haw par corporation limited annual report...
TRANSCRIPT
Haw Par Corporation Limitedannual report 2010
CONTENTS
1 Corporate Profi le
2 Chairman’s Statement
6 Board of Directors
11 Corporate Information
12 Key & Senior Executives
14 Group Financial Highlights
16 Five-Year Financial Summary
18 Operations Review
26 People & The Community
29 Financial Review
34 Share Price & Trading Volume
35 Corporate Governance Report
44 Statutory Reports & Financial Statements
114 Financial Calendar
115 Group Offi ces
117 Management Listing
119 Major Products & Services
121 Statistics of Shareholdings
123 Notice of Annual General Meeting
127 Proxy Form
CORE OPERATIONSHealthcare:Haw Par Healthcare Limited
Tiger Balm (Malaysia) Sdn. Bhd.
Xiamen Tiger Medicals Co., Ltd
Haw Par Healthcare (Xiamen) Co., Ltd
Haw Par (India) Private Limited
Haw Par Tiger Balm (Thailand) Limited
Haw Par Tiger Balm (Philippines), Inc.
Tiger Medicals (Taiwan) Limited
PT. Haw Par Healthcare
Leisure:Haw Par Leisure Pte Ltd
Underwater World Singapore Pte Ltd
Underwater World Pattaya Ltd
Chengdu Haw Par Oceanarium Co., Ltd
PROPERTY & INVESTMENTSProperty:Haw Par Properties (Singapore) Private Limited
Haw Par Centre Private Ltd
Setron Limited
Haw Par Land (Malaysia) Sdn. Bhd.
Investments:Haw Par Investment Holdings Private Limited
Straits Maritime Leasing Private Limited
Pickwick Securities Private Limited
Haw Par Equities Pte Ltd
Haw Par Trading Pte Ltd
M & G Maritime Services Pte Ltd
Haw Par Capital Pte Ltd
Haw Par Securities (Private) Limited
Haw Par Hong Kong Limited
Haw Par Brothers International (H.K.) Limited
Tiger Balm (Hong Kong) Limited
Haw Par Pharmaceutical Holdings Pte Ltd
Associated Companies:Hua Han Bio-Pharmaceutical Holdings Limited
(17.14%)
UIC Technologies Pte Ltd (40%)
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CORPORATE PROFILE
Haw Par Corporation Limited has been listed on The Singapore
Exchange since 1969.
Headquartered in Singapore, the Group’s core healthcare and leisure
businesses promote healthy lifestyles through its healthcare products
and oceanariums.
Haw Par’s healthcare products are manufactured and marketed
under its various established brands such as Tiger Balm and Kwan
Loong. Its renowned ointment Tiger Balm and product extensions
such as Tiger Balm Medicated Plaster, Tiger Balm Joint Rub, Tiger
Balm Neck and Shoulder Rub, Tiger Balm Neck and Shoulder Rub
Boost and Tiger Balm Mosquito Repellent Patch are used worldwide
to invigorate the body as well as to relieve aches and pains.
The Group owns and operates three oceanariums, namely the
Underwater World Singapore at Sentosa, Underwater World Pattaya
in Thailand and Chengdu Haw Par Oceanarium in China.
The Group also has interests in investment properties and manages
its own portfolio of investments in securities.
The Group’s primary corporate strategy is to expand its core healthcare
and leisure businesses through product extensions under its own
established brands, form strategic alliances with partners in various
key markets and explore acquisition of compatible businesses. It also
aims to manage effi ciently its portfolio of investments in properties
and securities to achieve a reasonable return.
Focus. Resilience. Sustainability.
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CHAIRMAN’S STATEMENT
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The Group will continue to pursue
revenue growth for its healthcare
business, by introducing more
products that will appeal to
a larger group of consumers
and more intensive marketing.
The Leisure Division will continue
to launch new exhibits and
activities to increase visitorship
in our three oceanariums.
The Group’s performance in 2010 was fuelled by
a strong economic recovery in Singapore and the
region. The Group’s earnings increased by 97%
to $112.8 million for 2010 (2009: $57.2 million).
This was largely attributable to the rebound of
investment properties’ capital value, higher
earnings of associated companies and higher
investment income.
Our Healthcare Division benefi tted from improved
consumer confi dence in major markets. Sales
increased by 7% to $79.1 million and profi t rose
by 4% to $16.2 million in 2010. Despite a swift
recovery of the tourism industry, performance of
the Leisure Division was hindered by heightened
competition and higher operating expenses.
As a consequence, there was a 7% decline in
profi ts to $12.6 million. The Property Division
also experienced an 11% drop in profi ts to $12.3
million because new rental rates were below the
rates achieved at the peak of 2008.
The Group’s associated company, Hua Han Bio-
Pharmaceuticals Holdings Limited, continued
to do well. During the year under review, one
of its subsidiaries was listed in Hong Kong.
The Group’s share of profits from Hua Han,
together with a dilution gain, amounted to $ 23.5
million, an increase of 210% from 2009.
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CHAIRMAN’S STATEMENT
DIVIDEND
The Board recommends a second and final tax
exempt (one-tier) dividend of 14 cents per share.
Together with the interim dividend of 6 cents paid
last September, the total dividend per share for
financial year ended 31 December 2010 would
amount to 20 cents per share, the same rate
as 2009.
HIGHLIGHTS OF OPERATIONS
To strengthen the global presence of Tiger Balm,
the Healthcare Division focused on expanding the
line of product offerings in key markets thereby
broadening its consumer base. Tiger Balm
Neck & Shoulder Rub, for example, succeeded
in entering several major chains of drugstores
in the United States. Focused advertising and
promotional efforts augmented the broad-based
growth momentum across major markets.
Underwater World Singapore, equipped with a new
interactive Dolphin Lagoon, continued to actively
engage in marketing and public relation efforts to
attract increasing number of visitors to Sentosa.
Underwater World Pattaya also increased its
efforts to expand foreign and local visitorship. The
newly opened oceanarium in Chengdu, Sichuan
faced challenges to breakeven.
2011 BUSINESS OUTLOOK AND STRATEGY
Singapore’s economic growth is expected to
moderate in 2011 after the economy’s strong
rebound in 2010. Coupled with increasing
competition and rising costs, the business
environment will be challenging.
In response to these challenges, the Group
will continue to pursue revenue growth for its
healthcare business, by introducing more products
that will appeal to a larger group of consumers
and by conducting more intensive marketing.
The Leisure Division will continue to launch new
exhibits and activities to increase visitorship at
Underwater World Singapore, Underwater World
Pattaya and the Chengdu Haw Par Oceanarium.
With a strong balance sheet, the Group will
continue to look for new investment opportunities
while maintaining steady progress in our core
businesses.
ACKNOWLEDGEMENT
On behalf of the Board, I would like to thank
management and staff for their hard work and
dedication, and our shareholders and business
associates for their continuing support. I would
also like to record my deepest appreciation to
my fellow Board members for their wise counsel
and guidance.
On behalf of the Board, I would also like to
record our deep appreciation to Director, Dr Lim
Kee Ming, who has decided not to offer himself
for re-appointment at this year’s annual general
meeting. Dr Lim has provided invaluable advice
since his appointment to the Board in 1997.
Wee Cho Yaw
Chairman
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BOARD OF DIRECTORS
WEE CHO YAWNon-Executive Chairman
Dr Wee Cho Yaw, aged 82, is a career banker with more than 50 years’ experience. He has been Chairman of the Company and of the Haw Par Group (“Group”) since 1978. He was appointed to the Board on 31 October 1975 and was last re-appointed on 20 April 2010. He is a member of the Remuneration and Nominating Committees.
Dr Wee is Chairman of the United Overseas Bank Limited Group , United Overseas Insurance Limited, United International Securities Limited, UOL Group Limited, Pan Pacifi c Hotels Group Limited, United Industrial Corporation Limited and Marina Centre Holdings Private Limited. He is also Chairman of Wee Foundation.
He is Honorary President of the Singapore Federation of Chinese Clan Associations, Singapore Hokkien Huay Kuan and Singapore Chinese Chamber of Commerce & Industry. Dr Wee is also Pro-Chancellor of Nanyang Technological University.
He received Chinese high school education and was conferred Honorary Doctor of Letters by National University of Singapore in 2008.
Dr Wee was conferred the Businessman Of The Year award twice at the Singapore Business Awards in 2001 and 1990. In 2006, he received the inaugural Credit Suisse-Ernst & Young Lifetime Achievement Award for his outstanding achievements in the Singapore business community. In 2009, he was conferred the Lifetime Achievement Award by The Asian Banker.
WEE EE LIMPresident & CEO
Mr Wee Ee Lim, aged 49, joined the Group in 1986 and became President & CEO of Haw Par Corporation Limited in 2003. He was appointed to the Board on 23 March 1994 and was last re-elected on 23 April 2008. Mr Wee is a member of the Investment Committee. He has been closely involved in the management and growth of the Group over the last 24 years.
He is a Director of Singapore Land Limited, United Industrial Corporation Limited, UOL Group Limited, Pan Pacifi c Hotels Group Limited, Hua Han Bio-Pharmaceutical Holdings Limited (a company listed on the Hong Kong Stock Exchange) and Wee Foundation.
He was previously a board member of Sentosa Development Corporation.
He holds a Bachelor of Arts (Economics) degree from Clark University, USA.
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BOARD OF DIRECTORS
SAT PAL KHATTARIndependent Director
Mr Sat Pal Khattar, aged 68, was a founding partner and later consultant in Messrs KhattarWong with over 40 years’ experience in the legal profession. He was appointed to the Board on 1 January 1977 and was last re-elected on 23 April 2008. He is Chairman of the Remuneration and Nominating Committees.
He is the Chairman and Director of Khattar Holdings Pte Ltd Group of Companies which is principally engaged in investments. Mr Khattar is the Chairman of GuocoLand Limited and a Director of Guoco Group Limited and GuocoLeisure Limited. He is also Chairman of the Board of Trustees of the Singapore Business Federation and a Director of the Institute of South Asian Studies.
He holds a LLM degree and LLB (Hons) degree from the University of Singapore.
He was presented the SICCI-DBS Singapore-India Business Award in 2009.
REGGIE THEINIndependent Director
Mr Reggie Thein, aged 70, is an accountant with over 40 years’ experience in the profession. He was appointed to the Board on 8 July 2003 and was last re-elected on 20 April 2010. He is the Chairman of the Audit Committee.
He is a Director of United Overseas Bank Limited, GuocoLand Limited, GuocoLeisure Limited, FJ Benjamin Holdings Limited, MobileOne Limited, Keppel Telecommunications and Transportation Limited and Otto Marine Limited.
He was a former director of Grand Banks Yachts Limited till 2009 and MFS Technology Ltd till January 2011.
He is also a member of the governing council of the Singapore Institute of Directors.
He is a Fellow of the Institute of Chartered Accountants in England and Wales and a member of the Institute of Certifi ed Public Accountants of Singapore.
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BOARD OF DIRECTORS
HWANG SOO JINIndependent Director
Mr Hwang Soo Jin, aged 75, is a chartered insurer with more than 50 years of business experience. He was appointed to the Board on 28 October 1986 and was last re-elected on 20 April 2010. He is a member of the Audit and Remuneration Committees.
Mr Hwang is the Chairman Emeritus, Director and Senior Advisor of Singapore Reinsurance Corporation Ltd and a Director of Singapore Land Limited, United Industrial Corporation Limited and United Overseas Insurance Limited.
He stepped down as a Director of the Hokkien Foundation in 2010. He was previously the Chairman of Singapore Reinsurance Corporation Ltd and a Director of Lee Kim Tah Holdings Limited among others.
He is a chartered insurer of the Chartered Insurance Institute, UK, an advisor to the ASEAN Insurance Council, an Honorary Fellow of The Singapore Insurance Institute and a Justice of the Peace.
LEE SUAN YEWIndependent Director
Dr Lee Suan Yew, aged 77, is a medical practitioner with over 40 years’ experience. He was appointed to the Board on 18 December 1995 and was last re-appointed on 20 April 2010. He is a member of the Audit and Nominating Committees.
Dr Lee is an independent Director of K1 Ventures Limited. After serving six years as a Trustee of the Board of SingHealth Foundation, he has stood down in 2010.
He was appointed Justice of the Peace in 1998. Dr Lee was President of the Singapore Medical Council for 4 years (2000 – 2004) and was also Chairman of the Singapore National Medical Ethics Committee (2007 and 2008). For his numerous public services, he was awarded the Public Service Star in 1991 and Public Service Star (Bar) in 2002.
He holds a M.B.B. Chir. degree from the University of Cambridge and MRCP and FRCP from the Royal College of Physicians, Glasgow.
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BOARD OF DIRECTORS
LIM KEE MINGIndependent Director
Dr Lim Kee Ming, aged 84, is the Chairman of Lim Teck Lee Group of Companies. He was appointed to the Board on 5 December 1997 and was last re-appointed on 20 April 2010.
Dr Lim is a Director of UOL Group Limited and Pan Pacifi c Hotels Group Limited and an advisor to Network China.
He is Honorary President of Singapore Chinese Chamber of Commerce & Industry and President of Ngee Ann Kongsi.
He holds a Masters of Science (International Trade & Finance) degree from Columbia University and a Bachelor of Science (Business Administration) degree from New York University.
In 2009, he was conferred the degree of Doctor of the University of Adelaide honoris causa for his distinguished service to education and service to the community.
Dr Lim has decided not to offer himself for re-appointment at this year’s annual general meeting.
WEE EE CHAONon-Executive Director
Mr Wee Ee Chao, aged 56, is the Chairman of UOB-Kay Hian Holdings Limited. He was appointed to the Board on 8 July 2003 and was last re-elected on 22 April 2009.
Mr Wee is the Chairman and Managing Director of UOB-Kay Hian Holdings Limited Group and a Director of UOL Group Limited and Pan Pacifi c Hotels Group Limited. He is also a Director of Wee Foundation.
He holds a Bachelor of Business Administration degree from The American University, Washington DC, USA.
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BOARD OF DIRECTORS
HAN AH KUANExecutive Director
Mr Han Ah Kuan, aged 62, joined the Group in 1991 as the General Manager of Haw Par Healthcare Limited (“HPH”) and was appointed as a director of HPH in 1995. He was appointed to the Board on 28 January 2005 and was re-elected on 20 April 2010. He is a member of the Investment Committee.
He holds a Bachelor of Business Administration (Hons) degree from the University of Singapore.
CHNG HWEE HONGExecutive Director
Mr Chng Hwee Hong, aged 61, joined the Group in 1990 and was appointed as Group General Manager in 1992. He was appointed to the Board on 23 March 1994 and was last re-elected on 22 April 2009. He was promoted as Chief Operating Offi cer in 1996 and was redesignated as Executive Director in April 2003. He is a member of the Investment Committee.
Mr Chng was appointed as a Committee Member of the Singapore Sichuan Trade and Investment Committee in 2005 and a Board member of Singapore Corporation of Rehabilitative Enterprise (SCORE) in 2009.
He holds a Bachelor of Science (Hons) degree in Applied Chemistry and a Diploma in Business Administration from the University of Singapore.
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CORPORATE INFORMATION
DIRECTORSWee Cho YawChairman (Non-Executive)
Wee Ee LimPresident & Chief Executive Offi cer
Sat Pal KhattarIndependent Director
Reggie TheinIndependent Director
Hwang Soo JinIndependent Director
Lee Suan YewIndependent Director
Lim Kee MingIndependent Director
Wee Ee ChaoNon-Executive Director
Chng Hwee HongExecutive Director
Han Ah KuanExecutive Director
AUDIT COMMITTEE
Reggie TheinChairman
Hwang Soo Jin
Lee Suan Yew
INVESTMENT COMMITTEE
Wee Cho YawChairman
Wee Ee Lim
Chng Hwee Hong
Han Ah Kuan
NOMINATING COMMITTEE
Sat Pal KhattarChairman
Wee Cho Yaw
Lee Suan Yew
REMUNERATION COMMITTEE
Sat Pal KhattarChairman
Wee Cho Yaw
Hwang Soo Jin
COMPANY SECRETARY
Zann Lim Seok Bin
AUDITOR
PricewaterhouseCoopers LLPYeoh Oon Jin (From 2009)
Audit Partner-in-charge
BANKERS
United Overseas Bank Limited
The Hong Kong & Shanghai BankingCorporation Limited
REGISTRAR
Boardroom Corporate & Advisory Services Pte Ltd50 Raffl es Place #32-01
Singapore Land Tower
Singapore 048623
REGISTERED OFFICE401 Commonwealth Drive
#03-03 Haw Par Technocentre
Singapore 149598
Tel : 6337 9102
Fax : 6336 9232
Website : www.hawpar.com
Reg. No. : 196900437M
INVESTOR RELATIONSEmail: [email protected]
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KEY & SENIOR EXECUTIVES
ZANN LIMGroup Financial Controller &
Group Company Secretary,
Haw Par Corporation Limited
Joined the Group in 2006 as Group Finance
Manager. Promoted to present position in 2008.
Holds a Master of Business Administration from
INSEAD and Tsinghua University. A member of
the Institute of Certifi ed Public Accountants of
Singapore.
TEO THIN YIENGroup Internal Audit Manager,
Haw Par Corporation Limited
Joined the Group in 1979 as Group Internal Audit
Manager.
Fellow of CPA Australia.
TARN SIEN HAOGeneral Manager
(Corporate Development and Property Division),
Haw Par Corporation Limited
Joined the Group in 2001 as Deputy General
Manager (Corporate Development) and was
promoted to the position of General Manager
(Corporate Development) in 2005. Appointed to
the present position in 2010.
Holds a Master of Business Administration from
the University of Dubuque.
GOH BEE LEONGDirector & General Manager (Manufacturing),
Haw Par Healthcare Limited
Joined Haw Par Healthcare in 1977 as Quality
Control Pharmacist. Promoted to present position
in 2006.
Holds a Bachelor of Science (Pharmacy) from the
University of Singapore.
JASMIN HONGDeputy General Manager (Marketing),
Haw Par Healthcare Limited
Joined Haw Par Healthcare in 2004 as Deputy
General Manager (Marketing).
Holds a Bachelor of Commerce degree from the
University of Melbourne.
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KEY & SENIOR EXECUTIVES
KWEK MENG TIAMRegional General Manager,
Underwater World Singapore Pte Ltd /
Haw Par Leisure Pte Ltd
Joined Underwater World Singapore in 1991
as Maintenance Superintendent. Promoted to
Operations Director in 2002 and General Manager
of Underwater World Singapore Pte Ltd in 2005.
Promoted to current position in 2010.
Holds a Bachelor of Arts in Business Studies, The
Open University, UK.
BERNARD WONGGeneral Manager,
Underwater World Pattaya Ltd
Joined Underwater World Pattaya in 2008 as
General Manager.
Holds a Bachelor of Engineering degree from
University of Tasmania.
ANTHONY CHANGCurator,
Underwater World Singapore Pte Ltd
Joined Underwater World Singapore and
appointed to his current position as Curator in
October 2009.
Holds a Master of Science Degree from Capella
University.
PETER CHEWDeputy General Manager,
Underwater World Singapore Pte Ltd
Joined Underwater World Singapore in 1994
as Front Offi ce Executive. Seconded to PGF
Golf Driving Range in 1998 as Range Manager.
Returned to Underwater World Singapore as
a Senior Marketing Executive in 2000. Promoted to
Assistant Director (Sales & Marketing) in 2007 and
to present position in 2010.
Holds a General Certifi cate of Education – Ordinary
Level.
JOHN NGGeneral Manager,
Chengdu Haw Par Oceanarium Co., Ltd
Joined Chengdu Haw Par Oceanarium in 2009 as
General Manager.
Holds a Post graduate Diploma in International
Marketing from Strathclyde University.
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GROUP FINANCIAL HIGHLIGHTS
% Increase/
2010 2009 (Decrease)
RESULTS ($’000)
Group turnover:
1st Quarter 30,098 28,106 7.1
2nd Quarter 34,503 30,924 11.6
3rd Quarter 31,670 33,055 (4.2)
4th Quarter 33,490 31,906 5.0
129,761 123,991 4.7
Profi t before taxation:
1st Quarter 8,978 10,012 (10.3)
2nd Quarter 49,722 44,821 10.9
3rd Quarter 31,665 23,876 32.6
4th Quarter 33,398 (20,500) 262.9
123,763 58,209 112.6
Earnings for the year:
1st Quarter 7,284 9,048 (19.5)
2nd Quarter 47,611 42,846 11.1
3rd Quarter 29,920 22,076 35.5
4th Quarter 27,692 (16,934) 263.5
112,507 57,036 97.3
STATEMENT OF FINANCIAL POSITION ($’000)
Shareholders’ funds 1,941,893 1,902,800 2.1
Borrowings – – –
Debt/Equity (%) – – –
PER SHARE
Earnings (cents) 56.9 28.9 96.9
Dividend net (cents) 20.0 20.0 –
Dividend cover (times) 2.8 1.4 100.0
Net tangible assets per share ($) 9.76 9.58 1.9
EMPLOYEES
Number of employees (Full time and Permanent) 471 473 (0.4)
Group turnover per employee ($’000) 276 262 5.3
Pre-tax profi t# per employee ($’000) 230 193 19.2
# Exclude the fair value changes on investment properties
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GROUP FINANCIAL HIGHLIGHTS
Healthcare 60.9 Leisure 27.0 Property 12.1
Healthcare 14.2 Leisure 11.1 Property 10.9 Investments 63.8
Healthcare 4.1 Leisure 4.1 Property 7.9 Investments 83.9
2009
Healthcare 59.8
Leisure 26.5
Property 13.7
Healthcare 16.2
Leisure 14.1
Property 14.5
Investments 55.2
Healthcare 4.8
Leisure 4.9
Property 9.9
Investments 80.4
2010
2009
2009
2010
2010
TURNOVER (%)
PROFIT CONTRIBUTION (%)
ASSETS EMPLOYED (%)
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* Include a 5 cents special dividend.
# Exclude the fair value changes on investment properties.
FIVE YEAR FINANCIAL SUMMARY
2010 2009 2008 2007 2006
RESULTS ($’000) Group turnover 129,761 123,991 122,109 119,332 119,682
Profi t from operations 84,806 83,485 90,438 109,039 101,837
- Healthcare 16,157 15,508 14,587 14,421 24,623
- Leisure 12,585 13,526 16,154 17,974 16,892
- Property 12,336 13,911 14,692 8,628 6,261
- Investment 48,993 45,323 50,764 74,539 58,238
- Unallocated expenses (5,265) (4,783) (5,759) (6,523) (4,177)
Associates’ contribution 23,521 7,590 6,616 6,129 8,599
Fair Value gains/(losses)
on investment properties 15,436 (32,866) (15,640) 72,662 16,661
Profi t before taxation 123,763 58,209 81,414 187,830 127,097
Profi t after taxation 112,770 57,165 78,548 159,130 107,268
Earnings for the year 112,507 57,036 78,269 158,983 107,091
PER SHARE Earnings (cents) 56.9 28.9 39.6 77.8 51.6
Dividend net (cents) 20.0 20.0 20.0 25.0* 20.0
Dividend cover (times) 2.8 1.4 2.0 3.1 2.6
STATEMENT OF FINANCIAL POSITION ($’000) Shareholders’ funds 1,941,893 1,902,800 1,320,065 1,927,289 1,799,165
Non-controlling interests 7,756 7,147 7,017 6,899 6,909
1,949,649 1,909,947 1,327,082 1,934,188 1,806,074
Property, plant and equipment 43,848 45,367 35,341 26,469 23,106
Investment properties 181,642 164,878 197,826 214,498 151,698
Associated companies 91,702 72,837 59,359 49,995 43,680
Available-for-sale
fi nancial assets 1,239,779 1,217,708 758,226 1,285,747 1,194,564
Intangible assets 11,116 11,116 11,116 11,216 11,116
Net current assets 435,098 452,320 306,348 413,918 443,162
Long term liabilities (53,536) (54,279) (41,134) (67,655) (61,252)
1,949,649 1,909,947 1,327,082 1,934,188 1,806,074
STATISTICS Return on equity (%) 5.8 3.0 5.9 8.2 5.9
Net tangible assets per share ($) 9.76 9.58 6.63 9.71 8.61
Debt/Equity (%) – – – – –
Number of shareholders 21,454 21,903 21,955 21,770 22,574
EMPLOYEES Number of employees
(Full time and permanent) 471 473 422 381 399
Group turnover per employee ($’000) 276 262 289 313 300
Pre-tax profi t # per employee ($’000) 230 193 230 302 277
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FIVE YEAR FINANCIAL SUMMARY
EARNINGS AND NET DIVIDEND
Earnings
Net Dividend per share
Earnings ($ m) Net Dividend
per share (cents)
50.0
45.0
40.0
35.0
30.0
25.0
20.0
15.0
10.0
5.0
0
200.0
250.0
150.0
100.0
50.0
0
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
NET TANGIBLE ASSETS (“NTA”) PER SHARE
15.00
10.00
5.00
0
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
$
NTA per share
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Healthcare
The world economic environment remained
challenging in 2010. While some of our markets
saw slight economic recovery, there were others,
such as the United States, where the rate of
recovery was slow. Our business in the Middle
Eastern countries recorded satisfactory growth.
The management focused on winning and
growing market shares by leveraging on the brand
equity, launching line extensions and stepping up
its advertising and promotion efforts in selective
markets. In the United States, for example, the
distribution for our newly launched Tiger Balm
Neck & Shoulder Rub expanded nationwide
with the addition of major chain stores to its
distribution network, including Walgreens — US
largest drugstore chain.
Our global website was revamped in line with
our efforts for better communication with our
consumers.
In Singapore, we widened our Tiger Balm plaster
range by launching the new Tiger Balm Ultra
Thin Patch with the aim to give our consumers
a wider choice in this very competitive category. 2010 Health & You Exhibition at Suntec Singapore and the Standard Chartered Marathon Singapore's post-marathon muscle rub stations provided opportunities for consumers to ask, learn and experience Tiger Balm products.
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OPERATIONS REVIEW
Our sponsorship of marathons and health fairs
provided us with a marketing platform to broaden
the awareness and consumer trials of Tiger Balm
amongst sports enthusiasts and fi tness conscious
consumers in a relevant and engaging way.
We also supported this new introduction with
effective print and bus advertising campaigns.
Entering 2011, we are cognizant of the challenges
ahead. Trading situations are expected to become
more complex with changes in the retail and
distribution arena due to the acquisitions and
mergers taking place in the healthcare industry.
Hundreds of people born in the Year of the Tiger joined Thailand’s “Roaring Tiger 2010” where fi ve lucky participants won trips to Singapore - Home of Tiger Balm.
Advertisements in US national magazines
The regulatory climate in many markets is
becoming more stringent imposing heavier
demands that increase the costs and time to
market products. Infl ationary pressure and rising
raw materials costs are leading to increased
operational costs in many countries.
Amidst the challenges, we continue to position our
company for the future as we take important strides
to continue with our launching of line extensions
in our markets and our work on a slate of new
products that will address lifestyle needs of modern
consumers, leveraging on the Tiger Balm equity.
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TIGER BALM WORLDWIDE DISTRIBUTION
AFRICA
Kenya
Malawi
Mauritius
Seychelles
AMERICA
Bahamas
Canada
Jamaica
Mexico
Suriname
Trinidad & Tobago
USA
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Countries that have manufacturing facilities.
EUROPE
Andorra
Austria
Belgium
Croatia
Denmark
Finland
France
Germany
Gibraltar
Greece
Holland
Hungary
Ireland
Latvia
Liechtenstein
Lithuania
Luxembourg
Malta
Norway
Poland
Portugal
Spain
Sweden
Switzerland
United Kingdom
Singapore
South Korea
Sri Lanka
Taiwan
Thailand
Vietnam
Laos
Macau
Malaysia
Myanmar
Nepal
Pakistan
Philippines
ASIA
Brunei
Cambodia
China
Hong Kong
India
Indonesia
Japan
AUSTRALASIA
Australia
New Caledonia
New Zealand
Papua New Guinea
MIDDLE EAST
Bahrain
Egypt
Israel
Jordan
Kuwait
Oman
Qatar
Saudi Arabia
UAE
Yemen
LeisureUNDERWATER WORLD SINGAPORE
2010 continued to be a challenging year for
Underwater World Singapore (UWS). With the
opening of Integrated Resorts in Singapore,
competition among attractions heightened.
Despite the competitive environment, UWS, aided
by a new Dolphin Lagoon, proved to be resilient
and recorded a modest year-on-year increase
in visitorship over 2009. Through increasing
advertising spent and stepping up public
relations efforts, UWS succeeded in capturing
and sustaining mindshare. To stay ahead of the
curve, UWS continued its effort in redefi ning
the oceanarium experience by introducing new
products that were responsive to the changing
tourism landscape in Singapore.
In conjunction with the local mid-year school
holidays, UWS collaborated with the Singapore‘s
National Library Board (NLB) to offer the fi rst
underwater story-telling session in Singapore.
During the weekends, librarians took turns to
dive into the Giant Arapaima Tank and to narrate
marine-related stories underwater using a deep-
sea communication system from the United States
and waterproof visuals from the storybooks.
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UWS marked the offi cial opening of the new Dolphin
Lagoon in July 2010 with a surprise introduction of
the second pink dolphin calf born in UWS named
Speedy. Speedy was the second documented
birth of this species of dolphin at any marine park
in the world following the world’s fi rst documented
birth of the dolphin calf, Splash, at UWS in 2002.
Home of the Pink Dolphins: Underwater World Singapore’s new Dolphin Lagoon
Pho
to: W
illia
m T
an
Children for Children 2010 at Underwater World Singapore: (Above from left) Haw Par Corporation Executive Director Chng Hwee Hong, CHIJ (Kellock) Principal Clara Lim-Tan, Arts House Board Chairman Jennie Chua, Business Times Editor Alvin Tay, Guest-of-Honour Lui Tuck Yew (Singapore’s Minister for Information, Communications and the Arts) and ChildAid 2010 Organising Chairman Seow Choke Meng at the cheque presentation. Net proceeds were donated to ChildAid which supports The Business Times Budding Artists Fund and The Straits Times School Pocket Money Fund.
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Over two years in the making, the facility located
within UWS features a 600-seat sheltered viewing
grandstand and an elevated air-conditioned gallery
that overlooks the performance area, providing
visitors with greater convenience and comfort, and
serving as a unique venue for corporate events.
Mr S Iswaran, Senior Minister of State for Trade
and Industry and Education, graced the occasion
as the Guest-of-Honour.
UWS was one of the venues for the “I Do”
Weddings 2010, a mass wedding solemnisation
ceremony for 118 couples that was supported by
the Ministry of Community Development, Youth
and Sports of Singapore and held in Sentosa on
10 October 2010. Four couples exchanged their
vows by the Dolphin Lagoon while one couple
took the plunge into the Reef Colony Tank and
tied the knot underwater amongst hundreds
of marine creatures. The unique weddings at
UWS attracted media attention and garnered
mainstream media coverage.
The overall interest in the Integrated Resorts will
remain strong and downstream competition
among the other attractions is expected to
stay intense in 2011. However, there are good
reasons to be optimistic. The opening of the new
Dolphin Lagoon coupled with intensifi ed sales and
marketing efforts this year have shown indications
of positive impact in the second half of the year.
A certain amount of this momentum is expected to
carry through into 2011. The scheduled reopening
of Rasa Shangri-La Sentosa, a 500-room hotel
situated next to UWS, in January 2011, is envisaged
to boost visitorship.
UNDERWATER WORLD PATTAYA
In 2010, Underwater World Pattaya (UWP)
performed satisfactorily despite the instability in
Thailand. Taking advantage of the improved climate
for tourism in 2010, UWP leveraged its networks
to grow both foreign and local visitorship, working
closely with the Tourism Authority of Thailand and
with other partners such as travel agents, museums
and the media.
During the Songkran Festival, Thailand’s New
Year, in April 2010, UWP, in collaboration with
Coke and Charoen Pokphand Group (CP), staged
football games for UWP visitors and rolled out
a multi-faceted advertising campaign across TV,
radio, print and online platforms. In August 2010,
Dr Pichai Songchaeng, President of National
Science Museum, invited UWP to participate in the
National Science and Technology Fair, Thailand’s
largest science and technology festival.
OPERATIONS REVIEW
Exquisitely camoufl aged: Leafy Seadragon and Weedy Seadragon
Up close and personal: Memorable encounters with friendly fur seals
Sparkling performance: The Rhythmic Gymnasts from CHIJ (Kellock) as ‘starfi shes’ promoting the marine conservation message
Magical experience: Meet-the-Dolphins sessions at the new Dolphin Lagoon
Photo
: Jose
ph N
air
OPERATIONS REVIEW
24
In its effort to enhance visitors’ experience, UWP
offered innovative displays with unique themes
this year: the “Aqua Monsters” exhibit, the “Ray
Pool” display and the “Koi feeding with milk
bottle” programme.
UWP will continue to face challenges from the
instability in Thailand and competition from other
attractions. Riding on the momentum from 2010,
UWP will forge ahead with concerted marketing
efforts to extend their reach to emerging foreign
markets and further strengthen their position in the
local market.
CHENGDU HAW PAR OCEANARIUM
The business environment for Chengdu Haw Par
Oceanarium (CHPO) was challenging in 2010.
The delayed opening of the revamped Chenghua
Park where CHPO is situated and the heightened
competition resulting from the entry of a new marine
theme park located at the outskirt of Chengdu
affected the visitorship of CHPO unfavourably.
To address the challenges, CHPO introduced
innovative programmes that generated publicity to
attract visitation.
Capitalising on the World Cup fever, CHPO
launched an underwater football show in June
2010. An innovative method was developed by
CHPO to perform the renowned Sichuan Opera’s
art of “Face Change” — speedy changes of masks
— underwater, a fi rst in the world. Launched during
China’s National Day period in October 2010, the
underwater “Face Change” performances were
well received. Constantly seeking to engage
visitors in new ways, CHPO also offered Turtle and
Koi feeding activities for visitors.
While competition from other attractions will
continue to pose challenges to CHPO, the
Oceanarium is likely to benefi t from the reported
opening of the revamped Chenghua Park in the
second half of 2011, which should provide greater
accessibility to the Oceanarium. In the longer term,
the progressive opening of the nearby Recreation
and Business District may further improve the
business prospects of CHPO.
Aqua Monsters: Exotic freshwater animals at Underwater World Pattaya
Family Fun: Celebrating Children’s Day at Underwater World Pattaya
World Cup Fever: Underwater football show at Chengdu Haw Par Oceanarium
World’s First: Underwater “Face Change” performance at Chengdu Haw Par Oceanarium
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Gross Investment Investment Portfolio Profi le No. of shares Fair Value Income 2010 2009 2010 2009 2010 2009 $’000 $’000 $’000 $’000
Quoted Equity Securities United Overseas
Bank Limited 66,116,619 63,882,816 1,203,322 1,257,214 38,628 38,330
UOL Group Limited 41,428,805 41,428,805 196,787 168,201 4,143 3,107
United Industrial
Corporation Limited 67,558,000 67,558,000 168,895 140,521 2,027 2,027
PROPERTY
The Group’s investment property portfolio comprises
45,922 square metres of commercial and industrial
space in Singapore, Malaysia and Hong Kong.
Singapore
Haw Par Centre and Haw Par Glass Tower are two
offi ce buildings located in Clemenceau Avenue
with a total lettable area of 13,567 square metres.
Haw Par Glass Tower achieved 90% occupancy
during the year with a committed 100% occupancy
for 2011 while Haw Par Centre saw an improved
occupancy commitment of 85% for the year and
into 2011.
Haw Par Technocentre is a light industrial building
located in Commonwealth Drive with a total lettable
area of 15,700 square metres. The building maintained
a good occupancy of 96% during the year.
Malaysia
Menara Haw Par, a freehold commercial building
located in Kuala Lumpur’s Golden Triangle along
Jalan Sultan Ismail, has a net lettable area of
16,180 square metres. Despite the persistent
over-supply of offi ce space in Kuala Lumpur, the
building’s occupancy improved from 76% to 82%
over the year.
Hong Kong
Three offi ce/industrial units at Westlands Centre,
Quarry Bay, which provide a lettable area of 475
square metres, were fully leased.
The property segments in which we operate
continue to face an over-supply situation. While the
economic climate has improved, a quick rebound of
rates is not anticipated. Any potential adverse impact
on the performance of our properties is mitigated by
their good locations and management’s resilience
against fl uctuations in tenancy.
INVESTMENTS
The Group has substantial investments in various
securities that are actively managed under the
guidance of the Investment Committee.
These investments have provided the Group with
a stable source of recurring dividend income and
fi nancial strength over the years.
The key investments in the Group include:
Property & Investments
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People & The Community
COMMUNITY
In line with the Group’s corporate social
responsibility mission, contributions were made
to charitable organisations and educational
concerns. Some of these included the Singapore
President’s Challenge, the YMCA-Lim Kim San
Volunteers Programme, and the Society for the
Physically Disabled.
Haw Par Healthcare
celebrated the Year of
the Tiger on the seventh
day of the Chinese
New Year, 20 February
2010, with the “Tiger
Balm Record Roar” —
a fundraising event in
support of the Society for the Physically Disabled
(SPD) held at Underwater World Singapore.
The event set a record in the Singapore Book of
Records as the largest gathering of people born in
the Year of the Tiger. Amongst them were Mrs Yu-
Foo Yee Shoon, Singapore’s Minister of State for
Community Development, Youth and Sports and
the Guest-of-Honour for the event, and Ms Chia
Yong Yong, President of SPD, both born in the Year
of the Tiger. Courageous and resilient in the face of
setbacks, the SPD’s benefi ciaries demonstrate the
spirit of the Tiger. Haw Par Healthcare succeeded
in raising S$100,000 for SPD.
In support of the meaningful cause that “no child
shall be left behind”, Underwater World Singapore
(UWS) hosted the fundraising event — “Children for
Children 2010” where some 1,100 underprivileged
children from various schools and non-profi t
organisations celebrated Children’s Day at UWS.
Jointly organised by The Business Times, The Arts
House and CHIJ (Kellock), the event raised a total
of $282,050 from corporate sponsors. The net
proceeds were donated to ChildAid which supports
The Business Times Budding Artists Fund and The
Straits Times School Pocket Money Fund. RAdm Lui
Tuck Yew, Minister for Information, Communications
and the Arts, was the Guest-of-Honour.
Underwater World Pattaya (UWP) is committed to
supporting social causes in Thailand. On 27 June
2010, UWP welcomed the underprivileged children
from Ban Home Hug, a child welfare organisation
located in North East Thailand that provides
a caring home and offers hope to children living
with HIV and other disabilities. The rare opportunity
Guest-of-Honour, Mrs Yu-Foo Yee Shoon, Singapore’s Minister of State for Community Development, Youth and Sports (centre) and Mr A K Han, Executive Director, Haw Par Corporation Limited, handing a cheque of S$100,000 to Ms Chia Yong Yong, President of the Society for the Physically Disabled at the Tiger Balm Record Roar.
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OPERATIONS REVIEW
to experience the marine world up close through
UWP’s feeding shows and marine biology
programmes brought cheer and excitement to
these children. UWP also participated in Her Royal
Highness Princess Bajra Kitiyhhaba’s Campaign to
raise awareness of violence against women held at
Pattaya Beach in July 2010.
In September 2010, Chengdu Haw Par
Oceanarium (CHPO) offered free admission days
to teachers in appreciation of their contribution to
the society.
ENVIRONMENT
Tiger and Leopard Conservation
The Group maintained its support for the
conservation of tigers in several markets like
Singapore, India, Germany and the United
States. In Singapore, the Group continued with
its sponsorship of the Malayan Tiger Exhibit at
the Night Safari and the Leopard Exhibit at the
Singapore Zoo.
Children from Ban Home Hug at Underwater World Pattaya
Underwater World Pattaya supports social causes in Thailand
In celebration of the Year of the Tiger and the
IYB, the three oceanariums launched a Tiger-
themed exhibit showcasing the uniqueness of
various species of Tiger Fish. Funds collected
by UWS from their Exhibit were donated to the
Raffl es Museum of Biodiversity Research of the
National University of Singapore in support of
their fundraising efforts to build a new natural
history museum.
Marine Conservation
In commemoration of the International Year of
Biodiversity 2010 (IYB) designated by the United
Nations, UWS, UWP and CHPO held a series
of activities with the aim to promote awareness,
understanding and appreciation of the urgent
need to conserve marine biodiversity and protect
our oceans and the Earth.
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The three oceanariums jointly supported the Earth
Hour, the biggest climate awareness campaign,
by switching off the lights on the façade during
Earth Hour, 8.30pm to 9.30pm on 27 March 2010.
In line with our Blue Mission to inspire, educate
and conserve, and in support of the “Earth Hour,
Every Hour” movement, the three oceanariums
incorporated the conservation message —
“Reduce, Reuse, Recycle” — in the commentary
for all their shows and feeding sessions.
As part of the effort to study the migratory
behaviour of the highly endangered Hawksbill
Turtle (Eretmochelys imbricata), UWS collaborated
with the Port of Nagoya Public Aquarium (PNPA) of
Japan and the National Oceanic and Atmospheric
Administration (NOAA) of the United States in
the tag-and-release of 13 Hawksbill turtles off
Singapore’s Big Sister’s Island (Pulau Subar Laut)
in August 2010. Dr Mohamad Maliki Bin Osman,
Senior Parliamentary Secretary for National
Development (Singapore), graced the event.
Satellite tracking devices were fi tted on these
turtles. Details and preliminary results of this
collaborative project were shared at the Kyoto
University International Symposium — “Biodiversity,
Zoos and Aquariums” in September 2010.
In August 2010, UWP participated in the beach
cleanup organised by the Bang Saray Municipality.
In July 2010, CHPO hosted the inauguration of
the Aquatic Wildlife Conservation Month organised
by the Provincial Fishery Department of Sichuan
Province in China.
Guest-of-Honour, Dr Mohamad
Maliki Bin Osman, Senior
Parliamentary Secretary
for National Development
(Singapore), with CHIJ (Kellock)
students at the UWS Hawksbill
Turtle Tag-and-Release event.
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FINANCIAL REVIEW
Group earnings for FY2010 soared by 97% to $112.5 million as compared to 2009 mainly due to a gain on revaluation of investment properties and higher profi ts from associated companies.
OVERVIEW
Group earnings for FY2010 soared by 97% to
$112.5 million as compared to 2009 mainly due
to a gain on revaluation of investment properties
and higher profi ts from associated companies.
Group revenue at $129.8 million was 5% higher
than 2009. Both Healthcare and Leisure divisions
reported positive growth of 7%, offsetting the 8%
lower revenue experienced by Property division.
Operating profi ts were 2% higher than 2009 with
higher investment income and higher contribution
from Healthcare division. Profi ts from listed
associate, Hua Han Bio-Pharmaceutical Holdings
Limited included higher share of profi ts and a gain
in dilution of $8.5 million.
Earnings per share increased to 56.9 cents (2009:
28.9 cents) and net tangible assets per share
increased to $9.76 (2009: $9.58), both attributable
mainly to higher profi ts for the fi nancial year.
Segment Profi ts Before Interest and Tax
($ million)
80
Healthcare Leisure Property Investments
70
60
50
40
30
20 15.516.2
13.512.6
13.9
52.9
72.5
12.3
2009 2010
10
0
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RETURN ON ASSETS EMPLOYED
The Group applies a Return of Assets Employed
(“ROA”) measure to evaluate the performance
of its business operations. The ROA measures
profi tability of assets utilised by the various
operations.
ROA for 2010 improved from 3.3% in 2009
to 5.9%, driven by higher earnings. Given a
relatively stable asset base, the increase in ROA
of healthcare division from 18.1% to 18.8% is
a result of favourable broad-based growth in
sales and profi tability. On the other hand, ROA of
Leisure division declined from 15.9% to 14.8%
due to higher operating expenses incurred at the
aquariums while ROA of Property division, which
was affected by the softening of offi ce rental
market during the year, decreased from 8.0% to
7.5%. ROA of the investment division decreased
marginally from 3.4% to 3.1%, with the increase
in investment income offset by a larger asset base
from equity markets recovery during the year.
Return on Assets Employed
(%)
25
20
15
10
5
Group Healthcare Leisure Property Investments
2009 2010
3.3
18.1
15.9
8.0
3.4
5.9
18.8
14.8
7.5
3.1
ROA for 2010 improved from 3.3% in 2009 to 5.9% driven by higher earnings.Increase in ROA of healthcare division from 18.1% to 18.8% is a result of favourable broad-based growth in sales and profi tability.
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SEGMENTAL PERFORMANCE
Healthcare
Healthcare division achieved a 7% and 4% growth
in sales to $79.1 million and in operating profi ts
to $16.2 million respectively. Sales of Tiger Balm
Brand products have been supported by a recovery
in global economy and increase in consumer
confi dence. Territorial mix showed favourable
growth in all regions, with strongest growth coming
from key markets in Middle East.
Leisure
With the recovery of tourism industry, the number
of visitors to the aquariums increased by 10%
from 2009 level and propelled revenue 7% higher
than 2009 to $35.0 million. Despite the higher
revenue, performance of Leisure division was
brought down by higher operating expenses at
the aquariums, which resulted in a 7% decline in
profi ts to $12.6 million.
FINANCIAL REVIEW
Healthcare (Sales of Tiger Balm and
Kwan Loong Brand Products)
($ million)
Visitorship of Aquariums
(‘000)
0
5
10
15
20
25
30
35
40
45
50
55
60 2,000
1,800
1,600
1,400
1,200
1,000
800
600
400
200
0America Europe Middle East 2009 2010Asia
2009 2010
10.5
6.8
14.9
41.9
1,544
1,701
11.2
7.6
16.9
43.4
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PropertyAn infl ux of new offi ce supply of approximately
2 million square feet in the Singapore property
market exerted downward pressure on rental rates,
Property division experienced a 8% and 11% dip
in rental revenue to $15.7 million and profi ts to
$12.3 million respectively. The decrease in profi ts
against last year is also attributable to higher
operating expenses. The division also recorded
a 9% increase in fair value of investment properties
with a rebound in offi ce property sector towards
the end of the year.
FINANCIAL REVIEW
InvestmentsInvestment income increased by 9% from 2009 due
to higher dividends received from our investment
portfolio and a gain from redemption of debt
securities in our investment portfolio.
The Group’s investment portfolio enjoyed a healthy
valuation surplus of $1,115.8 million.
Property (Building Occupancy Rates)
(%)
Investments (Cost vs Fair Value)
($ million)
100 1,800
1,600
1,400
1,200
1,000
800
600
400
200
0
80
60
40
20
0
Haw Par Centre
Haw Par Technocentre
MenaraHaw Par
Haw Par Glass Tower
2009 2010
2009 2010
67.0
100.097.0
76.0
81.0
444.5
1,597.4 1,574.9
459.1
96.0
90.0
85.0
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The Group ended the fi nancial year with a strong fi nancial position with net cash balances of $111.4 million, after dividend payments of $39.5 million.
FINANCIAL POSITION
Shareholders’ funds increased 2% to $1,942 million
mainly due to the higher revenue reserves from the
higher earnings this fi nancial year.
The Group ended the fi nancial year with a strong
fi nancial position with net cash balances of $111.4
million, after dividend payments of $39.5 million.
The Group enjoyed a healthy cash infl ow of
$24.9 million during the year. Cash generated by
operating activities decreased from $82.3 million to
$38.3 million in 2010 because a large part of the
dividend income were non-cash and scrip shares
were obtained in lieu of cash during the year.
FINANCIAL REVIEW
DIVIDENDS
In view of the higher earnings and stable fi nancial
position, a second & fi nal dividend of 14 cents per
share is being proposed at the coming Annual
General Meeting.
Shareholders’ funds
($ million)
2009 2010
1,950
1,940
1,930
1,920
1,910
1,900
1,890
1,880
1,902.8
1,941.9
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SHARE PRICE & TRADING VOLUME
Trading Volume ('000) Share Price ($)
2006 2007 2008 2009 2010
Trading Volume Share Price
22,000 9.00
8.00
7.00
6.00
5.00
4.00
3.00
2.00
1.00
20,000
18,000
16,000
14,000
12,000
10,000
8,000
6,000
4,000
2,000
2006 2007 2008 2009 2010
Share Price ($)
Last Done 7.10 7.11 3.81 5.81 6.13
High 7.50 8.45 7.61 6.00 6.35 Low 5.10 6.55 2.81 3.27 5.50
Per share
Earnings (cents) 51.6 77.8 39.6 28.9 56.9
Dividend net (cents) 20.0 25.0* 20.0 20.0 20.0Dividend cover (times) 2.6 3.1 2.0 1.4 2.8
Net tangible assets per share ($) 8.61 9.71 6.63 9.58 9.76
* Include a 5 cents special dividend.
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CORPORATE GOVERNANCE REPORT
The Board of Directors (“the Board”) and management of Haw Par Corporation Limited (“the Company”,
collectively with its subsidiaries “the Group”) is committed to uphold good corporate governance practices
to safeguard the interests of its shareholders. Corporate governance practices in the Group adhere and
align with best practices set out in the Code of Corporate Governance 2005 (the “Code”). The following
describes the Group’s corporate governance practices with specifi c references to the Code.
BOARD MATTERS
Principle 1: Board’s Conduct of its Affairs
The principal responsibilities of the Board include:
• approving strategic plans and annual budgets;
• approving major funding, investment and divestment proposals;
• approving the appointment of Directors to the Board;
• ensuring that management establishes and maintains a sound system of internal controls, risk
management, fi nancial reporting and statutory compliance;
• reviewing the performance of management in attaining agreed goals and objectives;
• approving the announcement of fi nancial results and declaration of dividends; and
• reviewing the Group’s risk management framework.
All Board members bring their independent judgement, diversifi ed knowledge and experience to bear on
issues of strategy, performance, resources and standards of conduct.
The Board meets at least four times a year to review performance and business strategy of the Group.
Meetings are scheduled in advance in the preceding year. Ad-hoc meetings can be called when there are
important and urgent matters requiring the Board’s consideration and approval in writing is sometimes
needed in between the scheduled meetings.
The Group has adopted internal guidelines, which set out matters requiring board approval. These
guidelines also include limits of authority given to management to facilitate operational effi ciency.
The Board has delegated specifi c responsibilities to four Committees, namely, the Audit, Nominating,
Remuneration and Investment Committees. The composition of each Committee is as follows:
NameAudit
CommitteeNominating Committee
Remuneration Committee
Investment Committee
Wee Cho Yaw (Non-executive and
non independent)N/A Member Member Chairman
Wee Ee Lim (Executive and non-independent) N/A N/A N/A Member
Sat Pal Khattar (Independent) N/A Chairman Chairman N/A
Reggie Thein (Independent) Chairman N/A N/A N/A
Hwang Soo Jin (Independent) Member N/A Member N/A
Lee Suan Yew (Independent) Member Member N/A N/A
Lim Kee Ming (Independent) N/A N/A N/A N/A
Wee Ee Chao (Non-independent) N/A N/A N/A N/A
Chng Hwee Hong (Executive) N/A N/A N/A Member
Han Ah Kuan (Executive) N/A N/A N/A Member
N/A – Not Applicable
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CORPORATE GOVERNANCE REPORT
The Board held four meetings during the year. The Articles of Association of the Company allow
Directors to participate in Board meetings and Committee meetings by telephone conference whereby
all persons participating in the meeting are able to communicate as a group. The attendance of Directors
at meetings of the Board and the Committees was as follows:
Number of meetings attended in 2010
Name Main Board
Audit Committee
Nominating Committee
Remuneration Committee
Investment Committee
Wee Cho Yaw 4 1 1 6
Wee Ee Lim (1 ) 4 4 1 6
Sat Pal Khattar 2 1 1
Reggie Thein 4 3
Hwang Soo Jin 4 4 1
Lee Suan Yew 4 4 1
Lim Kee Ming 4
Wee Ee Chao 3
Chng Hwee Hong 4 6
Han Ah Kuan 4 6
Number of meetings held in 2010
4 4 1 1 6
(1) Mr Wee Ee Lim was in attendance at the meetings of the Audit and Remuneration Committees
although he is not a member of either Committee to provide input to the Committees.
Appropriate training and comprehensive orientation program to familiarise newly appointed Directors with
the Group’s businesses, strategic plans, objectives and site visits are in place.
The Directors are continuously updated on changes to important relevant laws and regulations in the
Companies Act, other relevant legislation and industry-related matters.
Principle 2: Board Composition and Guidance
There are ten Directors on the Board. The Board considers the present size appropriate for the current
scope and nature of the Group’s operations. The Nominating Committee (“NC”), having regard to the
Code’s guidance for assessing independence, is of the view that fi ve Non-Executive Directors were
independent and no individual or small group of individuals dominated the decisions of the Board.
The Board contributes a range of relevant knowledge and industry experiences that enables management
to benefi t from their diverse and objective views on issues brought before the Board. The Board is looking
to appoint new members to its Board who can serve the Board for a longer period of time as the elder
members of the Board step down. In this context, Dr Lim Kee Ming has expressed his desire to not
offer himself for re-election at the next Annual General Meeting (“AGM”). We thank him for his services
rendered.
Principle 3: Chairman and Chief Executive Offi cer
There is a clear separation of the role and responsibilities of the non-executive Chairman and the Chief
Executive Offi cer (“CEO”), who is also the son of the Chairman. The Chairman’s principal role is to lead and
guide the Board while the CEO has executive responsibilities over the Group’s day-to-day operations.
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Principle 4: Board Membership
The Company has adopted a formal and transparent process for the appointment of new Directors through
the recommendation of the Nomination Committee (“NC”). Before making its recommendation, the NC
will select candidates taking into consideration the candidate’s background, qualifi cation, knowledge,
experience, independence and other directorship. Potential candidate are expected to be person of
integrity and possess core competencies to meet the needs of the Group and to complement the existing
competencies at the Board.
The NC comprises three members, the majority of which, including the chairman of the NC, are
independent Directors. The Chairman of the NC is neither a substantial shareholder of the Company nor
directly associated with a substantial shareholder of the Company.
The NC is empowered and adequately resourced to identify potential candidates for the Board.
A formal letter is provided to each Director, upon his appointment, setting out the Group governance
policies and the Directors’ duties and obligations.
The NC makes annual recommendations to the Board on all board appointments as well as re-nomination
of Directors having regard to their contributions and performance on a qualitative basis. At each AGM,
one-third of the Board are required to retire from offi ce by rotation and submit themselves for re-election.
Directors who are above the age of 70 are also statutorily required to seek re-appointment at each AGM.
Key information regarding the Directors is provided under the Board of Directors section of this Annual
Report.
Principle 5: Board Performance
The NC evaluated and assessed the effectiveness of the Board’s performance as a whole taking into
consideration, amongst other things, the Board’s discharge of its principal responsibilities, earnings of the
Group, return on equity and the share price performance of the Company. The NC is of the opinion that the
Board as a whole had performed well during the year.
The Chairman of the Board and the Chairman of the NC evaluate the performance, commitment and
contribution of individual Directors on a qualitative basis. They also review the contribution of Executive
Directors, and are of the view that the performance of each of them has been satisfactory.
Principle 6: Access to Information
The Board is provided with adequate and timely information by management which includes quarterly
management reports highlighting the Group’s fi nancial performance and position, draft announcements of
fi nancial results and matters requiring Board’s decision, at least fi ve working days prior to Board meetings.
Board meetings for each year are scheduled at least 5 days in advance.
The Board has unrestricted access to the advice and services of senior management and the Company
Secretary at all times. The Company Secretary attends all Board and Committee meetings and ensures
that the Company complies with all regulatory requirements. The Company Secretary is responsible
for ensuring information fl ows to the Board and its Committees and between Senior Management and
non-executive Directors, as well as facilitating orientation and assisting with professional development
as required. Under the Articles of Association of the Company, the decision to appoint or remove the
Company Secretary rests with the Board.
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Principle 6: Access to Information (Continued)
The Board is also provided with opportunities to meet with managers and head of divisions to deepen its
understanding of the businesses.
The Audit Committee meets the external and internal auditors separately at least once a year, without the
presence of the President and CEO and Senior Management.
To assist the Directors to carry out their duties and if needed, the Company will, with the approval of the
Chairman, appoint independent professional advisors to render the appropriate advice.
REMUNERATION MATTERS
Principle 7: Procedures for Developing Remuneration Policies
The Remuneration Committee (“RC”) comprises three members, the majority of whom, including the
chairman of the RC, are independent Directors. The RC is supported by Group Human Resource and/or
external consultants as and if needed.
The principal responsibilities of the RC are:
• to recommend to the Board for its endorsement, a framework of remuneration for Directors and
key executives;
• to determine and fi x the remuneration packages for the Executive Directors including the President
and CEO;
• to review the remuneration packages for key executives; and
• to administer the Company’s share option schemes.
During the year, the RC has recommended the amount of directors’ fees to be paid to the Non-Executive
Directors, assessed the performance and determined the bonus and salary components for the Executive
Directors, reviewed the remuneration packages for key executives and granted share options to eligible
staff and set the terms thereof.
Principle 8: Level and Mix of Remuneration
The RC takes into consideration current industry norms on compensation and adopts a remuneration
policy refl ective of industry practices which is responsive to the market. None of the Non-Executive
Directors are on service contracts or have consultancies with the Company. Only Non-Executive
Directors, including the Chairman of the Board, are paid directors’ fees which comprise basic fees and
additional fees for serving on Board committees. Directors’ fees recommended by the RC are submitted
for endorsement by the Board and payment of these fees is subject to shareholders’ approval at each
annual general meeting. None of the Non-Executive Directors has been granted share options even
though the Company’s share option scheme allows for such grants.
The Group remunerates its employees at competitive and appropriate levels, commensurate with their
performance and contributions. The remuneration framework comprises fi xed compensation, variable
compensation, provident fund, benefi ts and long-term incentives that are designed to strike a balance
between linking rewards to short-term and long-term objectives while maintaining competitiveness in
the market.
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Principle 8: Level and Mix of Remuneration (Continued)
In the annual review of remuneration of the CEO and Executive Directors, RC also takes into consideration
performance of the individuals in addition to the relevant comparative remuneration in the market.
The performance-related elements of the remuneration are designed to align interests of Executive Directors
with those of other shareholders. The performance criteria include the achievement of fi nancial objectives
and using fi nancial indicators like operating profi tability and return of assets employed over a period of time.
Their remuneration packages include a variable bonus element which is performance based and these are
reviewed annually by the RC. Share options are only granted to the Executive Directors and eligible key
executives that can be exercised after the vesting period. More information on the Haw Par Corporation
Group 2002 Share Option Scheme can be found in the Director’s Report.
Principle 9: Disclosure of Remuneration
Details of the share option schemes are disclosed in the Report of the Directors and Note 25(b) to the
fi nancial statements.
The details of the remuneration of each individual Director and the top fi ve key executives for fi nancial year
2010 are as follows:
Benefi t Base or -in-kind Share Directors’ fi xed Variable and options Name Fees salary bonus others Total granted % % % % % No. of shares
$1,000,001 to $1,200,000 Wee Ee Lim - 53 39 8 100 -
$400,001 to $600,000 Chng Hwee Hong - 54 22 24 100 48,000
Han Ah Kuan - 48 27 25 100 48,000
Below $200,000 Wee Cho Yaw 100 - - - 100 -
Sat Pal Khattar 100 - - - 100 -
Reggie Thein 100 - - - 100 -
Hwang Soo Jin 100 - - - 100 -
Lee Suan Yew 100 - - - 100 -
Lim Kee Ming 100 - - - 100 -
Wee Ee Chao 100 - - - 100 -
Top 5 Key Executives
Number of executives of the Group in remuneration bands:
$200,001 to $400,000 5
There were no employees (other than the CEO) who were immediate family members of the Directors or
the CEO. Immediate family members means the spouse, child, adopted child, step-child, brother, sister
and parent.
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ACCOUNTABILITY AND AUDIT
Principle 10: Accountability
The Management provides the Board with relevant and timely information on actual performance,
fi nancial position and business prospects on a quarterly basis and submit Annual Budgets for adoption
by the Board. Price-sensitive information, including announcements of fi nancial results, is released
to shareholders through the SGXNET and the Group’s website. The Company’s Summary Financial
Report is sent to all shareholders and its Annual Report is available on request and accessible on the
Company’s website.
Principle 11: Audit Committee
The Audit Committee (“AC”) comprises three members, all of whom are independent Directors.
The chairman of the AC is a senior accountant with over 40 years’ experience in the profession while the
rest of the members have substantial business experience. The Board is of the view that the members of
the AC have the requisite accounting, fi nancial management expertise and experience to discharge the
AC’s responsibilities effectively.
The principal responsibilities of the AC are:
• to review and approve the audit plans of the internal and external auditors;
• to consider the auditors’ evaluation of the system of internal controls;
• to recommend the re-appointment of external auditors and approve the compensation of the
external auditors;
• to review annually the independence and objectivity of the external auditors, the cost effectiveness of
the audit, and the nature and extent of non-audit services;
• to ensure adequacy, independence, effectiveness and objectivity of the internal audit function and
that it meets professional standards;
• to review the Group’s quarterly and full year results and annual fi nancial statements for approval by
the Board, and the appropriateness and consistency of accounting principles and policies adopted
across the Group, including signifi cant fi nancial reporting issues and judgements;
• to review the risk management policies and processes;
• to build consensus among Board members/management on acceptable risk levels;
• to review interested person transactions on a quarterly basis.
• to review incidences of whistle-blowing.
During the year, the AC had fulfi lled its responsibilities as stated above. In the review of non-audit services,
the AC was satisfi ed that non material possible confl icts would not affect the independence of the external
auditors. It has recommended to the Board to re-appoint PricewaterhouseCoopers LLP as auditors for
fi nancial year 2011.
The AC has full authority to investigate any matter on issues of internal controls, suspected fraud or
irregularity. It has full access to and cooperation of the Management and full discretion to invite any staff
to attend its meetings.
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Principle 11: Audit Committee (Continued)
Whistle Blowing Policy
The Company has adopted a whistle-blowing policy which will provide a channel for employees and others
to bring to the attention of the Audit Committee (‘AC’) any improprieties committed by the management
or staff of the Company. A whistle blowing unit has been set up to review all matters reported and
comprises the Group Human Resource Manager and Group Internal Audit Manager. The AC reviews
quarterly all cases reported and investigated. Details of the whistle blowing policy are posted in the
Company’s intranet for staff’s reference and new staff are briefed of this policy during their orientation.
Principle 12: Internal Controls and Risk Management
During the year, the AC met four times with the internal and external auditors to review their audit plans
to evaluate internal controls of the Group. It also met with the internal and external auditors separately
without the presence of the Management. The AC adopts key principles from “Guidebook for Audit
Committee in Singapore”, issued by the Audit Committee Guidance Committee in Singapore in 2008.
Based on the reports by the internal and external auditors and review undertaken by the AC, the Board
is satisfi ed that the internal controls of the Group were adequate to safeguard the Company’s interests.
The Group has established a formal risk management framework across the entire organisation
to provide a structured approach to ensure that all risks are identifi ed, mitigated and managed.
The Risk Management Committee, chaired by the CEO and comprising four other senior key executives
(including 2 executive directors), oversees various aspects of control and risk management policies and
processes of the Group. It meets annually to review risk management perimeters across the Group and
reports annually to the AC on its fi ndings and action taken to address the key risks identifi ed.
The framework enables management to have a formal structure and a standardised process in risk
mangement reporting. The framework is designed to align with the Group strategic, operational,
reporting and compliance objectives. Management considers risk identifi cation and its impact on the
Group. Risks are analysed and assessed in terms of risk impact and risk likelihood. Management will
evaluate the options and controls needed to deal with identifi ed risks. The Risk Management Committee
will perform ongoing reviews to monitor implementation and effectiveness of the risk management
activities and make refi nements as necessary.
Major operational risks such as competition, manufacturing capability, regulatory compliance and
business interruption are managed by leveraging on the Group’s experience and knowledge of local
market conditions, taking out appropriate insurance coverage, and having effective business continuity
plans. Financial risks are mitigated by using appropriate hedging instruments when necessary and
actively managing foreign exchange and credit exposures. Further details on managing fi nancial risks
are disclosed in Note 26 on Page 96 of the Annual Report.
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Principle 13: Internal AuditThe Company has an internal audit (“IA”) department comprising four staff. The Group Internal Audit
Manager reports to the Chairman of the AC on audit matters and to the CEO on administrative matters.
The IA follows the Standards for the Professional Practice of Internal Auditing set by the Institute of
Internal Auditors. IA adopts strict procedures in reporting its audit fi ndings to the Management and AC.
The role of IA is to render support to the AC in ensuring that the Group maintains a sound system of
internal controls by performing regular monitoring and testing of key controls and procedures, review of
all operational and fi nancial activities and undertaking investigations as requested by AC.
The IA submits its plan to AC for approval at the beginning of the year. Internal audit reviews were carried
out on all signifi cant business units in the Group and a summary of fi ndings and recommendations are
discussed during each AC meeting. The AC is of the view that the internal audit function is adequately
resourced.
Principles 14 and 15: Communication with Shareholders
The Company strives to facilitate effective communication and to convey to its shareholders pertinent
information in a regular and timely manner. Communication is generally made through annual reports,
press releases, SGXNET announcements and its website at www.hawpar.com. When matters requiring
shareholders’ meetings are to be held, notices are published in the newspapers and reports or circulars
are sent in a timely manner to all shareholders.
The CEO, Group Financial Controller and the Corporate Communications Manager hold regular meetings
with research analysts, fund managers and institutional investors to review the Company’s performance
and provide investors with a better understanding of the Group’s businesses.
At AGMs, shareholders are invited to raise questions on any matters that need clarifi cation and
appropriate responses are given. The chairpersons of the AC, NC and RC as well as the external
auditors are present at the AGMs to address all queries from shareholders on various matters affecting
the Group and the conduct of external audit. Key management personel are also present at AGMs to
assist in answering queries.
The reception after the AGM provides an opportunity for shareholder to informally communicate their
views and expectations to the company.
The Company’s Articles of Association allow a shareholder to appoint one or two proxies to attend and
vote at the Company’s general meetings. Separate resolutions on each distinct issue are tabled at the
general meetings. If requested, the Company allows shareholders who hold shares through nominees
to attend the AGM as observers.
CORPORATE GOVERNANCE REPORT
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OTHER GOVERNANCE PRACTICES
Investment Committee
The Investment Committee (“IC”) is headed by the Chairman of the Board and comprises three other
Executive Directors. The Committee meets once every 2 months to review the Group’s investments
and funding requirements. The role of the IC is to review the investments of the Group, in terms of their
performance and the related market risks.
Interested Person Transactions
Management reports to the AC on a quarterly basis all interested person transactions. During the year,
there were no interested person transactions entered into by the Company and any Director that required
disclosure under the Listing Rules.
Material Contracts
Except as disclosed in page 92 (Note 22 - Related Party Transactions) of the annual report, there were no
other material contracts of the Company or its subsidiaries involving the interests of the CEO, any director
or controlling shareholder.
Dealings in Securities
The Group adopts the Best Practices Guide with respect to dealings in securities issued by the Singapore
Exchange Securities Trading Limited. It has a policy which prohibits its offi cers from dealing in the
securities of the Company during the period commencing two weeks before the announcement of the
fi nancial results for each of the fi rst three quarters and one month before the announcement of the full
year results.
The Company Secretary issues guidelines periodically to Directors and employees reminding them of
the prohibitions in dealing with the Company’s securities while in possession of material unpublished
price-sensitive information and awareness of the applicability of the insider trading laws at all times.
CORPORATE GOVERNANCE REPORT
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STATUTORY REPORTS & FINANCIAL STATEMENTS
CONTENTS
45 Directors’ Report
49 Statement by Directors Pursuant to Section 201(15)
50 Independent Auditor’s Report
52 Consolidated Income Statement
53 Consolidated Statement of Comprehensive Income
54 Statements of Financial Position
55 Consolidated Statement of Changes in Equity
57 Consolidated Statement of Cash Flows
59 Notes to the Financial Statements
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DIRECTORS’ REPORTFor the financial year ended 31 December 2010
The Directors present their report to the members together with the audited financial statements of the Group for the financial year ended 31 December 2010 and the statement of financial position of the Company as at 31 December 2010.
DIRECTORS
The Directors of the Company in office at the date of this report are as follows:
Wee Cho Yaw (Chairman) Wee Ee Lim (President & Chief Executive Officer) Sat Pal KhattarReggie Thein Hwang Soo JinLee Suan YewLim Kee MingWee Ee ChaoChng Hwee Hong (Executive Director) Han Ah Kuan (Executive Director)
ARRAngEmEnTS TO EnAblE DIRECTORS TO ACquIRE ShARES AnD DEbEnTuRESNeither at the end of the financial year, nor at any time during the financial year, was the Company a party to any arrangement whose object was to enable the Directors to acquire benefits by means of the acquisition of shares, warrants, share options in, or debentures of, the Company or any other body corporate, other than pursuant to the Haw Par Corporation Group 2002 Share Option Scheme (“2002 Scheme”).
DIRECTORS’ InTERESTS In ShARES OR DEbEnTuRES
The Directors holding office at 31 December 2010 had no interests in the shares, warrants, share options in, or debentures of, the Company and/or its subsidiaries as recorded in the register of Directors’ shareholdings kept by the Company under Section 164 of the Companies Act, Cap 50 except as follows:
Direct interest as at Deemed interest as at 1.1.2010 31.12.2010 21.1.2011 1.1.2010 31.12.2010 21.1.2011
Interest in the Company’s ordinary shares Wee Cho Yaw 993,067 993,067 993,067 61,075,370 63,261,370 63,261,370Wee Ee Lim 397,448 397,448 397,448 56,777,958 58,963,958 58,963,958Sat Pal Khattar – – – 87,472 87,472 87,472Hwang Soo Jin 30,000 35,000 35,000 – – –Lim Kee Ming 49,606 49,606 49,606 125,752 125,752 125,752Wee Ee Chao 12,570 12,570 12,570 56,899,438 59,085,438 59,085,438Chng Hwee Hong 244,400 292,400 292,400 – – –Han Ah Kuan 14,000 9,000 9,000 – – –
Options to subscribe for the Company’s ordinary shares(Under the 2002 Scheme)
Chng Hwee Hong 235,000 144,000 144,000 – – –Han Ah Kuan 139,000 144,000 144,000 – – –
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DIRECTORS’ REPORT (COnTInuED)For the financial year ended 31 December 2010
DIRECTORS’ COnTRACTuAl bEnEfITS
Since the end of the previous financial year, no Director has received or has become entitled to receive benefits required to be disclosed by Section 201(8) of the Companies Act, Cap 50 by reason of a contract made by the Company or a related corporation 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 except those disclosed in Note 22 to the financial statements.
ShARE OPTIOnS
Haw Par Corporation Group 2002 Share Option Scheme
The 2002 Scheme was approved by members of the Company at an Extraordinary General Meeting held on 22 May 2002. The 2002 Scheme is granted to key executives personnel and directors (including non-executive directors) of the Company and the maximum life-span of exercising the options is 10 years. The exercise price of the options is determined at the average of the closing prices of the Company’s ordinary shares as quoted on the Singapore Exchange for five market days immediately preceding the date of the grant. The options are exercisable beginning on the first anniversary from the date when the options are granted or the second anniversary if the options are granted at a discount to the market price. Once the options are vested, they are exercisable for a period of four years. The options may be exercised in full or in part in respect of 1,000 shares or any multiple thereof, on the payment of the exercise price. The Group has no legal or constructive obligation to repurchase or settle the options in cash. The share option scheme size shall not exceed 15% of the total number of issued shares of the Company on the day preceding grant date and exercise prices are allowed to be set at discounts of up to 20% to their market price.
The number of unissued ordinary shares of the Company covered by the options in relation to the 2002 Scheme outstanding at the end of the financial year was as follows:
number of shares covered by the options
Date of grant balance at 31.12.2010 Exercise price Exercise period 2.3.2006 72,000 $5.52 2.3.2007 -1.3.20112.3.2007 244,000 $7.54 2.3.2008 -1.3.20123.3.2008 264,000 $6.47 3.3.2009 - 2.3.20132.3.2009 35,000 $3.71 2.3.2010 - 1.3.20141.3.2010 378,000 $5.86 1.3.2011 - 28.2.2015 993,000 In 2010, options to subscribe for 386,000 unissued shares in the Company at the exercise price of $5.86 per share were granted and accepted under the 2002 Scheme. No options have been granted at a discount to the market price of shares of the Company.
During the financial year, options to subscribe for 54,000 unissued shares were cancelled and 425,000 shares were issued by virtue of the exercise of options. The market price on the date of exercise ranged from $5.78 to $6.26.
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DIRECTORS’ REPORT (COnTInuED)For the financial year ended 31 December 2010
ShARE OPTIOnS (continued)
Other information required by the Singapore Exchange Securities Trading Limited (Pursuant to Listing Rule 852 of the Singapore Exchange Listing Manual)
(1) The share option scheme of the Company is administered by the Remuneration Committee, comprising the following Directors:
Sat Pal Khattar (Chairman)Wee Cho YawHwang Soo Jin
(2) The details of options granted to the Directors of the Company under the 2002 Scheme are as follows:
Aggregate Aggregate Aggregate number number number number of shares Aggregate of shares of shares of shares comprised number comprised comprised comprised in options of shares
in options in options in options that have comprised granted granted since exercised since expired since in options
during the commencement commencement commencement outstanding financial of scheme to of scheme to of scheme to as atname of director year 31.12.2010 31.12.2010 31.12.2010 31.12.2010
Wee Ee Lim - 48,000 48,000 – –Chng Hwee Hong 48,000 427,000 283,000 – 144,000 Han Ah Kuan 48,000 359,000 215,000 – 144,000
(3) no options are granted to controlling shareholders of the Company and their associates (as defined in the Listing Manual of Singapore Exchange Securities Trading Limited);
(4) no participant has received 5% or more of the total number of options available under the share option scheme;
(5) no options have been granted at a discount to the market price of shares of the Company for the financial year ended 31 December 2010; and
(6) options granted by the Company do not entitle the holders of the options, by virtue of such options, any right to participate in any share issue of any other company in the Group.
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DIRECTORS’ REPORT (COnTInuED)For the financial year ended 31 December 2010
AuDIT COmmITTEE
The Audit Committee comprises three members, all of whom are independent non-executive Directors. The members of the Audit Committee are as follows:
Reggie Thein (Chairman) Hwang Soo JinLee Suan Yew
In accordance with Section 201B(5) of the Companies Act, Cap 50, the Audit Committee has reviewed with the Company’s internal auditors their audit plan and the scope and results of their internal audit procedures. The Committee has also reviewed with the Company’s independent auditor, PricewaterhouseCoopers LLP, their audit plan, their evaluation of the system of internal accounting controls, their audit report on the statement of financial position of the Company and the consolidated financial statements of the Group for the financial year ended 31 December 2010 and the assistance given by the officers of the Group to them. The statement of financial position of the Company and the consolidated financial statements of the Group, as well as the independent auditor’s report on the same, have been reviewed by the Committee prior to their submission to the Board of Directors.
The Committee has recommended to the Board of Directors the re-appointment of PricewaterhouseCoopers LLP as independent auditor of the Company.
InDEPEnDEnT AuDITOR
PricewaterhouseCoopers LLP has expressed its willingness to accept re-appointment as independent auditor of the Company and a resolution proposing its re-appointment will be submitted at the forthcoming Annual General Meeting.
On behalf of the Board
Wee Cho Yaw Wee Ee limChairman President & Chief Executive Officer
Singapore23 February 2011
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STATEmEnT bY DIRECTORS
For the financial year ended 31 December 2010
We, Wee Cho Yaw and Wee Ee Lim, being two of the Directors of Haw Par Corporation Limited, do hereby state that, in the opinion of the Directors:
(a) the statement of financial position of the Company and the consolidated financial statements of the Group as set out on pages 52 to 113 are drawn up so as to give a true and fair view of the state of affairs of the Company and of the Group as at 31 December 2010 and of the results, changes in equity and cash flows of the Group for the financial year then ended; and
(b) at the date of this statement, there are reasonable grounds to believe that the Company will be able to pay its debts as and when they fall due.
On behalf of the Board
Wee Cho Yaw Wee Ee limChairman President & Chief Executive Officer
Singapore23 February 2011
Pursuant To Section 201(15)
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InDEPEnDEnT AuDITOR’S REPORT
For the financial year ended 31 December 2010To The Members Of Haw Par Corporation Limited
REPORT On ThE fInAnCIAl STATEmEnTS
We have audited the accompanying financial statements of Haw Par Corporation Limited (the “Company”) and its subsidiaries (the “Group”) set out on pages 52 to 113, which comprise the statements of financial position of the Company and of the Group as at 31 December 2010, the consolidated income statement, the consolidated statement of comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows of the Group for the financial year then ended, and a summary of significant accounting policies and other explanatory information.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation of financial statements that give a true and fair view in accordance with the provisions of the Singapore Companies Act (the “Act”) and Singapore Financial Reporting Standards, and for devising and maintaining a system of internal accounting control sufficient to provide a reasonable assurance that assets are safeguarded against loss from unauthorised use or disposition, that transactions are properly authorised and that they are recorded as necessary to permit the preparation of true and fair profit and loss accounts and statements of financial position and to maintain accountability of assets.
Auditor’s Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Singapore Standards on Auditing. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance as to whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation of financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
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InDEPEnDEnT AuDITOR’S REPORT (COnTInuED)
For the financial year ended 31 December 2010To The Members Of Haw Par Corporation Limited
Opinion
In our opinion, the consolidated financial statements of the Group and the statement of financial position of the Company are properly drawn up in accordance with the provisions of the Act and Singapore Financial Reporting Standards so as to give a true and fair view of the state of affairs of the Group and of the Company as at 31 December 2010, and the results, changes in equity and cash flows of the Group for the financial year ended on that date.
REPORT On OThER lEgAl AnD REgulATORY REquIREmEnTS
In our opinion, the accounting and other records required by the Act to be kept by the Company and by those subsidiaries incorporated in Singapore of which we are the auditors, have been properly kept in accordance with the provisions of the Act.
PricewaterhouseCoopers llPPublic Accountants and Certified Public Accountants
Singapore23 February 2011
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COnSOlIDATED InCOmE STATEmEnT For the financial year ended 31 December 2010
The group note 2010 2009 $’000 $’000 Revenue 4 129,761 123,991Cost of sales (56,887) (52,874) gross profit 72,874 71,117Other income 5 50,824 47,992Sales and marketing expenses (26,126) (24,648)Warehouse and delivery expenses (479) (542)General and administrative expenses (12,287) (10,434) Profit from operations 84,806 83,485Share of results of associated companies/ gain on dilution of investment in associated company (net) 13 23,521 7,590Fair value gains/(losses) on investment properties 11 15,436 (32,866) Profit before taxation 123,763 58,209Taxation 7 (10,993) (1,044) Profit for the financial year 112,770 57,165 Attributable to: Equity holders of the Company 112,507 57,036Non-controlling interests 263 129 112,770 57,165 Earnings per share attributable to equity holders of the Company 9 - Basic 56.9 cents 28.9 cents- Diluted 56.9 cents 28.9 cents
The accompanying notes form an integral part of these financial statements.
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COnSOlIDATED STATEmEnT Of COmPREhEnSIVE InCOmEFor the financial year ended 31 December 2010
The group 2010 2009 $’000 $’000 Profit for the financial year, net of tax 112,770 57,165 Other comprehensive (expense)/income, after tax Fair value (losses)/gains on available-for-sale financial assets (net) (30,896) 568,012 Reclassification of fair value gains on disposal of available-for-sale financial assets (2,173) – Currency translation differences on consolidation of foreign entities (net) (5,894) (3,179) Share of associated company’s currency translation reserve through equity accounting 4,212 (1,547) Share of associated company’s other comprehensive (expense)/income through equity accounting (1,032) 2,567 Other comprehensive (expense)/income for the financial year, net of tax (35,783) 565,853 Total comprehensive income for the financial year 76,987 623,018 Total comprehensive income attributable to: Equity holders of the Company 76,378 622,888Non-controlling interests 609 130 76,987 623,018
The accompanying notes form an integral part of these financial statements.
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The group The Company note 2010 2009 2010 2009 $’000 $’000 $’000 $’000
ASSETS non-current assets Property, plant and equipment 10 43,848 45,367 – –Investment properties 11 181,642 164,878 – –Investment in subsidiaries 12 – – 381,957 386,641Investment in associated companies 13 91,702 72,837 2,895 2,895Available-for-sale financial assets 14 1,239,779 1,217,708 455 431Intangible assets 15 11,116 11,116 – – 1,568,087 1,511,906 385,307 389,967 Current assets Available-for-sale financial assets 14 335,082 379,715 – –Inventories 16 9,275 6,090 – –Trade and other receivables 17 18,597 18,538 107,442 138,204Tax recoverable 4 124 – –Deposits with banks and financial institutions 18 87,579 64,059 71,017 48,502Cash and bank balances 18 23,780 22,890 1,085 819 474,317 491,416 179,544 187,525 Total assets 2,042,404 2,003,322 564,851 577,492 lIAbIlITIES Current liabilities Trade and other payables 19 (31,831) (32,172) (150,587) (151,964)Taxation (7,388) (6,924) (198) (73) (39,219) (39,096) (150,785) (152,037)non-current liabilities Deferred income taxation 20 (53,536) (54,279) – – (53,536) (54,279) – – Total liabilities (92,755) (93,375) (150,785) (152,037) nET ASSETS 1,949,649 1,909,947 414,066 425,455 EquITY Equity attributable to equity holders of the Company Share capital 21 241,355 239,541 241,355 239,541Reserves 1,700,538 1,663,259 172,711 185,914 1,941,893 1,902,800 414,066 425,455non-controlling interests 7,756 7,147 – –Total equity 1,949,649 1,909,947 414,066 425,455
STATEmEnTS Of fInAnCIAl POSITIOnAs at 31 December 2010
The accompanying notes form an integral part of these financial statements.
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COnSOlIDATED STATEmEnT Of ChAngES In EquITY For the financial year ended 31 December 2010
Attributable to equity holders of the Company foreign Share fair currency non- Share Statutory Capital option value translation Revenue controlling Total capital reserve 1 reserve 2 reserve reserve reserve reserve Total interests equity $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000
2010 Balance at 1 January 2010 239,541 1,522 16,815 1,974 1,106,390 (4,484) 541,042 1,902,800 7,147 1,909,947 Issue of share capital 1,814 – – – – – – 1,814 – 1,814 Expensing of share options – – – 450 – – – 450 – 450 Dividends paid – – – – – – (39,549) (39,549) – (39,549) Total comprehensive (expense)/ income for the financial year – – – – (33,069) (2,028) 111,475 76,378 609 76,987 balance at 31 December 2010 241,355 1,522 16,815 2,424 1,073,321 (6,512) 612,968 1,941,893 7,756 1,949,649
The accompanying notes form an integral part of these financial statements.
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COnSOlIDATED STATEmEnT Of ChAngES In EquITY (COnTInuED)For the financial year ended 31 December 2010
Attributable to equity holders of the Company foreign Share fair currency non- Share Statutory Capital option value translation Revenue controlling Total capital reserve 1 reserve 2 reserve reserve reserve reserve Total interests equity $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000
2009
Balance at 1 January 2009 239,541 1,522 17,267 1,760 538,378 243 521,354 1,320,065 7,017 1,327,082
Expensing of share options – – – 214 – – – 214 – 214
Purchase of non- controlling interest shares in subsidiary – – – – – – (505) (505) – (505) Increase in interest of an associated company – – – – – – 81 81 – 81 Liquidation of a subsidiary – – (452) – – – – (452) – (452) Dividends paid – – – – – – (39,491) (39,491) – (39,491) Total comprehensive income/ (expense) for the financial year – – – – 568,012 (4,727) 59,603 622,888 130 623,018 Balance at 31 December 2009 239,541 1,522 16,815 1,974 1,106,390 (4,484) 541,042 1,902,800 7,147 1,909,947
1 The statutory reserve is legally required to be set aside in the countries of incorporation of certain subsidiaries. Those laws restrict the distribution and use of the reserve.
2 The capital reserve relates to non-distributable profits arising from sale of long term investments according to certain subsidiaries’ Articles of Association and share premium arising from issue of shares by certain subsidiaries.
The accompanying notes form an integral part of these financial statements.
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COnSOlIDATED STATEmEnT Of CASh flOWS For the financial year ended 31 December 2010
The group note 2010 2009 $’000 $’000
Cash flows from operating activities: Profit for the financial year, net of tax 112,770 57,165Adjustments for: Taxation 7 10,993 1,044 Share of results of associated companies 13 (14,999) (7,590) Gain on dilution of investment in an associated company (net) 13 (8,522) – Gain on liquidation of a subsidiary 5 – (442) Fair value (gains)/losses on investment properties 11 (15,436) 32,866 Investment income 5 (44,910) (43,646) Interest income 5 (958) (1,500) Depreciation of property, plant and equipment 10 5,159 3,411 Expensing of share options 25 450 214 Property, plant and equipment written off 6 125 211 Gain on disposal of property, plant and equipment 6 (9) – Inventories written down 16 170 161 Write back of unclaimed dividends 5 (160) (125) Gain on disposal of available-for-sale financial assets 5 (2,638) – (Write back)/allowance for impairment in value of available-for-sale financial assets 5,6 (464) 476 Currency translation losses/(gains) 530 (135)Operating profit before working capital changes 42,101 42,110(Increase)/decrease in inventories (3,355) 307(Increase)/decrease in receivables (107) 4,532Decrease in payables (181) (844)Cash generated from operations 38,458 46,105 Investment income received 6,282 43,575Interest income received 513 496Net taxation paid (6,929) (7,624)net cash provided by operating activities 38,324 82,552 Cash flows from investing activities Purchase of short-term available-for-sale financial assets (784) –Proceeds from capital reduction of available-for-sale financial assets – 71Proceeds from liquidation of available-for-sale financial assets 464 –Proceeds from disposal of available-for-sale financial assets 27,763 –Purchase of property, plant and equipment 10 (4,079) (13,949)Dividends from associated companies 1,985 800Proceeds from sale of property, plant and equipment 15 –Purchase of non-controlling interests shares in subsidiary – (505)Investment in associated company – (9,095)Improvements to investment properties 11 (1,025) (347)net cash provided by/(used in) investing activities 24,339 (23,025)
The accompanying notes form an integral part of these financial statements.
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COnSOlIDATED STATEmEnT Of CASh flOWS (COnTInuED) For the financial year ended 31 December 2010
The group note 2010 2009 $’000 $’000
Cash flows from financing activities Proceeds from issue of share capital 21 1,814 –Payment of dividends to shareholders of the Company 8 (39,549) (39,491)Bank deposits pledged (26) (1,367)net cash used in financing activities (37,761) (40,858) net increase in cash and cash equivalents 24,902 18,669Cash and cash equivalents at beginning of the financial year 18 85,458 66,961Effects of currency translation on cash and cash equivalents (523) (172)Cash and cash equivalents at end of the financial year 18 109,837 85,458
The accompanying notes form an integral part of these financial statements.
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nOTES TO ThE fInAnCIAl STATEmEnTSFor the financial year ended 31 December 2010
These notes form an integral part of and should be read in conjunction with the accompanying financial statements.
1. gEnERAl
Haw Par Corporation Limited (the “Company”) is incorporated and domiciled in Singapore and is listed on the Singapore Exchange. The address of its registered office is as follows:
401 Commonwealth Drive#03-03 Haw Par Technocentre Singapore 149598
The Company is the owner of the “Tiger” trademarks and is the holding company of the Group.
The principal activities of the Company are licensing of the “Tiger” trademarks and owning investments for long term holding purposes.
The principal activities of the Group are as follows:(a) manufacturing, marketing and trading healthcare products;(b) providing leisure-related services; and(c) investing in properties and securities.
2. SIgnIfICAnT ACCOunTIng POlICIES
(a) basis of preparation
The financial statements have been prepared in accordance with Singapore Financial Reporting Standards (“FRS”). The financial statements have been prepared under the historical cost convention, except as disclosed in the accounting policies below.
The preparation of financial statements in conformity with FRS requires management to exercise its judgment in the process of applying the Group’s accounting policies. It also requires the use of certain critical accounting estimates and assumptions. An area involving a higher degree of judgment or complexity, or where assumptions and estimates are significant to the financial statements is disclosed in Note 3.
Interpretations and amendments to published standards effective in 2010
On 1 January 2010, the Group adopted the new or amended FRS and Interpretations to FRS (“INT FRS”) that are mandatory for application from that date. Changes to the Group’s accounting policies have been made as required, in accordance with the transitional provisions in the respective FRS and INT FRS.
The following are the new or revised FRS and INT FRS that are relevant to the Group’s and Company’s accounting policies and adoption of these standards has no material effect on the amounts reported for the current or prior financial years except as disclosed below:
FRS 27 (revised) Consolidated and Separate Financial Statements (effective for annual periods beginning on or after 1 July 2009).
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nOTES TO ThE fInAnCIAl STATEmEnTSFor the financial year ended 31 December 2010
2. SIgnIfICAnT ACCOunTIng POlICIES (continued)
(a) basis of preparation (continued)
FRS 27 (revised) requires the effects of all transactions with non-controlling interests to be recorded in equity if there is no change in control and these transactions will no longer result in goodwill or gains and losses. Losses incurred by a subsidiary are allocated to the non-controlling interest even if the losses exceed the non-controlling interest in the subsidiary’s equity. The standard also specifies the accounting when control is lost. Any remaining interest in the entity is re-measured to fair value, and gain or loss is recognised in profit or loss. Please refer to Note 2(c)(1) for the Group revised accounting policy on subsidiaries.
The Group has been applying FRS 27 (revised) to transactions with non- controlling interests.
FRS 103 (revised) Business Combinations (effective for annual periods beginning on or after 1 July 2009).
FRS 103 (revised) continues to apply the acquisition method to business combinations, with some significant changes. For example, all payments to purchase a business are to be recorded at fair value at the acquisition date, with contingent payments classified as debt subsequently re-measured through the profit or loss. There is a choice on an acquisition-by-acquisition basis to measure the non-controlling interest in the acquiree either at fair value or at the non-controlling interest’s proportionate share of the acquiree’s net assets. All acquisition-related costs should be expensed. Please refer to Note 2(c)(1) for the Group revised accounting policy on subsidiaries.
As the changes have been implemented prospectively, no adjustments were necessary to any of the amounts previously recognised in the financial statements. There were no transactions with non-controlling interests in the current financial year. Accordingly, these changes do not have any impact on the financial statements for the current financial year.
(b) Revenue recognition
Revenue comprises the fair value of the consideration received or receivable for the sale of goods and rendering of services, in the ordinary course of the Group’s activities, net of goods and services tax, rebates and discounts, and after eliminating sales within the Group. Revenue is recognised as follows:
(1) Sale of goods
Revenue from sale of goods is recognised when a Group entity has transferred to the customer the significant risks and rewards of the ownership of the goods, and collectibility of the related receivables is reasonably assured.
(2) Rendering of services
Revenue from services is recognised upon rendering of services.
(3) Interest income
Interest income is recognised on a time proportion basis using the effective interest method.
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2. SIgnIfICAnT ACCOunTIng POlICIES (continued)
(b) Revenue recognition (continued)
(4) Dividend income
Dividend income from subsidiaries, associated companies and available-for-sale financial assets is recognised when the right to receive payment is established.
(5) Rental income
Rental income from operating leases on investment properties is recognised on a straight-line basis over the lease term.
(c) group accounting
(1) Subsidiaries
(i) Consolidation
Subsidiaries are entities over which the Group has power to govern the financial and operating policies so as to obtain benefits from its activities, generally accompanied by a shareholding giving rise to a majority of the voting rights. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the Group controls another entity. Subsidiaries are consolidated from the date on which control is transferred to the Group. They are de-consolidated from the date on which control ceases.
In preparing the consolidated financial statements, transactions, balances and unrealised gains on transactions between group entities are eliminated. Unrealised losses are also eliminated but are considered an impairment indicator of the asset transferred. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group.
Non-controlling interests are that part of the net results of operations and of net assets of a subsidiary attributable to the interests which are not owned directly or indirectly by the equity holders of the Company. They are shown separately in the consolidated statement of comprehensive income, statement of changes in equity and statement of financial position. Total comprehensive income is attributed to the non-controlling interests based on their respective interests in a subsidiary, even if this results in the non-controlling interests having a deficit balance.
(ii) Acquisition of businesses
The acquisition method of accounting is used to account for business combinations by the Group.
The consideration transferred for the acquisition of a subsidiary comprises the fair value of the assets transferred, the liabilities incurred and the equity interests issued by the Group. The consideration transferred also includes the fair value of any contingent consideration arrangement and the fair value of any pre-existing equity interest in the subsidiary.
Acquisition-related costs are expensed as incurred.
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nOTES TO ThE fInAnCIAl STATEmEnTSFor the financial year ended 31 December 2010
2. SIgnIfICAnT ACCOunTIng POlICIES (continued)
(c) group accounting (continued)
(1) Subsidiaries (continued)
(ii) Acquisition of businesses (continued)
Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are, with limited exceptions, measured initially at their fair values at the acquisition date.
On an acquisition-by-acquisition basis, the Group recognises any non-controlling interest in the acquiree at the date of acquisition either at fair value or at the non-controlling interest’s proportionate share of the acquiree’s net identifiable assets.
The excess of the consideration transferred, the amount of any non-controlling interest in the acquiree and the acquisition-date fair value of any previous equity interest in the acquiree over the fair value of the net identifiable assets acquired is recorded as goodwill. Please refer to Note 2(e)(1) for the Group’s accounting policy on goodwill on acquisition of subsidiaries.
(iii) Disposals of subsidiaries or businesses
When a change in the Company’s ownership interest in a subsidiary results in a loss of control over the subsidiary, the assets and liabilities of the subsidiary including any goodwill are derecognised. Amounts recognised in other comprehensive income in respect of that entity are also reclassified to profit or loss or transferred directly to retained earnings if required by a specific Standard.
Any retained interest in the entity is remeasured at fair value. The difference between the carrying amount of the retained investment at the date when control is lost and its fair value is recognised in profit or loss.
(2) Transactions with non-controlling interests
Changes in the Company’s ownership interest in a subsidiary that do not result in a loss of control is accounted for as transactions with equity owners of the Group. Any changes in the carrying amounts of the non-controlling interest and the fair value of the consideration paid or received, if any, is brought to revenue reserve.
Please refer to Note 2(g) for the Company’s accounting policy on investments in subsidiaries and associated companies.
(3) Associated companies
Associated companies are entities over which the Group has significant influence, but not control, generally accompanying a shareholding of between and including 20% and 50% of the voting rights. Investments in associated companies are accounted for in the consolidated financial statements using the equity method of accounting. Investments in associated companies in the consolidated statement of financial position include goodwill (net of accumulated impairment loss) identified on acquisition, where applicable. Please refer to Note 2(e)(1) for the Group’s accounting policy on goodwill.
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2. SIgnIfICAnT ACCOunTIng POlICIES (continued)
(c) group accounting (continued)
(3) Associated companies (continued)
Investments in associated companies are initially recognised at cost. The cost of an acquisition is measured at the fair value of the assets given, equity instruments issued or liabilities incurred or assumed at the date of exchange, plus costs directly attributable to the acquisition. Goodwill on associated companies represents the excess of the cost of acquisition of the associate over the Group’s share of the fair value of the identifiable net assets of the associate and is included in the carrying amount of the investments.
In applying the equity method of accounting, the Group’s share of its associated companies’ post-acquisition results net of tax is recognised in the consolidated income statement and its share of post-acquisition other comprehensive income is recognised in other comprehensive income. These post-acquisition movements and distributions received from the associated companies are adjusted against the carrying amount of the investment. When the Group’s share of losses in an associated company equals or exceeds its interest in the associated company, including any other unsecured non-current receivables, the Group does not recognise further losses, unless it has obligations or has made payments on behalf of the associated company.
Unrealised gains on transactions between the Group and its associated companies are eliminated to the extent of the Group’s interest in the associated companies. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. Where necessary, adjustments are made to the financial statements of associated companies to ensure consistency of accounting policies with those of the Group.
Gains and losses arising from partial disposals or dilutions in investments in associated companies are recognised in profit or loss.
Investments in associated companies are derecognised when the Group loses significant influence. Any retained interest in the entity is remeasured at its fair value. The difference between the carrying amount of the retained investment at the date when significant influence is lost and its fair value is recognised in profit or loss.
Please refer to Note 2(g) for the Company’s accounting policy on investments in subsidiaries and associated companies.
(d) Property, plant and equipment
(1) Leasehold land and buildings
Leasehold land and buildings are stated at cost less accumulated depreciation and accumulated impairment losses (Note 2(h)(2)).
(2) Other property, plant and equipment
Plant, equipment, furniture, vehicles and marine livestock are stated at cost less accumulated depreciation and accumulated impairment losses (Note 2(h)(2)).
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nOTES TO ThE fInAnCIAl STATEmEnTSFor the financial year ended 31 December 2010
2. SIgnIfICAnT ACCOunTIng POlICIES (continued)
(d) Property, plant and equipment (continued)
(3) Components of costs
The cost of an item of property, plant and equipment includes its purchase price and any cost that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management. The projected cost of dismantlement, removal or restoration is also included as part of the cost of property, plant and equipment if the obligation for dismantlement, removal or restoration is incurred as a consequence of acquiring or using the asset.
(4) Depreciation
Depreciation is calculated using a straight-line method to allocate the depreciable amounts of property, plant and equipment over their estimated useful lives as follows:
Leasehold land and buildings - 50 years or over the term of the lease, whichever is shorter
Plant, equipment, furniture and vehicles - 4 to 10 years
Marine livestock - 5 years
Construction-in-progress assets are not depreciated until they are brought to use. Fully depreciated assets are retained in the financial statements until they are no longer in use.
The residual values, estimated useful lives and depreciation method of property, plant and equipment are reviewed, and adjusted as appropriate, at each statement of financial position date to ensure that the method and period of depreciation are consistent with the expected pattern of economic benefits from items of property, plant and equipment. The effects of any revision are recognised in the profit or loss for the financial year in which the changes arise.
(5) Subsequent expenditure
Subsequent expenditure relating to property, plant and equipment that has already been recognised is added to the carrying amount of the asset only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. All other repair and maintenance expense is recognised in the profit or loss when incurred.
(6) Disposal
On disposal of an item of property, plant and equipment, the difference between the net disposal proceeds and its carrying amount is recognised in the profit or loss.
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nOTES TO ThE fInAnCIAl STATEmEnTSFor the financial year ended 31 December 2010
2. SIgnIfICAnT ACCOunTIng POlICIES (continued)
(e) Intangible assets
(1) Goodwill
Goodwill on acquisitions of subsidiaries on or after 1 January 2010 represents the excess of the consideration transferred, the amount of any non-controlling interest in the acquiree and the acquisition-date fair value of any previous equity interest in the acquiree over the fair value of the identifiable net assets acquired.
Goodwill on acquisition of subsidiaries prior to 1 January 2010 represents the excess of the cost of an acquisition of subsidiaries or associated companies over the fair value of the Group’s share of their identifiable net assets at the date of acquisition.
Goodwill on subsidiaries and joint ventures is recognised separately as intangible assets and carried at cost less accumulated impairment losses.
Goodwill on associated companies is included in the carrying amount of the investments.
Gains and losses on the disposal of subsidiaries, joint ventures and associated companies include the carrying amount of goodwill relating to the entity sold, except for goodwill arising from acquisitions prior to 1 January 2001. Such goodwill was adjusted against retained profits in the year of acquisition and is not recognised in profit or loss on disposal.
(2) Trademarks
Trademarks are stated at cost less accumulated amortisation and accumulated impairment losses (Note 2(h)(2)). Amortisation is calculated using the straight line method to allocate the cost of trademarks over a period not exceeding 20 years. These have been fully amortised as at the statement of financial position date.
(3) Deferred expenditure
Deferred expenditure comprises technology fee paid in advance, clinical trial expenses and television advertisement production costs, which are recognised as assets as they generate future economic benefits. Technology fee expense paid in advance for the use of a third party’s technology is amortised using the straight line method over the period of the contract with the third party. Clinical trial expenses incurred for product registrations are amortised using the straight line method over a 5-year period. Television advertisement production costs are amortised using the straight line method over the estimated useful life of approximately 2-3 years.
The amortisation period and amortisation method of intangible assets other than goodwill are reviewed at least once at each statement of financial position date. The effects of any revision are recognised in profit or loss when the changes arise.
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2. SIgnIfICAnT ACCOunTIng POlICIES (continued)
(f) Investment properties
Investment properties of the Group, principally comprising office and industrial buildings, are held for long-term rental yields and/or capital appreciation and are not substantially occupied by the Group.
Investment properties are classified as non-current assets, initially recognised at cost and subsequently carried at fair value, determined annually by independent professional valuers. Changes in fair values are recognised in profit or loss.
Investment properties are subject to renovations or improvements at regular intervals. The cost of major renovations and improvements is capitalised as additions and the carrying amounts of the replaced components are written off to profit or loss. The cost of maintenance, repairs and minor improvement is charged to profit or loss when incurred.
On disposal of an investment property, the difference between the net disposal proceeds and the carrying amount is recognised in profit or loss.
(g) Investments in subsidiaries and associated companies
Investments in subsidiaries and associated companies are stated at cost less accumulated impairment losses (Note 2(h)(2)) in the Company’s statement of financial position. On disposal of investments in subsidiaries and associated companies, the difference between net disposal proceeds and the carrying amount of the net investment is recognised in profit or loss.
(h) Impairment of non-financial assets
(1) Goodwill
Goodwill, recognised separately as an intangible asset, is tested annually for impairment, as well as when there is any indication that the goodwill may be impaired.
For the purpose of impairment testing of goodwill, goodwill is allocated to each of the Group’s cash generating units (“CGU”) expected to benefit from synergies of the business combination.
An impairment loss is recognised when the carrying amount of CGU, including the goodwill, exceeds the recoverable amount of the CGU. Recoverable amount of the CGU is the higher of the CGU’s fair value less cost to sell and value-in-use.
The total impairment loss is allocated first to reduce the carrying amount of goodwill allocated to the CGU and then to the other assets of the CGU pro-rata on the basis of the carrying amount of each asset in the CGU.
An impairment loss on goodwill is recognised in profit or loss and is not reversed in a subsequent period.
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2. SIgnIfICAnT ACCOunTIng POlICIES (continued)
(h) Impairment of non-financial assets (continued)
(2) Intangible assets, Property, plant and equipment and Investments in subsidiaries and associated companies
Intangible assets, property, plant and equipment and investments in subsidiaries and associated companies are reviewed for impairment whenever there is any indication that these assets may be impaired. If any such indication exists, the recoverable amount (i.e. the higher of the fair value less cost to sell and value in use) of the asset is estimated to determine the amount of impairment loss.
For the purpose of impairment testing of these assets, recoverable amount is determined on an individual asset basis unless the asset does not generate cash flows that are largely independent of those from other assets. If this is the case, recoverable amount is determined for the CGU to which the asset belongs to.
If the recoverable amount of the asset (or CGU) is estimated to be less than its carrying amount, the carrying amount of the asset (or CGU) is reduced to its recoverable amount.
The impairment loss is recognised in profit or loss.
An impairment loss for an asset other than goodwill is reversed if, and only if, there has been a change in the estimates used to determine the asset’s recoverable amount since the last impairment loss was recognised. The carrying amount of an asset other than goodwill is increased to its revised recoverable amount, provided that this amount does not exceed the carrying amount that would have been determined (net of accumulated amortisation or depreciation) had no impairment loss been recognised for the asset in prior years.
A reversal of impairment loss for an asset other than goodwill is recognised in profit or loss.
(i) financial assets
(1) Classification
The Group classifies its investments in financial assets in the following categories: loans and receivables, available-for-sale and at fair value through profit or loss. The classification depends on the purpose for which the assets have been acquired. Management determines the classification of its financial assets at initial recognition.
Investments in convertible bonds are analysed into its non-derivative host contract debt securities and its embedded derivative. The non-derivative host contract is accounted for as financial assets, available-for-sale and its embedded derivative is accounted for as financial assets at fair value through profit or loss.
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2. SIgnIfICAnT ACCOunTIng POlICIES (continued)
(i) financial assets (continued)
(1) Classification (continued)
(i) Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They are included in current assets, except those maturing later than 12 months after the statement of financial position date which are classified as non-current assets. Loans and receivables are classified within “Trade and other receivables” on the statements of financial position.
(ii) Financial assets, available-for-sale
Financial assets, available-for-sale are non-derivatives that are either designated in this category or not classified in any of the other categories.
(iii) Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss are financial assets held for trading. A financial asset is classified in this category if acquired principally for the purpose of selling in the short term. Derivatives are also classified as held for trading unless they are designated as hedges. Assets in this category are presented as current assets if they are either held for trading or are expected to be realised within 12 months after the statement of financial position date.
(2) Recognition and derecognition
Purchases and sales of financial assets are recognised on trade-date - the date on which the Group commits to purchase or sell the asset.
Financial assets are derecognised when the rights to receive cash flows from the financial assets have expired or have been transferred and the Group has transferred substantially all risks and rewards of ownership.
On disposal of a financial asset, the difference between the net sale proceeds and its carrying amount is recognised in profit or loss. Any amount in the fair value reserve relating to that asset is reclassfied in profit or loss.
(3) Initial measurement
Financial assets are initially recognised at fair value plus transaction costs except for financial assets at fair value through profit or loss, which are recognised at fair value. Transaction costs for financial assets at fair value through profit or loss are recognised immediately as expenses.
(4) Subsequent measurement
Financial assets, both available-for-sale and financial assets at fair value through profit or loss are subsequently carried at fair value. Loans and receivables are subsequently carried at amortised cost using the effective interest method.
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2. SIgnIfICAnT ACCOunTIng POlICIES (continued)
(i) financial assets (continued)
(4) Subsequent measurement (continued)
Changes in fair values of available-for-sale equity securities (i.e. non-monetary items) denominated in foreign currencies are recognised in the fair value reserve, together with the related currency translation differences. Dividend income on available-for-sale equity securities is recognised separately in profit or loss.
For investments in the non-derivative host contract of the convertible bonds, interest is calculated using the effective interest method and is recognised in profit or loss as interest income. Changes in the fair value of these non-derivative host contracts are recognised in the fair value reserve.
Changes in the fair value of financial assets at fair value through profit or loss are recognised in profit or loss when the changes arise.
(5) Impairment
The Group assesses at each statement of financial position date whether there is objective evidence that a financial asset or a group of financial assets is impaired and recognises an allowance for impairment when such evidence exists.
(i) Loans and receivables
Significant financial difficulties of the debtor, probability that the debtor will enter bankruptcy, and default or significant delay in payments are objective evidence that these financial assets are impaired.
The carrying amount of these assets is reduced through the use of an impairment allowance account which is calculated as the difference between the carrying amount and the present value of estimated future cash flows, discounted at the original effective interest rate. When the asset becomes uncollectible, it is written off against the allowance account. Subsequent recoveries of amounts previously written off are recognised against the same line item in profit or loss.
The allowance for impairment loss account is reduced through profit or loss in a subsequent period when the amount of impairment loss decreases and the related decrease can be objectively measured. The carrying amount of the asset previously impaired is increased to the extent that the new carrying amount does not exceed the amortised cost had no impairment been recognised in prior periods.
(ii) Financial assets, available-for-sale
In addition to the objective evidence of impairment described in Note 2(i)(5)(i), a significant or prolonged decline in the fair value of an equity security below its cost is considered as an indicator that the available-for-sale financial asset is impaired.
If any evidence of impairment exists, the cumulative loss that was recognised in the fair value reserve is reclassified to profit or loss. The cumulative loss is measured as the difference between the acquisition cost (net of any principal repayments and amortisation) and the current fair value, less any impairment loss previously recognised as an expense. The impairment losses recognised as an expense on equity securities are not reversed through profit or loss.
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2. SIgnIfICAnT ACCOunTIng POlICIES (continued)
(j) Inventories
Inventories are carried at the lower of cost and net realisable value. Cost is determined on a weighted average basis. The cost of finished goods and work-in-progress comprises raw materials, direct labour, other direct costs and related production overheads (based on normal operating capacity) but exclude borrowing costs. Net realisable value is the estimated selling price in the ordinary course of business, less applicable variable selling expenses.
(k) Operating leases
(1) When a group company is the lessee:
Leases of property, plant and equipment where a significant portion of the risks and rewards of ownership is retained by the lessor are classified as operating leases. Payments made under operating leases (net of any incentives received from the lessor) are recognised in profit or loss on a straight-line basis over the period of the lease.
When an operating lease is terminated before the lease period has expired, any payment required to be made to the lessor by way of penalty is recognised as an expense in the period in which termination takes place.
(2) When a group company is the lessor:
Leases of investment properties to third parties where the Group assumes substantially all risks and rewards incidental to ownership of the leased assets are classified as operating leases.
Rental income (net of any incentives given to lessees) is recognised in the consolidated income statement on a straight-line basis over the lease term.
When an operating lease is terminated before the lease period has expired, any payment required to be made by the lessee by way of penalty is recognised as an income in the period in which termination takes place.
(l) Trade and other payables
Trade and other payables are initially measured at fair value, and subsequently measured at amortised cost, using the effective interest method.
(m) Income taxes
Current income tax liabilities (and assets) for current and prior periods are recognised at the amounts expected to be paid to (or recovered from) the tax authorities, using the tax rates (and tax laws) that have been enacted or substantially enacted by the statement of financial position date.
Deferred income tax assets/liabilities are recognised for all deductible/taxable temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements except when the deferred income tax assets/liabilities arise from the initial recognition of goodwill or an asset or liability in a transaction that is not a business combination and at the time of the transaction, affects neither accounting nor taxable profit or loss.
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2. SIgnIfICAnT ACCOunTIng POlICIES (continued)
(m) Income taxes (continued)
Deferred income tax liability is recognised on temporary differences arising on investments in subsidiaries and associated companies, except where the timing of the reversal of the temporary difference can be controlled and it is probable that the temporary difference will not reverse in the foreseeable future.
Deferred income tax asset is recognised to the extent that it is probable that future taxable profit will be available against which the deductible temporary differences and tax losses can be utilised.
Deferred income tax is measured:
(i) at the tax rates that are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted by the statement of financial position date; and
(ii) based on the tax consequence that would follow from the manner in which the Group expects, at the statement of financial position date, to recover or settle the carrying amounts of its assets and liabilities.
Current and deferred income taxes are recognised as income or expenses in profit or loss for the period, except to the extent that the tax arises from a business combination or a transaction, which is recognised directly in equity. Deferred tax arising from a business combination is adjusted against goodwill on acquisition.
(n) Employee benefits
(1) Defined contribution plans
Defined contribution plans are post-employment benefit plans under which the Group pays fixed contributions into separate entities such as Central Provident Fund on a mandatory, contractual or voluntary basis. The Group has no further payment obligations once the contributions have been paid. The Group’s contribution are recognised as employee expense when they are due, unless they can be capitalised as an asset.
(2) Share-based compensation
The Group operates an equity-settled, share-based compensation plan. The fair value of the employee services received in exchange for the grant of the options is recognised as an expense in profit or loss with a corresponding increase in share option reserve within equity over the vesting period. The total amount to be recognised over the vesting period is determined by reference to the fair value of the options granted on the date of grant. Non-market vesting conditions are included in the estimation of the number of shares under options that are expected to become exercisable on vesting date. At each statement of financial position date, the Group revises its estimates of the number of shares under options that are expected to become exercisable on vesting date and recognises the impact of the revision of estimates in profit or loss, with a corresponding adjustment to the share option reserve over the remaining vesting period.
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2. SIgnIfICAnT ACCOunTIng POlICIES (continued)
(o) Derivative financial instruments and hedging activities
A derivative financial instrument is initially recognised at its fair value on the date the contract is entered into and is subsequently carried at its fair value. The method of recognising the resulting gain or loss depends on whether the derivative is designated as a hedging instrument, and if so, the nature of the item being hedged.
The Group documents at the inception of the transaction the relationship between the hedging instruments and hedged items, as well as its risk management objective and strategies for undertaking various hedge transactions. The Group also documents its assessment, both at hedge inception and on an ongoing basis, on whether the derivatives designated as hedging instruments are highly effective in offsetting changes in fair value or cash flows of the hedged items.
The Group enters into currency forwards that qualify as cash flow hedges against highly probable forecasted transactions in foreign currencies. The fair value changes on the effective portion of the currency forwards designated as cash flow hedges are recognised in the hedging reserve and transferred to profit or loss when the hedged forecasted transactions affects profit or loss.
When the forecasted transaction is no longer expected to occur, the gains and losses that were previously recognised in the hedging reserve are transferred to profit or loss immediately.
Fair value in changes on derivatives that are not designated or do not qualify for hedge accounting are recognised in profit or loss when the changes arise.
(p) fair value estimation
The carrying amounts of current financial assets and liabilities, carried at amortised cost, are assumed to approximate their fair values.
The fair values of financial instruments traded in active markets (such as exchange-traded and over-the-counter securities and derivatives) are based on quoted market prices obtained from stock exchange at the statement of financial position date. The quoted market prices used for financial assets held by the Group are the current bid prices; the appropriate quoted market prices for financial liabilities are the current asking prices.
The fair values of financial instruments that are not traded in an active market are determined by using valuation techniques. The Group uses a variety of methods such as estimated discounted cash flow analyses.
The fair values of currency forwards are determined using actively quoted forward exchange rates provided by reputable financial institutions.
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2. SIgnIfICAnT ACCOunTIng POlICIES (continued)
(q) Currency translation
(1) Functional and presentation currency
Items included in the financial statements of each entity in the Group are measured using the currency of the primary economic environment in which the entity operates (“the functional currency”). The consolidated financial statements of the Group are presented in Singapore Dollar, which is the Company’s functional currency.
(2) Transactions and balances
Transactions in a currency other than the functional currency (“foreign currency”) are translated into the functional currency using the exchange rates prevailing at the dates of transactions. Currency translation gains and losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies at the closing rates at the statement of financial position date are recognised in the profit or loss, except for currency translation differences on the net investment in foreign operations, borrowings in foreign currencies and other currency instruments designated and qualifying as net investment hedges for foreign operations, which are included in the foreign currency translation reserve within equity in the consolidated financial statements and transferred to profit or loss of the gain or loss on disposal of the foreign operation.
Non-monetary items that are measured at fair values in foreign currencies are translated using the exchange rates at the date when the fair values are determined. Currency translation differences on non-monetary items whereby gains or losses are recognised directly in equity, such as equity investments classified as available-for-sale financial assets are included in the fair value reserve.
(3) Translation of Group entities’ financial statements
The results and financial position of Group entities (none of which has the currency of a hyperinflationary economy) that are in functional currencies different from the presentation currency are translated into the presentation currency as follows:
(i) Assets and liabilities are translated at the closing rates at the date of the statement of financial position;
(ii) Income and expenses are translated at average exchange rates (unless this average is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case, income and expenses are translated at the dates of the transactions); and
(iii) All resulting exchange differences are recognised in other comprehensive income and accumulated in currency translation reserve within equity.
Goodwill and fair value adjustments arising from the acquisition of a foreign entity on or after 1 January 2005 are treated as assets and liabilities of the foreign entity and translated at the closing rates at the date of the statement of financial position. For acquisitions prior to 1 January 2005, the exchange rates at the dates of the acquisition are used.
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2. SIgnIfICAnT ACCOunTIng POlICIES (continued)
(r) Segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the executive committee whose members are responsible for allocating resources and assessing performance of the operating segments.
(s) Cash and cash equivalents
Cash and cash equivalents include cash and bank balances, deposits with financial institutions and bank overdrafts, if any.
(t) Share capital
Ordinary shares are classified as equity. Incremental costs directly attributable to the issuance of new ordinary shares are deducted against the share capital account. When the Company’s ordinary shares are repurchased, the weighted average cost of each share is written off against the share capital, with the remaining amounts written off against the retained earnings of the Company.
(u) Dividends
Interim dividends are recorded during the financial year in which they are declared payable. Final dividends are recorded in the financial year in which the dividends are approved by the shareholders.
(v) government grants
Grants from the government are recognised as a receivable at their fair value when there is reasonable assurance that the grant will be received and the Group will comply with all the attached conditions.
Government grants receivable are recognised as income over the periods necessary to match them with the related costs which they are intended to compensate on a systematic basis. Government grants relating to expenses are shown separately as other income.
(w) financial guarantees
The Company had issued corporate guarantees to banks for credit facilities of its subsidiaries. These guarantees are financial guarantee contracts as they require the Company to reimburse the banks if the subsidiaries fail to make principal or interest payments when due in accordance with terms of their credit facilities.
Financial guarantee contracts are initially recognised at their fair values plus transaction costs in the Company’s statement of financial position.
Financial guarantee contracts are subsequently amortised to profit or loss over the period of the subsidiaries’ borrowings, unless it is probable that the Company will reimburse the bank for an amount higher than the unamortised amount. In this case, the financial guarantee contracts shall be carried at the expected amount payable to the bank in the Company’s statement of financial position.
Intragroup transactions are eliminated on consolidation.
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3. CRITICAl ACCOunTIng ESTImATES AnD juDgmEnTS
Estimates, assumptions and judgments are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.
The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal to the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.
Impairment of goodwill and property, plant and equipment
The Group tests annually whether goodwill and property, plant and equipment have suffered any impairment, in accordance with the accounting policy stated in Note 2(h)(1) and Note 2(h)(2) respectively. The recoverable amounts of these assets and where applicable, cash-generating units, have been determined based on value-in-use calculations. These calculations require the use of estimates. Based on the positive recoverable amount that exceeded the carrying amount of goodwill and property, plant and equipment, there is no impairment.
As the estimates and assumptions used are reasonably conservative, it will require a significant variation to the estimates and assumptions to result in any impairment adjustments. Please refer to Note 15(a) for details on goodwill impairment tests.
4. REVEnuE
Revenue of the Group represents invoiced sales and services, and rental income but excludes dividend income, interest income and intra-group transactions.
The group 2010 2009 $’000 $’000
Sale of goods 87,524 81,376Rendering of services 26,325 25,326
Rental income 15,912 17,289 129,761 123,991
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5. OThER InCOmE
The group 2010 2009 $’000 $’000
Investment income from gross dividends from quoted equity investments 44,910 43,575Gain on liquidation of a subsidiary – 442Write back of allowance for impairment in value of available-for-sale financial assets 464 –Gain on disposal of available-for-sale financial assets 2,638 –Capital distribution of available-for-sale financial assets – 71Write back of unclaimed dividends 160 125Interest income from: - Deposits 381 375- Available-for-sale financial assets 577 1,125Service, licence and rental fee 964 1,007Government grant - Jobs Credit Scheme 148 805
Miscellaneous income 582 467 50,824 47,992
The Jobs Credit Scheme is a cash grant introduced in the Singapore Budget 2009 to help businesses preserve jobs in the economic downturn. The amount an employer can receive would depend on the fulfilment of the conditions as stated in the scheme. The scheme ended during the financial year.
6. nATuRE Of ExPEnSES
The group 2010 2009 $’000 $’000
Purchase of inventories 32,464 27,712Changes in inventories (3,185) 468Sales and marketing expenses 20,626 19,415Employee benefits (Note 25(a)) 19,519 18,731Trademark expenses 634 412Depreciation of property, plant and equipment (Note 10) 5,159 3,411Auditors' remuneration: - Auditor of the Company: - audit fees 385 355 - non-audit fees 4 20 - under provision of audit fees in respect of prior year 15 17- Other auditors: - audit fees 22 16 - non-audit fees 5 –Foreign exchange loss, net 455 280Inventories written down 170 161Property, plant and equipment written off 125 211Gain on disposal of property, plant and equipment (9) –
Allowance for impairment in value of available-for-sale financial assets – 476
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7. TAxATIOn
The group 2010 2009 $’000 $’000
Tax expense attributable to profit is made up of:
Current taxation Current year: - Singapore 5,762 5,529
- Overseas 1,494 1,378 7,256 6,907
Under/(over) provision in respect of previous years: - Singapore 290 (68)
- Overseas 2 80 292 12
Deferred taxation Origination and reversal of temporary differences: - Singapore 2,628 (6,226)
- Overseas 205 368 2,833 (5,858)
Under/(over) provision in respect of previous years: - Singapore 599 –
- Overseas 13 (17) 612 (17) 10,993 1,044
The tax expense on accounting profit differs from the amount that would arise using the Singapore standard rate of income tax due to the following:
2010 2009 $’000 $’000
Profit before taxation 123,763 58,209Share of profit of associated companies, net of tax/gain on
dilution of investment in an associated company (net) (23,521) (7,590)Profit before taxation and share of profit of associated companies /gain on dilution of investment in an associated company (net) 100,242 50,619 Taxation at applicable Singapore tax rate of 17% (2009: 17%) 17,041 8,605Adjustments: - Change in tax rate 3 (786)- Tax rate difference in subsidiaries 289 322- Tax effect of expenses not deductible for tax purposes 995 664- Tax effect of income not subject to tax (7,856) (7,789)- Tax rebates and exemptions (200) (157)- Utilisation of tax losses not recognised in previous years (800) (80)- Deferred income tax asset not recognised 557 369- Originating/reversal of previous years’ temporary differences 43 (74)- Under/(over) provision in respect of previous years 904 (14)
- Other 17 (16) Taxation expense 10,993 1,044
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7. TAxATIOn (continued)
There is no tax charge/credit relating to the component of other comprehensive income except for fair value gains/(losses) on available-for-sale financial assets for which the deferred tax relating to it is disclosed in Note 20 to the financial statements.
8. DIVIDEnDS PAID
The group The Company 2010 2009 2010 2009 $’000 $’000 $’000 $’000
Ordinary dividends paid: Final exempt 2009 dividend of 14 cents per share (2009: Final 2008 dividend of 14 cents per share) 27,684 27,644 27,684 27,644Interim exempt 2010 dividend of 6 cents per share
(2009: 6 cents per share) 11,865 11,847 11,865 11,847 39,549 39,491 39,549 39,491
Dividend per share (net of tax) 20.0 cents 20.0 cents 20.0 cents 20.0 cents
The Directors recommend a final tax exempt one-tier dividend of 14 cents per share, amounting to approximately $27.7 million to be paid for the financial year ended 31 December 2010 (2009: 14 cents per share amounting to approximately $27.6 million). These financial statements do not reflect this dividend, which will be accounted for in the shareholders’ equity as an appropriation of revenue reserve in the financial year ending 31 December 2011.
9. EARnIngS PER ShARE
The group 2010 2009 $’000 $’000
Earnings for the financial year 112,507 57,036
'000 '000Weighted average number of ordinary shares for calculation of basic earnings per share 197,710 197,455
Dilution adjustment for share options 64 68 Adjusted weighted average number of shares for calculation
of diluted earnings per share 197,774 197,523 Earnings per share attributable to equity holders of the Company - Basic 56.9 cents 28.9 cents
- Diluted 56.9 cents 28.9 cents
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9. EARnIngS PER ShARE (continued)
Basic earnings per share is calculated by dividing the profit for the financial year, net of tax, by the weighted average number of ordinary shares in issue during the financial year.
The diluted earnings per share is adjusted for the effects of all dilutive potential ordinary shares. The Company has one category of dilutive potential ordinary shares which is share options. A calculation is carried out to determine the number of shares that could have been issued at fair value (determined as the average annual market share price of the Company’s shares) based on the monetary value of the subscription rights attached to outstanding share options. The number of shares calculated is compared with the number of shares that would have been issued assuming the exercise of the share options. The difference is added to the denominator as an issuance of ordinary shares for no consideration. No adjustment is made to earnings (numerator).
10. PROPERTY, PlAnT AnD EquIPmEnT Plant, equipment, leasehold furniture Construction- land and and marine in- buildings vehicles livestock progress Total $’000 $’000 $’000 $’000 $’000
The Group Cost At 1 January 2010 43,492 48,989 1,104 – 93,585Additions 150 1,624 183 2,122 4,079Disposals/write-offs (18) (385) (121) – (524)Currency translation differences 57 (176) (7) (5) (131)At 31 December 2010 43,681 50,052 1,159 2,117 97,009 Accumulated depreciation At 1 January 2010 17,034 30,541 643 – 48,218Charge for 2010 1,785 3,250 124 – 5,159Disposals/write-offs (8) (347) (38) – (393)Currency translation differences 162 14 1 – 177At 31 December 2010 18,973 33,458 730 – 53,161 Net book value At 31 December 2010 24,708 16,594 429 2,117 43,848
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10. PROPERTY, PlAnT AnD EquIPmEnT (continued)
Plant, equipment, leasehold furniture Construction- land and and marine in- buildings vehicles livestock progress Total $’000 $’000 $’000 $’000 $’000 The Group (continued) Cost At 1 January 2009 30,914 36,814 749 14,203 82,680Additions 4,091 284 98 9,476 13,949Disposals/write-offs (1,378) (1,251) (61) – (2,690)Transfers 9,865 13,191 318 (23,374) –Currency translation differences – (49) – (305) (354)At 31 December 2009 43,492 48,989 1,104 – 93,585 Accumulated depreciation At 1 January 2009 16,858 29,892 589 – 47,339Charge for 2009 1,426 1,904 81 – 3,411Disposals/write-offs (1,241) (1,214) (24) – (2,479)Currency translation differences (9) (41) (3) – (53)At 31 December 2009 17,034 30,541 643 – 48,218 Net book value At 31 December 2009 26,458 18,448 461 – 45,367
Included in leasehold land and buildings is land use rights amounting to $1,008,000 (2009: $1,049,000).
11. InVESTmEnT PROPERTIES
The group 2010 2009 $’000 $’000
At beginning of the financial year 164,878 197,826Improvements 1,025 347Fair value gains/(losses) on investment properties recognised in profit or loss 15,436 (32,866)
Currency translation differences 303 (429) At end of the financial year 181,642 164,878
At valuation: Freehold and 999-year leasehold properties 30,142 28,278
Leasehold properties 151,500 136,600
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11. InVESTmEnT PROPERTIES (continued)
All investment properties of the Group are based on open market valuations carried out by independent professional valuers annually at statement of financial position date based on the properties’ highest-and-best-use using the Direct Market Comparison Method.
Investment properties are mainly leased to third parties under operating leases (Note 24(b)).
Certain investment properties valued at approximately $151,500,000 (2009: $136,600,000) are pledged to the banks as security for bank credit facilities.
Fair value changes of investment properties amounting to gains of approximately $15,436,000 (2009: losses of $32,866,000) (before deferred taxation) are non-cash in nature.
The following amounts are recognised in profit or loss:
The group 2010 2009 $’000 $’000
Rental income (Note 4) 15,912 17,289Direct operating expenses arising from investment
properties that generated rental income (4,785) (4,388)
The details of the Group's investment properties are as follows:
Tenure Independent ValuationInvestment properties Description of land valuer date
Haw Par Glass Tower 8-storey office 99-year lease DTZ 31 December178 Clemenceau Avenue building on a land from 2 June Debenham 2010Singapore 239926 area of 899 square 1970 Tie Leung metres. The lettable (SEA) Pte Ltd area is 3,316 square metres. Haw Par Centre 6-storey office 99-year lease DTZ 31 December180 Clemenceau Avenue building on a land from 1 Debenham 2010Singapore 239922 area of 2,464 September Tie Leung square metres. 1952 (SEA) Pte Ltd The lettable area is 10,251 square metres. Haw Par Technocentre 7-storey industrial 99-year lease DTZ 31 December401 Commonwealth Drive building on a land from 1 Debenham 2010Singapore 149598 area of 8,131 March 1963 Tie Leung square metres. (SEA) Pte Ltd The lettable area is 15,700 square metres.
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11. InVESTmEnT PROPERTIES (continued)
Tenure Independent ValuationInvestment properties Description of land valuer date
Menara Haw Par 32-storey office Freehold DTZ Nawawi 31 DecemberLot 242, Jalan Sultan building on a land Tie Leung 2010Ismail, 50250 area of 2,321 PropertyKuala Lumpur square metres. ConsultantsMalaysia The lettable area Sdn Bhd is 16,180 square metres.
Westlands Centre 3 units of office/ 999-year DTZ 31 DecemberUnits 1405-1407 industrial space lease Debenham 2010Westlands Centre with a lettable Tie Leung20 Westlands Road area of 475 LimitedQuarry Bay square metres.Hong Kong
12. InVESTmEnT In SubSIDIARIES
The Company 2010 2009 $’000 $’000
Equity investments at cost: Unquoted, at written down cost 421,095 426,786
Allowance for impairment in value (39,138) (40,145) 381,957 386,641
Details of significant subsidiaries are shown in Note 29.
The Company 2010 2009 $’000 $’000
Equity investments at cost: Beginning of financial year 426,786 429,718
Liquidation of a subsidiary (5,691) (2,932) End of financial year 421,095 426,786
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13. InVESTmEnT In ASSOCIATED COmPAnIES
The group The Company 2010 2009 2010 2009 $’000 $’000 $’000 $’000 Equity Investment at cost 2,895 2,895 Balance at beginning of financial year 72,837 59,359 Increase in investment – 9,095 Share of profits 14,999 7,590 Dividends received/receivable (2,009) (2,185) Gain on dilution (net) 8,522 81 Share of translation reserves 4,212 (1,547) Share of other comprehensive (expense)/income (1,032) 2,567 Currency translation differences (5,827) (2,123) Balance at end of financial year 91,702 72,837
The summarised Group’s share of financial information of associated companies are as follows: - Assets 106,521 99,706 - Liabilities (11,768) (16,403) - Revenues 74,821 67,737 - Net profit 15,245 7,590 Share of associated companies contingent liabilities incurred jointly with other investors – –
Contingent liabilities relating to liabilities of associates for which the Group is severally liable – –
Fair value of investment in a Hong Kong Stock Exchange listed associate, which has a cost denominated in Hong Kong dollars with a Singapore-dollars equivalent of $43,267,000 (2009: $43,267,000), is $123,047,942 (2009: $95,569,329). This is based on its quoted bid price as at 31 December 2010 and the exchange rate of $1=HK$5.92 (2009: $1=HK$5.52).
Investments in associated companies at 31 December 2010 include intangible assets valued at $2,207,000 (2009: $3,201,000).
Associated companies comprise UIC Technologies Pte Ltd and Hua Han Bio-Pharmaceutical Holdings Limited and details of which are set out in Note 29. Note 29(iv) explains the basis of equity accounting for an associated company, which has a different financial year end.
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14. AVAIlAblE-fOR-SAlE fInAnCIAl ASSETS
The group The Company 2010 2009 2010 2009 $’000 $’000 $’000 $’000
Balance at beginning of financial year 1,597,423 1,009,881 431 828Additions 39,412 – – –Fair value (losses)/gains recognised in other comprehensive income (35,014) 587,049 24 73Amortisation of discount 486 1,026 – –Disposals (27,309) – – –Allowance for impairment in value – (476) – (470)
Currency translation differences (137) (57) – –Balance at end of financial year 1,574,861 1,597,423 455 431
Less: Non-current portion (1,239,779) (1,217,708) (455) (431) Current portion 335,082 379,715 – –
Available-for-sale financial assets are analysed as follows:
The group The Company 2010 2009 2010 2009 $’000 $’000 $’000 $’000
Quoted investments - Equity securities 1,574,297 1,571,063 – –- Debt securities – 25,819 – –
Unquoted investments 564 541 455 431 1,574,861 1,597,423 455 431
The quoted investments are mainly listed in Singapore.
During the financial year, approximately $38,628,000 (2009: $Nil) of additions were non-cash and obtained in lieu of dividends.
Certain available-for-sale financial assets valued at $153,358,000 (2009: $127,593,000) are pledged as security for bank credit facilities.
15. InTAngIblE ASSETS
The group The Company 2010 2009 2010 2009 $’000 $’000 $’000 $’000
Goodwill on consolidation 11,116 11,116 – –
Trademarks and deferred expenditure – – – – 11,116 11,116 – –
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15. InTAngIblE ASSETS (continued)
(a) Goodwill on consolidation
The group 2010 2009 $’000 $’000
Cost Balance at beginning and end of financial year 11,116 11,116
Impairment tests for goodwill
The goodwill is allocated to the healthcare division of the Group, which is regarded as a cash-generating unit (“CGU”).
During the financial year, the Group has determined that there is no impairment of its CGU containing the goodwill. The recoverable amount (i.e. higher of value-in-use and fair value less costs to sell) of the CGU is determined on the basis of value-in-use calculations. These calculations incorporate cash flow projections by management covering a twenty-year period.
Key assumptions used for value-in-use calculations:
Discount rate 9.40% (2009: 9.57%)Growth rate 0.00% (2009: 0.00%)
These assumptions have been used for the analysis of the CGU. The discount rate used is post-tax and reflects specific risks relating to the healthcare division. Management has determined a 0% growth rate on grounds of prudence.
(b) Trademarks and deferred expenditure
Deferred Trademarks expenditure $’000 $’000 The Group
Net book value2010
Beginning and end of financial year – – 2009
Beginning and end of financial year – – At 31 December 2010 & 2009: Cost 3,200 1,400
Less: Accumulated amortisation (3,200) (1,400) Net book value – –
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15. InTAngIblE ASSETS (continued)
(b) Trademarks and deferred expenditure (continued)
Trademarks $’000
The Company Balance at 1 January and 31 December 2010, net of accumulated amortisation – At 31 December 2010: Cost 2,000Less: Accumulated amortisation (2,000)Net book value –
The Company and its wholly-owned subsidiary, Haw Par Brothers International (HK) Ltd (“HPBIHK”) own the “Tiger” (Cost: $2.0 million) and “Kwan Loong” (“Double Lion”) (Cost: HK$5.58 million) trademarks respectively. The Company and HPBIHK (together “the Licensors”), licensed to Haw Par Healthcare Limited (“HPH”), another wholly-owned subsidiary, the exclusive right to manufacture, distribute, market and sell “Tiger” and “Kwan Loong” products worldwide until 31 December 2012. These licensing arrangements are renewable upon expiry for a further period of 25 years on terms to be mutually agreed between the Licensors and HPH.
16. InVEnTORIES
The group 2010 2009 $’000 $’000
Trading stocks 734 301Manufacturing stocks 6,627 4,238
Finished stocks 1,914 1,551 Total 9,275 6,090
The cost of inventories recognised as expense and included in “Cost of sales” amounted to $37,695,000 (2009: $36,339,000).
During the financial year, the Group recognised inventories written down of $170,000 (2009: $161,000). The inventories written off have been included in "Cost of sales" in profit or loss.
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17. TRADE AnD OThER RECEIVAblES
The group The Company 2010 2009 2010 2009 $’000 $’000 $’000 $’000
Trade receivables 13,858 14,482 1,544 1,529Less: Allowance for impairment
of receivables (70) (68) – – Trade receivables (net) 13,788 14,414 1,544 1,529
Advances to subsidiaries – – 105,823 136,599
Other receivables (Note (i)) 4,809 4,124 75 76 4,809 4,124 105,898 136,675
Total 18,597 18,538 107,442 138,204
Advances to subsidiaries are non-trade, unsecured, interest-free (2009: interest-free) and are repayable on demand. The carrying values of the advances approximate their fair values.
(i) Other receivables:
The group The Company 2010 2009 2010 2009 $’000 $’000 $’000 $’000
Sundry receivables and deposits 3,372 2,648 75 76 Dividends receivable 1,409 1,408 – –
Interest receivable on deposits 28 68 – – 4,809 4,124 75 76
The carrying amounts of sundry, dividends and interest receivables and deposits approximate their fair values.
18. CASh AnD CASh EquIVAlEnTS
The group The Company 2010 2009 2010 2009 $’000 $’000 $’000 $’000
Short term bank deposits 87,579 64,059 71,017 48,502
Cash at bank and on hand 23,780 22,890 1,085 819 111,359 86,949 72,102 49,321
The carrying amounts of cash and cash equivalents approximate their fair values.
Included in the cash and cash equivalents are bank deposits and cash on hand amounting to $12,150,000 (2009: $14,644,000) which are not freely remittable for use by the Group because of currency exchange restrictions.
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18. CASh AnD CASh EquIVAlEnTS (continued)
Cash and cash equivalents included in the consolidated statement of cash flows comprise the following:
The group 2010 2009 $’000 $’000
Cash and bank balances 23,780 22,890Deposits with banks and financial institutions 87,579 64,059
Less: Bank deposits pledged for banking facilities (1,522) (1,491)Cash and cash equivalents per consolidated
statement of cash flows 109,837 85,458
19. TRADE AnD OThER PAYAblES
The group The Company 2010 2009 2010 2009 $’000 $’000 $’000 $’000
Trade creditors 6,557 4,953 – –Bills payable (trade) 65 22 – –Accrued advertisement and promotion expenses 10,928 10,705 – –Accrued repairs and maintenance 321 849 – –Sundry accruals 5,328 6,357 955 699Other creditors 2,787 3,769 200 190Rental deposits 4,664 4,388 – –Unclaimed dividends 1,181 1,129 1,163 1,110
Advances from subsidiaries – – 148,269 149,965 31,831 32,172 150,587 151,964
The carrying values of trade creditors and advances approximate their fair values.
Advances from subsidiaries are non-trade, unsecured, interest free and are repayable on demand.
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20. DEfERRED InCOmE TAxATIOn
Deferred income tax assets and liabilities are offset when there is a legally enforceable right to set off current income tax assets against current income tax liabilities and when the deferred income taxes relate to the same fiscal authority. The amounts, determined after appropriate offsetting, are shown on the statements of financial position as follows:
The group The Company 2010 2009 2010 2009 $’000 $’000 $’000 $’000
Deferred income tax assets - to be recovered within 12 months (540) (529) – –
- to be recovered after more than 12 months (288) (337) – – (828) (866) – –
Deferred income tax liabilities - to be settled within 12 months 240 117 – –
- to be settled after more than 12 months 54,124 55,028 – – 54,364 55,145 – –
53,536 54,279 – –
The movements in the deferred income tax account are as follows:
The group The Company 2010 2009 2010 2009 $’000 $’000 $’000 $’000
At beginning of financial year 54,279 41,134 – –Tax (credited)/charged to fair value reserve: - changes in fair value (4,118) 20,566 – –- change in tax rate – (1,529) – –Tax charged/(credited) to consolidated income statement: - changes in fair value 2,592 (5,659) – –- change in tax rate 2 (786) – –- others 851 570 – –
Currency translation differences (70) (17) – – At end of financial year 53,536 54,279 – –
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20. DEfERRED InCOmE TAxATIOn (continued)
Deferred income tax assets are recognised for tax losses carried forward to the extent that realisation of the related tax benefits through future taxable profits is probable. The Group has unrecognised deferred income tax assets arising from tax losses of $25.3 million (2009: $28.9 million). These tax losses can be carried forward and used to offset against future taxable income subject to meeting certain statutory requirements by those corporations in their respective countries of incorporation. These tax losses have no expiry date.
The Group’s and Company’s deferred tax liabilities have been computed based on the corporate tax rate and tax laws prevailing at statement of financial position date.
The Group
The movements in the deferred income tax assets and liabilities (prior to offsetting of balances within the same tax jurisdiction) during the financial year are as follows:
Deferred income tax liabilities
fair value changes on current available- fair value -for-sale Accelerated changes on financial tax investment assets depreciation properties Total $’000 $’000 $’000 $’000
2010 Beginning of financial year 46,553 1,143 7,449 55,145(Credited)/charged to equity - changes in fair value (4,118) – – (4,118)Charged/(credited) to profit or loss - changes in fair value – – 2,592 2,592- others – 789 – 789
Currency translation differences – (2) (42) (44) End of financial year 42,435 1,930 9,999 54,364
2009 Beginning of financial year 27,516 714 13,876 42,106Charged/(credited) to equity - changes in fair value 20,566 – – 20,566- change in tax rate (1,529) – – (1,529)(Credited)/charged to profit or loss - changes in fair value – – (5,659) (5,659)- change in tax rate – (35) (752) (787)- others – 467 – 467
Currency translation differences – (3) (16) (19) End of financial year 46,553 1,143 7,449 55,145
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20. DEfERRED InCOmE TAxATIOn (continued)
The Group (continued)
Deferred income tax assets
Tax Payables losses Total $’000 $’000 $’000
2010 Beginning of financial year (336) (530) (866)Charged/(credited) to profit or loss - Change in tax rate 2 – 2- Others (12) 74 62Currency translation differences (11) (15) (26)End of financial year (357) (471) (828) 2009 Beginning of financial year (360) (612) (972)Charged to profit or loss - Change in tax rate 1 – 1- Others 22 81 103Currency translation differences 1 1 2End of financial year (336) (530) (866)
21. ShARE CAPITAl
number of shares Amount ‘000 $’000
The Group and the Company
2010 Beginning of financial year 197,455 239,541Issue 425,000 ordinary shares by virtue of
exercise of share options (Note 25(c)) 425 1,814 End of financial year 197,880 241,355
2009
Beginning and end of financial year 197,455 239,541
All issued ordinary shares are fully paid. There is no par value for these ordinary shares.
The holders of ordinary shares are entitled to receive dividends as and when declared by the Company. All ordinary shares carry one vote per share without restriction.
Please refer to Note 25(b) for details of share options.
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22. RElATED PARTY TRAnSACTIOnS
In addition to other related party information disclosed elsewhere in the financial statements, the following transactions have been carried out between the Group and its related parties on commercial terms and at market rates during the financial year:
(a) Transactions with related parties:
The group 2010 2009 $’000 $’000
Purchase of non-controlling interest shares
from a Director of the Company – 57
(b) Share options granted to key management
The aggregate number of share options granted to the key management of the Group during the financial year is 249,000 (2009: 204,000). The share options have been granted on the same terms and conditions as those offered to the other employees of the Company (Note 25(b)). The aggregate number of share options granted to the key management of the Group outstanding as at the end of the financial year is 754,000 (2009: 822,000).
(c) Key management’s remuneration
The key management’s remuneration includes fees, salary, bonus, commission and other emoluments (including benefits-in-kind) computed based on the cost incurred by the Group and the Company, and where the Group or Company do not incur any costs, the value of the benefit. The key management’s remuneration is as follows:
The group 2010 2009 $’000 $’000
Key management of the Group: - directors of the Company 2,444 2,309- directors of the subsidiaries 1,754 1,569
- others 111 42 4,309 3,920
Comprising the following:
The group 2010 2009 $’000 $’000
Directors’ fees, salaries and other short-term employee benefits 3,939 3,685Employer’s contribution to Central Provident Fund and other defined contribution plans 79 88
Share options granted 291 147 4,309 3,920
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23. COnTIngEnT lIAbIlITIES
Contingent liabilities relating to guarantees are:
The Company 2010 2009 $’000 $’000
In respect of guarantees given to banks in connection with facilities granted to subsidiaries 68 68
24. COmmITmEnTS
(a) Capital commitments
The group The Company 2010 2009 2010 2009 $’000 $’000 $’000 $’000
Capital commitments authorised and contracted but not provided for in the consolidated
financial statements 7,023 1,309 – –
The capital commitments above relate to construction of/purchases of property, plant and equipment and improvements to investment properties.
(b) Operating lease commitments
As a lessee
The Group leases certain offices, warehouses, and other premises under non-cancellable lease arrangements. Certain premises are further sub-leased to third parties under non-cancellable sub-lease agreements.
The group 2010 2009 $’000 $’000
Lease rental expense 2,292 1,580Sub-lease rental income recognised in consolidated
income statement (849) (810)
Future minimum rentals payable under non-cancellable leases as of 31 December are as follows:
The group 2010 2009 $’000 $’000
Within one year 1,056 570Between one year and five years 3,649 1,749
After five years 13,305 2,800 18,010 5,119
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24. COmmITmEnTS
(b) Operating lease commitments (continued)
As a lessor
The Group owns certain investment properties, which are tenanted under non-cancellable lease arrangements.
Future minimum rentals receivable under non-cancellable leases as of 31 December are as follows:
The group 2010 2009 $’000 $’000
Within one year 14,273 13,560 Between one year and five years 19,501 12,394
More than five years 824 1,236 34,598 27,190
25. EmPlOYEE bEnEfITS
The group 2010 2009 $’000 $’000
(a) Staff costs (including Executive Directors): - salaries, bonuses and other costs 17,719 17,142 - employer’s contribution to Central Provident Fund and other defined contribution plans 1,350 1,375
- expensing of share options 450 214 19,519 18,731
Key management’s remuneration is disclosed in Note (22(c)).
(b) The Company operates the Haw Par Corporation Group 2002 Share Option Scheme (“2002 Scheme”). The 2002 Scheme was approved by members of the Company on 22 May 2002.
The 2002 Scheme grants non-transferable options to selected employees and includes the participation by the non-executive directors. The maximum life-span of exercising the options is 10 years (exercise period). The options are exercisable beginning on the first anniversary from the date when the options are granted or the second anniversary if the options are granted at a discount to the market price under the 2002 Scheme. Once the options are vested, they are exercisable for a period of four years. The options may be exercised in full or in part in respect of 1,000 shares or any multiple thereof, on the payment of the exercise price. The Group has no legal or constructive obligation to repurchase or settle the options in cash.
The exercise price is equivalent to the average of the last dealt price for the share for five consecutive market days immediately before the offer date (“market price”) at the time of grant and can be set at discounts of up to 20% to the market price under the 2002 Scheme. During the financial year, options for 386,000 shares were granted to qualifying employees on 1 March 2010 (“2010 Options”), of which 8,000 had been subsequently cancelled. The fair value of the options granted using the Trinomial valuation model is approximately $508,000. The significant inputs into the model are exercise price of $5.86 at the grant date, standard deviation of expected share price returns of 33%, 5-year option life and annual risk-free interest rate of 0.25%. The volatility measured at the standard deviation of expected share price returns is based on statistical analysis of daily share prices over a historical period that matches the period to expiry of the options. The 2010 options are exercisable from 1 March 2011 and expire on 28 February 2015.
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25. EmPlOYEE bEnEfITS (continued)
(c) Information with respect to share options granted under the 2002 Scheme is as follows:
number of shares 2010 2009
under 2002 Scheme: Outstanding at beginning of the financial year 1,086,000 899,000Granted 386,000 339,000Cancelled (54,000) (152,000)
Exercised (425,000) – Outstanding at end of the financial year 993,000 1,086,000
Exercisable at end of the financial year 615,000 778,000
Details of share options granted during the financial year:
2010 2009 Expiry date 28.2.2015 1.3.2014Exercise price $5.86 $3.71
Aggregate proceeds if shares are issued ($’000) $2,262 $1,258
Movement in the number of unissued ordinary shares under option and their exercise prices are as follows:
number of shares covered by the options balance at beginning of financial balance year or date at end of Date of grant financial Exercise Exerciseof grant (if later) Cancelled Exercised year price period
2010 19.5.2005 94,000 – 94,000 – $5.11 19.5.2006 - 18.5.20102.3.2006 130,000 – 58,000 72,000 $5.52 2.3.2007 - 1.3.20112.3.2007 264,000 20,000 – 244,000 $7.54 2.3.2008 - 1.3.20123.3.2008 290,000 26,000 – 264,000 $6.47 3.3.2009 - 2.3.20132.3.2009 308,000 – 273,000 35,000 $3.71 2.3.2010 - 1.3.20141.3.2010 386,000 8,000 – 378,000 $5.86 1.3.2011 - 28.2.2015 1,472,000 54,000 425,000 993,000
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25. EmPlOYEE bEnEfITS (continued)
(c) (continued)
number of shares covered by the options balance at beginning of financial balance year or date at end of Date of grant financial Exercise Exerciseof grant (if later) Cancelled Exercised year price period
2009
18.5.2004 20,000 20,000 – – $4.80 18.5.2005 - 17.5.200919.5.2005 94,000 – – 94,000 $5.11 19.5.2006 -18.5.20102.3.2006 130,000 – – 130,000 $5.52 2.3.2007 -1.3.20112.3.2007 316,000 52,000 – 264,000 $7.54 2.3.2008 -1.3.20123.3.2008 339,000 49,000 – 290,000 $6.47 3.3.2009 - 2.3.20132.3.2009 339,000 31,000 – 308,000 $3.7 2.3.2010 - 1.3.2014 1,238,000 152,000 – 1,086,000
26. fInAnCIAl RISk mAnAgEmEnT
Financial risk factors
The Group’s activities expose it to market risk (including currency risk and price risk), credit risk and liquidity risk. The Group’s overall risk management strategy seeks to minimise adverse effects from the unpredictability of financial markets on the Group’s financial performance.
The Board of Directors is responsible for setting the objectives and underlying principles of financial risk management for the Group. The Investment Committee then establishes the detailed policies, such as authority levels, oversight responsibilities, risk identification and measurement, exposure limits and hedging strategies, in accordance with the objectives and underlying principles approved by the Board of Directors.
Regular reports are submitted to Investment Committee and Board of Directors respectively that contain the Group’s exposure to each type of financial risks.
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26. fInAnCIAl RISk mAnAgEmEnT (continued)
(a) Market risk
The Group is exposed to market risk, including primarily changes in currency exchange rates and market prices of securities.
(1) Foreign currency risk
The Group operates in Asia and through agents/distributors in other parts of the world, with dominant operations in Singapore. Entities in the Group regularly transact in currencies other than their respective functional currencies (“foreign currencies”). Currency risk arises when transactions are denominated in foreign currencies such as United States Dollar (“USD”), Hong Kong Dollar (“HKD”) and Euro.
In addition, the Group is also exposed to currency translation risks arising from its foreign currency denominated net financial assets, which are not significant.
The Group manages its foreign currency exposures by a policy of matching, as far as possible, by receipts and payments in each individual currency. The surplus of convertible currencies are either further matched with future foreign currency requirements or exchanged for Singapore Dollar.
The Group also has available forward contract facilities to hedge future foreign exchange exposure.
The foreign currency exposure of the Group’s net investment in overseas subsidiaries is managed under the guidance of the Investment Committee.
The Group’s currency exposure based on the information provided to key management is as follows:
uSD hkD Euro Others Total $’000 $’000 $’000 $’000 $’000
group At 31 December 2010 Cash and cash equivalents 6,996 895 1,154 1,411 10,456 Trade and other receivables 5,918 – 931 587 7,436 Trade and other payables (3,836) (353) (2,139) (1,487) (7,815) Currency exposure on financial assets and liabilities 9,078 542 (54) 511 10,077
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26. fInAnCIAl RISk mAnAgEmEnT (continued)
(a) Market risk (continued)
(1) Foreign currency risk (continued)
uSD hkD Euro Others Total $’000 $’000 $’000 $’000 $’000
group (continued) At 31 December 2009
Cash and cash equivalents 9,925 – 1,752 1,056 12,733Trade and other receivables 5,526 – 279 789 6,594Trade and other payables (3,389) (865) (1,773) (1,413) (7,440)Currency exposure on financial assets and liabilities 12,062 (865) 258 432 11,887
The Company does not have material foreign currency exposure as at 31 December 2010 and 2009 except for certain amounts due to a subsidiary denominated in Hong Kong Dollar of $19,432,000 (2009: $20,811,000).
A 10% (2009: 10%) weakening of Singapore Dollar against the following currencies at reporting date would increase/(decrease) profit or loss by the amounts shown below, with all other variables including tax rate being held constant:
uSD hkD Euro Others Total $’000 $’000 $’000 $’000 $’000
group At 31 December 2010 Profit or loss 908 54 (5) 51 1,008
At 31 December 2009 Profit or loss 1,206 (87) 26 43 1,188
A 10% (2009: 10%) strengthening of Singapore Dollar against the above currencies would have had the equal but opposite effect on the above currencies to the amounts shown above, on the basis that all other variables remain constant.
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26. fInAnCIAl RISk mAnAgEmEnT (continued)
(a) Market risk (continued)
(2) Market price risk
The Group has substantial investments carried at fair value of $1,574.9 million (2009: $1,597.4 million) held in various forms of securities as of 31 December 2010 and have been accounted for in accordance with the accounting policy stated in Note 2(i). These securities are mainly listed in Singapore. The Group is not exposed to material commodity price risk.
The fair value of financial instruments traded in active markets (such as available-for-sale securities) is based on quoted market prices at the statement of financial position date. The quoted market price used for financial assets held by the Group is the current bid price. These instruments are categorised as Level 1 under the fair value hierarchy under the relevant accounting standard.
The market price risk associated with these investments is the potential loss in fair value resulting from the decrease in market prices of securities. If prices for equity and debt securities listed in Singapore and elsewhere change by 10% (2009: 10%) with all other variables including tax rate being held constant, the equity will be:
2010 2009 $’000 $’000
Group Listed in Singapore - increased by 151,793 153,728
- decreased by (151,793) (153,728) Listed elsewhere - increased by 31 32
- decreased by (31) (32)
The Group’s investments are managed under the guidance of the Investment Committee.
(b) Liquidity risk
As at 31 December 2010, the Group has available cash and short term bank deposits totalling $109.8 million (2009: $85.5 million). The cash and deposits, together with the available credit facilities are expected to be sufficient to meet the funding requirements of the Group’s operations.
The Group does not have any material financial liabilities maturing more than 12 months from 31 December 2010.
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26. fInAnCIAl RISk mAnAgEmEnT (continued)
(c) Credit risk
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Group.
The Group’s maximum exposure to credit risk in the event that the counterparties fail to perform their obligations as of 31 December 2010 in relation to each class of recognised financial assets is the carrying amount of those assets as indicated in the statements of financial position, except as follows:
2010 2009 $’000 $’000
Corporate guarantees provided to banks on subsidiaries’ obligations 68 68
The Group’s and Company’s major classes of financial assets that are subject to credit risk are short-term bank deposits, investments in debt securities and trade receivables.
It is the Group’s policy to transact with creditworthy counterparties. In addition, the granting of material credit limits to counterparties is reviewed and approved by senior management. The Group does not expect to incur material credit losses on its financial assets or other financial instruments.
(i) Financial assets that are neither past due nor impaired
Short-term bank deposits that are neither past due nor impaired are mainly deposits with banks with high credit-ratings assigned by international credit rating agencies. Trade receivables that are neither past due nor impaired are substantially companies with a good collection track record with the Group. Debt securities are issued by companies with high credit-ratings assigned by international credit rating agencies.
(ii) Financial assets that are past due and/or impaired
There is no other class of financial assets that is past due and/or impaired except for trade receivables.
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26. fInAnCIAl RISk mAnAgEmEnT (continued)
(c) Credit risk (continued)
(ii) Financial assets that are past due and/or impaired (continued)
The age analysis of trade receivables past due but not impaired is as follows:
The group 2010 2009 $’000 $’000
Past due within 1 month 1,231 1,005Past due 1 to 3 months 33 29Past due 4 to 6 months 1 76
Past due over 6 months 33 26 1,298 1,136
The carrying amount of trade receivables individually determined to be impaired is $70,000 (2009: $68,000) and the movement of the related allowance for impairment are as follows:
2010 2009 $’000 $’000
Beginning of financial year 68 69
Exchange adjustments 2 (1) End of financial year 70 68
(d) Capital risk
The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern and to maintain an optimal capital structure so as to maximise shareholder value. In order to maintain or achieve an optimal capital structure, the Group may adjust the amount of dividend payment, return capital to shareholders, buy back issued shares or obtain new borrowings.
Management monitors capital based on ability of the Group to generate sustainable profits and availability of retained profits for dividend payments to shareholders. The Group’s overall strategy remains unchanged from 2009.
The Group and the Company are in compliance with all externally imposed capital requirements for the financial years ended 31 December 2009 and 2010.
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26. fInAnCIAl RISk mAnAgEmEnT (continued)
(e) Financial instruments by category
The financial instruments of the Group and of the Company include the following:
The group The Company note 2010 2009 2010 2009 $’000 $’000 $’000 $’000
financial Assets Available-for-sale financial assets 14 1,574,861 1,597,423 455 431Trade and other receivables 17 18,597 18,538 107,442 138,204
Cash and cash equivalents 18 109,837 85,458 72,102 49,321 1,703,295 1,701,419 179,999 187,956
financial liabilities Trade and other payables 19 (31,831) (32,172) (150,587) (151,964) (31,831) (32,172) (150,587) (151,964)
1,671,464 1,669,247 29,412 35,992
27. SEgmEnTAl REPORTIng
At 31 December 2010, the Group is organised into the following main business segments:
• Manufacturing,marketingandtradingofhealthcareproducts;
• Provisionofleisure-relatedservices;
• Propertyrental;and
• Investmentsinsecurities.
Healthcare division principally manufactures and distributes topical analgesic products under the “Tiger Balm” and “Kwan Loong” brand. These products are sold in more than 80 countries around the world.
Leisure division provides family and tourist oriented leisure alternatives mainly in the form of oceanariums.
Property division owns and leases out several investment properties in the Asia region.
Investment division engages in investing activities, mainly in quoted and unquoted securities in Asia region.
Inter-segment transactions are determined on an arm’s length basis. Unallocated costs represent corporate expenses. Segment assets consist primarily of available-for-sale financial assets, investment properties, property, plant and equipment, intangible assets, inventories, receivables, bank deposits and cash and bank balances. Segment liabilities comprise operating liabilities and exclude tax assets and tax liabilities. Capital expenditure on non-current assets comprises additions to investment properties, property, plant and equipment, intangible assets and investment in associated companies.
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27. SEgmEnTAl REPORTIng (continued)
The Group evaluates performance on the basis of profit or loss from operations before tax expenses and management fees charged internally and exclude non-recurring gains and losses.
The Group accounts for inter-segment sales and transfers as if the sales or transfers were to third parties, ie. at current market prices.
The Group’s reportable segments are strategic and distinct business units reporting to key group management. They are managed separately because each business targets different customers and carry different business risk.
(a) Reportable segments leisure products healthcare and Property products services rental Investments Eliminations Consolidated $’000 $’000 $’000 $’000 $’000 $’000 2010 Sales to external customers 79,072 34,971 15,718 – – 129,761Inter-segment sales 40 – 722 – (762) –Interest income – – – 958 – 958Other income 322 283 1,069 48,192 – 49,866Inter-segment other income – – – 23,679 (23,679) – 79,434 35,254 17,509 72,829 (24,441) 180,585 Depreciation 1,002 4,071 10 76 – 5,159 Reportable segment profit 16,157 12,585 12,336 71,090 (22,097) 90,071 Unallocated expenses (5,265)Profit from operations 84,806Share of results of associated companies/Gain on dilution of investment in associated company (net) – – – 23,521 – 23,521
Fair value gains on investment properties – – 15,436 – – 15,436Taxation (10,993)Non-controlling interests (263)Earnings for the financial year 112,507
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27. SEgmEnTAl REPORTIng (continued)
(a) Reportable segments (continued) leisure products healthcare and Property products services rental Investments Eliminations Consolidated $’000 $’000 $’000 $’000 $’000 $’000 2010 (continued) Reportable segment assets 53,587 55,986 178,481 1,977,896 (223,550) 2,042,400Tax recoverable 4Total assets per statement of financial position 2,042,404
Expenditures for reportable segment non-current assets
- Additions to property, plant and equipment 2,830 1,112 1 136 – 4,079 - Investment properties improvements – – 1,025 – – 1,025 2,830 1,112 1,026 136 – 5,104Reportable segment liabilities 20,194 4,806 5,086 1,745 – 31,831Taxation 7,388Deferred income taxation 53,536Total liabilities per statement of financial position 92,755
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27. SEgmEnTAl REPORTIng (continued)
(a) Reportable segments (continued) leisure products healthcare and Property products services rental Investments Eliminations Consolidated $’000 $’000 $’000 $’000 $’000 $’000 2009 Sales to external customers 74,105 32,802 17,084 – – 123,991Inter-segment sales 22 – 723 – (745) –Interest income – – – 1,500 – 1,500Gain on liquidation of a subsidiary – – – 442 – 442Other income 736 417 1,030 43,867 – 46,050Inter-segment other income – – – 29,095 (29,095) – 74,863 33,219 18,837 74,904 (29,840) 171,983 Allowance for impairment in value of available-for-sale financial assets – – – 476 – 476 Depreciation 943 2,363 11 94 – 3,411 Reportable segment profit 15,508 13,526 13,911 72,948 (27,625) 88,268 Unallocated expenses (4,783)Profit from operations 83,485Share of results of associated companies – – – 7,590 – 7,590Fair value losses on investment properties – – (32,866) – – (32,866)Taxation (1,044)Non-controlling interests (129)Earnings for the financial year 57,036
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27. SEgmEnTAl REPORTIng (continued)
(a) Reportable segments (continued) leisure products healthcare and Property products services rental Investments Eliminations Consolidated $’000 $’000 $’000 $’000 $’000 $’000 2009 (continued) Reportable segment assets 49,923 56,641 162,270 2,021,977 (287,613) 2,003,198Tax recoverable 124Total assets per statement of financial position 2,003,322 Expenditures for reportable segment non-current assets - Additions to property, plant and equipment 2,076 11,853 7 13 – 13,949 - Investment properties improvements – – 347 – – 347 - Investment in an associated company – – – 9,095 – 9,095 2,076 11,853 354 9,108 – 23,391 Reportable segment liabilities 19,332 5,922 5,346 1,572 – 32,172Taxation 6,924Deferred income taxation 54,279Total liabilities per statement of financial position 93,375
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27. SEgmEnTAl REPORTIng (continued)
(b) Geographical Information
non-current Revenues (i) assets (ii) $’000 $’000
2010 Singapore 50,248 1,424,409Other Asian countries 42,785 143,678
Other countries 36,728 – Total 129,761 1,568,087
2009 Singapore 51,650 1,389,181Other Asian countries 39,164 122,725
Other countries 33,177 – Total 123,991 1,511,906
(i) Revenues are attributable to countries in which the customer is located.
(ii) Non-current assets are shown by the geographical area where the assets are located.
(c) Major customers
Revenues of approximately $14,925,000 (2009: $16,353,000) are derived from a single group of external customers. These revenues are attributable to the sale of Healthcare products in Singapore and other Asian countries.
28. nEW ACCOunTIng STAnDARDS AnD fRS InTERPRETATIOnS AnD AmEnDmEnTS
Below are the mandatory standards, amendments and interpretations to existing standards that have been published, and are relevant for the Group’s accounting periods beginning on or after 1 January 2011 or later periods and which the Group has not early adopted:
- Amendments to FRS 24 – Related party disclosures (effective for annual periods beginning on or after 1 January 2011)
- Amendments to FRS 32 Financial instruments: Presentation – classification of rights issues (effective for annual periods beginning on or after 1 February 2010)
- Amendments to INT FRS 114 – Prepayments of a minimum funding requirement (effective for annual periods commencing on or after 1 January 2011)
- INT FRS 119 Extinguishing financial liabilities with equity instruments (effective for annual periods commencing on or after 1 July 2010)
The management anticipates that the adoption of the above FRSs, INT FRSs and amendments to FRS in the future periods will not have a material impact on the financial statements of the Group and of the Company in the period of their initial adoption, except for the amendments to FRS 24 – Related party disclosures that may entail further disclosures.
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29. SIgnIfICAnT SubSIDIARIES AnD ASSOCIATED COmPAnIES
Effective equity interest held Country of Principal by group name of Company incorporation activities 2010 2009 % % leisure products and services Haw Par Leisure Pte Ltd Singapore Investment holding 100.0 100.0
* Chengdu Haw Par The People's Owning and 100.0 100.0 Oceanarium Co., Ltd ++ Republic of China operating oceanariums * Sports Services Ltd Singapore Investment holding 100.0 100.0 * Underwater World Singapore Owning and 100.0 100.0 Singapore Pte Ltd operating oceanariums Underwater World Singapore Investment holding 100.0 100.0 Attractions Pte Ltd
* Underwater World Thailand Owning and operating 46.6 46.6 Pattaya Ltd + oceanariums
healthcare products Haw Par Healthcare Singapore Manufacturing, 100.0 100.0 Limited marketing and distributing healthcare products under licence * Tiger Balm (Malaysia) Malaysia Manufacturing, 100.0 100.0 Sdn. Bhd. + marketing and distributing pharmaceutical products * Haw Par Tiger Balm Thailand Marketing and 49.0 49.0 (Thailand) Limited + distributing pharmaceutical products
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29. SIgnIfICAnT SubSIDIARIES AnD ASSOCIATED COmPAnIES (continued)
Effective equity interest held Country of Principal by group name of Company incorporation activities 2010 2009 % % healthcare products (continued)
* Haw Par Tiger Balm Philippines Marketing and 100.0 100.0 (Philippines), Inc. ++ distributing pharmaceutical products * PT. Haw Par Healthcare ++ Indonesia Import, export 100.0 100.0 and distribution of pharmaceutical, health and consumer products * Tiger Medicals Taiwan Marketing and 100.0 100.0 (Taiwan) Limited ++ distributing pharmaceutical products * Xiamen Tiger The People’s Manufacturing, 100.0 100.0 Medicals Co., Ltd. ++ Republic of China marketing and distributing pharmaceutical products * Haw Par Healthcare The People’s Manufacturing, 100.0 100.0 (Xiamen) Co., Ltd ++ Republic of China marketing and distributing pharmaceutical products * Haw Par India India Marketing and 100.0 100.0 Private Limited + distributing pharmaceutical products
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29. SIgnIfICAnT SubSIDIARIES AnD ASSOCIATED COmPAnIES (continued)
Effective equity interest held Country of Principal by group name of Company incorporation activities 2010 2009 % % Property Haw Par Properties Singapore Property development 100.0 100.0 (Singapore) Private and owning and Limited letting properties Haw Par Centre Private Ltd Singapore Property development 100.0 100.0 and owning and letting properties Setron Limited Singapore Property development 100.0 100.0 and owning and letting properties * Sovereign Sports Limited + Hong Kong Owning and leasing 100.0 100.0 of properties of properties
Haw Par Land Malaysia Investment in 100.0 100.0 (Malaysia) Sdn. Bhd. + properties and letting out of office space Investments Haw Par Capital Pte Ltd Singapore Investment holding 100.0 100.0 Haw Par Equities Pte Ltd Singapore Investment holding 100.0 100.0 and dealing in securities Haw Par Investment Singapore Investment holding 100.0 100.0 Holdings Private Limited Haw Par Pharmaceutical Singapore Investment holding 100.0 100.0 Holdings Pte. Ltd Haw Par Securities Singapore Investment holding 100.0 100.0 (Private) Limited and dealing in securities
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29. SIgnIfICAnT SubSIDIARIES AnD ASSOCIATED COmPAnIES (continued)
Effective equity interest held Country of Principal by group name of Company incorporation activities 2010 2009 % % Investments (continued)
Haw Par Trading Pte Ltd Singapore Investment holding 100.0 100.0 and dealing in securities M & G Maritime Singapore Investment holding 100.0 100.0 Services Pte Ltd and dealing in securities Pickwick Securities Singapore Investment holding 100.0 100.0 Private Limited
Straits Maritime Singapore Investment holding 100.0 100.0 Leasing Private Limited and dealing in securities * Tiger Balm Hong Kong Investment holding 100.0 100.0 (Hong Kong) Limited + and dealing in securities
* Haw Par Brothers Hong Kong Investment holding 100.0 100.0 International (H.K.) and licensing Limited + of “Kwan Loong” trademark Haw Par Hong Kong Hong Kong Investment holding 100.0 100.0 Limited + Haw Par Management Singapore Provision of 100.0 100.0 Services Pte Ltd management support services
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29. SIgnIfICAnT SubSIDIARIES AnD ASSOCIATED COmPAnIES (continued)
Effective equity interest held Country of Principal by group name of Company incorporation activities 2010 2009 % % UIC Technologies Pte Ltd Singapore Investment holding 40.0 40.0 * Hua Han Bio-Pharmaceutical Cayman Islands Investment holding 17.14 20.93 Holdings Limited #
Notes
(i) Companies indicated with a (*) are indirectly held by Haw Par Corporation Limited.
(ii) Companies indicated with a (+) are audited by firms of PricewaterhouseCoopers outside Singapore.
(iii) Companies indicated with a (++) are audited by other firms. These foreign- incorporated companies are not considered as significant foreign-incorporated subsidiaries under the Singapore Exchange Listing Manual. Accordingly, Rule 716 of the Listing Manual has been complied with.
(iv) Company indicated with a (#) is listed on an overseas exchange and audited by other firm of auditors. Its financial year end is 30 June. The Group has equity accounted for the profit of its associated company from 1 January 2010 based on its audited accounts for the financial year ended 30 June 2010, and unaudited six months results to 31 December 2010 as announced on the overseas stock exchange.
(v) Accounting year end for Haw Par India Private Limited (“HPI”) is 31 March as required by the laws of its country of incorporation. The consolidated financial statements incorporated the unaudited results of HPI from 1 January to 31 December.
(vi) All the above subsidiaries and associated companies operate in their respective countries of incorporation except Hua Han Bio-Pharmaceutical Holdings Limited which operates mainly in the People’s Republic of China.
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30. COmPARATIVE fIguRES
Comparatives figures have been reclassified to conform to the current year’s presentation as follows:
The group As previously Restated stated 2009 2009 $'000 $'000 Cost of sales (52,874) (51,771)Gross profit 71,117 72,220
Sales and marketing expenses (24,648) (23,517) General and administrative expenses (10,434) (12,668)
31. AuThORISATIOn Of fInAnCIAl STATEmEnTS
These financial statements are authorised for issue in accordance with a resolution of the Board of Directors of Haw Par Corporation Limited on 23 February 2011.
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fInAnCIAl CAlEnDAR
Date Event
13 May 2010 Announcement of 2010 1st quarter results
5 August 2010 Announcement of 2010 2nd quarter results
9 September 2010 Payment of 2010 first and interim dividend
4 November 2010 Announcement of 2010 3rd quarter results
23 February 2011 Announcement of 2010 full-year audited results
25 March 2011 Announcement of Notice of Annual General Meeting/ Despatch of 2010 Summary Financial Report
6 April 2011 Despatch of 2010 Annual Report
20 April 2011 42nd Annual General Meeting
20 May 2011 Proposed books closure date for dividend entitlement
1 June 2011 Proposed payment of 2010 second and final dividend
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CORPORATE OffICE
haw Par Corporation limited401 Commonwealth Drive#03-03 Haw Par TechnocentreSingapore 149598Tel : 6337 9102Fax : 6336 9232Website : www.hawpar.com
hEAlThCARE
haw Par healthcare limited401 Commonwealth Drive#03-03 Haw Par TechnocentreSingapore 149598Tel : 6337 9102Fax : 6262 3436Website : www.tigerbalm.com
Tiger balm (malaysia) Sdn. bhd.PLO 95 No.6Jalan Firma 1/1Tebrau Industrial Estate81100 Johor BahruMalaysiaTel : 07 354 9616Fax : 07 354 9630
xiamen Tiger medicals Co., ltd2/F No 17 Building,Yi Bin Road,Taiwan Industrial Estate,Huli District, Zipcode 361006,XiamenThe People’s Republic of ChinaTel : 86 592 562 0201Fax : 86 592 562 0202
haw Par healthcare(xiamen) Co., ltdBlk 289 #02-08Wengjiao RoadXinyang Industrial AreaHaicang, XiamenThe People’s Republic of China
gROuP OffICES
PT. haw Par healthcareJl. Tebet TimurDalam Raya No. 135Jakarta 12820Indonesia
haw Par Tiger balm(Thailand) limited280 CharoenkrungKwaeng SamphanthawongKhet SamphanthawongBangkok 10100Thailand
haw Par Tiger balm(Philippines), Inc.Towers Virtual Office andBusiness Center11/F Unit MNCyberOne BuildingCyberpark EastwoodLibis, Quezon CityPhilippines 1110
haw Par (India) Private limited204-B, Crystal PlazaNew Link RoadAndheri (w)Mumbai 400053India
Tiger medicals (Taiwan) limited5F, No. 410 Sec 5Zhong Xiao E. RoadTaipei City 11061TaiwanROC
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lEISuRE
haw Par leisure Pte ltd401 Commonwealth Drive#03-03 Haw Par TechnocentreSingapore 149598Tel : 6337 9102Fax : 6336 9232
underwater WorldSingapore Pte ltd80 Siloso Road, SentosaSingapore 098969Tel : 6275 0030Fax : 6275 0036Email : uwspl@underwaterworld. com.sgWebsite : www.underwaterworld. com.sg
underwater WorldPattaya ltd22/22 Moo 11,Sukhumvit Road,Nongprue, Banglamung,Chonburi 20260ThailandTel : 66 3875 6879Fax : 66 3875 6977Website : www.underwaterworldpattaya. com
Chengdu haw ParOceanarium Co., ltdNo.8 YouLeYuanBinHe Street, Chengdu,Sichuan ProvinceThe People’s Republic of ChinaWebsite : www.cdoceanpark.cn
gROuP OffICES
PROPERTY & InVESTmEnTS
haw Par Properties(Singapore) Private limited401 Commonwealth Drive#03-03 Haw Par TechnocentreSingapore 149598Tel : 6337 9102Fax : 6336 9232
haw Par Securities(Private) limited401 Commonwealth Drive#03-03 Haw Par TechnocentreSingapore 149598Tel : 6337 9102Fax : 6336 9232
haw Par land (malaysia) Sdn. bhd.9th Floor, Menara Haw ParJalan Sultan Ismail50250, Kuala LumpurMalaysiaTel : 03 2070 1855Fax : 03 2070 6078
Tiger balm (hong kong) limitedUnits 1607-161416F Cosco Tower183 Queen’s Road CentralHong KongTel : 852 2910 8863Fax : 852 2868 6701
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mAnAgEmEnT lISTIng
CORPORATE OffICEWee Ee limPresident &Chief Executive Officer
Chng hwee hongExecutive Director
han Ah kuanExecutive Director
Zann limGroup Financial Controller &Group Company Secretary
Teo Thin YienGroup Internal Audit Manager
Tarn Sien haoGeneral Manager(Corporate Developmentand Property Division)
justina YipGroup Finance Manager
Desmond WongGroup Human ResourceManager
lee Tang lingCorporate CommunicationsManager
lawrence OeiLegal Counsel
Tan quee kimCorporate Secretarial Manager
PROPERTYTarn Sien haoDirector,Haw Par Properties (Singapore)Private Limited
Derrick lowProperty Manager,Haw Par Land (Malaysia)Sdn. Bhd.
hEAlThCAREhan Ah kuanDirector & General Manager,Haw Par Healthcare Limited
goh bee leongDirector & General Manager(Manufacturing),Haw Par Healthcare Limited
jasmin hongDeputy General Manager(Marketing),Haw Par Healthcare Limited
Song Teng SooGroup Finance Manager,Haw Par Healthcare Limited
kow mui lickSenior Manager (QC & QA),Haw Par Healthcare Limited
Tey Chee TiongRegional Manager,Haw Par Healthcare Limited
fion PangRegional Manager,Haw Par Healthcare Limited
Choong jun EeRegional Manager,Haw Par Healthcare Limited
felicia lowMarketing Manager,Haw Par Healthcare Limited
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mAnAgEmEnT lISTIng
hEAlThCARE (COnTInuED)
Yap Yee SahBrand Manager,Haw Par Healthcare Limited
Aninthaya SoonsathamCountry Manager(Thailand & Indochina),Haw Par Tiger Balm(Thailand) Limited
Randive udayCountry Manager (India),Haw Par Healthcare Limited
Tai Voon SanDirector & Plant Manager,Tiger Balm (Malaysia)Sdn. Bhd.
lin Shu CongDeputy Plant Manager,Xiamen Tiger MedicalsCo., Ltd
lEISuRE
Chng hwee hongDirector,Haw Par Leisure Pte Ltd
kwek meng TiamRegional General Manager,Underwater World SingaporePte Ltd/Haw Par Leisure Pte Ltd
Peter ChewDeputy General Manager,Underwater World SingaporePte Ltd
Anthony ChangCurator,Underwater World SingaporePte Ltd
betty khooSenior Finance& Administration Manager,Underwater World SingaporePte Ltd
bernard WongGeneral Manager,Underwater World Pattaya Ltd
Thanakorn johnsamerFinance &Administration Manager,Underwater World Pattaya Ltd
Darong YingchonCurator,Underwater World Pattaya Ltd
kelvin WhangMarketing Manager,Underwater World Pattaya Ltd
john ngGeneral Manager,Chengdu Haw ParOceanarium Co., Ltd
Tommy PengFinance Manager,Chengdu Haw ParOceanarium Co., Ltd
leo laiMarketing Manager,Chengdu Haw ParOceanarium Co., Ltd
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mAjOR PRODuCTS & SERVICES
hEAlThCARE PRODuCTSTiger brand Products
Tiger Balm Ointment,
Tiger Balm Soft,
Tiger Balm Plaster,
Tiger Indomethacin Plaster,
Tiger Balm Muscle Rub,
Tiger Balm Liniment,
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lEISuRE fACIlITIESOceanariums
underwater World Singapore*
Dolphin Pool
80 Siloso Road, Sentosa
Singapore 098969
•Aquariumbuilding
•Leasehold
Remaining Lease: 7 years
underwater World Pattaya*
22/22 Moo 11,
Sukhumvit Road,
Nongprue, Banglamung,
Chonburi 20260
Thailand
•Aquariumbuilding
•Leasehold
Remaining Lease: 11 years
Chengdu haw Par Oceanarium*
No.8 YouLeYuan,
BinHe Street, Chengdu,
Sichuan Province
The People’s Republic of China
•Aquariumbuilding
•Leasehold
Remaining Lease: 26 years
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mAjOR PRODuCTS & SERVICES
PROPERTIES
haw Par Centre
180 Clemenceau Avenue
Singapore 239922
•Six-storeycommercialbuilding
•Leasehold
Remaining Lease: 41 years
haw Par glass Tower
178 Clemenceau Avenue
Singapore 239926
•Eight-storeycommercial
building
•Leasehold
Remaining Lease: 59 years
haw Par Technocentre
401 Commonwealth Drive
Singapore 149598
•Seven-storeyindustrialbuilding
•Leasehold
Remaining Lease: 52 years
haw Par Tiger balm building*
2 Chia Ping Road
Singapore 619968
•Nine-storeyindustrialbuilding
•Leasehold
Remaining Lease: 19 years
menara haw Par
Lot 242, Jalan Sultan Ismail
50250 Kuala Lumpur,
Malaysia
•Thirty-twostorey
commercial building
•Freehold
Westlands Centre
Unit 1405-1407
Westlands Centre
20 Westlands Road
Quarry Bay,
Hong Kong
•Office&industrialunits
•999-yearlease
* Properties used by operations are included in Property, Plant and Equipment
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As at 2 March 2011STATISTICS Of ShAREhOlDIngS
DISTRIbuTIOn Of ShAREhOlDIngS
TWEnTY lARgEST ShAREhOlDERS
fREE flOAT
Number of shares issued : 197,935,654Class of shares : OrdinaryVoting rights : One vote per share
Size of holdings no. of Shareholders % no. of Shares %
1 - 999 16,084 75.20 1,921,548 0.97 1,000 - 10,000 4,665 21.81 13,330,329 6.73 10,001 - 1,000,000 626 2.93 27,169,013 13.73 1,000,001 and above 12 0.06 155,514,764 78.57Total 21,387 100.00 197,935,654 100.00
no. name no. of Shares %
1 Wee Investments Private Limited 47,969,542 24.232 Citibank Nominees Singapore Pte Ltd 39,541,641 19.983 DBS Nominees Pte Ltd 21,819,067 11.024 Tye Hua Nominees (Pte) Ltd 15,850,486 8.015 UOB Kay Hian Pte Ltd 13,790,815 6.976 United Overseas Insurance Limited - SHF 3,886,000 1.967 Wah Hin & Co Pte Ltd 3,320,596 1.688 HSBC (Singapore) Nominees Pte Ltd 2,371,961 1.209 United Overseas Bank Nominees Pte Ltd 2,320,995 1.1710 DBSN Services Pte Ltd 1,679,230 0.8511 C Y Wee & Co Pte Ltd 1,493,771 0.7512 Ho Sim Guan 1,470,000 0.7413 Wee Cho Yaw 972,583 0.4914 Lee Boon Leong 609,287 0.3115 How Kok Kooi 550,000 0.2816 Ho Han Leong Calvin 500,401 0.2517 Tan Proprietary (Pte) Ltd 430,000 0.2218 UOB Nominees (2006) Pte Ltd 423,094 0.2119 Chua Wee Keng 400,128 0.2020 Wee Ee Lim 397,448 0.20 Total 159,797,045 80.73
Based on the information available to the Company as at 2 March 2011, approximately 35% of the issued ordinary shares of the Company is held by the public and therefore, the Company has complied with Rule 723 of the SGX-ST Listing Manual which requires at least 10% of equity securities (excluding preference shares and convertible equity securities) in a class that is listed at all times held by the public.
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As at 2 March 2011STATISTICS Of ShAREhOlDIngS
no. of Shares held Direct Deemed Total %
Wee Cho Yaw 993,067 63,149,001 64,142,068 32.41 (1), (2), (3)
Wee Ee Cheong 117,143 60,488,074 60,605,217 30.62 (1), (2), (4)
Wee Ee Lim 397,448 58,963,443 59,360,891 29.99 (1)
Wee Ee Chao 12,570 59,084,305 59,096,875 29.86 (1), (5)
Wee Investments Private Limited 47,969,542 – 47,969,542 24.23 United Overseas Bank Limited – 19,735,034 19,735,034 9.97 (7)
MacKenzie Financial Corporation – 15,171,200 15,171,200 7.66 (8), (9)
First Eagle Investment Management LLC – 28,237,080 28,237,080 14.27 (10)
Supreme Island Corporation 10,986,910 – 10,986,910 5.55
(1) Messrs Wee Cho Yaw, Wee Ee Cheong, Wee Ee Lim and Wee Ee Chao are deemed to be interested in the shares held by Wee Investments Private Limited, Supreme Island Corporation and Kheng Leong Co Pte Ltd.
(2) Messrs Wee Cho Yaw and Wee Ee Cheong are deemed to have an interest in the shares held by C.Y. Wee & Co Pte Ltd.
(3) Mr Wee Cho Yaw is deemed to have an interest in the shares held by UOL Group Limited.
(4) Mr Wee Ee Cheong is deemed to have an interest in the shares held by E.C. Wee Pte Ltd.
(5) Mr Wee Ee Chao is deemed to have an interest in the shares held by Protheus Investment Holdings Pte Ltd and KIP Investment Holdings Pte Ltd.
(6) Kheng Leong Co Pte Ltd, C.Y. Wee & Co Pte Ltd, UOL Group Limited, E.C. Wee Pte Ltd, Protheus Investment Holdings Pte Ltd and KIP Investment Holdings Pte Ltd are not substantial shareholders of the Company.
(7) United Overseas Bank Limited is deemed to have an interest in the 15,849,034 shares held by Tye Hua Nominees (Pte) Limited and 3,886,000 shares held by United Overseas Insurance Limited - SHF.
(8) Mackenzie Financial Corporation (“MFC”) holds the shares in its capacity as investment manager on behalf of its advisory accounts. One of the accounts, Mackenzie Cundill Value Fund holds 13,369,000 shares, amounting to a shareholding of 6.75%.
(9) Certain upstream shareholders of MFC are deemed to have interest in the shares of the Company as follows:
(a) Each of Mackenzie Inc. (“MI”) and IGM Financial Inc (“IGM”) is a substantial shareholder of the Company by virtue of its deemed interest in the shares managed by its subsidiaries as fund managers. Each of MI and IGM is deemed to have an interest in 15,171,200 shares of which 15,171,200 shares are held through MFC.
(b) Each of Power Financial Corporation, 171263 Canada Inc., Power Corporation of Canada (“PCC”), Gelco Enterprises Ltd., Nordex Inc. and Pansolo Holding Inc. is a substantial shareholder of the Company by virtue of its deemed interest in the shares managed by its subsidiaries as fund managers. Each of these entities is deemed to have an interest in 15,176,454 shares of which 15,171,200 shares are held through MFC.
(c) Mr. Paul Desmarais is a substantial shareholder of the Company by virtue of his indirect controlling interest in, amongst others, PCC, which in turn has a deemed interest in the shares managed by PCC‘s subsidiaries as fund managers. He is deemed to have an interest in 15,176,454 shares of which 15,171,200 shares are held through MFC.
(10) First Eagle Investment Management LLC is an U.S. investment adviser, holding the shares on behalf of its clients. One of its mutual funds, First Eagle Overseas Fund holds 23,192,830 shares amounting to a shareholding of 11.71%.
SubSTAnTIAl ShAREhOlDERS AS AT 2 mARCh 2011
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nOTICE Of AnnuAl gEnERAl mEETIng
NOTICE IS HEREBY GIVEN that the Forty-Second Annual General Meeting of the Company will be held at 80 Raffles Place, 61st Storey, UOB Plaza 1, Singapore 048624 on Wednesday, 20 April 2011 at 3.00 p.m. to transact the following business:
AS ORDInARY buSInESS
Resolution 1 To receive and adopt the Directors’ Report and Audited Financial Statements for the financial year ended 31 December 2010 together with the Auditor’s Report thereon.
Resolution 2 To declare a Second & Final Tax-Exempt Dividend of 14 cents per share for the financial year ended 31 December 2010.
To re-appoint the following Directors, who are retiring pursuant to Section 153(6) of the Companies Act, Cap. 50, to hold office until the next Annual General Meeting of the Company:
Resolution 3 Mr Wee Cho Yaw
Mr Wee Cho Yaw will, upon re-appointment, continue as chairman of the Board and Investment Committee and a member of the Nominating Committee and Remuneration Committee of the Company.
Resolution 4 Dr Lee Suan Yew
Dr Lee Suan Yew will, upon re-appointment, continue as a member of the Audit Committee and Nominating Committee of the Company. Dr Lee is considered as an independent Director.
Resolution 5 Mr Hwang Soo Jin
Mr Hwang Soo Jin will, upon re-appointment, continue as a member of the Audit Committee and Remuneration Committee of the Company. Mr Hwang is considered as an independent Director.
Resolution 6 Mr Reggie Thein
Mr Reggie Thein will, upon re-appointment, continue as Chairman of the Audit Committee of the Company.Mr Thein is considered as an independent Director.
To re-elect the following Directors, who are retiring by rotation pursuant to Article 98 of the Company’s Articles of Association:
Resolution 7 Mr Wee Ee Lim
Mr Wee Ee Lim will, upon re-election, continue as a member of the Investment Committee.
hAW PAR CORPORATIOn lImITED(Incorporated in the Republic of Singapore) Company Registration Number: 196900437M
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nOTICE Of AnnuAl gEnERAl mEETIng
Resolution 8 Mr Sat Pal Khattar
Mr Sat Pal Khattar will, upon re-election, continue as Chairman of the Nominating Committee and Remuneration Committee of the Company. Mr Khattar is considered as an independent Director.
Resolution 9 To approve Directors’ fees of $310,000 for the financial year ended 31 December 2010 (2009: $257,000).
Resolution 10 To re-appoint Messrs PricewaterhouseCoopers LLP as Auditor of the Company to hold office until the conclusion of the next Annual General Meeting and to authorise the Directors to fix their remuneration.
AS SPECIAl buSInESS
To consider and, if thought fit, pass the following ordinary resolutions:
Resolution 11 “That approval be and is hereby given to the Directors to offer and grant options to employees (including executive Directors) and non-executive Directors of the Company and/or its subsidiaries who are eligible to participate in the Haw Par Corporation Group 2002 Share Option Scheme (“2002 Scheme”) in accordance with the rules of the 2002 Scheme, and pursuant to Section 161 of the Companies Act, Cap. 50, to allot and issue from time to time such number of shares in the Company as may be required to be issued pursuant to the exercise of options under the 2002 Scheme, provided that the aggregate number of shares to be issued pursuant to this resolution shall not exceed five per cent (5%) of the total number of issued shares of the Company from time to time.”
Resolution 12 “That approval be and is hereby given, pursuant to Rule 14.1 of the rules of the 2002 Scheme, for the extension of the duration of the 2002 Scheme for a further period of five (5) years from 6 June 2012 to 5 June 2017; and the Directors of the Company be and are hereby severally authorised to complete and do all such acts and things as they may consider necessary, expedient, incidental or in the interests of the Company to give effect to the transactions contemplated and/or authorised by this Resolution.”
Resolution 13 “That subject to and contingent upon the passing of Resolution 12 set out above, approval be and is hereby given for Options (as defined in the rules of the 2002 Scheme) to be granted under the 2002 Scheme with Exercise Prices (as defined in the rules of the 2002 Scheme) which may be set at a discount to the Market Prices (as defined in the rules of the 2002 Scheme) for the ordinary shares in the share capital of the Company, Provided that the maximum discount which may be given in respect of any Option shall not exceed 20% of the relevant Market Price in respect of that Option.”
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Resolution 14 “That pursuant to Section 161 of the Companies Act, Cap. 50, the Articles of Association of the Company and the listing rules of the Singapore Exchange Securities Trading Limited, approval be and is hereby given to the Directors to issue shares in the Company (whether by way of rights, bonus or otherwise) at any time and upon such terms and conditions and for such purposes and to such persons as the Directors may in their absolute discretion deem fit provided that the aggregate number of shares to be issued pursuant to this resolution shall not exceed fifty per cent (50%) of the Company’s total number of issued shares, of which the aggregate number of shares to be issued other than on a pro-rata basis to members of the Company shall not exceed fifteen per cent (15%) of the total number of issued shares of the Company, and for the purposes of this resolution, the percentage of issued shares shall be based on the total number of issued shares in the capital of the Company at the time this resolution is passed after adjusting for new shares arising from the conversion of share options on issue at the time this resolution is passed, and any subsequent consolidation or subdivision of the Company’s shares.”
nOTICE Of ClOSuRE Of bOOkS
NOTICE IS HEREBY GIVEN that the Share Transfer Books and Register of Members of the Company will be closed on 20 May 2011.
Duly completed transfers received in respect of the shares of the Company by the Company’s Share Registrar, Boardroom Corporate & Advisory Services Pte Ltd at 50 Raffles Place, #32-01, Singapore Land Tower, Singapore 048623 up to 5.00 p.m. on 19 May 2011 will be registered to determine members’ entitlement to the proposed Second & Final dividend. Members whose securities accounts with The Central Depository (Pte) Ltd which are credited with shares of the Company as at 5.00 p.m. on 19 May 2011 will be entitled to such proposed dividend.
The proposed Second & Final dividend, if approved by members, will be payable on 1 June 2011.
By Order of the Board
Zann limCompany Secretary
Singapore25 March 2011
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nOTES TO RESOluTIOnS 2, 3 TO 8, 11,12, 13 AnD 14
Resolution 2 Together with the interim tax-exempt dividend of 6 cents per share paid on 9 September 2010 and subject to shareholders’ approval on the second & final tax-exempt dividend of 14 cents per share, the total tax-exempt dividend for the financial year ended 31 December 2010 would be 20 cents per share. (2009: 20 cents tax-exempt).
Resolutions Further information on the Directors can be found in the Board of Directors section of this Annual Report.
Resolution 11 is to empower the Directors to allot and issue shares pursuant to the 2002 Scheme which was approved at the Extraordinary General Meeting of the Company on 22 May 2002. A copy of the Rules of the 2002 Scheme is available for inspection by members during normal business hours at the registered office of the Company at 401 Commonwealth Drive, #03-03 Haw Par Technocentre, Singapore 149598.
Resolution 12 this resolution if passed, will extend the duration of the 2002 Scheme for a further period of five (5) years from 6 June 2012 to 5 June 2017. Please refer to the Letter to Shareholders dated 25 March 2011.
Resolution 13 is to empower the Directors to grant options at a discount to the Market Price (as defined in the rules of the 2002 Scheme), up to a maximum of 20% of the relevant Market Price, in accordance with the 2002 Scheme.
Resolutions Pursuant to Rule 859 of the Listing Manual of the Singapore Exchange Securities Trading Limited, shareholders who are eligible to participate in the Scheme shall abstain from voting in respect of Resolution 11 to 13.
Resolution 14 is to empower the Directors to issue shares in the Company, subject to the limits contained in the resolution. Unless revoked or varied by the Company in general meetings, such authority shall remain 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. The Directors would only issue shares under this resolution where they consider it appropriate and in the interest of the Company to do so.
notes
(1) A member entitled to attend and vote at the meeting is entitled to appoint one or two proxy/proxies to attend and vote in his/her stead. A proxy need not be a member of the Company.
(2) To be effective, the Proxy Form must be deposited at the registered office of the Company at 401 Commonwealth Drive, #03-03 Haw Par Technocentre, Singapore 149598, not less than 48 hours before the time set for holding the meeting.
11 to 13
3 to 8
number of shares held:
Scrip-basedScripless
PROxY fORm
I/We, (Name)
of (Address)
being a member/members of the Company, hereby appoint:
ImPORTAnT:
1. For investors who have used their CPF monies to buy shares of Haw Par Corporation Limited, 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 CPFIS investors and shall be ineffective for all intents and purposes if used or purported to be used by them.
3. CPFIS Investors who wish to vote should contact their CPF Approved Nominees.
nAmE ADDRESS nRIC/ PASSPORT nO. PROPORTIOn Of ShAREhOlDIngS (%)
(a)
(b)
And/or (delete as appropriate)
as my/our proxy/proxies to attend and vote for me/us and on my/our behalf at the Forty-Second Annual General Meeting of the Company to be held on Wednesday , 20 April 2011 at 3.00 p.m. and at any adjournment thereof.
(Please indicate with a “x” in the spaces provided whether you wish your votes 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, your proxy/proxies may vote or abstain as he/she may think fit.
Dated this ________ day of _________ 2011
Signature(s) or Common Seal of Member(s)
fORTY-SECOnD AnnuAl gEnERAl mEETIng(Before completing this form, please read the notes behind.)
hAW PAR CORPORATIOn lImITED(Incorporated in the Republic of Singapore) Company Registration Number: 196900437M
nO. RESOluTIOn fOR AgAInST
Ordinary business
1 Adoption of Financial Statements and Reports of the Directors and Auditors
2 Declaration of Second & Final Dividend
3 Re-appointment of Mr Wee Cho Yaw
4 Re-appointment of Dr Lee Suan Yew
5 Re-appointment of Mr Hwang Soo Jin
6 Re-appointment of Mr Reggie Thein
7 Re-election of Mr Wee Ee Lim
8 Re-election of Mr Sat Pal Khattar
9 Approval of Directors’ fees
10 Re-appointment of PricewaterhouseCoopers LLP as Auditors
Special business
11 Authority to issue shares (Share Options)
12 Approval to extend Haw Par Corporation Group 2002 Share Option Scheme
13 Approval for granting discount to exercise price of Share Option
14 Authority to issue shares (General)
notes:
1. Please insert at the top right hand corner of this Proxy Form the number of scrip-based shares in the Company registered in your name in the Register of Members and the number of scripless shares in the Company entered against your name in the Depository Register maintained by The Central Depository (Pte) Limited (“CDP”) in respect of the shares in your securities account with CDP. If no number is inserted, this Proxy Form shall be deemed to relate to all the shares held by you.
2. A member entitled to attend and vote at the meeting is entitled to appoint one or two proxy/proxies to attend and vote in his/her stead. A proxy need not be a member of the Company.
3. A member is not entitled to appoint more than two proxies to attend and vote on his/her behalf. Where a member appoints two proxies, the appointments shall be invalid unless he/she specifies the proportion of his/her shareholding (expressed as a percentage of the whole) to be represented by each proxy.
4. The sending of a Proxy Form by a shareholder does not preclude him/her from attending and voting in person at the Annual General Meeting if he/she finds that he/she is able to do so. In such event, the relevant Proxy Form will be deemed to be revoked.
5. To be effective, this Proxy Form must be deposited at the registered office of the Company at 401 Commonwealth Drive, #03-03 Haw Par Technocentre, Singapore 149598, not less than 48 hours before the time set for holding the meeting.
6. This Proxy Form must be signed by the appointor or by his/her attorney. In the case of a corporation, this form must be executed under its common seal or signed by its duly authorised attorney or officer. In the case of joint holders, all holders must sign this form.
7. Any alteration made in this Proxy Form should be initialled by the person who signs it.
8. The Company shall be entitled to reject this Proxy Form if it is incomplete, improperly completed or illegible or where the true intentions of the appointor is not ascertainable from the instructions of the appointor specified in the form. In the case of members whose shares are entered against their names in the Depository Register, the Company may reject any proxy form lodged if such members are not shown to have the corresponding number of shares in the Company entered against their names in the Depository Register as at 48 hours before the time set for holding the meeting or the adjourned meeting, as appropriate.
9. Agent banks acting on the requests of the CPFIS investors who wish to attend the Annual General Meeting as observers are requested to submit in writing, a list with details of the investors’ names, NRIC/Passport numbers, addresses and number of shares held. The list, signed by an authorised signatory of the Agent Bank, should reach the Company’s Registrar, Boardroom Corporate & Advisory Services Pte Ltd at 50 Raffles Place, #32-01 Singapore Land Tower, Singapore 048623, not less than 48 hours before the time set for holding the meeting.
Haw Par Corporation LimitedAnnual Report 2008
Haw Par Corporation Limitedannual report 2010
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HAw PAR CORPORATION LIMITED(Incorporated in the Republic of Singapore)Company Registration Number: 196900437M
401 Commonwealth Drive#03-03 Haw Par TechnocentreSingapore 149598Tel: 6337 9102 Fax: 6336 9232www.hawpar.com