annual report 2006 - national university of...

beyond b o u n d a r i e s

ANNUAL REPORT 2006

No. 25 Playfair Road, Lian Beng Building, Singapore 367990 Tel - 6283 1468 Fax - 6280 9360 Email - [email protected]

www.lianbeng.com.sg

Company s Registration No: 199802527Z

LIA

N B

EN

G G

RO

UP

LT

D A

NN

UA

L R

EP

OR

T 2

00

6

C O N T E N T S

Mission Statement 01 • Chairman s Statement 02 • Board of Directors 06 • Operational Review 08Corporate Information 14 • Group Structure 15 • Key Executive Officers 16 • Corporate Governance 17Financial Contents 23 • Statistics of Shareholdings 75 • Notice of Annual General Meeting 76 • Proxy Form 79

mission s t a t e m e n t

TO ACHIEVEthe best services and products to all our customers

at the most competitive cost and quality management

chairman s s t a t e m e n t

02 LIAN BENG GROUP LTD | ANNUAL REPORT 2006

Dear Shareholders

We are pleased to present our Annual Report for the Financial Year ended 31May 2006 ( FY06 ).

Our Group s revenue for FY06 was S$189.4 million, an increase of S$40.9 millionor 27.6% from 31 May 2005 ( FY05 ). The construction division continued tobe the key driver of revenue with 84.6% of contribution to the Group s revenue.The remaining revenue came from overburden removal works, engineering andleasing, and the property development divisions. The Group s pre-tax profit forFY06 was S$3.1 million, an increase from S$2.4 million in FY05. ApproximatelyS$2.9 million of the profit before tax was attributed to the construction,engineering and leasing, property development and investment holding divisions,and S$0.2 million of the Group s profit before tax was attributed to the overburdenremoval project in Indonesia. The net profit attributable to shareholders increasedfrom S$1.5 million in FY05 to S$1.8 million in FY06. Earnings per share rosefrom 0.32 cent in FY05 to 0.40 cent in FY06.

In April 2006, we were awarded a US$17.4 million contract for the Design andBuild of 600 single-storey housing for the tsunami-affected victims in the Republicof Maldives through our wholly-owned subsidiary, Lian Beng Construction (1988)Pte Ltd ( LBC ). This is the first such housing project to be awarded to aSingapore-listed construction company. This project will not have an impact onthe earnings and net tangible assets of the Group for FY06.

03LIAN BENG GROUP LTD | ANNUAL REPORT 2006

According to the Ministry of Trade and Industry ( MTI ), overall Gross DomesticProduct ( GDP ) for Q2 2006 rose by 8.1% as compared to the same period in2005 and the Q2 2006 GDP for construction sector rose by 0.2% as comparedto a 0.8% decline in Q1 2006 and a 1.1% decline in Q2 2005 (Information Source:MTI s website dated 10 August 2006). The Building and Construction Authority( BCA ) forecasts that for 2006, the total construction demand for Singaporewill range between S$12.0 billion and S$13.5 billion (Information Source: BCAwebsite, 27 January 2006). Although the construction industry shows positivesigns, the domestic market remains competitive and limited. While we continueto tender actively for public and private sector projects in the domestic market,we remain receptive towards participating selectively in regional tenders, to buildon our overseas capabilities and experience.

With our diversification and regionalisation strategies, the Group will continue toseize opportunities in the regional markets. As progress is made on our overburdenremoval project in East Kalimantan, we are constantly on the lookout for furtheroverseas opportunities in the energy related sector, to diversify and venture intoregional markets where suitable opportunities present themselves.

I am pleased to announce that in light of the Group s performance in FY06, theBoard has recommended a net dividend of 0.22 cents per share for FY06. Theproposed dividend, if approved at the Company s Annual General Meeting to beheld on 26 September 2006, will be paid on 12 October 2006.

Finally, on behalf of the Board, I would like to thank the Management and staffof the Group for their hard work and immense contributions during the past year.I would also like to thank all our customers, suppliers, business partners andshareholders for their unwavering support and look forward to their continuedsupport in the future.

ONG PANG AIK PBMChairman and Managing Director

With our diversification andregionalisation strategies, the Group will continue to seize opportunities in the regional markets.


maldives d e v e l o p m e n t

MS ONG LAY HUAN is an Executive Director of the Company and the Contracts Manager ofthe Group. She joined the Group in 1991 and has more than ten years of experience in theconstruction industry. Ms Ong was first appointed as an Executive Director of the Board on 20March 1999 and was re-elected on 23 September 2005. She oversees the budgeting and costingof the Group s projects, manages the Group s Contracts Department and is also involved in alltenders submitted by the Group.

She holds a Diploma in Quantity Surveying from the Singapore Polytechnic and is currently amember of the Singapore Institute of Directors.

MS ONG LAY KOON is an Executive Director of the Company and the Resource Manager of theGroup. She joined the Group in 1992 and was first appointed as an Executive Director of theBoard on 20 March 1999 and re-elected on 24 September 2004. Ms Ong is presently involvedin overseeing the management of Group-wide human resources and she is also involved in theGroup s accounting functions.

She holds a Diploma in Civil Engineering from the Singapore Polytechnic and is a member of theSingapore Institute of Directors.

MR ONG PANG AIK PBM the Chairman and Managing Director of the Company, is credited forexpanding the Group s business from that of a sub-contractor to a corporation with the statusof an A1 graded main contractor registered with the Building and Construction Authority (BCA).He first joined the Group in 1978 upon completing his studies and has more than 25 years ofexperience in the construction industry. He was appointed as the Chairman of the Board on 5March 2003 and as the Board Chairman, he oversees the management, business developmentand overall operations of the Group.

Apart from his work, Mr Ong also participates actively in community work. He serves as agrassroots leader in the Marine Parade GRC - Braddell Heights CCMC and as the Chairman ofthe Aljunied-Hougang 6-Miles Business Sub-committee. He is also a member of the PAP CommunityFoundation Braddell Heights Executive Committee, the Braddell Heights Committee Club BuildingFund, the Braddell Heights Centre Management Committee and the Braddell Heights CommunityCentre Management Committee Harmonica Group. In addition, he also serves as a Patron andthe Vice-chairman of Xinghua Primary School Advisory Committee and a Patron of the BraddellHeights Constituency Sports Club.

In recognition of his contributions to the community, Mr Ong was awarded the Public ServiceMedal (Pingkat Bakti Musyarakat — PBM) in 2001.


board o f d i r e c t o r s

MR TAN SWEE HONG is an Executive Director of the Company and the General Manager of theGroup. Mr Tan began his career with the Group in 1996 and has more than 22 years of experiencein the construction industry. He was first appointed as an Executive Director of the Board on 1April 1999 and was re-elected on 23 September 2005.

As the General Manager, he oversees the management of all technical matters relating to theGroup s construction projects and is also involved in all tenders submitted by the Group. Prior tojoining the Group, Mr Tan was the Head of the Construction Supervision Unit, under the StructuralEngineering Department of HDB.

Mr Tan holds a Bachelor s degree in Civil Engineering from the National University of Singaporeand obtained his Professional Engineer certification from the Professional Engineers Board in1993. He is currently a member of the Singapore Institute of Directors.

DR WAN SOON BEE is an Independent Director of the Company and is not a shareholder of theCompany or any of its subsidiaries. He was first appointed as an Independent Director of the Boardon 1 April 1999 and was re-elected on 24 September 2004.

Dr Wan is currently the chairman of the Council of Advisors to the Singapore Industrial & ServicesEmployees Union and the Advisor of the Union of Telecoms Employees of Singapore. Dr Wan wasa political secretary and a Minister of State in the Prime Minister s office and a Member ofParliament from 1980 to 2001. He was also the Vice President of the International Confederationof Free Trade Unions for the Asian Regional Organisation. He is presently a director of 2 publiclylisted companies comprising Chemical Industries (Far East) Limited and Manhattan ResourcesLimited. Dr Wan was also the director of a publicly listed company in the preceding 5 years, namelyFHTK Holdings Limited.

Dr Wan holds a Dottore Ingegnere in Electronics Engineering from the University of Pisa, Italy.

MR SITOH YIH PIN is an Independent Director of the Company and is not a shareholder of theCompany or any of its subsidiaries. He was first appointed as an Independent Director of the Boardon 1 April 1999 and was re-elected on 15 October 2003.

Mr. Sitoh is a Certified Public Accountant and a partner of a certified public accounting firm, NexiaTan & Sitoh. Currently, Mr. Sitoh is the Advisor to Potong Pasir Grassroots Organisations. Heis also presently a director of several publicly listed companies comprising Allied TechnologiesLimited, GKE International Limited, Hitchins Group Ltd, Joinn Holdings Limited (formerly knownas Cytech Software Limited), Labroy Marine Limited, Meiban Group Ltd, Nera TelecommunicationsLtd, PNE Micron Holdings Ltd and United Food Holdings Limited. Mr. Sitoh was also the directorof 6 publicly listed companies in the preceding 5 years including Bio-Treat Technology Limited, CWTDistribution Limited, Fibrechem Technologies Limited, Futuristic Group Ltd. (formerly known asFuturistic Image Builder Ltd), KS Energy Services Limited (formerly known as KS Tech Ltd) andWPG International Pte. Ltd. (formerly known as WPG International Limited).

Mr. Sitoh holds a Bachelor of Accountancy (Honours) degree from the National University ofSingapore and is an Associate Member of the Institute of Chartered Accountants in Australia.


operationalr e v i e w

operational r e v i e w


CONSTRUCTION

As one of the major homegrown building contractors in Singapore, constructionremains as the Group s core business. Our construction activities haveprogressed from local public housing construction to private residential andcommercial properties, institutional projects, civil engineering works andmost recently, a regional construction project in Maldives.

In FY06, the construction division contributed S$160.3 million in revenue,an increase of S$33.7 million from S$126.6 million in FY05. Its contributionto profit before tax amounted to S$4.7 million compared with S$1.6 millionin FY05. This increase was attributed to higher revenue recognition fromprogressive completion of construction projects.

CURRENT PROJECTS

Building works on our private residential construction projects at TheLakeshore Condominium, La Casa Executive Condominium and the condominiumat Mount Sophia are in progress. The public residential building contract for424 dwelling units at Sengkang N2C34, awarded by the Housing andDevelopment Board ( HDB ), is also underway.

NEW CONTRACTS

The Group marked another milestone in its history in FY06 when LBC wasawarded a US$17.4 million project for the Design and Build of 600 single-storey housing units at Raa Dhuvaafaru Island, Republic of Maldives for itstsunami-affected victims. We are the first Singapore-listed constructioncompany to be awarded a housing project in Maldives. The project commencedon 10 April 2006 and is scheduled for completion within 13 months from itscommencement. The Group undertook this project in a joint venturearrangement with Amin Construction Private Limited, a major constructioncompany in Maldives.

COMPLETED PROJECTS

We have completed a number of projects in FY06, among them, theconstruction of a proposed road interchange at Queensway/CommonwealthAvenue and the main building and upgrading works at CHIJ Toa Payoh primaryand secondary schools. Addition and alteration works to an army camp arealso near completion.

The Lakeshore

Sengkang N2C34

Raa Dhuvaafaru Island, Maldives

...LBC was awarded a US$17.4 million projectfor the Design and Build of 600 single-storey housing units

at Raa Dhuvaafaru Island,Republic of Maldives for its tsunami-affected victims.


CHIJ (Toa Payoh)

The award is a commendation of our commitmentto safety practices and procedures at site operations.


ACHIEVEMENT

We have proudly added to our list of awards, the Bronze Award in the Singapore ContractorsAssociation Ltd ( SCAL ) 2nd Safety Innovation Teams ( SIT ) Convention 2005, organised by theSCAL Occupational Safety & Health Committee on 30 September 2005. We garnered this awardfor our La Casa Executive Condominium project. The award is a commendation of our commitmentto safety practices and procedures at site operations. This is the second consecutive year thatwe have received this award.

OVERBURDEN WORKS

Our five-year overburden removal contract for an open-cast coal mine in East Kalimantan is currentlyin progress. The contract is performed by PT Lian Beng Energy ( PT LBE ), a subsidiary of Lian BengEnergy Pte Ltd (a joint venture company between the Company and Manhattan Resources Limited).

In FY06, the Overburden Works Division contributed S$23.2 million or 12.3 % of the total revenue,a 90.2 % increase compared with S$12.2 million or 8% of the total revenue for FY05. The Divisionregistered S$0.2 million profit before tax for FY06, as compared to S$1.3 million in FY05. Thisdecrease in profit before tax was due to the weakening of the US dollar and the loss of operatinghours due to heavy rainfall during the second half of the financial year. We will continue to seekfurther opportunities in other coal mine related activities through strategic initiatives and mutuallybeneficial collaborations.


La Casa


ENGINEERING AND LEASING

Our two subsidiaries, Lian Beng Engineering & Machinery Pte Ltd ( LBEM )and Tradewin Machinery & Equipments Pte Ltd ( TWE ) make up theEngineering and Leasing Division of the Group. They complement theservices provided under the Construction Division by undertaking engineeringworks and leasing of construction machinery and equipment such asscaffolding, gondolas and metal formworks.

In FY06, the Engineering and Leasing Division contributed S$1.8 millionor 1.0 % of the total revenue, compared with S$2.0 million or 1.3% ofthe total revenue for FY05.

The division is currently handling the erecting and dismantling of externalscaffolds for Bukit Merah RC36 and has completed the same forKallang/Whampoa RC24 in FY06. It is also undertaking some engineeringworks in several other projects.

PROPERTY

The Group s Property Division is spearheaded by Lian Beng Realty PteLtd ( LBR ), our wholly-owned subsidiary, and Rocca Investments PteLtd ( Rocca ), a 60%-owned subsidiary.

In FY06, we obtained the Certificates of Statutory Completion forDerbyshire Heights, a 24-unit residential development and Rocca Balestier,a residential — commercial mix development. Sales for both these propertiesare currently taking place.

The Division contributed S$4.1 million or 2.2 % of the total revenue forFY06.

Rocca Balestier

Derbyshire Heights

Engineering and Leasing


corporate i n f o r m a t i o n

BOARD OF DIRECTORS

Ong Pang Aik PBM

Chairman and Managing Director

Ong Lay HuanExecutive Director

Ong Lay KoonExecutive Director

Tan Swee HongExecutive Director

Dr Wan Soon BeeIndependent Director

Sitoh Yih PinIndependent Director

COMPANY SECRETARY

Chew Kok Wye

REGISTERED OFFICE

25 Playfair Road, Lian Beng BuildingSingapore 367990Tel: 6283 1468Fax: 6280 9360Email: [email protected]: www.lianbeng.com.sg

NOMINATING COMMITTEE

Dr Wan Soon Bee - ChairmanSitoh Yih PinOng Lay Koon

REMUNERATION COMMITTEE

Sitoh Yih Pin - ChairmanDr Wan Soon BeeOng Lay Koon

AUDIT COMMITTEE

Dr Wan Soon Bee - ChairmanSitoh Yih PinOng Lay Koon

REGISTRAR ANDSHARE TRANSFER OFFICE

M & C Services Private Limited138 Robinson Road#17-00 The Corporate OfficeSingapore 068906

AUDITORS

ERNST & YOUNGCertified Public Accountants10 Collyer Quay#21-01 Ocean BuildingSingapore 049315Partner-in-charge: Loh Khum Whai, Max(Appointed Since Financial Year Ended 31 May 2005)

SOLICITORS

Loo & Partners88 Amoy Street, Level ThreeSingapore 069907

PRINCIPAL BANKERS

Maybank

Oversea-Chinese Banking Corporation Ltd

The Hongkong and Shanghai BankingCorporation Limited

group s t r u c t u r e


LIAN BENG GROUP LTD

DEENN ENGINEERING PTE LTDThe company provides one-stop design-and-build

services as well as civil engineering works.

L.S. CONSTRUCTION PTE LTDThe company engages in building and construction

activities.

LIAN BENG ENGINEERING &

MACHINERY PTE LTDThe company undertakes scaffold erection projects and

fabricates general structural steelworks such as

scaffolds and metalforms.

TRADEWIN MACHINERY &

EQUIPMENTS PTE LTDThe company leases and sells construction equipment

and machinery and provides repair and maintenance

services for construction equipment and machinery.

LIAN BENG REALTY PTE LTDThe company is involved in residential property

development business.

ROCCA INVESTMENTS PTE LTDThe company undertakes mixed property development.

LIAN BENG INVESTMENT

PTE LTDThe company is engaged in property investment holding

and owns the Group’s corporate headquarters.

LIAN BENG ENERGY PTE LTDThe company is a joint venture company with Manhattan

Resources Limited, a public listed company in Singapore.

It established PT Lian Beng Energy to perform coal-

related projects for open cast coal mines in Indonesia.

LIAN BENG CONSTRUCTION

(1988) PTE LTDThe company is one of Singapore s leading building

contractors and has secured the A1 grade classification

in the general building category under BCA s Contractors

Registry which enables it to tender for public sector

projects of unlimited value and the A2 grade

classification in the civil engineering category which

allows it to tender for projects up to $65 million.

100%

100%

100%

100%

100%

60%

100%

50% PT LIAN BENG ENERGY

The company was incorporated in Indonesia

to perform overburden removal and dumping

contracts at open cast mines in Indonesia.

95%

LIAN BENG -AMIN

JOINT VENTURE

PRIVATE LIMITEDThe company is a joint venture company

with Amin Construction Pvt. Ltd. a

construction company incorporated in the

Republic of Maldives. The company currently

undertakes the design and build of 600

single-storey housing units in Maldives.

50%

LIAN BENG

(BANGLADESH)

TRAINING AND TESTING

CENTRE PTE LTDThis is a joint venture company with Wah

Poh Shipping Agency & Construction Pte

Ltd, a Singapore company and Spangles

Export House Ltd, a Bangladeshi company.

The company is currently dormant.

70%

LIAN BENG TRAINING

& TESTING CENTRE

PTE LTDThe company provides management

services relating to training and

testing of construction workers.

70%

100%


keye x e c u t i v e o f f i c e r s

MR CHEW TEOW LEONG, has been the Financial Controllerof the Group since March 1999 and is responsible for thefinancial accounting, financial management and internalcontrol functions of the Group.

Prior to joining the Group, he has had over 15 yearsexperience in financial and management accounting, costsand budgetary control and financial management in thetrading, construction and manufacturing business.

He is a fellow member of the Chartered Association ofCertified Accountants in the United Kingdom (ACCA) anda member of the Institute of Certified Public Accountantsof Singapore (ICPAS). He has been awarded the Master ofBusiness Administration degree by the university of OxfordBrookes in July 2005.

MR JEFFREY TEO WEE JIN, the Construction Managerof Lian Beng Construction (1988) Pte Ltd (LBC), isresponsible for the overall management of the privateresidential construction projects of the company. Hecurrently also serves as the Managing Director of thesubsidiary, Lian Beng — Amin Joint Venture Private Limited.

He first joined the Group in 1992 as a Project Managerand later re-joined the Group as a Senior Project Managerin 1997 and was later promoted to become the ConstructionManager in 2004.

Mr Teo has had more than 19 years of project managementexperience in the construction industry and has been thekey driver in quality initiatives for all the private condominiumprojects undertaken by the company. His vast experiencesin managing condominium projects with the clients emphasison the delivery of quality products has enable him to mentorproject managers in the setting up of site QA/QC committeeand quality system. With the ever-increasing expectationof good quality housing of each homeowner, he is nowtasked to set-up the QA/QC department to provide leadershipin the company with regards to quality assurance, coincidingwith our organization policy.

MR LEE TEY SAY, a Director of PT Lian Beng Energy(PTLBE), is responsible for the overall management of theoverburden removal project in Indonesia.

He joined the Group in 1994 as a Project Manager andwas later promoted to the post of Senior Project Managerin 1997. With his project management skills, he wasappointed as a Director of PTLBE when the Group decidedto venture into the coal-related industry in 2004. Mr. Leehas had more than 29 years of experience in theconstruction industry and in civil engineering works as well.

He holds an Honours Degree in Bachelor of Applied Sciencefor Construction Management & Economics from CurtinUniversity of Technology as well as a Diploma in BusinessManagement and a Diploma in Building Services Engineering.

MS ONG LEE YAP, the Purchasing Manager of the Group,has more than ten years of experience in the constructionindustry.

Since joining the Group in 1988, she has gained wideexperience in the construction industry in her position asPurchasing Manager.

She is currently responsible for materials procurement,material and machinery logistics and the administration offoreign workers wages.

MR ONG PHANG HOO, the Project Director of the Group,is chiefly responsible for overseeing the Group s constructionprojects and activities.

Besides resolving on-site technical problems and handlingsub-contractors issues, he also acts to ensure the smoothrunning and timely completion of all projects of the Group.

He joined the Group after completing his studies and theNational Service and he has been with the Group for morethan 8 years.

MR ONG PHANG HUI, the Plant & Machinery Director ofthe Group, is responsible for the maintenance and repairof the Group s plant and machinery and the coordinationof the Group s scaffolding projects. He is also responsiblefor overseeing the progress of the Group s constructionprojects and activities.

As a Director of both Lian Beng Engineering & MachineryPte Ltd and Tradewin Machinery and Equipments Pte Ltd,he oversees the management of these two companies.

He has been with the Group for more than 9 years uponcompletion of his education and the National Service.

MR THAN KING HUAT, a Director of Deenn EngineeringPte Ltd (Deenn), is responsible for the overall managementof its construction projects.

He joined Deenn in 1994 as a Project Manager and waslater promoted to the post of Senior Project Managerin 1998. He was appointed as a Director of Deenn whenthe Group acquired Deenn in 2001. Mr Than has significantexperience, with more than 20 years in the constructionindustry in structural designing, construction engineeringand˚project management for design and build projects.

He holds a Master of Science degree in StructuralEngineering from the University of Manchester Instituteof Science and Technology (United Kingdom), an equivalentdegree in Civil and Structural Engineering from theEngineering Council Part II (United Kingdom) and a Diplomain Civil and Structural Engineering from the SingaporePolytechnic.

A M E T A F U S I O N D E S I G N

annual report 2006 - national university of...

Documents