CIRCULAR DATED 2 AUGUST 2013
THIS CIRCULAR IS ISSUED BY VIZ BRANZ LIMITED. THIS CIRCULAR IS IMPORTANT AS IT CONTAINS
THE RECOMMENDATION OF THE INDEPENDENT DIRECTORS (AS DEFINED HEREIN) OF VIZ BRANZ
LIMITED AND THE ADVICE OF SAC CAPITAL PRIVATE LIMITED TO THE INDEPENDENT DIRECTORS
OF VIZ BRANZ LIMITED. THIS CIRCULAR REQUIRES YOUR IMMEDIATE ATTENTION AND YOU SHOULD
READ IT CAREFULLY.
If you are in any doubt in relation to this Circular or as to the action you should take, you should
consult your stockbroker, bank manager, solicitor, accountant, tax adviser or other professional
adviser immediately.
If you have sold or transferred all your ordinary shares in the capital of the Company (“Shares”) held
through The Central Depositary (Pte) Limited (“CDP”), you need not forward this Circular to the purchaser
or transferee, as arrangements will be made by CDP for a separate Circular to be sent to the purchaser or
transferee. If you have sold or transferred all your Shares which are not deposited with the CDP, you should
immediately forward this Circular to the purchaser, the transferee or the bank, stockbroker or agent through
whom you effected the sale or transfer for onward transmission to the purchaser or the transferee.
The Singapore Exchange Securities Trading Limited assumes no responsibility for the correctness of any of
the statements made, reports contained or opinions expressed in this Circular.
VIZ BRANZ LIMITED
(Incorporated in the Republic of Singapore)
(Company Registration No. 199401631K)
CIRCULAR TO SHAREHOLDERS
in relation to the
MANDATORY UNCONDITIONAL CASH OFFER
by
CREDIT SUISSE (SINGAPORE) LIMITED
(Incorporated in the Republic of Singapore)
(Company Registration No. 197702363D)
for and on behalf of
PLUTO RISING PTE. LTD.
(Incorporated in the British Virgin Islands)
(Company Registration No. 1778366)
to acquire all the issued and paid-up ordinary shares in the capital of Viz Branz Limited other than those already
owned, controlled or agreed to be acquired by Pluto Rising Pte. Ltd. and parties acting in concert with it and
treasury shares held by Viz Branz Limited
Independent Financial Adviser to the Independent Directors of Viz Branz Limited
SAC CAPITAL PRIVATE LIMITED
(Company Registration Number: 200401542N)
(Incorporated in the Republic of Singapore)
SHAREHOLDERS SHOULD NOTE THAT THE OFFER DOCUMENT STATES THAT ACCEPTANCES
MUST BE RECEIVED BY THE CLOSE OF THE OFFER AT 5.30 P.M. (SINGAPORE TIME) ON 16
AUGUST 2013 UNLESS IT IS OTHERWISE EXTENDED BY THE OFFEROR (AS DEFINED HEREIN).
ACCORDINGLY, SHAREHOLDERS WHO WISH TO ACCEPT THE OFFER MUST DO SO BY SUCH TIME
AND DATE.
CONTENTS
DEFINITIONS ......................................................................................................................................
3
LETTER TO SHAREHOLDERS ..........................................................................................................
7
1.
INTRODUCTION .......................................................................................................................
7
2.
THE OFFER ..............................................................................................................................
7
3.
INFORMATION ON THE OFFEROR AND MERCURY RISING ...........................................
8
4.
RATIONALE FOR THE OFFER AND THE OFFEROR’S
INTENTIONS FOR THE COMPANY ......................................................................................
9
5.
COMPULSORY ACQUISITION AND LISTING STATUS......................................................
9
6.
ADVICE AND RECOMMENDATIONS ...................................................................................
10
7.
OVERSEAS SHAREHOLDERS .............................................................................................
12
8.
INFORMATION PERTAINING TO CPFIS INVESTORS ........................................................
13
9.
ACTION TO BE TAKEN BY SHAREHOLDERS .......................................................................
14
10.
RESPONSIBILITY STATEMENT ..............................................................................................
14
APPENDIX 1 - LETTER FROM THE IFA TO THE INDEPENDENT DIRECTORS IN RESPECT OF
THE OFFER ...............................................................................................................
15
APPENDIX 2 - ADDITIONAL GENERAL INFORMATION ON THE COMPANY ...............................
51
APPENDIX 3 - INFORMATION ON THE OFFEROR..........................................................................
55
APPENDIX 4 - AUDITED CONSOLIDATED FINANCIAL STATEMENTS OF THE GROUP FOR
FY2012 .......................................................................................................................
56
APPENDIX 5 - UNAUDITED FINANCIAL STATEMENTS OF THE GROUP FOR 3Q2013 ..............
127
APPENDIX 6 - EXTRACTS FROM THE COMPANY’S ARTICLES OF ASSOCIATION ...................
137
APPENDIX 7 – SUBJECT PROPERTIES ..........................................................................................
148
APPENDIX 8 – VALUATION REPORTS.............................................................................................
149
2
DEFINITIONS
Except where the context otherwise requires, the following definitions shall apply throughout this Circular:
“Articles”
:
The articles of association of the Company
“Books Closure Date”
:
Books closure date for determination of entitlements to any
Distribution
“CDP”
:
The Central Depository (Pte) Limited
“CEO”
:
Chief Executive Officer
“Circular”
:
This circular to Shareholders dated 2 August 2013 in relation
to the Offer
“Closing Date”
:
5.30 p.m. (Singapore time) on 16 August 2013 or such later
date(s) as may be announced from time to time by or on
behalf of the Offeror, being the closing time and date for the
lodgement of acceptances of the Offer
“Code”
:
The Singapore Code on Take-overs and Mergers
“Companies Act”
:
Companies Act, Chapter 50 of Singapore
“Company”
:
Viz Branz Limited
“Company Convertible
Securities”
:
Convertible securities, warrants, options and derivatives
in respect of the Shares or securities which carry voting rights
in the Company
“CPF”
:
Central Provident Fund
“CPF Agent Banks”
:
Agent banks included under the CPFIS
“CPFIS”
:
Central Provident Fund Investment Scheme
“CPFIS Investors”
:
Investors who have purchased Shares using their CPF
contributions pursuant to the CPFIS
“Directors”
:
The directors of the Company (including the Independent
Directors) as at the Latest Practicable Date, and “Director”
means any one of them
“Distribution”
:
Any dividend, right and/or distribution
“Encumbrance”
:
Any mortgage, debenture, lien, charge, pledge, title retention,
right to acquire, security interest, option, pre-emptive or similar
right, right of first refusal and any other encumbrance or
condition whatsoever
“FAA”
:
Form of Acceptance and Authorisation for Offer Shares which
forms part of the Offer Document and which is issued to
Shareholders whose Shares are deposited with CDP
“FAT”
:
For m of Acceptance and Transfer for Offer Shares
which forms part of the Offer Document which is issued to
Shareholders whose Shares are not deposited with CDP
3
DEFINITIONS
“Financial Adviser” or
“Credit Suisse”
:
Credit Suisse (Singapore) Limited, being the financial
adviser to the Offeror
“FY”
:
Financial year ended or ending 30 June
“Group”
:
The Company and its subsidiaries, and “Group Company”
means any one of them
“IFA” or “SAC Capital”
:
SAC Capital Private Limited, the independent financial
adviser to the Independent Directors in connection with the
Offer
“IFA Letter”
:
Has the meaning ascribed to it in Paragraph 6.1 of the
Letter to Shareholders
“Independent Directors”
:
The Directors who are considered independent for the
purpose of making recommendations to the Shareholders
in respect of the Offer, being Messrs Yuen San Seng, Chng
Khoon Peng, Tan Kok Hiang and Tan Hwee Yong
“Interested Director” or “CBB”
:
The Directors who faces an irreconcilable conflict of interests
as a party acting in concert with the Offeror, being Mr Ben
Chng Beng Beng
“Latest Practicable Date”
:
23 July 2013, being the latest practicable date prior to the
printing of this Circular
“Letter to Shareholders”
:
The letter from the Directors to the Shareholders as set out
from page 7 to page 14 of this Circular
“Listing Manual”
:
The listing manual of the SGX-ST, as amended up to the
Latest Practicable Date
“Market Day ”
:
A day on which the SGX-ST is open for trading of securities
“Mercury Rising”
:
Mercury Rising Pte. Ltd.
“Offer”
:
The mandatory unconditional cash offer to acquire the
Offer Shares on the terms and conditions set out in the
Offer Document, the FAA and/or the FAT
“Offer Announcement”
:
The announcement relating to the Offer made on the Offer
Announcement Date
“Offer Announcement Date”
:
5 July 2013, being the date of the Offer Announcement
“Offer Document”
:
The document (including the FAA and the FAT) dated 19 July
2013 issued by the Financial Adviser for and on behalf of the
Offeror in respect of the Offer, and any other document(s) which
may be issued for and on behalf of the Offeror to amend, revise,
supplement and/or update the document(s) from time to time
“Offer Price”
:
S$0.78 in cash for each Offer Share
“Offer Shares”
:
All the Shares in issue not already owned, controlled or
agreed to be acquired by the Offeror Concert Group and
treasury Shares held by the Company
4
DEFINITIONS
“Offeror”
:
Pluto Rising Pte. Ltd.
“Offeror Concert Group”
:
The Offeror and persons acting or presumed to be acting in
concert with the Offeror
“Offeror Convertible Securities”
:
Convertible securities, warrants, options and derivatives in
respect of Offeror Shares or securities which carry voting rights
in the Offeror
“Offeror Shares”
:
Issued and paid-up ordinary shares in the capital of the
Offeror
“Overseas Shareholders”
:
Shareholders whose addresses are outside Singapore as
shown in the Register or the Depository Register (as the
case may be)
“PRC”
:
The People’s Republic of China
“Register”
:
The register of holders of Shares as maintained by the
Registrar
“Registrar” or “M & C”
:
M & C Services Pte Ltd
“SGX-ST”
:
Singapore Exchange Securities Trading Limited
“SGXNET”
:
Singapore Exchange Network, the corporate announcement
system maintained by the SGX-ST for the submission of
announcements by listed companies
“Shares”
:
Issued and paid-up ordinary shares in the capital of the
Company
“Shareholders”
:
The holders of Shares, including persons whose Shares
are deposited with CDP or who have purchased Shares on the
SGX-ST
“Share Acquisition”
:
Has the meaning ascribed to it in Paragraph 1.1(a) of the
Letter to Shareholders
“Subject Properties”
:
The properties as set out in the third column of Appendix 7 to
this Circular
“SIC”
:
The Securities Industry Council of Singapore
“Valuation Reports”
:
Has the meaning ascribed to it in Paragraph 13 of Appendix
2 to this Circular
“Valuers”
:
Collectively, Colliers International Consultancy & Valuation (S)
Pte Ltd, Guangdong Horizon Assets and Real Estate Appraisal
Co., Ltd and Henan Xin Surplus Assets Appraisal Firm
“S$” and “cents”
:
Singapore dollars and cents, respectively, being the lawful
currency of Singapore
“%” or “per cent.”
:
Per centum or percentage
5
DEFINITIONS
Acting in Concert and Associated Company. Unless otherwise defined, the expressions “acting in
concert” and “associated company” shall have the same meanings as ascribed to them respectively in
the Code.
Depositor and Depository Register. The expressions “Depositor” and “Depository Register” shall
have the same meanings as ascribed to them respectively in Section 130A of the Companies Act.
Expressions. Words importing the singular shall, where applicable, include the plural and vice versa.
Words importing the masculine gender shall, where applicable, include the feminine and neuter genders.
References to persons shall, where applicable, include corporations.
Headings. The headings in this Circular are inserted for convenience only and shall be ignored in
construing this Circular.
Rounding. Any discrepancies in the figures in this Circular between the listed amounts and the totals
thereof are due to rounding. Accordingly, the figures shown as totals in this Circular may not be an
arithmetic aggregation of the figures that precede them.
Shareholders. References to “you”, “your” and “yours” in this Circular are, as the context so determines,
to Shareholders.
Statutes. Any reference in this Circular to any enactment is a reference to that enactment as for the time
being amended or re-enacted. Any word defined under the Companies Act, the Code, the Listing Manual
or any statutory modification thereof and not otherwise defined in this Circular shall, where applicable,
have the same meaning as ascribed to it under the Companies Act, the Code, the Listing Manual or any
statutory modification thereof, as the case may be, unless the context otherwise requires.
Subsidiary. The expression “subsidiary” shall have the same meaning as ascribed to it in the
Companies Act.
Time and Date. Any reference to a time of day and date in this Circular is made by reference to
Singapore time and date respectively unless otherwise stated.
Total number of Shares as at the Latest Practicable Date. In this Circular, the Company has
354,996,976 Shares (excluding treasury Shares) and 6,120,000 treasury Shares.
Cautionary Note on Forward-Looking Statements
All statements other than statements of historical facts included in this Circular are or may be
forward-looking statements. Forward-looking statements include but are not limited to those
using words such as “expect”, “anticipate”, “believe”, “estimate”, “intend”, “project”, “plan”,
“strategy”, “forecast” and similar expressions or future or conditional verbs such as “if”, “will”,
“would”, “should”, “could”, “may” and “might”. These statements reflect the Company’s current
expectations, beliefs, hopes, intentions or strategies regarding the future and assumptions in light
of currently available information. Such forward-looking statements are not guarantees of future
performance or events and involve known and unknown risks and uncertainties. Accordingly,
actual results may differ materially from those described in such forward-looking statements.
Shareholders should not place undue reliance on such forward-looking statements, and neither
the Company nor the IFA undertakes any obligation to update publicly or revise any forwardlooking statements, subject to compliance with all applicable laws and regulations and/or the
rules of the SGX-ST and/or any other regulatory or supervisory body or agency.
6
LETTER TO SHAREHOLDERS
VIZ BRANZ LIMITED
(Incorporated in the Republic of Singapore)
(Company Registration No. 199401631K)
Directors:
Registered Office:
Mr Yuen San Seng (Non-Executive Chairman and Independent Director)
Mr Ben Chng Beng Beng (Group Managing Director and Deputy Chairman)
Mr Chng Khoon Peng (Executive Director)
Mr Tan Kok Hiang (Non-Independent, Non-Executive Director)
Mr Tan Hwee Yong (Independent Director)
50 Raffles Place, #32-01
Singapore Land Tower
Singapore 048623
2 August 2013
To: The Shareholders of Viz Branz Limited
Dear Sir / Madam
MANDATORY UNCONDITIONAL CASH OFFER BY THE OFFEROR FOR THE OFFER SHARES
1.
INTRODUCTION
1.1
Offer Announcement. As set out in the Offer Announcement:
(a)
the Offeror had acquired from Mr Chng Khoon Peng an aggregate of 135,800,219 Shares,
amounting to approximately 38.25% of the issued and paid up Shares (excluding treasury
Shares) (“Share Acquisition”); and
(b)
following the completion of the Share Acquisition, the Offeror Concert Group owns
206,210,002 Shares, comprising approximately 58.09% of the total number of issued and paidup Shares (excluding treasury Shares) and the Financial Adviser announced on 5 July 2013,
for and on behalf of the Offeror, inter alia, the firm intention on the part of the Offeror to make
the Offer in accordance with Rule 14 of the Code.
1.2
Offer Document. Shareholders should by now have received a copy of the Offer Document
issued by the Financial Adviser, for and on behalf of the Offeror, setting out, inter alia, the terms
and conditions of the Offer. The principal terms and conditions of the Offer are set out on pages
7 and 8 of the Offer Document. Shareholders are advised to read the terms and conditions
contained therein carefully.
1.3
Circular. The purpose of this Circular is to provide Shareholders with relevant information
pertaining to the Company and to set out the recommendation of the Independent Directors and
the advice of the IFA to the Independent Directors with regard to the Offer.
2.
THE OFFER
2.1
Offer Price. As set out in the Offer Document, the offer price for each Offer Share will be as
follows:
For each Offer Share: S$0.78, payable in cash
The Offer Shares will be acquired:
(a)
fully paid;
(b)
free from any Encumbrance whatsoever; and
7
LETTER TO SHAREHOLDERS
(c)
together with all rights, benefits and entitlements attached as at the Offer Announcement
Date and thereafter attaching thereto, including the right to receive and retain all
Distributions declared, paid or made by the Company on or after the Offer Announcement
Date.
Accordingly, if any Distribution is declared, paid or made by the Company on or after
the Offer Announcement Date, and:
(i)
if the settlement date in respect of the Offer Shares accepted pursuant to the
Offer falls on or before the Books Closure Date, the Offeror will pay the relevant
accepting Shareholders the Offer Price for each Offer Share, as the Offeror will
receive the Distribution in respect of those Offer Shares from the Company; and
(ii)
if the settlement date in respect of the Offer Shares accepted pursuant to
the Offer falls after the Books Closure Date, the amount of the Distribution in
respect of such Offer Shares will be deducted from the Offer Price payable for
such Offer Shares, as the Offeror will not receive the Distribution in respect of
those Offer Shares from the Company.
2.2
Unconditional Offer. The Offer is not subject to any conditions and is unconditional in all respects.
2.3
Warranty. As set out in Paragraph 4 of the Offer Document, a Shareholder who tenders his
Offer Shares in acceptance of the Offer will be deemed to have unconditionally and irrevocably
warranted that he sells such Offer Shares, as or on behalf of the beneficial owner(s) thereof, (a)
fully paid, (b) free from all Encumbrances whatsoever, and (c) transferred together with all rights,
benefits and entitlements attached to them as at the Offer Announcement Date and thereafter
attaching thereto, including but not limited to the right to receive and retain all Distributions
declared, paid or made by the Company on or after the Offer Announcement Date.
2.4
Details of the Offer. Further details of the Offer are set out on pages 7 and 8 and Appendix
1 to the Offer Document in relation to (a) the duration of the Offer, (b) the settlement of the
consideration for the Offer, (c) the requirements relating to the announcement of level of
acceptances of the Offer, and (d) the right of withdrawal of acceptances of the Offer.
A copy of each of the Offer Announcement and the Offer Document is available on the website of
the SGX-ST at www.sgx.com.
2.5
Closing Date. Shareholders should note that the Offer will close at 5.30 p.m. (Singapore time) on
16 August 2013, being the Closing Date, unless it is otherwise extended by the Offeror.
3.
INFORMATION ON THE OFFEROR AND MERCURY RISING
Paragraph 8 of the Offer Document sets out information on the Offeror and Mercury Rising, an
extract of which is set out in italics below. Unless otherwise defined, all terms and expressions
used in the extract below and in the extracts in Paragraphs 4, 5, 7.1, 8 and Appendix 3 below
shall have the same meanings as those defined in the Offer Document.
“8.
INFORMATION ON THE OFFEROR
The Offeror is a special purpose vehicle incorporated on 14 June 2013 for the purpose of
the Offer under the laws of the British Virgin Islands. The Offeror has an authorised capital
of S$50,000 divided into 50,000 ordinary shares and an issued share capital of S$1.00
comprising 1 ordinary share. The Offeror is wholly owned by Mercury Rising and its sole
director is CBB.
Mercury Rising is also a special purpose vehicle incorporated on 14 June 2013 for the
purpose of the Offer under the laws of the British Virgin Islands. Mercury Rising has an
authorised capital of S$50,000 divided into 50,000 ordinary shares and an issued share
capital of S$1.00 comprising 1 ordinary share. Mercury Rising is wholly owned by CBB, who
is also its sole director.
8
LETTER TO SHAREHOLDERS
CBB is currently the Managing Director and Deputy Chairman of the Group. As at the Latest
Practicable Date, CBB does not hold any Shares in the Company directly, and is deemed to
have an interest in all the Shares held by the Offeror.”
Further information on the Offeror is set out in Appendix 3 to this Circular.
4.
RATIONALE FOR THE OFFER AND THE OFFEROR’S INTENTIONS FOR THE COMPANY
The full text of the rationale for the Offer and the Offeror’s intentions for the Company has been
extracted from Paragraphs 10 and 11 of the Offer Document and is set out in italics below.
Shareholders are advised to read the extract below carefully.
“10.
RATIONALE FOR THE OFFER
The Offer is made by the Offeror in compliance with Rule 14.1 of the Code, arising from the
Share Acquisition.
11.
OFFEROR’S INTENTIONS FOR THE COMPANY
It is the current intention of the Offeror that the Group continues with its existing activities
and there are presently no plans to (a) introduce any major changes to the business or
operations of the Group, (b) re-deploy any of the fixed assets of the Group or (c) discontinue
the employment of any of the existing employees of the Group, other than in the ordinary
course of business. The Offeror however reserves the right and discretion, subsequent
to the Offer, to conduct a review of the Group’s management and operations, restructure
its shareholdings or shareholdings of the Company and evaluate strategic options and
possibilities with a view to optimising and/or unlocking value in the Offeror and/or the Group
at an opportune time.”
5.
COMPULSORY ACQUISITION AND LISTING STATUS
Paragraph 13 of the Offer Document sets out the intentions of the Offeror relating to its right of
compulsory acquisition and the listing status of the Company, an extract of which is set out in italics
below.
“13.
COMPULSORY ACQUISITION AND LISTING STATUS
13.1 Compulsory Acquisition
Pursuant to Section 215(1) of the Companies Act, in the event that the Offeror receives valid
acceptances pursuant to the Offer in respect of not less than 90% of the total number of
issued Shares (other than those Shares already held by the Offeror, its related corporations
or their respective nominees as at the date of the Offer and excluding treasury Shares),
the Offeror will be entitled to compulsorily acquire all the Offer Shares held by Dissenting
Shareholders on the same terms as those offered under the Offer. In such an event, the
Offeror intends to exercise its rights of compulsory acquisition and the Company
will become a wholly-owned subsidiary of the Offeror upon the completion of such
compulsory acquisition.
In addition, the Dissenting Shareholders have the right under and subject to Section 215(3)
of the Companies Act, to require the Offeror to acquire their Shares at the Offer Price in the
event that the Offeror, its related corporations or their respective nominees acquire, pursuant
to the Offer, such number of Shares which, together with the Shares held by the Offeror, its
related corporations or their respective nominees, comprise 90% or more of the total number
of issued Shares (excluding treasury Shares). Shareholders who wish to exercise such right
are advised to seek their own independent legal advice.
9
LETTER TO SHAREHOLDERS
13.2 Listing Status
Under Rule 1105 of the Listing Manual, in the event that the Offeror Concert Group, as a
result of the Offer or otherwise, own or control more than 90% of the total number of issued
Shares (excluding any treasury Shares), the SGX-ST may suspend the trading of the Shares
on the SGX-ST until it is satisfied that at least 10% of the total number of issued Shares
(excluding treasury Shares) are held by at least 500 Shareholders who are members of the
public. Under Rule 1303(1) of the Listing Manual, where the Offeror succeeds in garnering
acceptances exceeding 90% of the total number of issued Shares (excluding treasury
Shares), thus causing the percentage of the total number of issued Shares (excluding
treasury Shares) held in public hands to fall below 10%, the SGX-ST will suspend trading of
the Shares only at the close of the Offer.
In addition, under Rule 724 of the Listing Manual, if the percentage of the total number
of issued Shares (excluding treasury Shares) held in public hands falls below 10%, the
Company must, as soon as practicable, announce that fact and the SGX-ST may suspend
the trading of all the Shares.
Rule 724 of the Listing Manual further provides that the SGX-ST may allow the Company
a period of three months, or such longer period as the SGX-ST may agree, to raise the
percentage of Shares in public hands to at least 10%, failing which the Company may be
delisted.
It is the intention of the Offeror to make the Company its wholly-owned subsidiary and
to delist the Company from the SGX-ST. It is therefore not the intention of the Offeror
to preserve the listing status of the Company and in the event that the trading of
Shares on the SGX-ST is suspended pursuant to Rule 724, Rule 1105 or Rule 1303(1)
of the Listing Manual, the Offeror does not intend to undertake or support any action
for any such trading suspension to be lifted by the SGX-ST.”
6.
ADVICE AND RECOMMENDATIONS
6.1
General. Shareholders should read and carefully consider the recommendations of the
Independent Directors and the advice of the IFA to the Independent Directors dated 2 August 2013,
which is set out in Appendix 1 to this Circular (“IFA Letter”), before deciding whether to accept or
reject the Offer.
6.2
Independence of Directors. The SIC has ruled that Mr Ben Chng Beng Beng is exempted from
assuming responsibility for any recommendations on the Offer that the Directors may make to
Shareholders on the basis that he faces an irreconcilable conflict of interest as a party acting in
concert with the Offeror as he is the sole director of the Offeror and the sole shareholder and
director of Mercury Rising which is the sole shareholder of the Offeror.
Notwithstanding the exemption sought for Mr Ben Chng Beng Beng, he will assume responsibility
for the accuracy of facts stated and opinions expressed in documents and advertisements issued
by, or on behalf of, the Company to Shareholders in connection with the Offer
Save for Mr Ben Chng Beng Beng, all of the Directors consider themselves independent for the
purposes of making a recommendation on the Offer.
6.3
Advice of the IFA to the Independent Directors.
(a)
IFA. SAC Capital has been appointed as the independent financial adviser to advise the
Independent Directors in respect of the Offer.
(b)
Factors Taken into Consideration by the IFA. In arriving at its recommendation, the IFA
has taken into account several key considerations, set forth in Paragraph 7 of the IFA Letter.
Shareholders should read Paragraph 7 of the IFA Letter in conjunction with, and in the
context of, the full text of the IFA Letter.
10
LETTER TO SHAREHOLDERS
(c)
Advice of the IFA. After having regard to the considerations set out in the IFA Letter, and
based on the circumstances of the Company and the information as at the Latest Practicable
Date, the IFA has made certain recommendations to the Independent Directors, an extract
of which is set out in italics below. Shareholders should read the extract in conjunction with,
and in the context of, the full text of the IFA Letter. Unless otherwise defined or the context
otherwise requires, all terms and expressions used in the extract below shall have the same
meanings as those defined in the IFA Letter.
“Based on our analysis set out above and after considering all relevant information available
to us as at the Latest Practicable Date, from a financial point of view, we are of the opinion
that the Offer Price is, on balance, fair and reasonable.
The Independent Directors may wish to consider advising Shareholders who:
(a)
wish to realise all or part of their investments in the Shares; and/or
(b)
are uncertain of the longer term performance and prospects of the Group,
to (i) accept the Offer; or (ii) sell the Shares in the open market if they can obtain a price
higher than the Offer Price (after deducting related expenses). In this regard, we note that
the Shares had traded above the Offer Price for the period after the Offer Announcement
Date and up to the Latest Practicable Date.
The Independent Directors may also wish to consider advising Shareholders who:
(a)
are prepared to take a longer term view of their investment in the Shares; and/or
(b)
are positive about the prospects of the Group,
to retain all or part of their shareholdings in the Company.”
6.4
Recommendations of the Independent Directors. The Independent Directors, having considered
carefully the terms of the Offer and the advice given by the IFA in the IFA Letter, CONCUR with the
advice given by the IFA in respect of the Offer.
Accordingly, the Independent Directors recommend the Shareholders who:
(a)
wish to realize all or part of their investments in the Shares; and/or
(b)
are uncertain of the longer term performance and prospects of the Group,
to (i) accept the Offer; or (ii) sell the Shares in the open market if they can obtain a price
higher than the Offer Price (after deducting related expenses).
The Independent Directors also recommend the Shareholders who:
(a)
are prepared to take a longer term view of their investment in the Shares; and/or
(b)
are positive about the prospects of the Group,
to retain all or part of their shareholdings in the Company.
6.5
No Regard to Specific Objectives. In rendering the advice and the recommendations above, both
the IFA and the Independent Directors have not had regard to the specific investment objectives,
financial situation, tax status, risk profiles or unique needs and constraints of any individual
Shareholder. As different Shareholders would have different investment objectives and profiles, the
Independent Directors recommend that any individual Shareholder who may require advice in the
context of his specific investment portfolio should consult his stockbroker, bank manager, solicitor,
accountant, tax adviser or other professional adviser immediately.
11
LETTER TO SHAREHOLDERS
SHAREHOLDERS ARE ADVISED TO READ THE FULL TEXT OF THE IFA LETTER WHICH IS
SET OUT IN APPENDIX 1 TO THIS CIRCULAR CAREFULLY. SHAREHOLDERS SHOULD NOTE
THAT THE IFA’S OPINION SHOULD NOT BE RELIED UPON BY ANY SHAREHOLDER AS THE
SOLE BASIS FOR DECIDING WHETHER OR NOT TO ACCEPT THE OFFER.
7.
OVERSEAS SHAREHOLDERS
7.1
Availability of Offer. The availability of the Offer to Shareholders whose addresses are outside
Singapore, as shown on the Register or in the Depository Register (as the case may be), being
the Overseas Shareholders, may be affected by the laws of the relevant overseas jurisdiction.
Overseas Shareholders should refer to Paragraphs 16.1 to 16.4 of the Offer Document, an extract
of which is set out in italics below.
“16.1 Overseas Shareholders
The availability of the Offer to Overseas Shareholders may be affected by laws and
regulations of the relevant overseas jurisdictions. Accordingly, all Overseas Shareholders
should inform themselves about and observe any applicable legal requirements. Where there
are potential restrictions on sending this Offer Document, the FAA and/or the FAT to any
overseas jurisdiction, each of the Offeror and Credit Suisse reserves the right not to send
these documents to any overseas jurisdiction. For the avoidance of doubt, the Offer is made
to all Shareholders holding Offer Shares, including to those to whom this Offer Document,
the FAA and/or the FAT have not been or will not be sent.
Copies of this Offer Document and any other formal documentation relating to the Offer are
not being, and must not be, directly or indirectly, mailed or otherwise forwarded, distributed
or sent in or into or from any Restricted Jurisdiction and will not be capable of acceptance
by any such use, instrumentality or facility within any Restricted Jurisdiction and persons
receiving such documents (including custodians, nominees and trustees) must not mail or
otherwise forward, distribute or send them in or into or from any Restricted Jurisdiction.
The Offer (unless otherwise determined by the Offeror and permitted by applicable law and
regulation) will not be made, directly or indirectly, in or into, or by the use of mails of, or by
any means or instrumentality (including, without limitation, telephonically or electronically)
of interstate or foreign commerce of, or any facility of a national, state or other securities
exchange of, any Restricted Jurisdiction, and the Offer will not be capable of acceptance by
any such use, means, instrumentality or facilities.
16.2 Overseas Jurisdiction
It is the responsibility of any Overseas Shareholder who wishes to accept the Offer, to
satisfy himself as to the full observance of the laws of the relevant jurisdiction, including the
obtaining of any governmental or other consent which may be required, or compliance with
other necessary formalities and legal requirements and the payment of any taxes, imposts,
duties or other requisite payments due in such jurisdiction. Such Overseas Shareholders
shall be liable for any such taxes, imposts, duties or other requisite payments payable,
and the Offeror and any person acting on its behalf (including Credit Suisse, CDP and the
Registrar) shall be fully indemnified and held harmless by such Overseas Shareholders for
any such taxes, imposts, duties or other requisite payments that may be required to be paid.
In accepting the Offer, the Overseas Shareholder represents and warrants to the Offeror
and Credit Suisse that he is in full observance of the laws of the relevant jurisdiction in
that connection, and that he is in full compliance with all necessary formalities and legal
requirements.
Each of the Offeror and Credit Suisse reserves the right not to treat any acceptance of the
Offer in or from any overseas jurisdiction and/or in respect of an Overseas Shareholder as
valid. Overseas Shareholders accepting the Offer should note that if they have, in the FAT,
provided addresses in overseas jurisdictions for the receipt of remittances of payment by the
Offeror, such acceptance may be rejected.
12
LETTER TO SHAREHOLDERS
Any Overseas Shareholder who is in doubt about his position should consult his
professional advisers in the relevant jurisdictions.
16.3 Copies of the Offer Document
Overseas Shareholders may obtain copies of the Offer Document, the FAA and/or the FAT
and any related documents, during normal business hours and up to 5:30 p.m. (Singapore
time) on the Closing Date from, as the case may be, (a) the Registrar, M&C Services Pte
Ltd at 112 Robinson Road, #05-01, Singapore 068902 or (b) CDP at 4 Shenton Way, #0201, SGX Centre 2, Singapore 068807. Electronic copies of the Offer Document, the FAA
and/or the FAT may also be obtained from the website of the SGX-ST at www.sgx.com.
Alternatively, an Overseas Shareholder may, subject to compliance with applicable laws,
write in to the Registrar at the aforementioned address to request for the Offer Document,
the FAA and/or the FAT and any related documents to be sent to an address in Singapore
by ordinary post at his own risk, provided always that the last date for despatch in respect
of such request shall be a date falling three (3) Market Days prior to the Closing Date. It
is the responsibility of the Overseas Shareholder who wishes to request for the Offer
Document, the FAA and/or the FAT and any related documents to satisfy himself as to
the full observance of the laws of the relevant jurisdiction in that connection, including the
obtaining of any governmental or other consent which may be required, and compliance with
all necessary formalities and legal requirements. In requesting for this Offer Document, the
FAA and/or the FAT and any related documents, the Overseas Shareholder represents and
warrants to the Offeror and Credit Suisse that he is in full observance of the laws of the
relevant jurisdiction in that connection, and that he is in full compliance with all necessary
formalities and legal requirements.
16.4 Notice
Each of the Offeror and Credit Suisse reserves the right to notify any matter, including
the fact that the Offer has been made, to any or all Shareholders (including Overseas
Shareholders) by announcement to the SGX-ST or paid advertisement in a daily newspaper
published or circulated in Singapore, in which case, such notice shall be deemed to have
been sufficiently given notwithstanding any failure by any Shareholder to receive or see such
announcement or advertisement.”
7.2
Copies of Circular. This Circular may not be sent to Overseas Shareholders due to potential
restrictions on sending such documents to the relevant overseas jurisdictions. Any affected
Overseas Shareholder may, nevertheless, obtain copies of this Circular during normal business
hours up to the Closing Date, from the offices of the Registrar at 112 Robinson Road, #05-01,
Singapore 068902, download a copy of the this Circular from the website of the SGX-ST at www.
sgx.com, or make a request to the Registrar for this Circular to be sent to an address in Singapore
by ordinary post at his own risk, up to five (5) Market Days prior to the Closing Date.
8.
INFORMATION PERTAINING TO CPFIS INVESTORS
The Offer Document sets out information pertaining to CPFIS Investors in Paragraph 16.5 of the
Offer Document, an extract of the relevant paragraph is set out in italics below. Unless otherwise
defined, all terms and expressions used in the extract below shall have the same meanings as
those defined in the Offer Document.
“16.5 CPFIS Investors
CPFIS Investors will receive further information on how to accept the Offer from their
respective CPF Agent Banks directly. CPFIS Investors are advised to consult their respective
CPF Agent Banks should they require further information, and if they are in any doubt as to
the action they should take, CPFIS Investors should seek independent professional advice.
CPFIS Investors who wish to accept the Offer are to reply to their respective CPF Agent
Banks by the deadline stated in the letter from their respective CPF Agent Banks. CPFIS
Investors who accept the Offer will receive the Offer Price payable in respect of their Offer
Shares in their CPF investment accounts.”
13
LETTER TO SHAREHOLDERS
9.
ACTION TO BE TAKEN BY SHAREHOLDERS
Shareholders who wish to accept the Offer must do so not later than the Closing Date, abiding by
the procedures for the acceptance of the Offer as set out in Appendix 2 to the Offer Document,
and in the accompanying FAA and/or FAT.
Acceptances should be completed and returned as soon as possible and, in any event, so as to be
received, on behalf of the Offeror, by CDP (in respect of the FAA) or the Registrar (in respect of the
FAT), as the case may be, not later than the Closing Date.
Shareholders who do not wish to accept the Offer need not take any further action in respect of the
Offer Document, the FAA and/or the FAT which have been sent to them.
10.
RESPONSIBILITY STATEMENT
The Directors (including any who may have delegated detailed supervision of this Circular) have
taken all reasonable care to ensure that the facts stated and all opinions expressed in this Circular
(other than the IFA Letter for which the IFA has taken responsibility) are fair and accurate and
that no material facts have been omitted the omission of which would make any statement in this
Circular (other than the IFA Letter for which the IFA has taken responsibility) misleading, and they
jointly and severally accept responsibility accordingly. Where any information in this Circular (other
than the IFA Letter for which the IFA has taken responsibility) has been extracted or reproduced
from the Offer Document or from published or publicly available sources, the sole responsibility of
the Directors has been to ensure through reasonable enquiries that such information is accurately
extracted from such sources or, as the case may be, reflected or reproduced in this Circular.
Yours faithfully
For and on behalf of the Board of Directors
VIZ BRANZ LIMITED
Mr Yuen San Seng
Non-Executive Chairman and Independent Director
14
APPENDIX 1 - LETTER FROM THE IFA TO THE INDEPENDENT DIRECTORS IN
RESPECT OF THE OFFER
SAC CAPITAL PRIVATE LIMITED
(Incorporated in the Republic of Singapore)
(Company Registration Number 200401542N)
1 Robinson Road #21-02 AIA Tower
Singapore 048542
2 August 2013
To:
The Independent Directors of Viz Branz Limited (in relation to the Offer)
Mr Yuen San Seng
Mr Chng Khoon Peng
Mr Tan Kok Hiang
Mr Tan Hwee Yong
Dear Sirs
MANDATORY UNCONDITIONAL CASH OFFER FOR ALL THE ISSUED AND PAID-UP ORDINARY
SHARES IN THE CAPITAL OF VIZ BRANZ LIMITED
Unless otherwise defined or the context otherwise requires, all terms defined in the Circular shall have
the same meanings herein.
1.
INTRODUCTION
On 5 July 2013 (the “Offer Announcement Date”), Credit Suisse (Singapore) Limited (“Credit
Suisse”) announced (the “Offer Announcement”), for and on behalf of Pluto Rising Pte. Ltd.
(the “Offeror”), that the Offeror is making a mandatory unconditional cash offer (the “Offer”) for
all the Offer Shares (as defined below). The Offeror had on 5 July 2013, acquired 135,800,219
issued ordinary shares (“Shares”) in the capital of Viz Branz Limited (the “Company”) from Mr
Chng Khoon Peng, representing approximately 38.25% of the total number of the issued Shares
(excluding treasury Shares) (the “Share Acquisition”).
As a result of the Share Acquisition, the Offeror and persons acting or presumed to be acting
in concert with the Offeror (collectively, the “Offeror Concert Group”) own 206,210,002
Shares, representing approximately 58.09% of the total number of issued Shares (excluding
treasury Shares). In accordance with Section 139 of the Securities and Futures Act (Cap. 289
of Singapore) (the “Securities and Futures Act”) and Rule 14.1 of the Singapore Code on
Take-Overs and Mergers (“Code”), the Offeror has incurred an obligation to make a mandatory
unconditional cash offer for all the Shares (other than those already owned, controlled or agreed
to be acquired by the Offeror Concert Group and treasury Shares held by the Company) (the
“Offer Shares”).
The formal Offer Document was despatched to Shareholders on 19 July 2013.
In connection with the Offer, the Company has appointed us as the independent financial adviser
to the directors of the Company (the “Directors”) who are independent in relation to the Offer (the
“Independent Directors”) to advise on the financial terms of the Offer. This letter, which sets out,
inter alia, our evaluation and advice, has been prepared for the use of the Independent Directors
in connection with their consideration of the Offer and their recommendation to Shareholders
arising thereof.
15
APPENDIX 1 - LETTER FROM THE IFA TO THE INDEPENDENT DIRECTORS IN
RESPECT OF THE OFFER
2.
OUR TERMS OF REFERENCE
We have been appointed as the independent financial adviser to the Independent Directors to
provide an assessment of the financial terms of the Offer in order to advise the Independent
Directors in respect of their recommendation to Shareholders on the Offer.
We were not privy to the negotiations in relation to the Offer or any other offers. We do not, by this
letter, make any representation or warrant the merits of the Offer. We have not been requested
to express, and we do not express, an opinion on the relative merits of the Offer as compared
to any other alternative transactions. We have not been instructed or authorised to solicit, and
we have not solicited, any indications of interest from any third party with respect to the Shares.
We have not conducted a comprehensive independent review of the business, operations or
financial condition of the Company and its subsidiaries (collectively, the “Group”) or the Offeror.
Our evaluation is confined to the financial terms of the Offer and we have not evaluated the
commercial rationale or merits of the Offer or the future growth prospects or earnings potential
of the Group after the completion of the Offer. Accordingly, we do not express any view as to the
prices at which the Shares may trade or on the future financial performance of the Group after the
completion of the Offer.
In the course of our evaluation, we have held discussions with the Directors and the management
of the Group (the “Management”) and have relied on the information and representations,
whether written or verbal, provided to us by the Directors and/or the Management, including
the information contained in the Circular. We have not independently verified such information
or representations and accordingly cannot and do not warrant or accept responsibility for the
accuracy, completeness or adequacy of these information or representations. We have, however,
made such enquiries and exercised such judgement (as we deemed necessary) in assessing the
information and representations provided to us, and have found no reason to doubt the reliability
of such information or representations which we have relied on.
The Directors (including those who may have delegated detailed supervision of the Circular)
have confirmed that, having made all reasonable enquiries and to the best of their knowledge
and belief, (a) all material information available to them in connection with the Offer has been
disclosed in the Circular; (b) such information is true and accurate in all material respects; and (c)
there is no other information or fact, the omission of which would cause any information disclosed
to us or the facts stated in the Circular to be inaccurate, incomplete or misleading in any material
respect. Whilst care has been exercised in reviewing the information which we have relied on,
we have not independently verified the information but nonetheless have made such enquiries
and exercised such judgement as were deemed necessary and have found no reason to doubt
the reliability of the information or facts. Accordingly, no representation or warranty, expressed or
implied, is made and no responsibility is accepted by us concerning the accuracy, completeness
or adequacy of such information or facts.
We have not made any independent evaluation or appraisal of the assets and liabilities of the
Group. We have also not been furnished with any such evaluation or appraisal, except for the
valuation summary and reports prepared by Colliers International Consultancy & Valuation (S)
Pte Ltd, Guangdong Horizon Assets and Real Estate Appraisal Co., Ltd. and Henan Xin Surplus
Assets Appraisal Firm, being the independent valuers appointed by the Company in connection
with the Offer (the “Independent Valuers”). As we are not experts in the evaluation or appraisal
of the assets set out in the valuation summary and reports, we have placed sole reliance on the
Independent Valuers in the evaluation or appraisal of the aforementioned assets.
Our opinion and advice, as set out in this letter, are based on the market, economic, industry
and other applicable conditions prevailing on, and the information made available to us as of, the
Latest Practicable Date. Such conditions may change significantly over a relatively short period of
time and we assume no responsibility to update, revise or reaffirm our opinion and advice in the
light of any subsequent development after the Latest Practicable Date that may affect our opinion
and advice contained herein.
16
APPENDIX 1 - LETTER FROM THE IFA TO THE INDEPENDENT DIRECTORS IN
RESPECT OF THE OFFER
In rendering our opinion and advice, we have not had regard to the specific investment objectives,
financial situation, tax position or unique needs and constraints of any Shareholder or any specific
group of Shareholders. We recommend that any individual Shareholder or specific group of
Shareholders who may require specific advice in relation to his or their investment portfolio(s)
should consult his or their legal, financial, tax or other professional adviser.
Our opinion and advice in relation to the Offer should be considered in the context of the
entirety of this letter and the Circular.
The Company has been separately advised by its own professional advisers in the preparation
of the Circular (other than this letter). We have had no role or involvement and have not provided
any advice, financial or otherwise, in the preparation, review and verification of the Circular (other
than this letter). Accordingly, we take no responsibility for and express no views, expressed or
implied, on the contents of the Circular (other than this Ietter).
3.
THE OFFER
3.1
In accordance with Rule 14.1 of the Code and section 139 of the Securities and Futures Act, and
subject to the terms and conditions set out in the Offer Document issued, the Offeror has made
the Offer for the Offer Shares on the following basis:
For each Offer Share: S$0.78, payable in cash (the “Offer Price”)
3.2
The Offer Shares will be acquired:
(a)
fully paid;
(b)
free from any Encumbrance whatsoever; and
(c)
together with all rights, benefits and entitlements attached as at the Offer Announcement
Date and thereafter attaching thereto, including the right to receive and retain all
Distributions declared, paid or made by the Company on or after the Offer Announcement
Date.
Accordingly, if any Distribution is declared, paid or made by the Company on or after
the Offer Announcement Date, and:
3.3
(i)
if the settlement date in respect of the Offer Shares accepted pursuant to
the Offer falls on or before the Books Closure Date, the Offeror will pay the
relevant accepting Shareholders the Offer Price for each Offer Share, as the
Offeror will receive the Distribution in respect of those Offer Shares from the
Company; and
(ii)
if the settlement date in respect of the Offer Shares accepted pursuant to
the Offer falls after the Books Closure Date, the amount of the Distribution in
respect of such Offer Shares will be deducted from the Offer Price payable for
such Offer Shares, as the Offeror will not receive the Distribution in respect of
those Offer Shares from the Company.
Unconditional Offer. The Offer is not subject to any conditions and is unconditional in all
respects.
17
APPENDIX 1 - LETTER FROM THE IFA TO THE INDEPENDENT DIRECTORS IN
RESPECT OF THE OFFER
3.4
Warranty. As set out in Paragraph 4 of the Offer Document, a Shareholder who tenders his
Offer Shares in acceptance of the Offer will be deemed to have unconditionally and irrevocably
warranted that he sells such Offer Shares, as or on behalf of the beneficial owner(s) thereof, (a)
fully paid, (b) free from all Encumbrances whatsoever ; and (c) transferred together with all rights,
benefits and entitlements attached to them as at the Offer Announcement Date and thereafter
attaching thereto, including but not limited to the right to receive and retain all Distributions
declared, paid or made by the Company on or after the Offer Announcement Date.
3.5
Details of the Offer. Further details of the Offer are set out on pages 7 and 8 and Appendix
1 to the Offer Document in relation to (a) the duration of the Offer, (b) the settlement of the
consideration for the Offer, (c) the requirements relating to the announcement of the level of
acceptances of the Offer; and (d) the right of withdrawal of acceptances of the Offer. A copy
of each of the Offer Announcement and the Offer Document is available on the website of the
SGX-ST at www.sgx.com. Shareholders are advised to read the information carefully.
3.6
Closing Date. Shareholders should note that the Offer will close at 5.30 p.m. (Singapore time) on
16 August 2013, being the Closing Date, unless it is otherwise extended by the Offeror.
4.
INFORMATION ON THE OFFEROR AND THE MERCURY RISING
4.1
The Offeror
Paragraph 8 of the Offer Document sets out information on the Offeror and Mercury Rising, an
extract of which is set out in italics below. Unless otherwise defined, all terms and expressions
used in the extract below and in the extracts in Paragraphs 4, 5, 7.1, 8 and Appendix 3 shall have
the same meanings as those defined in the Offer Document.
“8.
INFORMATION ON THE OFFEROR
The Offeror is a special purpose vehicle incorporated on 14 June 2013 for the purpose of
the Offer under the laws of the British Virgin Islands. The Offeror has an authorised capital
of S$50,000 divided into 50,000 ordinary shares and an issued share capital of S$1.00
comprising 1 ordinary share. The Offeror is wholly owned by Mercury Rising and its sole
director is CBB.
Mercury Rising is also a special purpose vehicle incorporated on 14 June 2013 for the
purpose of the Offer under the laws of the British Virgin Islands. Mercury Rising has an
authorised capital of S$50,000 divided into 50,000 ordinary shares and an issued share
capital of S$1.00 comprising 1 ordinary share. Mercury Rising is wholly owned by CBB,
who is also its sole director.
CBB is currently the Managing Director and Deputy Chairman of the Group. As at the
Latest Practicable Date, CBB does not hold any Shares in the Company directly, and is
deemed to have an interest in all the Shares held by the Offeror.”
Further information on the Offeror is set out in Appendix 3 of the Circular.
5.
RATIONALE FOR THE OFFER AND THE OFFEROR’S INTENTIONS FOR THE COMPANY
The full text of the rationale for the Offer and the Offeror’s intentions for the Company has been
extracted from Paragraphs 10 and 11 of the Offer Document and is set out in italics below.
Shareholders are advised to read the information carefully.
“10.
RATIONALE FOR THE OFFER
The Offer is made by the Offeror in compliance with Rule 14.1 of the Code, arising from the
Share Acquisition.
18
APPENDIX 1 - LETTER FROM THE IFA TO THE INDEPENDENT DIRECTORS IN
RESPECT OF THE OFFER
11.
OFFEROR’S INTENTIONS FOR THE COMPANY
It is the current intention of the Offeror that the Group continues with its existing activities
and there are presently no plans to (a) introduce any major changes to the business
or operations of the Group, (b) re-deploy any of the fixed assets of the Group or (c)
discontinue the employment of any of the existing employees of the Group, other than in
the ordinary course of business. The Offeror however reserves the right and discretion,
subsequent to the Offer, to conduct a review of the Group’s management and operations,
restructure its shareholdings or shareholdings of the Company and evaluate strategic
options and possibilities with a view to optimising and/or unlocking value in the Offeror and/
or the Group at an opportune time.”
6.
COMPULSORY ACQUISITION AND LISTING STATUS
Paragraph 13 of the Offer Document sets out the intentions of the Offeror relating to its right of
compulsory acquisition and the listing status of the Company, an extract of which is set out in
italics below. Shareholders are advised to read the information carefully.
“13.
COMPULSORY ACQUISITION AND LISTING STATUS
13.1 Compulsory Acquisition
Pursuant to Section 215(1) of the Companies Act, in the event that the Offeror receives
valid acceptances pursuant to the Offer in respect of not less than 90% of the total
number of issued Shares (other than those Shares already held by the Offeror, its related
corporations or their respective nominees as at the date of the Offer and excluding treasury
Shares), the Offeror will be entitled to compulsorily acquire all the Offer Shares held by
Dissenting Shareholders on the same terms as those offered under the Offer. In such an
event, the Offeror intends to exercise its rights of compulsory acquisition and the
Company will become a wholly-owned subsidiary of the Offeror upon the completion
of such compulsory acquisition.
In addition, the Dissenting Shareholders have the right under and subject to Section 215(3)
of the Companies Act, to require the Offeror to acquire their Shares at the Offer Price in
the event that the Offeror, its related corporations or their respective nominees acquire,
pursuant to the Offer, such number of Shares which, together with the Shares held by the
Offeror, its related corporations or their respective nominees, comprise 90% or more of
the total number of issued Shares (excluding treasury Shares). Shareholders who wish to
exercise such right are advised to seek their own independent legal advice.
Listing Status
Under Rule 1105 of the Listing Manual, in the event that the Offeror Concert Group, as
a result of the Offer or otherwise, own or control more than 90% of the total number of
issued Shares (excluding any treasury Shares), the SGX-ST may suspend the trading
of the Shares on the SGX-ST until it is satisfied that at least 10% of the total number of
issued Shares (excluding treasury Shares) are held by at least 500 Shareholders who
are members of the public. Under Rule 1303(1) of the Listing Manual, where the Offeror
succeeds in garnering acceptances exceeding 90% of the total number of issued Shares
(excluding treasury Shares), thus causing the percentage of the total number of issued
Shares (excluding treasury Shares) held in public hands to fall below 10%, the SGX-ST will
suspend trading of the Shares only at the close of the Offer.
In addition, under Rule 724 of the Listing Manual, if the percentage of the total number
of issued Shares (excluding treasury Shares) held in public hands falls below 10%, the
Company must, as soon as practicable, announce that fact and the SGX-ST may suspend
the trading of all the Shares.
19
APPENDIX 1 - LETTER FROM THE IFA TO THE INDEPENDENT DIRECTORS IN
RESPECT OF THE OFFER
Rule 724 of the Listing Manual further provides that the SGX-ST may allow the Company
a period of three months, or such longer period as the SGX-ST may agree, to raise the
percentage of Shares in public hands to at least 10%, failing which the Company may be
delisted.
It is the intention of the Offeror to make the Company its wholly-owned subsidiary
and to delist the Company from the SGX-ST. It is therefore not the intention of the
Offeror to preserve the listing status of the Company and in the event that the
trading of Shares on the SGX-ST is suspended pursuant to Rule 724, Rule 1105
or Rule 1303(1) of the Listing Manual, the Offeror does not intend to undertake or
support any action for any such trading suspension to be lifted by the SGX-ST.”
7.
FINANCIAL ASSESSMENT OF THE OFFER
In assessing the financial terms of the Offer, we have taken into account the following factors
which we consider to have a significant bearing on our assessment:
7.1.
(a)
Market quotation and trading liquidity of the Shares;
(b)
Book net tangible asset value (“NTA”), ex-cash book NTA and revalued NTA of the Group;
(c)
Comparison of valuation statistics of companies broadly comparable to the Group;
(d)
Comparison with recent successful privatisation transactions and delisting offers of
companies listed on the SGX-ST; and
(e)
Other relevant considerations.
Market Quotation and Trading Liquidity of the Shares
7.1.1. Share price performance and trading liquidity
A graphical representation of the daily closing prices and volume traded of the Shares for the
period commencing 12 months prior to the Offer Announcement and ending on the Latest
Practicable Date is set out below:
Source: Bloomberg L.P.
20
APPENDIX 1 - LETTER FROM THE IFA TO THE INDEPENDENT DIRECTORS IN
RESPECT OF THE OFFER
A summary of the salient announcements relating to the Group’s business operations and the
Offer during the aforesaid period is as follows:
Date
Event
10 July 2012
Announcement on the non-binding approach in relation to a possible
share transaction by a substantial Shareholder (the “Possible Share
Transaction”).
11 July 2012
Announcement on the clarification in relation to the business times article
entitled “Major Viz Branz Shareholder Gets ‘Buy More’ Offer” dated 11
July 2012 as well as the Company’s announcement dated 10 July 2012,
of which the Company clarified that the Possible Share Transaction by
the substantial Shareholder involved the possible sale of such substantial
Shareholder’s Shares to the third party which may or may not lead to an
offer being made for the Shares.
6 August 2012
Announcement providing an update on the Possible Share Transaction that
discussions remained ongoing with the third party as well as other potential
interested parties who approached the substantial Shareholder in relation
to the Possible Share Transaction.
27 August 2012
Announcement on the unaudited results for the financial year ended
30 June 2012 (“FY2012”), which reported a 47.8% increase in net profit
attributable to Shareholders from S$11.5 million in the financial year ended
30 June 2011 (“FY2011”) to S$17.0 million in FY2012.
3 September 2012
Announcement providing an update on the Possible Share Transaction, that
the substantial Shareholder entered into a (generally) non-binding indicative
preliminary letter of indication of interest with one of the potential interested
party to facilitate and advance further discussions.
In addition, it was also announced the Company decided to put on hold its
proposed bonus issue as announced on 25 May 2012 as it may potentially
constitute a frustrating action on the part of the Company (if and in the
event that the Possible Share Transaction by the substantial Shareholder
leads to an offer being made for the Shares).
2 October 2012
Announcement providing an update on the Possible Share Transaction, that
discussions remain ongoing between the substantial Shareholder and the
potential interested party.
8 October 2012
Announcement providing an update on the Possible Share Transaction, that
the substantial Shareholder, being Mr Ben Chng Beng Beng, had disposed
of 57,000,000 Shares, representing approximately 16.06% of the entire
issued and paid-up share capital of the Company to Lam Soon Cannery
Private Limited, for an aggregate sale consideration of S$41,895,000 at the
sale price of S$0.735 per Share.
21
APPENDIX 1 - LETTER FROM THE IFA TO THE INDEPENDENT DIRECTORS IN
RESPECT OF THE OFFER
Date
Event
17 October 2012
Announcement on the application to the SGX-ST for an extension of 2
months, till 31 December 2012, in holding the company’s annual general
meeting for FY2012 (the “Application”). As part of the statutory audit of
the Company’s financial statements for FY2012, the Company’s auditors
are conducting additional audit procedures (the “Additional Audit
Procedures”) on transactions between the Group and the Myanmar
distributors, and also seeking clarifications from Mr Chng Khoon Peng on
the bases underlying his allegations. The Application was therefore made
to enable the Additional Audit Procedures to be completed. If the Additional
Audit Procedures can be completed earlier, the Company will proceed to
hold its annual general meeting expeditiously and prior to 31 December
2012.
18 October 2012
Announcement on the SGX-ST’s approval to the extension of time for
holding the Company’s FY2012 annual general meeting subject to,
inter alia, approval of the same being obtained from the Accounting and
Corporate Regulatory Authority of Singapore (“ACRA”).
30 October 2012
Announcement on the approval from ACRA for extension of time under
Section 201(2) of the Companies Act (Cap. 50 of Singapore) for laying its
accounts before Shareholders.
14 November 2012
Announcement on the unaudited interim financial results for the 3-month
financial period ended 30 September 2012 (“1Q2013”) which reported a
15.4% increase in net profit attributable to Shareholders from S$3.9 million
in the 3-month financial period ended 30 September 2011 to S$4.5 million
in 1Q2013.
30 November 2012
Announcement on withdrawal of allegations and complaint by Mr Chng
Khoon Peng.
6 December 2012
Announcement on the audit opinion in relation to the FY2012 financial
statements, that its auditors have given a disclaimer of opinion, the
background and basis of which were set out in the auditors’ report dated 6
December 2012.
6 February 2013
Announcement on the unaudited interim financial results for the 6-month
financial period ended 31 December 2012 (“1H2013”) which reported a
3.2% increase in net profit attributable to Shareholders from S$9.3 million
in the 6-month financial period ended 31 December 2011 to S$9.6 million
in 1H2013.
Announcement on the withdrawal of the proposed bonus issue as
announced on 25 May 2012.
20 February 2013
Notice of book closure date for tax-exempted (first-tier) dividend of S$0.01
per Share in which share transfer books and register of members of the
Company will be closed from 5.00 p.m. on 6 March 2013 to 7 March 2013.
22
APPENDIX 1 - LETTER FROM THE IFA TO THE INDEPENDENT DIRECTORS IN
RESPECT OF THE OFFER
Date
Event
13 May 2013
Announcement on the unaudited interim financial results for the 9-month
financial period ended 31 March 2013 (“9M2013”) which reported a 4.4%
increase in net profit attributable to Shareholders from S$13.6 million in
the 9-month financial period ended 31 March 2012 (“9M2012”) to S$14.2
million in 9M2013.
5 July 2013
Announcement on the Offer Announcement.
18 July 2013
Announcement on the acquisition of 523,000 Shares by Lam Soon
Cannery Private Limited on 17 July 2013.
19 July 2013
Announcement on the despatch of offer document dated 19 July 2013 in
relation to the Offer.
Announcement on the acquisition of 260,000 Shares by Lam Soon
Cannery Private Limited on 18 July 2013.
22 July 2013
Announcement on the acquisition of 181,000 Shares by Lam Soon
Cannery Private Limited on 19 July 2013.
23 July 2013
Announcement on the acquisition of 146,000 Shares by Lam Soon
Cannery Private Limited on 22 July 2013.
Source: Announcements relating to the Group on the SGX-ST
Additional information on the traded closing prices of the Shares, volume-weighted average prices
(“VWAPs”) and average daily trading volumes for the period commencing 12 months prior to the
Offer Announcement and ending on the Latest Practicable Date is set out below:
Highest
closing
price
(S$)
Lowest
closing
price
(S$)
VWAP
(S$)
Premium /
(Discount) of
Offer Price over
/ (to) VWAP
(%)
Average
daily
trading
volume(1)
(’000)
Average daily
trading volume
as percentage
of free float(2)
(%)
Periods prior to Offer Announcement
Last 12 months
0.735
0.600
0.710
9.9
604
0.98
Last 6 months
0.715
0.655
0.694
12.4
133
0.22
Last 3 months
0.715
0.655
0.694
12.4
182
0.29
Last one month
0.715
0.655
0.691
12.9
303
0.49
Last Market Day
prior to the Offer
Announcement(3)
0.715
0.715
0.709
10.0
170
0.28
Period after the Offer Announcement and up to Latest Practicable Date
After Offer
Announcement
and up to Latest
Practicable Date
0.800
0.780
0.787
(0.9)
746
1.23
Latest Practicable Date
0.800
0.800
0.799
(2.4)
1,151
1.91
Source: Bloomberg L.P.
23
APPENDIX 1 - LETTER FROM THE IFA TO THE INDEPENDENT DIRECTORS IN
RESPECT OF THE OFFER
Notes:
(1)
The average daily trading volume of the Shares is calculated based on the total volume of Shares traded divided by
the number of Market Days during the relevant periods.
(2)
Free float refers to the Shares other than those held by the Directors, substantial Shareholders and their associates
(as defined in the Listing Manual) which amounts to 61,757,384 Shares as at the date of the Offer Announcement
(for the periods prior to the Offer Announcement) and 60,421,514 Shares as at the Latest Practicable Date (for the
period after the Offer Announcement and up to Latest Practicable Date).
(3)
This refers to the last Market Day on which the Shares were traded prior to the Offer Announcement, being 4 July
2013, before the trading halt of the Shares at 10.00 a.m. on 4 July 2013.
We note the following with regard to the Share prices:
(a)
during the 12-month period prior to the Offer Announcement, the closing prices of the
Shares ranged between a low of S$0.600 (on 6 July 2012) and a high of S$0.735 (on 16
July 2012 and 23 July 2012). The Offer Price represents a premium of 30.0% and 6.1%
over the lowest and the highest closing prices of the Shares respectively during the
12-month period;
(b)
the Offer Price represents a premium of 9.9%, 12.4%, 12.4% and 12.9% over the VWAP
of the Shares for the 12-, 6-, 3- and one-month periods prior to the Offer Announcement
respectively;
(c)
the Offer Price represents a premium of 9.1% over the closing price of S$0.715 on 4
July 2013, being the last Market Day on which the Shares were traded prior to the Offer
Announcement and before the trading halt of the Shares at 10.00 a.m. on 4 July 2013;
(d)
the Offer Price represents a marginal discount of 0.9% to the VWAP of the Shares of
S$0.787 for the period after the Offer Announcement and up to the Latest Practicable Date;
and
(e)
the Offer Price represents a marginal discount of 2.5% to the closing price of the Shares of
S$0.800 on the Latest Practicable Date.
We also note the following with regard to the trading liquidity of the Shares:
(a)
the average daily trading volume of the Shares for the 12-, 6-, 3- and one-month periods
prior to the Offer Announcement represented only 0.98%, 0.22%, 0.29%, and 0.49% of the
free float respectively;
(b)
during the 12-month period prior to the Offer Announcement, the Shares were traded on
236 Market Days out of a total of 251 Market Days (or 94.0% of the total number of Market
Days during the period), with an average daily trading volume of approximately 604,000
Shares; and
(c)
during the period after the Offer Announcement and up to the Latest Practicable Date, the
Shares were traded on all 12 Market Days out of a total of 12 Market Days (or 100.0% of
the total number of Market Days during the period), with an average daily trading volume of
approximately 746,000 Shares representing 1.23% of the free float.
24
APPENDIX 1 - LETTER FROM THE IFA TO THE INDEPENDENT DIRECTORS IN
RESPECT OF THE OFFER
7.1.2. Relative performance of the Shares versus the market index
For the period commencing 12 months prior to the Offer Announcement and ending on the date
of the Offer Announcement
The chart below sets out the relative returns (daily basis) of the Shares in relation to the relative
returns (daily basis) of the FTSE Strait Times All Share Index1 (the “FSTAS Index”) for the period
commencing 12 months prior to the Offer Announcement and ending on the date of the Offer
Announcement:
Source: Bloomberg L.P.
We observe that during the aforesaid period, the Shares have generally outperformed the FSTAS
Index in relative terms except for an intermittent period in May 2013. As at 4 July 2013 (being the
last Market Day on which the Shares were traded prior to the Offer Announcement and before
the trading halt of the Shares at 10.00 a.m. on 4 July 2013), the Share price had appreciated by
19.2% while the FSTAS Index had appreciated by 6.9% over the same period.
For the period commencing on the Market Day after the Offer Announcement and ending on the
Latest Practicable Date
We have also reviewed the relative performance of the Shares against the closing prices of the
FSTAS Index on 4 July 2013 (being the last Market Day on which the Shares were traded prior to
the Offer Announcement and before the trading halt of the Shares at 10.00 a.m. on 4 July 2013)
and on the Latest Practicable Date:
As at
4 July 2013
Company (S$)
FSTAS Index
As at Latest
Practicable Date
%
change
0.715
0.800
11.9
772.30
796.69
3.2
Source: Bloomberg L.P.
We note that the Share price had appreciated by 11.9% as compared to a marginal appreciation
of 3.2% in the FSTAS Index over the aforesaid period.
1
The FSTAS Index is a modified market capitalisation weighted index comprising all companies within the top 98% by full market
capitalisation of the SGX-Mainboard universe (i.e. large-, mid- and small-capitalisation indices combined).
25
APPENDIX 1 - LETTER FROM THE IFA TO THE INDEPENDENT DIRECTORS IN
RESPECT OF THE OFFER
Based on the above observations, it would appear that the market price of the Shares as
at the Latest Practicable Date may be supported by the Offer and purchases by Lam Soon
Cannery Private Limited since the Offer Announcment, and may or may not be sustained
at the current level prevailing as at the Latest Practicable Date after the close of the Offer.
Shareholders should note that the past trading performance of the Shares should not in any way
be relied upon as an indication or a promise of its future trading performance.
7.2.
Book NTA, Ex-Cash book NTA and Revalued NTA of the Group
Book NTA of the Group
Based on its latest unaudited financial statements as at 31 March 2013, the unaudited NTA of
the Group as at 31 March 2013 amounted to S$105.7 million (or S$0.298 per Share based on
354,996,976 issued Shares (excluding treasury Shares) as at 31 March 2013). Accordingly, the
Offer Price represents a significant premium of 161.7% over the unaudited NTA per Share of
S$0.298 as at 31 March 2013.
Ex-cash book NTA of the Group
Based on its latest unaudited financial statements as at 31 March 2013, we also note that the
Group has significant cash and bank balances (net of borrowings and finance leases) of S$46.1
million, representing 43.6% of the NTA of the Group. This represents net cash of S$0.130 per
Share. Adjusting for the net cash, the ex-cash NTA of the Group as at 31 March 2013 would be
S$59.6 million, or S$0.168 per Share (the “Ex-Cash book NTA per Share”). The Offer Price,
after adjusting for the net cash per Share (the “Ex-Cash Offer Price”), would be S$0.650 and
represents a significant premium of 286.9% over the Ex-Cash book NTA per Share of S$0.168 as
at 31 March 2013 (the “Ex-Cash Price-to-book NTA”).
The Directors have confirmed that to the best of their knowledge and belief, save for the Revalued
Properties (as defined below), (a) they are not aware of any circumstances which may cause
the book NTA of the Group as at the Latest Practicable Date to be materially different from that
recorded in the unaudited balance sheet of the Group as at 31 March 2013; (b) there have been
no material disposals or acquisitions of assets by the Group since 31 March 2013 and up to the
Latest Practicable Date; and (c) there are no contingent liabilities or bad or doubtful debts which
are likely to have a material impact on the unaudited NTA of the Group as at 31 March 2013.
Revalued NTA of the Group
In connection with the Offer and in compliance with Rule 26 of the Code, the Company has
commissioned the Independent Valuers to conduct independent valuations of the properties
owned by the Group as at 31 March 2013 (collectively, the “Revalued Properties”), except for a
120.87 square-metre residential property located at building G, 20th floor, Yidong Mansion No 6,
Bus Station Road, Jiangan District, Wuhan, the PRC and a 163.71 square-metre office located at
room 1501, No 111 Tai Kang road, Tai Kang City Plaza, Tai Fu Centre, Guangzhou, the PRC.
The aggregate unaudited net book value (“NBV”) of the Revalued Properties of S$37.0 million
as at 31 March 2013 represents 13.4% of the aggregate Offer value of approximately S$276.9
million (computed as the Offer Price of S$0.78 multiplied by 354,996,976 Shares as at 31 March
2013). Further details on the Revalued Properties are set out in the valuation summary from the
Independent Valuers (the “Valuation Reports”) in Appendix 8 of the Circular.
The bases for the independent valuations of the Revalued Properties are set out in the full reports
which are available for inspection at the registered office of the Company and involve certain
assumptions, limitations and disclaimers as stated therein. Shareholders are advised to read the
above in conjunction with the valuation reports in their entirety.
26
APPENDIX 1 - LETTER FROM THE IFA TO THE INDEPENDENT DIRECTORS IN
RESPECT OF THE OFFER
As set out in the Valuation Reports, the estimated aggregate market valuation of the Revalued
Properties as at 31 March 2013 is S$56.6 million. We set out below a summary of the market
values of the Revalued Properties as extracted from the Valuation Reports and the Group’s net
revaluation surplus after potential tax liabilities:
Location
Description
Market value
(S$’000)
NBV
(S$’000)
Net revaluation
surplus(1)
(S$’000)
14 Woodlands Link,
Viz Branz House,
Singapore 738739
Factory cum
warehouse building
11,000
7,689
2,163
16 Woodlands Link,
Singapore 738735
Factory cum
warehouse building
9,500
5,092
4,199
Plot 5A6 Jinyuan District Industrial
Estate (Land Parcel No.:83.2-61.2016), Chaoshan Road, Shantou,
Guangdong, PRC
Factory
4,328(2)
2,958
690
Plot 5A7 Jinyuan District Industrial
Estate (Land Parcel No.:83.2-61.2016), Chaoshan Road, Shantou,
Guangdong, PRC
Factory
4,326(2)
2,957
688
4A1A3 Jinyuan District Industrial
Estate, (Land Parcel No.: 106-2T3-10), Chaoshan Road, Shantou,
Guangdong, PRC
Factory
24,202(3)
15,162
5,286
Shi Ji Road, Zhongyuan
Green Food Industrial Park,
Xuediar, Xinzheng, Henan,
China Post code 451100
Factory
3,260(4)
3,149
46
37,007
13,072
TOTAL
56,616
Notes:
(1)
Net revaluation surplus is calculated as the difference between the market values as stated in the Valuation
Reports and their corresponding book values as at 31 March 2013 and net of potential tax liabilities. The potential
tax liabilities are computed by the Management assuming the hypothetical sale of the Revalued Properties at the
respective valuation amounts and applicable tax rates.
(2)
As the market valuations of the properties are in RMB, the values of the properties are converted based on the
closing exchange rate of S$1.00 : RMB4.852 as at 1 July 2013.
(3)
As the market valuation of the property is in RMB, the value of the property is converted based on the closing
exchange rate of S$1.00 : RMB4.849 as at 18 July 2013.
(4)
As the market valuation of the property is in RMB, the value of the property is converted based on the closing
exchange rate of S$1.00 : RMB4.847 as at 19 July 2013.
27
APPENDIX 1 - LETTER FROM THE IFA TO THE INDEPENDENT DIRECTORS IN
RESPECT OF THE OFFER
The revalued NTA (“RNTA”) of the Group as at 31 March 2013 is computed as follows:
Aggregate
(S$’000)
Per Share(1)
(S$)
Premium
represented by
Offer Price
(%)
105,690
0.298
161.7
13,072
0.037
118,762
0.335
NTA as at 31 March 2013
Add:
Net revaluation surplus from the
Revalued Properties
RNTA as at 31 March 2013
132.8
Note:
(1)
Based on 354,996,976 issued Shares.
We note that the Offer Price represents a significant premium of 132.8% over the RNTA per
Share of S$0.335 as at 31 March 2013.
Shareholders should note the following:
7.3.
(a)
the above analysis is provided solely for illustration purposes and in compliance with the
applicable requirements of the Code;
(b)
the RNTA is not necessarily a realisable value given that the market values of the Revalued
Properties may vary and are dependent on, inter alia, the prevailing market and economic
conditions. There is also no assurance that the eventual sale prices (if any) will be identical
to those appraised by the Independent Valuers in the Valuation Reports or that the
revaluation surpluses eventually recorded by the Group on the Revalued Properties (if any)
will be the same as indicated above; and
(c)
the potential tax liabilities have been provided pursuant to the requirement under Rule 26.3
of the Code on the assumption of a hypothetical sale of the Revalued Properties, and such
tax liabilities will not crystallise if the Group does not dispose of the Revalued Properties.
The Directors have confirmed that as at the Latest Practicable Date, the Group does not
have any plans for an impending material disposal and/or conversion of the use of the
Group’s assets and/or any material change in the nature of the Group’s businesses, and
the Group has not received any offers for the Revalued Properties at the market values set
out in the Valuation Reports. In this respect, it would appear that the likelihood of such tax
liabilities crystallising is low.
Comparison of Valuation Statistics of Companies Broadly Comparable to the Group
In order to derive a reasonable range of valuation for the purposes of assessing the financial
terms of the Offer, we have referred to selected companies listed and traded on the SGX-ST
which business activities are broadly comparable with those of the Group to give an indication of
the current market expections with regard to the perceived valuation of these businesses.
The Group is principally engaged in the manufacturing and exporting of instant beverages and
snack food. We have, in consultation with the Management, used the following SGX-ST listed
companies which are principally engaged in the beverage, instant food and/or snacks business
with market capitalisations less than S$1.0 billion (collectively, the “Comparable Companies”).
28
APPENDIX 1 - LETTER FROM THE IFA TO THE INDEPENDENT DIRECTORS IN
RESPECT OF THE OFFER
Details on the Comparable Companies, including their business descriptions and selected key
financial and valuation statistics, are set out below and in the annex to this letter:
(a)
Consciencefood Holdings Limited (“Consciencefood”);
(b)
Etika International Holdings Limited (“Etika”);
(c)
Food Empire Holdings Limited (“Food Empire”);
(d)
Hosen Group Ltd (“Hosen”);
(e)
Sino Grandness Food Industry Group Limited (“Sino Grandness”);
(f)
Synear Food Holdings Limited (“Synear Food”); and
(g)
Tsit Wing International Holdings Limited (“Tsit Wing”).
Shareholders should note that there is no company or group listed on any relevant stock
exchange which may be considered identical to the Group in terms of business activities, market
capitalisation, scale of operations, risk profile, geographical spread, operating and financial
leverage, accounting policies, adherence to accounting standards, tax factors, track record and
future prospects. In addition, each of the Comparable Companies may engage in other separate
business activities which are not related to the beverage, instant food and/or snack business. As
such, any comparison made herein is strictly limited in scope and merely serves as an illustrative
guide to Shareholders.
In assessing the financial terms of the Offer, we have used the following valuation parameters in
our analysis:
Valuation parameter
Description
Price-earnings ratio
(“PER”)
The historical PER, which illustrates the ratio of the market price of
a company’s shares relative to its historical consolidated earnings
per share, is commonly used for the purpose of illustrating the
profitability, and hence valuation of a company.
We have considered the historical PERs of the Comparable
Companies based on their respective last transacted prices on the
Latest Practicable Date and latest full-year net earnings per share
vis-à-vis the corresponding historical PER of the Group based on the
Offer Price.
Ex-cash PER
In view of the significant unaudited net cash position (i.e. cash and bank
balance less borrowings and financial lease) of the Group as at 31 March
2013, we have also computed the historical PER on an ex-cash basis.
In this regard, we have considered the historical ex-cash PER of the
Comparable Companies based on their respective last transacted prices
(less net cash per share, if applicable) on the Latest Practicable Date
and latest full-year net earnings per share vis-à-vis the corresponding
historical ex-cash PER of the Group based on the Offer Price (less net
cash per Share).
29
APPENDIX 1 - LETTER FROM THE IFA TO THE INDEPENDENT DIRECTORS IN
RESPECT OF THE OFFER
Valuation parameter
Description
Price-to-book NTA ratio
An NTA-based approach is useful to illustrate the extent that the
value of each share is backed by assets, and would be more
relevant in the case where the group were to change the nature of
its business or realise or convert the use of all or most of its assets.
The NTA-based valuation approach may provide an estimate of the
value of a company or group assuming the hypothetical sale of all its
assets over a reasonable period of time at the aggregate value of the
assets used in the computation of the NTA, with the balance to be
distributed to its shareholders after the settlement of all the liabilities
and obligations of the company or group.
We have considered the historical price-to-book NTA ratios of the
Comparable Companies based on their respective last transacted
prices on the Latest Practicable Date and latest available NTA per
share vis-à-vis the corresponding historical price-to-book NTA ratio
of the Group based on the Offer Price.
Ex-cash price-to-book
NTA ratio
In view of the significant unaudited net cash position (i.e. cash and bank
balance less borrowings and financial lease) of the Group as at 31 March
2013, we have also computed the historical price-to-book NTA ratio
on an ex-cash basis. In this regard, we have considered the historical
ex-cash price-to-book NTA ratios of the Comparable Companies based
on their respective last transacted prices (less net cash per share, if
applicable) on the Latest Practicable Date and latest available book
NTA (less net cash, if applicable) per share vis-à-vis the corresponding
historical ex-cash price-to-NTA ratio of the Group based on the Offer
Price (less net cash per Share) and latest available NTA per Share (less
net cash per Share).
Enterprise value
to EBITDA
(“EV/EBITDA”) ratio
The historical EV/EBITDA ratio illustrates the ratio of the market
value of a company’s business relative to its historical consolidated
pre-tax operating cashflow performance, without regard to its
capital structure, and provides an indication of current market
valuation relative to operating performance. “EV” is the sum of a
company’s market capitalisation, preferred equity, minority interests,
short- and long-term debts less cash and cash equivalents, and
represents the actual cost to acquire the entire company.
“EBITDA” refers to historical consolidated earnings before interest, tax,
depreciation and amortisation expenses. EBITDA can be used to
analyse the profitability between companies as it eliminates the
effects of financing and accounting decisions.
We have considered the historical EV/EBITDA ratios of the
Comparable Companies based on their respective last transacted prices on the Latest Practicable Date, latest available balance
sheet values and latest full-year EBITDA vis-à-vis the corresponding
historical EV/EBITDA ratio of the Group based on the Offer Price.
30
APPENDIX 1 - LETTER FROM THE IFA TO THE INDEPENDENT DIRECTORS IN
RESPECT OF THE OFFER
The following table sets out the comparative valuation statistics of the Comparable Companies
vis-à-vis the Group as implied by the Offer Price:
Historical PER
(times)
Company
Consciencefood
Etika
5.79
Historical
price-to-book NTA ratio
(times)
0.79
2.17(1)
23.72
Historical
EV/EBITDA ratio
(times)
2.14
12.69
Food Empire
13.96
1.89
10.66
Hosen
41.51
0.84
17.55
Sino Grandness(2)
7.07
2.22
5.65
17.66
0.37
3.21
17.91
1.34
8.30
High
41.51
2.22
17.55
Mean
14.35(5)
1.37
8.60
(5)
15.81
1.34
8.30
5.79
0.37
2.14
16.34
2.62
9.29
Synear Food(3)
(4)
Tsit Wing
Median
Low
Group
Source:
Bloomberg L.P., annual reports and/or announcements of the respective companies and SAC Capital’s
computations
Notes:
(1)
Based on the net asset value of the group.
(2)
On 1 July 2013, the board of directors of Sino Grandness announced that the Company had on 28 June 2013
obtained a no-objection letter from the SGX-ST for the spin-off of its beverage business segment for a listing on an
internationally recognised stock exchange.
(3)
On 15 October 2012, Synear Food and Fortune Domain Limited jointly announced a delisting proposal to seek the
voluntary delisting of the Company from the SGX-ST at an exit offer price of S$0.186 per share.
(4)
On 11 June 2013, DBS Bank announced, for and on behalf of Hero Valour Limited, a mandatory conditional cash
offer to acquire all the issued and paid-up ordinary shares in the capital of Tsit Wing at an offer price of S$0.3075 in
cash per share.
(5)
Being an outlier, Hosen has been excluded from the computation of the mean and median historical PER.
Historical PER comparison
We note that the historical PER of 16.34 times of the Group as implied by the Offer Price is:
(a)
within the range of historical PERs of the Comparable Companies of between 5.79 times
and 41.51 times; and
(b)
at a premium of 13.9% and 3.4% over the mean and median historical PERs of the
Comparable Companies of 14.35 times and 15.81 times respectively.
Historical price-to-book NTA comparison
We note that the historical price-to-book NTA ratio of 2.62 times of the Group as implied by the
Offer Price is:
(a)
above the range of historical price-to-book NTA ratios of the Comparable Companies of
between 0.37 times and 2.22 times; and
(b)
at a significant premium of 91.2% and 95.5% over the mean and median historical
price-to-book NTA ratios of the Comparable Companies of 1.37 times and 1.34 times
respectively.
31
APPENDIX 1 - LETTER FROM THE IFA TO THE INDEPENDENT DIRECTORS IN
RESPECT OF THE OFFER
Historical EV/EBITDA comparison
We note that the historical EV/EBITDA ratio of 9.29 times of the Group as implied by the Offer
Price is:
(a)
within the range of historical EV/EBITDA ratios of the Comparable Companies of between
2.14 times and 17.55 times; and
(b)
at a premium of 8.0% and 11.9% over the mean and median historical EV/EBITDA ratios of
the Comparable Companies of 8.60 times and 8.30 times respectively.
As set out in section 6.2 above, we note from the unaudited balance sheet of the Group as at
31 March 2013 that the Group was in a net cash position of S$46.1 million, representing 43.6%
of the NTA of the Group. In view thereof, we have also considered the PER and NTA of the
Comparable Companies on ex-cash basis vis-à-vis the Group as implied by the Ex-Cash Offer
Price:
Company
Consciencefood
Historical ex-cash PER
(times)
Historical ex-cash
price-to-book NTA ratio
(times)
3.11
0.68
(1)
Etika
23.72
2.17(1)
Food Empire
12.59
2.09
Hosen
(1)
0.84(1)
(1)
7.07
2.22(1)
41.51
Sino Grandness
Synear Food
Tsit Wing
High
9.55
0.24
17.49
1.35
41.51
2.22
Mean
(2)
12.26
1.37
Median
11.07(2)
1.35
3.11
0.24
13.62
3.87
Low
Group
Notes:
(1)
Historical ex-cash PER and historical ex-cash price-to-book NTA ratios were not relevant as these companies were
in a net-borrowings position. Accordingly, the historical PER and historical price-to-book NTA ratios were used.
(2)
Being an outlier, Hosen has been excluded from the computation of the mean and median historical ex-cash PER.
Historical ex-cash PER comparison
We note that the historical Ex-Cash PER of 13.62 times of the Group as implied by the Ex-Cash
Offer Price is:
(a)
within the range of historical ex-cash PERs of the Comparable Companies of between 3.11
times and 41.51 times; and
(b)
at a premium of 11.1% and 23.0% over the mean and median historical ex-cash PERs of
the Comparable Companies of 12.26 times and 11.07 times respectively.
32
APPENDIX 1 - LETTER FROM THE IFA TO THE INDEPENDENT DIRECTORS IN
RESPECT OF THE OFFER
Historical ex-cash price-to-book NTA comparison
We note that the historical Ex-Cash Price-to-book NTA ratio of 3.87 times of the Group as implied
by the Ex-Cash Offer Price is:
7.4.
(a)
above the range of historical ex-cash price-to-book NTA ratios of the Comparable
Companies of between 0.24 times and 2.22 times; and
(b)
at a significant premium of 182.5% and 186.7% over the mean and median historical
ex-cash price-to-book NTA ratios of the Comparable Companies of 1.37 times and 1.35
times respectively.
Comparison with Recent Successful Privatisation Transactions and Delisting Offers of
Companies Listed on the SGX-ST
We note that as set out in paragraph 13 of the Offer Document, the Offeror intends to make the
Company its wholly-owned subsidiary and does not intend to preserve the listing status of the
Company. Accordingly, the Offeror when entitled, intends to exercise its rights of compulsory
acquisition under Section 215(1) of the Companies Act and does not intend to take steps for any
trading suspension of the Shares by the SGX-ST to be lifted in the event that, inter alia, less
than 10% of the total number of issued Shares (excluding any Shares held by the Company as
treasury Shares) are held in public hands.
In view of the above and for the purposes of providing an illustrative guide as to the attractiveness
of the Offer Price relative to other take-over transactions, we have compared the financial
terms of the Offer with (a) selected recent successful privatisation transactions announced
during the 12-month period prior to the Offer Announcement, whether by way of a general offer
under the Code or a scheme of arrangement under Section 210 of the Companies Act where
the offeror has stated its intentions to delist the target company from the Official List of the
SGX-ST; and (b) selected recent completed delisting offers under Rule 1307 of the Listing
Manual announced during the 12-month period prior to the Offer Announcement (collectively, the
“Take-over Transactions”). As some of the Take-over Transactions had undertaken revaluations
and/or adjustments to their assets which may have a material impact on their last announced
book values, we have also, where relevant, compared the financial terms of such offer
transactions with the revalued NAV (or revalued NTA where applicable) and/or adjusted NAV (or
adjusted NTA where applicable) of the Take-over Transactions where available.
We wish to highlight that the Take-over Transactions set out below are by no means exhaustive.
In addition, as the Group is not directly comparable to the target companies involved in the
Take-over Transactions in terms of business activities, scale of operations, market capitalisation,
geographical spread, risk profile, accounting policies, financial performance, operating and
financial leverage, track record and future prospects, the comparison merely serves as a
general guide to provide an indication of the premia/discounts paid in connection with the
privatisation/delisting of companies listed on the SGX-ST. Each of the Take-over Transactions
must be judged on its own commercial and financial merits. Shareholders should also note that
the premium (if any) to be paid by an offeror in a privatisation/delisting transaction varies in
different circumstances depending on, inter alia, the attractiveness of the underlying business
to be acquired, the synergies to be gained from integration with an existing business, the trading
liquidity of the target company’s shares, prevailing market expectations and the presence of
competing bids. Accordingly, any comparison made herein is strictly limited in scope.
33
APPENDIX 1 - LETTER FROM THE IFA TO THE INDEPENDENT DIRECTORS IN
RESPECT OF THE OFFER
Nature of
transaction
Company
Hup Soon Global
Corporation Limited
Privatisation
Cerebos Pacific
Limited
Offer price
per share
(S$)
Date of
announcement
Premium of
offer price over
last transacted
price prior to
announcement
of offer
(%)
Offer
price-to-NTA
ratio
(times)
26 July 2012
0.100
0.0
0.54
Delisting
1 August 2012
6.600
22.7
2.16
Hersing Corporation
Ltd
Privatisation
8 August 2012
0.230
21.1
1.09
Sakari Resources
Limited
Privatisation
27 August 2012
1.8751(1)
25.8(2)
2.80
Luye Pharma Group
Ltd.
Privatisation
28 August 2012
1.300
16.1(3)
2.31
Gul Technologies
Singapore Ltd
Delisting
23 September 2012
0.162
38.5(4)
1.78
Kian Ann Engineering
Ltd
Privatisation
15 October 2012
0.440
46.7(5)
1.00
Harry’s Holding Ltd.
Privatisation
10 November 2012
0.230
53.3
1.50
(6)
(7)
Asia Pacific Breweries
Limited
Privatisation
15 November 2012
53.00
52.8
China Farm Equipment
Limited
Privatisation
3 December 2012
0.280
7.7
1.06
SC Global
Developments Ltd
Privatisation
5 December 2012
1.800
49.4
0.83
Kinergy Ltd
Privatisation
14 December 2012
0.250
38.9
0.66
Rokko Holdings Ltd.
Privatisation
17 December 2012
0.110
57.1
0.56
PCA Technology
Limited
Privatisation
1 February 2013
0.150
11.1
0.77
WBL Corporation
Limited
Privatisation
13 May 2013(8)
4.500
28.9
1.29
Pan Pacific Hotels
Group Limited(9)
Delisting
10 May 2013
2.550
9.0
0.95
Tsit Wing International
Holdings Limited
Privatisation
11 June 2013
0.3075
36.7
1.05
High
57.1
10.67
Mean
30.3
1.27(10)
Median
28.9
1.06(10)
Low
0.0
0.780
9.1
Company
Source:
Privatisation
5 July 2013
10.67
0.54
2.62 / 2.33(11)
Announcements and circulars to shareholders in relation to the respective Take-over Transactions and SAC
Capital’s computations
34
APPENDIX 1 - LETTER FROM THE IFA TO THE INDEPENDENT DIRECTORS IN
RESPECT OF THE OFFER
Notes:
(1)
Being the offer price of S$1.90 less dividends of S$0.0249 (the “Sakari Net Offer Price”) as (i) the dividend was
announced prior to the announcement of the voluntary conditional cash offer for shares in Sakari Resources
Limited; and (ii) the settlement date in respect of the offer shares tendered in acceptance of the offer falls after the
record date of the dividend.
(2)
The market premium in the table above was computed based on the Sakari Net Offer Price of S$1.8751 and the
last transacted price prior to its announcement of the voluntary conditional cash offer.
(3)
On 30 July 2012 (the “Luye Trading Suspension Date”), the trading prices and volume of Luye Pharma Group Ltd
(“Luye Pharma”) surged in the morning of 30 July 2012 and last traded at S$1.25 before Luye Pharma suspended
the trading of its shares. On the same day, Luye Pharma announced that Luye Pharmaceutical Investment Co.,
Ltd. (“LPIC”) acquired 15.22% of the shares in Luye Pharma, bringing its total interest to 92.63% and that the
shares held in public hands had fallen to below 10%. The market premium in the table above was computed based
on the offer price of S$1.30 and the last transacted price of S$1.12 on the Market Day prior to the Luye Trading
Suspension Date. The offer price of S$1.30 would represent a premium of 4.0% over the last transacted price of
S$1.25 prior to its offer announcement date.
(4)
On 13 September 2012, Gul Technologies Singapore Ltd (“Gul Technologies”) announced a holding announcement
that it was aware that a party was exploring certain corporate action that may or may not lead to an offer for
Gul Technologies (the “Gul Holding Announcement”). On 23 September 2012, Gul Technologies and the
offeror released a joint announcement for the delisting proposal of Gul Technologies (the “Delisting Proposal
Announcement”). The market premium in the table above was computed based on the offer price of S$0.162
and the last transacted price of S$0.117 prior to the Gul Holding Announcement. The offer price of S$0.162
would represent no premium or discount to the last transacted price of S$0.162 prior to the Delisting Proposal
Announcement.
(5)
On 17 August 2012 (the “Kian Ann Holding Announcement Date”), Kian Ann Engineering Ltd (“Kian Ann”)
announced a holding announcement that it had been approached by a party in relation to a possible transaction
involving the shares in the company and there is no assurance that any definitive or binding agreements or any
transaction will result from such discussions. On 15 October 2012, Kian Ann and the offeror jointly announced
the proposed acquisition of the company by the offeror to be effected by way of a scheme of arrangement under
Section 210 of the Companies Act. The market premium in the table above was computed based on the offer
price of S$0.44 and the last transacted price of S$0.30 prior to the Kian Ann Holding Announcement Date. The
offer price of S$0.44 would represent a premium of 7.3% over the last transacted price of S$0.41 prior to its offer
announcement date.
(6)
On 18 August 2012 (the “Heineken Pre-Conditional Offer Announcement Date”), Credit Suisse (Singapore)
Limited and Citigroup Global Markets Singapore Pte. Ltd. (collectively, the “Heineken Financial Advisers”)
announced, for and on behalf of Heineken International B.V. (“Heineken”), that Heineken had entered into two
conditional sale and purchase agreement with Fraser and Neave Limited (“F&NL”) for acquisition of shares (the
“APB Share Acquisition”) in Asia Pacific Breweries Limited (“APB”). On 15 November 2012 (the “Heineken
Offer Announcement Date”), the Heineken Financial Advisers announced, for and on behalf of Heineken, of the
completion of the APB Share Acquisition and the mandatory unconditional offer for the shares in APB.
(7)
On 16 July 2012, APB announced that Oversea-Chinese Banking Corporation Limited (“OCBC”) and Great Eastern
Holdings Limited (“GEH”) were approached with an offer to purchase, inter alia, their combined stakes in APB (the
“OCBC and GEH Announcement”). The market premium in the above table was computed based on the offer price
of S$53.00 and the last transacted price of S$34.69 prior to the OCBC and GEH Announcement. The offer price of
S$53.00 would represent a premium of 4.8% and 0.8% over the last transacted prices of S$50.57 and S$52.60 prior
to the Heineken Pre-conditional Offer Announcement Date and the Heineken Offer Announcement Date respectively.
(8)
On 26 November 2012 (the “STC Offer Announcement Date”), Standard Chartered Bank announced, for and
on behalf of Straits Trading Company Limited (“STC”), the possible mandatory conditional offer (the “STC
Offer”) for all the stock units of WBL Corporation Limited (“WBL Corporation”). On 30 January 2013 (the “UE
Pre-conditional Offer Announcement Date”), J.P. Morgan (S.E.A) Limited (“JPM”) announced, for and on behalf
of UE Centennial Venture Pte. Ltd. (“UE Offeror”), the pre-conditional voluntary offer for all stock units in WBL
Corporation (the “UE Pre-conditional Offer”) at a price of S$4.00 in cash per offer stock unit. The lapse of STC
Offer was subsequently announced on 4 March 2013. On 9 May 2013 (the “UE Offer Announcement Date”), JPM
announced that UE Offeror revised the stock unit offer price to S$4.50. On 13 May 2013, JPM announced that the
UE Pre-conditional offer has become and have been declared unconditional in all respects. The market premium in
the table above was computed based on the offer price of S$4.50 and the last transacted price of S$3.49 prior to
the STC Offer Announcement Date. The offer price of S$4.50 would represent a premium of 7.1% and 0% over the
last transacted price of S$4.20 and S$4.50 prior to the UE Pre-conditional Offer Announcement Date and the UE
Offer Announcement Date. As at the closing date of the offer, UE Offeror and its concert parties owned, controlled
or have agreed to acquire stock units representing 96.31% of the total number of issued stock units. While WBL has
not been delisted from the SGX-ST as at the Latest Practicable Date, UE Offeror had stated that it has no intention
to undertake or support any action for any listing suspension to be lifted.
35
APPENDIX 1 - LETTER FROM THE IFA TO THE INDEPENDENT DIRECTORS IN
RESPECT OF THE OFFER
(9)
Whilst Pan Pacific Hotels Group Limited (“Pan Pacific”) has not been delisted from the SGX-ST as at the Latest
Practicable Date. the percentage shareholding of Pan Pacific had fallen to below 10% as announced on 19 July
2013.
(10)
Being an outlier, Asia Pacific Breweries Limited has been excluded from the computation of the mean and median
offer price-to-NTA ratio.
(11)
Being the Offer Price-to-RNTA ratio.
We note that in respect of the Take-over Transactions:
(a)
(b)
(c)
7.5.
the premium of the Offer Price over the last transacted price of the Shares prior to the Offer
Announcement of 9.1% is:
(i)
within the range of the corresponding premia of the Take-over Transactions of
between 0.0% and 57.1%; and
(ii)
below the corresponding mean and median premia of 30.3% and 28.9% of the Takeover Transactions respectively;
the price-to-NTA ratio as implied by the Offer Price of 2.62 times is:
(i)
within the range of price-to-NTA ratios of the Take-over Transactions of between 0.54
times and 10.67 times; and
(ii)
at a significant premium of 106.3% and 147.2% over the mean and median
price-to-NTA ratios of the Take-over Transactions of 1.27 times and 1.06 times
respectively;
the price-to-RNTA ratio as implied by the Offer Price of 2.33 times is:
(i)
within the range of price-to-NTA ratios of the Take-over Transactions of between 0.54
times and 10.67 times; and
(ii)
at a significant premium of 83.5% and 119.8% over the mean and median
price-to-NTA ratios of the Take-over Transactions of 1.27 times and 1.06 times
respectively.
Other Relevant Considerations
7.5.1. Historical financial performance and condition of the Group
The salient financial information on the Group for the financial years ended 30 June 2010
(“FY2010”), FY2011, FY2012, 9M2012 and 9M2013 is set out below:
Income statement
Audited
Unaudited
(S$’000)
FY2010
FY2011
FY2012
9M2012
9M2013
Revenue
152,747
165,675
172,726
134,212
128,856
Gross profit
54,526
52,494
58,952
44,734
48,916
Profit before tax
20,317
17,766
25,206
19,538
21,111
Profit attributable to
owners of the Company
13,772
11,492
16,965
13,623
14,178
36
APPENDIX 1 - LETTER FROM THE IFA TO THE INDEPENDENT DIRECTORS IN
RESPECT OF THE OFFER
Balance sheet
Audited as at 30 June
(S$’000)
2010
Unaudited
2011
2012
31 March 2013
Current assets
93,325
98,960
112,764
131,578
Current liabilities
39,572
42,499
52,326
59,116
Working capital
53,753
56,461
60,438
72,462
Non-current assets
47,212
45,619
42,885
42,132
Non-current liabilities
10,679
7,865
6,780
6,917
Equity attributable to owners of the
Company
88,761
92,773
94,870
105,781
Cash flow statement
Audited
(S$’000)
Net cash flows from operating
activities
Unaudited
FY2010
FY2011
FY2012
9M2012
9M2013
25,809
19,160
20,352
8,295
19,121
Net cash flows used in
investing activities
(1,870)
(1,708)
(585)
(254)
(1,437)
Net cash flows used in
financing activities
(4,011)
(10,280)
(19,164)
(18,613)
(5,829)
2,414
7,133
6,060
293
13,086
26,608
33,741
39,801
34,034
52,887
Net increase in cash and
cash equivalents
Cash and cash equivalents
at end of financial year/period
Source:
Annual report of the Company for FY2011 and FY2012 and announcement of the Group’s unaudited financial
statements for 9M2013
We note the following:
(a)
The Group’s revenue increased by 8.5% from S$152.7 million in FY2010 to S$165.7 million
in FY2011, mainly due to higher sales turnover of instant beverages and snack food. The
Group’s revenue increased by 4.2% from S$165.7 million in FY2011 to S$172.7 million in
FY2012, mainly due to increased sales turnover of all its 3 business segments of instant
beverages, snack food and flexible packaging and printing businesses. Profit attributable
to owners of the Company decreased by 16.7% from S$13.8 million in FY2010 to S$11.5
million in FY2011, mainly due to rising raw material prices and strengthening of the
Singapore dollar against the US dollar and Renminbi. Profit attributable to owners of the
Company increased by 47.8% from S$11.5 million in FY2011 to S$17.0 million in FY2012,
mainly due to improved gross profit margin as a result of the higher sales volume and
selling price, a more stable foreign exchange environment and management controlling its
cost of sales;
(b)
The Group’s revenue decreased by 3.9% from S$134.2 million in 9M2012 to S$128.9
million in 9M2013, mainly due to an overall decrease in sales across all its business
segments. Profit attributable to owners of the Company increased by 4.4% from S$13.6
million in 9M2012 to S$14.2 million in 9M2013, mainly due to improved gross profit margin
as a result of an increase in selling prices, reduction in material prices, efficient inventory
control and favourable product sale mix;
(c)
The Group’s working capital had generally been increasing from S$53.8 million as at 30
June 2010 to S$72.5 million as at 31 March 2013;
37
APPENDIX 1 - LETTER FROM THE IFA TO THE INDEPENDENT DIRECTORS IN
RESPECT OF THE OFFER
(d)
Shareholders’ equity had generally been increasing from S$88.8 million as at 30 June 2010
to S$105.8 million as at 31 March 2013;
(e)
The Group has recorded net cashflows from operating activities of between S$8.3
million and S$25.8 million, for each of FY2010, FY2011, FY2012, 9M2012 and 9M2013
respectively. In respect of cashflow from investing activities, the Group utilised between
S$0.3 million and S$1.9 million for each of FY2010, FY2011, FY2012, 9M2012 and
9M2013 respectively. In respect of cashflows from financing activities, the Group utilised
between S$4.0 million and S$19.2 million for each of FY2010, FY2011, FY2012, 9M2012
and 9M2013 respectively; and
(f)
The Group’s cash and cash equivalents had generally been increasing from S$26.6 million
in FY2010 to S$52.9 million in 9M2013.
We also note that the following statement on the significant trends and competitive conditions
of the industry the Group operates for the next 12 months was made in its unaudited 9M2013
financial results announcement on 13 May 2013:
“The major markets that we operate in have become more competitive and challenging. As a
result, advertising and promotion expenses may increase in future in order to maintain our market
share. Additionally, any slow down in economic growth of these markets will have an impact on
our performance.
Our ability to increase selling prices and fluctuation in raw material prices; US Dollar and
Renminbi against Singapore Dollar will continue to have an impact on the Group’s performance.”
7.5.2. Limitation on subsequent offers by the Offeror
Pursuant to Rule 33.2 of the Code, neither the Offeror nor any person acting in concert with it
may (except with the consent of the SIC), within 6 months of the Closing Date, make a second
offer to or acquire any Shares from any Shareholder on terms better than those made available
under the current Offer.
Shareholders should also note that as the Offeror owns more than 50% of the voting rights of the
Company, the Offeror Concert Group will be free to increase their shareholding in the Company in
accordance with the Code after the close of the Offer without incurring a take-over obligation.
7.5.3. The Offer is already unconditional
As at the Latest Practicable Date, the Offeror Concert Group owns, control or has agreed to
acquire an aggregate of 206,288,002 Shares (representing approximately 58.11% of the existing
issued Share capital of the Company). Accordingly, as at the Latest Practicable Date, the Offer
is unconditional. As such, Shareholders who accept the Offer are assumed of receiving the Offer
Price in respect of all their acceptances of the Offer with no transaction costs involved.
As at the Latest Practicable Date, the Offeror Concert Group would be in a position to significantly
influence, inter alia, the management, operating and financial policies of the Group and is in a
position to be able to pass all ordinary resolutions on matters in which the Offeror Concert Group
does not have an interest and which are tabled for Shareholders’ approval at a general meeting.
7.5.4. Comparison to sale price in a recent share sale exercise
On 8 October 2012, the Company announced that Mr Ben Chng Beng Beng had disposed of
57,000,000 Shares to Lam Soon Cannery Private Limited at a sale price of S$0.735 per Share.
The Offer Price of S$0.780 is at a premium of 6.1% as compared to the purchase price made by
Lam Soon Cannery Private Limited.
38
APPENDIX 1 - LETTER FROM THE IFA TO THE INDEPENDENT DIRECTORS IN
RESPECT OF THE OFFER
Prior to the Latest Practicable Date, on 18, 19, 22 and 23 July 2013, the Company announced
that Lam Soon Cannery Private Limited purchased Shares in the Company at average prices of
between S$0.78985 and S$0.795. These Share prices represent a marginal premium of between
1.3% and 1.9% respectively compared to the Offer Price. As at the Latest Practicable Date, Lam
Soon Cannery Private Limited owns 20.45% of the Shares.
7.5.5. Comparison with invitation price at initial public offering and dividend payouts
We note that the invitation price of the Company at its intitial public offering is S$0.22 per
invitation share (the “IPO Price”) on June 2002. Adjusted for the share split exercise of every
1 ordinary share in the capital of the Company into 2 Shares, undertaken by the Company
in September 2010, the adjusted IPO Price would be S$0.11 (the “Adjusted IPO Price”).
Accordingly, the Offer Price of S$0.78 is at a significant premium of S$0.67 (or 609.1%) over the
Adjusted IPO Price.
We further note that the Company has been consistent in paying an annual dividend since its
listing, further details of which are set out below:
Financial year
Dividend per Share
(cents)(1)
FY2002(2)
0.1000
FY2003(2)
0.1000
(2)
FY2004
0.1400
FY2005(2)
0.1500
(2)
FY2006
0.1250
FY2007(2)
0.7500
FY2008(2)
0.7500
(3)
FY2009
0.5000
FY2010
2.0000
FY2011
2.2500
FY2012
3.3000
FY2013
Total
1.0000
11.1650
Notes:
(1)
Dividend per Share information was provided by the Company. The dividend per Share prior to the date of share
split has been adjusted for the share split exercise.
(2)
Refers to the respective financial year ended 31 December.
(3)
The financial year end was changed from 31 December to 30 June. For FY2009, the financial year was based from
the period of 1 January 2009 to 30 June 2009.
Accordingly, a Shareholder who has held the Shares since its listing in June 2002 and up to June
2013 would, taking into account the Offer Price, recognise a return of 89.165 cents (including
dividends received, but not taking into account any applicable taxes, brokerage and commissions).
This would translate into a compounded annual rate of return of approximately 20.95% over the
period.
Shareholders should note that the past dividend payouts by the Company should not in any
way be relied upon as an indication or a promise of its future dividend payouts. The Directors
have confirmed that the Company does not have a fixed dividend policy and that they had
recommended the past dividends payouts after taking into consideration, inter alia, the Company’s
cash and financial position, working capital requirements and future expansion.
39
APPENDIX 1 - LETTER FROM THE IFA TO THE INDEPENDENT DIRECTORS IN
RESPECT OF THE OFFER
7.5.6. Compulsory acquisition and listing status of the Company
Compulsory acquisition
Pursuant to Section 215(1) of the Companies Act, in the event that the Offeror receives valid
acceptances pursuant to the Offer in respect of not less than 90% of the total number of issued
Shares (other than those already held by the Offeror, its related corporations or their respective
nominees as at the date of the Offer and excluding treasury Shares), the Offeror would be entitled
to compulsorily acquire all the Offer Shares from Shareholders who have not accepted the Offer
after the Offeror has received valid acceptances in respect of not less than 90% of the Offer
Shares (the “Dissenting Shareholders”) on the same terms as those offered under the Offer. In
such an event, the Offeror intends to exercise its rights of compulsory acquisition and the
Company will become a wholly-owned subsidiary of the Offeror upon the completion of
such compulsory acquisition.
In addition, the Dissenting Shareholders have the right under and subject to Section 215(3) of
the Companies Act, to require the Offeror to acquire their Shares at the Offer Price in the event
that the Offeror, its related corporations or their respective nominees acquire, pursuant to the
Offer, such number of Shares which, together with the Shares held by the Offeror, its related
corporations or their respective nominees, comprise 90% or more of the total number of issued
Shares (excluding treasury Shares). Shareholders who wish to exercise such a right are advised
to seek their own independent legal advice.
Listing status
Shareholders should note that, as set out in paragraph 13 of the Offer Document, pursuant to
Rule 1105 of the Listing Manual, in the event that the Offeror Concert Group, as a result of the
Offer or otherwise, own or control more than 90% of the total number of issued Shares (excluding
any treasury Shares), the SGX-ST may suspend the trading of the Shares on the SGX-ST until
it is satisfied that at least 10% of the total number of issued Shares (excluding treasury Shares)
are held by at least 500 Shareholders who are members of the public. Under Rule 1303(1) of the
Listing Manual, where the Offeror succeeds in garnering acceptances exceeding 90% of the total
number of issued Shares (excluding treasury Shares), thus causing the percentage of the total
number of issued Shares (excluding treasury Shares) held in public hands to fall below 10%, the
SGX-ST will suspend trading of the Shares only at the close of the Offer.
In addition, pursuant to Rule 724 of the Listing Manual, if the percentage of the total number of
issued Shares (excluding treasury Shares) held in public hands falls below 10%, the Company
must, as soon as practicable, announce that fact and the SGX-ST may suspend the trading of
all the Shares. Rule 724 of the Listing Manual further states that the SGX-ST may allow the
Company a period of 3 months, or such longer period as the SGX-ST may agree, to raise the
percentage of the Shares held in public hands to at least 10%, failing which the Company may be
delisted. It is the intention of the Offeror to make the Company its wholly-owned subsidiary
and to delist the Company from the SGX-ST. It is therefore not the intention of the Offeror
to preserve the listing status of the Company and in the event that the trading of Shares
on the SGX-ST is suspended pursuant to Rule 724, Rule 1105 or Rule 1303(1) of the Listing
Manual, the Offeror does not intend to undertake or support any action for any such
trading suspension to be lifted by the SGX-ST.
Shareholders should note that as at the Latest Practicable Date, there is no assurance that, (i)
the Offeror would be in a position to exercise their rights to compulsory acquisition under Section
215(1) of the Act; (ii) Shareholders would be in a position to require the Offeror to acquire their
Shares under Section 215(3) of the Act; or (iii) there would remain a sufficient public float in the
Shares to maintain the listing status of the Shares.
40
APPENDIX 1 - LETTER FROM THE IFA TO THE INDEPENDENT DIRECTORS IN
RESPECT OF THE OFFER
As at the Latest Practicable Date, the shareholdings of (i) the Offeror Concert Group, (ii) the
Directors, and (iii) the substantial shareholder of the Company and their associates in aggregate
amount to 294,575,462 Shares, representing 82.98% of the Shares. Accordingly, the free float2
would constitute 17.02% of the Shares. Shareholders should note that the free float may fall
below 10% should there be any acquisitions (whether through acceptances arising from the
Offer or otherwise) by any of these parties of more than 24,921,816 Shares (in aggregate),
representing 7.02% of the Shares.
7.5.7. Absence of alternative take-over offers from third parties
As at the Latest Practicable Date, other than the Offer, there is no publicly available evidence
of an alternative take-over offer for the Shares from any third party. Further, the Directors have
confirmed that as at the Latest Practicable Date, apart from the Offer, they have not received any
other offer from any other party.
8.
OUR OPINION AND ADVICE
In arriving at our advice in respect of the Offer, we have taken into account, inter alia, the
following key considerations:
(a)
an assessment of the market quotation and trading liquidity of the Shares as follows:
(i)
(ii)
2
in relation to the Share prices:
(aa)
the Offer Price represents a premium of 30.0% and 6.1% over the lowest and
the highest closing prices of the Shares respectively during the 12-month
period;
(bb)
the Offer Price represents a premium of 9.9%, 12.4%, 12.4% and 12.9% over
the VWAP of the Shares for the 12-, 6-, 3- and one-month periods prior to the
Offer Announcement respectively;
(cc)
the Offer Price represents a premium of 9.1% over the closing price of
S$0.715 on 4 July 2013, being the last Market Day on which the Shares were
traded prior to the Offer Announcement and before the trading halt of the
Shares at 10.00 a.m. on 4 July 2013;
(dd)
the Offer Price represents a marginal discount of 0.9% to the VWAP of the
Shares of S$0.787 for the period after the Offer Announcement and up to the
Latest Practicable Date; and
(ee)
the Offer Price represents a marginal discount of 2.5% to the closing price of
the Shares of S$0.800 on the Latest Practicable Date;
in relation to the trading liquidity of the Shares:
(aa)
the average daily trading volume of the Shares for the 12-, 6-, 3- and onemonth periods prior to the Offer Announcement represented only 0.98%,
0.22%, 0.29%, and 0.49% of the free float respectively;
(bb)
during the 12-month period prior to the Offer Announcement, the Shares were
traded on 236 Market Days out of a total of 251 Market Days (or 94.0% of the
total number of Market Days during the period), with an average daily trading
volume of approximately 604,000 Shares; and
Free float refers to the Shares other than those held by the Directors, substantial Shareholders and their associates
(as defined in the Listing Manual).
41
APPENDIX 1 - LETTER FROM THE IFA TO THE INDEPENDENT DIRECTORS IN
RESPECT OF THE OFFER
(cc)
(iii)
(b)
(c)
during the period after the Offer Announcement and up to the Latest
Practicable Date, the Shares were traded on all 12 Market Days out of a total
of 12 Market Days (or 100.0% of the total number of Market Days during the
period), with an average daily trading volume of approximately 746,000 Shares
representing 1.23% of the free float;
in relation to the relative performance of the Shares versus the FSTAS Index:
(aa)
the Shares having generally outperformed the FSTAS Index in relative terms
during the period commencing 12 months prior to the Offer Announcement
and ending on the date of the Offer Announcement except for an intermittent
period in May 2013;
(bb)
the Share price having appreciated by 11.9% as compared to a marginal
appreciation of 3.2% in the FSTAS Index during the period from 4 July 2013
(being the last Market Day on which the Shares were traded prior to the Offer
Announcement and before the trading halt of the Shares at 10.00 a.m. on 4
July 2013) to the Latest Practicable Date; and
(cc)
the market price of the Shares as at the Latest Practicable Date may be
appeared to be supported by the Offer and purchases by Lam Soon Cannery
Private Limited since the Offer Announcement, and may or may not be
sustained at the current level prevailing as at the Latest Practicable Date after
the close of the Offer;
a comparison with the book NTA, Ex-Cash Price-to-book NTA and RNTA of the Group as
follows:
(i)
the Offer Price representing a significant premium of 161.7% over the unaudited NTA
per Share of S$0.298 as at 31 March 2013;
(ii)
the Ex-Cash Offer Price representing a significant premium of 286.9% over the
Ex-Cash Price-to-book NTA per Share of S$0.168 as at 31 March 2013; and
(iii)
the Offer Price representing a significant premium of 132.8% over the RNTA per
Share of S$0.335 as at 31 March 2013;
a comparison with the valuation statistics of the Comparable Companies as follows:
(i)
the historical PER of 16.34 times
(aa) within the range of historical
5.79 times and 41.51 times; and
mean and median historical PERs
15.81 times respectively;
(ii)
the historical price-to-book NTA ratio of 2.62 times of the Group as implied by the
Offer Price being (aa) above the range of historical price-to-book NTA ratios of
the Comparable Companies of between 0.37 times and 2.22 times; and (bb) at a
significant premium of 91.2% and 95.5% over the mean and median historical
price-to-book NTA ratios of the Comparable Companies of 1.37 times and 1.34 times
respectively; and
(iii)
the historical EV/EBITDA ratio of 9.29 times of the Group as implied by the Offer
Price being (aa) within the range of historical EV/EBITDA ratios of the Comparable
Companies of between 2.14 times and 17.55 times; and (bb) at a premium of
8.0% and 11.9% over the mean and median historical EV/EBITDA ratios of the
Comparable Companies of 8.60 times and 8.30 times respectively;
42
of the Group as implied by the Offer Price being
PERs of the Comparable Companies of between
(bb) at a premium of 13.9% and 3.4% over the
of the Comparable Companies of 14.35 times and
APPENDIX 1 - LETTER FROM THE IFA TO THE INDEPENDENT DIRECTORS IN
RESPECT OF THE OFFER
(d)
(e)
(f)
a comparison with the valuation statistics of the Comparable Companies on the ex-cash
basis as follows:
(i)
the historical Ex-Cash PER of 13.62 times of the Group as implied by the Ex-Cash
Offer Price being (aa) within the range of historical ex-cash PERs of the Comparable
Companies of between 3.11 times and 41.51 times; and (bb) at a premium of 11.1%
and 23.0% over the mean and median historical ex-cash PERs of the Comparable
Companies of 12.26 times and 11.07 times respectively; and
(ii)
the historical Ex-Cash Price-to-book NTA ratio of 3.87 times of the Group as
implied by the Ex-Cash Offer Price being (aa) above the range of historical ex-cash
price-to-book NTA ratios of the Comparable Companies of between 0.24 times
and 2.22 times; and (bb) at a significant premium of 182.5% and 186.7% over the
mean and median historical ex-cash price-to-book NTA ratios of the Comparable
Companies of 1.37 times and 1.35 times respectively;
a comparison with the Take-over Transactions as follows:
(i)
the premium of the Offer Price over the last transacted price of the Shares prior to
the Offer Announcement of 9.1% being (aa) within the range of the corresponding
premia of the Take-over Transactions of between 0.0% and 57.1%; and (bb) below
the corresponding mean and median premia of 30.3% and 28.9% of the Take-over
Transactions respectively;
(ii)
the price-to-NTA ratio as implied by the Offer Price of 2.62 times being (aa) within the
range of price-to-NTA ratios of the Take-over Transactions of between 0.54 times and
10.67 times; and (bb) at a significant preimum of 106.3% and 147.2% over the mean
and median price-to-NTA ratios of the Take-over Transactions of 1.27 times and 1.06
times respectively; and
(iii)
the price-to-RNTA ratio as implied by the Offer Price of 2.33 times being (aa) within
the range of price-to-NTA ratios of the Take-over Transactions of between 0.54 times
and 10.67 times; and (bb) at a significant premium of 83.5% and 119.8% over the
mean and median price-to-NTA ratios of the Take-over Transactions of 1.27 times
and 1.06 times respectively; and
other relevant considerations in relation to the Offer as follows:
(i)
the historical financial performance and condition of the Group, as set out in
paragraph 7.5.1 of this letter;
(ii)
the limitation on subsequent offers by the Offeror, as set out in paragraph 7.5.2 of
this letter;
(iii)
the Offer is already unconditional, as set out in paragraph 7.5.3 of this letter;
(iv)
the comparison of the Offer Price to sale price in a recent share sale exercise, as set
out in paragraph 7.5.4 of this letter;
(v)
the comparison of the Offer Price with the Adjusted IPO Price and dividend payouts,
as set out in paragraph 7.5.5 of this letter;
(vi)
the compulsory acquisition and listing status of the Company, as set out in paragraph
7.5.6 of this letter; and
(vii)
the absence of alternative take-over offers from third parties, as set out in paragraph
7.5.7 of this letter.
43
APPENDIX 1 - LETTER FROM THE IFA TO THE INDEPENDENT DIRECTORS IN
RESPECT OF THE OFFER
Based on our analysis set out above and after considering all relevant information available to
us as at the Latest Practicable Date, from a financial point of view, we are of the opinion that
the Offer Price is, on balance, fair and reasonable.
The Independent Directors may wish to consider advising Shareholders who:
(a)
wish to realise all or part of their investments in the Shares; and/or
(b)
are uncertain of the longer term performance and prospects of the Group,
to (i) accept the Offer; or (ii) sell the Shares in the open market if they can obtain a price higher
than the Offer Price (after deducting related expenses). In this regard, we note that the Shares
had traded above the Offer Price for the period after the Offer Announcement Date and up to
the Latest Practicable Date.
The Independent Directors may also wish to consider advising Shareholders who:
(a)
are prepared to take a longer term view of their investment in the Shares; and/or
(b)
are positive about the prospects of the Group,
to retain all or part of their shareholdings in the Company.
The Independent Directors should note that we have arrived at our advice based on the
information made available to us as at the Latest Practicable Date. Our advice on the Offer cannot
and does not take into account the future trading activity or patterns or price levels that may be
established for the Shares as these are governed by factors beyond the scope of our review and
do not fall within our terms of reference in connection with our evaluation of the financial terms of
the Offer.
We have prepared this letter for the use of the Independent Directors in connection with and
for the purposes of their consideration of the Offer, and any recommendation made by the
Independent Directors in respect of the Offer shall remain their responsibility.
Whilst a copy of this Ietter may be reproduced in the Circular, no other person may reproduce,
disseminate or quote this letter (or any part thereof) for any purpose (other than the intended
purpose in relation to the Offer) at any time and in any manner without the prior written consent of
SAC Capital in each specific case.
This Ietter is governed by and shall be construed in accordance with the laws of Singapore,
and is strictly limited to the matters stated herein and does not apply by implication to any other
matter.
Yours faithfully
For and on behalf of
SAC CAPITAL PRIVATE LIMITED
Bernard Lim Aik Kwang
Partner
Lau Sze Mei
Manager
44
Consciencefood processes food and
produces instant noodles and snack
noodles. The company markets its
noodles primarily in Indonesia.
Etika manufactures and distributes
sweetened condensed milk and
evaporated milk. The company also
repacks and distributes complementary
products such as full cream and instant
high calcium non-fat milk powder, instant
coffee powder, and tea dust.
Food Empire manufactures and markets
instant beverage products, frozen
convenience food, confectionery and
snack food. The company also exports
its products to markets such as Russia,
Eastern Europe, Central Asia, the Middle
East and Indochina.
Hosen distributes fast moving consumer
goods (FMCGs) under its house brand
as well as under third party leading
brands. The company has its own lines of
canned fruits, vegetables, seafood, meat
products and beverages.
Etika
Food Empire
Hosen
Business description
(as extracted from Bloomberg)
Consciencefood
Company
(Country of Listing)
0.070
45
22.9
359.6
241.9
0.395
0.675
67.4
Market
capitalisation
S$’(million)
0.170
Share price
as at
Latest
Practicable
Date
(S$)
31 December
31 December
30 September
31 December
Financial
year-end
SGD71.2
USD237.7
RM984.8
RP775,193.0
Revenue
(million)
SGD0.6
USD20.5
RM22.0
RP87,391.0
Net profit after
tax attributable to
shareholders
(million)
Latest full financial year
APPENDIX 1 - LETTER FROM THE IFA TO THE INDEPENDENT DIRECTORS IN RESPECT OF THE OFFER
Tsit Wing supplies coffee, tea and related
grocery items to food establishments.
The company also undertakes the entire
manufacturing process from processing,
roasting, grinding to packaging of coffee,
and cleaning, blending to packaging of
tea. Tsit Wing also distributes in-house
brands of fast moving consumer goods
(FMCGs) and manage café outlets.
Tsit Wing
65.6
0.305
46
237.9
449.3
Market
capitalisation
S$’(million)
0.173
1.530
Bloomberg L.P., annual reports and/or announcements of the respective companies
Synear Food produces and markets
quick freeze food products. The company
also produces dumplings, desserts and
snacks.
Synear Food
Source :
Sino Grandness processes food and
also cans fruits and vegetables including
asparagus, long beans, mushrooms,
bamboo shoots, sweet corn, chillies,
lychees, pineapples, and peaches.
Business description
(as extracted from Bloomberg)
Sino Grandness
Company
(Country of Listing)
Share price
as at
Latest
Practicable
Date
(S$)
31 December
31 December
31 December
Financial
year-end
HKD601.7
RMB1,874.6
RMB1,640.3
Revenue
(million)
HKD22.5
RMB68.0
RMB290.0
Net profit after
tax attributable to
shareholders
(million)
Latest full financial year
APPENDIX 1 - LETTER FROM THE IFA TO THE INDEPENDENT DIRECTORS IN RESPECT OF THE OFFER
APPENDIX 2 - ADDITIONAL GENERAL INFORMATION ON THE COMPANY
1.
DIRECTORS
The names, addresses and descriptions of the Directors as at the Latest Practicable Date are set
out below:
Name
2.
Address
Description
Mr Yuen San Seng
9 Tanjong Rhu Road
#-13-01 The Waterside
Singapore 436894
Non-Executive Chairman
and Independent Director
Mr Ben Chng Beng Beng
11 Ardmore Park #04-01
Singapore 259957
Group Managing Director
and Deputy Chairman
Mr Chng Khoon Peng
47 Jalan Besar Padang Besar
02100 Padang Besar
Perlis
Malaysia
Executive Director
Mr Tan Kok Hiang
17 Belimbing Avenue
Singapore 349889
Non-Independent,
Non-Executive Director
Mr Tan Hwee Yong
Block 578 Hougang
Avenue 4 #08-648
Singapore 530578
Independent Director
THE COMPANY
The Company was incorporated in Singapore on 9 March 1994 and is listed on the Mainboard
of the SGX-ST since 11 July 2002. The Company has its registered office at 50 Raffles Place,
#32-01Singapore Land Tower Singapore 048623.
3.
PRINCIPAL ACTIVITIES
The Group is principally engaged in the manufacturing and exporting of fine-quality instant
beverages, mixes, snack food and non-dairy creamer. The Group has manufacturing operations in
Singapore, the People’s Republic of China, Myanmar, Thailand and Vietnam, and its products are
sold under various brands in markets such as the People’s Republic of China, South-East Asia,
Indochina, Iran, Japan, Africa, the Middle East as well as the United States of America.
4.
SHARE CAPITAL
4.1
Issued Capital
The Company has only one class of shares, being ordinary shares. As at the Latest Practicable
Date, the issued and paid-up share capital of the Company is S$34,538,798.15 comprising
354,996,976 Shares (excluding treasury Shares).
The Company has 6,120,000 treasury Shares as at the Latest Practicable Date.
The Company has not issued any Shares since the end of FY2012.
There is no restriction in the Memorandum and Articles of Association of the Company on the right
to transfer any Shares, which has the effect of requiring the Shareholders, before transferring them,
to offer them for purchase to members of the Company or to any other person.
4.2
Rights in Respect of Capital, Dividends and Voting
The rights of Shareholders in respect of capital, dividends and voting are contained in the Articles
of Association of the Company. For ease of reference, selected texts of the Articles of Association
of the Company relating to the same have been extracted and reproduced in Appendix 6 to this
Circular.
47
APPENDIX 2 - ADDITIONAL GENERAL INFORMATION ON THE COMPANY
5.
COMPANY CONVERTIBLE SECURITIES
As at the Latest Practicable Date, there are no outstanding Company Convertible Securities.
6.
DISCLOSURE OF INTERESTS
6.1
Interests of the Company in Offeror Shares and Offeror Convertible Securities
As at the Latest Practicable Date, neither the Company nor its subsidiaries have any direct or
indirect interests in Offeror Shares or Offeror Convertible Securities.
6.2
Dealings in Offeror Shares and Offeror Convertible Securities by the Company
Neither the Company nor its subsidiaries have dealt in Offeror Shares or Offeror Convertible
Securities during the period commencing six (6) months prior to 5 July 2013, being the Offer
Announcement Date and ending on the Latest Practicable Date.
6.3
Interests of the Directors in Offeror Shares and Offeror Convertible Securities
As at the Latest Practicable Date, save for Mr Ben Chng Beng Beng who is deemed to have an
interest in all the Shares of the Offeror, none of the Directors have any direct or indirect interests in
Offeror Shares or Offeror Convertible Securities.
6.4
Dealings in Offeror Shares and Offeror Convertible Securities by the Directors
As at the Latest Practicable Date, save for Mr Ben Chng Beng Beng, none of the Directors
have dealt in Offeror Shares or Offeror Convertible Securities during the period commencing six
(6) months prior to 5 July 2013 being the Offer Announcement Date, and ending on the Latest
Practicable Date.
6.5
Interests of the Directors in Shares and Company Convertible Securities
Save as disclosed below, as at the Latest Practicable Date, none of the Directors have an interest,
direct or indirect, in the Shares or Company Convertible Securities.
Direct Interest as at the
Latest Practicable Date
Name
No. of Shares
Mr Yuen San Seng
No. of Shares
650,000
0.18
–
–
Mr Chng Khoon Peng
–
–
–
–
2,044,140
0.58
–
–
130,000
0.04
–
–
Mr Tan Hwee Yong
–
(%)1
Mr Ben Chng Beng Beng
Mr Tan Kok Hiang
6.6
(%)1
Deemed Interest as at the
Latest Practicable Date
206,288,0022
–
58.11
Dealings in Shares and Company Convertible Securities by the Directors
Save as disclosed below, as at the Latest Practicable Date, none of the Directors have dealt in the
Shares or Company Convertible Securities during the period commencing six (6) months prior to 5
July 2013, being the Offer Announcement Date, and ending on the Latest Practicable Date.
Dealing Party
Mr Chng Khoon Peng
Date
Nature of Dealing
No. of Shares
Price per Share
S$0.78
5 July 2013
Off market sale
135,800,219
2
Offeror
5 July 2013
Off market purchase
135,800,219
S$0.78
Offeror2
8 July 2013
Market purchase
78,000
S$0.78
Notes:
1.
Based on 354,996,976 Shares (excluding treasury Shares) as at the Latest Practicable Date.
2.
Mr Ben Chng Beng Beng is deemed interested in all the Shares held or acquired by the Offeror (as the case may be) as he is
the sole shareholder of Mercury Rising which is the sole shareholder of the Offeror.
48
APPENDIX 2 - ADDITIONAL GENERAL INFORMATION ON THE COMPANY
6.7
Interests of the IFA in Shares and Company Convertible Securities
None of the IFA, its related corporations or funds whose investments are managed by the IFA or its
related corporations on a discretionary basis, own or control any Shares or Company Convertible
Securities as at the Latest Practicable Date.
6.8
Dealings in Shares and Company Convertible Securities by the IFA
None of the IFA, its related corporations or funds whose investments are managed by the IFA or
its related corporations on a discretionary basis, have dealt for value in the Shares or Company
Convertible Securities during the period commencing six (6) months prior to 5 July 2013, being the
Offer Announcement Date, and ending on the Latest Practicable Date.
6.9
Interests of the IFA in Offeror Shares and Offeror Convertible Securities
None of the IFA, its related corporations or funds whose investments are managed by the IFA
or its related corporations on a discretionary basis, own or control any Offeror Shares or Offeror
Convertible Securities.
6.10 Dealings of the IFA in Offeror Shares and Offeror Convertible Securities
None of the IFA, its related corporations or funds whose investments are managed by the IFA or its
related corporations on a discretionary basis, have dealt for value in the Offeror Shares or Offeror
Convertible Securities during the period commencing six (6) months prior to 5 July 2013, being the
Offer Announcement Date, and ending on the Latest Practicable Date.
6.11 Accepting or Rejecting the Offer
Each of the Directors who directly holds Shares in the Company, being Messrs Yuen San Seng,
Tan Kok Hiang and Tan Hwee Yong, intends to accept the Offer in respect of each of their
shareholdings as set out against their names in Paragraph 6.5 of this Appendix 2 above.
7.
OTHER DISCLOSURES
7.1
Directors’ Service Contracts
A service agreement (each a “Service Agreement”) was entered into between the Company
and each of Executive Directors, Mr Chng Khoon Peng and Group Managing Director and
Deputy Chairman, Mr Ben Chng Beng Beng on 26 June 2002 and the Service Agreements
were supplemented pursuant to supplemental agreements dated 27 April 2011 (collectively the
“Agreements”). Pursuant to the Agreements, each of Messrs Chng Khoon Peng and Ben Chng
Beng Beng shall be paid a monthly remuneration of $18,000 and $25,000 respectively. In addition,
each of them will be paid an annual wage supplement of one (1) month.
The Service Agreement is not for a fixed term and runs from 26 June 2002 until such date that
the agreement is terminated by (a) not less than three months’ written notice (i) at any time by
reason of ill health or accident or where there is incapacitation of a total period of 60 days or more
(whether consecutive or not) in the past 12 months; or (ii) by not less than three (3) months’ notice
in writing of such termination or by giving an amount equal to three (3) months’ salary in lieu of
notice; or (b) summary notice if there is a serious breach (or a repetition or continuation thereof),
disreputable conduct or acts of bankruptcy or creditors’ compounding.
Save as disclosed above, as at the Latest Practicable Date, there (i) are no service contracts
between any Director or proposed director with any Group Company with more than 12 months to
run, which the employing company cannot, within the next 12 months, terminate without payment
of compensation, and (ii) were no such service contracts entered into or amended between any of
the Directors or proposed director and any Group Company during the period between the start of
the six (6) months immediately preceding the Offer Announcement Date and the Latest Practicable
Date.
49
APPENDIX 2 - ADDITIONAL GENERAL INFORMATION ON THE COMPANY
7.2
No Payment or Benefit to Directors
As at the Latest Practicable Date, save as disclosed below it is not proposed, in connection with
the Offer, that any payment or other benefit be made or given to any Director or to any director
of any other corporation which is, by virtue of Section 6 of the Act, deemed to be related to the
Company as compensation for loss of office or otherwise in connection with the Offer.
7.3
No Agreement Conditional upon Outcome of the Offer
Save as disclosed in this Circular, as at the Latest Practicable Date, there are no agreements or
arrangements made between any Director and any other person in connection with or conditional
upon the outcome of the Offer. None of the Directors will resign from office pursuant to or in
connection with the Offer.
7.4
Material Contracts entered into by the Offeror
As at the Latest Practicable Date, there are no material contracts entered into by the Offeror in
which any Director has a material personal interest, whether direct or indirect.
8.
FINANCIAL INFORMATION OF THE GROUP
A summary of the audited consolidated financial information of the Group for FY2010, FY2011,
FY2012 and the unaudited consolidated financial statements of the Group for the third quarter
ended 31 March 2013 (“3Q2013”) is set out below.
The summary of the financial information of the Group as set out in this Paragraph 8 is extracted
from, and should be read together with, the audited consolidated financial statements and the
unaudited financial statements of the Group for the relevant financial periods and the notes related
thereto, copies of which are available on the website of the SGX-ST at www.sgx.com and available
for inspection at the Company’s registered office at 50 Raffles Place #32-01 Singapore Land Tower
Singapore 048623. The audited consolidated financial statements for FY2012 and the unaudited
consolidated financial statements 3Q2013, are respectively set out in Appendices 4 and 5 to this
Circular.
50
APPENDIX 2 - ADDITIONAL GENERAL INFORMATION ON THE COMPANY
Consolidated Statements of the Group’s Comprehensive Income
Audited
Revenue
Exceptional items
Unaudited
FY2010
FY2011
FY2012
3Q2013
$’000
$’000
$’000
$’000
152,747
165,675
172,726
128,856
–
–
–
–
Cost of sales
(98,221)
(113,181)
(113,774)
(79,940)
Gross profit
54,526
52,494
58,952
48,916
Other income
777
440
328
204
Interest income
359
322
640
521
Other items of income
Other items of expense
Marketing and distribution expenses
(20,214)
(19,968)
(20,307)
(18,141)
Administrative expenses
(13,864)
(14,815)
(13,699)
(9,925)
Other expenses
(60)
(1)
(81)
(52)
Financial expenses
(998)
(492)
(436)
(310)
Other financial cost
(209)
(214)
(191)
(102)
Profit before tax
20,317
17,766
25,206
21,111
Income tax expense
(5,940)
(5,553)
(7,336)
(6,115)
Profit for the year
14,377
12,213
17,870
14,996
896
293
Other comprehensive income:
Foreign currency translation
Total comprehensive income for
the year
(246)
(2,010)
14,131
10,203
18,766
15,289
13,772
11,492
16,965
14,178
Profit for the year attributable to:
Owners of the Company
Non-controlling interests
605
721
905
818
14,377
12,213
17,870
14,996
Owners of the Company
13,526
9,550
17,828
14,461
Non-controlling interests
605
653
938
828
14,131
10,203
18,766
15,289
- Basic
4.47
3.27
4.77
3.99
- Diluted
4.25
3.27
4.77
3.99
Total comprehensive income for the
year attributable to:
Earnings per Share attributable to
owners of the Company
(cents per Share)
51
APPENDIX 2 - ADDITIONAL GENERAL INFORMATION ON THE COMPANY
Statements of the Group’s Financial Position
Audited
Unaudited
FY2010
FY2011
FY2012
3Q2013
$’000
$’000
$’000
$’000
Assets
Non-current assets
Property, plant and equipment
Investment in subsidiaries
Intangible assets
41,932
40,519
38,851
38,205
–
–
–
–
201
152
118
91
5,079
4,948
3,916
3,836
47,212
45,619
42,885
42,132
Inventories
26,738
28,552
26,161
24,662
Trade and other receivables
27,472
25,103
21,353
23,936
3,691
3,244
1,033
1,609
8,816
8,320
24,416
28,484
26,608
33,741
39,801
52,887
Land use rights
Current assets
Other current assets
Fixed deposits pledged
Cash and cash equivalents
93,325
98,960
112,764
131,578
140,537
144,579
155,649
173,710
Trade and other payables
11,873
19,319
12,965
14,413
Other liabilities
12,374
10,099
9,850
11,529
Loans and borrowings
12,302
10,830
26,511
29,554
Total assets
Equity and liabilities
Current liabilities
Provision for taxation
Net current assets
3,023
2,251
3,000
3,620
39,572
42,499
52,326
59,116
53,753
56,461
60,438
72,462
7,995
4,965
2,654
2,005
Non-current liabilities
Loans and borrowings
Deferred tax liabilities
2,684
2,900
4,126
4,912
10,679
7,865
6,780
6,917
Total liabilities
50,251
50,364
59,106
66,033
Net assets
90,286
94,215
96,543
107,677
34,179
36,383
36,383
36,383
(1,174)
(1,174)
Equity attributable to the owners of
the Company
Share capital
Treasury shares
Other reserves
Retained earnings
Non-controlling interests
Total equity
Total equity and liabilities
(693)
(719)
7,132
5,995
6,686
7,122
48,143
51,114
52,975
63,450
88,761
92,773
94,870
105,781
1,525
1,442
1,673
1,896
90,286
94,215
96,543
107,677
140,537
144,579
155,649
173,710
52
APPENDIX 2 - ADDITIONAL GENERAL INFORMATION ON THE COMPANY
Set out below is also a summary of the net dividend per Share declared in respect of each of
FY2010, FY2011, FY2012 and 3Q2013 by the Company. This information was extracted from the
Company’s annual reports for FY2010, FY2011, FY2012 and the unaudited consolidated financial
statements of the Group for 3Q2013.
Financial Period
Cents
In respect of FY2010 (interim dividend of 1.00 cents, special dividend of
1.50 cents and final dividend of 0.75 cents)(1)
3.25
In respect of FY2011 (interim dividend of 1.75 cents, final dividend of
0.50 cents)
2.25
In respect of FY2012 (interim dividends of 0.30 cents, 1.00 cents and
2.00 cents and final dividend of nil cents)
3.30
In respect of 3Q2013 (interim dividend of 1.00 cents)
1.00
Note:
(1)
The interim dividend of 1.00 cents per Share and the special dividend of 1.50 per Share was declared before the
share split exercise in FY2010 of one (1) ordinary share in the capital of the Company (both issued and unissued)
into two (2) ordinary shares in the capital of the Company (“Share Split”). The final dividend of 0.75 cents per Share
was declared after the Share Split had occurred.
Save as disclosed in the unaudited financial statements of the Group for 3Q2013, and any
other information on the Group which is publicly available (including without limitation, the
announcements released by the Group on the SGX-ST), there have been no material changes
to the financial position of the Company since 30 June 2012, being the date of the last audited
accounts of the Company laid before the Shareholders in general meeting.
9.
SIGNIFICANT ACCOUNTING POLICIES
A summary of the significant accounting policies of the Group is set out in the notes to the
audited consolidated financial statements of the Group for FY2012, a copy of which is attached as
Appendix 4 to this Circular. Save as disclosed in the notes to the audited consolidated financial
statements of the Group for FY2012, there are no significant accounting policies or any matter from
such notes, which are of any major relevance for the interpretation of the accounts of the Group
referred to the in the Appendices.
10.
CHANGES IN ACCOUNTING POLICIES
The adoption of new and revised FRS and INT FRS effective on 1 July 2012 has no material
impact on the financial statements of the Group. Accordingly, there is no change in the accounting
policy of the Group which will cause the figures disclosed in this Circular not to be comparable to a
material extent.
11.
MATERIAL CONTRACTS
As at the Latest Practicable Date, neither the Company nor any of its subsidiaries have entered
into any material contracts with interested persons (other than those entered into in the ordinary
course of business) during the period commencing three (3) years before 5 July 2013, being the
Offer Announcement Date, and ending on the Latest Practicable Date.
For completeness, as disclosed in the public announcements made by the Company via SGXNET
and the annual report of the Company for FY2010, FY2011 and FY2012, the Group had entered
into several interested person transactions in the ordinary course of its business during the period
commencing three (3) years before 5 July 2013, being the Offer Announcement Date, and ending
on the Latest Practicable Date.
53
APPENDIX 2 - ADDITIONAL GENERAL INFORMATION ON THE COMPANY
12.
MATERIAL LITIGATION
Neither the Company nor any of its subsidiaries are engaged in any material litigation as plaintiff
or defendant which might materially and adversely affect the financial position of the Group as
a whole. The Directors are not aware of any proceedings pending or threatened against the
Company or any of its subsidiaries or of any facts likely to give rise to any proceedings which might
materially or adversely affect the financial position of the Group taken as a whole.
13.
VALUATION ON SUBJECT PROPERTIES
The Company has commissioned independent valuations of the Subject Properties (the “Valuation
Reports”). Extracts of the Valuation Reports are set out in Appendix 8 to this Circular. The basis of
valuation of the Subject Properties is the open market value for the existing use.
14.
GENERAL
14.1 Costs and Expenses
All expenses and costs incurred by the Company in relation to the Offer will be borne by the
Company.
14.2 Consent of SAC Capital
SAC Capital has given and has not withdrawn its written consent to the issue of this Circular with
the inclusion of the IFA Letter which is set out in Appendix 1 to this Circular and all references to
its name in the form and context in which they appear in this Circular.
14.3 Consent of the Registrar
M & C has given and has not withdrawn its written consent to the issue of this Circular with the
inclusion of its name and all the references to its name in the form and context in which they
appear in this Circular.
14.4 Consent of the Valuers
Each of the Valuers have given and have not withdrawn their written consents to the issue of this
Circular with the inclusion of their names and the extract from their respective Valuation Reports
and all the references thereto in the form and context in which they appear in this Circular.
15.
DOCUMENTS AVAILABLE FOR INSPECTION
Copies of the following documents will be available for inspection at the registered office of the
Company at 50 Raffles Place, #32-01, Singapore Land Tower, Singapore 048623, during normal
business hours until the Closing Date:
(i)
the Memorandum and Articles of Association of the Company;
(ii)
the annual reports of the Company for FY2010, FY2011 and FY2012;
(iii)
the unaudited financial statements of the Group for 3Q2013;
(iv)
the IFA Letter;
(v)
the full technical Valuation Reports on the Subject Properties; and
(vi)
the letters of consent referred to in Paragraphs 14.2, 14.3 and 14.4 above.
54
APPENDIX 3 - INFORMATION ON THE OFFEROR
The following information on the Offeror has been extracted from Appendix 3 to the Offer Document and
set out in italics below.
“1.
DIRECTOR
The name, address and description of the sole director of the Offeror as at the Latest Practicable
Date are as set out below:
2.
Name
Address
Mr Ben Chng Beng Beng
c/o 14 Woodlands Link,
Singapore738739
Description
Director
SHARE CAPITAL
As at the Latest Practicable Date, the Offeror has an authorised capital of S$50,000 divided into
50,000 ordinary shares and an issued share capital of S$1.00 comprising 1 ordinary share.
3.
SUMMARY OF FINANCIAL INFORMATION
As the Offeror was incorporated on 14 June 2013, no audited financial statements of the Offeror
have been prepared as at the Latest Practicable Date.
4.
MATERIAL CHANGES IN FINANCIAL POSITION
Save for the making and financing of the Offer, as at the Latest Practicable Date, there has been
no known material change in the financial position of the Offeror since its incorporation.
5.
PRINCIPAL ACTIVITIES AND SHARE CAPITAL
The Offeror is a special purpose vehicle incorporated on 14 June 2013 for the purpose of the Offer
under the laws of the British Virgin Islands. The Offeror has an authorised capital of S$50,000
divided into 50,000 ordinary shares and an issued share capital of S$1.00 comprising 1 ordinary
share. The Offeror is wholly owned by Mercury Rising and its sole director is CBB.
Mercury Rising is also a special purpose vehicle incorporated on 14 June 2013 for the purpose of
the Offer under the laws of the British Virgin Islands. Mercury Rising has an authorised capital of
S$50,000 divided into 50,000 ordinary shares and an issued share capital of S$1.00 comprising 1
ordinary share. Mercury Rising is wholly owned by CBB, who is also its sole director.
6.
REGISTERED OFFICE
The registered office of the Offeror is at P.O. Box 957, Offshore Incorporations Centre, Road Town,
Tortola, British Virgin Islands.”
55
APPENDIX 4 - AUDITED CONSOLIDATED FINANCIAL STATEMENTS OF
THE GROUP FOR FY2012
DIRECTORS’ REPORT
The directors are pleased to present their report to the members together with the audited consolidated
financial statements of Viz Branz Limited (the “Company”) and its subsidiaries (collectively, the “Group”)
and the statement of financial position and statement of changes in equity of the Company for the
financial year ended 30 June 2012.
1.
Directors
The directors of the Company in office at the date of this report are:
Yuen San Seng
Ben Chng Beng Beng
Chng Khoon Peng
Tan Kok Hiang
Tan Hwee Yong
2.
Arrangements to enable directors to acquire shares and debentures
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 or debentures of the Company or any
other body corporate.
3.
Directors’ interests in shares and debentures
The following directors, who held office at the end of the financial year, had, according to the
register of directors’ shareholdings required to be kept under Section 164 of the Singapore
Companies Act, Chapter 50 (the “Act”), an interest in shares of the Company as stated below:
Direct interest
The Company
Viz Branz Limited
(Ordinary shares)
Yuen San Seng
Ben Chng Beng Beng
Chng Khoon Peng
Tan Kok Hiang
Tan Hwee Yong
At the
beginning of
financial year
At the end of
financial year
At 21 July 2012
1,000,000
178,334,144
82,541,858
2,044,140
130,000
750,000
127,409,783
135,800,219
2,044,140
130,000
650,000
127,409,783
135,800,219
2,044,140
130,000
By virtue of Section 7 of the Act, Mr Chng Khoon Peng and Mr Ben Chng Beng Beng, are deemed to
have interests in the shares of the subsidiaries of the Company.
Except as disclosed in this report, no director who held office at the end of the financial year
had interests in shares, share options, warrants or debentures of the Company, or of related
corporations, either at the beginning of the financial year or at the end of the financial year.
56
APPENDIX 4 - AUDITED CONSOLIDATED FINANCIAL STATEMENTS OF
THE GROUP FOR FY2012
DIRECTORS’ REPORT
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.
5.
Options
No options were issued by the Company or its subsidiaries during the financial year. As at 30 June
2012, there were no options on the unissued shares of the Company or its subsidiaries which were
outstanding.
6.
Audit Committee
The Audit Committee (AC) comprises Messrs Tan Hwee Yong, Yuen San Seng and Tan Kok Hiang.
The Chairman of the AC is Mr Tan Hwee Yong. Majority of the members, including the Chairman,
are independent non-executive directors.
The AC carried out its functions in accordance with Section 201B(5) of the Singapore Companies
Act, Cap. 50, Listing Manual and the Best Practice Guide of the SGX-ST, and the Code of Corporate
Governance. The functions performed are detailed in the Group’s Report on Corporate Governance
in the Annual Report.
On behalf of the board of directors:
Ben Chng Beng Beng
Director
Tan Kok Hiang
Director
6 December 2012
57
APPENDIX 4 - AUDITED CONSOLIDATED FINANCIAL STATEMENTS OF
THE GROUP FOR FY2012
STATEMENT BY DIRECTORS
We, Ben Chng Beng Beng and Tan Kok Hiang, being two of the directors of Viz Branz Limited, do hereby
state that, in the opinion of the directors,
(i)
the accompanying statements of financial position, consolidated statement of comprehensive
income, statements of changes in equity, and consolidated statement of cash flows together with
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 30 June 2012 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 ended on that date, and
(ii)
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:
Ben Chng Beng Beng
Director
Tan Kok Hiang
Director
6 December 2012
58
APPENDIX 4 - AUDITED CONSOLIDATED FINANCIAL STATEMENTS OF
THE GROUP FOR FY2012
INDEPENDENT AUDITOR’S REPORT
For the financial year ended 30 June 2012
To the members of Viz Branz Limited
Report on the financial statements
We were engaged to audit the accompanying financial statements of Viz Branz Limited (the “Company”)
and its subsidiaries (collectively, the “Group”) set out on pages 33 to 98, which comprise the statements
of financial position of the Group and the Company as at 30 June 2012, the statements of changes in
equity of the Group and the Company and the consolidated statement of comprehensive income and
consolidated statement of cash flows of the Group for the year then ended, and a summary of significant
accounting policies and other explanatory information.
Management’s responsibility for the financial statements
Management is responsible for the preparation of financial statements that give a true and fair view in
accordance with the provisions of the Singapore Companies Act, Chapter 50 (the “Act”) and Singapore
Financial Reporting Standards, and for devising and maintaining a system of internal accounting
controls sufficient to provide a reasonable assurance that assets are safeguarded against loss from
unauthorised use or disposition; and transactions are properly authorised and that they are recorded as
necessary to permit the preparation of true and fair profit and loss accounts and balance sheets and to
maintain accountability of assets.
Auditor’s 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. Because of the matters
described in the Basis for Disclaimer of Opinion paragraphs, however, we were not able to obtain
sufficient appropriate audit evidence to provide a basis for an audit opinion.
Basis for Disclaimer of Opinion
As disclosed in Note 1.2 to the financial statements, an Executive Director (“ED”) has alleged, amongst
others, that there are “unknown, private and irregular payment arrangements” between the Managing
Director (“MD”) and two Myanmar distributors of the Group whereby collection of payments from the
Myanmar distributors were paid to the MD’s bank account and payment was only thereafter made from
the bank account to the Group (the “allegations”). On 26 March 2012, the Company announced that
it received notification that the ED had lodged a complaint with the Commercial Affairs Department
(“CAD”) relating to these allegations against the MD. On 30 November 2012, the Company announced
that the ED has in writing withdrawn “without any reservation whatsoever” his previous allegations, and
further stated that he intends to withdraw his complaints lodged with CAD.
We were not provided with access to the complaints lodged with the CAD to enable us to understand
the full content of the complaints made. In addition, we are unable to ascertain the progress and/or
outcome of any investigation by the CAD and the effect, if any, of the intended withdrawal of complaints
by the ED. We were not able to obtain sufficient and appropriate evidence to ascertain the nature of the
transactions with the Myanmar distributors and whether the transactions are properly recorded and
presented in the financial statements. Consequently, we were unable to perform the audit procedures
necessary to satisfy ourselves as to the resolution of the allegations made. As a result, we are unable to
determine whether any adjustments to the financial statements are necessary.
Note 26 to the financial statements sets out disclosures of related party transactions including the above
mentioned arrangement with the Myanmar distributors. We are unable to carry out the audit procedures
necessary to satisfy ourselves on the completeness and accuracy of the related party transactions
disclosed in the financial statements.
59
APPENDIX 4 - AUDITED CONSOLIDATED FINANCIAL STATEMENTS OF
THE GROUP FOR FY2012
INDEPENDENT AUDITOR’S REPORT
For the financial year ended 30 June 2012
Disclaimer of Opinion
Because of the significance of the matters described in the Basis for Disclaimer of Opinion paragraphs,
we have not been able to obtain sufficient appropriate audit evidence to provide a basis for an audit
opinion. Accordingly, we do not express an opinion on the financial statements.
Report on other legal and regulatory requirements
Because of the significance of the matters described in the Basis for Disclaimer of Opinion paragraphs,
we do not express an opinion on whether the accounting and other records required by the Act to be
kept by the Company, Gold Roast Food Industry Pte Ltd and VB Global Trade Pte. Ltd., have been properly
kept in accordance with the provisions of the Act.
In our opinion, the accounting and other records required to be kept by other subsidiaries incorporated
in Singapore of which we are the auditors have been properly kept in accordance with the provisions of
the Act.
During the course of the audit, we noted that there are instances of breach of the requirements in the
Memorandum and Articles of Association of the Company with details as disclosed in Note 24 to the
financial statements.
Ernst & Young LLP
Public Accountants and
Certified Public Accountants
Singapore
6 December 2012
60
APPENDIX 4 - AUDITED CONSOLIDATED FINANCIAL STATEMENTS OF
THE GROUP FOR FY2012
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the financial year ended 30 June 2012
(Amounts in Singapore dollars)
Revenue
Cost of sales
Gross profit
Other items of income
Other income
Interest income
Other items of expense
Marketing and distribution expenses
Administrative expenses
Other expenses
Financial expenses
Other financial cost
Profit before tax
Income tax expense
Note
2012
$’000
2011
$’000
4
172,726
(113,774)
58,952
165,675
(113,181)
52,494
5
6
328
640
440
322
6
6
(20,307)
(13,699)
(81)
(436)
(191)
(19,968)
(14,815)
(1)
(492)
(214)
7
9
25,206
(7,336)
17,766
(5,553)
17,870
12,213
896
18,766
(2,010)
10,203
16,965
905
17,870
11,492
721
12,213
17,828
938
18,766
9,550
653
10,203
Profit for the year
Other comprehensive income:
Foreign currency translation
Total comprehensive income for the year
Profit for the year attributable to:
Owners of the Company
Non-controlling interests
Total comprehensive income for the year attributable to:
Owners of the Company
Non-controlling interests
Earnings per share attributable to owners of the Company
(cents per share)
- Basic
10
4.77
3.27
- Diluted
10
4.77
3.27
The accompanying accounting policies and explanatory notes form an integral part of the financial
statements.
61
APPENDIX 4 - AUDITED CONSOLIDATED FINANCIAL STATEMENTS OF
THE GROUP FOR FY2012
STATEMENTS OF FINANCIAL POSITION
As at 30 June 2012
(Amounts in Singapore dollars)
Group
Company
2012
2011
$’000
$’000
Note
2012
$’000
2011
$’000
Assets
Non-current assets
Property, plant and equipment
Investment in subsidiaries
Intangible assets
Land use rights
11
12
13
14
38,851
–
118
3,916
42,885
40,519
–
152
4,948
45,619
–
35,734
19
–
35,753
–
34,827
23
–
34,850
Current assets
Inventories
Trade and other receivables
Other current assets
Fixed deposits pledged
Cash and cash equivalents
15
16
17
25
25
26,161
21,353
1,033
24,416
39,801
112,764
155,649
28,552
25,103
3,244
8,320
33,741
98,960
144,579
–
20,378
15
24,416
6,644
51,453
87,206
–
25,819
16
8,320
7,168
41,323
76,173
18
19
20
12,965
9,850
26,511
3,000
52,326
60,438
19,319
10,099
10,830
2,251
42,499
56,461
682
1,423
24,416
193
26,714
24,739
1,269
1,686
8,320
131
11,406
29,917
20
9
Total liabilities
2,654
4,126
6,780
59,106
4,965
2,900
7,865
50,364
–
–
–
26,714
–
4
4
11,410
Net assets
96,543
94,215
60,492
64,763
36,383
(1,174)
6,686
52,975
94,870
1,673
96,543
36,383
(719)
5,995
51,114
92,773
1,442
94,215
36,383
(1,174)
–
25,283
60,492
–
60,492
36,383
(719)
–
29,099
64,763
–
64,763
Total assets
Equity and liabilities
Current liabilities
Trade and other payables
Other liabilities
Loans and borrowings
Provision for taxation
Net current assets
Non-current liabilities
Loans and borrowings
Deferred tax liabilities
Equity attributable to the owners of the
Company
Share capital
Treasury shares
Other reserves
Retained earnings
22
22
23
Non-controlling interests
Total equity
Total equity and liabilities
155,649
144,579
87,206
76,173
The accompanying accounting policies and explanatory notes form an integral part of the financial
statements.
62
APPENDIX 4 - AUDITED CONSOLIDATED FINANCIAL STATEMENTS OF
THE GROUP FOR FY2012
STATEMENTS OF CHANGES IN EQUITY
For the financial year ended 30 June 2012
(Amounts in Singapore dollars)
Attributable to owners of the Company
Equity
Premium
attributable
paid on
to owners
Foreign acquisition
of the
Statutory currency
of nonNonEquity, Company, Share Treasury reserve translation controlling Retained controlling
total
total
capital shares
fund
reserve
interests earnings interests
$’000
$’000
$’000
$’000
$’000
$’000
$’000
$’000
$’000
Group
Opening balance at
1 July 2011
Profit for the year
Other
comprehensive
income
Foreign currency
translation
Total comprehensive
income for the year
94,215
92,773
36,383
(719)
7,559
(1,356)
(208)
51,114
1,442
17,870
16,965
–
–
–
–
–
16,965
905
896
863
–
–
–
863
–
–
33
18,766
17,828
–
–
–
863
–
16,965
938
(455)
–
(455)
–
–
–
–
–
(15,276)
–
–
–
–
–
(15,276)
–
–
–
–
–
–
–
–
(707)
–
–
–
(172)
–
–
172
–
(15,731)
–
(455)
(172)
–
–
(15,104)
(707)
94,870
36,383
(1,174)
7,387
(493)
(208)
52,975
1,673
Contributions by
and distributions to
owners
Purchase of treasury
shares (Note 22(b))
(455)
Dividends on
ordinary shares
(Note 24)
(15,276)
Dividend paid by
subsidiaries to
non-controlling
shareholders
(707)
Reclassifications
from statutory
reserve fund
–
Total contributions
by and distributions
to owners
(16,438)
Closing balance at
30 June 2012
96,543
The accompanying accounting policies and explanatory notes form an integral part of the financial
statements.
63
APPENDIX 4 - AUDITED CONSOLIDATED FINANCIAL STATEMENTS OF
THE GROUP FOR FY2012
STATEMENTS OF CHANGES IN EQUITY
For the financial year ended 30 June 2012
(Amounts in Singapore dollars)
Attributable to owners of the Company
Equity
Premium
attributable
paid on
to owners
Foreign acquisition
of the
Statutory currency of nonNonEquity, Company, Share Treasury Warrants reserve translation controlling Retained controlling
total
total
capital shares reserve
fund
reserve interests earnings interests
$’000
$’000
$’000
$’000
$’000
$’000
$’000
$’000
$’000
$’000
Group
Opening balance at 1 July
2010
90,286
88,761
34,179
(693)
398
6,148
586
–
48,143
1,525
Profit for the year
12,213
Other comprehensive income
Foreign currency translation
(2,010)
11,492
–
–
–
–
–
–
11,492
721
(1,942)
–
–
–
–
(1,942)
–
–
(68)
10,203
9,550
–
–
–
–
(1,942)
–
11,492
653
1,806
1,806
2,204
–
(398)
–
–
–
–
–
(26)
(26)
–
(26)
–
–
–
–
–
–
(7,110)
(7,110)
–
–
–
–
–
–
(7,110)
–
(697)
–
–
–
–
–
–
–
–
(697)
–
–
–
–
–
1,411
–
–
(1,411)
–
(6,027)
(5,330)
2,204
(26)
(398)
1,411
–
–
(8,521)
(697)
(247)
(208)
–
–
–
–
–
(208)
–
(39)
(208)
–
–
–
–
–
(208)
–
(39)
(5,538)
2,204
(26)
(398)
1,411
–
(208)
(8,521)
(736)
92,773
36,383
(719)
–
7,559
(1,356)
(208)
51,114
1,442
Total comprehensive income
for the year
Contributions by and
distributions to owners
Issue of ordinary shares via
conversion of warrants
Purchase of treasury shares
(Note 22(b))
Dividends on ordinary shares
(Note 24)
Dividend paid by subsidiaries
to non-controlling
shareholders
Transfer to statutory
reserve fund
Total contributions by and
distributions to owners
Changes in ownership
interests in subsidiaries
Acquisition of non-controlling
interests without a change
in control
Total changes in ownership
interests in subsidiaries
(247)
Total transaction with owners
in their capacity as owners
(6,274)
Closing balance at
30 June 2011
94,215
The accompanying accounting policies and explanatory notes form an integral part of the financial
statements.
64
APPENDIX 4 - AUDITED CONSOLIDATED FINANCIAL STATEMENTS OF
THE GROUP FOR FY2012
STATEMENTS OF CHANGES IN EQUITY
For the financial year ended 30 June 2012
(Amounts in Singapore dollars)
Equity,
total
$’000
Share
capital
$’000
Treasury
shares
$’000
Warrants
reserve
$’000
Retained
earnings
$’000
Company
Opening balance at 1 July 2011
Profit for the year, representing total
comprehensive income for the year
Contributions by and distributions
to owners
64,763
36,383
11,460
–
Dividends on ordinary shares (Note 24)
Purchase of treasury shares (Note 22(b))
(15,276)
(455)
–
–
Total transactions with owners in their
capacity as owners
Closing balance at 30 June 2012
(15,731)
60,492
Opening balance at 1 July 2010
Profit for the year, representing total
comprehensive income for the year
Contributions by and distributions
to owners
Dividends on ordinary shares (Note 24)
Purchase of treasury shares (Note 22(b))
Issue of ordinary shares via conversion
of warrants
Total transactions with owners in their
capacity as owners
Closing balance at 30 June 2011
–
29,099
–
11,460
–
(455)
–
–
(15,276)
–
–
36,383
(455)
(1,174)
–
–
(15,276)
25,283
58,259
34,179
(693)
398
24,375
11,834
–
–
11,834
(7,110)
(26)
–
–
–
–
(7,110)
–
1,806
2,204
(5,330)
64,763
2,204
36,383
(719)
–
–
–
(26)
–
(26)
(719)
(398)
(398)
–
–
(7,110)
29,099
The accompanying accounting policies and explanatory notes form an integral part of the financial
statements.
65
APPENDIX 4 - AUDITED CONSOLIDATED FINANCIAL STATEMENTS OF
THE GROUP FOR FY2012
CONSOLIDATED STATEMENT OF CASH FLOWS
For the financial year ended 30 June 2012
(Amounts in Singapore dollars)
Note
Operating activities
Profit before tax
Adjustments for:
Amortisation of intangible assets
Amortisation of land use rights
Depreciation of property, plant and equipment
Property, plant and equipment written off
Net loss/(gain) on disposal of property, plant and equipment
Gain on disposal of intangible assets
Loss on disposal of land use rights
Impairment loss on goodwill
Interest expense
Interest income
Unrealised exchange difference loss/(gain)
Total adjustments
13
14
11
2012
$’000
2011
$’000
25,206
17,766
52
115
2,929
29
17
–
28
375
436
(640)
888
4,229
Operating cash flows before changes in working capital
Changes in working capital
Decrease/(increase) in:
Inventories
Trade and other receivables
Other current assets
(Decrease)/increase in:
Trade and other payables
Other liabilities
Total changes in working capital
29,435
Cash flows from operations
Interest received
Interest paid
Income taxes paid
Net cash flows from operating activities
Investing activities
Addition to intangible asset
Purchase of property, plant and equipment
Proceeds from disposal of property, plant and equipment
Proceeds from disposal of intangible asset
Proceeds from disposal of land use rights
Cash outflow on acquisition of subsidiary
Net cash flows used in investing activities
13
11
12
66
131
3,144
14
(53)
(30)
–
–
492
(322)
(1,981)
1,461
19,227
2,406
3,770
2,353
(1,814)
2,369
447
(6,749)
(249)
1,531
7,446
(2,275)
6,173
30,966
640
(436)
(5,361)
25,809
25,400
322
(492)
(6,109)
19,121
(18)
(1,916)
628
–
889
(168)
(585)
(37)
(1,813)
92
50
–
–
(1,708)
The accompanying accounting policies and explanatory notes form an integral part of the financial
statements.
66
APPENDIX 4 - AUDITED CONSOLIDATED FINANCIAL STATEMENTS OF
THE GROUP FOR FY2012
CONSOLIDATED STATEMENT OF CASH FLOWS
For the financial year ended 30 June 2012
(Amounts in Singapore dollars)
Note
Financing activities
Acquisition of non-controlling interests
Dividends paid on ordinary shares
Dividends paid to non-controlling shareholders of subsidiaries
Purchase of treasury shares
Repayment of obligations under finance leases
Proceeds from loans and borrowings
Repayment of loans and borrowings
Proceeds from conversion of warrants
(Increase)/decrease in short-term deposits pledged
Net cash flows used in financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents at 1 July
Cash and cash equivalents at 30 June
24
22(b)
25
2012
$’000
2011
$’000
–
(15,276)
(707)
(455)
(523)
31,500
(17,607)
–
(16,096)
(19,164)
(247)
(7,110)
(697)
(26)
(540)
17,181
(21,143)
1,806
496
(10,280)
6,060
33,741
39,801
7,133
26,608
33,741
The accompanying accounting policies and explanatory notes form an integral part of the financial
statements.
67
APPENDIX 4 - AUDITED CONSOLIDATED FINANCIAL STATEMENTS OF
THE GROUP FOR FY2012
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 30 June 2012
1.
Corporate information
1.1
The Company
Viz Branz Limited (the Company) is a limited liability company incorporated and domiciled in
Singapore and is listed on the Singapore Exchange Securities Trading Limited (SGX-ST).
The registered office and principal place of business of the Company is located at 50 Raffles
Place, #32-01 Singapore Land Tower, Singapore 048623 and 14 Woodlands Link, Singapore 738739
respectively.
The principal activities of the Company are those of investment holding and provision of
management and administrative support services to its subsidiaries. The principal activities of the
subsidiaries are disclosed in Note 12 to the financial statements.
1.2
Allegations made by CKP
The Company had on 20 March 2012 received a letter from Chng Khoon Peng (“CKP”), an Executive
Director of the Company, addressed to the Enforcement Department, Risk Management &
Regulation Group, Singapore Exchange Limited relating to allegations against Ben Chng Beng Beng
(“CBB”), being the Group’s Managing Director and Deputy Chairman (“Letter from CKP”).
On 26 March 2012, the Company received notification from CKP, an Executive Director of the
Company, that CKP had lodged a complaint with the Commercial Affairs Department (“CAD”)
relating to allegations as stated in Letter from CKP.
The Letter from CKP had alleged, amongst others, “hitherto unknown, private and irregular
payment arrangement” between CBB and two Myanmar distributors of the Group, whereby “monies
due to the Company from the Myanmar distributors were paid into a third party account operated
by CBB from which payment was only thereafter made from the third party account to the
Company”.
The Company had responded on 26 March 2012 that these allegations have already been looked
into and carefully considered previously by the Company and its audit committee. The conclusion
was that there was no merit in these allegations. Thereafter, the Company had met and explained
to CKP the conclusion and made available for inspection the relevant documents. The Company
believes that by the end of the meeting, the Company had addressed CKP’s concerns. Since 26
March 2012, the Company has not received any communication from CAD.
On 29 November 2012, the Company received a letter from CKP informing that having considered
all the explanations and reviewing all the documents given to him, he was satisfied and was
withdrawing all his allegations unreservedly. Accordingly then he would also withdraw his
complaint to the CAD.
As at the date of this report, the Company does not have access to the complaints lodged with
CAD and the Company has yet to receive the letter from CKP relating to withdrawal of complaints
previously lodged with CAD. In addition, due to the limitation of accounting system, Myanmar
distributors are unable to provide certain information relating to transactions with the Group.
68
APPENDIX 4 - AUDITED CONSOLIDATED FINANCIAL STATEMENTS OF
THE GROUP FOR FY2012
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 30 June 2012
2.
Summary of significant accounting policies
2.1
Basis of preparation
The consolidated financial statements of the Group and the statement of financial position 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 the historical cost basis except as disclosed in the
accounting policies below.
The financial statements are presented in Singapore Dollars (SGD or $) and all values in the tables
are rounded to the nearest thousand ($’000) as indicated.
2.2
Changes in accounting policies
The accounting policies adopted are consistent with those of the previous financial year except
in the current financial year, the Group has adopted all the new and revised standards and
Interpretations of FRS (INT FRS) that are effective for annual periods beginning on or after 1 July
2011. The adoption of these standards and interpretations did not have any effect on the financial
performance or position of the Group and the Company.
2.3
Standards issued but not yet effective
The Group has not adopted the following standards and interpretations that have been issued but
are not yet effective:
Effective for annual
periods beginning
on or after
Description
Amendments to FRS 12 Income Taxes – Deferred Tax: Recovery of Underlying
Assets
Amendments to FRS 1 Presentation of Financial Instruments: Presentation of
Items of Other Comprehensive Income
Revised FRS 19 Employee Benefits
Revised FRS 27 Separate Financial Statements
Revised FRS 28 Investments in Associates and Joint Ventures
FRS 110 Consolidated Financial Statements
FRS 111 Joint Arrangements
FRS 112 Disclosure of Interests in Other Entities
FRS 113 Fair Value Measurements
Amendments to FRS 107 Financial Instruments: Disclosures – Offsetting
Financial Assets and Financial Liabilities
Amendments to FRS 32 Financial Instruments: Presentation – Offsetting
Financial Assets and Financial Liabilities
Improvements to FRSs 2012
Amendments to FRS 101 – Government Loans
69
1 January 2012
1 July 2012
1
1
1
1
1
1
1
1
January
January
January
January
January
January
January
January
2013
2014
2014
2014
2014
2014
2013
2013
1 January 2014
1 January 2013
1 January 2013
APPENDIX 4 - AUDITED CONSOLIDATED FINANCIAL STATEMENTS OF
THE GROUP FOR FY2012
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 30 June 2012
2.
Summary of significant accounting policies (cont’d)
2.3
Standards issued but not yet effective (cont’d)
Except for the Amendments to FRS 1, FRS 110, FRS 112 and FRS 113, the directors expect that the
adoption of the other standards and interpretations above will have no material impact on the
financial statements in the period of initial application. The nature of the impending changes in
accounting policy on adoption of the Amendments to FRS 1, FRS 110, FRS 112 and FRS 113 are
described below.
Amendments to FRS 1 Presentation of Items of Other Comprehensive Income
The Amendments to FRS 1 Presentation of Items of Other Comprehensive Income (“OCI”) is
effective for financial periods beginning on or after 1 July 2012.
The Amendments to FRS 1 changes the grouping of items presented in OCI. Items that could be
reclassified to profit or loss at a future point in time would be presented separately from items
which will never be reclassified. As the Amendments only affect the presentation of items that
are already recognised in OCI, the Group does not expect any impact on its financial position or
performance upon adoption of this standard.
FRS 110 Consolidated Financial Statements and FRS 27 Separate Financial Statements (Revised)
FRS 110 establishes a single control model that applies to all entities (including special purpose
entities). The changes introduced by FRS 110 will require management to exercise significant
judgement to determine which entities are controlled, and therefore are required to be
consolidated by the Group, compared with the requirements that were in FRS 27. Therefore, FRS
110 may change which entities are consolidated within a group. The revised FRS 27 was amended
to address accounting for subsidiaries, jointly controlled entities and associates in separate
financial statements. The Group does not expect adoption of these standards to have material
impact to the financial statements.
FRS 112 Disclosure of Interests in Other Entities
FRS 112 is a new and comprehensive standard on disclosure requirements for all forms of interests
in other entities, including joint arrangements, associates, special purpose vehicles and other off
balance sheet vehicles. FRS 112 requires an entity to disclose information that helps users of its
financial statements to evaluate the nature and risks associated with its interests in other entities
and the effects of those interests on its financial statements. The Group is currently determining
the impact of the disclosure requirements. As this is a disclosure standard, it will have no impact
on the financial position and financial performance of the Group when implemented in 2014.
FRS 113 Fair Value Measurements
FRS 113 provides a single source of guidance for all fair value measurements. FRS 113 does
not change when an entity is required to use fair value, but rather provides guidance on how
to measure fair value under FRS when fair value is required or permitted by FRS. The Group is
currently determining the impact of this new standard on the Group’s financial statements.
70
APPENDIX 4 - AUDITED CONSOLIDATED FINANCIAL STATEMENTS OF
THE GROUP FOR FY2012
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 30 June 2012
2.
Summary of significant accounting policies (cont’d)
2.4
Basis of consolidation and business combinations
(a)
Basis of consolidation
Basis of consolidation from 1 July 2010
The consolidated financial statements comprise the financial statements of the Company
and its subsidiaries as at the end of the reporting period. 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 and dividends are eliminated in full.
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.
Losses within a subsidiary are attributed to the non-controlling interest even if that results in
a deficit balance.
A change in the ownership interest of a subsidiary, without a loss of control, is accounted for
as an equity transaction. If the Group loses control over a subsidiary, it:
-
De-recognises the assets (including goodwill) and liabilities of the subsidiary at their
carrying amounts at the date when control is lost;
-
De-recognises the carrying amount of any non-controlling interest;
-
De-recognises the cumulative translation differences recorded in equity;
-
Recognises the fair value of the consideration received;
-
Recognises the fair value of any investment retained;
-
Recognises any surplus or deficit in profit or loss;
-
Re-classifies the Group’s share of components previously recognised in other
comprehensive income to profit or loss or retained earnings, as appropriate.
Consolidation of the subsidiaries in the PRC is based on the subsidiaries’ financial statements
prepared in accordance with FRS. Profits reflected in the financial statements prepared
in accordance with FRS may differ from those reflected in the PRC statutory financial
statements of the subsidiaries, prepared for PRC reporting purposes. In accordance with the
relevant laws and regulations, profits available for distribution by the PRC subsidiaries are
based on the amounts stated in the PRC statutory financial statements.
71
APPENDIX 4 - AUDITED CONSOLIDATED FINANCIAL STATEMENTS OF
THE GROUP FOR FY2012
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 30 June 2012
2.
Summary of significant accounting policies (cont’d)
2.4
Basis of consolidation and business combinations (cont’d)
(a)
Basis of consolidation (cont’d)
Basis of consolidation prior to 1 July 2010
Certain of the above-mentioned requirements were applied on a prospective basis. The
following differences, however, are carried forward in certain instances from the previous
basis of consolidation:
(b)
-
Acquisition of non-controlling interests, prior to 1 July 2010, were accounted for using
the parent entity extension method, whereby, the difference between the consideration
and the book value of the share of the net assets acquired were recognised in goodwill.
-
Losses incurred by the Group were attributed to the non-controlling interest until the
balance was reduced to nil. Any further losses were attributed to the Group, unless
the non-controlling interest had a binding obligation to cover these. Losses prior to 1
July 2010 were not reallocated between non-controlling interest and the owners of the
Company.
-
Upon loss of control, the Group accounted for the investment retained at its
proportionate share of net asset value at the date control was lost. The carrying value
of such investments as at 1 July 2010 have not been restated.
Business combinations
Business combinations from 1 July 2010
Business combinations are accounted for by applying the acquisition method. Identifiable
assets are acquired and liabilities assumed in a business combination are measured initially
at their fair values at the acquisition date. Acquisition-related costs are recognised as
expenses in the periods in which the costs are incurred and the services are received.
When the Group acquires a business, it assess the financial assets and liabilities assumed
for appropriate classification and designation in accordance with the contractual terms,
economic circumstances and pertinent conditions as at the acquisition date. This includes
the separation of embedded derivatives in host contracts by the acquiree.
Any contingent consideration to be transferred by the acquirer will be recognised at
fair value at the acquisition date. Subsequent changes to the fair value of the contingent
consideration which is deemed to be an asset or liability, will be recognised in accordance
with FRS 39 either in profit or loss or as a change to other comprehensive income. If the
contingent consideration is classified as equity, it is not remeasured until it is finally settled
within equity.
In business combinations achieved in stages, previously held equity interests in the acquiree
are remeasured to fair value at the acquisition date and any corresponding gain or loss is
recognised in profit or loss.
The Group elects for each individual business combination, whether non-controlling interest
in the acquiree (if any) is recognised on the acquisition date at fair value, or at the noncontrolling interest’s proportionate share of the acquiree’s identifiable net assets.
72
APPENDIX 4 - AUDITED CONSOLIDATED FINANCIAL STATEMENTS OF
THE GROUP FOR FY2012
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 30 June 2012
2.
Summary of significant accounting policies (cont’d)
2.4
Basis of consolidation and business combinations (cont’d)
(b)
Business combinations (cont’d)
Business combinations from 1 July 2010 (cont’d)
Any excess of the sum of the fair value of the consideration transferred in the business
combination, the amount of non-controlling interest in the acquiree (if any), and the fair
value of the Group’s previously held equity interest in the acquiree (if any), over the net
fair value of the acquiree’s identifiable assets and liabilities is recorded as goodwill. The
accounting policy for goodwill is set out in Note 2.8(a). In instances where the latter amount
exceeds the former, the excess is recognised as gain on bargain purchase in profit or loss on
the acquisition date.
Business combinations prior to 1 July 2010
In comparison to the above mentioned requirements, the following differences applied:
Business combinations are accounted for by applying the purchase method. Transaction
costs directly attributable to the acquisition formed part of the acquisition costs. The noncontrolling interest (formerly known as minority interest) was measured at the proportionate
share of the acquiree’s identifiable net assets.
Business combinations achieved in stages were accounted for as separate steps. Adjustments
to those fair values relating to previously held interests are treated as a revaluation and
recognised in equity. Any additional acquired share of interest did not affect previously
recognised goodwill.
When the Group acquired a business, embedded derivatives separated from the host contract
by the acquiree were not reassessed on acquisition unless the business combination resulted
in a change in the terms of the contract that significantly modified the cash flows that
otherwise would have been required under the contract.
Contingent consideration was recognised if, and only if, the Group had a present obligation,
the economic outflow was more likely than not and a reliable estimate was determinable.
Subsequent adjustments to the contingent consideration were recognised as part of goodwill.
2.5
Transactions with non-controlling interests
Non-controlling interest represents the equity in subsidiaries not attributable, directly or
indirectly, to owners of the Company, and are presented separately in the consolidated statement
of comprehensive income and within equity in the consolidated statement of financial position,
separately from equity attributable to owners of the Company.
Changes in the Company owners’ ownership interest in a subsidiary that do not result in a loss of
control are accounted for as equity transactions. In such circumstances, the carrying amounts of
the controlling and non-controlling interests are adjusted to reflect the changes in their relative
interests in the subsidiary. Any difference between the amount by which the non-controlling
interest is adjusted and the fair value of the consideration paid or received is recognised directly in
equity and attributed to owners of the Company.
73
APPENDIX 4 - AUDITED CONSOLIDATED FINANCIAL STATEMENTS OF
THE GROUP FOR FY2012
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 30 June 2012
2.
Summary of significant accounting policies (cont’d)
2.6
Foreign currency
The Group’s consolidated financial statements are presented in Singapore Dollars, which is also the
Company’s functional currency. Each entity in the Group determines its own functional currency
and items included in the financial statements of each entity are measured using that functional
currency.
(a)
Transactions and balances
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 end of the reporting period. 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. Non-monetary 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 end of the reporting period are recognised in profit or loss except for exchange
differences arising on monetary items that form part of the Group’s net investment in foreign
operations, which are recognised initially in other comprehensive income and accumulated
under foreign currency translation reserve in equity. The foreign currency translation reserve
is reclassified from equity to profit or loss of the Group on disposal of the foreign operation.
(b)
Consolidated financial statements
For consolidation purpose, the assets and liabilities of foreign operations are translated into
SGD at the rate of exchange ruling at the end of the reporting period and their profit or loss
are translated at the exchange rates prevailing at the date of the transactions. The exchange
differences arising on the translation are recognised in other comprehensive income. On
disposal of a foreign operation, the component of other comprehensive income relating to
that particular foreign operation is recognised in profit or loss.
In the case of a partial disposal without loss of control of a subsidiary that includes a foreign
operation, the proportionate share of the cumulative amount of the exchange differences
are re-attributed to non-controlling interest and are not recognised in profit or loss. For
partial disposals of associates or jointly controlled entities that are foreign operations, the
proportionate share of the accumulated exchange differences is reclassified to profit or loss.
2.7
Property, plant and equipment
All items of property, plant and equipment are initially recorded at cost. Subsequent to
recognition, property, plant and equipment are measured at cost less accumulated depreciation
and any accumulated impairment losses. The cost includes the cost of replacing part of the
property, plant and equipment and borrowing costs that are directly attributable to the acquisition,
construction or production of a qualifying property, plant and equipment. The accounting policy
for borrowing costs is set out in Note 2.18. 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.
74
APPENDIX 4 - AUDITED CONSOLIDATED FINANCIAL STATEMENTS OF
THE GROUP FOR FY2012
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 30 June 2012
2.
Summary of significant accounting policies (cont’d)
2.7
Property, plant and equipment (cont’d)
When significant parts of property, plant and equipment are required to be replaced in intervals,
the Group recognises such parts as individual assets with specific useful lives and depreciation,
respectively. Likewise, when a major inspection is performed, its cost is recognised in the carrying
amount of the plant and equipment as a replacement if the recognition criteria are satisfied. All
other repair and maintenance costs are recognised in profit or loss as incurred.
Depreciation is computed on a straight-line basis over the estimated useful lives of the assets as
follows:
Years
Leasehold buildings and improvements
Plant, machinery and equipment
Furniture and fittings
Office equipment
Air-conditioners
Renovations
Motor vehicles
10 – 60
3 – 10
3 – 10
3–6
5 – 10
3
3–5
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 useful life and depreciation method are reviewed at each financial year-end, and adjusted
prospectively, if appropriate.
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 on de-recognition of the
asset is included in the profit or loss in the year the asset is derecognised.
2.8
Intangible assets
(a)
Goodwill
Goodwill is initially measured at cost. Following initial recognition, goodwill is measured at
cost less any accumulated impairment losses.
For the purpose of impairment testing, goodwill acquired in a business combination is, from
the acquisition date, allocated to each of the Group’s cash-generating units that are expected
to benefit from the synergies of the combination, irrespective of whether other assets or
liabilities of the acquiree are assigned to those units.
The cash-generating unit to which goodwill has been allocated is tested for impairment
annually and whenever there is an indication that the cash-generating unit may be impaired.
Impairment is determined for goodwill by assessing the recoverable amount of each cashgenerating unit (or group of cash-generating units) to which the goodwill relates. Where
the recoverable amount of the cash-generating unit is less than the carrying amount, an
impairment loss is recognised in the profit or loss. Impairment losses recognised for goodwill
are not reversed in subsequent periods.
75
APPENDIX 4 - AUDITED CONSOLIDATED FINANCIAL STATEMENTS OF
THE GROUP FOR FY2012
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 30 June 2012
2.
Summary of significant accounting policies (cont’d)
2.8
Intangible assets (cont’d)
(a)
Goodwill (cont’d)
Where goodwill forms part of a cash-generating unit and part of the operation within that
cash-generating unit is disposed of, the goodwill associated with the operation disposed of
is included in the carrying amount of the operation when determining the gain or loss on
disposal of the operation. Goodwill disposed of in this circumstance is measured based on
the relative fair values of the operations disposed of and the portion of the cash-generating
unit retained.
Goodwill and fair value adjustments arising on the acquisition of foreign operations on or
after 1 January 2005 are treated as assets and liabilities of the foreign operations and are
recorded in the functional currency of the foreign operations and translated in accordance
with the accounting policy set out in Note 2.6.
Goodwill and fair value adjustments which arose on acquisitions of foreign operations before
1 January 2005 are deemed to be assets and liabilities of the Company and are recorded in
SGD at the exchange rates prevailing at the date of acquisition.
(b)
Other intangible assets
Intangible assets acquired separately are measured initially at cost. The cost of intangible
assets acquired in a business combination is their fair value as at the date of acquisition.
Following initial recognition, intangible assets are measured at cost less any accumulated
amortisation and any accumulated impairment losses.
Intangible assets with finite useful lives are amortised over the estimated useful lives and
assessed for impairment whenever there is an indication that the intangible asset may
be impaired. The amortisation period and the amortisation method are reviewed at least
at each financial year-end. Changes in the expected useful life or the expected pattern of
consumption of future economic benefits embodied in the asset is accounted for by changing
the amortisation period or method, as appropriate, and are treated as changes in accounting
estimates. The amortisation expense on intangible assets with finite useful lives is recognised
in profit or loss in the expense category consistent with the function of the intangible asset.
Gains or losses arising from de-recognition of an intangible asset are measured as the
difference between the net disposal proceeds and the carrying amount of the asset and are
recognised in profit or loss when the asset is derecognised.
(i)
Trademarks
The total cost of establishment and initial registration of trademarks is capitalised and
amortised on a straight line basis over their estimated useful lives of 10 years.
(ii)
Club membership
Club membership was acquired separately and is amortised on a straight line basis
over its finite useful life of 30 years.
(iii)
Software
Software was acquired separately and is amortised on a straight line basis over its
estimated useful life of 3 years.
76
APPENDIX 4 - AUDITED CONSOLIDATED FINANCIAL STATEMENTS OF
THE GROUP FOR FY2012
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 30 June 2012
2.
Summary of significant accounting policies (cont’d)
2.9
Land use rights
Land use rights are initially measured at cost. Following initial recognition, land use rights are
measured at cost less accumulated amortisation and any accumulated impairment losses. The
land use rights are amortised on a straight-line basis over the lease term of 50 years.
2.10 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 indication exists, or when annual impairment testing 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 or group of
assets. Where the carrying amount of an asset or cash-generating unit exceeds its recoverable
amount, the asset is considered impaired and is written down to its recoverable amount. In
assessing value in use, the estimated future cash flows expected to be generated by the asset
are discounted to their present value using a pre-tax discount rate that reflects current market
assessments of the time value of money and the risks specific to the asset. In determining fair
value less costs to sell, recent market transactions are taken into account, if available. If no such
transactions can be identified, an appropriate valuation model is used. These calculations are
corroborated by valuation multiples, quoted share prices for publicly traded subsidiaries or other
available fair value indicators.
The Group bases its impairment calculation on detailed budgets and forecast calculations which
are prepared separately for each of the Group’s cash-generating units to which the individual
assets are allocated. These budgets and forecast calculations are generally covering a period of five
years. For longer periods, a long-term growth rate is calculated and applied to project future cash
flows after the fifth year.
Impairment losses are recognised in profit or loss.
For assets excluding goodwill, 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. If such indication exists, the Group estimates the asset’s or cash-generating unit’s
recoverable amount. 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 been recognised previously. Such reversal
is recognised in the profit or loss.
2.11 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 impairment losses.
77
APPENDIX 4 - AUDITED CONSOLIDATED FINANCIAL STATEMENTS OF
THE GROUP FOR FY2012
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 30 June 2012
2.
Summary of significant accounting policies (cont’d)
2.12 Financial assets
Initial recognition and measurement
Financial assets are recognised when, and only when, the Group becomes a party to the
contractual provisions of the financial instrument. The Group determines the classification of its
financial assets at initial recognition.
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.
Subsequent measurement
Loans and receivables
Non-derivative 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, less impairment.
Gains and losses are recognised in profit or loss when the loans and receivables are derecognised
or impaired, and through the amortisation process.
De-recognition
A financial asset is derecognised where the contractual right to receive cash flows from the asset
has expired. On de-recognition 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
had been recognised in other comprehensive income is recognised in profit or loss.
All regular way purchases and sales of financial assets are recognised or derecognised on the trade
date i.e., the date that the Group commits to purchase or sell the asset. Regular way purchases or
sales are purchases or sales of financial assets that require delivery of assets within the period
generally established by regulation or convention in the marketplace concerned.
2.13 Impairment of financial assets
The Group assesses at the end of each reporting period whether there is any objective evidence
that a financial asset is impaired.
Financial assets carried at amortised cost
For financial assets carried at amortised cost, the Group first assesses whether objective
evidence of impairment exists individually for financial assets that are individually significant,
or collectively for financial assets that are not individually significant. If the Group determines
that no objective evidence of impairment exists for an individually assessed financial asset,
whether significant or not, it includes the asset in a group of financial assets with similar credit
risk characteristics and collectively assesses them for impairment. Assets that are individually
assessed for impairment and for which an impairment loss is, or continues to be recognised are
not included in a collective assessment of impairment.
78
APPENDIX 4 - AUDITED CONSOLIDATED FINANCIAL STATEMENTS OF
THE GROUP FOR FY2012
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 30 June 2012
2.
Summary of significant accounting policies (cont’d)
2.13 Impairment of financial assets (cont’d)
If there is objective evidence that an impairment loss on financial assets carried at amortised
cost has 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. If a loan has a variable interest rate, the discount rate for
measuring any impairment loss is the current effective interest rate. The carrying amount of the
asset is reduced through the use of an allowance account. The impairment loss is recognised in
profit or loss.
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
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 to the extent that the carrying amount of the asset does
not exceed its amortised cost at the reversal date. The amount of reversal is recognised in profit or
loss.
2.14 Cash and cash equivalents
Cash and cash equivalents comprise cash at bank and on hand and unpledged fixed deposits that
are readily convertible to known amount of cash and which are subject to an insignificant risk of
changes in value.
2.15 Inventories
Inventories are stated at the lower of cost and net realisable value. Costs incurred in bringing the
inventories to their present location and condition are accounted for as follows:
z
Raw materials
– purchase costs on a first-in first-out basis.
z
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 firstin first-out basis.
Where necessary, allowance is provided for damaged, obsolete and slow moving items to adjust the
carrying value of inventories to the lower of cost and net realisable value.
Net realisable value is the estimated selling price in the ordinary course of business, less estimated
costs of completion and the estimated costs necessary to make the sale.
79
APPENDIX 4 - AUDITED CONSOLIDATED FINANCIAL STATEMENTS OF
THE GROUP FOR FY2012
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 30 June 2012
2.
Summary of significant accounting policies (cont’d)
2.16 Provisions
Provisions are recognised when the Group has a present obligation (legal or constructive) as a
result of a past event, it is probable that an outflow of resources embodying economic benefits will
be required to settle the obligation and the amount of the obligation can be estimated reliably.
Provisions are reviewed at the end of each reporting period 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.
2.17 Financial liabilities
Initial recognition and measurement
Financial liabilities are recognised when, and only when, the Group becomes a party to the
contractual provisions of the financial instrument. The Group determines the classification of its
financial liabilities at initial recognition.
All financial liabilities are recognised initially at fair value plus in the case of financial liabilities
not at fair value through profit or loss, directly attributable transaction costs.
Subsequent measurement
After initial recognition, other financial liabilities are subsequently measured at amortised cost
using the effective interest rate method. Gains and losses are recognised in profit or loss when the
liabilities are derecognised, and through the amortisation process.
De-recognition
A financial liability is de-recognised when the obligation under the liability is discharged or
cancelled or expires. When an existing financial liability is replaced by another from the same
lender on substantially different terms, or the terms of an existing liability are substantially
modified, such an exchange or modification is treated as a de-recognition of the original liability
and the recognition of a new liability, and the difference in the respective carrying amounts is
recognised in profit or loss.
2.18 Borrowing costs
Borrowing costs are capitalised as part of the cost of a qualifying asset if they are directly
attributable to the acquisition, construction or production of that 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 substantially completed for their intended use or sale. All other borrowing
costs are expensed in the period they occur. Borrowing costs consist of interest and other costs
that an entity incurs in connection with the borrowing of funds.
80
APPENDIX 4 - AUDITED CONSOLIDATED FINANCIAL STATEMENTS OF
THE GROUP FOR FY2012
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 30 June 2012
2.
Summary of significant accounting policies (cont’d)
2.19 Employee benefits
(a)
Defined contribution plans
The Group participates in the national pension schemes as defined by the laws of the
countries in which it has operations. In particular, the Singapore companies in the
Group make contributions to the Central Provident Fund scheme in Singapore, a defined
contribution pension scheme. Contributions to defined contribution pension schemes are
recognised as an expense in the period in which the related service is performed.
The subsidiaries incorporated in the PRC are required to provide certain staff pension
benefits to their employees under existing PRC legislation. Pension contributions are
provided at rates stipulated by PRC legislation and are contributed to a pension fund
managed by government agencies, which are responsible for paying pensions to the PRC
subsidiaries’ retired employees.
(b)
Employee leave entitlement
Employee entitlements to annual leave are recognised as a liability when they accrue to
employees. The estimated liability for leave is recognised for services rendered by employees
up to the end of the reporting period.
2.20 Leases
The determination of whether an arrangement is, or contains a lease is based on the substance of
the arrangement at inception date: whether fulfilment of the arrangement is dependent on the use
of a specific asset or assets or the arrangement conveys a right to use the asset, even if that right is
not explicitly specified in an arrangement.
For arrangements entered into prior to 1 January 2005, the date of inception is deemed to be 1
January 2005 in accordance with the transitional requirements of INT FRS 104.
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 profit or loss. 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 profit or loss 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.
81
APPENDIX 4 - AUDITED CONSOLIDATED FINANCIAL STATEMENTS OF
THE GROUP FOR FY2012
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 30 June 2012
2.
Summary of significant accounting policies (cont’d)
2.21 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, regardless of when the payment is made.
Revenue is measured at the fair value of consideration received or receivable, taking into account
contractually defined terms of payment and excluding taxes or duty. The Group assesses its
revenue arrangements to determine if it is acting as principal or agent. The Group has concluded
that it is acting as a principal in all of its revenue arrangements. The following specific recognition
criteria must also be met before revenue is recognised:
(a)
Sale of goods
Revenue from sale of goods is recognised upon the transfer of significant risk and rewards
of ownership of the goods to the customer, usually on delivery of goods. Revenue is not
recognised to the extent where there are significant uncertainties regarding recovery of the
consideration due, associated costs or the possible return of goods.
(b)
Interest income
Interest income is recognised using the effective interest method.
(c)
Dividend income
Dividend income is recognised when the Group’s right to receive payment is established.
2.22 Taxes
(a)
Current income tax
Current income 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 substantively
enacted at the end of the reporting period, in the countries where the Group operates and
generates taxable income.
Current income taxes are recognised in profit or loss except to the extent that the tax relates
to items recognised outside profit or loss, either in other comprehensive income or directly
in equity. Management periodically evaluates positions taken in the tax returns with respect
to situations in which applicable tax regulations are subject to interpretation and establishes
provisions where appropriate.
82
APPENDIX 4 - AUDITED CONSOLIDATED FINANCIAL STATEMENTS OF
THE GROUP FOR FY2012
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 30 June 2012
2.
Summary of significant accounting policies (cont’d)
2.22 Taxes (cont’d)
(b)
Deferred tax
Deferred tax is provided using the liability method on temporary differences at the end of the
reporting period between the tax bases of assets and liabilities and their carrying amounts
for financial reporting purposes.
Deferred tax liabilities are recognised for all temporary differences, except:
z
Where the deferred income tax liability arises from the initial recognition of goodwill
or 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;
and
z
In respect of taxable temporary differences associated with investments in subsidiaries,
where the timing of the reversal of the temporary differences can be controlled and it
is probable that the temporary differences will not reverse in the foreseeable future.
Deferred tax assets are recognised for all deductible temporary differences, carry forward of
unused tax credits and unused tax losses, to the extent that it is probable that taxable profit
will be available against which the deductible temporary differences, and the carry forward
of unused tax credits and unused tax losses can be utilised except:
z
Where the deferred tax asset relating to the deductible temporary difference 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; and
z
In respect of deductible temporary differences associated with investments in the
subsidiaries, deferred tax assets are recognised only to the extent that it is probable
that the temporary differences will reverse in the foreseeable future and taxable profit
will be available against which the temporary differences can be utilised.
The carrying amount of deferred tax assets is reviewed at the end of each reporting period
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 the end of each reporting period and are recognised to the extent
that it has become probable that future taxable profit will allow the deferred tax asset to be
recovered.
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 end of each reporting period.
Deferred tax relating to items recognised outside profit or loss is recognised outside profit or
loss. Deferred tax items are recognised in correlation to the underlying transaction either in
other comprehensive income or directly in equity and deferred tax arising from a business
combination is adjusted against goodwill on acquisition.
Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists
to set off current income tax assets against current income tax liabilities and the deferred
taxes relate to the same taxable entity and the same taxation authority.
83
APPENDIX 4 - AUDITED CONSOLIDATED FINANCIAL STATEMENTS OF
THE GROUP FOR FY2012
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 30 June 2012
2.
Summary of significant accounting policies (cont’d)
2.22 Taxes (cont’d)
(b)
Deferred tax (cont’d)
Tax benefits acquired as part of a business combination, but not satisfying the criteria for
separate recognition at that date, would be recognised subsequently if new information
about facts and circumstances changed. The adjustment would either be treated as a
reduction to goodwill (as long as it does not exceed goodwill) if it incurred during the
measurement period or in profit or loss.
(c)
Sales tax
Revenues, expenses and assets are recognised net of the amount of sales tax except:
z
Where the sales tax incurred on a purchase of assets or services is not recoverable
from the taxation authority, 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
z
Receivables and payables that are stated with the amount of sales tax included.
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.
2.23 Segment reporting
For management purposes, the Group is organised into operating segments based on their products
and services which are independently managed by the respective segment managers responsible
for the performance of the respective segments under their charge. The segment managers report
directly to the management of the Company who regularly review the segment results in order to
allocate resources to the segments and to assess the segment performance. Additional disclosures
on each of these segments are shown in Note 31, including the factors used to identify the
reportable segments and the measurement basis of segment information.
2.24 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.
2.25 Treasury shares
The Group’s own equity instruments, which are reacquired (treasury shares) are recognised at cost
and deducted from equity. No gain or loss is recognised in profit or loss on the purchase, sale,
issue or cancellation of the Group’s own equity instruments. Any difference between the carrying
amount of treasury shares and the consideration received, if reissued, is recognised directly in
equity. Voting rights related to treasury shares are nullified for the Group and no dividends are
allocated to them respectively.
84
APPENDIX 4 - AUDITED CONSOLIDATED FINANCIAL STATEMENTS OF
THE GROUP FOR FY2012
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 30 June 2012
2.
Summary of significant accounting policies (cont’d)
2.26 Contingencies
A contingent liability is:
(a)
a possible obligation that arises from past events and whose existence will be confirmed
only by the occurrence or non-occurrence of one or more uncertain future events not wholly
within the control of the Group; or
(b)
a present obligation that arises from past events but is not recognised because:
(i)
It is not probable that an outflow of resources embodying economic benefits will be
required to settle the obligation; or
(ii)
The amount of the obligation cannot be measured with sufficient reliability.
A contingent asset is a possible asset that arises from past events and whose existence will be
confirmed only by the occurrence or non-occurrence of one or more uncertain future events not
wholly within the control of the Group.
Contingent liabilities and assets are not recognised on the balance sheet of the Group, except for
contingent liabilities assumed in a business combination that are present obligations and which
the fair values can be reliably determined.
2.27 Related parties
A related party is defined as follows:
(a)
(b)
A person or a close member of that person’s family is related to the Group and Company if
that person:
(i)
Has control or joint control over the Company;
(ii)
Has significant influence over the Company; or
(iii)
Is a member of the key management personnel of the Group or Company or of a parent
of the Company.
An entity is related to the Group and the Company if any of the following conditions applies:
(i)
The entity and the Company are members of the same group (which means that each
parent, subsidiary and fellow subsidiary is related to the others).
(ii)
One entity is an associate or joint venture of the other entity (or an associate or joint
venture of a member of a group of which the other entity is a member).
(iii)
Both entities are joint ventures of the same third party.
(iv)
One entity is a joint venture of a third entity and the other entity is an associate of the
third entity.
85
APPENDIX 4 - AUDITED CONSOLIDATED FINANCIAL STATEMENTS OF
THE GROUP FOR FY2012
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 30 June 2012
2.
Summary of significant accounting policies (cont’d)
2.27 Related parties (cont’d)
3.
(v)
The entity is a post-employment benefit plan for the benefit of employees of either the
Company or an entity related to the Company. If the Company is itself such a plan, the
sponsoring employers are also related to the Company.
(vi)
The entity is controlled or jointly controlled by a person identified in (a).
(vii)
A person identified in (a) (i) has significant influence over the entity or is a member of
the key management personnel of the entity (or of a parent of the entity).
Significant accounting judgments and estimates
The preparation of the Group’s financial statements requires management to make judgments,
estimates and assumptions that affect the reported amounts of revenues, expenses, assets and
liabilities, and the disclosure of contingent liabilities at the end of each reporting period. 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 periods.
3.1
Judgments made in applying accounting policies
In the process of applying the Group’s accounting policies, management has made the following
judgments, apart from those involving estimations, which has the most significant effect on the
amounts recognised in the consolidated financial statements:
Income taxes
The Group has exposure to income taxes in numerous jurisdictions. Significant judgment
is involved in determining the Group-wide provision for income taxes. The PRC subsidiaries
make tax submissions and obtain clearances from the local tax authorities in accordance with
local practices. 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 income tax payables and deferred tax
liabilities at the end of the reporting period was $3,000,000 (2011: $2,251,000) and $4,126,000 (2011:
$2,900,000) respectively.
86
APPENDIX 4 - AUDITED CONSOLIDATED FINANCIAL STATEMENTS OF
THE GROUP FOR FY2012
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 30 June 2012
3.
Significant accounting judgments and estimates (cont’d)
3.2
Key sources of estimation uncertainty
The key assumptions concerning the future and other key sources of estimation uncertainty at the
end of each reporting period, 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.
(a)
Useful lives of plant, machinery and equipment
The cost of plant, machinery and equipment for the manufacture of food and beverages
and packaging materials is depreciated on a straight-line basis over the plant, machinery
and equipment’s estimated economic useful lives. Management estimates the useful lives
of these plant, machinery and equipment to be within 3 to 10 years. These are common
life expectancies applied in the industry. 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. The carrying amount
of the Group’s plant, machinery and equipment at the end of each reporting period is
disclosed in Note 11 to the financial statements. A 5% difference in the expected useful lives
of these assets from management’s estimates would result in approximately 0.34% (2011: 1%)
variance in the Group’s profit before tax.
(b)
Impairment of non-financial assets
An impairment exists when the carrying value of an asset or cash generating unit exceeds
its recoverable amount, which is the higher of its fair value less costs to sell and its value
in use. The fair value less costs to sell calculation is based on available data from binding
sales transactions in an arm’s length transaction of similar assets or observable market
prices less incremental costs for disposing the asset. The value in use calculation is based
on a discounted cash flow model. The cash flows are derived from the budget for the next
five years and do not include restructuring activities that the Group is not yet committed
to or significant future investments that will enhance the asset’s performance of the cash
generating unit being tested. The recoverable amount is most sensitive to the discount rate
used for the discounted cash flow model as well as the expected future cash inflows and the
growth rate used for extrapolation purposes.
4.
Revenue
Revenue represents sale of goods, net of sales tax, discounts and returns. Intra-group transactions
have been excluded from Group revenue.
87
APPENDIX 4 - AUDITED CONSOLIDATED FINANCIAL STATEMENTS OF
THE GROUP FOR FY2012
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 30 June 2012
5.
Other income
Group
Gain on disposal of property, plant and equipment
Gain on disposal of intangible assets
Scrap sales
Government grant
Others
6.
2012
$’000
2011
$’000
31
–
203
3
91
328
53
30
190
–
167
440
Interest income, Finance expenses and Other financial cost
Group
Interest income from:
- Fixed deposits
Interest expense on:
- Bills payable to banks
- Bank term loans
- Obligations under finance leases
Other financial cost:
- Bank charges
88
2012
$’000
2011
$’000
(640)
(322)
123
269
44
436
71
346
75
492
191
214
APPENDIX 4 - AUDITED CONSOLIDATED FINANCIAL STATEMENTS OF
THE GROUP FOR FY2012
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 30 June 2012
7.
Profit before tax
The following expense/(income) items have been included in arriving at profit before tax:
Group
Amortisation of intangible assets (Note 13)
Amortisation of land use rights (Note 14)
Depreciation of property, plant and equipment (Note 11)
Directors’ fee
Employee benefits expenses (Note 8)
Net foreign exchange loss
Inventories recognised as an expense in cost of sales (Note 15)
Audit fees:
- Auditors of the Company
- Other auditors
Non-audit fees:
- Auditors of the Company
- Other auditors
Operating lease expense (Note 27(b))
Impairment loss on goodwill
Property, plant and equipment written off
Loss on disposal of property, plant and equipment
Loss on disposal of land use rights
Allowance for inventory obsolescence
Write-back of allowance for inventory obsolescence
Allowance for doubtful trade receivables
Write-back of allowance of trade receivables
8.
2012
$’000
2011
$’000
52
115
2,929
400
18,551
288
113,774
66
131
3,144
400
15,972
2,477
113,181
200
31
166
27
256
11
1,139
375
29
48
28
242
(317)
87
(198)
80
–
1,080
–
14
–
–
416
(265)
315
(264)
Employee benefits
Group
Employee benefits expense (including directors’ remuneration):
Salaries, bonuses and other costs
Central Provident Fund and other pension costs
Other personnel expenses
89
2012
$’000
2011
$’000
16,472
1,520
559
18,551
14,269
1,186
517
15,972
APPENDIX 4 - AUDITED CONSOLIDATED FINANCIAL STATEMENTS OF
THE GROUP FOR FY2012
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 30 June 2012
9.
Income tax expense
Major components of income tax expense
The major components of income tax expense for the year ended 30 June 2012 and 2011 are:
Group
Consolidated statement of comprehensive income:
Current income tax
- Current year
- Over provision in respect of previous years
Deferred income tax
- Current year
- Under provision in respect of previous years
Income tax expense recognised in the consolidated statement of
comprehensive income
2012
$’000
2011
$’000
6,197
(87)
5,382
(45)
1,219
7
207
9
7,336
5,553
Relationship between tax expense and profit before tax
A reconciliation between tax expense and the product of profit before tax multiplied by the
applicable corporate tax rate for the year ended 30 June 2012 and 2011 is as follows:
Profit before tax
Tax at the domestic rates applicable to profits in the countries
where the Group operates
Adjustments:
Non-deductible expenses
Income not subject to taxation
Effect of partial tax exemption
Provision for withholding tax relating to earnings of PRC subsidiaries
Deferred tax assets not recognised
Overprovision in respect of previous years
Income tax expense recognised in the consolidated statement of
comprehensive income
25,206
17,766
5,964
4,144
1,136
–
(427)
693
50
(80)
1,107
(1)
(258)
585
12
(36)
7,336
5,553
The above reconciliation is prepared by aggregating separate reconciliations for each national
jurisdiction.
The Company
The Company is subjected to tax rate of 17% (2011: 17%).
90
APPENDIX 4 - AUDITED CONSOLIDATED FINANCIAL STATEMENTS OF
THE GROUP FOR FY2012
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 30 June 2012
9.
Income tax expense (cont’d)
Singapore subsidiaries
Gold Roast Food Industry Pte Ltd (“GRFI”), VB Global Trade Pte. Ltd. (“VBGT”), Gold Roast (Thailand) Pte Ltd
(“GRT”), Gold Roast (Vietnam) Pte Ltd (“GRV”) and VB Distribution Pte. Ltd (“VBD”)
The corporate income tax rate applicable to the Singapore subsidiaries was 17% (2011: 17%). No
provision for income tax has been made for GRT, GRV and VBD as these subsidiaries have no
taxable income for the financial years ended 30 June 2012 and 30 June 2011.
PRC subsidiaries
Based on the Income Tax Law of the PRC for Enterprises with Foreign Investment, the subsidiaries
in the PRC are entitled to an exemption from PRC Corporate Income Tax (CIT) for two years
commencing from their first profit-making year of operation and a 50% relief from PRC CIT for the
following three years.
During the 5th Session of the 10th National People’s Congress of the PRC, which was concluded on
16 March 2007, the PRC Corporate Income Tax Law (the New CIT Law) was approved and became
effective on 1 January 2008. The New CIT Law introduces a wide range of changes which include,
but not limited to, the unification of the income tax for domestic-invested and foreign-invested
enterprises at 25%. Based on the implementation and administrative rules and regulations relating
to the New CIT Law, PRC subsidiaries which have been granted tax concessions will continue
to enjoy these concessions until the expiry of such concession period. Thereafter, they will be
subjected to income tax at the rate of 25%.
Shantou Gold Roast Food Ind. Co., Ltd. (“GR”), Shantou Oriental Packaging Ind. Co., Ltd. (“OP”) and Shantou
Oriental Confectionery Food Co., Ltd. (“OC”)
With effect from 1 January 2008, in line with the New CIT Law, enterprises which do not enjoy
full tax exemptions will be subject to the CIT rate of 25%. However, the State Administration
of Taxation has allowed a transitional period to be progressively applied for foreign-invested
enterprises which operate in any of the Economic Development Zones of the PRC.
Accordingly, the CIT rates applicable to GR, OP and OC are 24% from 1 January 2011 to 31
December 2011 and 25% from the PRC statutory financial year from 1 January 2012 to 31 December
2012 onwards.
No provision for income tax has been made for OC as it has no taxable income for the financial
years ended 30 June 2012 and 30 June 2011.
Xinzheng Viz Branz Foods Co., Ltd (“XZVB”)
Given that XZVB’s first profit making year was in 2007, it enjoyed tax exemption from 1 January
2007 to 31 December 2008 and preferential income tax rate of 12.5% from 1 January 2009 to 31
December 2011. Thereafter, the subsidiary will be subjected to income tax at the rate of 25%.
91
APPENDIX 4 - AUDITED CONSOLIDATED FINANCIAL STATEMENTS OF
THE GROUP FOR FY2012
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 30 June 2012
9.
Income tax expense (cont’d)
Bridge Shine Coffee (Shanghai) Co., Ltd (“BSC”) and Bridge Shine Coffee Equipment (Shanghai) Co., Ltd
(“BSE”) and Goldwaves Food (Shanghai) Co., Ltd (“GW”)
BSC, BSE and GW are subject to income tax at 25%. No provision for income tax has been made for
BSC and GW as these subsidiaries have no assessable profits for the financial years ended 30 June
2012 and 30 June 2011.
Vietnam subsidiary
Gold Roast (Vietnam) Company Limited (“GR Vietnam”)
GR Vietnam is subjected to tax rate of 15% (2011: 15%).
GR Vietnam is entitled to an exemption from CIT for two years commencing from the first year in
which taxable profit is earned, which was the financial year ended 31 December 2003, based on
the Tax Assessment Minute dated 9 April 2004. In accordance with the provisions of tax incentives
issued by the Ministry of Finance of Vietnam, GR Vietnam has obtained Official Letter No. 7380/CTDTNN dated 8 November 2006 from the Tax Department of Binh Duong Province, which allows it to
be exempted from CIT for three years from 2003 to 2005 and entitled to 50% reduction of CIT for
seven years commencing from 2006.
Thailand subsidiary
Gold Roast (Thailand) Co., Ltd. (“GR Thailand”)
GR Thailand is subjected to tax rate of 30% (2011: 30%). No provision for income tax has been
made for GR Thailand as it has no taxable income for the financial years ended 30 June 2012 and
30 June 2011.
Deferred tax
Deferred tax as at 30 June relates to the following:
Group
Consolidated
statement of
financial position
2012
2011
$’000
$’000
Company
Consolidated
statement of
comprehensive
income
2012
2011
$’000
$’000
Statement of
financial position
2012
2011
$’000
$’000
Deferred tax liabilities:
Differences in depreciation
for tax purposes
Undistributed earnings of
PRC subsidiaries
Other items
1,219
1,400
(181)
(152)
–
–
2,907
–
4,126
1,496
4
2,900
1,411
(4)
1,226
368
–
216
–
–
–
–
4
4
92
APPENDIX 4 - AUDITED CONSOLIDATED FINANCIAL STATEMENTS OF
THE GROUP FOR FY2012
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 30 June 2012
9.
Income tax expense (cont’d)
Unrecognised tax losses
As at 30 June 2012, the Group has tax losses of approximately $641,000 (2011: $288,000) that are
available for offset against future taxable profits of the companies in which the losses arose, for
which no deferred tax asset is recognised due to uncertainty of its recoverability. The use of these
tax losses is subject to the agreement of the tax authorities and compliance with certain provisions
of the tax legislation of the respective countries in which the companies operate.
Tax consequences of proposed dividends
There are no income tax consequences (2011: nil) attached to the dividends to the shareholders
proposed by the Company but not recognised as a liability in the financial statements (Note 24).
Deferred income tax related to other comprehensive income
As at 30 June 2012, there is no deferred income tax (2011: nil) related to other comprehensive
income.
10.
Earnings per share
Earnings per share computation
Basic earnings per share are calculated by dividing profit for the year, net of tax, attributable to
owners of the Company by the weighted average number of ordinary shares outstanding (excluding
treasury shares) during the financial year.
There are no potential dilutive ordinary share for 30 June 2012 and 30 June 2011.
The following table reflects the profit and share data used in the computation of basic and diluted
earnings per share for the years ended 30 June:
Group
2012
$’000
2011
$’000
Profit for the year, net of tax, attributable to owners of
the Company used in the computation of basic and
diluted earnings per share
16,965
11,492
Weighted average number of ordinary shares for basic
earnings per share computation
355,471
351,038
Basic earnings per share (cents)
4.77
3.27
Diluted earnings per share (cents)
4.77
3.27
93
11.
(77)
Write off
94
(1,544)
–
–
–
Disposals
Write off
Transfer/Reclassification
Exchange differences
42,558
4
Additions
At 30 June 2012
–
44,098
–
Acquisition of subsidiary
At 30 June 2011 and
1 July 2011
Exchange differences
6,390
–
Disposals
Transfer/Reclassification
409
37,376
$’000
Additions
At 1 July 2010
Cost:
Group
28,996
47
9
(258)
(94)
1,147
9
28,136
(112)
24
(48)
(1,851)
456
29,667
$’000
Plant,
Leasehold
machinery
buildings
and
and
improvements equipment
Property, plant and equipment
648
1
–
(30)
–
6
–
671
–
–
–
–
128
543
$’000
Furniture
and
fittings
909
–
–
(99)
–
61
4
943
(6)
–
(26)
(2)
161
816
$’000
Office
equipment
321
–
–
(1)
(15)
–
–
337
–
–
(1)
–
3
335
$’000
866
7
–
–
–
29
–
830
(12)
–
–
–
50
792
$’000
Airconditioners Renovations
3,103
4
–
(18)
(365)
422
–
3,060
(25)
–
–
(26)
56
3,055
$’000
Motor
vehicles
247
–
(9)
–
–
247
–
9
–
(6,414)
–
–
550
5,873
$’000
Assets
under
construction
Total
77,648
59
–
(406)
(2,018)
1,916
13
78,084
(155)
–
(152)
(1,879)
1,813
78,457
$’000
APPENDIX 4 - AUDITED CONSOLIDATED FINANCIAL STATEMENTS OF
THE GROUP FOR FY2012
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 30 June 2012
11.
95
–
–
Write off
Exchange differences
35,535
34,091
At 30 June 2011
At 30 June 2012
Net carrying amount:
8,467
(932)
Disposals
At 30 June 2012
836
–
8,563
Charge for the year
Attributable to acquisition
of a subsidiary
At 30 June 2011 and
1 July 2011
–
(63)
Write off
Exchange differences
–
802
7,824
$’000
Disposals
Charge for the year
At 1 July 2010
Accumulated depreciation
and impairment loss:
Group
3,512
4,020
25,484
40
(230)
(61)
1,618
1
24,116
(96)
(48)
(1,813)
1,856
24,217
$’000
Plant,
Leasehold
machinery
buildings
and
and
improvements equipment
Property, plant and equipment (cont’d)
173
222
475
–
(30)
–
56
–
449
–
–
–
54
395
$’000
Furniture
and
fittings
206
216
703
2
(98)
–
71
1
727
(5)
(26)
(2)
61
699
$’000
Office
equipment
2
3
319
–
(1)
(15)
1
–
334
–
(1)
–
2
333
$’000
58
111
808
7
–
–
82
–
719
(12)
–
–
119
612
$’000
Airconditioners Renovations
562
403
2,541
2
(18)
(365)
265
–
2,657
(13)
–
(25)
250
2,445
$’000
Motor
vehicles
247
9
–
–
–
–
–
–
–
–
–
–
–
–
$’000
Assets
under
construction
Total
38,851
40,519
38,797
51
(377)
(1,373)
2,929
2
37,565
(126)
(138)
(1,840)
3,144
36,525
$’000
APPENDIX 4 - AUDITED CONSOLIDATED FINANCIAL STATEMENTS OF
THE GROUP FOR FY2012
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 30 June 2012
APPENDIX 4 - AUDITED CONSOLIDATED FINANCIAL STATEMENTS OF
THE GROUP FOR FY2012
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 30 June 2012
11.
Property, plant and equipment (cont’d)
Plant,
machinery
and
equipment
$’000
Company
Cost:
At 1 July 2010, 1 July 2011, 30 June 2011 and 30 June 2012
81
Accumulated depreciation:
At 1 July 2010, 1 July 2011, 30 June 2011 and 30 June 2012
81
Net carrying amount:
At 30 June 2011 and 30 June 2012
–
The carrying amount of certain leasehold buildings of the Group’s subsidiaries that remained
temporarily idle during the financial year ended 30 June 2012 was $4,524,000 (2011: $5,558,000).
Assets held under finance leases
The carrying amount of property, plant and equipment held under finance leases at the end of the
reporting period were $793,000 (2011: $1,370,000).
Leased assets are pledged as security for the related finance lease liabilities.
Assets pledged as security
In addition to assets held under finance leases, the Group’s leasehold buildings with a carrying
amount of $12,999,000 (2011: $13,290,000) were pledged to banks to secure the Group’s bank term
loans and other banking facilities (Notes 20 and 21).
12.
Investment in subsidiaries
Company
2012
2011
$’000
$’000
Shares, at cost
Additional investments during the year
Impairment losses
35,875
907
(1,048)
35,734
96
35,628
247
(1,048)
34,827
APPENDIX 4 - AUDITED CONSOLIDATED FINANCIAL STATEMENTS OF
THE GROUP FOR FY2012
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 30 June 2012
12.
Investment in subsidiaries (cont’d)
Name
Country of
incorporation
Principal activities
Proportion (%) of
ownership interest
2012
2011
Held by the Company
(1)
Gold Roast Food Industry
Pte Ltd
Singapore
Manufacturing
and distribution of
beverages and
snack food
(2a)
Shantou Gold Roast Food
Ind. Co., Ltd.
People’s Republic
of China
Manufacturing
and distribution
of beverages and
snack food
(1)
VB Global Trade Pte. Ltd.
Singapore
(1)
Gold Roast (Thailand)
Pte Ltd
(1)
100
100
93.75
93.75
Distribution of
beverages and
snack food
100
100
Singapore
Investment holding
100
100
Gold Roast (Vietnam)
Pte Ltd
Singapore
Investment holding
100
100
(2a)
Shantou Oriental
Packaging
Ind. Co., Ltd
People’s Republic
of China
Printing of flexible
packaging materials
99
99
(2b)
Xinzheng Viz Branz Foods
Co., Ltd
People’s Republic
of China
Manufacturing
and distribution of
snack food
100
100
(1)
VB Distribution Pte. Ltd.
Singapore
General wholesale
trade
100
–
(6)
Goldwaves Food
(Shanghai) Co., Ltd
People’s Republic
of China
Coffee roasting
business
100
–
(5)
Bridge Shine Coffee
(Shanghai) Co., Ltd
People’s Republic
of China
Coffee roasting
business
100
100
97
APPENDIX 4 - AUDITED CONSOLIDATED FINANCIAL STATEMENTS OF
THE GROUP FOR FY2012
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 30 June 2012
12.
Investment in subsidiaries (cont’d)
Name
Country of
incorporation
Principal activities
Proportion (%) of
ownership interest
2012
2011
Held by the Company (cont’d)
(6)
Bridge Shine Coffee
Equipment (Shanghai)
Co., Ltd
People’s Republic
of China
Business of selling
coffee machines
100
100
(2a)(i)
Shantou Oriental
Confectionery Food Co.,
Ltd.
People’s Republic
of China
Manufacturing
and distribution
of beverages and
snack food
100
100
99.993
99.993
100
100
Held by subsidiary
(4)
Gold Roast (Thailand) Co.,
Ltd.
Thailand
Manufacturing
and distribution
of beverages
and snack food
(currently dormant)
(3)
Gold Roast (Vietnam)
Company Limited
Vietnam
Manufacturing
and distribution of
beverages
(1)
Audited by Ernst & Young LLP, Singapore
(2a)
Audited by Si Wei Certified Public Accountants Co., Ltd, PRC for PRC statutory audit purposes
(2b)
Audited by Henan Shiji Lianhe Certified Public Accountants Co. Ltd., PRC for PRC statutory
audit purposes
(3)
Audited by Ernst & Young, Vietnam
(4)
Audited by Mr Thanakorn Wongthiang, Certified Public Accountant, Thailand for Thailand
statutory audit purposes
(5)
Audited by Shanghai Shi Cheng Certified Public Accountants Co., Ltd, PRC for PRC statutory
audit purposes
(6)
Audited by Shanghai Jin Cheng Certified Public Accountants Co., Ltd, PRC for PRC statutory
audit purposes
(i)
Shantou Oriental Confectionary Food Co., Ltd was incorporated as a sino-foreign cooperative
joint venture with a PRC partner. The PRC joint venture partner does not have any share in the
results or assets of the subsidiary.
98
APPENDIX 4 - AUDITED CONSOLIDATED FINANCIAL STATEMENTS OF
THE GROUP FOR FY2012
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 30 June 2012
12.
Investment in subsidiaries (cont’d)
Acquisition of subsidiary
On 13 January 2012, the Company acquired 100% interest in Goldwaves Food (Shanghai) Co., Ltd
(“GW”) for a cash consideration of $168,000. Subsequent to the acquisition, the Company injected
additional capital of $739,000 to the subsidiary.
The fair value of the identifiable assets and liabilities of GW as at the acquisition date were:
Fair value
recognised
on
acquisition
$’000
Property, plant and equipment
Inventories
Trade and other receivables
Other current assets
Trade and other payables
Total identifiable net liabilities at fair value
Goodwill arising from acquisition (Note 13)
Cash paid, representing total consideration transferred/cash outflow on acquisition
11
15
20
142
188
(395)
(207)
375
168
Impact of acquisition on profit or loss
The revenue and profit contribution from GW is deemed insignificant to the Group for the financial
year ended 30 June 2012.
99
APPENDIX 4 - AUDITED CONSOLIDATED FINANCIAL STATEMENTS OF
THE GROUP FOR FY2012
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 30 June 2012
13.
Intangible assets
Software
$’000
Trademarks
$’000
Group
Club
memberships Goodwill
$’000
$’000
Total
$’000
Cost:
At 1 July 2010
Additions
Disposals
At 30 June 2011 and 1 July 2011
Additions
Arising from acquisition of a
subsidiary
At 30 June 2012
58
35
–
93
18
878
2
–
880
–
120
–
(50)
70
–
368
–
–
368
–
1,424
37
(50)
1,411
18
–
111
–
880
–
70
375
743
375
1,804
Accumulated amortisation and
impairment:
At 1 July 2010
Amortisation
Disposals
At 30 June 2011 and 1 July 2011
Amortisation
Impairment
At 30 June 2012
29
24
–
53
23
–
76
750
38
–
788
27
–
815
76
4
(30)
50
2
–
52
368
–
–
368
–
375
743
1,223
66
(30)
1,259
52
375
1,686
Net carrying amount:
At 30 June 2011
40
92
20
–
152
At 30 June 2012
35
65
18
–
118
Cost:
At 1 July 2010, 30 June 2011, 1 July 2011 and 30 June 2012
Accumulated amortisation and impairment:
At 1 July 2010
Amortisation
At 30 June 2011 and 1 July 2011
Amortisation
At 30 June 2012
Net carrying amount:
At 30 June 2011
At 30 June 2012
100
Trademarks
$’000
Company
Club
membership
$’000
Total
$’000
40
70
110
34
3
37
2
39
47
3
50
2
52
81
6
87
4
91
3
20
23
1
18
19
APPENDIX 4 - AUDITED CONSOLIDATED FINANCIAL STATEMENTS OF
THE GROUP FOR FY2012
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 30 June 2012
13.
Intangible assets (cont’d)
Software, trademarks and club membership
Software has an average remaining amortisation period for the Group of 1 to 9 years (2011: 1 to 3
years).
Trademarks have average remaining amortisation periods for the Group and the Company of 1 to 8
years and 1 to 2 years respectively (2011: 1 to 9 years and 1 to 3 years respectively).
Club membership has an average remaining amortisation period for the Group and the Company
of 16 years (2011: 17 years).
Amortisation expenses
The amortisation of software, trademarks and club memberships is included in the “Administrative
expenses” line item in the consolidated statement of comprehensive income.
Goodwill
Goodwill acquired through business combinations have been allocated to cash-generating units
(“CGU”) for the impairment testing.
The carrying amounts of goodwill allocated to each CGU are as follows:
Group
2012
$’000
Goldwaves Food (Shanghai) Co., Ltd (“GW”)
Impairment loss
Carrying value
375
(375)
–
2011
$’000
–
–
–
Impairment loss recognised
During the financial year, an impairment loss was recognised to write-down the carrying amount
of goodwill arising from acquisition of GW. The impairment loss of $375,000 (2011: Nil) has been
recognised in profit or loss under the line item “administrative expenses”.
101
APPENDIX 4 - AUDITED CONSOLIDATED FINANCIAL STATEMENTS OF
THE GROUP FOR FY2012
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 30 June 2012
14.
Land use rights
Group
2012
$’000
2011
$’000
6,556
(1,233)
5,323
6,556
–
6,556
Accumulated amortisation:
At 1 July
Amortisation for the year
Disposals
At 30 June
1,608
115
(316)
1,407
1,477
131
–
1,608
Net carrying amount:
At 30 June
3,916
4,948
106
426
3,384
3,916
131
524
4,293
4,948
Cost:
At 1 July
Disposals
At 30 June
Amount to be amortised:
- Not later than one year
- Later than one year but not later than five years
- Later than five years
The Group has land use rights over 4 (2011: 5) plots of state-owned land in the People’s Republic of
China (PRC) where the Group’s PRC manufacturing and storage facilities reside. The land use rights
are not transferable and have a remaining tenure of 31 to 44 years (2011: 32 to 45 years).
15.
Inventories
Group
Statement of financial position:
Raw materials
Work-in-progress
Finished goods
Goods-in-transit
Statement of comprehensive income:
Inventories recognised as an expense in cost of sales
Inclusive of the following charge/(credit):
- Allowance for inventory obsolescence
- Write-back of allowance for inventory obsolescence
2012
$’000
2011
$’000
19,492
1,690
3,833
1,146
26,161
20,746
1,433
5,179
1,194
28,552
113,774
113,181
242
(317)
416
(265)
The write-back of allowance for inventory obsolescence was made when the related inventories
were sold above their carrying amounts in the financial year ended 30 June 2012.
102
APPENDIX 4 - AUDITED CONSOLIDATED FINANCIAL STATEMENTS OF
THE GROUP FOR FY2012
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 30 June 2012
16.
Trade and other receivables
Group
Company
2012
2011
$’000
$’000
2012
$’000
2011
$’000
18,768
23,067
–
–
- Deposits
- Dividend receivable from subsidiaries
- VAT/GST recoverable
- Other receivables
527
–
735
1,148
368
–
356
1,232
2
10,815
–
–
–
12,453
–
–
Total other receivables
2,410
1,956
10,817
12,453
–
175
–
80
9,561
–
13,366
–
21,353
269
64,217
85,839
25,103
322
42,061
67,486
20,378
–
31,060
51,438
25,819
–
15,488
41,307
Trade receivables
Other receivables:
Amounts due from subsidiaries
Amount due from related party
Total trade and other receivables
Add: Advances to employees (Note 17)
Add: Cash and short-term deposits (Note 25)
Total loans and receivables
Trade receivables
Trade receivables are non-interest bearing and are generally on 30 to 90 days’ terms. They are
recognised at their original invoice amounts which represent their fair values on initial recognition.
At the end of the reporting period, trade receivables arising from export sales amounting to
$1,459,000 (2011: $nil) are arranged to be settled via letter of credit issued by reputable banks in
countries where the customers are based.
Trade receivables denominated in foreign currencies as at 30 June are as follows:
Group
Japanese Yen
United States Dollar
Malaysian Ringgit
Hong Kong Dollar
103
2012
$’000
2011
$’000
80
1,034
629
489
–
1,303
1,079
324
APPENDIX 4 - AUDITED CONSOLIDATED FINANCIAL STATEMENTS OF
THE GROUP FOR FY2012
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 30 June 2012
16.
Trade and other receivables (cont’d)
Related party balances
Amount due from related party is trade related, unsecured, non-interest bearing, repayable upon
demand and are to be settled by cash.
Amounts due from subsidiaries are non-trade, unsecured, non-interest bearing and repayable upon
demand.
Receivables that are past due but not impaired
The Group has trade receivables amounting to $2,615,000 (2011: $5,113,000) that are past due at
the end of the reporting period but not impaired. These receivables are unsecured and the analysis
of their aging at the end of the reporting period is as follows:
Group
Trade receivables past due but not impaired:
Lesser than 30 days
30 - 60 days
61 - 90 days
91 - 120 days
2012
$’000
2011
$’000
1,711
853
21
30
2,615
3,704
1,333
70
6
5,113
Receivables that are impaired
The Group’s trade receivables that are impaired at the end of the reporting period and the
movement of the allowance accounts used to record the impairment are as follows:
Group
Individually impaired
2012
2011
$’000
$’000
Trade receivables - nominal amounts
Less: Allowance for doubtful receivables
Movement in allowance accounts:
At 1 July
Charge for the year
Write back
Written off
Exchange difference
At 30 June
104
818
(788)
30
1,032
(912)
120
912
87
(198)
(49)
36
788
3,138
315
(264)
(2,227)
(50)
912
APPENDIX 4 - AUDITED CONSOLIDATED FINANCIAL STATEMENTS OF
THE GROUP FOR FY2012
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 30 June 2012
16.
Trade and other receivables (cont’d)
Receivables that are impaired (cont’d)
Trade receivables that are individually determined to be impaired at the end of the reporting period
relate to invoices aged more than 150 days. These receivables are not secured by any collateral or
credit enhancements.
Amounts due from subsidiaries that are impaired
At the end of the reporting period, the Company has provided an allowance of $101,000 (2011:
$199,000) for impairment of the amount due from a subsidiary with nominal amount of $101,000
(2011: $199,000). The subsidiary has been suffering losses for the current and past two financial
years.
Movement in allowance accounts:
At 1 July
Write back
At 30 June
17.
2012
$’000
2011
$’000
199
(98)
101
262
(63)
199
Other current assets
Group
Prepaid operating expenses
Advances to employees
2012
$’000
2011
$’000
764
269
1,033
2,922
322
3,244
Company
2012
2011
$’000
$’000
15
–
15
16
–
16
Advances to employees
Advances to employees are unsecured, non-interest bearing, and are for business-related
expenditure which have not been incurred as at year end.
105
APPENDIX 4 - AUDITED CONSOLIDATED FINANCIAL STATEMENTS OF
THE GROUP FOR FY2012
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 30 June 2012
18.
Trade and other payables
Group
Trade payables
Bills payable to banks
Other payables
Amount due to subsidiaries
Total trade and other payables
Add:
- Other liabilities (Note 19)
- Loans and borrowings
(Note 20)
Total financial liabilities carried at
amortised cost
Company
2012
2011
$’000
$’000
2012
$’000
2011
$’000
4,524
3,937
4,504
–
12,965
6,482
8,115
4,722
–
19,319
–
–
514
168
682
–
–
496
773
1,269
9,850
10,099
1,423
1,686
29,165
15,795
24,416
8,320
51,980
45,213
26,521
11,275
Trade payables/other payables
These amounts are non-interest bearing and normally settled on 30 to 90 days’ terms.
Trade payables denominated in foreign currencies as at 30 June are as follows:
Group
2012
$’000
United States Dollar
Malaysian Ringgit
763
7
2011
$’000
971
10
Bills payable to banks
Bills payable to banks bear interest at rates ranging from 1.80% to 2.03% (2011: 1.60% to 2.03%) per
annum and have an average maturity period of 120 days.
A corporate guarantee for $3,937,000 (2011: $8,115,000) has been given by the Company in respect
of the bills facilities granted to the subsidiaries.
Amount due to subsidiaries
These amounts are non-trade related, unsecured, non-interest bearing and repayable on demand.
106
APPENDIX 4 - AUDITED CONSOLIDATED FINANCIAL STATEMENTS OF
THE GROUP FOR FY2012
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 30 June 2012
19.
Other liabilities
Group
2012
$’000
Accrued operating expenses
Accruals for bonus
20.
2011
$’000
7,908
1,942
9,850
8,892
1,207
10,099
Company
2012
2011
$’000
$’000
271
1,152
1,423
1,020
666
1,686
Loans and borrowings
Group
Current:
Obligations under finance leases (Note 27(c))
Short-term bank loans
Bank term loans (Note 21)
Non-current:
Obligations under finance leases (Note 27(c))
Bank term loans (Note 21)
Total loans and borrowings
2012
$’000
2011
$’000
Company
2012
2011
$’000
$’000
501
24,416
1,594
26,511
593
8,320
1,917
10,830
–
24,416
–
24,416
–
8,320
–
8,320
74
2,580
2,654
29,165
505
4,460
4,965
15,795
–
–
–
24,416
–
–
–
8,320
A corporate guarantee for $43,830,000 (2011: $41,660,000) has been given by the Company in
respect of the banking facilities granted to subsidiaries.
Obligations under finance leases
These obligations are secured by a charge over the leased assets (Note 11). In addition, finance
lease obligations of a subsidiary are pledged by a corporate guarantee of approximately $473,000
(2011: $968,000) issued by the Company.
Short-term bank loans
These short-term bank loans bear interest ranging from 0.55% to 0.85% (2011: 0.70% to 0.80%) per
annum and have a maturity period ranging from 3 to 27 days (2011: 7 to 21 days). These shortterm bank loans are secured against certain fixed deposits.
107
APPENDIX 4 - AUDITED CONSOLIDATED FINANCIAL STATEMENTS OF
THE GROUP FOR FY2012
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 30 June 2012
21.
Bank term loans
Group
2012
$’000
Bank
Bank
Bank
Bank
Bank
term
term
term
term
term
loan (1)
loan (2)
loan (3)
loan (4)
loan (5)
2011
$’000
1,767
–
1,667
740
–
4,174
2,106
66
2,167
1,511
527
6,377
Notes:
(1)
This bank term loan bears interest at 2.50% per annum (2011: 2.50% per annum), is repayable
over 10 years by 120 monthly instalments and is to be repaid in full in April 2017.
(2)
This bank term loan bears interest at 4.75% per annum (2011: 4.75% per annum) and has
been repaid in full in August 2011.
(3)
This bank term loan bears interest at 1 month swap rate plus 2.25% per annum (2011: 1
month swap rate plus 2.25% per annum), is repayable over 7 years by 84 monthly instalments
and is to be repaid in full in October 2015.
(4)
This bank term loan bears interest at 5.00% per annum (2011: 5.00% per annum), is repayable
over 4 years by 48 monthly instalments and is to be repaid in full in May 2013.
(5)
This bank term loan bears interest at 5.00% per annum (2011: 5.00% per annum) and has
been repaid in full in October 2011.
2 (2011: 3) of the bank term loans are secured by a legal mortgage over a subsidiary’s leasehold
factory buildings with a net book value of $12,999,000 (2011: $13,290,000). In addition, a corporate
guarantee for $17,767,000 (2011: $15,497,000) has been given by the Company in respect of banking
facilities, including the bank term loans, granted to the subsidiary.
22.
Share capital and treasury shares
(a)
Share capital
Group and Company
2012
Issued and fully paid ordinary shares:
At 1 July
Issue of shares on exercise of warrants(1)
Adjustment for share split on 17
September 2010(2)
Issue of shares on exercise of warrants(3)
Shares issuance expenses
At 30 June
108
No. of
shares
‘000
2011
$’000
No. of
shares
‘000
$’000
361,116
–
36,383
–
168,612
10,490
34,179
2,098
–
–
–
361,116
–
–
–
36,383
179,102
2,912
–
361,116
–
232
(126)
36,383
APPENDIX 4 - AUDITED CONSOLIDATED FINANCIAL STATEMENTS OF
THE GROUP FOR FY2012
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 30 June 2012
22.
Share capital and treasury shares (cont’d)
(a)
Share capital (cont’d)
(1)
Conversion of warrants into nil shares (2011: 10,490,000 shares) at $0.20 per share.
(2)
On 17 September 2010, the Company split each ordinary share into two ordinary shares.
(3)
Conversion of warrants into nil shares (2011: 2,912,000) shares at $0.08 per share.
The holders of ordinary shares (except treasury shares) are entitled to receive dividends as
and when declared by the Company. All ordinary shares carry one vote per share without
restrictions. The ordinary shares have no par value.
(b)
Treasury shares
Group and Company
2012
At 1 July
Adjustment for share split
Acquired during the financial year
At 30 June
No. of
shares
‘000
4,618
–
1,502
6,120
2011
$’000
No. of
shares
‘000
$’000
719
–
455
1,174
2,259
2,259
100
4,618
693
–
26
719
Treasury shares relate to ordinary shares of the Company that are held by the Company.
The Company acquired 1,502,000 (2011: 100,000) shares through purchases on the Singapore
Exchange during the financial year. The total amount paid to acquire the shares was
$455,000 (2011: $26,000) and this was presented as a component within shareholders’ equity.
23.
Other reserves
Group
Statutory reserve fund
Foreign currency translation reserve
Premium paid on acquisition of non-controlling interests
109
2012
$’000
2011
$’000
7,387
(493)
(208)
6,686
7,559
(1,356)
(208)
5,995
APPENDIX 4 - AUDITED CONSOLIDATED FINANCIAL STATEMENTS OF
THE GROUP FOR FY2012
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 30 June 2012
23.
Other reserves (cont’d)
(a)
Warrants reserve
Group and Company
2012
At 1 July
Conversion during the year
At 14 September before warrant split
Adjustment for warrant split
Conversion during the year
Warrants expired
At 30 June
No. of
shares
‘000
–
–
–
–
–
–
–
2011
$’000
No. of
shares
‘000
$’000
–
–
–
–
–
–
–
11,960
(10,490)
1,470
1,470
(2,912)
(28)
–
398
(398)
–
–
–
–
–
The Company issued 41,422,000 warrants at an issue price of $0.05 per warrant whereby each
warrant carries the right to subscribe for 1 new ordinary share in the capital of the Company
at an exercise price of $0.15. On 14 September 2010, each outstanding unconverted warrant
was split into two warrants and the exercise price of the warrant was adjusted to $0.08.
The 28,000 unexercised warrants expired on 30 June 2011.
(b)
Statutory reserve fund
In accordance with the Foreign Enterprise Law applicable to the subsidiaries in the People’s
Republic of China (PRC), the subsidiaries are required to make appropriation to a Statutory
Reserve Fund (SRF). At least 10% of the statutory profits after tax as determined in
accordance with the applicable PRC accounting standards and regulations must be allocated
to the SRF until the cumulative total of the SRF reaches 50% of the subsidiaries’ registered
capital. Subject to approval from the relevant PRC authorities, the SRF may be used to offset
any accumulated losses or increase the registered capital of the subsidiaries. The SRF is not
available for dividend distribution to shareholders.
During the financial year, GR’s statutory reserve fund reached 50% of GR’s registered capital.
The Board resolved that GR will stop allocating its profit after tax to the statutory reserve
fund from 1 January 2011.
(c)
Foreign currency translation reserve
The foreign currency translation reserve represents 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.
110
APPENDIX 4 - AUDITED CONSOLIDATED FINANCIAL STATEMENTS OF
THE GROUP FOR FY2012
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 30 June 2012
24.
Dividends
Group and Company
2012
2011
$’000
$’000
Declared and paid during the financial year:
Dividends on ordinary shares:
- Interim tax exempt dividend for 2012: 0.30 cents (2011: 0.75 cents)
per share
- Interim tax exempt dividend for 2012: 1.00 cents (2011: 0.50 cents)
per share
- Interim tax exempt dividend for 2012: 2.00 cents
- Interim tax exempt dividend for 2011: 0.50 cents (2010: nil cents)
per share
- Final tax exempt dividend for 2011: 0.50 cents (2010: 0.75 cents)
per share
1,065
2,667
3,550
7,100
1,778
–
1,780
–
1,781
15,276
2,665
7,110
–
1,781
Proposed but not recognised as a liability as at 30 June:
Dividends on ordinary shares, subjected to shareholders’ approval at the
Annual General Meeting (AGM)
- Final tax exempt dividend for 2012: nil cents (2011: 0.50 cents)
per share
During the current financial year, the Company has made 3 declarations/payments of interim onetier tax exempt dividend in respect of financial year ended 30 June 2012. In accordance with the
Memorandum and Articles of Association (“M&A”) of the Company, the Directors may from time to
time pay to the Members such interim dividends as in their judgment the position of the Company
justifies provided no such dividends shall be declared more than once in six months. Accordingly,
there is breach of the M&A. The Company intends to rectify the breach of the M&A requirement
through a special resolution in the forthcoming Annual General Meeting.
25.
Cash and short-term deposits
Group
Cash at banks and on hand
Short-term deposits
Cash and short-term deposits
2012
$’000
2011
$’000
17,360
46,857
64,217
17,843
24,218
42,061
Company
2012
2011
$’000
$’000
392
30,668
31,060
2,111
13,377
15,488
Cash at banks held by entities domiciled in Singapore earn interest at floating rates based on daily
bank deposit rates.
111
APPENDIX 4 - AUDITED CONSOLIDATED FINANCIAL STATEMENTS OF
THE GROUP FOR FY2012
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 30 June 2012
25.
Cash and short-term deposits (cont’d)
Cash at banks held by entities domiciled in the PRC earn interest at an effective interest rate of
0.36% (2011: 0.36%) per annum.
Short-term deposits are made for varying periods depending on the immediate cash requirements
of the Group and earn interests at 0.02% to 3.10% (2011: 0.10% to 2.85%) per annum. They are
pledged for the short-term bank loans as disclosed in Note 20.
Cash and short-term deposits denominated in foreign currencies at 30 June are as follows:
Group
Japanese Yen
United States Dollar
Hong Kong Dollar
Swiss Franc
2012
$’000
2011
$’000
71
2,244
210
434
–
17,198
161
–
Company
2012
2011
$’000
$’000
71
169
–
–
–
15,105
–
–
For the purpose of the consolidated statement of cash flows, cash and cash equivalents comprise
the following at the end of the reporting period:
Group
Cash and short-term deposits
Less: Fixed deposits pledged
Cash and cash equivalents
112
2012
$’000
2011
$’000
64,217
(24,416)
39,801
42,061
(8,320)
33,741
APPENDIX 4 - AUDITED CONSOLIDATED FINANCIAL STATEMENTS OF
THE GROUP FOR FY2012
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 30 June 2012
26.
Related party transactions
(a)
Sales and purchases of goods and services
In addition to the related party information disclosed elsewhere in the financial statements,
the following significant transactions between the Group and related parties took place at
terms agreed between the parties during the financial year:
Group
2012
$’000
Sales of finished goods to Gold Roast Food Ltd, Partnership (“GRP”)(1)
Sales to certain customers which are facilitated by Ms Chng
Soo Yeian (2)
Collection of payments from certain customers which were
facilitated by Mr Ben Chng Beng Beng (3)
(b)
2011
$’000
1,413
1,357
3,536
3,621
9,174
10,937
(1)
GRP is a company in which certain directors have an interest.
(2)
Sales to certain customers which are facilitated by Ms Chng Soo Yeian (being the sister of Mr Ben Chng
Beng Beng (“Mr Chng”) (Deputy Chairman and Managing Director) and the daughter of Mr Chng Khoon Peng
(Executive Director)). As part of such facilitation, Ms Chng collated the orders and arranged for delivery of the
goods and collections of payments therefrom. No remuneration whatsoever was paid by the subsidiary to Ms
Chng for the same.
(3)
Collection of payments arising from sales by the Company to certain customers were facilitated by Mr Chng.
Mr Chng would at the directions of these customers and on their behalf, pay for the subsidiary’s invoices via
their funds deposited with him (which funds, pursuant to personal arrangements between the customers
and Mr Chng, are also applied for various other personal purposes of these customers). No remuneration
whatsoever was paid by them nor the subsidiary to Mr Chng for the same.
Compensation of key management personnel
Group
Directors’ fee
Salaries, bonuses and other costs
Central Provident Fund and other pension costs
Consultant fee
Comprise amounts paid to:
Directors of the Company
Other key management personnel
2012
$’000
2011
$’000
400
2,193
36
85
2,714
400
2,907
33
40
3,380
1,578
1,136
2,714
2,262
1,118
3,380
The directors’ fee is subject to the approval of the shareholders at the forthcoming AGM of
the Company.
The remuneration of key management personnel is determined by the remuneration
committee having regard to the performance of the individuals and market trend.
113
APPENDIX 4 - AUDITED CONSOLIDATED FINANCIAL STATEMENTS OF
THE GROUP FOR FY2012
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 30 June 2012
27.
Commitments
(a)
Capital commitments
Capital expenditure contracted for as at the end of the reporting period but not recognised in
the financial statements is as follows:
Group
Capital commitments in respect of property, plant and equipment
(b)
2012
$’000
2011
$’000
561
–
Operating lease commitments – as lessee
In addition to the land use rights disclosed in Note 14, the Group has entered into
commercial leases relating to the rental of office and factory premises.
Minimum lease payments and amortisation of land use rights recognised as an expense in
the consolidated statement of comprehensive income for the financial year ended 30 June
2012 amounted to $1,139,000 (2011: $1,080,000) and $115,000 (2011: $131,000) respectively.
Future minimum rental payable under non-cancellable operating leases (excluding land use
rights) at the end of the reporting period are as follows:
Group
Not later than one year
Later than one year but not later than five years
Later than five years
114
2012
$’000
2011
$’000
932
2,368
8,884
12,184
844
2,353
8,530
11,727
APPENDIX 4 - AUDITED CONSOLIDATED FINANCIAL STATEMENTS OF
THE GROUP FOR FY2012
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 30 June 2012
27.
Commitments (cont’d)
(c)
Finance lease commitments
The Group has finance leases for certain items of plant and equipment and motor vehicles.
Future minimum lease payments under finance leases together with the present value of the
net minimum lease payments are as follows:
Group
2012
2011
Minimum
Present
Minimum
Present
lease
value of
lease
value of
payments payments
payments payments
$’000
$’000
$’000
$’000
Not later than one year
Later than one year but not later than
five years
Total minimum lease payments
Less: Amounts representing finance
charges
Present value of minimum lease
payments
(d)
519
501
616
593
91
610
74
575
560
1,176
505
1,098
(35)
575
–
575
(78)
1,098
–
1,098
Corporate guarantees
The Company has issued corporate guarantees of $43,830,000 (2011: $41,660,000) in favour of
several banks in relation to banking facilities granted to subsidiaries. In addition, a corporate
guarantee of approximately $473,000 (2011: $968,000) was issued in respect of the finance
lease obligations of a subsidiary.
(e)
Continuing financial support
As at 30 June 2012, the Company has given undertakings to provide financial support
to certain subsidiaries to enable them to operate as going concerns and to meet their
obligations for at least 12 months from the respective dates of their directors’ reports.
28.
Fair value of financial instruments
A.
Fair value of financial instruments by classes that are not carried at fair value and whose
carrying amounts are a reasonable approximation of fair value
Trade and other receivables and payables (Notes 16 and 18), Other liabilities (Note 19), and Loans and
borrowings at floating rate (Note 20)
The carrying amounts of these financial assets and liabilities are a reasonable approximation
of fair values, either due to their short-term nature or that they are floating rate instruments
that are re-priced to market interest rates on or near the end of the reporting period.
115
APPENDIX 4 - AUDITED CONSOLIDATED FINANCIAL STATEMENTS OF
THE GROUP FOR FY2012
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 30 June 2012
28.
Fair value of financial instruments (cont’d)
B.
Fair value of financial instruments by classes that are not carried at fair value and whose
carrying amounts are not a reasonable approximation of fair value
The fair value of financial liabilities by classes that are not carried at fair value and whose
carrying amounts are not a reasonable approximation of fair value are as follows:
Group
2012
2011
Carrying
Carrying
amount
Fair value
amount
Fair value
$’000
$’000
$’000
$’000
Financial liabilities:
- Obligations under finance leases
- Loans and borrowings at fixed rate
(non-current) (Note 20)
575
629
1,098
1,104
1,413
1,268
2,794
2,683
Determination of fair value
The fair values as disclosed in the table above are estimated by discounting expected future
cash flow at market incremental lending rates for similar types of lending, borrowing or
leasing arrangements at the end of the reporting period.
29.
Financial risk management objectives and policies
The Group and the Company are exposed to financial risks arising from their operations and the
use of financial instruments. The key financial risks include credit risk, liquidity risk, interest rate
risk and foreign currency risk. The board of directors reviews and agrees policies and procedures
for the management of these risks, which are executed by the Chief Financial Officer. The audit
committee provides independent oversight to the effectiveness of the risk management process.
It is, and has been throughout the current and previous financial year, the Group’s policy that no
derivatives shall be undertaken except for the use as hedging instruments where appropriate and
cost-efficient. The Group and the Company do not apply hedge accounting.
The following sections provide details regarding the Group’s and Company’s exposure to the abovementioned financial risks and the objectives, policies and processes for the management of these
risks.
There has been no change to the Group’s exposure to these financial risks or the manner in which
it manages and measures the 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
cash and short-term deposits), the Group and the Company minimise credit risk by dealing
exclusively with high credit rating counterparties.
116
APPENDIX 4 - AUDITED CONSOLIDATED FINANCIAL STATEMENTS OF
THE GROUP FOR FY2012
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 30 June 2012
29.
Financial risk management objectives and policies (cont’d)
(a)
Credit risk (cont’d)
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 Chief Operating Officer.
Exposure to credit risk
At the end of the reporting period, 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 statements of
financial position;
-
A nominal amount of $43,830,000 (2011: $41,660,000) relating to corporate guarantees
provided by the Company in favour of several banks in relation to banking facilities
granted to subsidiaries; and
-
A nominal amount of approximately $473,000 (2011: $968,000) relating to a corporate
guarantee provided by the Company issued in respect of the finance lease obligations
of a subsidiary.
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 ongoing basis. The credit risk concentration
profile of the Group’s trade receivables at the end of the reporting period is as follows:
2012
$’000
% of total
2011
$’000
% of total
1,497
8,089
7,203
156
1,823
18,768
8%
43%
38%
1%
10%
100%
2,200
8,323
10,191
209
2,144
23,067
10%
36%
44%
1%
9%
100%
18,673
95
18,768
99%
1%
100%
22,829
238
23,067
99%
1%
100%
By country:
Singapore
People’s Republic of China
Myanmar
Vietnam
Others
By industry sectors:
Food industry
Others
117
APPENDIX 4 - AUDITED CONSOLIDATED FINANCIAL STATEMENTS OF
THE GROUP FOR FY2012
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 30 June 2012
29.
Financial risk management objectives and policies (cont’d)
(a)
Credit risk (cont’d)
At the end of the reporting period, approximately:
-
58% (2011: 60%) of the Group’s trade receivables were due from 3 major customers of
the Group who are located in the People’s Republic of China and Myanmar; and
-
0.82% (2011: 0.32%) of the Group’s trade and other receivables were due from related
parties while almost all of the Company’s receivables were balances due from related
parties.
Financial assets that are neither past due nor impaired
Trade and other receivables that are neither past due nor impaired are with creditworthy
debtors with good payment record with the Group. Cash and short-term deposits that are
neither past due nor impaired are placed with or entered into with reputable financial
institutions or companies with high credit ratings and no history of default.
Financial assets that are either past due or impaired
Information regarding financial assets that are either past due or impaired is disclosed in
Note 16 (Trade and other receivables).
(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 liquidity risk management policy is to maintain sufficient liquid financial
assets and stand-by credit facilities with different banks. At the end of the reporting period,
approximately 91% (2011: 69%) of the Group’s loans and borrowings (Note 20) will mature in
less than one year based on the carrying amount reflected in the financial statements.
The Group assessed the concentration of risk with respect to refinancing its debt and
concluded it to be low. Access to source of funding is sufficiently available and debt maturing
within 12 months can be rolled over with existing lenders.
118
APPENDIX 4 - AUDITED CONSOLIDATED FINANCIAL STATEMENTS OF
THE GROUP FOR FY2012
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 30 June 2012
29.
Financial risk management objectives and policies (cont’d)
(b)
Liquidity risk (cont’d)
Analysis of financial instruments by remaining contractual maturities
The table below summarises the maturity profile of the Group’s and the Company’s financial
assets and liabilities at the end of the reporting period based on contractual undiscounted
repayment obligations.
2012
One
One
Over
year or to five
five
less
years
years
$’000
$’000
$’000
Total
$’000
One
year or
less
$’000
2011
One
Over
to five
five
years
years
$’000
$’000
21,353
–
–
21,353
25,103
–
–
25,103
64,217
–
–
64,217
42,061
–
–
42,061
85,570
–
–
85,570
67,164
–
–
67,164
12,965
9,850
–
–
–
–
12,965
9,850
19,319
10,099
–
–
–
–
19,319
10,099
26,626
2,774
–
29,400
11,078
4,998
340
16,416
49,441
2,774
–
52,215
40,496
4,998
340
45,834
36,129
(2,774)
–
33,355
26,668
(4,998)
(340)
21,330
Total
$’000
Group
Financial assets:
Trade and other
receivables
Cash and shortterm deposits
Total undiscounted
financial assets
Financial liabilities:
Trade and other
payables
Other liabilities
Loans and
borrowings
Total undiscounted
financial liabilities
Total net
undiscounted
financial assets/
(liabilities)
119
APPENDIX 4 - AUDITED CONSOLIDATED FINANCIAL STATEMENTS OF
THE GROUP FOR FY2012
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 30 June 2012
29.
Financial risk management objectives and policies (cont’d)
(b)
Liquidity risk (cont’d)
2012
One
One
Over
year or to five
five
less
years
years
$’000
$’000
$’000
2011
One
Over
to five
five
years
years
$’000
$’000
Total
$’000
One
year or
less
$’000
20,378
–
–
20,378
25,819
–
–
25,819
31,060
–
–
31,060
15,488
–
–
15,488
51,438
–
–
51,438
41,307
–
–
41,307
682
1,423
–
–
–
–
682
1,423
1,269
1,686
–
–
–
–
1,269
1,686
24,419
–
–
24,419
8,321
–
–
8,321
26,524
–
–
26,524
11,276
–
–
11,276
24,914
–
–
24,914
30,031
–
–
30,031
Total
$’000
Company
Financial assets:
Trade and other
receivables
Cash and shortterm deposits
Total undiscounted
financial assets
Financial liabilities:
Trade and other
payables
Other liabilities
Loans and
borrowings
Total undiscounted
financial liabilities
Total net
undiscounted
financial assets
120
APPENDIX 4 - AUDITED CONSOLIDATED FINANCIAL STATEMENTS OF
THE GROUP FOR FY2012
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 30 June 2012
29.
Financial risk management objectives and policies (cont’d)
(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. All of the Group’s and the Company’s financial assets and liabilities at
floating rates are contractually repriced at intervals of less than 6 months (2011: less than 6
months) from the end of the reporting period.
The Group’s policy is to manage interest cost using a mix of fixed and floating rate debts. The
Group’s policy is to keep 30% to 50% (2011: 30% to 50%) of its loans and borrowings at fixed
rates of interest.
Sensitivity analysis for interest rate risk
At the end of the reporting period, if SGD interest rates had been 75 (2011: 75) basis points
lower/higher with all other variables held constant, the Group’s profit before tax would have
been $26,000 (2011: $33,000) higher/lower, arising mainly as a result of lower/higher interest
expense on floating rate loans and borrowings. The assumed movement in basis points for
interest rate sensitivity analysis is based on the currently observable market environment,
showing a significantly higher volatility as in prior years.
(d)
Foreign currency risk
The Group has transactional currency exposures arising from sales or 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 United States Dollars (USD). Approximately 14% (2011: 12%) of the
Group’s sales are denominated in foreign currencies whilst almost 76% (2011: 78%) of costs
are denominated in the respective functional currencies of the Group entities. The Group’s
trade receivable and trade payable balances at the end of the reporting period have similar
exposures.
The Group and the Company also hold cash and short-term deposits denominated in foreign
currencies for working capital purposes. At the end of the reporting period, such foreign
currency balances are mainly in USD.
The Group is also exposed to currency translation risk arising from its net investments in
foreign operations, including the People’s Republic of China (PRC), Vietnam and Thailand.
The Group’s net investments in the PRC, Vietnam and Thailand are not hedged as currency
positions in RMB, Vietnam Dong and Thai Baht are considered to be long-term in nature.
121
APPENDIX 4 - AUDITED CONSOLIDATED FINANCIAL STATEMENTS OF
THE GROUP FOR FY2012
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 30 June 2012
29.
Financial risk management objectives and policies (cont’d)
(d)
Foreign currency risk (cont’d)
Sensitivity analysis for foreign currency risk
The following table demonstrates the sensitivity of the Group’s profit before tax to a
reasonably possible change in the USD, MYR, HKD, CHF and JPY exchange rates against the
respective functional currencies of the Group entities, with all other variables held constant.
Profit before tax
2012
2011
$’000
$’000
30.
USD
- strengthened 3% (2011: 3%)
- weakened 3% (2011: 3%)
(42)
42
526
(526)
MYR
- strengthened 3% (2011: 3%)
- weakened 3% (2011: 3%)
19
(19)
32
(32)
HKD
- strengthened 3% (2011: 3%)
- weakened 3% (2011: 3%)
21
(21)
15
(15)
CHF
- strengthened 3% (2011: 3%)
- weakened 3% (2011: 3%)
13
(13)
–
–
JPY
- strengthened 3% (2011: 3%)
- weakened 3% (2011: 3%)
5
(5)
–
–
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 30 June 2012 and 30 June
2011.
As disclosed in Note 23(b), certain subsidiaries of the Group are required by the Foreign Enterprise
Law of the PRC to contribute to and maintain a non-distributable statutory reserve fund whose
utilisation is subject to approval by the relevant PRC authorities. This externally imposed capital
requirement has been complied with by the subsidiaries for the financial years ended 30 June 2012
and 2011.
The Group is in compliance with the capital requirements imposed by the bankers in respect of the
banking facilities granted for the financial years ended 30 June 2012 and 2011.
122
APPENDIX 4 - AUDITED CONSOLIDATED FINANCIAL STATEMENTS OF
THE GROUP FOR FY2012
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 30 June 2012
30.
Capital management (cont’d)
The Group monitors capital using the debts to equity ratio, which is total loans and borrowings
divided by total capital. Capital includes equity attributable to the owners of the Company less the
abovementioned restricted statutory reserve fund. The Group’s policy is to keep the debts to equity
ratio below 50%.
Group
31.
2012
$’000
2011
$’000
Loans and borrowings (Note 20)
29,165
15,795
Equity attributable to the owners of the Company
Less: Statutory reserve fund (Note 23)
Total capital
Debts to equity ratio
94,870
(7,387)
87,483
33%
92,773
(7,559)
85,214
19%
Segment information
For management purposes, the Group is organised into business units based on their products and
services, and has three reportable segments as follows:
(i)
Flexible packaging printing
- Provision of printing services on packaging materials.
(ii)
Instant beverages
- Comprises mainly cereal mix, coffee mix and tea mix.
(iii)
Snack foods and others
- Comprises crackers, coffee beans and coffee machines.
Except as indicated above, no operating segments have been aggregated to form the above
reportable operating segments.
Management monitors the operating results of its business units separately for the purpose of
making decisions about resource allocation and performance assessment. Segment performance
is evaluated based on operating profit or loss which in certain respects, as explained in the
tables below, is measured differently from operating profit or loss in the consolidated financial
statements. Group financing (including finance costs) and income taxes are managed on a group
basis and are not allocated to operating segments.
Transfer prices between operating segments are at terms agreed between the parties.
123
31.
124
245
11,947
1,746
771
10,596
1,315
Segment liabilities
83
705
430
292
(127)
1,386
82
10,391
8,235
18,626
75
11,194
8,694
19,888
Additions to noncurrent assets
Segment assets
Assets:
Interest income
Depreciation and
amortisation
Other non-cash
(income)/expenses,
net
Segment profit
Results:
External customers
Inter-segment
Total revenue
Revenue
Flexible
packaging
printing
2012
2011
$’000
$’000
Segment information (cont’d)
52,103
1,047
104,629
97
22,525
2,506
257
147,173
–
147,173
44,942
1,527
108,673
(64)
16,712
2,604
133
143,863
–
143,863
Instant
beverages
2012
2011
$’000
$’000
1,376
116
40,424
(46)
1,295
298
308
14,359
–
14,359
913
78
24,059
64
349
307
107
11,421
–
11,421
Snack foods
and others
2012
2011
$’000
$’000
4,312
–
–
–
–
–
–
–
(8,694)
(8,694)
2,763
–
(100)
–
–
–
–
–
(8,235)
(8,235)
Adjustments/
Eliminations
2012
2011
$’000
$’000
E
C
D
B
A
Note
59,106
1,934
155,649
(76)
25,206
3,096
640
172,726
–
172,726
50,364
1,850
144,579
83
17,766
3,341
322
165,675
–
165,675
Per consolidated
financial
statements
2012
2011
$’000
$’000
APPENDIX 4 - AUDITED CONSOLIDATED FINANCIAL STATEMENTS OF
THE GROUP FOR FY2012
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 30 June 2012
APPENDIX 4 - AUDITED CONSOLIDATED FINANCIAL STATEMENTS OF
THE GROUP FOR FY2012
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 30 June 2012
31.
Segment information (cont’d)
Notes
Nature of adjustments and eliminations to arrive at amounts reported in the consolidated
financial statements
A
Inter-segment revenues are eliminated on consolidation.
B
Other non-cash (income)/expenses consist of the following items as presented in the
respective notes to the financial statements:
Allowance for inventory obsolescence
Write-back of allowance for inventory obsolescence
Allowance for doubtful trade receivables
Write-back of allowance of trade receivables
Unrealised exchange loss/(gain) on allowance for doubtful
trade receivables
Property, plant and equipment written off
Net loss/(gain) on disposal of property, plant and equipment
Loss on disposal of land use rights
Gain on disposal of intangible asset
2012
2011
$’000
$’000
242
(317)
87
(198)
416
(265)
315
(264)
36
29
17
28
–
(76)
(50)
14
(53)
–
(30)
83
C
Additions to non-current assets consist of additions to property, plant and equipment and
intangible assets.
D
Inter-segment assets are deducted from segment assets to arrive at total assets reported
in the consolidated statement of financial position.
E
The following items are added to segment liabilities to arrive at total liabilities reported in
the consolidated statement of financial position:
Other payables and accruals
Income tax payable
Deferred tax liabilities
125
2012
$’000
2011
$’000
574
830
2,908
4,312
437
830
1,496
2,763
APPENDIX 4 - AUDITED CONSOLIDATED FINANCIAL STATEMENTS OF
THE GROUP FOR FY2012
NOTES TO THE FINANCIAL STATEMENTS
For the financial year ended 30 June 2012
31.
Segment information (cont’d)
Geographical information
Revenue and non-current assets information based on the geographical location of customers and
assets respectively are as follows:
Revenues
2012
2011
$’000
$’000
People’s Republic of China
South-East Asia and Indochina
Others
93,570
73,250
5,906
172,726
83,405
75,561
6,709
165,675
Non-current assets
2012
2011
$’000
$’000
27,767
15,118
–
42,885
29,117
16,502
–
45,619
Non-current assets information presented above consist mainly of property, plant and equipment,
land use rights and intangible assets as presented in the consolidated statement of financial
position.
Information about a major customer
Revenue from one major customer amounted to $33,558,000 (2011: $33,312,000), arising from sales
by the instant beverages segment.
32.
Authorisation of financial statements for issue
The financial statements for the year ended 30 June 2012 were authorised for issue in accordance
with a resolution of the directors on 6 December 2012.
126
APPENDIX 5 - UNAUDITED FINANCIAL STATEMENTS OF THE GROUP
FOR 3Q2013
VIZ BRANZ LIMITED (Company Registration No. 199401631K)
Financial Statement And Dividend Announcement for the Third Quarter and Period Ended 31 March 2013
1 (a)
An income statement and statement of comprehensive income or a statement of comprehensive income for the group together with a
comparative statement for the corresponding period of the immediately preceding financial year.
Income Statement
3Q 2013
3Q 2012
$'000
$'000
Group
% increase/
YTD Mar
(decrease)
2013
$'000
YTD Mar
2012
$'000
% increase/
(decrease)
42,781
43,037
(1)
128,856
134,212
(4)
Cost of sales
(25,891)
(28,397)
(9)
(79,940)
(89,478)
(11)
Gross profit
16,890
14,640
15
48,916
44,734
9
Revenue
Other items of income
Other income
Interest income
43
181
39
179
(5,771)
(3,716)
(101)
(25)
(4,948)
(2,864)
(12)
(113)
(36)
7,501
6,885
Income tax expense
(2,642)
Profit for the period
4,859
Other items of expense
Marketing and distribution expenses
Administrative expenses
Other expenses
Financial expenses
Other financial cost
Profit before tax
Other comprehensive income:
Foreign currency translation
579
204
521
248
460
(18)
13
(18,141)
(9,925)
(52)
(310)
(102)
(15,386)
(9,954)
(81)
(323)
(160)
18
N.A
(36)
(4)
(36)
9
21,111
19,538
8
(2,328)
13
(6,115)
(5,230)
17
4,557
7
14,996
14,308
5
N.M
293
838
(848)
10
1
17
30
N.M
(11)
(31)
(65)
Total comprehensive income for the period
5,438
3,709
47
15,289
15,146
1
Profit attributable to:
Owners of the Company
Non-controlling interests
4,598
261
4,348
209
6
25
14,178
818
13,623
685
4
19
4,859
4,557
7
14,996
14,308
5
5,149
289
3,536
173
46
67
14,461
828
14,438
708
N.A
17
5,438
3,709
47
15,289
15,146
1
Total comprehensive income attributable to:
Owners of the Company
Non-controlling interests
Breakdown and explanatory notes to the income statement
Group
3Q 2013
3Q 2012
$'000
$'000
Amortisation of intangible assets
Amortisation of land use rights
Depreciation of property, plant and equipment
Employee benefits expenses
Loss on disposal of land use rights
Net loss on disposal of property, plant and equipment
Interest on borrowings
Net foreign exchange gain/(loss)
Property, plant and equipment written off
Allowance for inventory obsolescence
Write-back of allowance for inventory obsolescence
Allowance for doubtful trade receivables
Write-back of allowance of trade receivables
Impairment loss on goodwill
N.M: Not meaningful
(9)
(27)
(665)
(5,583)
(101)
188
(120)
13
(19)
156
-
(10)
(27)
(714)
(4,036)
(3)
(113)
276
(64)
52
(106)
26
(375)
N.A : Not applicable
127
% increase/
(decrease)
(10)
N.A
(7)
38
N.A
N.M
(11)
(32)
N.A
88
(75)
(82)
500
N.M
YTD Mar
2013
$'000
(29)
(80)
(2,049)
(14,612)
(30)
(310)
(72)
(4)
(196)
92
(73)
340
-
Group
YTD Mar
2012
$'000
(42)
(88)
(2,224)
(14,098)
(28)
(17)
(323)
(239)
(29)
(223)
296
(162)
175
(375)
% increase/
(decrease)
(31)
(9)
(8)
4
N.M
76
(4)
(70)
(86)
(12)
(69)
(55)
94
N.M
APPENDIX 5 - UNAUDITED FINANCIAL STATEMENTS OF THE GROUP
FOR 3Q2013
1(b)(i) A statement of financial position (for the issuer and group), together with a comparative statement as at the
end of the immediately preceding financial year.
Group
31-Mar-13
30-Jun-12
$'000
$'000
Company
31-Mar-13
30-Jun-12
$'000
$'000
Assets
Non-current assets
Property, plant and equipment
Investment in subsidiaries
Intangible assets
Land use rights
38,205
91
3,836
42,132
38,851
118
3,916
42,885
36,106
16
36,122
35,734
19
35,753
24,662
21,224
2,535
1,609
177
28,484
52,887
131,578
26,161
18,768
2,410
1,033
175
24,416
39,801
112,764
14,585
16
9,986
28,484
17,923
70,994
10,817
15
9,561
24,416
6,644
51,453
173,710
155,649
107,116
87,206
5,098
17,163
77
993
28,484
3,681
3,620
59,116
4,524
14,354
501
1,594
24,416
3,937
3,000
52,326
2,011
6,145
28,484
81
36,721
1,937
168
24,416
193
26,714
72,462
60,438
34,273
24,739
53
1,952
4,912
6,917
74
2,580
4,126
6,780
-
-
66,033
59,106
36,721
26,714
107,677
96,543
70,395
60,492
Non-controlling interests
36,383
(1,174)
7,122
63,450
105,781
1,896
36,383
(1,174)
6,686
52,975
94,870
1,673
36,383
(1,174)
35,186
70,395
-
36,383
(1,174)
25,283
60,492
-
Total equity
107,677
96,543
70,395
60,492
Total equity and liabilities
173,710
155,649
107,116
87,206
Current assets
Inventories
Trade receivables
Other receivables
Other current assets
Amounts due from subsidiaries
Amount due from related party
Fixed deposits pledged
Cash and cash equivalents
Total assets
Equity and liabilities
Current liabilities
Trade payables
Other payables and accruals
Amounts due to subsidiaries
Obligations under finance leases
Bank term loans
Short-term bank loans
Bills payable to banks
Provision for taxation
Net current assets
Non-current liabilities
Obligations under finance leases
Bank term loans
Deferred tax liabilities
Total liabilities
Net assets
Equity attributable to owners of the Company
Share capital
Treasury shares
Other reserves
Retained earnings
128
APPENDIX 5 - UNAUDITED FINANCIAL STATEMENTS OF THE GROUP
FOR 3Q2013
1(b)(ii) Aggregate amount of group's borrowings and debt securities.
Amount repayable in one year or less, or on demand
As at 31-Mar-13
Secured
Unsecured
$'000
$'000
33,235
-
As at 30-Jun-12
Secured
Unsecured
$'000
$'000
30,448
-
As at 31-Mar-13
Secured
Unsecured
$'000
$'000
2,005
-
As at 30-Jun-12
Secured
Unsecured
$'000
$'000
2,654
-
Amount repayable after one year
Details of any collateral
(a) Legal mortgages over a subsidiary's leasehold factory buildings with a net book value of $12,780,000 (30-Jun-12: $12,999,000).
(b) Corporate guarantee for $43,579,000 (30-Jun-12: $43,830,000) and $48,000 (30-Jun-12: $473,000) given by the Company in
respect of banking facilities and finance lease obligations granted to subsidiaries.
(c) Net carrying amount of property, plant and equipment amounting to $360,000 (30-Jun-12: $793,000) were financed under finance
lease arrangements.
(d) Short-term bank loans of $28,484,000 (30-Jun-12: $24,416,000) are secured by certain fixed deposits of the same amount.
129
APPENDIX 5 - UNAUDITED FINANCIAL STATEMENTS OF THE GROUP
FOR 3Q2013
1(c)
A statement of cash flows (for the group), together with a comparative statement for the corresponding
period of the immediately preceding financial year.
Group
Operating activities
Profit before tax
Adjustments for:
Amortisation of intangible assets
Amortisation of land use rights
Depreciation of property, plant and equipment
Property, plant and equipment written off
Property
Net loss on disposal of property, plant and equipment
Loss on disposal of land use rights
Impairment loss on goodwill
Interest expense
Interest income
Unrealised exchange difference loss/(gain)
Total adjustments
Operating cash flows before changes in working capital
Changes in working capital
(Increase)/decrease in:
Inventories
Trade receivables
Other receivables
Other current assets
Amount due from related party
Increase/(decrease) in:
Trade payables
Other payables and accruals
Bills payable to banks
Total changes in working capital
Cash flows from operations
Interest received
Interest paid
Income taxes paid
Net cash flows from operating activities
3Q 2013
3Q 2012
$'000
$'000
7,501
6,885
9
27
665
101
(181)
571
1,192
10
27
714
3
375
113
(179)
(842)
221
Group
YTD Mar
YTD Mar
2013
2012
$'000
$'000
21,111
29
80
2,049
4
30
310
(521)
291
2,272
19,538
42
88
2,224
29
17
28
375
323
(460)
830
3,496
8,693
7,106
23,383
23,034
2,593
3,041
216
(528)
16
1,583
4,897
457
1,401
(264)
1,499
(2,456)
(125)
(576)
(2)
636
(614)
(115)
1,858
(348)
(2,385)
(2,385)
(1,363)
(795)
(3,144)
(3,237)
(287)
1,406
574
2,809
(256)
1,467
(1,388)
1,603
(2,013)
(381)
7,898
8,512
24,850
22,653
181
(101)
(1,706)
179
(113)
(1,470)
521
(310)
(4,709)
460
(323)
(3,630)
6,272
7,108
20,352
19,160
Investing activities
Addition to intangible asset
Purchase of property, plant and equipment
Proceeds from disposal of property, plant and equipment
Proceeds from disposal of land use rights
Cash outflow on acquisition of subsidiary
(492)
-
(4)
(1,023)
30
(168)
(2)
(1,472)
37
-
(18)
(1,585)
628
889
(168)
Net cash flows used in investing activities
(492)
(1,165)
(1,437)
(254)
Financing activities
Dividends paid on ordinary shares
Dividends paid to non-controlling shareholders of subsidiaries
Purchase of treasury shares
Repayment of obligations under finance leases
Repayment of bank term loans
Proceeds from short-term bank loans
Repayment of short-term bank loans
Increase in fixed deposits pledged
(3,550)
(150)
(412)
6,213
(1,309)
(4,904)
(11,715)
(143)
(404)
14,648
(4,391)
(10,257)
(3,550)
(605)
(445)
(1,229)
9,840
(5,772)
(4,068)
(15,276)
(707)
(455)
(379)
(1,796)
26,861
(12,406)
(14,455)
Net cash flows used in financing activities
(4,112)
(12,262)
(5,829)
(18,613)
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period (Note A)
1,668
51,219
52,887
(6,319)
40,353
34,034
13,086
39,801
52,887
293
33,741
34,034
Note A : Cash and cash equivalents
Cash and cash equivalents comprise the following:
Group
Cash at banks and on hand
Short-term deposits
Less: Fixed deposits pledged
Cash and cash equivalents
31-Mar-13
31-Mar-12
$'000
$'000
16,238
65,133
(28,484)
16,094
40,715
(22,775)
52,887
34,034
130
131
3,709
(11,715)
(11,715)
92,923
Contributions by and distributions to owners
Dividends on ordinary shares
Reclassifications from statutory reserve fund
Total transaction with owners in their capacity as owners
Closing balance at 31 March 2012
(848)
Other comprehensive income
Foreign currency translation
Total comprehensive income for the period
4,557
Profit for the period
100,929
(4,723)
Total transaction with owners in their capacity as owners
Closing balance at 31 December 2011
(455)
(3,561)
(707)
-
Contributions by and distributions to owners
Purchase of treasury shares
Dividends on ordinary shares
Dividend paid by subsidiaries to non-controlling shareholders
Transfer to statutory reserve fund
1,686
11,437
Other comprehensive income
Foreign currency translation
Total comprehensive income for the period
9,751
94,215
Equity, total
$'000
Profit for the period
Opening balance at 1 July 2011
July 2011 to March 2012
Group
91,480
(11,715)
(11,715)
-
3,536
(812)
4,348
99,659
(4,016)
(455)
(3,561)
-
10,902
1,627
9,275
92,773
Equity
attributable
to owners of
the
Company,
total
$'000
36,383
-
-
-
-
-
36,383
-
-
-
-
-
36,383
Share capital
$'000
1(d)(i) A statement (for the issuer and group) showing either (i) all changes in equity or (ii) changes in equity
other than those arising from capitalisation issues and distributions to shareholders, together with a
comparative statement for the corresponding period of the immediately preceding financial year.
(1,174)
-
-
-
-
-
(1,174)
(455)
(455)
-
-
-
-
(719)
Treasury
Shares
$'000
7,296
(941)
(941)
-
-
-
8,237
678
678
-
-
-
7,559
Statutory
reserve fund
$'000
(541)
-
-
(812)
(812)
-
271
-
-
1,627
1,627
-
(1,356)
Foreign
currency
translation
reserve
$'000
Attributable to owners of the Company
(208)
-
-
-
-
-
(208)
-
-
-
-
-
(208)
Premium paid
on acquisition
of noncontrolling
interests
$'000
49,724
(10,774)
(11,715)
941
4,348
-
4,348
56,150
(4,239)
(3,561)
(678)
9,275
-
9,275
51,114
Retained
earnings
$'000
1,443
-
-
173
(36)
209
1,270
(707)
(707)
-
535
59
476
1,442
Noncontrolling
interests
$'000
APPENDIX 5 - UNAUDITED FINANCIAL STATEMENTS OF THE GROUP
FOR 3Q2013
132
(3,550)
Total transaction with owners in their capacity as owners
107,677
(3,550)
-
Closing balance at 31 March 2013
5,438
Contributions by and distributions to owners
Dividends on ordinary shares
Transfer to statutory reserve fund
579
4,859
Total comprehensive income for the period
Other comprehensive income
Foreign currency translation
Profit for the period
105,789
(605)
Total transaction with owners in their capacity as owners
Closing balance at 31 December 2012
(605)
-
9,851
Total comprehensive income for the period
Contributions by and distributions to owners
Dividend paid by subsidiaries to non-controlling shareholders
Transfer to statutory reserve fund
(286)
10,137
Profit for the period
Other comprehensive income
Foreign currency translation
96,543
Equity, total
$'000
Opening balance at 1 July 2012
July 2012 to March 2013
Group
105,781
(3,550)
(3,550)
-
5,149
551
4,598
104,182
-
-
9,312
(268)
9,580
94,870
Equity
attributable
to owners of
the
Company,
total
$'000
36,383
-
-
-
-
-
36,383
-
-
-
-
-
36,383
Share capital
$'000
1(d)(i) A statement (for the issuer and group) showing either (i) all changes in equity or (ii) changes in equity
other than those arising from capitalisation issues and distributions to shareholders, together with a
comparative statement for the corresponding period of the immediately preceding financial year.
(1,174)
-
-
-
-
-
(1,174)
-
-
-
-
-
(1,174)
Treasury
Shares
$'000
7,540
77
77
-
-
-
7,463
76
76
-
-
-
7,387
Statutory
reserve fund
$'000
(210)
-
-
551
551
-
(761)
-
-
(268)
(268)
-
(493)
Foreign
currency
translation
reserve
$'000
Attributable to owners of the Company
(208)
-
-
-
-
-
(208)
-
-
-
-
-
(208)
Premium paid
on acquisition
of noncontrolling
interests
$'000
63,450
(3,627)
(3,550)
(77)
4,598
-
4,598
62,479
(76)
(76)
9,580
-
9,580
52,975
Retained
earnings
$'000
1,896
-
-
289
28
261
1,607
(605)
(605)
-
539
(18)
557
1,673
Noncontrolling
interests
$'000
APPENDIX 5 - UNAUDITED FINANCIAL STATEMENTS OF THE GROUP
FOR 3Q2013
APPENDIX 5 - UNAUDITED FINANCIAL STATEMENTS OF THE GROUP
FOR 3Q2013
Company
Equity, total
$'000
Share
capital
$'000
Treasury
Shares
$'000
Retained
earnings
$'000
July 2011 to March 2012
64,763
Opening balance at 1 July 2011
Profit for the period, representing total comprehensive income for the period
36,383
-
509
(719)
-
29,099
509
Contributions by and distributions to owners
Purchase of treasury shares
Dividends on ordinary shares
(455)
(3,561)
-
(455)
-
(3,561)
Total transaction with owners in their capacity as owners
(4,016)
-
(455)
(3,561)
Closing balance at 31 December 2011
61,256
36,383
(1,174)
-
-
Profit for the period, representing total comprehensive income for the period
656
26,047
656
Contributions by and distributions to owners
Dividends on ordinary shares
(11,715)
-
-
(11,715)
Total transaction with owners in their capacity as owners
(11,715)
-
-
(11,715)
50,197
36,383
(1,174)
14,988
60,492
36,383
(1,174)
25,283
-
-
Closing balance at 31 March 2012
July 2012 to March 2013
Opening balance at 1 July 2012
Loss for the period, representing total comprehensive income for the period
(383)
(383)
Closing balance at 31 December 2012
60,109
36,383
(1,174)
24,900
Profit for the period, representing total comprehensive income for the period
13,836
-
-
13,836
Contributions by and distributions to owners
Dividends on ordinary shares
(3,550)
-
-
(3,550)
Total transaction with owners in their capacity as owners
(3,550)
-
-
(3,550)
Closing balance at 31 March 2013
70,395
36,383
(1,174)
35,186
1(d)(ii) Details of any changes in the company's share capital arising from rights issue, bonus issue, share buy-backs,
exercise of share options or warrants, conversion of other issues of equity securities, issue of shares for cash
or as consideration for acquisition or for any other purpose since the end of the previous period reported on.
State also the number of shares that may be issued on conversion of all the outstanding convertibles, as well as
the number of shares held as treasury shares, if any, against the total number of issued shares excluding
treasury shares of the issuer, as at the end of the current financial period reported on and as at the end of the
corresponding period of the immediately preceding financial year.
No. of Shares
('000)
$'000
Treasury Shares
Balance as at 31 March 2013 and 30 June 2012
6,120
1,174
1(d)(iii) To show the total number of issued shares excluding treasury shares as at the end of the current financial period
and as at the end of the immediately preceding year.
Total number of issued shares
31-Mar-13
30-Jun-12
354,996,976
354,996,976
1(d)(iv) A statement showing all sales, transfers, disposal, cancellation and/or use of treasury shares as at the end of the
current financial period reported on.
Not applicable.
133
APPENDIX 5 - UNAUDITED FINANCIAL STATEMENTS OF THE GROUP
FOR 3Q2013
2
Whether the figures have been audited or reviewed and in accordance with which auditing standard or practice.
The figures have not been audited or reviewed by the Company's auditors.
3
Where the figures have been audited or reviewed, the auditors' report (including any qualifications or emphasis
of a matter).
Not applicable.
4
Whether the same accounting policies and methods of computation as in the issuer's most recently audited
annual financial statement have been applied.
The Group and the Company have applied the same accounting policies and methods of computation in the preparation of the financial
statements for the current reporting period compared with those of the audited financial statements as at 30 June 2012.
5
If there are any changes in the accounting policies and methods of computation, including any required by an
accounting standard, what has changed, as well as the reasons for, and the effect of, the change.
The adoption of new and revised FRS and INT FRS effective on 1 July 2012 has no material impact on the financial statements
of the Group.
6
Earnings per ordinary share of the group for the current financial period reported on and the corresponding
period of the immediately preceding financial year, after deducting any provision for preference dividends.
(a) Based on weighted average number of ordinary shares in
issue
Weighted average number of shares
3Q 2013
3Q 2012
YTD Mar
2013
YTD Mar
2012
1.30 cents
1.22 cents
3.99 cents
3.83 cents
354,996,976
354,996,976
354,996,976
355,629,121
Earnings per share for 31 March 2013 and 31 March 2012 were computed by dividing the profit attributable to the owners of the Company
by the weighted average number of ordinary shares of 354,996,976 and 355,629,121 respectively.
(b) On a fully diluted basis
Adjusted weighted average number of shares
1.30 cents
1.22 cents
3.99 cents
3.83 cents
354,996,976
354,996,976
354,996,976
355,629,121
There are no potential dilutive ordinary shares for 31 March 2013 and 31 March 2012.
7
Net asset value (for the issuer and Group) per ordinary share based on the total number of issued shares excluding
treasury shares of the issuer at the end of the:-
(a) current financial period reported on;
Group
Company
29.8 cents
19.8 cents
26.7 cents
17.0 cents
and
(b) immediately preceding financial year
Net asset value per ordinary share as at 31 March 2013 and 30 June 2012 were calculated based on the existing number of shares in issue
of 354,996,976 ordinary shares.
134
APPENDIX 5 - UNAUDITED FINANCIAL STATEMENTS OF THE GROUP
FOR 3Q2013
8
A review of the performance of the group, to the extent necessary for a reasonable understanding of the group's
business. It must include a discussion of the following:
(a)
any significant factors that affected the turnover, costs, and earnings of the group for the current financial period
reported on, including (where applicable) seasonal or cyclical factors; and
(b)
any material factors that affected the cash flow, working capital, assets or liabilities of the group during the current
financial period reported on.
Income Statement
In 3Q FY2013 Group sales turnover were $42.8m as compared to $43.0m for 3Q FY2012. YTD March FY2013 total sales went down to $128.9m from
$134.2m in the preceding corresponding period, decreased by $5.3m or 3.9%.
Sales of instant beverages decreased by $0.5m or 1.3%, from $37.5m in 3Q FY2012 to $37.0m in 3Q FY2013. Sales of flexible packaging were $2.1m
in the current quarter versus $2.3m in 3Q FY2012. Other business segments increased by $0.5m, or 16.6%, from $3.2m to $3.7m in 3Q FY2013.
In the current reporting YTD period ended 31 March FY2013, instant beverages sales dropped to $113.0m, down $2.0m or 1.7% from $115.0m in the YTD
period ended 31 March FY2012. For the same reporting periods, sales of flexible packaging went down by $2.0m or 23.8% to $6.4m from $8.4m.
Other business segments recorded lower sales by 12.0% or $1.3m from $10.8m to $9.5m.
In terms of geographical markets, sales in the PRC increased by $2.1m or 9.5%, from $22.0m in 3Q FY2012 to $24.1m in 3Q FY2013. Sales in
the SEA and Indochina sector went down by $2.6m or 13% to $17.4m in 3Q FY2013 as compared to $20.0m in the previous corresponding
period. Other export markets booked higher sales of $1.2m versus $1.0m in 3Q FY2012.
In the current reporting YTD period ended 31 March FY2013, the PRC market achieved higher sales of $72.5m, up $0.6m or 0.8% from $71.9m in the
YTD period ended 31 March FY2012. For the same reporting periods, sales in the SEA and Indochina sector went down by $4.7m or 8.1% to $53.2m from
$57.9m. Other export market recorded a drop in sales by 27.3% or $1.2m from $4.4m to $3.2m.
In 3Q FY2013 gross margin improved to 39% as compared to 34% attained in 3Q FY2012. Gross margin for YTD period ended 31 March FY2013 stood
at 38% versus 33% in the preceding corresponding period. Increase in selling prices as well as reduction in material prices, efficient inventory control
and favourable product sale mix contributed to the improved gross margin.
Due to more competitive environment, our advertising and promotion expenses increased by $2.6m for the 9 months period compared to previous
corresponding period. The increase is mainly in Indochina and SEA.
Lower exchange loss of $0.07m was booked in current reporting period as compared to $0.24m loss in the previous corresponding period mainly due
to the strengthening of the Renminbi against the Singapore Dollar.
Balance Sheet
Fixed deposits, cash and cash equivalents increased by $17.2m to $81.4m as at 31 March 2013 from $64.2m as at 30 June 2012.
Net current assets went up by $12.1m from $60.4m as at 30 June 2012 to $72.5m as at 31 March 2013 mainly due to increase in fixed deposits, cash
and trade receivables offset by higher payables and bank loans. Correspondingly, the current ratio went up to more than 2.2 times during the period.
Cash Flows
Positive cash flows from operating activities amounted to $6.3m in 3Q FY2013 and $20.4m for YTD period ended March FY2013. These were mainly
due to operating profits and reduction in inventory levels.
Net cash used in investing activities in 3Q FY2013 amounted to $0.5m due to acquisition of fixed assets.
Net cash used in financing activities in 3Q FY2013 was $4.1m mainly due to dividends payments.
9
Where a forecast, or a prospect statement, has been previously disclosed to shareholders, any variance between
it and the actual results.
In our announcement of 1H FY2013 results on 6 February 2013, we highlighted that the fluctuations in raw material prices and the US Dollar, Renminbi
and Swiss Franc against Singapore Dollar would affect the performance of the Group.
In 3Q FY2013 we managed to improve gross margin to 39% through increase in selling prices as well as effective inventory control coupled with
reduction in raw materials prices.
The appreciation of the Renminbi against Singapore Dollar resulted in lower exchange loss of $0.07m in current reporting period as compared to
a loss of $0.24m in the previous corresponding period.
135
APPENDIX 5 - UNAUDITED FINANCIAL STATEMENTS OF THE GROUP
FOR 3Q2013
10
A commentary at the date of the announcement of the significant trends and competitive conditions of the industry
in which the Group operates and any known factors or events that may affect the group in the next reporting period
and the next 12 months.
The major markets that we operate in have become more competitive and challenging. As a result, advertising and promotion expenses
may increase in future in order to maintain our market share. Additionally, any slow down in economic growth of these markets will
have an impact on our performance.
Our ability to increase selling prices and fluctuation in raw material prices; US Dollar and Renminbi against Singapore Dollar will
continue to have an impact on the Group's performance.
11
Dividend
(a) Current financial period reported on
Any dividend declared for the current financial period reported on ? No
(b) Corresponding period of the immediately preceding financial year ?
Any dividend declared for the corresponding period of the immediately preceding financial year? Yes
Name of dividend: Interim
Dividend Type: Cash, tax exempt (one-tier)
Dividend amount per share (in cents): 2.00 cents per ordinary share
(c) Date payable
Not applicable.
12
If no dividend has been declared/recommended, a statement to that effect.
No dividend has been declared.
13
Interested Person Transactions
The aggregate value of interested person transactions entered into during the period were as follows:
Aggregate value of all
interested person
transactions during the
financial year under review
(excluding transactions less
than $100,000 and
transactions conducted
under shareholders'
mandate pursuant to Rule
920)
Name of interested person
Sales of finished goods to Gold Roast Food Ltd, Partnership
Sales of finished goods to Lam Soon Edible Oils Sdn Bhd
14
Aggregate value of all
interested person
transactions conducted
during the financial year
under review under
shareholders' mandate
pursuant to Rule 920
(excluding transactions less
than $100,000 )
$'000
$'000
-
841
1,708
-
Negative Assurance on Interim Financial Statements
We, Ben Chng Beng Beng and Tan Kok Hiang, being two directors of Viz Branz Limited (the "Company"), do hereby confirm on behalf of the
directors of the Company that, to the best of our knowledge, nothing has come to the attention of the board of directors of the Company
which may render the third quarter and period ended 2013 unaudited financial results to be false or misleading in any material aspects.
BY ORDER OF THE BOARD
Tan Kok Hiang
Director
13 May 2013
136
APPENDIX 6 - EXTRACTS FROM THE COMPANY’S ARTICLES OF ASSOCIATION
The provisions in the Articles relating to rights of Shareholders in respect of capital, dividends and voting
are reproduced below.
All capitalised terms used in the following extract shall have the same meanings ascribed to them in the
Articles, a copy of which is available for inspection at the registered office of the Company at 50 Raffles
Place, #32-01, Singapore Land Tower, Singapore 048623, during normal business hours until the Closing
Date.
SHARES
5
Subject to the Statutes, no shares may be issued without the prior
approval of the Company in General Meeting but subject thereto and to
these Articles relating to new shares and to any special right attached
to any share for the time being Issued, the Directors may allot (with or
without conferring any right of renunciation), grant options over or
otherwise dispose of the same to such persons on such terms and
conditions (including such consideration) and at such time as the Directors
determine.
Shares under
control
of
Company
in General
Meeting.
Provided Always that the rights attaching to shares of a class other than
ordinary shares shall be expressed in the resolution creating the same.
6(1)
Subject to the limits referred to in Article 57, the Company in General
Meeting may by Ordinary Resolution authorise the Directors to exercise
any power of the Company to issue shares, such authority being confined
to a particular exercise of that power or generally. Any such authority may
be unconditional or subject to conditions and shall continue in force until
the conclusion of the Annual General Meeting commencing next after the
Iate on which the approval was given or the expiration of the period within
which the next Annual General Meeting after that date Is required by law
to be held whichever is the earlier but may be previously revoked or varied
by the Company in General Meeting.
6(2)
Subject to the terms and conditions of any application for shares, the
Directors shall allot shares applied for within ten Market Days of the
closing date (or such other period as may be approved by the Exchange)
of any such application. The Directors may, at any time after the allotment
of any share but before any person has been entered in the Register as
the holder thereof or before such share is entered against the name of
a Depositor in the Depository Register, as the case may be, recognise
a renunciation thereof by the allottee in favour of some other person
and may accord to any allottee of such share a right to effect such
renunciation upon and subject to such terms and conditions as the
Directors may think fit.
7
Any share in the Company may be Issued with such preferred, qualified,
deferred or other special rights, privileges arid conditions or such
restrictions, whether in regard to dividend1 return of capital, voting or,
otherwise, as the Company may from time to time by Ordinary Resolution
determine, and subject to the Statutes, the Company may Issue
preference shares which are or1 at the option of the Company, are liable
to be redeemed on such terms and in such manner as the Company
before the issue thereof may by Ordinary Resolution determine.
Company may
issue shares
with preferred,
qualified,
deferred and
other special
rights.
8
The Company shall have the power to issue further preference capital
ranking equally with or in priority to the preference capital then already
issued.
Issue
of
f u r t h e r
preference
shares.
137
Authority of
Directors to
issue shares.
APPENDIX 6 - EXTRACTS FROM THE COMPANY’S ARTICLES OF ASSOCIATION
9
Subject to the provisions of the Statutes, all or any of the special rights
or privileges for the time being attached to any preference share for the
time being issued may from time to time (whether or not the Company
is being wound up) be modified, affected, altered or abrogated and
preference capital other than redeemable preference shares may be
repaid if authorised by a Special Resolution passed by holders of such
preference shares at a special meeting called for the purpose. To any such
special meeting, all provisions of these Articles as to General Meetings
of the Company shall mutatis mutandis apply but so that the necessary
quorum shall be two persons at least holding or representing by proxy
not fess than one third of the issued preference shares concerned and
that every holder of the preference shares concerned shall be entitled on
a poll to one vote for every such share held by him and that any holder
of the preference shares concerned present either in person or by proxy
may demand a poll Provided Always that where the necessary majority
for such a Special Resolution is not obtained at the meeting, consent in
writing if obtained from holders of three-fourths of the preference shares
concerned within two months of the meeting shall be as valid and effectual
as a Special Resolution carried at the meeting
Alteration
of rights of
preference
shareholders.
10
Preference shares may be issued subject to such limitation thereof as
may be prescribed by the Exchange. Preference shareholders shall have
the same rights as ordinary Members as regards the receiving of notices,
reports and balance sheets and the attending of General Meetings of the
Company. Preference shareholders shall also have the right to vote at any
meeting convened for the purpose of reducing the capital of the Company
or winding up or sanctioning the sale of the undertaking of the Company
or where the proposal to be submitted to the meeting directly affects their
rights and privileges or when the dividend on the preference shares is
more than six months in arrears.
Rights
of
preference
shareholders.
11
If by the conditions of allotment of any share, the whole or part of the
amount or issue price thereof shall be payable by instalments, every such
instalment shall, when due, be paid to the Company by the holder for the
time being of the share or his legal personal representative.
Instalments of
shares.
12(1)
The Company shall not be bound to register more than three persons
as the joint holders- of any share except in the case of executors,
administrators or trustees of the estate of a deceased Member.
Joint holders.
12(2)
Subject to Article 12(1), any two or more persons may be registered
as joint holders of any share and the joint holders of a share shall be
severally as well as jointly liable for the payment of all instalments and
calls and interest (if any) due in respect of such share..
12(3)
The joint holder first named in the Register or the Depository Register,
as the case may be, shall as regards voting, proxy, service of notices and
delivery of certificates and dividend warrants, be deemed to be the sole
owner of such share.
13
No person shall be recognised by the Company as holding any share
upon any trust, and the Company shall not be bound by or be required
in any way to recognise (even when having notice thereof) any equitable,
contingent, future or partial interest in any share or any other rights in
respect of any share other than an absolute right to the entirety thereof
in the registered holder or in the person whose name is entered in the
Depository Register in respect of that share, as the case may be, except
only where these Articles otherwise provide or as required by the Statutes
or pursuant to any order of Court
138
No
trusts
recognised.
APPENDIX 6 - EXTRACTS FROM THE COMPANY’S ARTICLES OF ASSOCIATION
14
No person shall exercise any rights of a Member in respect of a share
until his name shall have been entered in the Register as the registered
holder thereof or in the Depository Register in respect of such share, as
the case may be, and, unless the Directors otherwise determine, such
person shall have paid all calls and other moneys for the time being due
and payable on any share held by him.
Exercise
of rights of
Members.
15(1)
The Company may, subject to and in accordance with the Act and any
other relevant legislation, rules or regulations enacted or prescribed by
any relevant authority from time to time, purchase or otherwise acquire its
issued shares on such terms and in such manner as the Company may
from time to time think fit. Any share which is so purchased or acquired by
the Company may be deemed to be cancelled immediately on purchase
or acquisition by the Company or, subject to the provisions of the Act,
be held and dealt with by the Company as treasury shares. On the
cancellation of any share as aforesaid, the rights and privileges attached
to that share shall expire.
Po w e r
to
purchase or
acquire its
issued share.
15(2)
The Company shall not exercise any right in respect of treasury shares
other than as provided by the Act. Subject thereto, the Company may hold
or deal with its treasury shares in the manner authorised by, or prescribed
pursuant to, the Act.
Tr e a s u r y
shares.
INCREASE OF CAPITAL
55
The Company in General Meeting may from time to time by Ordinary
Resolution, whether all the shares for the time being issued have been
fully paid up or not, increase its capital by the creation and issue of new
shares, such aggregate increase to be of such amount as the Company
by the resolution authorising such increase shall direct.
Po w e r
to
increase
capital.
56 (1)
Unless otherwise determined by the Company in General Meeting or
except as permitted by the listing rules of the Exchange, all new shares
shall, before issue, be offered to such persons who as at the date of
the offer are entitled to receive notices from the Company of General
Meetings, in proportion, as nearly as the circumstances admit, to the
number of the existing shares to which they are entitled
Issue of new
shares
to
Members.
56 (2)
The offer shall be made by notice specifying the number of shares offered
and limiting a time within which the offer, if not accepted, will be deemed
to be declined, and, after the expiration of that time, or on the receipt of
an intimation from the person to whom the offer is made that he declines
to accept the shares offered, the Directors may dispose of those shares in
such manner as they think most beneficial to the Company. The Directors
may likewise so dispose of any new shares which (by reason of the ratio
which the new shares bear to shares held by persons entitled to an offer
of new shares) cannot, in the opinion of the Directors, be conveniently
offered in the manner hereinbefore provided
Notice
issue.
of
57
Notwithstanding Article 55 above, the Company may pursuant to Section
161 of the Act by Ordinary Resolution in General Meeting give to the up
to fifty per Directors a general authority, either unconditionally or subject
to such cent. conditions as may be specified in the Ordinary Resolution,
to issue shares whether by way of rights, bonus or otherwise, and make
or grant offers, agreements or options (collectively, “Instruments”) that
might or would require shares to be issued, including but not limited to
the creation and issue of (as well as adjustments to) warrants, debentures
or other instruments convertible into shares, and (notwithstanding the
Issue
shares.
of
139
APPENDIX 6 - EXTRACTS FROM THE COMPANY’S ARTICLES OF ASSOCIATION
authority conferred by the Ordinary Resolution may have ceased to be in
force) issue shares in pursuance of any instrument made or granted by
the Directors while the Ordinary Resolution was in force, provided that:-
58
(a)
the aggregate number of shares to be issued pursuant to the
Ordinary Resolution (including shares to be issued in pursuance of
Instruments made or granted pursuant to the Ordinary Resolution)
does not exceed fifty per cent (or such other limit as may be
prescribed by the Exchange) of the issued share capital of the
Company (as calculated in accordance with sub-paragraph (b)
below), of which the aggregate number of shares to be issued other
than on a pro-rata basis to the Members of the Company (including
shares to be issued in pursuance of Instruments made or granted
pursuant to the Ordinary Resolution) does not exceed twenty per
cent (or such other limit as may be prescribed by the Exchange)
of the issued share capital of the Company (as calculated in
accordance with sub-paragraph (b) below);
(b)
(subject to such manner of calculation as may be prescribed by the
Exchange) for the purpose of determining the aggregate number
of shares that may be issued under sub-paragraph (a) above,
the percentage of issued share capital shall be based on the
issued share capital of the Company at the time that the Ordinary
Resolution is passed, after adjusting for new shares arising from the
conversion or exercise of any convertible securities or exercise of
employee share options or vesting of share awards on issue at the
time that the Ordinary Resolution is passed, and any subsequent
consolidation or subdivision of shares; and
(c)
unless previously revoked or varied by the Company in General
Meeting, such authority conferred by the Ordinary Resolution
shall not continue beyond the conclusion of the Annual General
Meeting of the Company next following the passing of the Ordinary
Resolution or the date by which such Annual General Meeting is
required by law to be held, or the expiration of such other period as
may be prescribed by the Act (whichever is the earliest).
Subject to any directions that may be given in accordance with the powers
contained in the Memorandum of Association or these Articles, any
capital raised by creation of new shares shall be considered as part of the
original capital and all new shares shall be subject to the same provisions
with reference to the payment of calls, transfer, transmission, forfeiture,
lien and otherwise as if it had been part of the original capital.
New capital
considered
part of original
capital.
ALTERATION OF CAPITAL
59(1)
The Company may by Ordinary Resolution:(a)
consolidate and divide its capital; or
(b)
subdivide its existing shares or any of them (subject nevertheless to
the provisions of the Act) provided always that in such subdivision
the proportion between the amount paid and the amount (if any)
unpaid on each reduced share shall be the same as it was in the
case of the share from which the reduced share is derived. The
resolution by which the subdivision is effected may determine that,
as between the holders of the resulting shares, one or more of
140
Alteration of
capital.
APPENDIX 6 - EXTRACTS FROM THE COMPANY’S ARTICLES OF ASSOCIATION
such shares may have any such preferred, deferred or other special
rights or be subject to any restriction as the Company has power to
attach to unissued or new shares; or
(c)
59(2)
subject to the Statutes, convert any class of shares into any other
class of shares.
The Company may by Special Resolution reduce its share capital or any
other undistributable reserve in any manner and subject to any incident
uthorised and consent required by law. Without prejudice to the generality
of the foregoing, upon cancellation of any share purchased or otherwise
acquired by the Company pursuant to these Articles and the Act, the
number of issued shares of the Company shall be diminished by the
number of shares so cancelled, and where any such cancelled share is
purchased or acquired out of the capital of the Company, the amount of
the share capital of the Company shall be reduced accordingly.
MODIFICATION OF CLASS RIGHTS
60
Subject to the Statutes and save as provided by these Articles, all or any
of the special rights or privileges attached to any class of shares in the
capital of the Company for the time being issued may, at any time, as well
before as during liquidation, be modified, affected, altered or abrogated,
either with the consent in writing of the holders of not less than threefourths of the issued shares of the class or with the sanction of a Special
Resolution passed at a separate General Meeting, but so that the quorum
thereof shall be not less than two persons personally present and holding
or representing by proxy one-third of issued shares of the class, and that
any holder of shares of the class, present in person or by proxy, shall on a
poll be entitled to one vote for each share of the class held or represented
by him, and if at any adjourned meeting of such holders such quorum as
aforesaid is not present, any two holders of shares of the class who are
personally present shall be a quorum. The Directors shall comply with the
provisions of Section 186 of the Act as to forwarding a copy of any such
consent or Resolution to the Registrar of Companies.
Modification of
class rights.
VOTES OF MEMBERS
84(1)
Subject to and without prejudice to any special privileges or restriction
as. to voting for the time being attached to any special class of shares for
the time being forming part of the capital of the Company and to Article
15(2):(a)
every Member who is present in person or by proxy shall have one
vote on a show of hands, provided the Chairman shall be entitled to
treat the first named proxy as the authorised representative to vote
where a Member is represented by two proxies; and
(b)
every Member who is present in person or by proxy, in case of
a poll, shall have one vote for every share which he holds or
represents and upon which all calls or other sums due thereon to
the Company have been paid.
141
Voting rights.
APPENDIX 6 - EXTRACTS FROM THE COMPANY’S ARTICLES OF ASSOCIATION
84(2)
For the purpose of determining the number of votes which a Member,
being a Depositor, or his proxy may cast at any General Meeting upon
a poll being called, the number of shares held or represented shall, In
relation to the shares of that Depositor, be the number of shares entered
against his name in the Depository Register as at the Cut-Off Time as
certified by the Depository to the Company.
85
In the case of joint holders the vote of the senior who tenders a vote
whether in person or by proxy, shall be accepted to the exclusion of the
votes of the other joint holders; and for this purpose seniority shall be
determined by the order in which the names stand in the Register or the
Depository Register, as the case may be.
Right of joint
holders.
86
Unless the Directors otherwise determine, no person other than a Member
who shall have paid everything for the time being due from him and
payable to the Company in respect of his shares, shall be entitled to be
present or to vote on any question either personally or by proxy at any
General Meeting.
Members only
entitled
to
vote upon full
payment.
87
A Member of unsound mind, or in respect of whom an order has been
made by any Court having jurisdiction in lunacy, may vote, whether on
a show of hands or on a poll by the committee, curator bonis, or other
person in the nature of committee or curator bonis appointed by that
Court, and any such committee, curator bonis, or other person may, on a
poll, vote by proxy.
Vo t e s
of
Members of
unsound mind.
88
On a poll, votes may be given either personally or by proxy and a person
entitled to more than one vote need not use all his votes or cast all the
votes he uses in the same way.
Vote personal
or by proxy.
89(1)
A proxy need not be a Member.
Proxies.
89(2)
A Member shall not be entitled to appoint more than two proxies to attend
and vote at the same General Meeting Provided Always that where the
Member is a Depositor, the Company shall be entitled and bound:
(a)
to reject any instrument of proxy lodged if the Depositor is not
shown to have any shares entered against his name in the
Depository Register as at the Cut-Off Time as certified by the
Depository to the Company;
(b)
to accept as the maximum number of votes which in aggregate the
proxy or proxies appointed by the Depositor Is or are able to cast
on a poll a number which is the number of shares entered against
the name of that Depositor in the Depository Register as at the GutOff Time as certified by the Depository to the Company, whether
that number be greater or smaller than the number specified in any
Instrument of proxy executed by or on behalf of that Depositor; and
(c)
In determining rights to vote and other matters in respect of a
completed Instrument of proxy submitted to it, to have regard to the
instructions (if any) given by and the notes (If any) set out In the
Instrument of proxy.
142
APPENDIX 6 - EXTRACTS FROM THE COMPANY’S ARTICLES OF ASSOCIATION
89(3)
In any case where a form of proxy appoints more than one proxy, the
proportion of the shareholding concerned to be represented by each proxy
shall be specified in the form of proxy. If no proportion Is specified, the
Company shall be entitled to treat the first named proxy as representing
the entire number of shares entered against his name in the Depository
Register and any second named proxy as an alternate to the first named
or at the Company’s option to treat the instrument of proxy as invalid,
90
Any corporation which is a Member may, by resolution of its directors or
other governing body, authorise any person to act as its representative at
any meetings of the Company or any class of Members of the Company,
and such representative shall be entitled to exercise the same powers
on behalf of the corporation which he represents as if he had been an
individual shareholder and such corporate Member shall for the purpose
of these Articles (but subject to the Act) be deemed to be present in
person at any such meeting if a person so authorised is present thereat.
Cor poration
may appoint
representative.
91
An instrument appointing a proxy shall be in writing in any usual or
common form (including the form approved from time to time by the
Depository) or in any other form which the Directors may approve and:-
Execution of
instrument
of proxy on
behalf
of
appointor.
(1)
in the case of an individual shall be signed by the appointor or his
attorney;
(2)
in the case of a corporation shall be either given under its common
seal or signed on its behalf by an attorney or a duly authorised
officer of the corporation.
92
Where an instrument appointing a proxy is signed on behalf of the
appointor by an attorney, the letter or the power of attorney or other
authority, if any, or a duly certified copy thereof shall (failing previous
registration with the Company) if required by law, be duly stamped and
be deposited at the Office, not less than forty-eight hours before the time
for holding the meeting or adjourned meeting at which the person named
in the instrument proposes to vote and in default the instrument of proxy
shall not be treated as valid
Lodgement
of instrument
appointing
proxy.
93
The signature on an instrument of proxy need not be witnessed.
No witness
needed for
instrument of
proxy.
94
A vote given in accordance with the terms of an instrument of proxy shall
be valid notwithstanding the previous death of the principal or revocation
of the proxy or transfer of the share in respect of which the vote is given
Provided Always that no notice in writing of the death or revocation or
transfer shall have been received at the Office one hour at least before the
time fixed for holding the meeting.
When vote
by
proxy
valid though
authority
revoked.
95
An instrument appointing a proxy shall be deemed to confer authority to
demand or join in demanding a poll and to speak at the meeting
Instrument
d e e m e d
to
confer
authority.
143
APPENDIX 6 - EXTRACTS FROM THE COMPANY’S ARTICLES OF ASSOCIATION
DIVIDENDS
132
The profits of the Company, subject to any special rights relating thereto
created or authorised to be created by these Articles and subject to the
provisions of these Articles as to the reserve fund shall be divisible among
the Members in proportion to the amount of capital paid up or credited as
paid up on the shares held by them respectively.
Appropriation
of profits.
133
The Company in General Meeting may by Ordinary Resolution declare a
dividend on or in respect of any share to the Members according to their
rights and interest in the profits and may fix the time for payment. No
larger dividend shall be declared than is recommended by the Directors
but the Company in General Meeting may declare a smaller dividend.
Declaration of
dividend.
134
No dividend shall be payable except out of the profits of the Company. No
dividend shall carry interest.
Dividend
payable out of
profits.
135.
The declaration of the Directors as to the net profits of the Company shall
be conclusive
Declaration
conclusive.
136.
The Directors may from time to time pay to the Members such interim
dividends as in their judgment the position of the Company justifies
provided no such dividends shall be declared more than once in six
months.
I n t e r i m
dividend.
137
The Directors may retain any dividends on which the Company has a lien
and may apply the same in or towards satisfaction of the debts, liabilities,
or engagements in respect of which the lien exists.
Debts may be
deducted.
138
A transfer of shares shall not pass the right to any dividend declared
thereon before the registration of the transfer or the entry of the shares
against the Depositor’s name in the Depository Register, as the case may
be.
Effect
transfer.
of
139.
Any General Meeting declaring a dividend may direct payment of such
dividend wholly or in part by the distribution of specific assets, and in
particular of wholly or partly paid-up shares, debentures, or debenture
stock of the Company, or wholly or partly paid-up shares, debentures
or debenture stock of any other company, or in any one or more of
such ways, and the Directors shall give effect to such resolution; and
where any difficulty arises in regard to the distribution, they may settle
the same as they think expedient, and in particular may issue fractional
certificates, and may fix the value for distribution of such specific assets,
or any part thereof and may determine that cash payment shall be made
to any Member upon the footing of the value so fixed, In order to adjust
the rights of all parties, and may vest any such specific assets in trustees
upon such trusts for the persons entitled to the dividends as may seem
expedient to the Directors. Where requisite, a proper contract shall be filed
in accordance with Section 63 of the Act, and the Directors may appoint
any person to sign such contract on behalf of the persons entitled to the
dividend, and such appointment shall be effective.
Dividend
specie.
in
144
APPENDIX 6 - EXTRACTS FROM THE COMPANY’S ARTICLES OF ASSOCIATION
140.
The Directors may retain the dividends payable upon shares in respect
of which any person is under the provisions as to the transmissions of
shares hereinbefore contained entitled to become a Member, or which
any person under those provisions is entitled to transfer until such person
shall become a Member in respect of such shares or shall duly transfer
the same.
P o w e r
to
retain
dividends.
141.
In case several persons are registered in the Register or entered In the
Depository Register, as the case may be, as the holders of any share, any
resolution of the Directors or the Company in General Meeting declaring
a. dividend on shares of any class may specify that the dividend shall
be payable to such persons at the close of business on a particular date
and thereupon the dividend shall be payable in accordance with their
respective holdings so registered. Any person registered in the Register
or in the Depository Register, as the case may be, as the holder or joint
holder of any share or is entitled jointly to a share In consequence of the
death or bankruptcy of the holder may give effectual receipts for dividends,
bonuses, other moneys payable or properties distributable and payment
on account of dividends on or in respect of such shares.
Payment to
and receipt by
joint holders.
142
Notice of declaration of any dividend, whether interim or otherwise, may
be given by advertisement.
Notice
dividend.
of
143
Unless otherwise directed, any dividend may be paid by cheque, dividend
warrant or Post Office Order, sent through the post to the registered
address appearing in the Register or the Depository Register, as the case
may be, of the Member or person entitled or where two or more persons
are registered in the Register or entered In the Depository Register, as
the case may be, as joint holders or are entitled to the dividend as a result
of the death or bankruptcy of the holder, to that one whose name shall
stand first on the Register or the Depository Register, as the case may
be, in respect thereof and every cheque, dividend warrant or Post Office
Order so sent shall be made payable to the order of the person to whom
it is sent or to any person and address as such Member(s) or person(s)
may direct in writing. The Company shall not be responsible for the loss
of any cheque, dividend warrant or Post Office Order, which shall be sent
by post duly addressed to and at the sole risk of the Member or person
for whom it is intended. Payment of the cheque, dividend warrant or Post
Office Order by the bank upon which they are respectively drawn shall be
a full arid valid discharge to the Company. Notwithstanding the provisions
of these Articles payment by the Company to the Depository of any
dividend payable to a Depositor shall also be a full and valid discharge of
the Company from liability to the Depositor in respect of that payment to
the extent of the payment made to the Depository.
Payment
post.
by
144
The Depository will hold all dividend unclaimed for six years after having
been declared and paid before release to the Directors, and the Directors
may invest or otherwise make use of the unclaimed dividends for the
benefit of the Company until claimed.
Unclaimed
dividends.
145
APPENDIX 6 - EXTRACTS FROM THE COMPANY’S ARTICLES OF ASSOCIATION
BONUS ISSUES, CAPITALISATION OF PROFITSAND RESERVES
145(1)
The Directors may, with the sanction of the Company by way of an
Ordinary Resolution, including any Ordinary Resolution passed pursuant
to Article 5:
(a)
issue bonus shares for which no consideration is payable to the
Company to the persons registered as holders of shares in the
Register or (as the case may be) the Depository Register at the
close of business on:
(i)
the date of the Ordinary Resolution (or such other date as
may be specified therein or determined as therein provided);
or
(ii)
(in the case of an Ordinary Resolution passed pursuant
to Article 5) such other date as may be determined by the
Directors,
in proportion to their then holdings of shares; and
(b)
145(2).
capitalise any sum for the time being standing to the credit of any
of the Company’s reserve accounts or other undistributable reserve
or any sum standing to the credit of the profit and loss account
by appropriating such sum to the persons registered as holders
of shares In the Register or (as the case may be) the Depository
Register at the close of business on:
(i)
the date of the Ordinary Resolution (or such other date as
may be specified therein or determined as therein provided);
or
(ii)
(in the case of an Ordinary Resolution passed pursuant
to Article 5) such other date as may be determined by the
Directors, in proportion to their then holdings of shares
and applying such sum on their behalf In paying up in full
unissued shares (or, subject to any special rights previously
conferred on any shares or class of shares for the time
being issued, unissued shares of any other class not being
redeemable shares) for allotment and distribution credited as
fully paid up to and amongst them as bonus shares In the
proportion aforesaid.
The Directors may do all acts and things considered necessary or
expedient to give effect to any such bonus issue or capitalisation under
Article 134(1), with full power to the Directors to make such provisions
as they think fit for any fractional entitlements which would arise on the
basis aforesaid (including provisions whereby fractional entitlements are
disregarded or the benefit thereof accrues to the Company rather than
to the Members concerned). The Directors may authorise any person to
enter, on behalf of all the Members interested, into an agreement with the
Company providing for any such bonus issue or capitalisation and matters
incidental thereto and any agreement made under such authority shall be
effective and binding on all concerned
146
Capitalisation
of profits and
reserves.
APPENDIX 6 - EXTRACTS FROM THE COMPANY’S ARTICLES OF ASSOCIATION
145(3)
In addition and without prejudice to the powers provided for by Articles
145(1) and 145(2), the Directors shall have the power to issue shares for
which no consideration is payable and to capitalise any undivided profits
or other moneys of the Company not required for the payment or provision
of any dividend on any shares entitled to cumulative or non-cumulative
preferential dividends (including profits or other moneys carried and
standing to any reserve or reserves) and to apply such profits or other
moneys in paying up in full unissued shares, in each case on terms that
such shares shall, upon issue, be held by or for the benefit of participants
of any share incentive or option scheme or plan implemented by the
Company and approved by shareholders in General Meeting, in such
manner and on such terms as the Directors shall think fit
147
APPENDIX 7 - SUBJECT PROPERTIES
The Subject Properties are set out in the list below. The full Valuation Reports of the respective Subject
Properties are available for inspection at the registered office of the Company at 50 Raffles Place, #32-01
Singapore Land Tower, Singapore 048623 during normal business hours up to the Closing Date.
List of Properties
Registered Owner
Valuer
Subject Property
Gold Roast
Pte Ltd
Food
Industry
Colliers
International
Consultancy & Valuation (S)
Pte Ltd
14 Woodlands Link, Viz Branz
House, Singapore 738739
Gold Roast
Pte Ltd
Food
Industry
Colliers
International
Consultancy & Valuation (S)
Pte Ltd
16 Woodlands Link, Singapore
738735
Shantou Oriental Confectionary
Food Co., Ltd
Guangdong Horizon Assets
and Real Estate Appraisal
Co., Ltd
Plot 5A6 Jinyuan District
Industrial Estate, Chaoshan
Road, Shantou, Guangdong,
PRC
Shantou Gold Roast Food Ind.
Co., Ltd
Guangdong Horizon Assets
and Real Estate Appraisal
Co., Ltd
Plot 5A7 Jinyuan District
Industrial Estate, Chaoshan
Road, Shantou, Guangdong,
PRC
Shantou Gold Roast Food Ind.
Co., Ltd
Guangdong Horizon Assets
and Real Estate Appraisal
Co., Ltd
4A1A3 Jinyuan Distr ict
Industrial Estate, Chaoshan
Road, Shantou, Guangdong,
PRC
Xinzheng Viz Branz Foods Co.,
Ltd
Henan Xin Surplus Assets
Appraisal Firm
Shi Ji Road, Zhongyuan
Green Food Industrial Park,
Xuediar, Xinzheng, Henan,
China Post code 451100
148
APPENDIX 8 - EXTRACTS OF THE VALUATION REPORTS
This Appendix 8 sets out the extracts from the Valuation Reports in respect of the Subject Properties
and should be read together with, the full technical Valuation Reports of the Valuers. The full Valuation
Reports of the respective Subject Properties are available for inspection at the registered office of
the Company at 50 Raffles Place, #32-01 Singapore Land Tower Singapore 048623. For the Subject
Properties situated in China, the Valuation Reports and the extracts thereof are in Chinese, and
a translation has been prepared for ease of reference. In the event of any inconsistency between the
Chinese and the translated version of the Valuation Reports and the extracts thereof, the Chinese version
shall prevail.
149
APPENDIX 8 - EXTRACTS OF THE VALUATION REPORTS
150
APPENDIX 8 - EXTRACTS OF THE VALUATION REPORTS
151
APPENDIX 8 - EXTRACTS OF THE VALUATION REPORTS
152
APPENDIX 8 - EXTRACTS OF THE VALUATION REPORTS
153
APPENDIX 8 - EXTRACTS OF THE VALUATION REPORTS
154
APPENDIX 8 - EXTRACTS OF THE VALUATION REPORTS
Guangdong Horizon Assets and Real Estate Appraisal Co., Ltd.
Letter to Client
To Shantou Jinwei Food Manufacture Co., Ltd.:
We have accepted your delegation and conducted a real estate appraisal on the real estate
property located at Plot 5A6 Jinyuan District Industrial Estate (Land Parcel No.:83.2-61.2-016),
Chaoshan Road, Shantou, Guangdong, PRC on 1 July 2013, with a purpose of providing you
a reference of the objective and reasonable value of the abovementioned real estate property.
In accordance with: (i) the purpose of the appraisal, (ii) the relevant laws, regulations and
rules in the PRC, (iii) the principles of appraisal, and (iv) the procedure of appraisal, applying
scientific and reasonable methods of appraisal and having taken into account of various
factors which affect the real estate market price, our appraiser(s) conducted the appraisal
which reflects the objective and reasonable value of the said real estate property at the said
time of appraisal. Based on our assessment and estimate, the objective and reasonable value
of the appraised object (including the attached land use right)at the time of appraisal was
determined at RMB21,001,503 (Twenty-One Million One Thousand Five Hundred and Three
Yuan Only), and the objective and reasonable value of the attached land use right was
determined at RMB5,651,904 (Five Million Six Hundred and Fifty-One Thousand Nine
Hundred and Four Yuan Only).
Please refer to the attached Real Estate Appraisal Report (Results) and Real Estate
Appraisal Report (Technical) for the detailed procedure of appraisal.
Legal representative: (Signature) Li Xiangqun
PRC Registered Real Estate Appraiser
(PRC Registered Appraiser)
PRC Registered Real Estate Valuer
Guangdong Horizon Assets and Real Estate Appraisal Co., Ltd.
(Company stamp)
3 July 2013
155
APPENDIX 8 - EXTRACTS OF THE VALUATION REPORTS
156
APPENDIX 8 - EXTRACTS OF THE VALUATION REPORTS
Guangdong Horizon Assets and Real Estate Appraisal Co., Ltd.
Letter to Client
To Shantou Jinwei Food Manufacture Co., Ltd.:
We have accepted your delegation and conducted a real estate appraisal on the real estate
property located at Plot 5A7 Jinyuan District Industrial Estate (Land Parcel No.:83.2-61.2-016),
Chaoshan Road, Shantou, Guangdong, PRC on 1 July 2013, with a purpose of providing you
a reference of the objective and reasonable value of the abovementioned real estate property.
In accordance with: (i) the purpose of the appraisal, (ii) the relevant laws, regulations and
rules in the PRC, (iii) the principles of appraisal, and (iv) the procedure of appraisal, applying
scientific and reasonable methods of appraisal and having taken into account of various
factors which affect the real estate market price, our appraiser(s) conducted the appraisal
which reflects the objective and reasonable value of the said real estate property at the said
time of appraisal. Based on our assessment and estimate, the objective and reasonable value
of the appraised object (including the attached land use right) at the time of appraisal was
determined at RMB20,990,839 (Twenty Million Nine Hundred and Ninety Thousand Eight
Hundred and Thirty-Nine Yuan Only), and the objective and reasonable value of the attached
land use right was determined at RMB5,642,954 (Five Million Six Hundred and Forty-Two
Thousand Nine Hundred and Fifty-Four Yuan Only).
Please refer to the attached Real Estate Appraisal Report (Results) and Real Estate
Appraisal Report (Technical) for the detailed procedure of appraisal.
Legal representative: (Signature) Li Xiangqun
PRC Registered Real Estate Appraiser
(PRC Registered Appraiser)
PRC Registered Real Estate Valuer
Guangdong Horizon Assets and Real Estate Appraisal Co., Ltd.
(Company stamp)
3 July 2013
157
APPENDIX 8 - EXTRACTS OF THE VALUATION REPORTS
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APPENDIX 8 - EXTRACTS OF THE VALUATION REPORTS
Letterhead of Guangdong Horizon Assets and Real Estate Appraisal Co., Ltd.
Letter to Client
To Shantou Jinwei Food Manufacture Co., Ltd.:
We have accepted your delegation and conducted a real estate appraisal on the industrial
site and the above-ground buildings located at 4A1A3 Jinyuan District Industrial Estate, (Land
Parcel No.: 106-2-T3-10), Chaoshan Road, Shantou, Guangdong, PRC on 18 July 2013, with
a purpose of providing you a reference of the objective and reasonable value of the
abovementioned real estate property.
In accordance with: (i) the purpose of the appraisal, (ii) the relevant laws, regulations and
rules in the PRC, (iii) the principles of appraisal, and (iv) the procedure of appraisal, applying
scientific and reasonable methods of appraisal and having taken into account of various
factors which affect the real estate market price, our appraiser(s) conducted the appraisal
which reflects the objective and reasonable value of the said real estate property at the said
time of appraisal. Based on our assessment and estimate, the objective and reasonable value
of the appraised object (including the attached land use right) at the time of appraisal was
determined at RMB117,356,310 (One Hundred and Seventeen Million Three Hundred and
Fifty-Six Thousand Three Hundred and Ten Yuan Only), and the objective and reasonable
value of the attached land use right was determined at RMB34,154,409 (Thirty-Four Million
One Hundred and Fifty-Four Thousand Four Hundred and Nine Yuan Only).
Please refer to the attached Real Estate Appraisal Report (Results) and Real Estate
Appraisal Report (Technical) for the detailed procedure of appraisal.
Legal representative: (Signature) Li Xiangqun
PRC Registered Real Estate Appraiser
(PRC Registered Appraiser)
PRC Registered Real Estate Valuer
Guangdong Horizon Assets and Real Estate Appraisal Co., Ltd.
(Company stamp)
22 July 2013
159
APPENDIX 8 - EXTRACTS OF THE VALUATION REPORTS
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APPENDIX 8 - EXTRACTS OF THE VALUATION REPORTS
Asset Appraisal Report on Proposed Asset Value Verification of Xin Zheng Wei Chi Food Co.,
Ltd.
Summary of Asset Appraisal Report on Proposed Asset Value Verification of Xin Zheng Wei
Chi Food Co., Ltd.
Yu Xin Ping BaoZi (2013) No. 021
To Xin Zheng Wei Chi Food Co., Ltd.:
Henan Xin Surplus Assets Appraisal Firm has accepted your delegation, and in accordance
with i) the relevant laws, regulations and appraisal rules, ii) the principles of appraisal, and iii)
the necessary procedure of appraisal, applying cost method and cost approach, conducted
appraisals on the market value of the fixed assets – buildings and intangible assets – land
involved in the proposed asset value verification of your company on 19 July 2013 (base date
of appraisal). The assessment and conclusion of the appraisal are briefly summarised below:
1.
Purpose of Appraisal: To determine the market value of the buildings and land use right
declared by Xin Zheng Wei Chi Food Co., Ltd., and to provide a reference of value for
the proposed asset value verification of the company.
2.
Appraised Object: Seven buildings and one land parcel declared by Xin Zheng Wei Chi
Food Co., Ltd..
3.
Scope of Appraisal: Seven buildings and one land parcel declared by Xin Zheng Wei
Chi Food Co., Ltd..
4.
Nature of Value: Market value.
5.
Base Date of Appraisal: 19 July 2013.
6.
Method of Appraisal: Cost method (for buildings) and cost approach (for land parcel).
7.
Conclusion of Appraisal: As at 19 July 2013 (base date of appraisal), the appraised
value of the buildings and land use right declared by Xin Zheng Wei Chi Food Co., Ltd.
was 15,800,400 Yuan.
User of this report shall consider carefully the effects to the conclusion of appraisal brought by
the pre-conditions, assumptions, limitations, special matters and limits of use as stated in the
main body of this appraisal report.
This appraisal report shall only be used as a reference by the client and other users as listed
in this report. This appraisal report shall not be extracted, cited or disclosed to public, entirely
or partially, without prior consent from the appraisal firm and the undersigned registered
appraiser(s), provided that disclosure shall be permitted to the extent required by laws or
regulations or mutual agreement between the relevant parties.
Conclusion of this appraisal is only valid for one year, which starts from 19 July 2013 (base
date of appraisal) and ends on 18 July 2014.
Important Notes: The above are extracted from the main body of this appraisal report. Please
refer to the main body of this report for details of appraisal to ensure a better understanding of
the conclusion of appraisal.
Henan Xin Surplus Assets Appraisal Firm
Registered Certified Public Valuer: Zheng Chuan Min
Registered Certified Public Valuer: Chang Xin
19 July 2013
161