shares for rights cum warrants issue
(Note 28)
Warrants exercised
At 31 December 2007
Share
Other
capital
Accumulated reserves
Total
(Note 28)
profits
(Note 29)
reserves
$
$
$
$
35,210,275
31,365,660
(19,453,749)
–
–
–
–
9,405,065
44,615,340
–
(45,263,132)
(45,263,132)
(10,505,025)
–
(24,402,497)
19,382,749
–
19,382,749
–
–
(71,000)
Total equity
$
11,911,911
19,382,749
19,382,749
(45,263,132) (45,263,132)
(25,880,383) (25,880,383)
(10,505,025) (10,505,025)
–
9,405,065
(24,473,497) 20,141,843
Share
Other
capital
Accumulated reserves
Total
(Note 28)
profits
(Note 29)
reserves
$
$
$
$
17,764,108
1,726,425
–
–
–
–
37,084,099
37,084,099
2,609,676
8,100,000
–
–
6,228,771
–
507,720
35,210,275
1,775,324
47,122,186
Total equity
$
3,501,749
21,265,857
(21,229,073) (21,229,073) (21,229,073)
–
37,084,099
37,084,099
(21,229,073) 15,855,026
15,855,026
–
–
(6,228,771)
–
(1,216,093)
–
–
–
31,365,660 (19,453,749)
–
–
(6,228,771)
(1,216,093)
–
11,911,911
2,609,676
8,100,000
–
(1,216,093)
507,720
47,122,186
43
Note
Cash flows from operating activities
(Loss)/profit before taxation from continuing operations
Loss before taxation from discontinued operations
Adjustments for:
Share of results of associate
Gain on disposal of subsidiaries
Depreciation of property, plant and equipment
Gain on disposal of plant and equipment (net)
Gain on disposal of land occupancy rights
Fair value changes on derivative financial instrument
Amortisation of land occupancy rights
Impairment of goodwill
Fair value loss on quoted equity investments
Impairment loss on quoted equity investments
Impairment loss on property, plant and equipment
(Write back)/impairment of doubtful debt
Bad debts (recovered)/written off
Amortisation of deferred rental
Stock written off
Interest expense
Interest income
Translation difference
Operating (loss)/profit before working capital changes
Decrease/(increase) in:
Inventories
Trade receivables
Increase/(decrease) in:
Trade payables
Unearned revenue
Bills payable
Other payables and accruals
Due to directors of a subsidiary (non-trade)
Cash generated from operations
6(a)
6(b)
6(a)
6(b)
6(c)
6(c)
6(c)
6(c)
6(b)
24
2008
$
2007
$
(45,189,138)
–
(45,189,138)
48,271,512
(506,448)
47,765,064
29,595
–
568,752
(8,134)
(5,162,698)
–
–
–
1,736,093
44,922,404
453,000
(17,000)
(9,558)
(199,714)
6,941
131,091
(275,626)
(19,890)
(3,033,882)
(18,908)
(24,995,976)
721,133
(15,039,956)
–
(107,350)
2,811
1,758,113
861,305
–
–
38,147
61,536
(166,429)
205,145
393,181
(360,513)
38,966
11,156,269
572,227
1,154,819
690,146
361,099
45,552
(2,115,093)
(751,907)
(52,953)
(580,032)
(17,946)
(80,000)
(2,099,528)
1,979,732
–
(2,014,366)
479,238
(200,000)
9,692,431
44
Note
Interest paid
Interest received
Income taxes paid
Net cash (used in)/generated from operating activities
Cash flows from investing activities
Purchase of property, plant and equipment
Proceeds from disposal of property, plant and equipment
Proceeds from disposal of land occupancy rights
Purchase of quoted equity investments (net)
Liquidation of a subsidiary
Discontinued operations
Cash generated (used in)/generated from investing activities
A
Cash flows from financing activities
Repayment of term loans (net)
Proceeds for issuance of ordinary shares
Proceeds from warrants exercised
Payment of lease obligations
Payment of dividends
Fixed deposits (secured)
Cash used in financing activities
Net (decrease)/increase in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year
31
2008
$
2007
$
(131,091)
274,653
(33,055)
(1,989,021)
(393,181)
360,513
(1,933,226)
7,726,537
(135,264)
772,921
5,660,825
(12,094,922)
–
–
(5,796,440)
(533,768)
25,044,200
–
(9,607,556)
239,204
2,776,086
17,918,166
(224,000)
–
9,405,065
(93,885)
(10,505,025)
753,990
(663,855)
(7,595,215)
8,100,000
507,720
(315,050)
(1,216,093)
(1,557,543)
(2,076,181)
(8,449,316)
19,931,379
11,482,063
23,568,522
(3,637,143)
19,931,379
Note A
During the financial year, the Group acquired property, plant and equipment with an aggregate cost of $135,264 (2007:
$704,706) of which $Nil (2007: $170,938) was acquired by means of finance lease. Cash payments of $135,264 (2007: $533,768)
were made to purchase property, plant and equipment.
45
31 December 2008
1.
Corporate information
The Company is a limited liability Company domiciled and incorporated in Singapore and is listed on the Singapore
Exchange Securities Trading Limited (SGX-ST).
The address of the Company’s registered office and principal place of business is 521 Bukit Batok Street 23, Level 3,
Singapore 659544.
The principal activities of the Company are the provision of management and other services to related companies and
investment holding. The principal activities of the subsidiaries are as disclosed in Note 13.
2.
Summary of significant accounting policies
2.1
Basis of preparation
The consolidated financial statements of the Group and the balance sheet and statement of changes in equity of the
Company have been prepared in accordance with Singapore Financial Reporting Standards (FRS).
The financial statements have been prepared on a historical cost basis except as disclosed in the accounting policies
below.
The financial statements are presented in Singapore Dollars (SGD or $).
The accounting policies have been consistently applied by the Group and the Company and are consistent with those
used in the previous financial year, except for the change in accounting policies discussed below.
2.2
Change in accounting policies
On 1 January 2008, the Group and the Company adopted interpretation of FRS (“INT FRS”) that are mandatory for
application in the current financial year.
References
Description
INT FRS 109 :
Reassessment of Embedded Derivatives
The adoption of the above INT FRS did not have any significant impact to the Group and the Company’s accounting
policies.
46
31 December 2008
2.
Summary of significant accounting policies (cont’d)
2.3
Future changes in accounting policies
The Group and the Company have not adopted the following FRS and INT FRS that have been issued but not yet
effective:
Effective date for
annual periods
beginning on
or after
FRS 1
: - Presentation of Financial Statements – Revised Presentation
- Presentation of Financial Statements – Puttable Financial Instruments
and Obligations Arising on Liquidation
1 January 2009
FRS 23
: Borrowing Costs
1 January 2009
FRS 32
: Financial Instruments: Presentation – Amendments relating to Puttable
Financial Instruments and Obligations Arising on Liquidation
1 January 2009
FRS 39
: Financial Instruments: Recognition and Measurement – Amendments
relating to eligible hedged items
1 July 2009
FRS 101 and FRS 27 : Amendments to FRS 101 and FRS 27 – Cost of an Investment in a
Subsidiary, Jointly Controlled Entity or Associate
1 January 2009
FRS 102
: Share-based Payments – Amendments relating to vesting conditions and
cancellations
1 January 2009
INT FRS 101
: Changes in Existing Decommissioning, Restoration and Similar
Liabilities
1 January 2009
INT FRS 112
: Service Concession Arrangements
1 January 2009
INT FRS 116
: Hedges of a Net Investment in a Foreign Operation
1 October 2008
INT FRS 117
: Distributions of Non-cash Assets to Owners
1 July 2009
47
31 December 2008
2.
2.3
Future changes in accounting policies (cont’d)
The directors expect that the adoption of the above pronouncements will have no material impact to the financial
statements in the period of initial application, except for FRS 1 and FRS 108 as indicated below.
FRS 1 Presentation of Financial Statements – Revised presentation
The revised FRS 1 requires owner and non-owner changes in equity to be presented separately. The statement of
changes in equity will include only details of transactions with owners, with all non-owner changes in equity presented
as a single line. In addition, the revised standard introduces the statement of comprehensive income. It presents all
items of income and expenses recognised in profit or loss, together with all other items of recognised income and
expense, either in one single statement, or in two linked statements. The Company is currently evaluating the format
to adopt.
FRS 108 Operating Segments
FRS 108 requires entities to disclose segment information based on the information reviewed by the entity’s chief
operating decision maker. The impact of this standard on the other segment disclosures is still to be determined. As this
is a disclosure standard, it will have no impact on the financial position and results of the Group when implemented in
2009.
2.4
Basis of consolidation
The consolidated financial statements comprise the financial statements of the Company and its subsidiaries as at the
balance sheet date. The financial statements of the subsidiaries used in the preparation of the consolidated financial
statements are prepared for the same reporting date as the Company. Consistent accounting policies are applied to like
transactions and events in similar circumstances.
All intra-group balances, income and expenses and unrealised gains and losses resulting from intra-group transactions
are eliminated in full.
Acquisitions of subsidiaries are accounted for by applying the purchase method. Identifiable assets acquired and
liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the
acquisition date. Adjustments to those fair values relating to previously held interests are treated as a revaluation and
recognised in equity. Any excess of the cost of business combination over the Group’s share in the net fair value of
the acquired subsidiary’s identifiable assets, liabilities and contingent liabilities is recorded as goodwill on the balance
sheet. Any excess of the Group’s share in the net fair value of the acquired subsidiary’s identifiable assets, liabilities and
contingent liabilities over the cost of business combination is recognised as income in the income statement on the date
of acquisition.
Subsidiaries are consolidated from the date of acquisition, being the date on which the Group obtains control, and
continue to be consolidated until the date that such control ceases.
48
31 December 2008
2.
2.5
Transactions with minority interests
Minority interests represent the portion of profit or loss and net assets in subsidiaries not held by the Group and
are presented separately in the consolidated income statement and within equity in the consolidated balance sheet,
separately from parent shareholders’ equity. Transactions with minority interests are accounted for using the entity
concept method, whereby, transactions with minority interests are accounted for as transactions with equity holders.
On acquisition of minority interests, the difference between the consideration and book value of the share of the net
assets acquired is reflected as being a transaction between owners and recognised directly in equity. Gain or loss on
disposal to minority interests is recognised directly in equity.
2.6
Functional and foreign currency
(i)
Functional currency
The management has determined the currency of the primary economic environment in which the Company
operates i.e. functional currency, to be SGD. Sales prices and major costs of providing goods and services including
major operating expenses are primarily influenced by fluctuations in SGD.
(ii)
Foreign currency transactions
Transactions in foreign currencies are measured in the respective functional currencies of the Company and its
subsidiaries and are recorded on initial recognition in the functional currencies at exchange rates approximating
those ruling at the transaction dates. Monetary assets and liabilities denominated in foreign currencies are translated
at the rate of exchange ruling at the balance sheet date. Non-monetary items that are measured in terms of historical
cost in a foreign currency are translated using the exchange rates as at the dates of the initial transactions. Nonmonetary items measured at fair value in a foreign currency are translated using the exchange rates at the date
when the fair value was determined.
Exchange differences arising on the settlement of monetary items or on translating monetary items at the balance
sheet date are recognised in the income statement except for exchange differences arising on monetary items that
form part of the Group’s net investment in foreign subsidiaries, which are recognised initially in equity as foreign
currency translation reserve in the consolidated balance sheet and recognised in the consolidated income statement
on disposal of the subsidiary.
The assets and liabilities of foreign operations are translated into SGD at the rate of exchange ruling at the balance
sheet date and their income statements are translated at the weighted average exchange rates for the year. The
exchange differences arising on the translation are taken directly to a separate component of equity as foreign
currency translation reserve. On disposal of a foreign operation, the deferred cumulative amount recognised in
equity relating to that particular foreign operation is recognised in the income statement.
49
31 December 2008
2.
2.7
All items of property, plant and equipment are initially recorded at cost. The cost of an item of property, plant and
equipment is recognised as an asset if, and only if, it is probable that future economic benefits associated with the item
will flow to the Group and the cost of the item can be measured reliably.
Subsequent to recognition, property, plant and equipment are measured at cost less accumulated depreciation and any
accumulated impairment losses.
Depreciation of an asset begins when it is available for use and is computed on a straight-line basis over the estimated
useful life of the asset as follows:
Leasehold buildings and factory
Computers and office equipment
Furniture and fittings
Motor vehicles
Showroom renovation
Air-conditioners
Machinery
–
–
–
–
–
–
–
20 to 67 years
3 to 6 years
3 to 6 years
6 years
3 to 8 years
8 years
8 years
Assets under construction are not depreciated as these assets are not yet available for use.
The carrying values of property, plant and equipment are reviewed for impairment when events or changes in
circumstances indicate that the carrying value may not be recoverable.
The residual values, useful life and depreciation method are reviewed at each financial year-end to ensure that the amount,
method and period of depreciation are consistent with previous estimates and the expected pattern of consumption of
the future economic benefits embodied in the items of property, plant and equipment.
An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are
expected from its use or disposal. Any gain or loss arising on derecognition of the asset is included in the income
statement in the year the asset is derecognised.
50
31 December 2008
2.
2.8
Impairment of non-financial assets
The Group assesses at each reporting date whether there is an indication that an asset may be impaired. If any such
indication exists, or when annual impairment assessment for an asset is required, the Group makes an estimate of the
asset’s recoverable amount.
An asset’s recoverable amount is the higher of an asset’s or cash-generating unit’s fair value less costs to sell and its value in
use and is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent
of those from other assets. In assessing value in use, the estimated future cash flows expected to be generated by the asset
are discounted to their present value. Where the carrying amount of an asset exceeds its recoverable amount, the asset
is written down to its recoverable amount.
Impairment losses are recognised in the income statement except for assets that are previously revalued where the
revaluation was taken to equity. In this case the impairment is also recognised in equity up to the amount of any
previous revaluation.
An assessment is made at each reporting date as to whether there is any indication that previously recognised impairment
losses may no longer exist or may have decreased. A previously recognised impairment loss is reversed 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. If that is the case, the carrying amount of the asset is increased to its recoverable amount. That increase
cannot exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss be
recognised previously. Such reversal is recognised in the income statement unless the asset is measured at revalued
amount, in which case the reversal is treated as a revaluation increase.
2.9
Subsidiaries
A subsidiary is an entity over which the Group has the power to govern the financial and operating policies so as to
obtain benefits from its activities.
In the Company’s separate financial statements, investments in subsidiaries are accounted for at cost less any impairment
losses.
51
31 December 2008
2.
2.10 Associates
An associate is an entity, not being a subsidiary or a joint venture, in which the Group has significant influence. This
generally coincides with the Group having 20% or more of the voting power, or has representation on the board of
directors. The associate is equity accounted for from the date the Group obtains significant influence until the Group
ceases to have significant influence over the associate.
The Group’s investments in associates are accounted for using the equity method. Under the equity method, the
investment in associate is measured in the balance sheet at cost plus post-acquisition changes in the Group’s share of net
assets of the associate.
When the Group’s share of losses in an associate equals or exceeds its interest in the associate, the Group does not
recognise further losses, unless it has incurred obligations or made payments on behalf of the associate.
The financial statements of the associate are prepared as of the same reporting date as the Company. Where necessary,
adjustments are made to bring the accounting policies into line with those of the Group.
2.11 Land occupancy rights
Land occupancy rights are stated at cost less accumulated amortisation.
Land occupancy rights are amortised using the straight-line method to write off the cost over the lease term of 50
years.
2.12 Financial assets
Financial assets are recognised on the balance sheet when, and only when, the Group becomes a party to the contractual
provisions of the financial instrument.
When financial assets are recognised initially, they are measured at fair value, plus, in the case of financial assets not at
fair value through profit or loss, directly attributable transaction costs.
A financial asset is derecognised where the contractual right to receive cash flows from the asset has expired. On
derecognition of a financial asset in its entirety, the difference between the carrying amount and the sum of the
consideration received and any cumulative gain or loss that has been recognised directly in equity is recognised in the
income statement.
52
31 December 2008
2.
2.12 Financial assets (cont’d)
(a)
Financial assets at fair value through profit or loss
Financial assets held for trading are classified as financial assets at fair value through profit or loss. Financial assets
held for trading are derivatives (including separated embedded derivatives) or financial assets acquired principally
for the purpose of selling in the near term.
Subsequent to initial recognition, financial assets at fair value through profit or loss are measured at fair value. Any
gains or losses arising from changes in fair value of the financial assets are recognised in the income statement. Net
gains or net losses on financial assets at fair value through profit or loss includes unrealised fair value changes in
quoted equity investment.
(b)
Loans and receivables
Financial assets with fixed or determinable payments that are not quoted in an active market are classified as loans
and receivables. Subsequent to initial recognition, loans and receivables are measured at amortised cost using the
effective interest method. Gains and losses are recognised in the income statement when the loans and receivables
are derecognised or impaired, and through the amortisation process.
(c)
Available-for-sale financial assets
Available-for-sale financial assets are financial assets that are not classified in any of the other categories. After
initial recognition, available-for-sale financial assets are measured at fair value. Any gains or losses from changes
in fair value of the financial asset are recognised directly in the fair value adjustment reserve in equity, except
that impairment losses, foreign exchange gains and losses on monetary instruments and interest calculated using
the effective interest method are recognised in the income statement. The cumulative gain or loss previously
recognised in equity is recognised in the income statement when the financial asset is derecognised.
Investments in equity instruments whose fair value cannot be reliably measured are measured at cost less impairment
loss.
53
31 December 2008
2.
2.13 Impairment of financial assets
The Group assesses at each balance sheet date whether there is any objective evidence that a financial asset or group of
financial assets is impaired.
(a)
Assets carried at amortised cost
If there is objective evidence that an impairment loss on financial assets carried at amortised cost has been incurred,
the amount of the loss is measured as the difference between the asset’s carrying amount and the present value of
estimated future cash flows discounted at the financial asset’s original effective interest rate. The carrying amount
of the asset is reduced through the use of an allowance account. The amount of the loss is recognised in the income
statement.
When the asset becomes uncollectible, the carrying amount of impaired financial assets is reduced directly or if
an amount was charged to the allowance account, the amounts charged to the allowance account are written off
against the carrying value of the financial asset.
To determine whether there is objective evidence that an impairment loss on financial assets has been incurred, the
Group considers factors such as the probability of insolvency or significant financial difficulties of the debtor and
default or significant delay in payments.
If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively
to an event occurring after the impairment was recognised, the previously recognised impairment loss is reversed.
Any subsequent reversal of an impairment loss is recognised in the income statement, to the extent that the carrying
value of the asset does not exceed its amortised cost at the reversal date. The amount of reversal is recognised in
the income statement.
(b)
Assets carried at cost
If there is objective evidence (such as significant adverse changes in the business environment where the issuer
operates, probability of insolvency or significant financial difficulties of the issuer) that an impairment loss on
financial assets carried at cost has been incurred, the amount of the loss is measured as the difference between the
asset’s carrying amount and the present value of estimated future cash flows discounted at the current market rate
of return for a similar financial asset. Such impairment losses are not reversed in subsequent periods.
(c)
Significant or prolonged decline in fair value below cost, significant financial difficulties of the issuer or obligor,
and the disappearance of an active trading market are considerations to determine whether there is objective
evidence that investment securities classified as available-for-sale financial assets are impaired.
54
31 December 2008
2.
2.13 Impairment of financial assets (cont’d)
(c)
Available-for-sale financial assets (cont’d)
If an available-for-sale financial asset is impaired, an amount comprising the difference between its cost (net of
any principal payment and amortisation) and its current fair value, less any impairment loss previously recognised
in the income statement, is transferred from equity to the income statement. Reversals of impairment loss in
respect of equity instruments are not recognised in the income statement. Reversals of impairment losses on
debt instruments are reversed through the income statement, if the increase in fair value of the instrument can be
objectively related to an event occurring after the impairment loss was recognised in the income statement.
2.14 Cash and cash equivalents
Cash and cash equivalents comprise of fixed deposits, cash and bank balances and bank overdrafts, which are subject to
an insignificant risk of changes in value. Bank overdrafts form an integral part of the Group’s cash management.
2.15 Inventories
Inventories are stated at the lower of cost and net realisable value. Costs incurred in bringing the inventories to their
present locations and conditions are accounted for as follows:
-
Raw materials: purchase costs determined on a first-in first-out basis;
Finished goods and work-in-progress: costs of direct materials and labour and a proportion of manufacturing
overheads based on normal operating capacity. These costs are assigned on a first-in first-out basis for wholesale
businesses and on a weighted average basis for retail businesses.
Allowance is made for deteriorated, damaged, obsolete and slow moving inventories.
2.16 Provisions
Provisions are recognised when the Group has a present obligation as a result of a past event, it is probable that an
outflow of economic resources will be required to settle the obligation and the amount of the obligation can be estimated
reliably.
Provisions are reviewed at each balance sheet date and adjusted to reflect the current best estimate. If it is no longer
probable that an outflow of economic resources will be required to settle the obligation, the provision is reversed. If the
effect of the time value of money is material, provisions are discounted using a current pre tax rate that reflects, where
appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage
of time is recognised as a finance cost.
55
31 December 2008
2.
2.17 Financial liabilities
Financial liabilities are recognised on the balance sheet when, and only when, the Group becomes a party to the
contractual provisions of the financial instrument.
Financial liabilities are recognised initially at fair value, plus, in the case of financial liabilities other than derivatives,
directly attributable transaction costs.
Subsequent to initial recognition, all financial liabilities are measured at amortised cost using the effective interest
method, except for derivatives, which are measured at fair value.
A financial liability is derecognised when the obligation under the liability is extinguished. For financial liabilities other
than derivatives, gains and losses are recognised in the income statement when the liabilities are derecognised, and
through the amortisation process. Any gains or losses arising from changes in fair value of derivatives are recognised in
the income statement. Net gains or losses on derivatives include exchange differences.
2.18 Deferred rental
Deferred rental relates to the difference between the selling price and the fair value of the property under a sale and
leaseback transaction. This is amortised on a straight line basis over the term of the lease.
2.19 Borrowing costs
Borrowing costs are recognised in the income statement as incurred except to the extent that they are capitalised.
Borrowing costs are capitalised if they are directly attributable to the acquisition, construction or production of a
qualifying asset. Capitalisation of borrowing costs commences when the activities to prepare the asset for its intended
use or sale are in progress and the expenditures and borrowing costs are incurred. Borrowing costs are capitalised until
the assets are ready for their intended use or sale.
2.20 Employee benefits
(a)
Defined contribution plan
As required by law, the Singapore companies in the Group make contributions to the state pension scheme, the
Central Provident Fund (“CPF”). CPF contributions are recognised as compensation expense in the same period
as the employment that gives rise to the contributions.
(b)
Employee leave entitlement
Employee entitlements to annual leave are recognised when they accrue to employees. The estimated liability for
leave is recognised for services rendered by employees up to the balance sheet date.
56
31 December 2008
2.
2.20 Employee benefits (cont’d)
(c)
Pension scheme
The subsidiary in the People’s Republic of China contributes to defined contribution pension schemes.
Contributions are charged to the income statement as they become payable in accordance with the rules of the
scheme.
2.21 Leases
(a)
As lessee
Finance leases, which transfer to the Group substantially all the risks and rewards incidental to ownership of
the leased item, are capitalised at the inception of the lease at the fair value of the leased asset or, if lower, at the
present value of the minimum lease payments. Any initial direct costs are also added to the amount capitalised.
Lease payments are apportioned between the finance charges and reduction of the lease liability so as to achieve
a constant rate of interest on the remaining balance of the liability. Finance charges are charged to the income
statement. Contingent rents, if any, are charged as expenses in the periods in which they are incurred.
Capitalised leased assets are depreciated over the shorter of the estimated useful life of the asset and the lease term,
if there is no reasonable certainty that the Group will obtain ownership by the end of the lease term.
Operating lease payments are recognised as an expense in the income statement on a straight-line basis over the
lease term. The aggregate benefit of incentives provided by the lessor is recognised as a reduction of rental expense
over the lease term on a straight-line basis.
(b)
As lessor
Leases where the Group retains substantially all the risks and rewards of ownership of the asset are classified as
operating leases. Initial direct costs incurred in negotiating an operating lease are added to the carrying amount of
the leased asset and recognised over the lease term on the same bases as rental income. The accounting policy for
rental income is set out in Note 2.22(f).
57
31 December 2008
2.
2.22 Revenue
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue
can be reliably measured. Revenue is measured at the fair value of consideration received or receivable.
(a)
Sale of goods
Sales are recognised (net of goods and services tax and discounts) when goods have been delivered and accepted
by the customer.
(b)
Rendering of services
Service income is recognised when services are rendered.
Unearned revenue relates to service packages entered into with the customer to the extent that services have not
been rendered and income has not been recognised.
(c)
Management fee
Management fee income is recognised when management services are rendered.
(d)
Dividend income
Dividend income is recognised when the Group’s right to receive payment is established.
(e)
Interest income
Interest income is recognised using the effective interest method.
(f)
Rental income
Rental income on the sublet of a leased property is accounted for on a straight-line basis over the lease terms. The
aggregate costs of incentives provided to leases are recognised as a reduction of rental income over the lease term
on a straight-line basis.
58
31 December 2008
2.
2.23 Income tax
(a)
Current tax
Current tax assets and liabilities for the current and prior periods are measured at the amount expected to be
recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are
those that are enacted or substantially enacted by the balance sheet date.
Current taxes are recognised in the income statement except that tax relating to items recognised directly in equity
is recognised directly in equity.
(b)
Deferred tax
Deferred income tax is provided using the liability method on temporary differences at the balance sheet date
between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.
Deferred tax assets and liabilities are recognised for all temporary differences, except:
–
Where the deferred tax arises from the initial recognition of an asset or liability in a transaction that is not
a business combination and, at the time of the transaction affects neither the accounting profit nor taxable
profit or loss;
–
In respect of temporary differences associated with investments in subsidiaries and associates, where the
timing of the reversal of the temporary differences can be controlled by the Group and it is probable that the
temporary differences will not reverse in the foreseeable future; and
–
In respect of deductible temporary differences and carry-forward of unused tax credits and unused tax losses,
if it is not probable that taxable profit will be available against which the deductible temporary differences
and carry-forward of unused tax credits and unused tax losses can be utilised.
The carrying amount of deferred tax asset is reviewed at each balance sheet date and reduced to the extent that it is
no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be
utilised. Unrecognised deferred tax assets are reassessed at each balance sheet date and are recognised to the extent
that it has become probable that future taxable profit will allow the deferred tax asset to be utilised.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset
is realised or the liability is settled, based on tax rates and tax laws that have been enacted or substantively enacted
at the balance sheet date.
Deferred taxes are recognised in the income statement except that deferred tax relating to items recognised directly
in equity is recognised directly in equity and deferred tax arising from a business combination is adjusted against
goodwill on acquisition.
59
31 December 2008
2.
2.23 Income tax (cont’d)
(c)
Sales tax
Revenues, expenses and assets are recognised net of the amount of sales tax except:
r
8IFSFUIFTBMFTUBYJODVSSFEPOBQVSDIBTFPGBTTFUTPSTFSWJDFJTOPUSFDPWFSBCMFGSPNUIFUBYBUJPOBVUIPSJUZ
in which case the sales tax is recognised as part of the cost of acquisition of the asset or as part of the expense
item as applicable; and
r
3FDFJWBCMFTBOEQBZBCMFTUIBUBSFTUBUFEXJUIUIFBNPVOUPGTBMFTUBYJODMVEFE
The net amount of sales tax recoverable from, or payable to, the taxation authority is included as part of receivables
or payables in the balance sheet.
2.24 Segments
A business segment is a distinguishable component of the Group that is engaged in providing products or services that
are subject to risks and returns that are different from those of other business segments. A geographical segment is a
distinguishable component of the Group that is engaged in providing products or services within a particular economic
environment and that is subject to risks and returns that are different from those of components operating in other
economic environments.
Segment information is presented in respect of the Group’s business and geographical segments.
2.25 Share capital and share issue expenses
Proceeds from issuance of ordinary shares are recognised as share capital in equity. Incremental costs directly attributable
to the issuance of ordinary shares are deducted against share capital.
60
31 December 2008
3.
Significant accounting judgements and estimates
The preparation of the Group’s financial statements requires management to make judgements, estimates and assumptions
that affect the reported amounts of revenues, expenses, assets and liabilities at the reporting date. However, uncertainty
about these assumptions and estimates could result in outcomes that could require a material adjustment to the carrying
amount of the asset or liability affected in the future.
(a)
Judgements made in applying accounting policies
In the process of applying the Group’s accounting policies, management has made the following judgements, apart
from those involving estimations, which has the most significant effect on the amounts recognised in the financial
statements:
(i)
Income taxes
The Group has exposure to income taxes in numerous jurisdictions. Significant judgement is involved in
determining the Group-wide provision for income taxes. There are certain transactions and computations
for which the ultimate tax determination is uncertain during the ordinary course of business. The Group
recognises liabilities for expected tax issues based on estimates of whether additional taxes will be due. Where
the final tax outcome of these matters is different from the amounts that were initially recognised, such
differences will impact the income tax and deferred tax provisions in the period in which such determination
is made. The carrying amount of the Group’s tax payables and deferred tax liabilities at 31 December 2008
was $1,790,497 (2007: $1,025,484) and $65,679 (2007: $46,483) respectively.
(ii)
Finance lease - as lessee
The Group has entered into finance leases for its motor vehicles. The Group has determined, based on an
evaluation of the terms and conditions of the arrangements that the risks and rewards incidental to ownership
of the leased items have been transferred to the Group and so accounts for the contracts as finance leases.
(b)
Key sources of estimation uncertainty
The key assumptions concerning the future and other key sources of estimation uncertainty at the balance sheet
date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities
within the next financial year are discussed below.
(i)
Useful lives of property, plant and equipment
Property, plant and equipment are depreciated on a straight-line basis over their estimated useful lives.
Management estimates the useful lives of these property, plant and equipment to be within 3 to 67 years.
The carrying amount of the Group’s property, plant and equipment at 31 December 2008 was $3,154,243
(2007: $4,504,807). Changes in the expected level of usage and technological developments could impact the
economic useful lives and the residual values of these assets, therefore future depreciation charges could be
revised.
61
31 December 2008
3.
Significant accounting judgements and estimates (cont’d)
(b)
Key sources of estimation uncertainty (cont’d)
(ii)
Impairment of non-financial assets
The Group assesses whether there are any indicators of impairment for all non-financial assets at each
reporting date. Goodwill and other indefinite life intangibles are tested for impairment annually and at
other times when such indicators exist. Other non-financial assets are tested for impairment when there are
indicators that the carrying amounts may not be recoverable.
When value in use calculations are undertaken, management must estimate the expected future cash flows
from the asset or cash-generating unit and choose a suitable discount rate in order to calculate the present
value of those cash flows.
(iii) Impairment of loans and receivables
The Group assesses at each balance sheet date whether there is any objective evidence that a financial asset is
impaired. To determine whether there is objective evidence of impairment, the Group considers factors such
as the probability of insolvency or significant financial difficulties of the debtor and default or significant
delay in payments.
Where there is objective evidence of impairment, the amount and timing of future cash flows are estimated
based on historical loss experience for assets with similar credit risk characteristics. The carrying amount of the
Group’s loans and receivable at the balance sheet date is disclosed in Note 35 to the financial statements.
4.
Revenue
Group
Sales of goods
Service income
Consultancy and management fee
Dividend income
62
2008
$
2007
$
37,270,901
267,722
12,000
210,664
41,217,389
410,480
663,338
11,979,304
37,761,287
54,270,511
31 December 2008
5.
Personnel expenses
Group
2008
$
Wages and salaries
Pension contributions
Other personnel expenses
2007
$
3,511,764
335,317
799,577
3,332,916
402,761
927,585
4,646,658
4,663,262
These include the amount shown as directors’ and executive officers’ remuneration and fee in Note 6(d).
6.
(Loss)/profit from operations
This is determined after charging/crediting the following:
Group
(a)
2007
$
–
8,134
17,160
–
1,078,005
17,000
89,553
–
80,886
1,290,738
24,995,976
15,420,320
1,847,158
45,876
385,176
–
89,852
107,350
164,384
43,056,092
–
568,752
–
7,442
–
71,799
116,206
764,199
2,811
721,133
380,364
61,536
38,147
119,312
247,709
1,571,012
Other income:
Gain on disposal of subsidiaries
Gain on disposal of property, plant and equipment
Realised gain on disposal of quoted equity investment
Gain on liquidation of a subsidiary
Rental income
Write back of allowance for doubtful debts
Display incentive
Fair value gain on derivative financial instrument
Others
(b)
2008
$
Other operating expenses:
Amortisation of land use rights
Depreciation of property, plant and equipment
Loss on disposal of plant and equipment
Bad debts written off
Impairment of doubtful debt
Closure of outlets
Others
63
31 December 2008
6.
(Loss)/profit from operations (cont’d)
Group
2008
$
(c)
Other non-operating expenses:
Impairment loss of property
Unrealised fair value loss on quoted equity investments
Realised fair value loss on quoted equity investments
Impairment of goodwill
Impairment loss on quoted equity investments
(d)
453,000
1,736,093
694,541
–
44,922,404
47,806,038
–
861,305
–
1,758,113
–
2,619,418
–
108,414
607,608
131,978
125,000
315,589
3,381,677
673,108
115,681
109,667
368,158
3,613,291
5,162,698
–
Other expenses
Non-audit fees paid to auditors
Directors’ remuneration
- directors of the Company
- directors of the subsidiaries
Directors’ fees
Executive officers’ remuneration
Operating lease expenses
(e)
2007
$
Land compensation
Land compensation
This relates to amounts received by a subsidiary for the disposal of its land occupancy rights (Note 12).
7.
Directors’ remuneration
Number of directors of the Company in remuneration bands
2008
$500,000 and above
$250,000 to $499,000
0 to $250,000
64
2007
1
–
6
1
–
4
7
5
31 December 2008
8.
Finance expenses
Group
Interest expense
- bank overdrafts
- bank term loans
- lease obligations
- brokerage
Others
9.
2008
$
2007
$
39,729
37,256
12,787
41,319
24,386
155,477
178,611
69,021
11,467
134,082
7,993
401,174
Income tax expense
Group
2008
$
Current tax
- current year
- (over)/under provision in respect of prior year
Deferred tax
- current year
- under provision in respect of prior year
- effect of reduction in tax rate
2007
$
924,267
(126,200)
2,074,029
9,046
–
19,196
–
817,263
26,116
65,012
(4,059)
2,170,144
The reconciliation of the tax expense and the product of accounting (loss)/profit multiplied by the applicable corporate
tax rate for the years ended 31 December 2008 and 2007 was as follows:
Accounting (loss)/profit
Tax at the statutory rate applicable to profits in the
countries where the Group operates
Non-deductible expenses/charges
Income not subject to tax
Effect of reduction in tax rate
Utilisation of previously unrecognised tax benefit
Deferred tax asset not recognised
Effect of partial tax exemption
(Over)/under provision in respect of prior year
Others
(45,189,138)
48,271,512
(7,805,438)
10,353,283
(1,294,510)
–
(237,569)
14,277
(108,126)
(107,004)
2,350
817,263
8,688,872
1,193,780
(8,124,037)
(4,059)
–
382,455
(40,664)
74,058
(261)
2,170,144
65
31 December 2008
9.
Income tax expense (cont’d)
The Group has unutilised tax losses and capital allowances of approximately $79,000 (2007: $1,438,000) available for offset
against future taxable profits, subject to the agreement of the tax authorities and compliance with relevant provisions of the
tax legislation of the respective countries in which the subsidiaries operate. The potential deferred tax assets arising from these
unutilised tax losses have not been recognised in the financial statements in accordance with the Group’s accounting policy
in Note 2.
Group
Deferred taxation at 31 December relates to the following:
Consolidated balance sheet
2008
2007
$
$
Deferred tax asset
Differences in depreciation
Unutilised tax losses
Total deferred tax asset
–
–
–
–
–
–
–
–
Deferred tax liability
Differences in depreciation
Provisions
Total deferred tax liability
65,679
–
65,679
46,483
–
46,483
–
19,196
Deferred income tax
10.
Consolidated income statement
2008
2007
$
$
19,196
(11,248)
(75,821)
–
–
(87,069)
Earnings per share
Basic earnings per share amounts are calculated by dividing (loss)/profit for the year from continuing operations
attributable to ordinary equity holders of the parent by the weighted average number of ordinary shares outstanding
during the financial year.
Diluted earnings per share amounts are calculated by dividing (loss)/profit for the year from continuing operations
attributable to ordinary equity holders of the parent by the weighted average number of ordinary shares outstanding
during the financial year plus the weighted average number of ordinary shares that would be issued on the conversion
of all the existing warrants of the Company into ordinary shares.
66
31 December 2008
10.
Earnings per share (cont’d)
The following tables reflect the profit and loss and share data used in the computation of basic and diluted earnings per
share for the years ended 31 December.
Group
2008
2007
$
$
Net (loss)/profit attributable to shareholders from
(a) continuing operations
(b) discontinued operations
(47,065,206)
–
46,199,738
(506,448)
(47,065,206)
45,693,290
Number of Shares
2008
2007
Weighted average number of ordinary shares for the calculation
of basic earnings per share
383,872,665
274,985,280
Adjusted weighted average number of ordinary shares for the
calculation of diluted earnings per share
394,632,896
292,097,978
67
31 December 2008
11.
Leasehold
buildings
Group
$
Cost
At 1.1.2007
21,321,194
Additions
15,600
Disposals
(7,103,475)
Attributable to
discontinued
operations
(10,223,502)
Translation
difference
–
At 31.12.2007 and
1.1.2008
4,009,817
Additions
–
Disposals
(1,165,495)
Translation
difference
34,277
Written off
–
At 31.12.2008
2,878,599
Accumulated
depreciation and
impairment loss
At 1.1.2007
5,033,344
Charge for the year
118,287
Disposals
(72,280)
Attributable to
discontinued
operations
(4,348,646)
Translation
difference
(257)
At 31.12.2007 and
1.1.2008
730,448
Charge for the year
42,964
Disposals
(564,452)
Translation
difference
16,600
Written off
–
Impairment loss
453,000
At 31.12.2008
678,560
Net book value
2,200,039
At 31.12.2008
3,279,369
At 31.12.2007
68
Factory
$
Computers
and office Furniture
equipment and fittings
$
$
Motor
vehicles
$
$
$
2,927,564 2,179,927 3,452,396
116,991
170,938
96,022
(532,096) (139,959) (203,106)
278,525
56,648
(5,600)
2,672,692
26,596
(560,315)
–
90,744
–
40,295,282
704,706
(8,727,738)
(6,099,766) (353,675) (2,195,695) (1,217,050) (2,113,567)
(153,068)
(16,000)
–
(22,372,323)
–
–
–
–
–
957,523
66,081
(23,181)
–
–
–
3,760
(478)
3,282
2,126,733
12,170
(63,644)
90,266
–
(93,024)
9,903,209
135,264
(1,588,769)
–
–
167,774
60,401
(1,537,183)
598,477
2,758
–
–
105,641
(1,561,651)
6,993,694
2,351,076 1,631,023 2,724,555
63,944
131,207
188,929
(326,405) (104,215) (100,162)
251,641
18,238
(1,867)
2,371,555
82,822
(353,081)
–
–
–
18,015,109
721,133
(1,135,918)
(2,614,185) (298,143) (1,852,536) (1,051,789) (1,874,517)
(150,777)
(14,060)
–
(12,204,653)
1,507
–
2,614,185 1,037,730
–
117,706
– (177,908)
–
–
719
(24,468)
294,011
1,535
993,856 1,231,745
–
43,148
(135,005)
(86,820)
–
176,505
4,197
(12,928)
–
–
–
–
– 1,000,423
316,764
9,668
(8,672)
$
Total
$
6,099,766 1,363,218
–
131,167
– (183,187)
$
Showroom
Air
Construction
renovation conditioners Machinery in progress
7,486
–
866,337
(54)
–
–
1,188,073
–
–
–
–
679,385
136,188
(15,176)
237,614
78,735
(5,320)
606,172
113,534
(88,146)
–
–
–
–
–
–
–
800,397
41
(24,468)
–
286,602
7,059
–
(11,016)
–
–
–
627,603 1,039,497
–
–
200,026
278,138
7,409
79,150
238,734
387,684
938,805
150,562
(49,870)
148,576
292,940
–
2,731
117,235
18,986
(5,995)
2,088,743
27,783
(440,505)
–
–
–
5,398,402
568,752
(1,169,464)
–
–
–
130,226
61,382
(1,460,837)
–
276,566
–
–
–
–
85,082
(1,496,321)
453,000
3,839,451
37,548
59,270
321,911
37,990
–
90,266
3,154,243
4,504,807
31 December 2008
11.
Property, plant and equipment (Cont’d)
Computers
and office
equipment
$
Furniture
and fittings
$
Air
conditioners
$
Total
$
67,791
(67,791)
82,493
–
–
133,176
–
–
56,648
67,791
(67,791)
272,317
At 31.12.2007 and 1.1.2008
Written off
82,493
(1,808)
133,176
–
56,648
–
272,317
(1,808)
At 31.12.2008
80,685
133,176
56,648
270,509
Company
Cost
At 1.1.2007
Written off
Additions
Accumulated depreciation
At 1.1.2007
Written off
Charge for the year
67,791
(67,791)
8,016
–
–
6,625
–
–
3,215
67,791
(67,791)
17,856
At 31.12.2007 and 1.1.2008
Written off
Charge for the year
8,016
(602)
27,196
6,625
–
19,024
3,215
–
8,093
17,856
(602)
54,313
At 31.12.2008
34,610
25,649
11,308
71,567
Net book value
At 31.12.2008
46,076
107,527
45,340
198,942
At 31.12.2007
74,477
126,551
53,433
254,461
Assets held under finance leases
The carrying amount of motor vehicles held under finance leases as at 31 December 2008 was $202,823
(2007: $351,202).
Leased assets are pledged as security for the related finance lease liabilities.
69
31 December 2008
11.
Property, plant and equipment (Cont’d)
Assets pledged as security
In addition to assets held under finance leases, the Group’s leasehold building with a carrying amount of $2,200,039
(2007: $2,696,004) is subject to a first charge for term loans and bank overdraft as disclosed in Note 26 and Note 27.
Impairment of assets
During the financial year, a subsidiary of the Group within the beauty segment, Shine @ Spring Pte Ltd carried out a
valuation of its property. An impairment loss of $453,000 (2007: $Nil), representing the write down of the property was
recognised in the financial year ended 31 December 2008.
12.
Land occupancy rights
Group
2008
$
2007
$
Cost
At beginning of year
Translation difference
Disposal
498,127
–
(498,127)
685,473
14
–
Less: Accumulated amortisation
–
–
685,487
(187,360)
At end of year
–
498,127
Movements in accumulated amortisation during the financial year:
At beginning of year
(Written off)/amortisation during the year
At end of year
187,360
(187,360)
–
184,549
2,811
187,360
A subsidiary had land use rights over two plots of state-owned land in the People’s Republic of China (“PRC”) where
the subsidiary’s manufacturing and storage facilities reside. The land used rights were disposed during the current year
when they were acquired by the PRC government authorities.
70
31 December 2008
13.
Investment in subsidiaries
Group
(a)
2008
$
2007
$
Unquoted equity shares, at cost
At beginning of the year
Disposal during the year
Liquidation during the year
Addition during the year
12,715,432
–
–
–
13,458,335
(5,700,000)
(678,600)
1
Capital contribution during the year
12,715,432
–
7,079,736
5,635,696
Impairment losses
12,715,432
(7,589,626)
12,715,432
(1,968,977)
5,125,806
10,746,455
Subsidiaries comprise:
Carrying amount of investments
Movement in impairment loss:
Balance at beginning of year
Impairment during the year
Attributable to discontinued operations
Attributable to liquidated subsidiary
1,968,977
5,620,649
–
–
1,806,450
868,077
(100,000)
(605,550)
Balance at end of year
7,589,626
1,968,977
71
31 December 2008
13.
Investment in subsidiaries (cont’d)
(b)
The Company and the Group had the following subsidiaries as at 31 December:
Name
Country of
incorporation Principal activities
Proportion (%) of
ownership interest
2008
2007
Held by the Company
Novena Investment Pte Ltd*
Singapore
Investment holding
100
100
Novena Strategic Investments Pte Ltd*
Singapore
Investment holding
100
100
Shine @ Spring Pte Ltd (formerly
known as Beaute Spring Pte Ltd)*
Singapore
Retailing of beauty and personal
care products
100
100
Fasta International Pte Ltd *
Singapore
Retailing of beauty and personal
care products
100
100
Chuan Seng Leong Pte Ltd *
Singapore
Distributing and wholesaling of
household, beauty and personal
care products
80
80
People’s
Republic of
China
Manufacture and retail of office,
household and custom-made
furniture
75
75
B.S.P. Global Pte Ltd *
Singapore
Provision of beauty and personal
care services and sales of beauty
and personal care products
100
100
Niclas International Pte Ltd *
Singapore
Retailer, importer and distributor
of beauty and personal care
products
100
100
Held by subsidiaries
Suzhou Novena Furniture
Co. Ltd **
72
31 December 2008
13.
Investment in subsidiaries (cont’d)
*
**
Audited by Ernst & Young LLP, Singapore.
Audited by Suzhou Kaicheng Certified Public Accountants, PRC.
Subsidiaries not audited by Ernst & Young LLP, Singapore, are not significant as defined under Listing Rule 718
of the Singapore Exchange Listing Manual.
14.
Investment in associate
Group
(a)
Investment in associate comprise:
Unquoted equity shares, at cost
Share of reserves
2008
$
2007
$
237,250
(237,250)
237,250
(207,655)
Carrying amount
(b)
–
29,595
Details of the associate company at the end of the financial year are as follows:
Name
Shenzhen Calo Enersave Furniture
Co. Ltd *
*
Country of
incorporation Principal activities
People’s
Republic of
China
Manufacture and retail of office,
household and custom-made
furniture
Proportion (%) of
ownership interest
2008
2007
26
26
Audited by Yuehua Certified Public Accountants Co. Ltd,Shenzhen, PRC. The associate company is not
significant as defined under Listing Rule 718 of the Singapore Exchange Listing Manual.
73
31 December 2008
14.
Investment in associate (cont’d)
The summarised financial information of the associate, not adjusted for the proportion of ownership interest held by
the Group, is as follows:
Group
2008
2007
$
$
Assets and liabilities:
Total assets
2,457,277
1,870,425
Total liabilities
2,103,809
1,362,875
Results
Revenue
1,342,315
2,526,446
(Loss)/profit for the year
15.
(182,800)
72,723
Group and Company
2008
2007
$
$
Non-current
14,190,918
Group
2008
$
26,264,832
Company
2007
$
2008
$
2007
$
3,616,323
509,411
820,820
Current
Financial assets at fair value through profit and loss
74
509,411
31 December 2008
15.
Quoted equity investments (Cont’d)
Impairment loss (available-for-sale financial assets)
During the financial year, the Group recognised in the income statement for the year ended 31 December 2008 a total
amount of impairment loss of $44,922,404 (2007: $Nil) pertaining to quoted equity investments to record the writedown in the carrying value of these quoted equity investments. This amount includes an amount of $19,588,749 relating
to fair value adjustment that was recorded in fair value adjustment reserve in equity in prior year.
16.
Due from a subsidiary (non-trade)
The balance is stated at cost and has no fixed repayment terms. It is unsecured, non-interest bearing and is intended as
quasi-equity.
17.
Inventories
Group
2008
$
Balance sheet:
Raw materials
Work-in-progress
Finished goods
Income statement:
Inventories recognised as an expense
Inclusive of the following debit:
- inventories written-down
2007
$
151,923
7,028
5,176,715
172,816
54,332
5,687,686
5,335,666
5,914,834
6,941
205,145
The reversal of write-down of inventories was made when the related inventories were sold below their carrying
amounts.
75
31 December 2008
18.
Trade receivables
Group
2008
$
Trade receivables
Allowance for doubtful debts
Company
2007
$
2,971,107
(21,147)
2,949,960
2008
$
4,116,368
(38,147)
4,078,221
2007
$
–
43,028
–
–
–
43,028
Trade receivables are non-interest bearing and are generally on 30 to 90 days’ terms. They are recognised at their
original invoice amounts which represents their fair values on initial recognition.
As at 31 December 2008, RMB 1,144,376 (2007: RMB 2,980,000) equivalent to approximately $242,608 (2007: $601,960)
is included in trade receivables for the Group.
Receivables that are past due but not impaired
The Group and Company have trade receivables amounting to $486,626 (2007: $758,811) and $Nil (2007: $Nil)
respectively, that are past due at the balance sheet date but not impaired. These receivables are unsecured and the
analysis of their aging at the balance sheet date is as follows:
Group
2008
$
2007
$
347,597
406,909
–
–
30 to 60 days
80,593
96,582
–
–
61-90 days
35,415
240,603
–
–
More than 90 days
23,021
41,717
–
–
486,626
758,811
–
–
Trade receivables past due:
Less than 30 days
76
Company
2008
$
2007
$
31 December 2008
18.
Trade receivables (Cont’d)
Receivables that are impaired
The Group’s trade receivables that are impaired at the balance sheet date and the movement of the allowance accounts
used to record the impairment are as follows:
Group
Collectively impaired
Individually impaired
2008
2007
2008
2007
$
$
$
$
Trade receivables – nominal amounts
–
–
21,147
38,147
Less: Allowance for impairment
–
–
(21,147)
(38,147)
–
–
–
–
At 1 January
–
113,640
38,147
–
(Write-back)/charge for the year
–
–
Attributable to discontinued operations
–
At 31 December
–
Movement in allowance accounts:
(17,000)
(113,640)
–
38,147
–
–
21,147
38,147
Trade receivables that are individually determined to be impaired at the balance sheet date relate to debtors that are in
significant financial difficulties and have defaulted on payments. These receivables are not secured by any collateral or
credit enhancements.
19.
Group
2008
$
Company
2007
$
2008
$
2007
$
Deposits
830,210
1,183,409
20,000
20,000
Other receivables
578,719
948,953
396,714
676,532
Prepayments
111,269
77,983
43,967
4,250
1,520,198
2,210,345
460,681
700,782
77
31 December 2008
20.
Due from/(to) subsidiaries (non-trade)
Due to director of a subsidiary (non-trade)
Except as disclosed below, these balances are unsecured, interest-free and are repayable on demand.
Due from subsidiary (non-trade)
An amount of $400,000 (2007: $400,000) due from a subsidiary is unsecured, bears interest at 3% per annum
(2007: 3%).
21.
Fixed deposits
Group
2008
$
Company
2007
$
(Note 39)
2008
$
2007
$
Secured
2,451,060
3,205,050
–
–
Unsecured
9,659,024
18,295,050
1,151,070
9,242,046
12,110,084
21,500,100
1,151,070
9,242,046
Secured fixed deposits have been pledged with banks to secure performance guarantees, bank loans, bills payable and
bank overdrafts granted by the banks.
Fixed deposits are made for varying periods of between 7 days to 3 months, depending on the immediate cash
requirements of the Group, and earn interests at the respective short-term deposit rates, ranging from 0.23% to 3.15%
(2007: 0.95% to 3.90%) per annum.
22.
Trade payables
Trade payables are non-interest bearing and are normally settled on 30- 90 day terms. As at 31 December 2008, RMB
1,199,960 (2007: RMB 2,038,000) equivalent to approximately $254,392 (2007: $411,676) are included in trade payables
for the Group.
78
31 December 2008
23.
Other payables and accruals, and unearned revenue
Group
Company
2008
$
2007
$
806,182
207,642
275,428
2,308
22,208
–
–
Other payables
213,242
94,830
9,764
6,235
Rental deposits received
329,350
285,024
–
–
1,190,298
1,208,244
217,406
281,663
Accrued operating expenses
Customers’ deposits
2008
$
2007
$
645,398
Unearned revenue of $681,994 (2007: $734,947) relates to service packages entered into with customers to the extent
that services have not been rendered and revenue has not been recognised.
24.
Deferred rental
Group
2008
$
2007
$
Cost
At 1 January
Additions
1,398,000
–
–
1,398,000
At 31 December
1,398,000
1,398,000
Accumulated Amortization
At 1 January
Amortisation during the year
(166,429)
(199,714)
–
(166,429)
At 31 December
(366,143)
(166,429)
Net Book Value
Current
Non-current
199,714
832,143
199,714
1,031,857
At 31 December
1,031,857
1,231,571
79
31 December 2008
24.
Deferred rental (Cont’d)
In prior year, a subsidiary in the Group entered into an agreement for sale and leaseback of a property. Deferred rental
relates to the difference between the selling price and the fair value of the property. This difference is amortised over the
lease term of the property of 7 years on a straight line basis.
25.
Lease obligations
Group
Minimum
lease
payments
$
Interest
$
Present
value of
payments
$
2008
1 year to 5 years
Later than 5 years
101,699
44,774
(18,580)
(9,800)
83,119
34,974
Not later than 1 year
146,473
68,124
(28,380)
(10,519)
118,093
57,605
214,597
(38,899)
175,698
2007
1 year to 5 years
Later than 5 years
184,740
57,598
(29,757)
(12,600)
154,983
44,998
Not later than 1 year
242,338
82,605
(42,357)
(13,003)
199,981
69,602
324,943
(55,360)
269,583
Obligations under finance lease are secured by a charge over the leased asset (Note 11).
Lease terms range from 3 to 7 years with options to purchase at the end of the lease term. Lease terms do not contain
restrictions concerning dividends, additional debt or further leasing. The average discount rate implicit in the Company’s
and Group’s lease obligations are 3.3% to 6.5% (2007: 3.3% to 6.5%) per annum respectively.
80
31 December 2008
26.
Term loans
Group
Company
2008
$
2007
$
2008
$
2007
$
Due within 1 year
224,004
224,004
–
–
Due after 1 year
858,662
1,082,662
–
–
1,082,666
1,306,666
–
–
Term loans – secured
The SGD secured term loan bears interest at 3.08% (2007 : 2.30%) per annum, repayable in 120 equal monthly
instalments commencing October 2003. The loan is secured by a first legal mortgage on the subsidiary’s building and a
corporate guarantee from a subsidiary.
27.
Bank overdrafts
Bank overdrafts are secured by a first legal mortgage on a leasehold building, pledge of fixed deposits and a corporate
guarantee from the holding company. Bank overdrafts bear interest of 3.7% to 5.5% (2007 : 3.7% to 5.5%) per
annum.
28.
Share capital
2008
No. of shares
Group and Company
2007
2008
No. of shares
$
2007
$
Issued and fully paid
At 1 January
302,954,700
110,993,254
35,210,275
17,764,108
–
10,310,849
–
2,609,676
- Issuance of ordinary shares for cash
–
27,000,000
–
8,100,000
- Rights cum warrants issue
–
148,304,103
–
6,228,771
- Exercise of warrants
117,563,297
6,346,494
9,405,065
507,720
At 31 December
420,517,997
302,954,700
44,615,340
35,210,275
Issue of new shares
- Issuance of ordinary shares for
quoted equity investment
81
31 December 2008
28.
Share capital (cont’d)
The holders of ordinary shares are entitled to receive dividends as and when declared by the Company. All ordinary
shares carry one vote per share without restriction.
In 2007, the Company issued 148,304,103 rights shares with 148,304,103 detachable warrants from the reinvestment of a
special interim dividend (Note 30) by equity holders. The gross proceeds of $6,228,771 were credited to share capital.
During the financial year, the Company issued 117,563,297 (2007: 6,346,494) shares at $0.08 (2007: $0.08) each upon the
exercise of warrants.
Each warrant carries the right to subscribe for one new share in the Company at an exercise price of $0.08 for each new
share.
As at the end of the financial year, there were 24,394,312 (2007: 141,957,609) warrants outstanding of which no further
warrants (2007: 1,428,500 warrants) were exercised for issuance of new shares as of 20 March 2009.
29.
Other reserves
Group
Foreign currency translation reserve
Fair value adjustment reserve
82
Company
2008
$
2007
$
817,356
606,409
(206,000)
Share options reserve
135,000
Closing balance at 31 December
746,356
(19,588,749)
135,000
(18,847,340)
2008
$
2007
$
–
(206,000)
135,000
(71,000)
–
(19,588,749)
135,000
(19,453,749)
31 December 2008
29.
Other reserves (Cont’d)
(a)
Foreign currency translation reserve
The foreign currency translation reserve relates to exchange differences arising from the translation of the financial
statements of foreign operations whose functional currencies are different from that of the Group’s presentation
currency.
Group
At 1 January
(b)
Company
2008
$
2007
$
2008
$
606,409
575,247
2007
$
–
–
210,947
31,162
–
–
At 31 December
817,356
606,409
–
–
Fair value adjustment reserve
Fair value adjustment reserve records the cumulative fair value changes of available-for-sale financial assets until
they are derecognised or impaired.
Group
Company
2008
$
2007
$
2008
$
2007
$
At 1 January
(19,588,749)
1,640,324
(19,588,749)
1,640,324
Net loss on fair value changes during the year
(25,539,656)
(21,229,073)
(25,539,656)
(21,229,073)
Transfer of impairment loss on quoted equity
investments to income statement
At 31 December
(c)
44,922,405
(206,000)
–
(19,588,749)
44,922,405
(206,000)
–
(19,588,749)
Share options reserve
At 1 January and 31 December
135,000
135,000
135,000
135,000
83
31 December 2008
30.
Dividends
Group and Company
2008
2007
$
$
Declared and paid during the year
Dividends on ordinary shares
- Interim dividend for 2008: Nil cents (2007: 5.1 cents) (2007: 18%) – Note 28
- Final exempt (one-tier) dividend for 2007: 2.5 cent per share
(2006: 1.0 cent per share less tax of 18%)
–
6,228,771
10,505,025
1,216,093
10,505,025
7,444,864
–
–
6,059,094
1,514,774
–
7,573,868
Proposed but not recognised as a liability as at 31 December
Dividends on ordinary shares, subject to shareholders’ approval at the AGM :
- Special exempt (one-tier) dividend for 2008: Nil (2007: 2.0 cents per share)
- Final exempt (one-tier) dividend for 2008: Nil (2007: 0.5 cent per share)
31.
Cash and cash equivalents
Group
2008
$
Cash and bank balances
Fixed deposits (unsecured) – Note 21
Bank overdrafts
Cash and cash equivalents
1,843,085
9,659,024
(20,046)
11,482,063
2007
$
3,072,586
18,295,050
(1,436,257)
19,931,379
Bank overdrafts are included in the determination of cash and cash equivalents because they form an integral part of the
Group’s cash management.
84
31 December 2008
32.
Related party information
(a)
Sale and purchase of goods and services
In addition to the related party information disclosed elsewhere in the financial statements, significant transactions
with related parties on terms agreed between the parties, were as follows:
Group
2008
$
Income
Management service income from a company
related to a director
Company
2007
$
2008
$
2007
$
12,000
15,000
12,000
15,000
Interest income received from a subsidiary
–
–
12,000
2,000
Expense
Rental of office premise from a subsidiary
–
–
48,000
15,000
Company related to a director
One of the directors of the Company holds 50% (2007: 50%) equity interest in Premium Capital Pte Ltd (PCPL).
During the financial year, the Company provided management services to PCPL. No balance with PCPL was
outstanding at the balance sheet date (2007: Nil).
85
31 December 2008
32.
Related party information (Cont’d)
(b)
Compensation of key management personnel
Group
2008
$
2007
$
Short-term employee benefits
Central Provident Fund contributions
1,133,253
46,922
1,212,768
53,846
Total compensation paid to key management personnel
1,180,175
1,266,614
732,608
447,567
782,775
483,839
1,180,175
1,266,614
Comprise amounts paid to :
- Directors of the Company
- Other key management personnel
The remuneration of key management personnel are determined by the remuneration committee having regard to
the performance of individuals and market trends.
Directors’ interests in an employee share option plan
No options were granted during the year ended 31 December 2008.
Directors’ interests in warrants
During the financial year, the directors exercised 4,108,257 (2007: Nil) warrants at an exercise price of $0.08 for
issuance of new shares.
86
31 December 2008
33.
Commitments
(a)
Operating lease commitments – as lessee
The Group has entered into commercial leases for a building (used for office premise and showrooms) and retail
outlets. These leases have an average tenure of between 1 to 7 years with options for renewal. The Group is not
restricted from subleasing the property and retail outlets to third parties.
Future minimum lease payments payable under non-cancellable operating leases as at 31 December are as
follows:
Group
- Not later than 1 year
- 1 year through 5 years
- Later than 5 years
(b)
2008
$
2007
$
3,841,074
11,101,680
363,899
3,368,000
12,334,000
2,056,000
15,306,653
17,758,000
Operating lease commitments – as lessor
The Group has entered into commercial leases on a lease property. These non-cancellable leases have remaining
non-cancellable lease terms of 1 to 3 years.
Future minimum rental receivables under non-cancellable operating leases as at 31 December are as follows:
Group
2008
$
- Not later than 1 year
- 1 year through 5 years
- later than 5 years
2007
$
1,354,227
1,359,679
–
1,307,000
3,139,000
636,000
2,713,906
5,082,000
87
31 December 2008
34.
Fair value of financial instruments
The fair value of financial assets and liabilities by classes that are not carried at fair value and whose carrying amounts
are not reasonable approximation of fair value are as follows :
Carrying
amount
$
Group
Carrying
Fair value
amount
$
$
Fair value
$
Financial liabilities
Obligation under finance leases
(175,698)
(186,410)
(269,583)
(286,019)
Determination of fair value
Quoted equity investments (Note 15)
Fair value is determined directly by reference to their published market bid price at the balance sheet date.
Due from a subsidiary (non-current, non-trade) (Note 16)
The balance is stated at cost. It is long term, interest-free and given to subsidiaries as quasi-equity. The fair value is not
determinable since it has no fixed repayment terms.
Cash and bank balances (Note 31) and other current financial assets and liabilities
The carrying amounts of these financial assets and liabilities are reasonable approximation of fair values, either due to
their short-term nature or that they are floating rate instruments that are repriced to market interest rates on or near the
balance sheet date.
88
31 December 2008
35.
Classification of financial assets and liabilities
Group
2008
$
Company
2007
$
2008
$
2007
$
509,411
3,616,323
509,411
820,820
–
–
2,360,000
2,360,000
2,949,960
4,078,221
–
43,028
Deposits
830,210
1,183,409
20,000
20,000
Other receivables
578,719
948,953
396,714
676,532
–
–
881,420
1,230,938
12,110,084
21,500,100
1,151,070
9,242,046
1,843,085
3,072,586
434,327
988,814
18,312,058
30,783,269
5,243,531
14,561,358
2,446,577
3,198,484
–
–
–
580,032
–
–
Other payables
542,592
379,854
9,764
6,235
Accrued operating expenses
309,182
421,166
5,000
5,979
Lease obligations
175,698
269,583
–
–
1,082,666
1,306,666
–
–
120,000
200,000
–
–
–
–
4,044,936
4,405,223
20,046
1,436,257
–
–
4,696,761
7,792,042
4,059,700
4,417,437
14,190,918
26,264,832
14,190,918
26,264,832
Fair value through profit or loss
Assets
Loans and receivables
Trade receivables
Fixed deposits
Cash and cash balances
Financial liabilities at amortised cost
Trade payables
Bills payable
Term loans
Due to a director of a subsidiary (non-trade)
Due to subsidiary (non-trade)
Bank overdrafts
89
31 December 2008
36.
Financial risk management objectives and policies
The Group and the Company is exposed to financial risks arising from its operations and the use of financial instruments.
The key financial risks include credit risk, liquidity risk, interest rate risk, foreign currency risk and market price
risk. The Board of Directors reviews and agrees policies and procedures for the management of these risks, which are
executed by the Board of Directors. The Audit Committee provides independent oversight to the effectiveness of the
risk management process.
The following sections provide details regarding the Group’s and Company’s exposure to the above-mentioned financial
risks and the objectives, policies and processes for the management of these risks.
(a)
Credit risk
Credit risk is the risk of loss that may arise on outstanding financial instruments should a counterparty default
on its obligations. The Group’s and the Company’s exposure to credit risk arises primarily from trade and other
receivables. For other financial assets (including quoted equity investments and cash and cash equivalents), the
Group and the Company minimise credit risk by dealing exclusively with high credit rating counterparties.
The Group’s objective is to seek continual revenue growth while minimising losses incurred due to increased credit
risk exposure. The Group trades only with recognised and creditworthy third parties. It is the Group’s policy
that all customers who wish to trade on credit terms are subject to credit verification procedures. In addition,
receivable balances are monitored on an ongoing basis with the result that the Group’s exposure to bad debts is
not significant. For transactions that do not occur in the country of the relevant operating unit, the Group does
not offer credit terms without the approval of the Operations Manager.
Exposure to credit risk
At the balance sheet date, the Group’s and the Company’s maximum exposure to credit risk is represented by the
carrying amount of each class of financial assets recognised in the balance sheets.
Financial assets that are neither past due nor impaired
Trade and other receivables that are neither past due nor impaired are creditworthy debtors with good payment
record with the Group. Cash and cash equivalents are placed with reputable financial institutions.
90
31 December 2008
36.
Financial risk management objectives and policies (Cont’d)
(a)
Credit risk (cont’d)
Financial assets that are either past due or impaired (cont’d)
Information regarding financial assets that are either past due or impaired are disclosed in Note 18 (Trade
receivables) and Note 15 (quoted equity investments).
Credit risk concentration profile
The Group determines concentrations of credit risk by monitoring the country and industry sector profile of its
trade receivables on an on-going basis. The credit risk concentration profile of the Group’s trade at the balance
sheet date is as follows:
2008
$
2007
% of total
$
% of total
Group
By country:
Singapore
2,707,352
92%
3,488,131
86%
242,608
8%
590,090
14%
2,949,960
100%
4,078,221
100%
242,608
8%
590,090
14%
Beauty
2,707,352
92%
3,445,103
85%
Others
–
–
43,028
1%
2,949,960
100%
4,078,221
100%
People’s Republic of China
By industry sectors:
Furniture
The Group and the Company have no significant concentration of credit risk.
91
31 December 2008
36.
(b)
Liquidity risk
Liquidity risk is the risk that the Group or the Company will encounter difficulty in meeting financial obligations
due to shortage of funds. The Group’s and the Company’s exposure to liquidity risk arises primarily from
mismatches of the maturities of financial assets and liabilities. The Group’s and the Company’s objective is to
maintain a balance between continuity of funding and flexibility through the use of stand-by credit facilities.
The Group’s and the Company’s liquidity risk management policy is that to maintain sufficient liquid financial
assets and stand-by credit facilities with their different bankers. At the balance sheet date, approximately 21%
(2007: 17%) of the Group’s term loans (Note 26) will mature in less than one year based on the carrying amount
reflected in the financial statements.
The table below summarises the maturity profile of the Group’s and the Company’s financial liabilities at the
balance sheet date based on contractual undiscounted payments.
2008
Group
Trade payables
Bills payable
Other payables
Lease obligations
Term loans
Due to a director of a
subsidiary (non-trade)
1 year
or less
$
2007
1 to 5 years
$
Total
$
1 year
or less
$
1 to 5 years
$
Total
$
2,446,577
–
542,592
57,605
224,004
–
–
–
118,093
858,662
2,446,577
–
542,592
175,698
1,082,666
3,198,484
580,032
379,854
69,602
224,004
–
–
–
199,981
1,082,662
3,198,484
580,032
379,854
269,583
1,306,666
120,000
3,390,778
–
976,755
120,000
4,367,533
200,000
4,651,976
–
1,282,643
200,000
5,934,619
9,764
4,044,936
4,054,700
–
–
–
9,764
4,044,936
4,054,700
6,235
4,405,223
4,411,458
–
–
–
6,235
4,405,223
4,411,458
Company
Other payables
Due to subsidiary (non-trade)
92
31 December 2008
36.
(c)
Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of the Group’s and the Company’s financial
instruments will fluctuate because of changes in market interest rates. The Group’s and the Company’s exposure to
interest rate risk arises primarily from their loans and borrowings and interest-bearing loans given to a subsidiary,
respectively.
Sensitivity analysis for interest rate risk
At the balance sheet date, if SGD interest rates had been 75 (2007: 75) basis points lower/higher with all other
variables held constant, the Group’s (loss)/profit net of tax would have been $8,000 (2007: $25,000) lower/higher,
arising mainly as a result of lower/higher interest expense on floating rate loans and borrowings.
(d)
Foreign currency risk
The Group has transactional currency exposures arising from purchases that are denominated in a currency other
than the respective functional currencies of Group entities, primarily SGD and Renminbi (RMB). The foreign
currencies in which these transactions are denominated are mainly U.S Dollars (USD).
The Group also holds cash and cash equivalents denominated in foreign currencies for working capital purposes.
At the balance sheet date, such foreign currency balances (mainly in RMB) is $6,055,000 (2007: $84,000).
It is not the Group’s policy to enter into derivative forward foreign exchange contracts for hedging and speculative
purposes.
The Group is also exposed to currency translation risk arising from its net investments in foreign operations,
namely the People’s Republic of China (“PRC”). The Group’s net investments in PRC are not hedged as currency
positions RMB are considered to be long-term in nature.
93
31 December 2008
36.
(d)
Foreign currency risk (Cont’d)
Sensitivity analysis for foreign currency risk
The following table demonstrates the sensitivity to a reasonably possible change in the RMB exchange rates
(against SGD), with all other variables held constant.
RMB
(e)
- strengthened 10% (2007: 10%)
- weakened 10% (2007: 10%)
2008
$
Loss net
of tax
2007
$
Profit net
of tax
(575,000)
575,000
60,000
(60,000)
Market price risk
Market price risk is the risk that the fair value or future cash flows of the Group’s and Company’s financial instruments
will fluctuate because of changes in market prices (other than interest or exchange rates). The Group is exposed to
equity price risk arising from its investment in quoted equity investments. These investments are quoted on the SGXST in Singapore and the Hang Seng Index in Hong Kong and are classified as held for trading or available-for-sale
financial assets.
The Group’s objective is to manage investment returns and equity price risk using a mix of investment grade
shares with steady dividend yield and non-investment grade shares with higher volatility as determined by the
Board of Directors. All investments are approved by the Board of Directors.
Sensitivity analysis for equity price risk
At the balance sheet date, if the STI had been 2% (2007: 2%) higher/lower with all other variables held constant,
the Group’s loss net of tax would have been $10,000 (2007: $76,000) lower/higher, arising as a result of higher/
lower fair value gains on held for trading investments in equity instruments, and the Group’s other reserve in
equity would have been $284,000 (2007: $917,000) higher/lower, arising as a result of an increase/decrease in the
fair value of equity instruments classified as available-for-sale.
94
31 December 2008
37.
Capital management
The primary objective of the Group’s capital management is to ensure that it maintains a strong credit rating and healthy
capital ratios in order to support its business and maximise shareholder value.
The Group manages its capital structure and makes adjustments to it, in light of changes in economic conditions. To
maintain or adjust the capital structure, the Group may adjust the dividend payment to shareholders, return capital to
shareholders or issue new shares. No changes were made in the objectives, policies or processes during the years ended
31 December 2008 and 31 December 2007. The Group is not subject to any externally imposed capital requirements.
The Group monitors capital using a gearing ratio, which is total debt divided by total capital plus total debt. The
Group’s policy is to keep the gearing ratio less than 60%. The Group includes within total debt, loans and borrowings,
trade and other payables and other liabilities. Capital includes equity attributable to the equity holders of the parent
including fair value adjustment reserve.
Group
2008
$
Total debt (Note 36 (b))
2007
$
4,367,533
5,934,619
Equity attributable to the equity holders of the parent
Add/(less): - Fair value adjustment reserve (Note 29(b))
30,905,485
206,000
59,476,955
19,588,749
Total capital
31,111,485
79,065,704
Capital and total debt
35,479,018
85,000,323
12%
7%
Gearing ratio
95
31 December 2008
38.
Group segmental information
The primary segment reporting format is determined to be business segments as the Group’s risks and rates of return
are affected predominantly by differences in the products and services produced. Secondary information is reported
geographically. The operating businesses are organised and managed separately according to the nature of the products
and services provided, with each segment representing a strategic business unit that offers different products and serves
different markets.
(a)
Analysis by Business Segments
The Group has two operating divisions, namely, the Beauty Division and the Furniture Division.
Other operations comprise of the corporate division. This includes dividend income, income from trading of
quoted equity investments and management fee.
Inter-segment pricing is on an arm’s length basis.
Beauty
Division
$
Furniture
Division
$
Others
$
Elimination
$
Total
$
External sales
Inter-segment sales
Total sales
Loss from operations
Finance expenses
Finance income
Share of associate results
Loss before tax
Tax
Loss for the year
35,525,798
2,606,225
1,965,978
–
269,511
4,502,153
–
(7,108,378)
37,761,287
–
37,761,287
(1,336,391)
4,585,624
(49,975,515)
1,446,590
(45,279,692)
(155,477)
275,626
(29,595)
(45,189,138)
(817,263)
(46,006,401)
Assets
Liabilities
Capital expenditure
Depreciation and impairment loss
14,046,699
(7,277,052)
133,244
935,719
3,918,036
(1,230,053)
2,020
31,719
31,026,589
(7,475,967)
–
54,314
(7,377,759)
7,377,760
–
–
41,613,565
(8,605,312)
135,264
1,021,752
2008
Revenue
96
31 December 2008
38.
Group segmental information (Cont’d)
(a)
Analysis by Business Segments (Cont’d)
Beauty
Division
$
Furniture
Division
$
Others
$
Elimination
$
Total
$
External sales
Inter-segment sales
Total sales
(Loss)/profit from operations
Gain on disposal of property,
plant and equipment
Finance expenses
Interest income
Share of associate results
Profit before tax
Tax
Net profit for the year from
continuing operations
Net loss for the year from
discontinued operations
Profit for the year
37,599,737
3,372,787
3,366,592
–
13,304,182
286,670
–
(3,659,457)
54,270,511
–
54,270,511
(1,652,808)
594,122
38,394,093
(4,618,142)
32,717,265
15,576,000
(240,493)
212,003
–
–
(5,776)
109,000
–
Assets
Liabilities
Capital expenditure
Depreciation and amortisation
31,494,881
(12,601,357)
341,645
585,354
2007
Turnover
–
(154,905)
41,510
18,908
–
–
(2,000)
–
15,576,000
(401,174)
360,513
18,908
48,271,512
(2,170,144)
46,101,368
(506,448)
45,594,920
2,261,598
(522,204)
90,744
117,924
60,543,645
(7,992,667)
272,317
20,667
(22,610,354)
9,878,477
–
–
71,689,770
(11,237,751)
704,706
723,945
97
31 December 2008
38.
Group segmental information (Cont’d)
(b)
Analysis by Geographical segments
Turnover is based on the location of customers. Assets and capital expenditures are based on the location of those
assets.
2008
Singapore
People's Republic of China
Taiwan
Others
39.
Turnover
$
Assets
$
35,795,309
1,965,978
–
–
37,761,287
37,695,529
3,918,036
–
–
41,613,565
2007
Capital
expenditure
$
133,244
2,020
–
–
135,264
Turnover
$
Assets
$
50,328,472
2,835,290
531,302
575,447
54,270,511
69,428,171
2,261,599
–
–
71,689,770
Capital
expenditure
$
613,962
90,744
–
–
704,706
Comparative figures
The following comparative figures for the Group have been reclassified to be consistent with current year’s
classification:
As
reclassified
$
Fixed deposits
- secured
- unsecured
3,205,050
18,295,050
2007
As previously
reported
$
9,750,774
11,749,326
The reclassifications were made so as to better reflect the nature of the balances.
40.
Authorisation of financial statements
The financial statements for the year ended 31 December 2008 were authorised for issue in accordance with a resolution
of the directors on 20 March 2009.
98
STATISTICS OF SHAREHOLDINGS
As at 16 March 2009
Number of Shares
Class of Equity Shares
Voting Rights
420,517,997
Ordinary
On show of hands : one vote for each member
On a poll : one vote for each ordinary share
ANALYSIS OF SHAREHOLDINGS
Range of Shareholdings
1 - 999
1,000 - 10,000
10,001 - 1,000,000
1,000,001 and above
No. of Shareholders
%
No. of Shares
%
62
298
548
23
6.66
32.01
58.86
2.47
21,923
1,742,973
34,843,716
383,909,385
0.01
0.41
8.29
91.29
931
100
420,517,997
100
Based on information provided to the Company as at 16 March 2009, approximately 24.45 % of the issued ordinary shares
of the Company is held by the public, and therefore, Rule 723 of the Listing Manual is complied with.
TOP 20 SHAREHOLDERS LIST AS AT 16 MARCH 2009
Name
Oei Hong Leong Foundation Pte Ltd
Toh Soon Huat
UOB Kay Hian Pte Ltd
Mayban Nominees (S) Pte Ltd
Singapore Nominees Pte Ltd
SBS Nominees Pte Ltd
Chua Swee Wah
Kim Eng Securities Pte. Ltd.
Teo Ngian Heng
Lee Kek Choo
Corporate Bridge Limited
United Overseas Bank Nominees Pte Ltd
Hong Leong Finance Nominees Pte Ltd
Citibank Nominees Singapore Pte Ltd
Chan Lay May
Phillip Securities Pte Ltd
Chong Hon Kuan Ivan
DBS Nominees Pte Ltd
Ng Chze Keong Richard
Chua Geok Lin
No. of shares held
111,932,547
56,436,735
47,703,000
25,673,000
23,286,000
19,250,000
15,564,616
14,707,259
12,485,000
11,652,984
10,516,000
8,534,750
6,183,000
5,742,611
3,032,000
1,703,947
1,625,524
1,495,762
1,423,000
1,406,750
380,354,485
%
26.62
13.42
11.34
6.11
5.54
4.58
3.70
3.50
2.97
2.77
2.50
2.03
1.47
1.37
0.72
0.41
0.39
0.36
0.34
0.33
90.47
99
Statistics of SHAREHOLDingS
As at 16 March 2009
SUBSTANTIAL SHAREHOLDERS AS AT 16 MARCH 2009
as recorded in the Register of Substantial Shareholders
Number of
shares registered
in the name
of substantial
shareholder
Number of
shares in which
substantial
shareholder is
deemed to have
an interest
Total
%
Toh Soon Huat (1)
56,436,735
75,917,234
132,353,969
31.47
Lee Kek Choo (2)
11,652,984
120,700,985
132,353,969
31.47
111,932,547
0
111,932,547
26.62
42,558,000
0
42,558,000
10.12
Xpress Group Limited (3)
0
53,074,000
53,074,000
12.62
Ong Soon Liong @ Ong Soon Chong (4)
0
23,286,000
23,286,000
5.54
Name of Substantial Shareholder
Oei Hong Leong Foundation Pte Ltd
Sure World Capital Limited
Notes:
(1)
Toh Soon Huat is deemed to have an interest in the shares held by his spouse Lee Kek Choo. In addition, Toh Soon
Huat’s deemed interest of 59,388,500 shares arises from (other than shares held by Lee Kek Choo) 19,250,000 shares,
7,500,000 shares, 8,354,500 shares, 18,773,000 shares, 4,500,000 shares and 1,011,000 shares held by Singapura Building
Society Limited, United Overseas Bank Nominees (Private) Limited, Kim Eng Securities Pte Ltd, Mayban Nominees
Pte Ltd, UOB Kay Hian Pte Ltd and Hong Leong Finance Nominees Pte Ltd as his nominees, respectively.
(2)
Lee Kek Choo is deemed to have an interest in the shares held by Toh Soon Huat. Lee Kek Choo’s deemed interest
arises from (other than shares held by Toh Soon Huat) 4,875,750 shares held by Hong Leong Finance Nominees Pte
Ltd as her nominee.
(3)
Xpress Group Limited (“XGL”) is the holding company of Sure World Capital Limited (“SWC”). XGL has a controlling
interest in SingXpress Ltd (“SXL”) which, in turn, is the holding company of Corporate Bridge Limited (“CBL”). CBL
holds 10,516,000 shares in Novena Holdings Limited. XGL is deemed interested in the 53,074,000 shares held by SWC
and CBL.
(4)
The deemed interest of Ong Soon Liong @ Ong Soon Chong arises from shares held by Singapore Nominees Pte. Ltd.
100
Statistics OF WARRANTHOLDINGS
As at 16 March 2009
DISTRIBUTION OF WARRANTHOLDINGS
Range of Warrantholdings
1 - 999
1,000 - 10,000
10,001 - 1,000,000
1,000,001 and above
No. of Warrantholders
%
No. of Warrants
%
35
139
140
2
11.08
43.99
44.30
0.63
23,777
804,714
7,519,146
16,046,675
0.10
3.30
30.82
65.78
316
100.00
24,394,312
100.00
TOP 20 WARRANTHOLDERS LIST AS AT 16 MARCH 2009
Name
Lee Kek Choo
Chua Swee Wah
Ng Ser Miang
Tay Chin Beng
Phillip Securities Pte Ltd
Soh Sey Hua @ Soh Tai Ping
Benny Tay Yew Lim
United Overseas Bank Nominees Pte Ltd
Tay Theng Kwang
Kwan Seik Cheong
Herman Halim
Koh Cheoh Liang Vincent
Chua Bak Hoh
Thie Daniel or Aidawati Muliani
OCBC Securities Private Ltd
Tan Suan Kui
Long Foo Tong
Ong Quee Lan
Lim Kean Ngan
Seah Hock Boon
No. of warrants held
8,264,367
7,782,308
525,000
370,000
360,151
341,000
302,000
235,000
220,000
215,750
192,000
178,000
165,000
140,000
129,415
120,000
116,000
110,000
107,500
107,500
19,980,991
%
33.88
31.90
2.15
1.52
1.48
1.40
1.24
0.96
0.90
0.88
0.79
0.73
0.68
0.57
0.53
0.49
0.48
0.45
0.44
0.44
81.91
101
NOTICE OF ANNUAL GENERAL MEETING
NOTICE IS HEREBY GIVEN that the Annual General Meeting of the Company will be held at 521 Bukit Batok Street 23,
Level 3, Singapore 659544 on Monday, 27 April 2009 at 2:30 p.m. to transact the following businesses:
ORDINARY BUSINESS:
1.
To receive and consider the Directors’ Report and Audited Accounts for the financial year ended 31 December 2008
and the Auditors’ Report thereon.
Resolution 1
2.
To re-elect Mr Toh Soon Huat, who is retiring by rotation in accordance with Article 104 of the Company’s Articles of
Association, as Director of the Company.
Resolution 2
3.
To re-elect Ms Li Ling Xiu, who is retiring by rotation in accordance with Article 108 of the Company’s Articles of
Resolution 3
4.
To re-elect Mr Lien Kait Long, who is retiring by rotation in accordance with Article 108 of the Company’s Articles of
Resolution 4
5.
To approve the Directors’ fees of S$125,000 for the financial year ended 31 December 2008. (2007: S$109,667)
Resolution 5
6.
To re-appoint Messrs Ernst & Young LLP as Auditors and to authorise the Directors to fix their remuneration.
Resolution 6
SPECIAL BUSINESS :
To consider and, if thought fit, to pass with or without any modifications, the following resolutions as Ordinary
Resolutions:
7.
That pursuant to Section 153(6) of the Companies Act, Cap. 50, Mr Tay Beng Chuan be re-appointed as a Director of
the Company to hold office until the next Annual General Meeting.
[Mr Tay Beng Chuan, will, upon re-appointment as a Director of the Company, remain as member of the Audit
Committee. Mr Tay Beng Chuan is considered independent for the purposes of Rule 704(7) of Section B of the Singapore
Exchange Securities Trading Limited (“SGX-ST”) Listing Manual (the “Catalist Rules”).]
Resolution 7
102
8.
Ordinary Resolution: Authority to allot and issue shares in the capital of the Company
Resolution 8
That pursuant to Section 161 of the Companies Act, Cap. 50. and Rule 806 of the Singapore Exchange Securities
Trading Limited (“SGX-ST”) Listing Manual Section B: Rules of Catalist (the “Catalist Rules”), authority be and is
hereby given to the Directors of the Company to allot and issue shares and convertible securities in the capital of the
Company (whether by way of rights, bonus or otherwise) at any time and upon such terms and conditions and for such
purposes and to such persons as the Directors may in their absolute discretion deem fit provided that:(a)
the aggregate number of shares and convertible securities to be issued pursuant to this Resolution does not exceed
one hundred per cent (100%) of the total number of issued shares excluding treasury shares of the Company (as
calculated in accordance with sub-paragraph (b) below), of which the aggregate number of shares and convertible
securities to be issued other than on a pro rata basis to existing shareholders of the Company does not exceed fifty
per cent (50%) of the total number of issued shares excluding treasury shares of the Company (as calculated in
accordance with sub-paragraph (b) below);
(b)
(subject to such manner of calculations as may be prescribed by the SGX-ST), for the purpose of determining the
aggregate number of shares that may be issued under sub-paragraph (a) above, the percentage of the total number
of issued shares excluding treasury shares shall be based on the total number of issued shares excluding treasury
shares of the Company at the time this Resolution is passed after adjusting for:(i)
new shares arising from the conversion or exercise of any convertible securities;
(ii)
new shares arising from exercising share options or vesting of share awards outstanding or subsisting at the
time of the passing of the resolution approving the mandate, provided the options or awards were granted in
compliance with Part VIII of Chapter 8 of the Catalist Rules; and
(iii) any subsequent bonus issue, consolidation or sub-division of shares
(c)
unless revoked or varied by the Company in general meeting, the authority conferred by this Resolution shall
continue in force until the conclusion of the next Annual General Meeting or the date by which the next Annual
General Meeting of the Company is required by law to be held, whichever is the earlier.
[See Explanatory Note (i)].
103
9.
Ordinary Resolution: Authority to issue shares other than on a pro-rata basis pursuant to the aforesaid share
issue mandate at discounts not exceeding twenty per centum (20%) of the weighted average price for trades done
on the SGX-ST
Resolution 9
That subject to and pursuant to the aforesaid share issue mandate being obtained, the Directors of the Company be
hereby authorised and empowered to issue shares other than on a pro-rata basis at a discount not exceeding twenty
per centum (20%) to the weighted average price for trades done on the SGX-ST for the full market day on which the
placement or subscription agreement in relation to such shares is executed (or if not available for a full market day, the
weighted average price must be based on the trades done on the preceding market day up to the time the placement or
subscription agreement is executed), provided that :-
10.
(a)
in exercising the authority conferred by this Resolution, the Company complies with the provisions of the Listing
Manual of the SGX-ST for the time being in force (unless such compliance has been waived by the SGX-ST);
and
(b)
unless revoked or varied by the Company in general meeting, such authority shall continue in force until the
conclusion of the next Annual General Meeting of the Company or the date by which the next Annual General
Meeting of the Company is required by law to be held, whichever is earlier. [See Explanatory Note (ii)]
Ordinary Resolution: Authority to offer and grant options and to allot and issue shares under The Novena
Holdings Limited Share Option Scheme
Resolution 10
“That authority be and is hereby given to the directors of the Company to offer and grant options in accordance with
the provisions of the The Novena Holdings Limited Share Option Scheme (the “Scheme”) and to allot and issue from
time to time such number of shares in the Company as may be required to be issued pursuant to the exercise of the
options under the Scheme, provided that the aggregate number of shares to be issued pursuant to the Scheme shall not
exceed 15% of the issued shares in the capital of the Company from time to time.” [See Explanatory Note (iii)].
11.
104
To transact any other business which may be properly transacted at an Annual General Meeting.
Explanatory Notes:
(i)
The proposed Resolution 8, if passed, will empower the Directors from the date of the above Meeting until the date of
the next Annual General Meeting, to allot and issue shares and convertible securities in the Company. The number of
shares and convertible securities, which the Directors may allot and issue under this Resolution shall not exceed 100%
of the total number of issued shares excluding treasury shares of the Company at the time of passing this Resolution.
For allotment and issue of shares and convertible securities other than on a pro-rata basis to all shareholders of the
Company, the aggregate number of shares and convertible securities to be allotted and issued shall not exceed 50%
of the total number of issued shares excluding treasury shares of the Company. This authority will, unless previously
revoked or varied at a general meeting, expire at the next Annual General Meeting.
(ii)
The proposed Resolution 9 above is pursuant to measures implemented by the SGX-ST as stated in a press release
entitled “SGX introduces further measures to facilitate fund raising” dated 19 February 2009 and which became effective
on 20 February 2009. Under the measures implemented by the SGX-ST, issuers will be allowed to undertake non prorata placements of new shares priced at discounts of up to 20% to the weighted average price for trades done on the
SGX-ST for a full market day on which the placement or subscription agreement in relation to such shares is executed,
subject to the conditions that (a) shareholders’ approval be obtained in a separate resolution (the “Resolution”) at a
general meeting to issue new shares on a non pro-rata basis at discount exceeding 10% but not more than 20%; and (b)
that the resolution seeking a general mandate from shareholders for issuance of new shares on a non pro-rata basis is
not conditional upon the Resolution.
It should be noted that under the Listing Manual of the SGX-ST, shareholders’ approval is not required for placements
of new shares, on a non pro-rata basis pursuant to a general mandate, at a discount of up to 10% to the weighted average
price for trades done on the SGX-ST for a full market day on which the placement or subscription agreement in relation
to such shares is executed.
(iii) The proposed Resolution 10, if passed, will empower the Directors of the Company to offer and grant options under
The Novena Holdings Limited Share Option Scheme (the “Scheme”) and to allot and issue shares up to 15% of the
Company’s issued shares pursuant to the exercise of the options.
BY ORDER OF THE BOARD
Low Mei Mei Maureen
Company Secretary
Singapore
9 April 2009
105
Proxies :
1.
A member of the Company is entitled to attend and vote at the above Meeting and may appoint not more than two
proxies to attend and vote instead of him.
2.
Where a member appoints two proxies, he shall specify the proportion of this shareholding to be represented by each
proxy in the instrument appointing the proxies. A proxy need not be a member of the Company.
3.
If the member is a corporation, the instrument appointing the proxy must be under seal of the hand of an officer or
attorney duly authorised.
4.
The instrument appointing a proxy must be deposited at the Registered Office of the Company at 521 Bukit Batok
Street 23, Level 3, Singapore 659544 not less than 48 hours before the time appointed for holding the above Meeting.
106
IMPORTANT
Registration No. 199307300M
PROXY FORM
1.
For investors who have used their CPF monies to buy the Company’s
shares, this Annual Report is forwarded to them at the request of their CPF
Approved Nominees and is sent solely FOR INFORMATION ONLY.
2.
This Proxy Form is not valid for use by CPF investors and shall be ineffective
for all intents and purposes if used or purported to be used by them.
I/We
of
being a member/members of Novena Holdings Limited (the “Company”) hereby appoint
Name
Address
NRIC/Passport
Number
Proportion of
Shareholdings (%)
Address
NRIC/Passport
Number
Proportion of
Shareholdings (%)
and/or (delete as appropriate)
Name
as my/our proxy/proxies to attend and to vote for me/us on my/our behalf and, if necessary, to demand a poll at the
Annual General Meeting of the Company to be held at 521 Bukit Batok Street 23, Level 3, Singapore 659544 on Monday,
27 April 2009 at 2:30 p.m. and at any adjournment thereof.
(Please indicate with an “X” in the spaces provided whether you wish your vote(s) to be cast for or against the resolutions
as set out in the Notice of Annual General Meeting. In the absence of specific directions, the proxy/proxies will vote or
abstain as he/they may think fit, as he/they will on any other matter arising at the Annual General Meeting.)
No.
Resolutions
For
Against
ORDINARY BUSINESS
1
To receive and consider Directors and Auditors’ Reports and Audited Accounts
2
To re-elect Director – Mr Toh Soon Huat
3
To re-elect Director – Ms Li Ling Xiu
4
To re-elect Director – Mr Lien Kait Long
5
To approve the Directors’ fees of S$125,000 for the financial year ended
31 December 2008
6
To re-appoint Auditors and to authorise the Directors to fix their remuneration
SPECIAL BUSINESS
7
To re-appoint Mr Tay Beng Chuan pursuant to Section 153(6) of the Companies Act,
Chapter 50
8
To authorise Directors to allot and issue shares in the capital of the company
9
To authorise Directors to issue shares other than on pro-rata basis at discounts
not exceeding 20%
10
To authorise Directors to offer and grant options and to issue shares under
The Novena Holdings Limited Share Option Scheme
Dated this
day of
2009
Total number of Shares held
Signature(s) of member(s) or common seal
IMPORTANT: PLEASE READ NOTES OVERLEAF
NOTES :
1.
Please insert the total number of shares held by you. If you have shares entered against your name in the Depository
Register (as defined in Section 130A of the Companies Act, Chapter 50), you should insert that number of shares. If
you have shares registered in your name in the Register of Members, you should insert that number of shares. If you
have shares entered against your name in the Depository Register and shares registered in your name in the Register
of Members, you should insert the aggregate number of shares. If no number is inserted, this form of proxy will be
deemed to relate to all the shares held by you.
2.
A member of the Company entitled to attend and vote at a meeting of the Company is entitled to appoint not more
than two proxies to attend and vote on his behalf. A proxy need not be a member of the Company.
3.
Where a member appoints more than one proxy, he shall specify the proportion of his shareholding to be represented
by each proxy.
4.
The instrument appointing a proxy or proxies must be under the hand of the appointor or his attorney duly
authorised in writing. Where the instrument appointing a proxy or proxies is executed by a corporation, it must be
executed either under its common seal or under the hand of its attorney or duly authorised officer.
5.
A corporation which is a member of the Company may authorise by resolution of its directors or other governing
body such person as it thinks fit to act as its representative at the Annual General Meeting, in accordance with its
Articles of Association and Section 179 of the Companies Act, Chapter 50.
6.
The instrument appointing a proxy or proxies, together with the power of attorney or other authority (if any) under
which it is signed, or notarially certified copy thereof, must be deposited at the registered office of the Company
at 521 Bukit Batok Street 23, Level 3, Singapore 659544 not less than 48 hours before the time set for the Annual
General Meeting.
7.
The Company shall be entitled to reject the instrument appointing a proxy or proxies if it is incomplete, improperly
completed or illegible or where the true intentions of the appointor are not ascertainable from the instructions of
the appointor specified in the instrument appointing a proxy or proxies. In addition, in the case of members of the
Company whose shares are entered against their names in the Depository Register, the Company may reject any
instrument appointing a proxy or proxies lodged if such members are not shown to have shares entered against their
names in the Depository Register as at 48 hours before the time appointed for holding the Annual General Meeting
as certified by The Central Depository (Pte) Limited to the Company.

novena holdings limited

Transcription

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