chuan hup holdings limited 2007chuanhup.listedcompany.com/misc/ar2007.pdfrig tenders indonesia held...

Chuan Hup Holdings Limited

annual report

2007

Contents

About Us

Corporate Data and Financial Calendar

Chairman’s Statement

Our Investments at a Glance

Five-Year Group Financial Statistics and Charts

Board of Directors

Key Management

Corporate Governance

Financial Report

Shareholder Information

Notice of Annual General Meeting

Proxy Form

01

02

03

06

08

10

12

13

22

80

82

1CHUAN HUP HOLDINGS LIMITEDA N N U A L R E P O R T 2 0 0 7

About Us

Chuan Hup Holdings Limited (“CHH”) was founded in 1970 as a tug and barge service provider for the PSA Corporation in Singapore. CHH subsequently

developed a core competency in the provision of marine transportation services

to the mining and energy sectors within the ASEAN region. In doing so, CHH

established itself as one of the leading owners and operators of marine transport

equipment to the resource industries.

During the second half of year 2002, CHH reorganised its marine business

into two separate and distinct operations according to industry focus, namely

the offshore support services to the oil and gas industry (held under its then

subsidiary CH Offshore Ltd) and marine logistics services and transportation of

bulk aggregates.

On 14 February 2005, CHH entered into an agreement with Habib Corporation

Berhad (“Habib”), pursuant to which Habib would acquire from CHH the

following:

Chuan Hup Holdings

the entire marine logistics business of CHH which is undertaken substantially through six subsidiaries of CHH;

205,000,000 shares representing 29.1% (out of the 52.8% held by CHH) of the issued shares of CH Offshore Ltd; and

298,905,500 shares representing 49.1% of the issued shares of PT Rig Tenders Indonesia held by CHH.

On 30 September 2005, CHH completed the above transaction with Habib

Corporation Berhad (now known as Scomi Marine Berhad) for SGD $485,621,190

and a 28.9% stake in Scomi Marine Berhad. CHH continues to operate as

an investment holding company with investments in the following sectors:

Marine, Property, Electronic Manufacturing Services and others.

Board of DirectorsDr Tan Cheng Bock Mr Peh Siong Woon Terence Mr Peh Kwee Chim Prof. Tan Cheng Han, S.C. Mdm Joanna Young Sau Kwan

Audit CommitteeMdm Joanna Young Sau KwanDr Tan Cheng BockProf. Tan Cheng Han, S.C.

Remuneration CommitteeProf. Tan Cheng Han, S.C.Dr Tan Cheng BockMdm Joanna Young Sau Kwan

Nominating CommitteeDr Tan Cheng BockMr Peh Kwee ChimProf. Tan Cheng Han, S.C.Mdm Joanna Young Sau Kwan

Company SecretaryMs Valerie Tan May Wei

Registered Offi ce390 Jalan Ahmad IbrahimSingapore 629155Telephone: (65) 65599700Facsimile: (65) 62681937Website: www.chuanhup.com.sgEmail: [email protected]

Share RegistrarTricor Barbinder Share Registration Services(A division of Tricor Singapore Pte. Ltd.)8 Cross Street #11-00PWC BuildingSingapore 048424

AuditorsDeloitte & Touche6 Shenton Way #32-00 DBS Building Tower TwoSingapore 068809

Partner-in-Charge: Ms Ng Peck HoonDate of Appointment: 1 July 2002

Corporate Data and Financial Calendar

30 June 2007

10 November 2006

13 February 2007

16 April 2007

11 May 2007

17 August 2007

11 October 2007

29 October 2007

6 November 2007

15 November 2007

Financial Year End

Announcement of First Quarter Financial Results

Announcement of Half-Year Financial Results

Payment of Interim Dividend

Announcement of Third Quarter Financial Results

Announcement of Full-Year Financial Results

Despatch of Annual Report to Shareholders

Annual General Meeting

Book Closure to Register Members for Dividend Payment

Proposed Payment of Final Dividend

2 CHUAN HUP HOLDINGS LIMITEDA N N U A L R E P O R T 2 0 0 7

(Non-Executive Chairman)

(Chief Executive Offi cer and Executive Director)

(Executive Director)

(Non-Executive, Independent Director)

(Non-Executive, Independent Director)

(Chairman)

(Chairman)

(Chairman)

On behalf of the Board of Directors, I am pleased to present the Group’s annual report for the Financial Year ended 30 June 2007(“FY 2007”). The Group achieved net profi t attributable to shareholders of USD23.043 million for FY2007. Earnings per share for FY2007 was USD2.12 cents as compared to FY2006 of USD1.64 cents, an increase of 29.3%.

Financial OverviewGroup revenue and gross profi t were higher in the FY2007 as compared to FY2006.

Gross revenue rose to USD15.615 million from USD13.595 million while gross profi t

increased to USD14.289 million from USD13.438 million for the corresponding

year. This was mainly attributed to the increase in contribution from the treasury

operations and dividend income from available-for-sale investments.

Other income in FY2007 and FY2006 were USD12.209 million and USD15.930

million respectively. In FY2007, gains from sale of available-for-sale investments

accounted for USD9.499 million. The disposal of vessels, foreign exchange gain

and reversal of allowance for doubtful debts contributed a further USD2.432

million, USD0.217 million and USD0.061 million respectively. In FY2006, other

income derived from gains from sale of available-for-sale investments, sale of

vessels and foreign exchange gain were USD7.836 million, USD6.314 million and

USD1.424 million respectively.

As reported in the second quarter of FY2007, the Group had invested in two(2)

associates carrying on the business of marine logistics and trading of bulk

aggregates in the Middle East. In FY2007, the marine logistics associate accounted

for a share of loss of USD0.04 million. The other associate in the business of

trading has yet to commence operations. In FY2006, loss of USD7.807 million was

mainly due to a one-off impairment loss of a Philippine associate.


Dr Tan Cheng BockNon-Executive Chairman


As at 30 June 2007, the Group’s fi nancial position continues to strengthen with its

total assets rising 18.3% to USD377.377 million from USD318.885 million whilst

its total liabilities stood at USD20.758 million. Group shareholders’ equity rose to

USD356.291 million from USD285.763 million as at 30 June 2006. As a result, net

asset value per share increased to USD32.84 cents from USD26.25 cents. This was

due to an upward adjustment in fair value of certain available-for-sale investments

held by the Group. The Group continues to show a healthy cash position. Net cash

balance after bank borrowings rose to USD24.613 million from USD8.773 million

as at 30 June 2006.

Share Repurchase and DividendDuring the year, the Company repurchased 3,878,000 shares for SGD1.263 million,

at an average price of SGD32.6 cents under the Share Repurchase Mandate

approved at the extraordinary general meeting on 13 October 2005. All shares

repurchased were cancelled.

The Company has also paid an interim tax-exempt dividend of SGD0.5 cents per

share on 16 April 2007. With the good performance for this fi nancial year, the

directors are recommending a fi nal tax-exempt dividend of SGD1.0 cent per share

for shareholders’ approval at the forthcoming Annual General Meeting. If approved

by the shareholders, this will bring the total dividend paid and payable to SGD1.5

cents per share for the fi nancial year ended 30 June 2007.

Total consideration for the share repurchase and cash dividend paid/payable will

amount to SGD17.5 million (equivalent to USD11.5 million), representing 49.7% of

the Group’s net profi t after tax.



OutlookDuring FY2007, global economies have been robust and performed well. However

investment conditions have remained uncertain since the beginning of July 2007.

Any major threats such as terrorism, confl ict in the Middle East, continued increase

in energy cost, US sub-prime mortgage crisis and its unknown contagion effects

may affect the performance of the Group’s regional and global investments.

Management remains cautious and will continue to exercise due care when making

new investment decisions, as we have in the past.

AcknowledgementsI would like to thank the Board of Directors, the Management and the employees

for their valued effort and continued dedication. It is through their teamwork and

commitment that the Group has been able to maintain its profi tability despite the

diffi cult operating environment.

In closing, I also wish to take this opportunity to thank our loyal shareholders

for their continued support and confi dence in CHH all these years.

Dr Tan Cheng BockNon- Executive Chairman

28 August 2007

It is through teamwork and commitment that the Group

has been able to maintain its profi tability


Scomi Marine Berhad (“Scomi Marine”)Scomi Marine is involved in marine logistics providing coal transportation to the coal producers and offshore marine support services to the oil and gas operators and contractors. It owns and operates one of the largest fl eet of vessels in South East Asia. Scomi Marine is listed on the Main Board of Bursa Malaysia Securities.

CH Offshore Limited (“CH Offshore”)CH Offshore owns and operates a fl eet of vessels to support and service the offshore oil and gas industry in the Asia Pacifi c and Middle Eastern regions. Its offshore support services are involved in various phases of offshore oil and gas exploration, development and production activities.

These services include supporting seismic surveys, towing and anchor handling of drilling rigs and equipment, transportation of supplies and personnel, work-over and production activities and supporting pipe-laying and other offshore construction activities. CH Offshore is listed on the Main Board of SGX-ST.

Properties

Finbar International Limited (“Finbar”)Finbar is involved in the property investment and development business in Perth, Western Australia. It focuses mainly on the development of medium to high-density luxury residential

Marine

Marine

Treasury andOther Investments

Properties

Manufacturing

Our Investments at a Glance


engineering, marketing and servicing transit concrete mixers

international marketing and communications

biotechnology sector

structured bank deposits and other treasury products

a)

b)

c)

d)

apartments in the Perth Metropolitan area by way of direct ownership or by joint venture involvement through companies registered specifi cally to conduct the development. Finbar is listed on the Australian Securities Exchange (“ASX”).

Cedarwoods Properties Properties Limited (“CWPL”) CWPL is involved in the property investment and development business in Australia. CWPL is essentially a land sub-division company with a sizable landbank in its books. It specialises in canal and waterfront housing and develops other residential housing projects. CWPL is listed on the ASX.

96 & 102 Terrace Road Pty Ltd(“96 & 102”)96 & 102 has entered into a joint venture agreement with a subsidiary of Finbar to develop, construct and market two residential apartment towers with unrestricted views of Swan River over Langley Park in East Perth, Western Australia. This project is scheduled to complete by year 2008.

Security Land Corporation (SLC)SLC is involved in the property investment and development business in Philippines. It currently owns and leases out for rental, a nine-storey offi ce building sitting on the prime commercial and business district in Makati, Manila. It also owns a collection of parcels of raw land located in General Trias, Cavite City, 2km away from Gateway Business Park.

Manufacturing

PCI Limited (“PCI”) PCI provides electronic manufacturing services to a global customer base. Its business is to create competitive advantage for its customers through helping them bring products to market in the shortest possible time, at the right price and performance point, and with the highest quality. PCI is listed on the Main Board of the SGX-ST.

Others

This is represented by treasury activities and other investments as follows:


25,000

20,000

15,000

10,000

5,000

0

-5,000

20072006200520042003

2.5

2.0

1.5

1.0

0.5

0

0.5

400,000

350,000

300,000

250,000

200,000

150,000

100,000

50,000

0

20072006200520042003

35

30

25

20

15

10

5

0

120.00

100.00

80.00

60.00

40.00

20.00

0

20072006200520042003

50

45

40

35

30

25

20

15

10

5

0

Profi t attributtable to shareholders

(US$ 000)

EPS(USD cents)

2007

2006

2005

2004

2003

23,052

17,881

19,009

6,550

(278)

2.12

1.64

1.75

0.60

(0.03)

Shareholders’Equity

(US$ 000)

Net Tangible Assets per

Share (US$ 000)

2007

2006

2005

2004

2003

356,291

285,763

284,482

239,325

210,806

32.84

26.25

26.13

21.99

19.38

Dividend Payout Ratio

(%)

Dividend per Share

(USD cents)

2007

2006

2005

2004

2003

46.26

109.88

66.38

51.00

55.78

1.50

45.00

6.00

3.00

2.50

Five-Year Group Financial Statistics and Charts

Investment Holding Activities


INCOME STATEMENT

Revenue (USD) - Marine Businesses - Investment Holding Activities

Profi t Before Taxation (USD) - Marine Businesses - Investment Holding Activities

Profi t Attributable to Shareholders (USD) - Marine Businesses - Investment Holding Activities

BALANCE SHEET

Current assets Cash and cash equivalents Other current assets Non-current assets Property, plant and equipment Investments Other non-current asset

Current Liabilities Non-current liabilities Long-term borrowing and other payable Deferred taxation Minority interestShareholders equity

OTHER DATA

Issued and paid up capital (US$ 000) Earnings per share(USD cents) - Marine Businesses - Investment Holding Activities

Dividends per share(SGD cents) Dividend payout ratio(%) Net tangible assets per share(USD cents) Return on average equity(ROAE)

FY2003(US$000)

94,1683,302

97,470

29,77787

29,864

28,063 (278)

27,785

66,69138,607

86,005 74,032

- 265,335

36,428

- 325

17,776 210,806 265,335

126,517

2.59

(0.03)2.56

2.50

55.78 19.38

12.68%

98,7332,890

101,623

36,7896,523

43,312

30,744 6,550

37,294

98,19330,568

109,806 89,445

- 328,012

50,687

2,029 144

35,827 239,325 328,012

126,570

2.830.603.43

3.00 51.00 21.99

16.57%

104,391 3,273

107,664

46,722 19,39666,118

39,22919,009

58,238

120,34835,967

128,652 100,726

-385,693

44,495

16,425

171

40,120 284,482 385,693

126,588

3.601.755.35

6.00

66.38 26.13

22.24%

30,45713,59544,052

256,09018,628

274,718

253,83617,881

271,717

27,589 34,717

1,719 218,15136,709

318,885

32,812

--

310 285,763 318,885

168,814

23.32

1.6424.96

45.00 109.88 26.25

95.30%

0 15,615 15,615

-

23,36623,366

-23,05223,052

31,99362,791

5,621 271,460

5,512 377,377

20,758

- -

328 356,291 377,377

168,814

-2.122.12

1.50 46.2632.847.18%

FY2004(US$000)

FY2005(US$000)

FY2006(US$000)

FY2007(US$000)

Note: The fi nancial data from FY2003 to FY2004 which was previously reported in the Singapore Dollar, has been translated into the United States Dollar using the exchange rates as follows:

Share capital

Revenue and expenses

Assets, liabilities and equity

Average Rates Year End Rates

1.7605

1.7200

FY2003

FY2004

-at 1.72

at average rates for the respective years

at respective year end rates

1.7552

1.7171


MR PEH KWEE CHIM

executive director

Dr Tan Cheng BockNon-Executive Chairman

Dr Tan Cheng Bock is a Non-Executive, Independent Director of Chuan Hup Holdings Limited (“CHH”). He was appointed as Chairman 0n 12 February 1991 and last re-elected on 20 October 2006. He is also the Chairman of the Nominating Committee and a member of the Audit and Remuneration Committees. He serves as a Non-Executive, Independent Director of PCI Limited. He is also Chairman of Dredging International Asia Pacifi c Pte Ltd and was a Board member of Land Transport Authority until 2005. Dr Tan served as a Member of Parliament for Ayer Rajah from 1980 to 2006. He was also the Leader of the Singapore Southeast Asia Parliamentary Group, Chairman of the West Coast - Ayer Rajah Town Council, Vice-Chairman of the South West Community Development Council and member of the Government Parliamentary Committee for Defence and Foreign Affairs. After retiring from politics he continued to serve the Ministry of Health as Chairman of the Advisory Board, Jurong Health Connect and as Chairman of the Jurong Medical Centre. He served on the Chronic Disease Management Committee in the Ministry of Health and currently sits on the steering committee on Active Aging, Ministry of Health and is a board member of the Council of the Third Age.

Dr Tan was appointed as an Independent Director of the H-REIT Manager Board and HBT Trustee-Manager Board on 22 May 2006. He also sits on the Audit Committee of both c0mpanies. A private medical practitioner by profession, Dr Tan obtained his Bachelor of Medicine and Surgery degree from the then University of Singapore in 1968. In addition, he is a Fellow of the College of Family Practitioners and an Honorary Member of the Singapore Medical Association.

Mr Peh Siong Woon TerenceChief Executive Offi cer & Executive Director

Mr Peh Siong Woon Terence is the Chief Executive Offi cer and Executive Director of CHH. He was appointed to this position on 1 November 2005 and was last re-elected on 20 October 2006. Mr Peh was the Deputy Financial Controller of CHH from July 2002 to October 2005. From July 2002 to September 2005, he was seconded to CH Offshore Ltd (“CHO”) as Chief Financial Offi cer As Chief Financial Offi cer, he oversaw the fi nancial affairs of CHO. From July 2000 to June 2002, Mr Peh was the Finance Manager at CHH and was responsible for its cash management, treasury functions, account payables and banking relations. Prior to his appointment with CHH, he was a Finance Manager at PCI Limited and was responsible for its cash management and treasury functions.

Mr Peh is also a Director of WhiteRock Health Care Pte. Ltd.

Mr Peh holds a degree of Bachelor of Commerce in Marketing from Curtin University of Technology, Australia and a Masters of Commerce in Finance from the University of New South Wales, Australia.

Mr Peh Kwee ChimExecutive Director

Mr Peh is an Executive Director of CHH. He has over 30 years of experience in the marine transportation, marine logistics and offshore support services industries. Mr Peh was one of the co-founders of CHH in 1970 and was appointed as Managing Director in 1984. On 1 November 2005, he resigned as Managing Director and remained on the Board as an Executive Director. He will be due for re-election at the coming AGM under Article 86 of the Company’s Articles of Association. He is also a member of the Nominating Committee.

Mr Peh is also the Executive Chairman of PCI Limited and has been instrumental in building up the PCI Group. He is also a Director of CH Offshore Ltd, Scomi Marine Bhd, Dredging International Asia Pacifi c Pte Ltd and Security Land Corporation.

Mr Peh graduated from the University of Western Australia in 1969 with a Bachelor of Engineering (Mechanical) degree.

DR TAN CHENG BOCK

non-executive chairman

MR PEH SIONG WOON TERENCEchief executive offi cer& executive director

Board ofDirectors


Prof Tan Cheng Han S.C.Non-Executive, Independent Director

Prof Tan Cheng Han, S.C., is a Non-Executive, Independent Director of CHH. He was appointed as a Director of CHH on 1 July 2001 and will be due for re-election at the coming AGM under Article 86 of the Company’s Articles of Association. He is also Chairman of the Remuneration Committee and a member of the Audit and Nominating Committees.

Prof Tan is currently the Dean of the Faculty of Law, National University of Singapore, where he teaches Company Law, Contract Law and the Law of Agency. He has been a Visiting Professor at Peking University and the East China University of Politics and Law, and a Consultant and Instructor to the John F Kennedy School of Government’s Vietnam Programme. Prior to joining NUS in 1996, he was a Partner in M/s Drew & Napier’s litigation department. He currently also practises as an advocate specialising in commercial disputes and is a member of the Singapore International Arbitration Centre’s Regional Panel of Arbitrators. He was appointed to the rank of Senior Counsel in 2004 and in August 2006 he was appointed a Specialist Judge.

Some of Prof Tan’s previous public appointments include being a member of the Corporate Finance Committee, Financial Sector Review Group and the Advisory Panel to the former Registry of Companies and Businesses. His current public appointments include being a Vice-President of the Singapore Academy of Law, a Senate member of the National University of Singapore, a member of the Securities Industry Council, a member of the Competition Commission of Singapore, a member of the Appeal Advisory Panel to the Minister for Finance constituted under the Securities and Futures Act, the Financial Advisers Act, and the Insurance Act, a member of the Military Court of Appeal and a member of the Board of Legal Education. He also serves on many professional and university committees. He is a Director of Exploit Technologies Private Limited, ST Marine Limited, Anwell Technologies Limited, NTUC Income, Singapore Computer Systems Limited, Centillion Environment and Recycling Ltd and Yellow Pages (Singapore) Ltd. He has written and edited several monographs, and published many book chapters and articles in various local and foreign law journals including the Asian Journal of Comparative Law, Company Financial and Insolvency Law Review, Journal of Corporate Law Studies, Law Quarterly Review, Malaya Law Review, Malayan Law Journal, Singapore Academy of Law Journal, Singapore Journal of International and Comparative Law, and Singapore Journal of Legal Studies.

In January 2005, he was selected by the World Economic Forum as one of 3 Young Global Leaders from Singapore. In 2006 he was awarded the Public Administration Medal (Silver) in Singapore’s 41st National Day celebrations.

Prof Tan received his Bachelor of Law (Honours) degree from the National University of Singapore in 1987 and his Master of Law degree from the University of Cambridge in 1990.

Mdm Joanna Young Sau KwanNon-Executive, Independent Director

Mdm Joanna Young Sau Kwan is a Non-Executive, Independent Director of CHH. She was appointed on 21 February 2003 and was last re-elected on 20 October 2006. She is also the Chairman of the Audit Committee and a member of the Remuneration and Nominating Committees.

Mdm Young brings with her a wealth of experience in accounting, auditing and fi nancial management. Mdm Young runs her own accounting fi rm. From 1969 to 1978, she gained extensive experience in the accounting profession during her employment with Evan Wong & Co and Turquand Youngs & Co. In 1978, she joined a garment manufacturing company taking charge of fi nancial, administration and production duties before setting up her own practice in 1980. Mdm Young has been the Honorary Auditor of the Chinese Women’s Association since 1972. Mdm Young is also a Non-Executive, Independent Director of CH Offshore Ltd.

Mdm Young studied Accountancy in Sydney Technical College and obtained her Accountancy Certifi cate in 1968 She was admitted to membership of the Australian Society of Accountants and the Singapore Society of Accountants in 1969. She is a Fellow (Practising) Member of the Institute of Certifi ed Public Accountants of Singapore and a Fellow Member of CPA Australia.

PROF TAN CHENG HAN S.C.

non-executive independent director

MDM JOANNA YOUNG SAU KWAN

non-executive independent director


Mr Valerie Tan May WeiGroup Legal Manager/ Company SecretaryMs Valerie Tan May Wei joined CHH on 15 July 1993 as Group Legal Manager and was appointed Group Company Secretary on 18 January 1994. She is responsible for all legal and secretarial matters of the CHH Group.

Prior to joining CHH, Ms Tan was Group Legal Manager and Company Secretary of Jurong Shipyard Ltd. Prior to that, she was Senior Legal Offi cer at Neptune Orient Lines Ltd. She has over 18 years of experience in legal and corporate secretarial matters.

Ms Tan graduated from the National University of Singapore in 1987 with a Bachelor of Law (Honours) degree.

Mr Quek Kai ChuaActing Chief Financial Offi cerMr Quek Kai Chua joined CHH on 3 October 2002 as a Senior Accountant and was appointed Finance Manager on 21 February 2006. On 6 July 2007, he was promoted to Acting Chief Financial Offi cer. He is responsible for all accounting, fi nancial and taxation matters of the CHH Group. Mr Quek was an Audit Supervisor with Ernst and Young (Singapore) before joining CHH. Prior to that, he was an Audit Senior with Deloitte Touche Tohmatsu (Kuala Lumpur). Mr Quek has over 11 years of experience in the accounting profession.

Mr Quek is a member of The Malaysian Institute of Certifi ed Public Accountants and the Malaysian Institute of Accountants.

Mr William Chan Eng Chong Senior Project ManagerMr Chan is the Special Project Manager of CHH and was appointed to this position on 1 November 2006. He joined CHH in 1980 as an Operations Assistant and was appointed as Senior Operations Executive in 1988 and Shipyard Manager in 1991.

He has over 20 years of working experience in the marine and offshore industry. His experience ranges from logistics planning, handling vessel insurance, vessel maintenance and procurement, shipping agency transactions to project management in the CHH Group.

Mr Chan is a member of the Institute of Shipping Management.

Key Management



Chuan Hup Holdings Limited (“CHH”) is committed to achieving high standards of corporate governance to ensure greater transparency and maximise long-term shareholder value.

This report describes CHH’s corporate governance practices with reference to the Code of Corporate Governance (the “Code”).

Board Matters

The Board’s Conduct of its AffairsThe Board oversees the business affairs of CHH and therefore every director is expected to act in good faith and always in the interests of the Company. The principal functions of the Board includes the approval of the Company’s strategic plans, the approval of major investments, divestments and fund-raising, overseeing processes for evaluating the adequacy of internal controls and risk management and being responsible for corporate governance practices. CHH has in place fi nancial authorisation and approval limits for operating and capital expenditure, as well as acquisitions and disposal of investments. The Board and the Audit Committee also approve the CHH Group’s fi nancial results.

The Board meets on a regular basis. Where necessary, additional Board meetings are held to deliberate on urgent substantive matters. An aggregate of 7 Board meetings were held for the Financial Year ended 30 June 2007. Details of the attendance of Board members at Board meetings and meetings of the various Board committees for the Financial Year ended 30 June 2007 are set out on page 20 of this Annual Report.

All new Directors appointed to the Board are briefed on the business activities of the Group and its strategic directions, as well as their statutory and other duties and responsibilities as Directors. In addition, Directors are briefed either during Board meetings or at specially convened sessions on changes to regulations and accounting standards which have an important bearing on the Company’s or Directors’ disclosure obligations. Where appropriate, Directors are encouraged to attend courses, conferences and seminars in relevant fi elds.

Board Composition and BalanceThe Board currently comprises 5 Directors, 3 of whom are Non-Executive, Independent Directors. The Non-Executive Independent Directors are Dr Tan Cheng Bock, Prof Tan Cheng Han, S.C. and Mdm Joanna Young Sau Kwan.

The Nominating Committee reviews the independence of each director annually bearing in mind the Code’s defi nition of what constitutes an independent director. Under the Code of Corporate Governance, Prof Tan Cheng Han, S.C. would be deemed to be not independent because his spouse,



Ms Valerie Tan May Wei, is the Group Legal Manager and Group Company Secretary. However, Ms Tan reports to the Chief Executive Offi cer and Prof Tan abstains from discussions relating to her remuneration, and hence Prof Tan is considered to be an Independent Director. In any event, the Board considers Prof Tan to be an Independent Director because he is a strong-minded individual who is able to exercise independent judgement with a view to the best interests of the Company at all times in the discharge of his duties as Director.

The Directors bring with them a broad range of expertise and experience in areas such as accounting or fi nance, legal, business or management experience, industry knowledge and customer-based experience or knowledge. The diversity of the Directors’ experience allows for the useful exchange of ideas and views. Profi les of the Directors and other relevant information are set out on pages 10 and 11 of this Annual Report.

Chairman and Chief Executive Offi cerDifferent individuals assume the Chairman and the Chief Executive Offi cer functions in CHH. There is a clear separation of the roles and responsibilities between the Chairman and the Chief Executive Offi cer. The Chairman, who is non-executive, is responsible for the Board and the Board has delegated day-to-day management of CHH to the CEO.

Board MembershipThe Nominating Committee comprises Dr Tan Cheng Bock (Committee Chairman), Mr Peh Kwee Chim, Prof Tan Cheng Han, S.C., and Mdm Joanna Young Sau Kwan, the majority of whom including the Chairman, are Non-Executive, Independent Directors.

The Nominating Committee reviews and assesses candidates for directorships before making recommendations to the Board. In recommending new directors to the Board, the Nominating Committee takes into consideration the skills and experience required and the current composition of the Board, and strives to ensure that the Board has an appropriate balance of independent directors as well as directors with the right profi le of expertise, skills, attributes and ability.

In evaluating a director’s contribution and performance for the purpose of re-nomination, the Nominating Committee takes into consideration a variety of factors such as attendance, preparedness, participation and candour.

Recommendations for nominations of new directors and retirement of directors are made by the Nominating Committee and considered by the Board as a whole. At each Annual General Meeting (“AGM”) of CHH, not less than one third of the directors for the time being (being those who have been longest in offi ce since their last re-election) are required to retire from offi ce by rotation. A retiring director is eligible for re-election by the shareholders of CHH at the AGM. Also, all newly appointed directors during the year will hold offi ce only until the next AGM and will be eligible for re-election.

Board PerformanceCHH believes that the Board’s performance is ultimately refl ected in the performance of CHH. The Board should ensure compliance with applicable laws and Board members should act in good faith, with due diligence and care in the best interests of CHH and its shareholders. In addition to these fi duciary duties, the Board is charged with two key responsibilities: setting strategic directions and ensuring that CHH is ably led. The measure of a board’s performance is also tested through its ability to lend support to Management especially in times of crisis and to steer CHH in the right direction.


CHH is of the opinion that the fi nancial indicators set out in the Code as guides for the evaluation of directors are more of a measure of Management’s performance and hence are less applicable to Directors. In any case, such fi nancial indicators provide a snapshot of a Company’s performance, and do not fully measure the sustainable long term wealth and value creation of CHH.

The Board through the delegation of its authority to the Nominating Committee, has used its best efforts to ensure that directors appointed to the Board possess the background, experience, knowledge and skills critical to the Company’s business and that each director with his special contributions brings to the Board an independent and objective perspective to enable balanced and well-considered decisions to be made.

Informal reviews of the Board’s performance are undertaken on a continual basis by the Nominating Committee with inputs from the other Board Members and the CEO. Access to InformationPrior to each Board meeting, the Board is supplied with relevant information by the Management pertaining to matters to be brought before the Board for decision as well as ongoing reports relating to operational and fi nancial performance of the Group. The Board has separate and independent access to Senior Management and the Company Secretary at all times. The Board also has access to independent professional advice, where appropriate, at the expense of CHH.

Remuneration Matters

Remuneration CommitteeThe Remuneration Committee comprises Prof Tan Cheng Han, S.C. (Committee Chairman), Dr Tan Cheng Bock and Mdm Joanna Young Sau Kwan, all of whom are Non-Executive, Independent Directors. The role of the Remuneration Committee is to review and approve the remuneration, including the grant of aggregate variable cash bonuses, share options, performance shares and benefi ts in kind to the Directors and the Senior Management of CHH.

The Remuneration Committee in establishing the framework of remuneration policies for its Directors and Senior Executives is largely guided by the fi nancial performance of the Company. The primary objective is to align the interest of Management with that of the shareholders. In this respect, it believes that remuneration should be competitive and suffi cient to attract, retain and motivate Executive Directors and Senior Executives to manage the Company well. Pay levels, benefi ts and incentives are structured to focus them to achieve corporate objectives.


The remuneration package generally comprises two components. One component is fi xed in the form of a base salary that includes the 13th month based AWS. The other component is variable consisting of performance and incentive bonuses. The variable portion is largely dependent on the fi nancial performance of the Company. The Remuneration Committee strongly supports and endorses the fl exible wage system because it gives the Company more fl exibility to ride through economic downturns. The Remuneration Committee has adopted set profi tability levels to be achieved before performance bonuses are payable.

While share options may be a good form of long-term incentive compensation, the Remuneration Committee is less inclined to grant them as the conversion of these options will dilute the interest of existing shareholders. The Remuneration Committee will therefore recommend granting share options selectively and sparingly and depend more on cash bonuses to reward the key executives including Executive Directors. The Chief Executive Offi cer, Mr Peh Siong Woon Terence, has voluntarily declined receiving share options. Non-Executive Directors are not eligible for grant of share options as the Remuneration Committee believes that their independence can be better preserved and their discharge of their duties will not be infl uenced or affected by movements in the Company’s share price. All Non-Executive Directors are paid Directors’ fees which are subject to approval at AGMs. The Non-Executive Chairman of the Board is paid more than the other Non-Executive Directors due to the nature of his position.

The Directors’ remuneration in bands of US$150,000 is disclosed below. The remuneration of the top three key executives who are not also Directors is shown by number in bands of US$150,000.

The names of the top three key executives who are not also Directors and the breakdown of their remuneration have not been disclosed for competitive reasons and to maintain confi dentiality of staff remuneration matters.


DIRECTORS’ REMUNERATION PAID OR PAYABLE FOR FINANCIAL YEAR ENDED 30 JUNE 2007 – (GROUP SUMMARY)

Directors of Company

US$1,050,000 to US$1,199,999Mr Peh Kwee ChimMr Peh Siong Woon Terence

Below US$150,000Dr Tan Cheng BockProf Tan Cheng Han, S.C.Mdm Joanna Young Sau Kwan

BaseSalary

20.0%14.0%

0.0%0.0%0.0%

Variable Payment

80.0%86.0%

0.0%0.0%0.0%

Directors’ Fees

0.0%0.0%

100.0%100.0%100.0%

Total

100.0%100.0%

100.0%100.0%100.0%

Share Options Granted

NilNil

NilNilNil

Notes:

1. Base salary includes allowances, employer’s CPF and other benefi ts in kind such as the use of Company cars.

2. Variable payments are subject to the fi nancial performance of the Company and the Group.


Audit CommitteeThe Audit Committee comprises Mdm Joanna Young Sau Kwan (Committee Chairman), Dr Tan Cheng Bock and Prof Tan Cheng Han, S.C., all of whom are Non-Executive, Independent Directors. Mdm Joanna Young Sau Kwan has accounting and related fi nancial management expertise and experience. The Board considers the other members as having suffi cient fi nancial knowledge and experience to discharge their responsibilities as members of the Committee.

The Audit Committee meets at least four times a year to carry out its role of reviewing the fi nancial reporting process, the systems of internal control, management of fi nancial risks and the audit process.

The Audit Committee’s duties include:

The Company has implemented a Whistle-Blowing Policy, which serves to encourage and provide a channel to employees to report in good faith and in confi dence, without fear of reprisals, concerns about possible improprieties in fi nancial reporting or other matters. The objective for such arrangement is to ensure independent investigation of such matters and for appropriate follow-up action.

The Audit Committee has authority to investigate any matters within its terms of reference and has full access to and cooperation from Management, in addition to its direct access to the external auditors.

REMUNERATION OF TOP THREE KEY EXECUTIVES IN THE CHUAN HUP GROUP WHO ARE NOT ALSO DIRECTORS OF THE COMPANY FOR FINANCIAL YEAR ENDED 30 JUNE 2007

Below US$150,000 3 (including an Executive who is an immediate family member of a Director)

reviewing the audit plans and results of the external auditors’ examination and evaluation of the Group’s systems of internal accounting controls and any matters which the external auditors wish to discuss (in the absence of Management where necessary);reviewing the scope and results of the internal audit procedures;reviewing the fi nancial statements of the Company and the consolidated fi nancial statements of the Group before their submission to the Directors of the Company and the external auditors’ report on those fi nancial statements; reviewing the quarterly and annual announcements on the results and fi nancial position of the Group and of the Company;reviewing the co-operation and assistance given by the Management to the Group’s external auditors;evaluating the cost effectiveness, independence and objectivity of the external auditors and the nature and extent of the non-audit services provided by them;making recommendation to the Board on the appointment, re-appointment and remuneration of the external auditors of the Company; andmonitoring interested person transaction and confl ict of interest situation that may arise within the Group including any transaction, procedure or course of action that raises questions of Management integrity.

a)

b)c)

d)

e)f )

g)

h)


Accountability and Audit

AccountabilityCHH recognises the importance of providing the Board with a continual fl ow of relevant information on an accurate and timely basis in order that it may effectively discharge its duties. On a regular basis, Board members are provided with business and fi nancial reports comparing actual performance with budget with highlights on key business indicators and major issues.

CHH has implemented quarterly reporting of its fi nancial results since Financial Year ended 30 June 2004.

Internal ControlsThe Board has ultimate responsibility for the system of internal controls maintained by the Company to safeguard the shareholders’ investments and the Company’s assets and for reviewing their effectiveness. The system is intended to provide reasonable but not absolute assurance against material misstatements or loss, and include the safeguarding of assets, the maintenance of proper accounting records, the reliability of fi nancial information, compliance with appropriate legislation, regulation and best practice, and the identifi cation and containment of business risk.

CHH’s external auditors, Deloitte & Touche (“Deloitte”), have also, in the course of their statutory audit, carried out a review of the Company’s system of internal controls to the extent of their planned reliance as laid out in their audit plan. Any material non-compliance and internal control weaknesses noted during their audit and their recommendations to address such non-compliance and weaknesses are reported to the Audit Committee. The Audit Committee Chairman also sets aside time during the year to meet with the external auditors to discuss internal controls and various accounting issues, in the absence of Management. The Management follows up on Deloitte’s recommendations as part of its role in the review of the Group’s internal control systems. The Audit Committee is of the opinion that there are adequate internal controls in the Company.

The Audit Committee also reviewed the non-audit services provided by the external auditors and was satisfi ed that the independence of the external auditors would not be impaired. The Audit Committee has recommended to the Board that Deloitte be nominated for reappointment as auditors at the forthcoming AGM of the Company.

With the exception of PT Mudha Graha Realty, 96 & 102 Terrace Road Pty Ltd, Westgarden Development Pte Ltd, Cleanway Systems and Technologies Pte Ltd, Valcom Holdings Inc, Polytech Investing Ltd, Sunbest Transco Limited and CH Aggregate Limited, all the subsidiaries and associated companies listed on pages 76 to 78 of this Annual Report are audited by Deloitte & Touche, Singapore or are not required to be audited in their countries of incorporation. PT Mudha Graha Realty is audited by KAP Doli, Bambang, Sudarmadji & Dadang, a member fi rm of BKR International. 96 & 102 Terrace Road Pty Ltd is audited by KPMG, Australia. Westgarden Development Pte Ltd and Cleanway Systems and Technologies Pte Ltd are dormant. Valcom Holdings Inc, Polytech Investing Ltd, Sunbest Transco Limited and CH Aggregate Limited are newly incorporated companies and were audited by Deloitte & Touche, Singapore for consolidation purposes only.

The Board and the Audit Committee are satisfi ed that the appointment of the above auditors would not compromise the standard and effectiveness of the audit of the Group.



The Company has established an internal audit function that is independent of the activities it audits. The Head of Internal Audit reports primarily to the Chairman of the Audit Committee and administratively to the Chief Executive Offi cer. The Internal Auditors meet the standards set by recognised professional bodies including the Standards for the Professional Practice of Internal Auditing set by The Institute of Internal Auditors. The Audit Committee has reviewed the adequacy of the internal audit function and is satisfi ed that the Company’s internal audit function is adequately resourced.

Risk ManagementRisk management is essential to the Company’s business. The Company has established risk management policies, guidelines and control procedures to identify operational risks and monitor and manage these risks.

CHH has implemented a Group insurance program and has in place a system for fi nancial monitoring and control.

Communication with Shareholders

CHH believes in regular and timely communication with investors. The Company is open to meetings with investors and analysts.

CHH’s website was recently enhanced to better serve shareholders. The website now serves as a comprehensive and easy-to-use source of information for shareholders. It contains the Company’s publicly disclosed fi nancial information, annual reports, news releases and announcements.

CHH is in full support of the Code’s principle to encourage shareholder participation. CHH’s Articles of Association allow a member entitled to attend and vote to appoint a proxy to attend and vote instead of the member and also provide that a proxy need not be a member of CHH. Voting in absentia by facsimile or email is not currently permitted to ensure proper authentication of the identity of shareholders and their voting intentions.

Securities TradingThe Group has adopted the SGX Best Practices Guide with respect to the dealings in securities for the guidance of directors and offi cers. CHH’s Directors and offi cers are prohibited from dealing in CHH’s shares on short-term considerations, during the periods commencing two weeks before the announcement of CHH’s fi nancial statements for each of the fi rst three quarters of its fi nancial year, and one month before the announcement of the Company’s fi nancial statements for the fi nancial year, and ending on the date of the announcement of the relevant fi nancial statements, or if they are in possession of unpublished price-sensitive information on the Group.

Interested Person TransactionsThe Company has put in place an internal procedure to track interested person transactions (“IPTs”) of the Company. All IPTs are disclosed in the Company’s Annual Report.

CHH did not enter into any IPTs in Financial Year ended 30 June 2007.


Conclusion

CHH recognises the importance of good corporate governance practices for maintaining and promoting investor confi dence. CHH will continue to review and improve its corporate governance practices on an ongoing basis.

Attendance at Board and Committee Meetings

The attendance of each Director at Board meetings and Board Committee meetings during the Financial Year ended 30 June 2007 is as follows:

Board Meetings

Dr Tan Cheng Bock (independent)

Mr Peh Kwee Chim

Mr Peh Siong Woon Terence

Prof Tan Cheng Han, S.C. (Independent)

Mdm Joanna Young Sau Kwan (Independent)

7

7

7

7

7

7

7

7

5

7

Board MeetingsNo. of Meetings Held No. of Meetings Attended

Dr Tan Cheng Bock

Mr Peh Kwee Chim

Prof Tan Cheng Han, S.C.

Mdm Joanna Young Sau Kwan

Audit Committee

5

-

5

5

No. of meetings

Held

No. of meetingsAttended

RemunerationCommittee

No. of meetings

Held


NominatingCommittee

No. of meetings

Held


Board Committee Meetings

5

-

5

5

1

-

1

1

1

-

1

1

1

1

1

1

1

1

1

1



Financial Contents22 Report of the Directors 25 Independent Auditors’ Report 26 Balance Sheets 27 Profi t and Loss Statements 28 Statements of Changes in Equity 31 Consolidated Cash Flow Statement 33 Notes to the Financial Statements79 Statement of Directors 80 Shareholder Information 82 Notice of Annual General MeetingProxy Form

Report of the Directors


The directors present their report together with the audited consolidated fi nancial statements of the group and the balance sheet, profi t and loss statement and statement of changes in equity of the company for the fi nancial year ended 30 June 2007.

1 DIRECTORS

The directors of the company in offi ce at the date of this report are :

Dr Tan Cheng Bock Mr Peh Kwee Chim Prof. Tan Cheng Han, S.C. Mdm Joanna Young Sau Kwan Mr Peh Siong Woon Terence

In accordance with Article 86 of the articles of association, Prof. Tan Cheng Han, S.C. and Mr Peh Kwee Chim retire by rotation and being eligible, offer themselves for re–election.

2 ARRANGEMENTS TO ENABLE DIRECTORS TO ACQUIRE BENEFITS BY MEANS OF THE ACQUISITION OF SHARES AND DEBENTURES

Neither at the end of the fi nancial year nor at any time during the fi nancial year did there subsist any arrangement whose object is to enable the directors of the company to acquire benefi ts by means of the acquisition of shares or debentures in the company or any other body corporate except for the options mentioned in paragraphs 3 and 5 of the Report of the Directors.

3 DIRECTORS’ INTERESTS IN SHARES AND DEBENTURES

The directors of the company holding offi ce at the end of the fi nancial year and their interests in the share capital and debentures of the company and related corporations as recorded in the register of directors’ shareholdings kept by the company under Section 164 of the Singapore Companies Act are as follows :

Shareholdings registered in the name of directors

Shareholdings in which directors are deemed to have interest

At beginning of year

At end of year

At 21 July 2007

At beginning of year

At endof year

At 21 July 2007

Chuan Hup Holdings Limited

(Ordinary shares)

Dr Tan Cheng Bock – – – 250,000 250,000 250,000

Mr Peh Kwee Chim 219,752,660 316,823,990 316,823,990 – 151,835,500 151,835,500

Prof. Tan Cheng Han, S.C. – – – 1,060,000 1,060,000 1,060,000

Mdm Joanna Young Sau Kwan 22,500 22,500 22,500 – – –

Mr Peh Siong Woon Terence – – – – 151,835,500 151,835,500 By virtue of Section 7 of the Singapore Companies Act, Mr Peh Kwee Chim is deemed to have an interest in the

company and in all the related corporations of the company.



4 DIRECTORS’ RECEIPT AND ENTITLEMENT TO CONTRACTUAL BENEFITS

Since the beginning of the fi nancial year, no director has received or become entitled to receive a benefi t which is required to be disclosed under Section 201(8) of the Singapore Companies Act, by reason of a contract made by the company or a related corporation with the director or with a fi rm of which he is a member except for salaries, bonuses and other benefi ts as disclosed in the fi nancial statements. Certain directors received remuneration from related corporations in their capacity as directors and/or executives of those related corporations.

5 SHARE OPTIONS

(a) The Chuan Hup Employees’ Share Option Scheme 1997 (“the Scheme”) was approved by the shareholders of the company at an Extraordinary General Meeting held on 15 August 1997 and amendments to the Scheme were approved by the shareholders of the company at an Extraordinary General Meeting held on 10 November 2000.

(b) During the fi nancial year, no share options were granted, exercised, cancelled and outstanding under the Scheme. Statutory information regarding the options granted in 1998, 1999, 2001 and 2002 under the Scheme have been set out in the Reports of the Directors for the years ended 30 June 1999, 2000, 2001 and 2002.

(c) The Scheme is administered by the Remuneration Committee comprising Prof. Tan Cheng Han, S.C., an independent director, Dr Tan Cheng Bock, an independent director and Mdm Joanna Young Sau Kwan, an independent director.

(d) Non–executive directors, controlling shareholders or their associates are not eligible to participate in the Scheme.

(e) No options have been granted to eligible participants which, in aggregate, represent 5% or more of the total number of new shares available under the Scheme and the Performance Share Plan, as detailed under the “Performance Share Plan” (“PSP”) collectively.

(f) During the fi nancial year, no options to take up unissued shares of any subsidiary company were granted and there were no shares of any subsidiary company issued by virtue of the exercise of an option to take up unissued shares.

(g) At the end of the fi nancial year, there were no unissued shares of the company or any subsidiary company under option.

6 PERFORMANCE SHARE PLAN (“PSP”)

The PSP was approved and adopted by the shareholders at an Extraordinary General Meeting held on 10 November 2000. Under the PSP, awards which represent the right to receive the company’s ordinary shares free of charge upon the achievement of certain prescribed performance targets, will be given to those participants eligible to participate in the PSP. The aggregate number of ordinary shares to be issued pursuant to the Chuan Hup Employees’ Share Option Scheme 1997 and those to be awarded under the PSP, shall not exceed 15% of the issued share capital of the company on the day preceding the relevant award date.

The PSP is administered by the Remuneration Committee (“Committee”). The PSP shall continue to be in force at the discretion of the Committee subject to a maximum period of 10 years commencing 10 November 2000. Further details of the PSP are set out in the company’s Circular dated 25 October 2000.

No awards have been granted under the PSP since its commencement.



7 SHARE REPURCHASE

During the fi nancial year, the company repurchased 3,878,000 ordinary shares by way of market acquisition pursuant to the authority given to the directors under the Share Repurchase Mandates approved at the Extraordinary General Meeting on 13 October 2005.

8 AUDIT COMMITTEE

The Audit Committee carried out its functions in accordance with Section 201B(5) of the Singapore Companies Act, Cap. 50, and the Singapore Exchange Securities Trading Limited Listing Manual. The functions carried out are detailed in the Corporate Governance Report.

The Audit Committee has recommended to the directors the nomination of Deloitte & Touche for re–appointment as external auditors of the group at the forthcoming AGM of the company.

9 AUDITORS

The auditors, Deloitte & Touche, have expressed their willingness to accept re–appointment.

ON BEHALF OF THE DIRECTORS

Peh Siong Woon Terence

Peh Kwee Chim

Singapore28 August 2007


Independent Auditors’ Reportto the members of Chuan Hup Holdings Limited

We have audited the consolidated fi nancial statements of Chuan Hup Holdings Limited (the company) and its subsidiaries (the group) which comprise the balance sheets of the group and the company as at 30 June 2007, the profi t and loss statement, statement of changes in equity and cash fl ow statement of the group and the profi t and loss statement and statement of changes in equity of the company for the year then ended, and a summary of signifi cant accounting policies and other explanatory notes, as set out on pages 26 to 79.

Directors’ Responsibility

The company’s directors are responsible for the preparation and fair presentation of these fi nancial statements in accordance with Singapore Financial Reporting Standards and the Singapore Companies Act, Cap. 50 (the “Act”). This responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and fair presentation of fi nancial statements that are free from material misstatement, whether due to fraud or error; 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 fi nancial 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 fi nancial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the fi nancial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the fi nancial statements, whether due to fraud or error. In making those risk assessments, the auditor considers the internal control relevant to the entity’s preparation and fair presentation of the fi nancial 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 directors, as well as evaluating the overall presentation of the fi nancial statements. We believe that the audit evidence we have obtained is suffi cient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion,

(a) the consolidated fi nancial statements of the group and the balance sheet, profi t and loss statement 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 30 June 2007 and of the results and changes in equity of the group and of the company and cash fl ows of the group for the year ended on that date; and

(b) the accounting and other records required by the Act to be kept by the company and by those subsidiary companies incorporated in Singapore of which we are the auditors have been properly kept in accordance with the provisions of the Act.

Deloitte & ToucheCertifi ed Public Accountants

Ng Peck HoonPartner

Singapore28 August 2007

Balance Sheetsas at 30 June 2007


See accompanying notes to the fi nancial statements.

Group Company

Note 2007 2006 2007 2006

US$’000 US$’000 US$’000 US$’000

ASSETS

Current assets :

Cash and bank balances 7 31,993 27,589 7,540 9,498

Trade receivables 8 931 226 – –

Other receivables and prepayments 9 51,144 18,643 1,916 18,464

Due from subsidiary companies 10 – – 82,838 63,833

Held–for–trading investments 11 2,143 1,744 716 597

Inventory – land held for development 12 8,573 8,580 – –

Assets classifi ed as held for sale 13 – 5,524 – –

Total current assets 94,784 62,306 93,010 92,392

Non–current assets :

Property, plant and equipment 14 5,621 1,719 219 325

Intangible asset 15 5,512 – – –

Subsidiary companies 16 – – 15,494 15,534

Associated companies 17 – – – –

Available–for–sale investments 18 265,087 217,892 220,498 181,208

Other fi nancial assets at fair value through profi t and loss 19 6,373 – 4,308 –

Other assets 20 – 259 – 259

Other receivables – non current 21 – 36,709 – –

Total non–current assets 282,593 256,579 240,519 197,326

Total assets 377,377 318,885 333,529 289,718

LIABILITIES AND EQUITY

Current liabilities :

Bank loans 22 7,380 18,816 7,380 18,816

Trade payables 23 11,222 12,553 10,312 11,969

Other payables 24 1,170 503 372 154

Due to subsidiary companies 25 – – 1,300 3,480

Income tax payable 986 940 905 791

Total current liabilities 20,758 32,812 20,269 35,210

Capital, reserves and minority interests :

Share capital 26 168,814 168,814 168,814 168,814

Reserves 99,398 44,419 98,359 47,117

Accumulated profi ts 88,079 72,530 46,087 38,577

Equity attributable to equity holders of the company 356,291 285,763 313,260 254,508

Minority interests 328 310 – –

Total equity 356,619 286,073 313,260 254,508

Total liabilities and equity 377,377 318,885 333,529 289,718


Profi t and Loss Statementsyear ended 30 June 2007


Group Company

Note 2007 2006 2007 2006

US$’000 US$’000 US$’000 US$’000

Continuing operations

Revenue 27 15,615 13,595 14,848 19,313

Cost of sales 28 (1,237) 45 (619) 92

Gross profi t before direct depreciation 14,378 13,640 14,229 19,405

Direct depreciation and amortisation (89) (202) – –

Gross profi t 14,289 13,438 14,229 19,405

Other income 29 12,209 15,930 3,295 12,208

General and administrative expenses (2,489) (2,371) (1,298) (21,930)

Other expenses – indirect depreciation (152) (135) (110) (104)

Finance costs – interest expense to non–related companies (451) (427) (425) (425)

Share of results of associated companies 17 (40) (7,807) – –

Profi t before tax 23,366 18,628 15,691 9,154

Income tax expense 30 (314) (735) (335) (848)

Profi t for the year from continuing operations 31 23,052 17,893 15,356 8,306

Discontinued operations

Profi t for the year from discontinued operations 32 – 255,223 – 285,113

Profi t for the year 23,052 273,116 15,356 293,419

Group

Note 2007 2006

US$’000 US$’000

Attributable to :

Equity holders of the company 23,043 271,717

Minority interests 9 1,399

23,052 273,116

Earnings per share 34

From continuing and discontinued operations :

Basic 2.12 cents 24.96 cents

Fully diluted 2.12 cents 24.96 cents

From continuing operations :

Basic 2.12 cents 1.64 cents

Fully diluted 2.12 cents 1.64 cents

Statements of Changes in Equityyear ended 30 June 2007


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of

sha

res

42,2

15(1

4,52

3)(2

7,69

2)–

––

–

–

–

–

–

–

Paym

ent o

f div

iden

ds (

Not

e 33

)

–

–

–

–

–

–

–

(3

3,62

0)(2

86,7

70)

(320

,390

)

–

(320

,390

)

Bal

ance

at 3

0 Ju

ne 2

006

168,

814

–

–

–

–

(1

,617

)46

,036

–

7

2,53

028

5,76

3

310

286,

073



See

acc

ompa

nyin

g no

tes

to th

e fi n

anci

al s

tate

men

ts.

Sha

reca

pita

l

Rese

rves

Accu

mul

ated

profi

ts

Attr

ibut

able

to e

quit

yho

lder

sof

com

pany

Min

orit

y in

tere

sts

Tota

l

Exch

ange

fl uct

uati

on

rese

rve

Inve

stm

ent

reva

luat

ion

re

serv

e

US

$’0

00U

S$

’000

US

$’0

00U

S$

’000

US

$’0

00U

S$

’000

US

$’0

00

Gro

up (C

ont’

d)

Bal

ance

at 1

July

200

616

8,81

4(1

,617

)46

,036

72,5

3028

5,76

331

028

6,07

3

Incr

ease

in fa

ir v

alue

of a

vaila

ble–

for–

sale

inve

stm

ents

––

64,5

86–

64,5

86–

64

,586

Curr

ency

tran

slat

ion

rese

rve

–

(28

8)

–

352

64

9

73

Net

inco

me

reco

gnis

ed d

irec

tly

in e

quit

y–

(288

)64

,586

352

64,6

509

64,6

59

Tran

sfer

to p

rofi t

on

sale

of a

vaila

ble–

for–

sale

inve

stm

ents

––

(9,3

19)

–

(9

,319

)–

(9

,319

)

Net

profi t

for

the

year

–

–

–

23,0

43 2

3,04

3

9 2

3,05

2

Tota

l rec

ogni

sed

inco

me

and

expe

nse

for

the

year

–

(28

8) 5

5,26

723

,395

78,

374

18

78,

392

Paym

ent o

f div

iden

ds (N

ote

33)

––

–

(7

,050

)(7

,050

)–

(7

,050

)

Repu

rcha

se o

f sha

res

–

–

–

(7

96)

(

796)

–

(

796)

Bal

ance

at 3

0 Ju

ne 2

007

168,

814

(1,9

05)

101,

303

88,0

7935

6,29

132

835

6,61

9



See

acc

ompa

nyin

g no

tes

to th

e fi n

anci

al s

tate

men

ts.

Sha

reca

pita

l

Rese

rves

Accu

mul

ated

profi

ts

Tota

l

Capi

tal

rede

mpt

ion

rese

rve

S

hare

prem

ium

Inve

stm

ent

reva

luat

ion

rese

rve

D

ivid

end

rese

rve

US

$’0

00U

S$

’000

US

$’0

00U

S$

’000

US

$’0

00U

S$

’000

US

$’0

00

Com

pany

Bal

ance

at 1

July

200

512

6,58

814

,523

27,6

8952

333

,620

31,9

2823

4,87

1

Incr

ease

in fa

ir v

alue

of a

vaila

ble–

for–

sale

inve

stm

ents

–

–

–

46,5

94

–

–

4

6,59

4

Net

inco

me

reco

gnis

ed d

irec

tly

in e

quit

y–

––

46,5

94–

–

46

,594

Net

profi t

for

the

year

–

–

–

–

–

293,

419

293,

419

Tota

l rec

ogni

sed

inco

me

and

expe

nse

for

the

year

–

–

–

46,5

94

–

29

3,41

934

0,01

3

Issu

e of

sha

res

(Not

e 26

)11

–3

–

–

–

14

Adju

stm

ent a

risi

ng fr

om a

bolit

ion

of p

ar v

alue

of s

hare

s42

,215

(14,

523)

(27,

692)

–

–

–

–

Paym

ent o

f div

iden

ds (N

ote

33)

–

–

–

–

(33,

620)

(286

,770

)(3

20,3

90)

Bal

ance

at 3

0 Ju

ne 2

006

168,

814

–

–

47

,117

–

38,

577

254,

508

Incr

ease

in fa

ir v

alue

of a

vaila

ble–

for–

sale

inve

stm

ents

–

–

–

52,2

34

–

–

5

2,23

4

Net

inco

me

reco

gnis

ed d

irec

tly

in e

quit

y–

––

99,3

51–

38,5

7730

6,74

2

Tran

sfer

to p

rofi t

on

sale

of a

vaila

ble–

for–

sale

inve

stm

ents

–

–

–

(9

92)

––

(992

)

Net

profi t

for

the

year

–

–

–

–

–

15,

356

15,

356

Tota

l rec

ogni

sed

inco

me

and

expe

nse

for

the

year

–

–

–

98,3

59

–

5

3,93

332

1,10

6

Paym

ent o

f div

iden

ds (N

ote

33)

–

–

–

–

–(7

,050

)(7

,050

)

Repu

rcha

se o

f sha

res

–

–

–

–

–

(

796)

(

796)

Bal

ance

at 3

0 Ju

ne 2

007

168,

814

–

–

98,3

59

–

4

6,08

731

3,26

0


Consolidated Cash Flow Statementyear ended 30 June 2007


2007 2006US$’000 US$’000

Operating activities

Profi t before income tax and results of associated companies 23,406 281,218

Adjustments for :

Depreciation expense 241 2,945

Dividend income (5,801) (5,702)

Interest income (7,168) (6,434)

Interest expense 451 478

Gain on disposal of subsidiary companies – (250,750)

Loss on disposal of associated company – 6,428

Gain on disposal of plant and equipment (2,432) (6,314)

Reversal of allowance for doubtful debts (net) (61) –

Gain on disposal of available–for–sale investments (net) (9,395) (7,836)

Gain on disposal of other assets (104) –

Fair value adjustments of other fi nancial assets at fair value through profi t and loss 457 –

Operating (loss) profi t before movements in working capital (406) 14,033

Held–for–trading investments (398) (1,667)

Receivables (664) 16,837

Land held for development 7 –

Payables (664) (12,789)

Cash (used in) generated from operations (2,125) 16,414

Interest paid (451) (478)

Interest received 5,604 5,254

Dividends received – other investments 5,801 5,702

Dividends received – associated company – 1,531

Income tax paid (698) (2,239)

Net cash from operating activities 8,131 26,184

Investing activities

Purchase of plant and equipment (4,110) (8,293)

Purchase of assets classifi ed as held for sale (Note B) (960) (14,204)

Proceeds from disposal of plant and equipment – 148

Proceeds from disposal of subsidiary companies (Note 35) – 237,541

Purchase of investment in associated companies (40) –

Proceeds from disposal of associated company – 32,738

Purchase of intangible asset (5,512) –

Purchase of available–for–sale investments (20,632) (55,408)

Proceeds from disposal of available–for–sale investments 38,690 9,826

Purchase of other fi nancial assets at fair value through profi t and loss (6,833) –

Reclassifi cation to bank deposits (Note C) – 6,907

Net cash from investing activities 603 209,255

Consolidated Cash Flow Statementyear ended 30 June 2007



2007 2006US$’000 US$’000

Financing activities

Proceeds from issue of shares – 14

Repayment from (Advance to) the holding company of the former subsidiaries 16,057 (16,057)

Advance to an associated company (2,700) –

Share repurchase (796) –

Dividends paid to shareholders of the company (7,050) (320,390)

Proceeds from bank loans 5,720 42,643

Repayment of bank loans (16,402) (33,339)

Net cash used in fi nancing activities (5,171) (327,129)

Net effect of exchange rate changes in consolidation 841 (1,069)

Net increase (decrease) in cash 4,404 (92,759)

Cash and cash equivalent at beginning of year 27,589 120,348

Cash and cash equivalent at end of year (Note A) 31,993 27,589

A. Cash and cash equivalents consist of :

Cash at bank 5,413 6,824

Fixed deposits 26,577 20,744

Cash on hand 3 21

31,993 27,589

B. Proceeds from disposal of assets classifi ed as held for sale :

During the fi nancial year, the company sold vessels to a former subsidiary company for an aggregate price of US$8,950,000 (2006 : US$33,823,000) by means of an other non–current receivable from the former subsidiary company and remains unpaid as at year end.

C. Reclassifi cation to bank deposits :

The company had reclassifi ed cash from their portfolio of investments to be in compliance with the requirements of FRS 39 “Financial Instruments: Recognition and Measurement”.


Notes to the Financial Statementsyear ended 30 June 2007

1 GENERAL

The company (Registration No. 197000572R) is incorporated in the Republic of Singapore with its registered offi ce and principal place of business at 390 Jalan Ahmad Ibrahim, Singapore 629155. The company is listed on the Singapore Exchange Securities Trading Limited. The fi nancial statements are expressed in United States dollars.

The principal activity of the company is investment holding.

The principal activities of the subsidiary companies and associated companies are set out respectively in Notes 39 and 40 to the fi nancial statements.

The consolidated fi nancial statements of the group and the balance sheet, profi t and loss statement and statement of changes in equity of the company for the year ended 30 June 2007 were authorised for issue by the Board of Directors on 28 August 2007.

2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a) BASIS OF ACCOUNTING

The fi nancial statements are prepared in accordance with the historical cost convention, except as disclosed in the accounting policies below, and are drawn up in accordance with the provisions of the Singapore Companies Act and Singapore Financial Reporting Standards (“FRS”).

In the current fi nancial year, the group and the company have adopted all the new and revised FRSs and Interpretations of FRS (“INT FRS”) issued by the Council on Corporate Disclosure and Governance that are relevant to its operations and effective for annual periods beginning on or after 1 July 2006. The adoption of these new/revised FRSs and INT FRSs has no material effect on the amounts reported for the current or prior years.

At the date of authorisation of these fi nancial statements, the following FRSs and INT FRSs were issued but not effective :

FRS 40 – Investment Property FRS 107 – Financial Instruments: Disclosures FRS 108 – Operating Segments INT FRS 110 – Interim Financial Reporting and Impairment INT FRS 111 – FRS 102 Group and Treasury Share Transactions INT FRS 112 – Service Concession Arrangements

Amendments to FRS 1: Presentation of Financial Statements on Capital Disclosures.

Consequential amendments were also made to various standards as a result of these new/revised standards.

The application of FRS 107 and the consequential amendments to other FRS will not affect any of the amounts recognised in the fi nancial statements, but will change the disclosures presently made in relation to the company’s fi nancial instruments and the objectives, policies and processes for managing capital.

Other than FRS 107, the directors anticipate that the adoption of the above FRS, INT FRS and amendments to FRS in future periods will have no material impact on the fi nancial statements of the company in the period of their initial adoption.

Notes to the Financial Statementsyear ended 30 June 2007


2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont’d)

(b) BASIS OF CONSOLIDATION

The consolidated fi nancial statements incorporate the fi nancial statements of the company and entities (including special purpose entities) controlled by the company (its subsidiary companies). Control is achieved where the company has the power to govern the fi nancial and operating policies of an entity so as to obtain benefi ts from its activities.

The results of subsidiary companies acquired or disposed of during the year are included in the consolidated profi t and loss statement from the effective date of acquisition or up to the effective date of disposal, as appropriate.

Where necessary, adjustments are made to the fi nancial statements of subsidiary companies to bring their accounting policies into line with those used by other members of the group.

All intra–group transactions, balances, income and expenses are eliminated on consolidation.

Minority interests in the net assets of consolidated subsidiary companies are identifi ed separately from the group’s equity therein. Minority interests consist of the amount of those interests at the date of the original business combination and the minority’s share of changes in equity since the date of the combination. Losses applicable to the minority in excess of the minority’s interest in the subsidiary’s equity are allocated against the interests of the group except to the extent that the minority has a binding obligation and is able to make an additional investment to cover its share of those losses.

In the company’s fi nancial statements, investments in subsidiary and associated companies are carried at cost less any impairment in net recoverable value that has been recognised in the profi t and loss statement.

(c) FINANCIAL INSTRUMENTS

Financial assets and fi nancial

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