Annual Report 2006
iii
Financial Calender 2005/2006 14 February 2006 Announcement of unaudited Half-Year Results ended 31 December 2005 30 June 2006 End of Financial Year 29 August 2006 Announcement of Results for the Full Year ended 30 June 2006 5 October 2006 Release of Annual Report 2006 27 October 2006 Annual General Meeting 7 November 2006 Books Closure Date for Dividend Entitlement 15 November 2006 Payment of a First and Final Dividend
iv
2 Chairman’s Statement 4 Corporate Directory 6 Board of Directors 8 Financial Highlights 10 Corporate Governance 18 Directors’ Report 20 Statement by Directors 21 Report of the Auditors to the Members 22 Balance Sheets 23 Consolidated Profit & Loss Account 24 Consolidated Statement of Changes in Equity 26 Consolidated Statement of Cash Flows 27 Notes to the Financial Statements 45 Shareholdings Statistics 47 Notice of Annual General Meeting 49 Our Services 51 Proxy Form
1
Chairman’s Statement We will continue to engage our customers’ needs in bringing their every vision... into reality On behalf of the Board
Your Group’s total interest
o f Directors, I am pleased to
income and hiring charges
The new framework provides
present the Annual Report and
amounted to $24 million
a robust approach which is
Financial Statements of the
recording an increase of 31%
structured and transparent in
Group and the Company for
over the preceding year. Total
the monitoring, mitigation and
the year ended 30 June 2006.
assets registered a growth of
management of risks in the
33% to $729 million. Total
governance of our business.
The Si ngapore economy
Management framework.
registered a GDP Growth of
loans and advances expanded
Our re-engineering strategy
8.1% i n the second half of
by 24% to $484 million after
of reaching out to all new and
2005 after a moderate increase
deducting allowances for loan
existing customers has been a
of 4.5% in the first half. The
impairment while deposits and
great success. It underlined our
economy continued to improve
savings rose by 47% to $550
organization as a progressive
in the first half of 2006 with a
million.
and dynamic finance company
growth of 9.4%. Against this background,
Subject to shareholders’
in Singapore, one that is
approval at the forthcoming
well-placed to stay relevant
your Group’s pre-tax profit
Annual General Meeting,
in meeting the rapid changing
attributable to shareholders
your Board recommends the
and sophisticated needs of our
was $5.8 million for the year
payment of a first and final
customers. We will continue to
under review. Excluding the
dividend of 6 cents per share
engage our customers’ needs
impact of the one-off write
(2005: 6 cents plus a special
in bringing their every vision
back of general provision in
dividend of 3 cents) less 20%
whether business goals or
2005 and taking into account
tax for the year under review.
personal lifestyle aspirations
the current year’s prudential
We have strengthened our
loan provisioning against an
risk management capability by
enlarged loan portfolio, the
way of institutionalizing our
o f s e r v i c e h a v e f ur th e r
decline in the pre-tax profit
risk management practices
improved with the completion
compared to last financial
under a formal Corporate
of the enhancement of our
year was 6%.
G o v e r n a n c e an d R i s k
computer system during the
2
into reality. Our facilities and quality
year. Staff at all levels have undergone extensive trainings to further improve work-flow and efficiency to better serve the needs of our customers. The outlook for the Singapore economy remains positive. Whilst competition for business will continue to be keen, rising costs will impact on profit margins. We will continue to expand on our niche markets and seek out new and profitable business opportunities. On behalf of the Board, I would like to thank our customers, shareholders and business partners for their support. I would also like to thank all my fellow Directors for their invaluable contributions and guidance and the management and staff for their unwavering dedication
Teo Chiang Long Chairman Singapore, 29 August 2006
and hard work.
3
Corporate Directory Vision
Board Of Directors
Risk Management Committee
Key Management Staff (cont’d)
Executive Teo Chiang Long Chairman & Managing Director CEO Jamie Teo Miang Yeow William Ho Ah Seng
Teo Chiang Long Chairman Jamie Teo Miang Yeow William Ho Ah Seng Nguy Joo Tian Chua Hat Eng
Nguy Joo Tian General Manager Age: 60 Mrs Nguy Joo Tian joined Singapura Finance Ltd as the General Manager & Company Secretary in September 1993. She is a member of the Risk Management and Executive Committees. Prior to joining the Company, Mrs Nguy was a lawyer in an insurance brokerage and financial services corporation in New York. She also has had legal work experience in Singapore. Mrs Nguy holds a Bachelor of Law (Honours) from the University of Singapore.
Independent Non-Executive Ong Pang Boon Phua Bah Lee Teoh Eng Hong
Company Secretary Nguy Joo Tian
Assistant Company Secretary Audit Committee
Blandina Chia Swee Hoon
Ong Pang Boon Chairman Phua Bah Lee Teoh Eng Hong
Key Management Staff
Nominating Committee Ong Pang Boon Chairman Phua Bah Lee Teoh Eng Hong
Remuneration Committee Teoh Eng Hong Chairman Ong Pang Boon Phua Bah Lee
Teo Chiang Long Chairman of the Board & Managing Director CEO (Please refer to Profile write-up on page 6)
Jamie Teo Miang Yeow Executive Director and Deputy Chief Executive Officer (Please refer to Profile write-up on page 7)
William Ho Ah Seng Executive Director (Please refer to Profile write-up on page 7)
Executive Committee Teo Chiang Long Teoh Eng Hong Jamie Teo Miang Yeow William Ho Ah Seng Nguy Joo Tian
4
Key Management Staff (cont’d)
Key Management Staff (cont’d)
Goh Teik Liang General Manager (Loans) Age: 53 Mr Goh Teik Liang joined Singapura Finance Ltd in January 2003 as Senior Manager in charge of the marketing of Small and Medium Enterprise Loans. In March 2005, he was promoted to General Manager responsible for the marketing and administration of financial products of the Company. Prior to joining the Company, Mr Goh had worked in several financial institutions in Singapore. He joined UOB in 1989 as Head of Asset Based Unit and in 1994 he was with HL Bank (Singapore) as Head of Commercial and Corporate Banking. He was the Finance Director of a public listed Company in Australia. Mr Goh holds a Bachelor of Science (Agribusiness) from Universiti Pertanian Malaysia.
Chua Hat Eng General Manager (Finance, Risk Management) Age: 47 Mr Chua Hat Eng joined Singapura Finance Ltd as General Manager (Finance, Risk Management) in February 2006. He is a member of the Risk Management Committee. He started his career with KPMG and moved on to work in several financial institutions in Singapore. He was with UOB in 1992 as Vice President before joining Schroders Group as Financial Controller in 1996. Prior to joining the Company, he was with OCBC as Vice President, Group Finance. Mr Chua holds a Master of Applied Finance from the Macquarie University in Sydney, Australia. He is a Fellow Member of both The Chartered Association of Certified Accountants and CPA Australia and a non-practising member of the Institute of Certified Public Accountants of Singapore.
Share Registrars & Share Transfer Office M & C Services Private Limited 138 Robinson Road #17-00 The Corporate Office Singapore 068906 Tel: 6227 6660 Fax: 6225 1452
Auditors KPMG Certified Public Accountants, Singapore 16 Raffles Quay #22-00 Hong Leong Building Singapore 048581 Audit Partner: Mr Quek Shu Ping (since Financial Year 2005)
Bankers DBS Bank Ltd Oversea-Chinese Banking Corporation Ltd United Overseas Bank Ltd
Registered Office Singapura Finance Ltd (Co. Regn. No. 196900340N) 150 Cecil Street #01-00 Singapore 069543 Tel: 6880 0633 Fax: 6225 8310 www.singapurafinance.com.sg
5
Board of Directors
Mr Teo Chiang Long
Mr Ong Pang Boon
Mr Phua Bah Lee
Chairman & Managing Director CEO
Independent Non-Executive Director
Independent Non-Executive Director
Age: 61 Mr Teo Chiang Long joined the Board of Singapura Finance Ltd on 10 March 1981. He was appointed Chairman of the Board on 8 November 2002, and he continues as the Managing Director and Chief Executive Officer, which he has held since 1 March 1989. He was last re-elected as a Director on 12 October 2004. Mr Teo is a member of the Risk Management and Executive Committees. Mr Teo is a non-executive Chairman of Cerebos Pacific Limited, and AXA Insurance Singapore Pte Ltd. He is a Director of Chinese Development Assistance Council. He has been elected member of the Singapore Chinese Chamber of Commerce & Industry Council since 1987. He is a Council Member of Ngee Ann Kongsi. Mr Teo graduated with a Bachelor of Economics from the University of Adelaide, Australia. He is a Fellow Member of CPA Australia and a nonpractising member of the Institute of Certified Public Accountants of Singapore. He is also a fellow member of the Singapore Institute of Directors.
Age: 77 Mr Ong Pang Boon joined the Board of Singapura Finance Ltd on 6 March 1985. He was last re-appointed as a Director on 12 October 2005. Mr Ong is the Chairman of the Audit and Nominating Committees and a member of the Remuneration Committee. Mr Ong sits on the Boards of Hong Leong Holdings Limited and several companies within the Hong Leong Group. Mr Ong holds a Bachelor of Arts (Honours) from the University of Malaya and has extensive experience in the real estate and hotel businesses.
Age: 73 Mr Phua Bah Lee joined the Board of Singapura Finance Ltd on 19 October 1988. He was last re-appointed as a Director on 12 October 2005. Mr Phua is a Member of the Audit, Nominating and Remuneration Committees. Mr Phua is a Director of Metro Holdings Ltd, GP Batteries International Limited, GP Industries Limited, Pan-United Corporation Ltd, QAF Limited and Wing Tai Holdings Limited. He was the Parliamentary Secretary of the Ministry of Communications from 1968 to 1971 and Senior Parliamentary Secretary of the Ministry of Defence from 1972 to 1988. He was a Member of Parliament for the Tampines Constituency from 1968 to 1988. He graduated from the Nanyang University of Singapore with a Bachelor of Commerce.
6
Mr Teoh Eng Hong
Mr Jamie Teo Miang Yeow
Independent Non-Executive Director
Executive Director & Deputy Chief Executive Officer
Age: 63 Mr Teoh Eng Hong joined Singapura Finance Ltd as an Independent nonexecutive Director on 18 June 1992. He was last re-elected as a Director on 12 October 2004. Mr Teoh is the Chairman of the Remuneration Committee. He is also a member of the Audit, Nominating and Executive Committees. Mr Teoh was with Shell Eastern Petroleum Company in Singapore for over 30 years and had held various senior management positions including Director of Sales & Marketing. Mr Teoh holds a Bachelor of Economics (1st class Honours) from the University of Adelaide, Australia. He has extensive experience in many aspects of oil and chemical related businesses. His other interest is in the education industry.
Age: 33 Mr Jamie Teo Miang Yeow joined Singapura Finance Ltd on 30 March 2000 and was appointed to the Board as Executive Director on 8 November 2002. Mr Teo was appointed Deputy Chief Executive Officer on 17 March 2005. He was last re-elected as a Director on 12 October 2005. Mr Teo is a member of the Risk Management and Executive Committees. Prior to joining the Company, he worked with Ernst & Young Consultants as a senior consultant. Mr Teo holds a Bachelor of Arts and a Master in Business Administration from the University of Adelaide, Australia. He holds directorships in several private companies. He is a Council member at Ngee Ann Kongsi, and represents Ngee Ann Kongsi as a member of the Ngee Ann Polytechnic Council. He is a member of the Singapore Institute of Directors.
Mr William Ho Ah Seng Executive Director Age: 63 Mr William Ho Ah Seng joined Singapura Finance Ltd as the General Manager on 2 April 1983 and was appointed to the Board as Executive Director on 1 March 1989. He was last re-elected as a Director on 12 October 2005. He is a member of the Risk Management and Executive Committees. Earlier in his career, Mr Ho worked for the National Giro Bank in the United Kingdom and the Singapore High Commission in London. Prior to joining the Company he was the Manager of Standard Chartered Finance for over ten years. Mr Ho holds a Bachelor of Science in Sociology from the University of London. He sits on the Council of Hire Purchase, Finance and Leasing Association of Singapore. A veteran in the finance industry, Mr Ho is currently the Honorary Secretary of the Finance Houses Association of Singapore. He is a member of the Singapore Institute of Directors.
7
Financial Highlights Total Assets (S$ million) 700 600
Profit before tax (S$ million)
500 400
16
300
14 12
200
10
100
8
0 2002
6
2003
2004
2005
2006
2005
2006
4 2
Deposits (S$ million)
0 2002
2003
2004
2005
2006
500
400
Loans (S$ million) 300 500 200 400 100 300 0 200
2002
100
0 2002
8
2003
2004
2005
2006
2003
2004
2002 S$ ‘000
2003 S$ ‘000
2004 S$ ‘000
2005 S$ ‘000
2006 S$ ‘000
366,819 117,493 2.17
379,048 118,595 2.19
431,343 121,050 2.23
546,102 132,778 2.45
729,005 133,142 2.46
54,163 54,163
54,163 54,163
54,163 54,163
54,163 54,163
61,820 54,163
297,059 231,303
290,207 240,300
339,982 282,767
402,896 375,014
496,774 549,827
5,145 4,038 3,250 21,525
4,755 3,637 3,250 21,727
6,646 4,990 4,875 22,946
17,709 15,628 4,875 30,774
5,806 4,707 3,250 30,312
9.5 cents 6.0 cents
8.8 cents 6.0 cents
12.3 cents 9.0 cents
32.7 cents 9.0 cents
10.7 cents 6.0 cents
Capital Employed Total assets Net assets Net assets per share (dollars) Share Capital Issued and fully paid* Number of shares issued (thousands) Loans And Deposits Loans before allowances Deposits Profits And Retained Earnings Profit before tax Profit after tax Gross dividend Retained earnings Earnings Per Share And Dividends Earnings per share (before tax) Gross dividend per share
*Under the Companies (Amendment) Act 2005 effective 30 January 2006, the concepts of par value and authorised share capital are abolished and the amount in the share premium account as of 30 June 2006 becomes part of the Company’s Share Capital.
9
Corporate Governance Singapura Finance Ltd is committed to achieving and maintaining high standards of corporate governance in order to protect the interest of shareholders. It adopts corporate governance practices which are in line with the principles set out in the Code of Corporate Governance issued in 2001 (the “Code”) and the Best Practices Guide issued by Singapore Exchange Securities Trading Ltd (“SGX-ST”) with regard to dealings in securities. Following the issue of the revised Code of Corporate Governance by the Ministry of Finance in July 2005 (the “Revised Code”) and also the guidelines on corporate governance issued by the Monetary Authority of Singapore in September 2005 (the “MAS Code”), the Company has also taken steps to implement some of the revised guidelines set out therein in advance of the date when the Revised Code and MAS Code shall take effect, i.e. from annual general meetings to be held on or after 1 January 2007.
THE BOARD OF DIRECTORS Code Principle 1: Every company should be headed by an effective Board to lead and control the company. The Board is collectively responsible for the success of the company. The Board works with Management to achieve this and the Management remains accountable to the Board. Code Principle 2: There should be a strong and independent element on the Board, which is able to exercise objective judgment on corporate affairs independently, in particular, from Management. No individual or small group of individuals should be allowed to dominate the Board’s decision making. Code Principle 3: There should be a clear division of responsibilities at the top of the company - the working of the Board and the executive responsibility of the company’s business - which will ensure a balance of power and authority, such that no one individual represents a considerable concentration of power.
Board Composition And Balance The Board comprises of six members of whom three are executive Directors, namely, Mr Teo Chiang Long who is the Chairman of the Board, Mr Jamie Teo Miang Yeow and Mr William Ho Ah Seng, and the three independent non-executive Directors, namely, Mr Ong Pang Boon, Mr Phua Bah Lee and Mr Teoh Eng Hong. Members of the Board are prominent business leaders and professionals with financial, banking and business management backgrounds. Their diverse corporate experiences as a group provide core competencies relevant to the Group’s business. The Board has reviewed its composition, and is satisfied that the current size of the Board is appropriate and adequate for effective decision-making having regard to its present scale of operation. Details of the Directors’ professional qualifications and background can be found on pages 6 to 7. The Board determines the Group’s overall business strategy and supervises the management on the Group’s business and affairs. There will be at least two meetings a year. Apart from its statutory responsibilities, the Board approves the strategic plans, annual budget, key operational issues, loans and reviews the financial performance of the Group. Other matters which are required to be referred to the Board for approval include: • Quarterly/Half Yearly and Yearly Reports; • Statutory Financial Statements; • Major transactions, acquisitions, and funding decisions; • Interested person transactions; and • Risk Management strategies and Corporate Governance.
Training Of Directors All new Directors will be given briefing sessions on the operations of all the key business and support units. Directors are also updated regularly on accounting and regulatory changes. Directors may at any time request further explanations, briefings or informal discussions on any aspect of the Company operations.
Independent Members Of The Board Independent Directors shall at all times make up at least one-third of the Board. The criterion of independence is based on the definition given in the Code. The Nominating Committee on 27 January 2006 had appointed Mr Ong Pang Boon as the lead independent Director to address any queries and shareholders’ concerns. 10
As non-executive members of the Board, the independent Directors do not exercise management functions in the Company. However, all the Directors have equal responsibility and make contributions towards the performance of the Group. The Board considers its non-executive Directors to be of significant influence and their views to be of sufficient weight that no individual or small group can dominate the Board’s decision-making processes.
Role Of Chairman & Managing Director CEO Mr. Teo Chiang Long is the Chairman of the Board and he is also the Managing Director CEO of the Company. The Chairman is responsible for the workings of the Board and exercises control over the quality, quantity and timeliness of information flow between the Board and Management while as Managing Director CEO, Mr. Teo is responsible for the operations and management of the Group. Mr. Teo has played a pivotal role in developing and expanding the business of the Group. The Board views that it is in the best interests of the Group to adopt a single leadership structure i.e. where the Managing Director CEO and Chairman of the Board is the same person, so as to ensure that the decision-making process of the Group would be implemented smoothly and with maximum effectiveness. There are internal controls in place to allow for effective oversight and objective decision making process by the Board. Mr. Teo Chiang Long has been Chairman, Managing Director CEO of the Company since 8 November 2002. All major decisions made by the Chairman and Managing Director CEO are reviewed by various Board’s Committees and the Board. The Company has in place an effective process to receive and respond to public feedback and shareholders concerns. Mr Ong Pang Boon as the lead independent Director will address any shareholder concerns where contact through the normal channels of the Board Chairman and Managing Director CEO may be considered to be inappropriate.
ACCESS TO INFORMATION Code Principle 6: In order to fulfil their responsibilities, Board members should be provided with complete, adequate and timely information prior to board meetings and on an on-going basis. All Directors have unrestricted access to the Company’s records and information and receive detailed financial and operational reports from senior management during the year to enable them to carry out their duties. In addition, Directors have separate and independent access to the advice and services of the Company Secretary. The Company Secretary attends all Board meetings. Each Director has the right to seek independent legal and other professional advice, at the Company’s expense, concerning any aspect of the Group’s operations or undertakings in order to fulfil his duties and responsibilities as Director.
THE NOMINATING COMMITTEE [“NC”] Code Principle 4: There should be a formal and transparent process for appointment of new directors to the Board. Code Principle 5: There should be a formal assessment of the effectiveness of the Board as a whole and the contribution by each director to the effectiveness of the Board. All three members of the Nominating Committee (“NC”) are independent non-executive Directors namely Mr Ong Pang Boon (Chairman), Mr Phua Bah Lee and Mr Teoh Eng Hong. Mr Teo Chiang Long relinquished his NC membership on 27 January 2006. The NC’s responsibilities include: • Making recommendations to the Board on all board appointments and re-appointments; • Considering and determining on an annual basis, whether or not a Director is independent; • To assess the effectiveness of the Board as a whole and the contribution by each individual Director to the effectiveness of the Board; • The NC in considering the re-appointment of any Director, evaluates the performance of the Director on a continuous basis. The criteria adopted in the evaluation and assessment of Board Members include attendance at the Board and Committee meetings, intensity and quality of participation at meetings, special contributions, as well as other qualitative measures such as setting of strategic directions and achievement of strategic objectives, quality of risk management and adequacy of internal controls. 11
Corporate Governance
(cont’d)
THE REMUNERATION COMMITTEE [“RC”] Code Principle 7: There should be a formal and transparent procedure for developing policy on executive remuneration and for fixing the remuneration packages of individual directors. No director should be involved in deciding his own remuneration. Code Principle 8: The level of remuneration should be appropriate to attract, retain and motivate the directors needed to run the company successfully but companies should avoid paying more than is necessary for this purpose. A significant proportion of executive directors’ remuneration should be structured so as to link rewards to corporate and individual performance. Code Principle 9: Each company should provide clear disclosure of its remuneration policy, level and mix of remuneration, and the procedure for setting remuneration in the company’s annual report. It should provide disclosure in relation to its remuneration policies to enable investors to understand the link between remuneration paid to directors and key executives, and performance. The Remuneration Committee (“RC”) comprises of three members who are all independent non-executive Directors namely Mr Teoh Eng Hong (Chairman), Mr Ong Pang Boon and Mr Phua Bah Lee. With the early adoption of the Revised Code, Mr Teo Chiang Long relinquished his RC membership on 27 January 2006. The RC’s main responsibilities are to make recommendations to the Board with regard to the remuneration of executive Directors, non-executive Directors and key executives and to ascertain that they are fairly remunerated. The Group’s remuneration policy is to provide compensation packages at market rates which reward successful performance and attract, retain and motivate managers and Directors. The remuneration packages are approved by the Board upon recommendations by the RC. The Chairman & Managing Director CEO and the executive Directors do not participate in meetings to discuss their compensation packages. Details of remuneration paid to the Directors are set out below: Number of Directors 2005 2006
Remuneration Band $250,000 to below $500,000 Below $250,000
2 4 6
3 3 6
Summary compensation table for the year ended 30 June 2006 Base Salary
Teo Chiang Long Ong Pang Boon Phua Bah Lee Teoh Eng Hong Jamie Teo Miang Yeow William Ho Ah Seng
%
Bonuses/ Allowances %
60.31 53.20 59.83
27.53 36.66 29.97
Board/Board* Committee Fees % 12.16 100.00 100.00 100.00 10.14 10.20
* These fees comprise Directors’ fees for the financial year ended 30 June 2006 which are subject to approval by shareholders as a lump sum at the forthcoming Annual General Meeting (“AGM”). The Revised Code requires the remuneration of at least the top 5 key executives who are not Directors to be disclosed in bands of $250,000/-. Such a disclosure is not in the best interest of the Company, given the highly competitive industry conditions. The Revised Code also requires the disclosure of employees who are immediate family members of a Director or the CEO, and whose remuneration exceed $150,000/- during the year in bands of $250,000/-. A sister of the Chairman & Managing Director/CEO, Mr Teo Chiang Long is an employee of the Company. Her remuneration for the year ended 30 June 2006 is less than $250,000 and it is made up of Base salary - 63.86% and Bonuses/Allowances – 36.14%. 12
THE AUDIT COMMITTEE [“AC”] Code Principle 11: The Board should establish an Audit Committee [“AC”] with written terms of reference which clearly set out its authority and duties. The Audit Committee [“AC”] comprises of three members who are independent non-executive Directors namely Mr Ong Pang Boon (Chairman), Mr Phua Bah Lee and Mr Teoh Eng Hong. Mr Teo Chiang Long, an executive Director, relinquished his AC membership on 27 January 2006 to be in compliance with the Code. During the period from 6 August 2003 to 26 January 2006, the AC comprised of four Directors of whom one was our executive Director, Mr Teo Chiang Long. This was a deviation from the Code, which requires all members of the AC to be non-executive Directors. The Board recognised during the period that while Mr Teo Chiang Long, an executive Director, was a member of the AC, the majority of the members of the AC were independent non-executive Directors and accordingly no individual was able to dominate the AC’s decision making process. The function of the AC is to assist the Board in fulfilling its responsibilities in providing an independent review of the effectiveness of the financial reporting process and internal control system. Specific functions of the AC include: • The review with Management and the external auditors of financial statements issued by the Group to ensure their completeness, accuracy and fairness; • The review with the internal auditors and the external auditors of the effectiveness of the financial reporting process and material internal control systems of the Group; • The review of the scope of work of the internal auditors and of the external auditors, the level of assistance provided by Management to the internal auditors and external auditors and the receipt and consideration of the internal auditors’ and external auditors’ reports; • The recommendation of the appointment of the external auditors; • The AC constantly bears in mind the need to maintain a balance between the independence and objectivity of the external auditors and the desire to have work that may be best carried out by the external auditors based on value for money consideration; • The review of Management’s procedures for ensuring compliance with relevant legislations and regulations issued by the regulatory bodies such as the Monetary Authority of Singapore and the SGX-ST, as well as policies, procedures and practices as established by the Board; • The review with Management of the processes and activities to ensure compliance with the Revised Code and MAS Code adopted by the Board; and • The review of Interested Person Transactions. In line with the Revised Code, the AC has reviewed the Company’s comprehensive whistle blowing policy whereby staff of the Company may, in confidence, bring attention to the AC any concern, suspected breach or fraud, or possible improprieties in matters of financial reporting or behaviour that may not be in compliance with the law and Code of Conduct of the Company. The AC is of the opinion that arrangements are in place for the independent investigation of such matters and for appropriate follow up action. The AC meets with the external and internal auditors without the presence of Management at least once during the year. Having reviewed the nature and extent of the non-audit services provided to the Group by the external auditors, the AC is of the opinion that the provision of such non-audit services would not affect the independence of the external auditors.
FINANCIAL REPORTING AND INTERNAL CONTROL Code Principle 10: The Board should present a balanced and understandable assessment of the company’s performance, position and prospects. Code Principle 12: The Board should ensure that the Management maintains a sound system of internal controls to safeguard the shareholders’ investment and the company’s assets. The Management provides all Directors periodically with accounts and reports on the Group’s financial performance and commentary on the competitive conditions within the industry in which the Company operates, which are reviewed by the Board at each Board meeting prior to release of the announcements on half-yearly and full-year results of the Group. Periodic reports covering the Group’s financial performance are also provided to all Board members. Apart from the periodic updates provided by the Management, the Directors may at any time seek further information from, and discussion with, the Management on the Group’s operations and performance. 13
Corporate Governance
(cont’d)
The Directors recognise that they have overall responsibility to ensure accurate financial reporting for the Group and for the Group’s system of internal controls. The Board confirms that, with the assistance of the AC, it reviews the effectiveness of the Group’s financial reporting and internal controls system, which are monitored through a programme of internal audits, and is satisfied with the adequacy of such internal controls system. While no system can provide absolute assurance against material loss or financial misstatement, the Group’s internal financial controls are designed to provide reasonable assurance that assets are safeguarded, that proper accounting records are maintained, and that financial information used within the business and for publication is reliable and accurate. In reviewing these controls, the Directors have had regard to the risks to which the business is exposed, the likelihood of such risks occurring and the costs of protecting against them.
INTERNAL AUDIT Code Principle 13: The company should establish an internal audit function that is independent of the activities it audits. The Group has a well-established internal audit function with formal procedures for internal auditors to report their audit findings direct to the AC. The internal auditors report to the Chairman of the AC on audit issues and administrative matters to the Managing Director CEO of the Company. The AC reviews the adequacy of the internal audit function through a review of the internal auditors’ programs periodically and ensures that the internal audit function has adequate resources and appropriate authority to perform its functions properly. The Group also has a separate compliance function to help ensure adherence with applicable legislation, rules and regulations in the conduct of its business.
EXECUTIVE COMMITTEE [“EXCO”] The Executive Committee [“EXCO”] comprises of five members and they are the Board Chairman & Managing Director CEO, Mr Teo Chiang Long, independent non-executive Director, Mr Teoh Eng Hong, executive Director & Deputy CEO, Mr Jamie Teo Miang Yeow, executive Director, Mr William Ho Ah Seng, and the General Manager, Mrs Nguy Joo Tian. The Committee acts for the Board in supervising the management of the Company’s business and affairs within the authority limits delegated by the Board.
RISK MANAGEMENT COMMITTEE [“RMC”] The Board is fully committed to the implementation of sound risk management policies and practices, aligned to the Group’s overall business strategy and objectives. The Board determines the type and level of business risks that the Group undertakes. The Board appointed a Risk Management Committee [“RMC”] in 2003 to oversee the overall risk management of the Group’s businesses and operations. The RMC comprises of five members and they are the Board Chairman & Managing Director CEO, Mr Teo Chiang Long, executive Director & Deputy CEO, Mr Jamie Teo Miang Yeow, executive Director, Mr William Ho Ah Seng, General Manager, Mrs Nguy Joo Tian, and General Manager (Finance, Risk Management), Mr Chua Hat Eng. The roles and responsibilities of the RMC are to formulate, review and approve the risk management policies and procedures. The RMC also monitors and manages the risk exposures for the Group. However, all major policy decisions and approval on risk exposures including loan limits are approved by the Board. The RMC in turn appointed the Credit Control Committee, Credit Portfolio Committee, and Asset-Liability Committee in 2006 to assist in fulfilling its role.
Credit Control Committee [“CCC”] The Credit Control Committee [“CCC”] develops the credit risk management framework, policies and procedures, and recommends credit risk limits for concurrence by RMC and approval by the Board. The CCC also reviews delinquent accounts and makes decisions on recovery actions.
14
Credit Portfolio Committee [“CPC”] The Credit Portfolio Committee [“CPC”] manages risk on a portfolio-wide basis and recommends alternative portfolio strategies, analyzes results of portfolio management actions, and develops portfolio limits for each portfolio segment for approval by the RMC.
Asset-Liability Committee [“ALCO”] The Asset-Liability Committee [“ALCO”] manages the balance sheet to achieve an optimal balance between risk and reward, with regard to structural interest rate risk, and liquidity and funding risk, determine the appropriate levels of liquidity and ensure that funding is managed cost effectively, and review contingency plan for liquidity crisis.
RISK MANAGEMENT The Group is actively looking into the risk management practices and identifying areas for improvement on an on-going basis. A firm of consultants has completed its review of the Risk Management framework to further expand and enhance the risk management policies and processes. The key risks of the Group include strategic risk, credit risk, market risk, liquidity risk and operational risk. The Group is presently evaluating several risk management systems, which together with the appropriate risk check and stress test programs will provide the necessary support towards the management of the Group’s credit, liquidity and market risk. Strategic Risk Financial estimates including business plans are drawn up with the close involvement of Management and all Heads of Departments. These plans are approved by the Board. Credit Risk Counter-party and credit risk is defined as potential loss arising from any failure by customers to fulfil their obligations, as and when they fall due. Exposure in credit risks arises primarily from lending activities. The risk parameters for accepting credit risk are clearly defined, supported by policies and processes to ensure the Group maintains a well diversified and high quality loan portfolio. The credit control functions ensure that credit risks are closely monitored and managed in compliance with the Group’s credit policies and guidelines. Credit reviews are carried out regularly to proactively identify and address potential weakness in the credit process and to pre-empt any unexpected deterioration in credit quality. Continuous efforts are being made to further enhance the Group’s credit risk management processes. Market Risk Market risk encompasses price and interest rate risk, which are inherent in the ordinary course of the Group’s business. Market risk is defined as the uncertainty in market value of a given portfolio arising from movements in market factors including interest rates, equity prices and asset values. The Group has a comprehensive set of policies and monitoring system in place for the management of market risk. To enhance this, the Group is exploring options for enhancing its assets and liability management with capabilities for simulation and scenario analysis. Liquidity Risk Liquidity risk arises in the general funding of the Group’s activities and in the management of its assets and liabilities. It is the Group’s policy to maintain adequate liquidity at all times. The Group maintains sufficient liquidity to fund its day-to-day operations, including customers’ demand for loan drawdown, as well as any unanticipated cash funding needs. The liquidity policies and procedures and limits are in place to ensure effective liquidity management and compliance with the regulatory requirements.
15
Corporate Governance
(cont’d)
Operational Risk Operational risk is the risk of loss resulting from inadequate or failed internal processes, people and systems or from external events. The day-to-day management of operational risk exposures is through the maintenance of a comprehensive set of stringent guidelines and procedures supported by an enhanced system of internal controls following the upgrading of the computer system to ensure the soundness of the operating environment. The web-based system is using role-based access control, i.e. within an operational department; there are 3 categories of roles assigned to managerial level, officer level and clerical level. This feature strengthens the segregation of duties which is a preventive control. Access rights are granted to users on a need-to relevant job basis, access rights granted are either Read Only, or Insert/Update/Delete for respective screens. Certain critical screens require supervisor override before transactions can go through. Another important feature is the audit trails or logs which allows for real-time monitoring and control of users access system. The Group has purchased an operational risk software, which together with the appropriate key risk indicators and risk/control self-assessments will enhance the management of operational risks. The Company recognises that risk management process is an ongoing process and will thus continuously ensure that the Company’s current risk management system and processes are in line with the MAS Code and with industry best practices.
COMMUNICATION WITH SHAREHOLDERS Code Principle 14: Companies should engage in regular, effective and fair communication with shareholders. Code Principle 15: Companies should encourage greater shareholder participation at AGMs, and allow shareholders the opportunity to communicate their views on various matters affecting the company. The Company endeavours to communicate regularly and effectively with its shareholders. The Company announces its half-yearly and full-year results within the mandatory period. The Company does not practise selective disclosure. Price sensitive announcements are released to the public via SGXNET and such information is simultaneously posted on the Company’s website at www.singapurafinance.com.sg The Board regards the Annual General Meeting [“AGM”] as an opportunity to communicate directly with the shareholders and encourages attendance and participation in dialogue. The notice of AGM is dispatched to shareholders, together with explanatory notes on items of special business at least 14 days before the meeting. The notice, first disseminated via SGXNET, is also published in newspapers. The Articles of Association of the Company allow a shareholder of the Company to appoint one or two proxies to attend and vote at all general meetings on his behalf. The Chairman and other Directors attending the AGM are available to answer questions from shareholders who are present. External auditors are also present to assist Directors in addressing relevant queries by shareholders.
16
INTERESTED PERSON TRANSACTIONS The Interested Person Transactions and the aggregate value of Interested Person Transactions disclosed as required under Rule 907 of the Listing Manual of the SGX-ST during the financial year ended 30 June 2006 are as follows: Name of Interested Person
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)
Aggregate value of all interested person transactions conducted under shareholders’ mandate pursuant to Rule 920 (excluding transactions less than $100,000)
High Luck Pte Ltd
$590,040.32
NIL
The above transactions were carried out on normal business engagements on commercial terms which are not prejudicial to the interest of the Company or its minority shareholders.
ETHICAL STANDARD In addition to observing the Code of Conduct issued by the Finance Houses Association of Singapore, the Company has also adopted the SGX-ST’s Best Practices Guide with respect to dealings in securities and has a Code on Dealings in securities for the guidance of Directors and officers. The Company manages its business according to the core values of integrity, performance excellence, teamwork, trust and respect to which staff subscribe and are assessed on. The Company has a comprehensive whistle blowing policy for staff to bring attention to the Audit Committee any concern, suspected breach or fraud, or activity or behaviour that may not be in compliance with the law and Code of Conduct of the Company.
DIRECTORS’ ATTENDANCE AT BOARD AND BOARD COMMITTEE MEETINGS FOR THE PERIOD UNDER REVIEW Name of Directors
Board
Audit Committee
Nominating
Remuneration
No. of Meetings Held
No. of Meetings Attended
No. of Meetings Held
No. of Meetings Attended
No. of Meetings Held
No. of Meetings Attended
No. of Meetings Held
No. of Meetings Attended
Teo Chiang Long
5
5
4
2
3
2
3
2
Ong Pang Boon
5
5
4
4
3
3
3
3
Phua Bah Lee
5
5
4
4
3
3
3
3
Teoh Eng Hong
5
5
4
4
3
3
3
3
Jamie Teo Miang Yeow
5
5
-
-
-
-
3
2
William Ho Ah Seng
5
5
-
-
-
-
-
-
17
Directors’ Report We are pleased to submit this annual report to the members of the Company together with the audited financial statements for the financial year ended 30 June 2006.
Directors The directors in office at the date of this report are as follows: Teo Chiang Long Ong Pang Boon Phua Bah Lee William Ho Ah Seng Teoh Eng Hong Jamie Teo Miang Yeow
Directors’ Interests According to the register kept by the Company for the purposes of Section 164 of the Companies Act, Chapter 50 (the Act), particulars of interests of directors who held office at the end of the financial year (including those held by their spouses and infant children) in shares or debentures in the Company are as follows: Shareholdings registered in the name of directors At beginning of the year
At end of the year
Other shareholdings in which the directors are deemed to have an interest At beginning At end of the year of the year
Singapura Finance Ltd Ordinary Shares fully paid Teo Chiang Long Phua Bah Lee William Ho Ah Seng
1,875 53,750 2,375
1,875 53,750 2,375
27,644,500 5,020 -
27,644,500 5,020 -
By virtue of Section 7 of the Act, Mr. Teo Chiang Long is deemed to have an interest in all the other wholly-owned subsidiaries of Singapura Finance Ltd, at the beginning or at the end of the financial year. Except as disclosed in this report, no director who held office at the end of the financial year had interests in shares or debentures of the Company or of related corporations, either at the beginning or at the end of the financial year. There were no changes in any of the above mentioned interests in the Company between the end of the financial year and 21 July 2006. Neither at the end of nor at any time during the financial year was the Company a party to any arrangement whose objects are, or one of whose objects is, to enable the directors of the Company to acquire benefits by means of the acquisition of shares in or debentures of the Company or any other body corporate. Except as disclosed in Note 16 to the financial statements, since the end of the last financial year, no director has received or become entitled to receive a benefit by reason of a contract made by the Company and/or its related corporations with the director or with a firm of which he is a member or with a company in which he has a substantial financial interest.
18
Share Options During the financial year, there were: (i) no options granted by the Company or its subsidiaries to any person to take up unissued shares in the Company or its subsidiaries; and (ii) no shares issued by virtue of any exercise of option to take up unissued shares of the Company or its subsidiaries. As at the end of the financial year, there were no unissued shares of the Company or its subsidiaries under option.
Audit Committee The members of the Audit Committee during the financial year and at the date of this report are: Ong Pang Boon (Chairman), independent, non-executive director Phua Bah Lee, independent, non-executive director Teoh Eng Hong, independent, non-executive director The financial statements, accounting policies and system of internal accounting controls are the responsibility of the Board of Directors acting through the Audit Committee. The Audit Committee met to review the scope of work of the internal and external auditors, and the results arising therefrom, including their evaluation of the system of internal controls. The Audit Committee also reviewed the assistance given by the Company’s officers to the internal and external auditors. The financial statements of the Company and the consolidated financial statements of the Group were reviewed by the Audit Committee prior to their submission to the directors of the Company for adoption. In addition, the Audit Committee has, in accordance with Chapter 9A of the Singapore Exchange Listing Manual, reviewed the requirements for approval and disclosure of interested person transactions, reviewed the internal procedures set up by the Company to identify and report and where necessary, seek approval for interested person transactions and reviewed interested person transactions. The Audit Committee has full access to Management and is given the resources required for it to discharge its functions. It has full authority and discretion to invite any director or executive officer to attend its meetings. The Audit Committee also recommends the appointment of the external auditors and reviews the level of audit and non-audit fees. The Audit Committee is satisfied with the independence and objectivity of the external auditors and has recommended to the Board of Directors that the auditors, KPMG, be nominated for re-appointment as auditors at the forthcoming Annual General Meeting of the Company.
Auditors The auditors, KPMG, have indicated their willingness to accept re-appointment. On behalf of the Board of Directors
Teo Chiang Long Director
Ong Pang Boon Director
Singapore 29 August 2006
19
Statement by Directors In our opinion: (a) the financial statements set out on pages 22 to 44 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 2006 and of the results, changes in equity and cash flows of the Group and of the changes in equity of the Company for the year ended on that date; and (b) at the date of this statement, there are reasonable grounds to believe that the Company will be able to pay its debts as and when they fall due. The Board of Directors has, on the date of this statement, authorised these financial statements for issue. On behalf of the Board of Directors
Teo Chiang Long Director Singapore 29 August 2006
20
Ong Pang Boon Director
Report of the Auditors to the Members of Singapura Finance Ltd We have audited the accompanying financial statements of Singapura Finance Ltd for the year ended 30 June 2006 as set out on pages 22 to 44. These financial statements are the responsibility of the Company’s directors. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Singapore Standards on Auditing. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the directors, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion: (a) the consolidated financial statements of the Group, the balance sheet and the statement of changes in equity of the Company are properly drawn up in accordance with the provisions of the Companies Act, Chapter 50 (the Act) and Singapore Financial Reporting Standards to give a true and fair view of the state of affairs of the Group and of the Company as at 30 June 2006 and of the results, changes in equity and cash flows of the Group and of the changes in equity of the Company for the year ended on that date; and (b) the accounting and other records required by the Act to be kept by the Company and by the subsidiaries incorporated in Singapore of which we are the auditors have been properly kept in accordance with the provisions of the Act.
KPMG Certified Public Accountants Singapore 29 August 2006
21
Balance Sheets (As at 30 June 2006) Group
Company
Note
2006 $’000
2005 $’000
2006 $’000
2005 $’000
3 4 5
5,381 271,482
5,488 179,680
5,381 125 271,482
5,488 125 179,680
7
3,923 280,786
3,496 188,664
3,923 280,911
3,496 188,789
12,601
8,303
12,601
8,303
5
212,977
211,128
212,977
211,128
8 9
118,036 5,783
42,879 3,963
118,036 5,773
42,879 3,960
10
98,822 448,219
91,165 357,438
98,501 447,888
90,875 357,145
729,005
546,102
728,799
545,934
11 12
61,820 71,322 133,142
54,163 78,615 132,778
61,820 70,205 132,025
54,163 77,537 131,700
13 14
29,830 1,053 30,883
25,747 1,037 26,784
29,830 1,053 30,883
25,747 1,037 26,784
13 15
11,367 549,827
7,238 375,014
11,548 550,566
7,421 375,750
3,786 564,980
4,288 386,540
3,777 565,891
4,279 387,450
Total liabilities
595,863
413,324
596,774
414,234
Total equity and liabilities
729,005
546,102
728,799
545,934
Non-current assets Property, plant and equipment Interests in subsidiaries Loans and advances due after 12 months Deferred taxation
Current assets Statutory deposit with the Monetary Authority of Singapore Loans and advances due within 12 months Investments Other receivables, deposits and prepayments Cash and cash equivalents
Total assets Equity attributable to equity holders of the parent Share capital Reserves Total equity Non-current liabilities Trade and other payables Staff retirement gratuities
Current liabilities Trade and other payables Deposits and savings accounts of customers Current tax payable
The accompanying notes form an integral part of these financial statements. 22
Consolidated Profit and Loss Account (Year Ended 30 June 2006)
Group Note
Interest income and hiring charges Interest expense Net interest and hiring charges Fee and commission income Dividend income Other operating income Income before operating expenses Staff costs Depreciation of property, plant and equipment Other operating expenses Profit from operations before allowances Allowances for loan losses and impairment losses of investments Profit before taxation Income tax expense Net profit for the year Basic and diluted earnings per share (cents)
2006 $’000
2005 $’000
23,504 (8,647) 14,857 205 100 1,090 16,252 (4,928) (868) (2,839) 7,617 (1,811)
17,885 (3,668) 14,217 131 50 716 15,114 (4,272) (805) (2,478) 7,559 10,150
18
5,806 (1,099) 4,707
17,709 (2,081) 15,628
19
8.69
28.85
3 16 17
The accompanying notes form an integral part of these financial statements. 23
Consolidated Statement of Changes in Equity (Year Ended 30 June 2006) Group
Share Share Capital Statutory Fair value General capital premium reserve reserve reserve reserve $’000 $’000 $’000 $’000 $’000 $’000
Accumulated profits $’000
Total $’000
At 1 July 2004 54,163 Net profit for the year Total recognised income and expenses for the year Transfer from accumulated profits to statutory reserve Final dividend paid of 6 cents per share less tax at 20% in respect of year 2004 Special dividend paid of 3 cents per share less tax at 20% in respect of year 2004 At 30 June 2005 54,163
7,657 -
1,353 -
34,201 -
-
730 -
-
-
3,900
-
-
(3,900)
-
-
-
-
(2,600)
(2,600 )
-
-
-
-
-
(1,300)
(1,300 )
7,657
1,353
38,101
-
730
30,774 132,778
At 30 June 2005, as previously reported 54,163 Effects of adopting FRS 39 At 1 July 2005, restated 54,163 Change in fair value of investments available-for-sale Net gains/(losses) recognised directly in equity Net profit for the year Total recognised income and expenses for the year Transfer from accumulated profits to statutory reserve Transfer from share premium account 7,657 to share capital upon implementation of the Companies (Amendment) Act 2005 Final dividend paid of 6 cents per share less tax at 20% in respect of year 2005 Special dividend paid of 3 cents per share less tax at 20% in respect of year 2005 At 30 June 2006 61,820
7,657 7,657 -
1,353 1,353 -
38,101 38,101 -
226 226 (568)
730 730 -
30,774 132,778 (101) (125 ) 30,673 132,903 (568 )
-
-
-
(568)
-
-
-
-
-
(568)
-
4,707 4,707
-
-
1,168
-
-
(1,168)
-
-
-
-
-
-
-
-
-
(2,600)
(2,600 )
-
-
-
-
-
(1,300)
(1,300 )
-
1,353
39,269
(7,657)
-
The accompanying notes form an integral part of these financial statements. 24
(342)
730
22,946 121,050 15,628 15,628 15,628 15,628
-
-
(568 ) 4,707 4,139 -
30,312 133,142
Statement of Changes in Equity (Year Ended 30 June 2006)
Company
Share Share Capital Statutory Fair value General capital premium reserve reserve reserve reserve $’000 $’000 $’000 $’000 $’000 $’000
Accumulated profits $’000
Total $’000
21,894 15,602 15,602
119,998 15,602 15,602
At 30 June 2004 54,163 Net profit for the year Total recognised income and expenses for the year Transfer from accumulated profits to statutory reserve Final dividend paid of 6 cents per share less tax at 20% in respect of year 2004 Special dividend paid of 3 cents per share less tax at 20% in respect of year 2004 At 30 June 2005 54,163
7,657 -
1,353 -
34,201 -
-
730 -
-
-
3,900
-
-
(3,900)
-
-
-
-
-
(2,600)
(2,600)
-
-
-
-
-
(1,300)
(1,300)
7,657
1,353
38,101
-
730
29,696
At 30 June 2005, as previously reported 54,163 Effects of adopting FRS 39 At 1 July 2005, restated 54,163 Change in fair value investments available-for-sale Net gains/(losses) recognised directly in equity Net profit for the year Total recognised income and expenses for the year Transfer from accumulated profits to statutory reserve Transfer from share premium account 7,657 to share capital upon implementation of the Companies (Amendment) Act 2005 Final dividend paid of 6 cents per share less tax at 20% in respect of year 2005 Special dividend paid of 3 cents per share less tax at 20% in respect of year 2005 At 30 June 2006 61,820
7,657 7,657 -
1,353 1,353 -
38,101 38,101 -
226 226 (568)
730 730 -
29,696 131,700 (101) 125 29,595 131,825 (568)
-
-
-
(568)
-
-
-
-
-
(568)
-
4,668 4,668
-
-
1,168
-
-
(1,168)
-
-
-
-
-
-
-
-
-
(2,600)
(2,600)
-
-
-
-
-
(1,300)
(1,300)
-
1,353
39,269
(7,657)
(342)
730
-
29,195
-
131,700
(568) 4,668 4,100 -
132,025
The accompanying notes form an integral part of these financial statements. 25
Consolidated Statement of Cash Flows (Year Ended 30 June 2006)
Note
2006 $’000
2005 $’000
5,806
17,709
868 1 1,811 (322) 16 8,180
805 1 (10,150) (96) 38 8,307
(4,298) (95,703) (1,820) 174,813 8,227
(1,356) (64,173) (556) 92,247 9,126
Cash generated from operations Income taxes paid
89,399 (1,892)
43,595 (1,153)
Cash flows from operating activities
87,507
42,442
(761) (240,004) 164,815 (75,950)
(922) (81,718) 73,663 (8,977)
Dividends paid
(3,900)
(3,900)
Cash flows from financing activity
(3,900)
(3,900)
Net increase in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year
7,657 91,165 98,822
29,565 61,600 91,165
Operating activities Profit before taxation Adjustments for: Depreciation of property, plant and equipment Property, plant and equipment written off Allowances for loan losses and impairment losses of investments (net) Gain on sale of investments Staff retirement gratuities Operating profit before working capital changes Changes in working capital: Statutory deposit with the Monetary Authority of Singapore Loan and advances Other receivables, deposits and prepayments Deposits and savings accounts of customers Trade and other payables
Investing activities Purchase of property, plant and equipment Purchase of investments Proceeds from sale and maturity of investments Cash flows from investing activities
Financing activity
The accompanying notes form an integral part of these financial statements. 26
10
Notes to the Financial Statements These notes form an integral part of the financial statements. The financial statements were authorised for issue by the directors on 29 August 2006.
1. Domicile and Activities Singapura Finance Ltd (the Company) is incorporated in the Republic of Singapore and has its registered office at 150 Cecil St, #01-00 Singapore 069543. The principal activities of the Company are those relating to finance companies operating under the Finance Companies Act, Chapter 108. The principal activities of the subsidiaries are set out in note 4 to the financial statements. The consolidated financial statements relate to the Company and its subsidiaries (referred to as the Group).
2. Summary of Significant Accounting Policies 2.1 Basis of Preparation The financial statements are prepared in accordance with Singapore Financial Reporting Standards (FRS) including related Interpretations promulgated by the Council on Corporate Disclosure and Governance. During the financial year, the Group adopted the following new/revised FRSs which are relevant to its operations: FRS 1 FRS 8 FRS 10 FRS 16 FRS 17 FRS 24 FRS 27 FRS 32 FRS 33 FRS 36 FRS 39
(revised) (revised) (revised) (revised) (revised) (revised) (revised) (revised) (revised) (revised)
Presentation of Financial Statements Accounting Policies, Changes in Accounting Estimates and Errors Events After the Balance Sheet Date Property, Plant and Equipment Leases Related Party Disclosures Consolidated and Separate Financial Statements Financial Instruments: Disclosure and Presentation Earnings Per Share Impairment of Assets Financial Instruments: Recognition and Measurement
The effects of adopting the new/revised FRSs during the financial year are set out in Note 26. The financial statements are prepared and presented in Singapore dollars and rounded to the nearest thousand, unless otherwise stated. The historical cost basis is used except as disclosed in the accounting policies below. The preparation of financial statements in conformity with FRSs requires Management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets, liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgements about carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised, if the revision affects only that period, or in the period of the revision and future periods, if the revision affects both current and future periods. Judgements made by Management in the application of FRSs that have a significant effect on the financial statements and in arriving at estimates with a significant risk of material adjustment in the following year are discussed in Note 27.
27
Notes to the Financial Statements
(cont’d)
2.2 Financial Assets and Liabilities (a) Classification of Financial Instruments The Group classifies its financial assets and financial liabilities in the following categories: financial assets and financial liabilities at fair value through profit or loss; loans and receivables; held-to-maturity investments; and available-for-sale financial assets. Management determines the classification of its financial assets and financial liabilities at initial recognition. Financial Assets and Financial Liabilities at Fair Value Through Profit or Loss Held-for-Trading Held-for-trading financial assets and financial liabilities are acquired by the Group for the purposes of resale in the near term, short term profit taking and include derivatives (except for derivatives in an effective hedging relationship). Designated at Fair Value Through Profit or Loss Financial assets and financial liabilities at fair value through profit or loss are so designated by the Group upon initial recognition. Loans and Receivables Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. Held-to-Maturity (“HTM”) HTM assets are non-derivative financial assets with fixed or determinable payments and fixed maturity that the Group has the positive intention and ability to hold to maturity. Available-for-Sale (“AFS”) AFS assets are non-derivative financial assets that are designated as AFS or are not classified as i) financial assets at fair value through profit or loss ii) loans and receivables or iii) HTM. (b) Recognition and Derecognition The Group recognises financial assets or liabilities on its balance sheet when it becomes a party to the contractual provisions of the instrument. Regular way purchase or sale of financial asset/financial liabilities are recognised/derecognised using trade date accounting. Financial assets are derecognised when the contractual rights to the cash flows from the financial assets expire or the Group transfers majority of the risks and rewards over the ownership of the financial assets. A financial liability is removed from balance sheet when the obligation specified in the contract is discharged / cancelled or expires. (c)
Measurement Financial instruments are measured initially at fair value plus transaction costs (transaction costs are not included in initial measurement for financial asset/financial liability at fair value through profit and loss) that are directly attributable to the acquisition or issue of the financial instrument. Subsequent to initial measurement, financial instruments classified as financial asset/financial liability at fair value through profit or loss and AFS are measured at fair value. Gains or losses arising from fair value changes for financial assets/financial liability classified as financial asset/financial liability at fair value through profit or loss are recognised in the profit and loss account. Gains and losses arising from fair value changes of AFS assets are recognised directly in equity until the financial asset is derecognised or impaired at which time the cumulative gain/loss previously recognised in equity is recognised in the profit and loss account.
(cont’d next page) 28
HTM and loans and receivables are measured at amortised cost using effective interest method less allowances for loan losses. Equity investments without an active quoted market price and whose fair value cannot be reliably measured are measured at cost less impairment losses. Other than the above, all other financial liabilities after initial recognition are recognised at amortised cost using effective interest method. 2.3 Functional Currency The functional currency of the Company is the Singapore dollar. As income and expenses are denominated primarily in Singapore dollars and receipts from operations are usually retained in Singapore dollars, the directors are of the opinion that the Singapore dollar reflects the economic substance of the underlying events and circumstances relevant to the Company. 2.4 Consolidation Subsidiaries are those companies controlled by the Company. Control exists when the Company has the power, directly or indirectly, to govern the financial and operating policies of a company so as to obtain benefits from its activities. Investments in subsidiaries are stated in the Company’s balance sheet at cost less impairment losses. The financial statements of the subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases. All significant intra-group transactions and balances are eliminated on consolidation. Accounting policies for subsidiaries are consistent with the policies adopted by the Group. 2.5 Property, Plant and Equipment Property, plant and equipment are stated at cost less accumulated depreciation and impairment losses. No depreciation is provided in respect of freehold land. Depreciation is provided on a straight line basis so as to write off all other items of property, plant and equipment over their estimated useful lives as follows: Freehold buildings Leasehold land Leasehold buildings Furniture and office equipment Motor vehicles Computers
40 years 40 years 40 years Between 5 and 8 years 4 years 5 years
The useful lives and residual values, if not insignificant, are reassessed annually. 2.6 Investments Investments in Singapore Government Securities and quoted equity investments classified as available-for-sale are measured in accordance with note 2.2. 2.7 Loans, Advances and Receivables Loans, advances and receivables are recognised initially at cost together with attributable transaction costs. Subsequent to initial recognition, these are stated at amortised cost less allowances for loan losses in accordance with note 2.2. 2.8 Other Receivables, Deposits and Prepayments Other receivables, deposits and prepayments are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method, less impairment losses. 2.9 Cash and Cash Equivalents Cash and cash equivalents comprise cash balances and bank deposits.
(cont’d next page) 29
Notes to the Financial Statements
(cont’d)
2.10 Impairment The carrying amounts of the Group’s assets are reviewed at each balance sheet date to determine whether there is any indication of impairment. If any such indication exists, the assets’ recoverable amount is estimated. An impairment loss is recognised whenever the carrying amount of an asset or its cash-generating unit exceeds its recoverable amount. The impairment loss is charged to the profit and loss account unless it reverses a previous revaluation, credited to equity, in which case it is charged to equity. The Group assesses whether objective evidence of impairment exists for financial assets that are 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. A financial asset or a group of financial assets is impaired and impairment loss is incurred, if, and only if, there is objective evidence of impairment as a result of one or more events that occurred after initial recognition of the asset (a “loss asset”) and that loss event (or events) has an impact on the estimated future cash flows of the financial asset or group of financial assets that can be reliably estimated. Losses expected as result of future events are not recognised. When an indication of impairment is identified in an individually assessed asset and the impairment loss is or continues to be recognised, the asset is not included in collective assessment of impairment. Calculation of Recoverable Amount Loans, Advances and Receivables and HTM Assets The present value of expected future cash flows (excluding future credit losses that have not been incurred), discounted at the instruments original effective interest rate is calculated by the Group to derive the recoverable amount arising from loans and receivables and HTM assets. The amount of loss is measured as the difference between the receivable amount and the asset’s carrying amount. The carrying amount of the asset is reduced by the amount held in an allowance account and the amount of the current period’s loss is recognised in the profit and loss account. Future cash flows in a group of financial assets assessed for collective impairment are estimated on the basis of the contractual cash flows of the assets in the group and historical loss experience for assets with credit characteristics similar to those in the group. Historical loss experience is adjusted on the basis of current observable data to reflect the effects or current conditions that did not affect the period on which the historical loss experience is based and to remove the effects of conditions in the historical period that do not exist currently. Portfolio impairment provision is created for collective impairment of financial assets. When a loan is uncollectible, it is written off against the related impairment allowance. Subsequent recoveries of amounts previously written off are taken directly to the profit and loss account. Equity Investment at Cost The Group assesses at each balance sheet date whether there is objective evidence that an impairment loss has occurred on equity instruments not carried at fair value when fair value cannot be reliably measured. The amount of impairment loss is measured as the difference between the carrying amount of the financial asset and the present value of estimated cash flows discounted at the current market rate of return for a similar financial asset. AFS Assets The Group assesses at each balance sheet date whether there is objective evidence that an impairment loss has occurred on AFS assets. A significant or prolonged decline in fair value is considered in determining impairment and if such evidence exists, the cumulative loss - measured as the difference between the acquisition cost and current fair value less any impairment loss on the financial asset previously recognised in the profit and loss account is removed from equity and recognised in the profit and loss account. Reversals of Impairment An impairment loss in respect of loan and receivables or HTM assets carried at amortised cost is reversed if the subsequent increase in recoverable amount can be related objectively to an event occurring after the impairment loss was recognised.
(cont’d next page) 30
Impairment loss arising from equity investments at cost or AFS equity assets are not reversed through the profit and loss account. If the fair value of an AFS debt instrument increases and the increase can be objectively related to an event occurring after the impairment loss was recognised in the profit and loss account, the impairment loss is reversed, with the amount of the reversal recognised in the profit and loss account. 2.11 Deposits and Savings Accounts of Customers Deposits and savings accounts of customers are recognised initially at fair value. Subsequent to initial recognition, these are stated at amortised cost less allowances for doubtful debts in accordance with note 2.2 which is equivalent to original cost plus accrued interest. Interest payable on deposits and savings accounts is computed using the effective interest rate method. 2.12 Trade and Other Payables Trade and other payables are recognised initially at fair value. Subsequent to initial recognition, trade and other payables are stated at amortised cost on an effective interest basis. 2.13 Employee Benefits Defined Contribution Plans Contributions to defined contribution plans are recognised as an expense in the profit and loss account as incurred. Provision is made for staff retirement gratuities annually at a specified rate based on salaries paid during the year. 2.14 Income Tax Income tax in the financial statements comprises current and deferred tax. Current tax is the expected amount of income taxes payable in respect of the taxable profit for the period and is measured using the tax rates that have been enacted or substantively enacted at the balance sheet date. Deferred tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. Temporary differences are not recognised for the initial recognition of assets or liabilities that affect neither accounting nor taxable profit. The amount of deferred tax provided is based on the expected manner of realisation or settlement of the carrying amount of assets and liabilities, using tax rates enacted or substantively enacted at the balance sheet date. A deferred tax asset is recognised to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised. 2.15 Revenue Recognition Interest Income on Loans and Advances In general, the basis adopted for crediting income from loans to the profit and loss account is to spread the interest over the period in which the repayments are due. Specifically, interest on mortgaged loans is charged on the annual/monthly/daily rest basis while interest on hire purchase and leasing transactions is spread over the period of the agreement using the sum-of-digits method. Interest relating to non-performing loans and advances is not recognised as income until it is received. Interest Income from Singapore Government Securities Interest income from Singapore Government Securities is recognised as it accrues using the effective interest method. Interest Income from Bank Deposits Interest income from bank deposits is accrued on a time-apportioned basis. Dividend Income Dividend income is recognised in the profit and loss account when the shareholder’s right to receive payment is established. 2.16 Key Management Personnel Key management personnel of the Group are those persons having the authority and responsibility for planning, directing and controlling the activities of the entity. The directors and general managers are considered as key management personnel of the Group. 31
Notes to the Financial Statements
(cont’d)
3. Property, Plant and Equipment Freehold land and buildings $’000
Leasehold land and buildings $’000
Furniture and office equipment $’000
Cost At 1 July 2004 Additions Disposals At 30 June 2005
2,263 2,263
3,397 3,397
2,416 101 (47) 2,470
385 385
2,841 821 (60) 3,602
11,302 922 (107) 12,117
At 1 July 2005 Additions Disposals At 30 June 2006
2,263 2,263
3,397 3,397
2,470 85 (1) 2,554
385 385
3,602 676 (11) 4,267
12,117 761 (12) 12,866
Accumulated depreciation At 1 July 2004 Depreciation for the year Disposals At 30 June 2005
733 57 790
1,007 84 1,091
1,867 222 (47) 2,042
196 77 273
2,127 365 (59) 2,433
5,930 805 (106) 6,629
At 1 July 2005 Depreciation for the year Disposals At 30 June 2006
790 57 847
1,091 84 1,175
2,042 157 (1) 2,198
273 76 349
2,433 494 (11) 2,916
6,629 868 (12) 7,485
Carrying amount At 1 July 2004
1,530
2,390
549
189
714
5,372
At 30 June 2005
1,473
2,306
428
112
1,169
5,488
At 1 July 2005
1,473
2,306
428
112
1,169
5,488
At 30 June 2006
1,416
2,222
356
36
1,351
5,381
Group and Company
32
Motor vehicles Computers Total $’000 $’000 $’000
Properties held by the Group and the Company are as follows:
Location
Description
Tenure
Carrying amount 2006 2005 $’000 $’000
212 East Coast Road Singapore 428911
2-storey shophouse used as branch premises
Freehold
1,129
1,172
203 Henderson Road #02-07 Singapore 159546 Total freehold properties
Warehouse
Freehold
287
301
1,416
1,473
Blk 202 Bedok North Street 1 #01-471/473/475/477 Singapore 460202
4 units of office space used as branch premises
86-year lease commencing July 1992
1,439
1,495
Blk 101 Towner Road #01-230 Singapore 322101
1st storey used as branch premises and 2nd storey used as staff quarters
89-year lease commencing January 1993
432
448
Blk 711 Ang Mo Kio Avenue 8 #01-3501D Singapore 560711 Total leasehold properties
1 unit of office space used as branch premises
86-year lease commencing July 1993
351
363
2,222 3,638
2,306 3,779
4. Interests in Subsidiaries Company
Unquoted shares, at cost
2006 $’000
2005 $’000
125
125
Details of the subsidiaries are as follows: Name of Subsidiary
Principal activities
Place of incorporation and business
Effective equity held by the Group 2006 2005 % %
Cost of investment 2006 2005 $’000 $’000
*
SBS Nominees Private Limited
Provision of nominee services
Singapore
100
100
25
25
*
SBS Realty Services (Private) Limited
Provision of estate agency and management services
Singapore
100
100
100
100
125
125
* Audited by KPMG Singapore.
33
Notes to the Financial Statements
(cont’d)
5. Loans and Advances Note
Mortgage loans Hire purchase and leasing receivables Other secured loans
6
Unearned interest Suspended interest Allowance for loan losses: At 30 June, as previously reported Effect of adopting FRS 39 At 1 July, restated Allowance made/(reversed) during the year (net) Amount written off At 30 June
17
These comprise balances: Due within 12 months Due after 12 months
Group and Company 2006 2005 $’000 $’000 283,034 35,361 201,710 520,105 (4,309) (19,022) 496,774
222,269 48,348 154,608 425,225 (3,783) (18,546) 402,896
12,088 241 12,329 1,811 (1,825) 12,315 484,459
23,554 23,554 (10,207) (1,259) 12,088 390,808
212,977 271,482 484,459
211,128 179,680 390,808
As at 30 June 2006, secured loans to directors of the Company amounted to $375,052 (2005: $493,000). Allowances for collective impairment are made in line with finance company regulatory requirements and directives issued by the Monetary Authority of Singapore. The adoption of FRS 39 has also resulted in an opening balance adjustment of $241,000 to the allowance for collective impairment (Note 26).
6. Hire Purchase and Leasing Receivables Gross $’000 2006 Within 1 year After 1 year but within 5 years After 5 years 2005 Within 1 year After 1 year but within 5 years After 5 years
34
Group and Company Interest Principal $’000 $’000
14,511 19,025 1,825 35,361
1,001 1,619 234 2,854
13,510 17,406 1,591 32,507
18,325 27,935 2,088 48,348
1,757 1,665 353 3,775
16,568 26,270 1,735 44,573
7. Deferred Tax Movements in deferred tax assets and liabilities during the year are as follows:
Group and Company Deferred tax liabilities/(assets) Property, plant and equipment Impairment losses of quoted equity investments Loans and advances Staff retirement gratuities Investments Total
At 1 July 2005 $’000
321 (7) (3,603) (207) (3,496)
Effect of adoption of FRS 39 $’000
(48) 56 8
(Credited)/Charged to Profit and loss account (note 18) $’000
23 7
At Equity 30 June 2006 $’000 $’000
-
(320) (3) (293)
(142) (142)
344 (3,971) (210) (86) (3,923)
8. Investments Group and Company 2006 2005 $’000 $’000 Singapore Government Securities, available-for-sale Quoted equity securities, available-for-sale
Singapore Government Securities, at cost Quoted equity securities, at cost Impairment losses: At 30 June Effect of adopting FRS 39 At 1 July, restated Allowance made during the year At 30 June Market value: Singapore Government Securities Quoted equity securities
116,724 1,312 118,036
-
-
40,746 2,225 42,971
92 (92) 118,036
35 35 57 92 42,879
116,724 1,312 118,036
41,120 2,133 43,253
With the adoption of FRS 39, available-for-sale investments are stated at fair values. The differences between the fair values and the carrying amounts of these investments at 1 July 2005 have been taken to the opening balance of fair value reserve at that date.
35
Notes to the Financial Statements
(cont’d)
9. Other Receivables, Deposits and Prepayments Group
Interest receivable Deposits Prepayments Other receivables
2006 $’000
2005 $’000
Company 2006 2005 $’000 $’000
1,062 291 286 4,144 5,783
232 268 251 3,212 3,963
1,062 291 286 4,134 5,773
232 267 251 3,210 3,960
Other receivables relate to repayments made by customers using electronic payment and not yet received by the Company at the balance sheet dates.
10. Cash and Cash Equivalents Group
Cash at banks and in hand Fixed deposits with banks
2006 $’000
2005 $’000
1,317 97,505 98,822
1,879 89,286 91,165
Company 2006 2005 $’000 $’000 996 97,505 98,501
1,589 89,286 90,875
11. Share Capital
Company Issued and fully paid: Ordinary shares Transfer from share premium account upon implementation of the Companies (Amendments) Act 2005
2006 Number of ordinary shares (’000) $’000
2005 Number of ordinary shares (’000) $’000
54,163 -
54,163 7,657
54,163 -
54,163 -
54,163
61,820
54,163
54,163
The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at meetings of the Company. All shares rank equally with regard to the Company’s residual assets. On the date of commencement of the Companies (Amendment) Act 2005 on 30 January 2006: (a)
The concept of authorised share capital is abolished;
(b) Shares of the Company have no par value; and (c)
36
Amount standing to the credit of the Company’s share premium account becomes part of the Company’s share capital.
12. Reserves Group
Share premium Capital reserve Statutory reserve Fair value reserve Revenue reserve: General Accumulated profits
Company 2006 2005 $’000 $’000
2006 $’000
2005 $’000
1,353 39,269 (342)
7,657 1,353 38,101 -
1,353 39,269 (342)
7,657 1,353 38,101 -
730 30,312 71,322
730 30,774 78,615
730 29,195 70,205
730 29,696 77,537
Prior to the date of commencement of the Companies (Amendment) Act 2005 on 30 January 2006, the application of the share premium account was governed by Section 69 of the Companies Act, Chapter 50. The capital reserve comprises gain on disposal of property, plant and equipment. The statutory reserve is maintained in compliance with Section 18 of the Finance Companies Act, Chapter 108. The fair value reserve includes the cumulative net change in the fair value of available-for-sale investments until the investment is derecognised. Details of movements in reserves are shown in the consolidated statement in equity and statement of changes in equity.
13. Trade and Other Payables Group
Accrued interest payable Accrued operating expenses Amount due to SPRING Singapore (unsecured) Deposits for safe deposit boxes and rental deposits Factoring current accounts Unclaimed dividends Amount owing to subsidiaries (trade) Others
These comprise balances: Due within 12 months Due after 12 months
Company 2006 2005 $’000 $’000
2006 $’000
2005 $’000
4,112 1,237 32,309 213 608 480 2,238 41,197
1,890 1,152 27,878 235 833 464 533 32,985
4,112 1,235 32,309 212 608 258 407 2,237 41,378
1,890 1,147 27,878 235 833 245 407 533 33,168
11,367 29,830 41,197
7,238 25,747 32,985
11,548 29,830 41,378
7,421 25,747 33,168
Amount due to SPRING Singapore represents unsecured advances from the Standards, Productivity and Innovations Board (“SPRING Singapore”) under the Local Enterprise Finance Scheme (“LEFS”) and Extended Local Enterprise Finance Scheme (“ELEFS”) to finance LEFS and ELEFS borrowers. The interest rates and repayment periods vary in accordance with the type, purpose and security of the facilities granted under the above schemes. Credit risks are shared with SPRING Singapore.
37
Notes to the Financial Statements
(cont’d)
14. Staff Retirement Gratuities Group and Company 2006 2005 $’000 $’000 At 1 July Provision made during the year At 30 June
1,037 16 1,053
999 38 1,037
15. Deposits and Savings Accounts of Customers These include deposits placed by subsidiaries amounting to $739,000 (2005: $735,000) for the Company, accepted in the ordinary course of business.
16. Profit from Operations Before Allowances The following items have been included in arriving at profit from operations before allowances: Group
Interest income and hiring charges Interest income on: - loans and advances to other persons - bank deposits - Singapore Government Securities Interest expense Interest expense on deposits Dividend income Quoted equity investments Other operating income Gain on sale of investments Others Staff costs Salaries and other benefits Contributions to defined contribution plans Other operating expenses Non-audit fees paid to auditors of the Company Property, plant and equipment written off Operating lease expense paid to: - companies in which directors own a controlling interest - other persons Others Remuneration of key management personnel included in: - staff costs - other operating expenses
2006 $’000
2005 $’000
20,410 1,682 1,412 23,504
16,465 833 587 17,885
8,647
3,668
100
50
322 768 1,090
96 620 716
4,518 410 4,928
3,884 388 4,272
5 1
10 1
647 91 2,095 2,839
568 78 1,821 2,478
1,442 250
1,161 161
Directors’ remuneration Directors’ remuneration included in key management personnel compensation amounted to $1,182,471 (2005: $1,004,000). 38
17. Allowances for Loan Losses and Impairment Losses of Investments Group
Allowance made/(reversed) for loan losses Impairment losses made for investments
Note
2006 $’000
2005 $’000
5 8
1,811 1,811
(10,207) 57 (10,150)
18. Income Taxes Group 2006 $’000 Current tax expense Current year Overprovided in prior years Deferred tax expense Movements in temporary differences Underprovided in prior years
2005 $’000
1,638 (246)
2,773 -
1,392
2,773
(293) (293)
Income tax expense Reconciliation of effective tax rate Net profit before tax Income tax using Singapore tax rate at 20% Tax exempt revenue Non-deductible expenses Overprovided in prior years
(725) 33 (692)
1,099
2,081
5,806
17,709
1,161 (11) 195 (246) 1,099
3,542 (1,613) 119 33 2,081
19. Earnings Per Share - The Group The basic and diluted earnings per share are calculated based on profit after taxation of $4,707,000 (2005: $15,628,000) and the number of ordinary shares in issue during the year of 54,163,397 (2005: 54,163,397).
20. Related Party Transactions For the purposes of these financial statements, parties are considered to be related to the Group if the Group has the ability, directly or indirectly, to control the party or exercise significant influence over the party in making financial and operating decisions, or vice versa, or where the Group and the party are subject to common control or common significant influence. Related parties may be individuals or other entities. In addition to the related party information disclosed elsewhere in the financial statements, the following related party transaction was carried out in the normal course of business on terms agreed between the parties during the financial year: Group
Interest on deposits paid to subsidiaries
2006 $’000
2005 $’000
-
-
Company 2006 2005 $’000 $’000 3
3
39
Notes to the Financial Statements
(cont’d)
21. Dividend After the balance sheet date, the Directors proposed the following dividend which has not been provided for in the financial statements.
Final dividend proposed of 6 cents (2005: 6 cents) per share less tax at 20% (2005: 20%) Special dividend: Nil (2005: 3 cents per share less tax at 20%)
2006 $’000
2005 $’000
2,600
2,600
-
1,300
2,600
3,900
22. Contingent Liabilities As at the balance sheet date, letters of credit and guarantees issued on behalf of customers amounted to $1,999,000 (2005: $15,991,000). The contingent liabilities are not secured on any of the Group’s assets.
23. Commitments Group and Company 2006 2005 $’000 $’000 Capital Commitments Capital commitments contracted but not provided for
-
471
Operating Lease Commitments Commitments for future minimum lease payments under non-cancellable operating leases are as follows: Group and Company 2006 2005 $’000 $’000 Payable: Within 1 year After 1 year but within 5 years
40
749 1,452 2,201
524 331 855
24. Financial Instruments Financial risk management objectives and policies The Group has put in place policies and procedural guidelines for its business operations. The Management meets regularly to help identify, evaluate and monitor financial risks on a continuous basis. In addition, internal audits are conducted on an on-going basis to confirm that these policies and procedures are functioning effectively and any deviations are duly highlighted for special attention. The inherent financial risks in the normal course of the Group’s business comprise principally of credit risk, interest rate risk and liquidity risk. Credit risk The Group has established policies and guidelines to evaluate, monitor and control credit risk on a continuous basis. All loans are subject to the stringent process of credit evaluation and these loans are secured by collaterals. Credit reviews are conducted periodically to monitor the health of these accounts and to detect early signs of weaknesses and deviations. At the balance sheet date, there is no significant concentration of credit risk. The maximum exposure to credit risk is represented by the carrying amount of each financial asset in the balance sheets. Interest rate risk The Group’s inherent exposure to market risk arises from differences in the repricing of its loans and deposits portfolios. The Group manages the risk through the diversification of its loans and deposits portfolios to avoid concentration in any one particular area of business. A tracking system is in place to closely monitor the movements of interest rates and to respond to changes on a timely basis. Liquidity risk The Group’s loans are currently funded from shareholders’ funds and deposits liabilities while there are other avenues available including the raising of funds by issuing bonds or accessing short-term funds from the inter-bank market. The objective of liquidity management is to ensure that there are sufficient funds to meet contractual and regulatory financial obligations as they become due. Effective interest rates and repricing analysis In respect of interest-earning financial assets and interest-bearing financial liabilities, the following table indicates their effective interest rates at balance sheet date and the periods in which they mature or reprice.
Effective interest rate %
0 to 3 months $’000
Group 2006 Financial Assets Singapore Government Securities 1.5 - 4.0 Loans and advances 2.0 - 7.8 Cash and cash equivalents 1.5 - 3.5
27,306 378,955 89,505 495,766
Financial Liabilities Deposits and savings accounts of customers
177,465
0.5 - 3.4
3 to 12 months $’000
Over Non-interest 1 year bearing $’000 $’000
12,363 77,055 3,426 58,772 8,000 - 23,789 135,827
350,540
20,243
Total $’000
- 55,621 1,317 56,938
116,724 496,774 98,822 712,320
1,579
549,827
(cont’d next page) 41
Notes to the Financial Statements Effective interest rate %
0 to 3 months $’000
(cont’d)
3 to 12 months $’000
Over 1 year $’000
Non-interest bearing $’000
Total $’000
2005 Financial Assets Singapore Government Securities Loans and advances Cash and cash equivalents
1.5 - 4.4 3.1 - 7.0 1.7 - 2.0
29,373 332,130 89,285 450,788
2,977 2,238 5,215
8,396 68,528 76,924
1,880 1,880
40,746 402,896 91,165 534,807
Financial Liabilities Deposits and savings accounts of customers
0.3 - 1.7
137,945
202,136
26,334
8,599
375,014
Company 2006 Financial Assets Singapore Government Securities Loans and advances Cash and cash equivalents
1.5 - 4.0 2.0 - 7.8 1.5 - 3.5
27,306 378,955 89,505 495,766
12,363 3,426 8,000 23,789
77,055 58,772 135,827
55,621 996 56,617
116,724 496,774 98,501 711,999
Financial Liabilities Deposits and savings accounts of customers
0.5 - 3.4
178,204
350,540
20,243
1,579
550,566
Company 2005 Financial Assets Singapore Government Securities Loans and advances Cash and cash equivalents
1.5 - 4.4 3.1 - 7.0 1.7 - 2.0
29,373 332,130 89,285 450,788
2,977 2,238 5,215
8,396 68,528 76,924
1,590 1,590
40,746 402,896 90,875 534,517
Financial Liabilities Deposits and savings accounts of customers
0.3 - 1.7
138,681
202,136
26,334
8,599
375,750
42
25. Fair Values of Financial Instruments In assessing the fair value of financial instruments, the Group uses a variety of methods and make assumptions that are based on market conditions existing at each balance sheet date. Although the directors have employed their best judgement in the estimation of fair values, there is inevitably a significant element of subjectivity involved in the calculations. Therefore, the fair value estimates presented below are not necessarily indicative of the amounts the Group could have realised in a sales transaction at balance sheet date. The methodologies and assumptions used depend on the terms and risk characteristics of the various instruments and include the following: Liquid Assets and Liabilities The carrying values of statutory deposit with the Monetary Authority of Singapore, other receivables and deposits, cash and cash equivalents, trade and other payables approximate their fair values as these balances are short-term in nature or are receivable or payable on demand. Investment Securities The fair values of investment securities are based on quoted market prices at balance sheet date. Loans and Advances The fair value of loans and advances that mature or reprice within six months of balance sheet date is assumed to equate to the carrying value. The fair value of all other loans and advances was calculated using discounted cash flow models based on the maturity of the loans. The discount rates applied in this exercise were based on the current interest rates of similar types of loans. Deposits and Savings Accounts of Customers The fair value of deposits and savings accounts of customers which mature or reprice within six months is estimated to be the carrying value at balance sheet date. The fair value of other term deposits was calculated using discounted cash flow models, based on the deposit type and its related maturity. The discount rates applied in this exercise were based on the current interest rates of similar types of deposits. Summary The aggregate net fair values of recognised financial assets and financial liabilities which are not carried at fair value in the balance sheet are represented in the following table: 2006 Carrying Fair amount value $’000 $’000 Group Financial Assets Loans and advances Investments
Financial Liabilities Deposits and savings accounts of customers Company Financial Assets Loans and advances Investments
Financial Liabilities Deposits and savings accounts of customers
2005 Carrying Fair amount value $’000 $’000
484,459 118,036 602,495
482,375 118,036 600,411
390,808 42,879 433,687
391,946 43,253 435,199
549,827
553,504
375,014
377,121
484,459 118,036 602,495
482,375 118,036 600,411
390,808 42,879 433,687
391,946 43,253 435,199
550,566
554,243
375,750
377,857
43
Notes to the Financial Statements
(cont’d)
26. Changes in Accounting Policies The accounting policies set out in note 2 have been applied in preparing the financial statements for the year ended 30 June 2006. The changes in accounting policies arising from the adoption of FRS 39 Financial Instruments: Recognition and Measurement are summarised below:The adoption of FRS 39 resulted in the Group measuring and recognising its investments and available-for-sale at fair values. Previously, investments were stated at cost less allowance for diminution (Singapore Government Securities) and lower of cost or market value (quoted equity investments). This change has been accounted for by increasing the opening balance of fair value reserve and accumulated profits of the Group and Company at 1 July 2005 by $226,000 and $92,000 respectively. Comparatives have not been restated. With the implementation of FRS 39, the assessment of allowances for collective impairment to be maintained for loans, advances and receivables has been revised. The opening balance for collective impairment as at 1 July 2005 has been increased by $241,000. This change has been accounted for net consequential tax adjustments by decreasing the opening balance at 1 July 2005 of accumulated profits of the Group and the Company by $193,000.
27. Accounting Estimates and Judgement Impairment losses on loans, advances and receivables The Group reviews the loan portfolio to assess impairment at least on a quarterly basis. To determine whether an impairment loss should be recorded in the profit and loss account, the Group makes judgements as to whether there is any observable data indicating a measurable decrease in the estimated future cash flows of the loan portfolio. The evidence may include observable data indicating adverse changes in the payment status of certain groups of borrowers or local economic conditions that correlate with defaults in the loan portfolio. Management uses estimates based on historical loss experience for loans, advances and receivables with credit risk characteristics and objective evidence of impairment similar to those in the loan portfolio when scheduling future cash flows. The methodology and assumptions used for estimating the amount and timing of cash flows are reviewed regularly to reduce any differences between estimates and actual loss experience.
28. Segment Reporting Segment reporting is not required for the Group and the Company as majority of the income is from the same business segment, which is credit and lending. All activities are carried out in the Republic of Singapore.
29. FRS Not Yet Adopted Certain new accounting standards and interpretation have been issued and are mandatory for the financial year beginning on 1 July 2006. The Group has assessed those standards and interpretations issued. The initial application of these standards and interpretations is not expected to have any material impact on the Group’s financial statements.
44
Shareholdings Statistics (as at 7 September 2006) Issued Share Capital Number of Shares Class of Shares Voting Rights
-
$61,820,127 54,163,397 Ordinary Shares One vote per share
Breakdown of shareholdings by range as at 7 September 2006
Size of Shareholdings 1 to 999 1,000 to 10,000 10,001 to 1,000,000 1,000,001 AND ABOVE TOTAL
No. of Shareholders 333 1,633 352 7 2,325
% 14.32 70.24 15.14 0.30 100.00
No. of Shares 133,036 6,152,319 14,177,814 33,700,228 54,163,397
% 0.24 11.36 26.18 62.22 100.00
Twenty largest Shareholders as at 7 September 2006 (As shown in the Register of Members) No. Name of Shareholders 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
See Hoy Chan (1988) Private Limited Teo Hang Sam Realty Sdn Berhad United Overseas Bank Nominees Pte Ltd Morph Investments Ltd See Hoy Chan International Pte Ltd DBS Nominees Pte Ltd Teo Soo Meng Peh Chin Chiong Lee Chee Khuen OCBC Nominees Singapore Pte Ltd Citibank Nominees Singapore Pte Ltd Ou Yang Yan Te Malayan International Corporation Private Limited Chuah Bee Jiat Ang Chian Poh Hong Leong Finance Nominees Pte Ltd Lee Khing Yoong Vincent Tan Soon Lin Overseas Union Bank Nominees Pte Ltd Oh Hoon Jiun TOTAL
No. of Shares 24,814,000 2,793,000 1,390,633 1,279,000 1,235,000 1,142,845 1,045,750 582,800 530,300 518,675 412,625 253,496 250,000 245,000 240,000 233,000 223,500 218,000 184,499 135,000 37,727,123
% 45.81 5.16 2.57 2.36 2.28 2.11 1.93 1.08 0.98 0.96 0.76 0.47 0.46 0.45 0.44 0.43 0.41 0.40 0.34 0.25 69.65
On the basis of the information available to the Company, approximately 48.67% of the issued ordinary shares were held by the public and therefore Rule 723 of the Listing Manual issued by the Singapore Exchange Securities Trading Limited has been complied with, which requires at least 10% of a listed issuer’s equity securities to be held by the public.
45
Shareholdings Statistics (as at 7 September 2006) Substantial Shareholders as at 7 September 2006 (As shown in the Company’s Register of Substantial Shareholders) Name
See Hoy Chan (1988) Pte Ltd Teo Soo Chuan Pte Ltd Teo Hang Sam Realty Sdn Bhd Teo Soo Chuan Teo Chiang Long
1 2
3
46
Number of Shares Direct Interest
%
Deemed Interest
24,814,000 35,625 2,793,000 47,500 1,875
45.813 0.066 5.157 0.088 0.003
24,814,000 27,690,125 27,644,500
%
1 2 3
45.813 51.123 51.039
Teo Soo Chuan Pte Ltd is deemed to be interested in the 24,814,000 Shares held by See Hoy Chan (1988) Pte Ltd Of the 27,690,125 Shares in which Teo Soo Chuan is deemed to be interested: (a) 24,814,000 Shares are held by See Hoy Chan (1988) Pte Ltd; (b) 2,793,000 Shares are held by Teo Hang Sam Realty Sdn Bhd; (c) 35,625 Shares are held by Teo Soo Chuan Pte Ltd; and (d) 47,500 Shares are held by his spouse, Goh Siok Cheng Of the 27,644,500 Shares in which Teo Chiang Long is deemed to be interested: (a) 24,814,000 Shares are held by See Hoy Chan (1988) Pte Ltd; (b) 2,793,000 Shares are held by Teo Hang Sam Realty Sdn Bhd; (c) 35,625 Shares are held by Teo Soo Chuan Pte Ltd; and (d) 1,875 Shares are held by his spouse, Lo Pia Leng
Notice of Annual General Meeting NOTICE IS HEREBY GIVEN THAT THE THIRTY-SEVENTH ANNUAL GENERAL MEETING of the Company will be held at 391A Orchard Road, Tower A, #26-00, Ngee Ann City, Singapore 238873, on Friday, 27 October 2006 at 11.00 a.m. for the purpose of transacting the following business:-
As Ordinary Business 1. To receive and adopt the Audited Accounts for the financial year ended 30 June 2006 and the Directors’ Report and the Auditors’ Report thereon. 2. To declare a first and final dividend of 6 cents per share less 20% tax for the financial year ended 30 June 2006. 3. To approve Directors’ fees of $250,000/-. [2005: $161,000/-] 4. To re-appoint the following Directors: (i) Mr Ong Pang Boon; and (ii) Mr Phua Bah Lee, each of whom retires under Section 153(6) of the Companies Act, Chapter 50, each to hold office from the date of this Annual General Meeting until the next Annual General Meeting of the Company. Mr. Ong Pang Boon, when re-appointed, would be considered as an independent Director and is the Chairman of the Audit and Nominating Committees and a member of the Remuneration Committee. Mr. Phua Bah Lee, when re-appointed, would be considered as an independent Director and is a member of the Audit, Nominating and Remuneration Committees. 5. To re-elect : (i) Mr Teo Chiang Long, a Director who will retire by rotation in accordance with Article 85 of the Articles of Association of the Company and who, being eligible, will offer himself for re-election. (ii) Mr Teoh Eng Hong, a Director who will retire by rotation in accordance with Article 85 of the Articles of Association of the Company and who, being eligible, will offer himself for re-election. Mr Teoh Eng Hong, when re-elected, would be considered as an independent Director and is the Chairman of the Remuneration Committee and a member of the Audit, Nominating and Executive Committees. 6. To re-appoint Messrs KPMG as Auditors of the Company and to authorise the Directors to fix their remuneration. 7. To transact any other business which may properly be transacted at an Annual General Meeting of the Company.
As Special Business 8. To consider and, if thought fit, to pass with or without modifications, the following resolution which will be proposed as an Ordinary Resolution : “That authority be and is hereby given to the Directors of the Company to: (a) (i) issue shares in the capital of the Company (“shares”) whether by way of rights, bonus or otherwise; and or (ii) 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; at any time and upon such terms and conditions and for such purposes and to such persons as the Directors may in their absolute discretion deem fit; and (b) (notwithstanding the authority conferred by this Resolution may have ceased to be in force) issue shares in pursuance of any Instrument made or granted by the Directors while this Resolution was in force, provided that: (1) the aggregate number of shares to be issued pursuant to this Resolution (including shares to be issued in pursuance of Instruments made or granted pursuant to this Resolution) does not exceed 50 per cent of the issued shares in the capital of the Company (as calculated in accordance with sub-paragraph (2) below), of which the aggregate (cont’d next page) 47
Notice of Annual General Meeting
(cont’d)
number of shares to be issued other than on a pro rata basis to shareholders of the Company (including shares to be issued in pursuance of Instruments made or granted pursuant to this Resolution) does not exceed 20 per cent of the issued shares in the capital of the Company (as calculated in accordance with sub-paragraph (2) below);
(subject to such manner of calculation and adjustments as may be prescribed by the Singapore Exchange Securities Trading Limited (“SGX-ST”)) for the purpose of determining the aggregate number of shares that may be issued under sub-paragraph (1) above, the percentage of issued shares shall be based on the number of issued shares in the capital of the Company at the time this Resolution is passed, after adjusting for :
(2)
(i) new shares arising from the conversion or exercise of any convertible securities or share options or vesting of share awards which are outstanding or subsisting at the time this Resolution is passed; and (ii) any subsequent consolidation or subdivision of shares;
(3) in exercising the authority conferred by this Resolution, the Company shall comply with the provisions of the Listing Manual of the SGX-ST for the time being in force (unless such compliance has been waived by the SGX-ST) and the Articles of Association for the time being of the Company; and
(4) (unless revoked or varied by the Company in general meeting) the authority conferred by this Resolution shall continue in force until the conclusion of the next Annual General Meeting of the Company or the date by which the next Annual General Meeting of the Company is required by law to be held, whichever is the earlier. BY ORDER OF THE BOARD Nguy Joo Tian Company Secretary Singapore 5 October 2006
Notice Of Books Closure /Dividend Payment Date NOTICE IS ALSO HEREBY GIVEN that the Share Transfer Books and Register of Members of the Company will be closed on Tuesday, 7 November 2006 for the preparation of dividend warrants. Duly completed transfers received by the Company’s Share Registrar, M & C Services Private Limited, 138 Robinson Road #17-00, The Corporate Office, Singapore 068906, up to 5.00 p.m. on Monday, 6 November 2006 will be registered to determine the shareholders’ entitlement to the dividend. Payment of the dividend, if approved by shareholders at the Annual General Meeting, will be paid on Wednesday, 15 November 2006. BY ORDER OF THE BOARD Nguy Joo Tian Company Secretary Singapore 5 October 2006 Note:- 1. A Shareholder of the Company entitled to attend and vote at the Annual General Meeting is entitled to appoint a proxy to attend and vote in his stead. A proxy need not be a Shareholder of the Company. 2. The instrument appointing a proxy must be lodged at the registered office of the Company at 150 Cecil Street #01-00, Singapore 069543 not less than 48 hours before the time appointed for the Annual General Meeting. Effect of Special Business to be Transacted Ordinary Resolution 8 is to empower the Directors to issue shares in the capital of the Company and to make or grant instruments (such as warrants or debentures) convertible into shares, and to issue shares in pursuance of such instruments, up to a number not exceeding 50 per cent of the issued shares in the capital of the Company with a sub-limit of 20 per cent for issues other than on a pro rata basis to shareholders. For the purpose of determining the aggregate number of shares that may be issued, the percentage of issued shares shall be based on the number of issued shares in the capital of the Company at the time that Ordinary Resolution 8 is passed, after adjusting for (a) new shares arising from the conversion or exercise of any convertible securities or share options or vesting of share awards which are outstanding or subsisting at the time that Ordinary Resolution 8 is passed, and (b) any subsequent consolidation or subdivision of shares. 48
Our Services For more than half a century, Singapura Finance has provided innovative and quality financial services for the everyday man as well as businesses large and small. Since our incorporation in 1950, we grew with Singapore and Singaporeans, and today we are a leading financial institution providing a comprehensive range of financial services. As the island’s oldest financial institution centred around the core values of innovation and service excellence, we are proud of our role in the progress and development of the banking and finance industry in Singapore. Our unswerving mission is to empower our customers with the financial muscle to achieve their dreams, whether in attaining a secure and comfortable family life, or achieving their every business aspiration. Our services are listed below:
Financing Block Discounting
Deposits Local Enterprise Finance Scheme
Savings Accounts
Car
(LEFS) for Small Medium Enterprises
Fixed Deposits
Commercial & Industrial Property
Property Development
Safe Deposit Boxes
Commercial Vehicle
Share
Dealership
Structured Financing customised
Domestic Factoring
to the needs of the customer
Equipment
Ship/Vessel/Pleasure Craft
Housing
Savings and Fixed Deposits placed with Singapura Finance Ltd by or for ‘Insured Depositors’ as defined under the Deposit Insurance Scheme, are insured up to the limits as specified in the Deposit Insurance Act 2005.
Customer Centres City HQ 150 Cecil Street, #01-00 Singapore 069543 Tel: 6880 0633
Ang Mo Kio Blk 711 Ang Mo Kio Ave 8, #01-3501D Singapore 560711 Tel: 6458 4222
49
Our Services
(cont’d)
Bedok Blk 202 Bedok North St 1, #01-471 Singapore 460202 Tel: 6445 8011
Bugis 108 Middle Road, #05-01 Bright Chambers Singapore 188967 Tel: 6292 1459
East Coast 212 East Coast Road Singapore 428911 Tel: 6348 8262
Jurong West Blk 501 Jurong West St 51, #01-273 Singapore 640501 Tel: 6467 1918
Serangoon Blk 101 Towner Road, #01-230 Singapore 322101 Tel: 6299 8855
50
Proxy Form IMPORTANT: 1. For investors who have used their CPF moneys to buy shares in the capital of Singapura Finance Ltd, this Annual Report is forwarded to them at the request of their CPF Approved Nominees and is sent solely FOR INFORMATION ONLY. 2. This Proxy Form is not valid for use by CPF investors and shall be ineffective for all intents and purposes if used or purported to be used by them. 3. CPF investors who wish to attend the Annual General Meeting as an observer must submit their requests through their CPF Approved Nominees in accordance with their instructions within the timeframe specified. 4. CPF investors who wish to vote must submit their voting instructions to their CPF Approved Nominees to enable them to vote on their behalf.
(Incorporated in the Republic of Singapore) Co. Regn. No. 196900340N
*l/We
(Name)
of
(Address)
being a member/members of Singapura Finance Ltd (the “Company”) hereby appoint
Name
Address
Proportion of Shareholdings (%)
NRIC/Passport No.
and/or (delete as appropriate)
as my/our proxy/proxies to attend and to vote for me/us on my/our behalf and, if necessary, to demand a poll, at the Thirty-Seventh Annual General Meeting of the Company to be held on 27 October 2006 at 391A Orchard Road, Tower A, #26-00, Ngee Ann City, Singapore 238873, at 11.00 a.m. and at any adjournment thereof. (Please indicate with an “X” in the spaces provided whether you wish your vote(s) to be cast for or against the Ordinary Resolutions as set out in the Notice of Annual General Meeting. In the absence of specific directions, the proxy/proxies will vote or abstain as he/they may think fit, as he/they will on any other matter arising at the Annual General Meeting.) No. Resolution 1. 2. 3. 4.
5.
6. 7. 8.
For
Against
Adoption of Directors’ and Auditors’ Reports, Statement by Directors and Accounts Declaration of Dividend Approval of Directors’ Fees Re-appointment of Directors under Section 153(6) of the Companies Act, Chapter 50: (i) Mr Ong Pang Boon (ii) Mr Phua Bah Lee Re-election of Directors retiring under Article 85 of the Articles of Association of the Company: (i) Mr Teo Chiang Long (ii) Mr Teoh Eng Hong Re-appointment of Messrs KPMG as Auditors and to authorise the Directors to fix their remuneration. Any Other Business Approval of the proposed share issue mandate Dated this
day of
2006.
Signature(s) of Member(s) or Common Seal
Total number of Ordinary Shares held
IMPORTANT: PLEASE READ NOTES ON THE REVERSE
51
Notes: 1. Please insert the total number of Shares you hold. If you have Shares entered against your name in the Depository Register (as defined in Section 130A of the Companies Act, Chapter 50 of Singapore), you should insert that number of Shares. If you have Shares registered in your name in the Register of Shareholders of our Company, you should insert that number of Shares. If you have Shares entered against your name in the Depository Register and Shares registered in your name in the Register of Shareholders, you should insert the aggregate number of Shares entered against your name in the Depository Register and registered in your name in the Register of Shareholders. If no number is inserted, the instrument appointing a proxy or proxies shall be deemed to relate to all the Shares in the capital of the Company held by you. 2. A Shareholder of the Company entitled to attend and vote at a meeting of the Company is entitled to appoint one or two proxies to attend and vote instead of him. A proxy need not be a Shareholder of the Company. 3. Where a Shareholder appoints two proxies, the appointments shall be invalid unless he specifies the proportion of his shareholding (expressed as a percentage of the whole) to be represented by each proxy. 4. The instrument appointing a proxy or proxies must be lodged at the registered office of the Company at 150 Cecil Street #01-00, Singapore 069543 not less than 48 hours before the time appointed for the Annual General Meeting. 5. The instrument appointing a proxy or proxies must be under the hand of the appointor or of his attorney duly authorised in writing. Where the instrument appointing a proxy or proxies is executed by a corporation, it must be executed either under its seal or under the hand of an officer or attorney duly authorised. 6. A corporation which is a Shareholder may authorise by resolution of its directors or other governing body such person as it thinks fit to act as its representative at the Annual General Meeting, in accordance with Section 179 of the Companies Act, Chapter 50 of Singapore. 7. The Company shall be entitled to reject the instrument appointing a proxy or proxies if it is incomplete, improperly completed or illegible or where the true intentions of the appointor are not ascertainable from the instructions of the appointor specified in the instrument appointing a proxy or proxies. In addition, in the case of Shares entered in the Depository Register, the Company may reject any instrument appointing a proxy or proxies lodged if the shareholder, being the appointor, is not shown to have Shares entered against his name in the Depository Register as at 48 hours before the time appointed for holding the Annual General Meeting, as certified by The Central Depository (Pte) Limited to the Company.
Affix Postage Stamp
The Company Secretary Singapura Finance Ltd 150 Cecil Street #01-00 Singapore 069543
52
The Singapura Finance Brand Our brand is built on the characteristics of ‘optimism, inspiration and confidence’. As an expression of these aspirations, our products and services cater to the everyday man. We equip our customers with product literature and our relationship managers will assist them in making an informed decision. We understand their needs and package practical deals to suit their lifestyle and fulfill their dreams. We will continue to engage our customers’ needs in bringing their every vision into reality.
Our Chinese Name Our Chinese name, Fu Ya, stands for prosperity and elegance. It links our roots to our future, reflecting the endeavours we have.
Our Logo Our vibrant colours of purple and orange reflect the infusion of new life and vitality into the existing business.
HEAD OFFICE: 150 CECIL STREET, #01-00, SINGAPORE 069543 Tel: 6880 0633 www.singapurafinance.com.sg Singapura Finance Ltd and its Subsidiaries Registration Number : 196900340N
ii
AP NO: 0453. CO. REGN. NO.: 196900340N.
The Phoenix symbolises the link to our history and our desire to retain many of the qualities that have served us well over the years. The Phoenix, being the emperor of all birds, signifies our ambition to become the leading financial institution of choice for Singaporeans. A bird that soars towards ever greater heights of success, it is a symbol of Singapura Finance’s determination and eagerness to seek and tap unexplored avenues of growth.
