transform -...

TRANSFORMAnnuAl RepoRt 2010

C O N T E N T S04.

Chairman’s Statement

10. Board of Directors

14. Key Personnel

18. Group Financial Highlights

22. Corporate Information

23. Corporate Social

Responsibility

28. Business Review

37. Corporate Governance

45. Financial Report

Annual Report 2010 tRAns F O R m 1

Change, in its essence, is cultivated through the process of

time. And Straits Trading’s vision to become a Corporate

Transformer is by no means any different. Some successes

are achieved overnight, but building a legacy takes time.

Building upon last year’s theme of transformation, this year’s

annual report is an extension of the origami concept to

symbolise our ongoing process of transformation and growth.

Just as it takes time and skill to craft a single piece of paper

into a work of art, we dedicate our efforts to constantly

mould and develop our investments into businesses of

enhanced value. With each experience bringing us closer to

fulfilling our vision, we invite you to join us once again as we

continue this journey of transformation.

O R i G a m i

t R A n s F O R mJust as the unassuming caterpillar morphs into

a majestic butterfly, we seek to nurture our investments and transform them to businesses that deliver greater yield.

2 The Straits Trading Company Limited

The Butterfly is a symbol of transformation.

A metamorphosis that represents eminence and beauty, it is the process

of change in its most elegant form.


Chew Gek KhimExecutive Chairman

The Straits Trading Company Limited


ChAirmAn’S S TaT E m E N T

2010 saw Straits Trading Company Limited (STC) continue its transformation and growth, with total revenues increasing by

41.5% to S$1.4 billion from S$971.6 million in 2009. This jump in revenues arose mainly from our resources and hospitality divisions.

The recovery in the global economy from the global financial crisis also saw global tourism pick up, resulting in improved occupancies in Asia and Australia, contributing to improved

revenue from our hospitality division.

The strong demand for tin, which is extensively used in the electronics industry, saw average tin prices rise to US$20,362 per tonne in 2010 from US$13,469 per tonne in 2009. mSC therefore benefited from higher sales from tin mining and smelting due to higher tin prices on a higher business volume.

The recovery in the global economy from the global financial crisis also saw global tourism pick up, resulting in improved occupancies in Asia and Australia, contributing to improved revenue from our hospitality division.

As articulated in previous years, STC’s objective is to reposition each business as an “engine of growth”. As part of this transformation, and in order to ensure longer term sustainability, the Board decided that a cautious stand should be taken with regard to those aspects of the businesses that were underperforming. hence after careful deliberation, the Board decided to adopt a prudent stance and make provisions for certain underperforming hotel contracts and non-tin investments in the accounts.

As a consequence of these exceptional impairment provisions of S$95.3 million made for the resource and hospitality divisions in 2010, profit before tax for the STC Group fell 87.2% to S$23.9 million for 2010 from S$187.4 million for 2009 and earnings per share fell to 8.6 cents for 2010 from 48.9 cents for 2009. Excluding exceptional items, the decrease was 43.7% to S$13.3 million in 2010 from S$23.6 million in 2009, largely as a result of losses from our hospitality division and lower contributions from property development and financial assets.

notwithstanding the significant provisions for impairments, STC managed to turn in a profit, resulting in net asset value per share increasing to S$3.52 as at 31 December 2010 from S$3.43 as at 31 December 2009.

Fiscal discipline continues to be a key tenet and we have kept a tight rein on our borrowings to maintain a strong financial position. As a result, our net gearing ratio increased marginally to 29.8% as at 31 December 2010 from 28.9% as at 31 December 2009. Excluding net borrowings of the mSC Group, the net gearing ratio was a conservative 18.0% as at 31 December 2010, a slight increase from 17.1% as at 31 December 2009.

PROPERTyin 2009, an analytical review of the Group’s real estate portfolio was undertaken in 2009 with the objective of maximising value and in the same year, the redevelopment of STC’s flagship Straits Trading Building at 9 Battery road was completed and 44 units of Gallop Gables were sold.

in 2010, we articulated and implemented the strategy to reposition STC as a niche developer and owner of high-end lifestyle properties.


In line with its role as a corporate transformer, STC continues to pursue its goal of repositioning its various business divisions.

Following the takeover of STC by Tecity in 2008, we worked on the capital allocation of the different businesses, identifying

engines of growth within the various divisions of STC.

* As at 31 January 2011

17.85%54.84%100%100%

market capitalisation: $1.26 bn*

investmentsWBL Corporation Limited is one of the earliest singapore-based developers of residential properties in China and global no. 3 in flexible printed circuit manufacturing. Key customers include Apple and rim.

Resourcesmalaysia Smelting Corporation Berhad is the largest global custom tin smelter, and the world’s third largest global producer of refined tin. The quality Straits Tin brand is in demand amongst top electronics manufacturers.

Hospitality rendezvous hospitality Group is the hospitality division of Straits Trading that focuses on branded three- and four-star hotels in Asia targetting the business market.

PropertyStraits Trading, through its property division Straits Developements Pte Ltd, is one of the largest listed owners of good quality bungalows in Singapore.

(holding Company)

ChAirmAn’S S TaT E m E N T — continued


2010 saw the repositioning of MSC as a pure tin smelter and producer. MSC continues

to pursue its strategy into 2011 by focusing efforts into making MSC a vertically integrated player in the tin space with both

mining and smelting businesses.

in 2010, Taiko-Straits Developments Sdn Bhd, a joint venture between Taiko Development Sdn Bhd and STC launched the Thompson-Flora Tropika residences in ipoh comprising 47 luxurious freehold bungalows. A review of our land bank in malaysia has led us to formulate clear plans for the development of residential/commercial projects in various states in malaysia, which will be announced in due course.

STC also initiated development work on two of our five remaining plots of vacant bungalow land in Singapore. The completion of these bungalows in 2011 will make STC one of the listed companies with the largest portfolio of “good class” bungalows in Singapore, the supply of which is currently limited in Singapore.

in 2011, we will complete our Five Chancery project which comprises 12 high-end Strata Bungalows near the premier Anglo Chinese School (ACS). in addition, we have invested in 14 units of The holland Collection, a well-located high-end luxury freehold residential development.

maLaySia SmELTiNG CorporatIon Berhad (MSC)2010 saw the repositioning of mSC as a pure tin smelter and producer. mSC continues to pursue its strategy into 2011 by focusing efforts into making mSC a vertically integrated player in the tin space with both mining and smelting businesses.

Following the successful secondary listing of mSC on the Singapore Exchange on 27 January 2011, STC’s shareholding in mSC decreased from 72% to 54%. mSC’s successful listing makes it the first company in 13 years to be listed in both Singapore and malaysia. Cross-listing on both exchanges stopped in the late 1998[*] after Singapore and malaysian firms were delisted from each other’s exchanges after the split between Kuala Lumpur

Stock Exchange and the Stock Exchange of Singapore. This will help position mSC for growth in its core business of tin. it is my sincere hope that this secondary listing will be the corporate exemplification and a logical continuation of improved governmental, diplomatic and political ties between Singapore and malaysia.

Further details of the business of mSC can be found in the section headed “Business review” under the segment headed “Perform”.

RENDEzvOuS HOSPiTaLiTy Group (rhG)Against the backdrop of a strong rebound in global tourism, the revenue for the hospitality division increased in 2010 from 2009.

however, this was not reflected in profitability and a review of the performance of our hospitality division led us to focus on its management and operations.

To recapitulate, the strategy for rhG as articulated last year was to focus on being a branded three-and-a-half to four-and-a-half star business hotel chain in key cities, targeting the business market. rhG will persevere with this strategy of focusing on the business traveler and the corporate segment; working to improve its product and service in the three-and-a-half to four-and-a-half star market.


ChAirmAn’S S TaT E m E N T — continued

however, a sound strategy requires proper execution and sound implementation to achieve the desired objective. in this regard, a management board comprising senior executives and advisors was formed to oversee the hospitality business with a view to creating a clearer brand, identifying areas of inefficiency, improving operational effectiveness and creating a leaner and nimbler organisation in the process so as to ultimately raise the operating performance of this division.

2011 will therefore mark a year of change for the hospitality division and work is already underway as we streamline the business and increase productivity. The Board of STC has made a prudent assessment of the business and appropriate provisions have been taken in the accounts for the financial year ended 2010.

Following an assessment of our hotel properties, the Company decided that one of the approaches to transform the business is to invest in value accretive capital expenditure. We are in the process of refurbishing our hotels (as detailed in the business review section) and it is anticipated that upon completion, our hospitality division will have a stronger brand presence, better customer experience and

increased occupancies and rates resulting in improved profitability.

WBL CORPORaTiON LimiTEDin 2009, we consolidated our investments into one company, WBL Corporation Limited, and increased our shareholdings in WBL to 18.9% as at 31 December 2009. All four of WBL’s core divisions comprising Technology, Automotive, Property and Engineering and Distribution continued to perform profitably for the financial year ended 30 September 2010. WBL paid out a total dividend of 10 cents per share in 2010, compared with 8.5 cents in 2009.

DiviDENDSWe have maintained our interim dividend payout of two-cents per share.

uNLOCKiNG vaLuEin line with its role as a corporate transformer, STC continues to pursue its goal of repositioning its various business divisions. Following the takeover of STC by Tecity in 2008, we worked on the capital allocation of the different businesses, identifying engines of growth within the various divisions of STC. in 2009 we worked on repositioning the Property Division as a niche developer and owner of high-end lifestyle properties. in 2010, we repositioned mSC as a vertically integrated player in the tin space. 2011 will see us working on repositioning rhG as a branded three-and-a-half to four-and-a-half star business hotel chain targeted at the business market and focusing on improving its operational efficiency.

We have also announced that STC is considering a secondary listing on the main market of Bursa malaysia Securities Berhad (Bursa listing). This is in line with our view that the proposed Bursa

In 2009 we worked on repositioning the Property Division as a niche developer and

owner of high-end lifestyle properties. In 2010, we repositioned MSC as a vertically integrated

player in the tin space. 2011 will see us working on repositioning RHG as a branded three-and-a-half to four-and-a-half star business hotel chain targeted at the business market and focusing

on improving its operational efficiency.


listing will enhance the public profile of STC, and provide us with an additional channel to raise capital for future expansion of our significant business activities in both Singapore and malaysia.

2011 aND BEyONDThe global landscape in 2011 will be challenging. Japan’s devastating earthquake, tsunami and deepening nuclear crisis, the unexpected and slowly spreading tide of political unrest and change in the middle East, the growing deficit and financial problems confronting Europe as well as the rising prices of food and fuel will affect the global economy, but the impact and extent of each of these different events on the economy and business remain to be seen.

however, we remain cautiously optimistic about the performance of the Company. With most of our repositioning and write-offs done in 2010, and having put in place the infrastructure roadmaps for realising our vision of transforming our investments into businesses of enhanced value, we are hopeful of a positive performance in 2011.

CHaNGES TO THE ExECuTivE TEamWe are pleased to welcome mr Quah Ban huat into STC as the Chief investment Officer and are sorry to see mr iqbal Jumabhoy leave rhG to pursue his personal interests. We wish to thank mr Jumabhoy for his hard work and contributions to the Group. mr Eric Teng’s responsibilities have expanded to cover both the Property and hospitality divisions.

i wish to thank my fellow Directors, all the Company’s shareholders, advisors, business associates, financiers, clients and customers for their strong and consistent support and all staff for their commitment and professionalism as we continue to transform and grow.

Chew Gek KhimExecutive Chairman28 march 2011

* reference from the Monetary Authority of Singapore, “Deputy Prime Minister Lee’s reply to Parliament question on CLOB, dated 12 October 1998”.


Ms Chew Gek KhimExecutive ChairmanLLB (Hons)

Non-Independent and Executive DirectorAppointed Executive Chairman: 1 november 2009Last re-elected: 2010

Tan Sri Dato’ Dr Lin See-yanPSM, DPMP, DSAP, JMN, JSM, AMN, BA (Hons),Mpa, Ma, phd, C Stat, C Sci

Independent and Non-Executive DirectorLast re-appointed: 2010

Prior to her appointment as Executive Chairman on 1 november 2009, ms Chew Gek Khim was the non-Executive and non-independent Chairman of Straits Trading from 24 April 2008. ms Chew works closely with the Group CFO and each of the CEOs of Straits Trading’s businesses in resources, property and hospitality to oversee the implementation of policies and decisions, including compliance with corporate governance codes. ms Chew is also Executive Chairman of the Tecity Group of investment companies, the parent company of Straits Trading, which she joined in 1987. She also sits on the board of Capitaretail China Trust, a listed trust of the CapitaLand Group.

ms Chew is also Deputy Chairman of The Tan Chin Tuan Foundation in Singapore and The Tan Sri Tan Foundation in malaysia. She chairs the national Environment Agency Board, and sits on the Singapore Totalisator Board and the Securities industry Council. A lawyer by training, ms Chew graduated from the national University of Singapore in 1984.

Tan Sri Lin, a British Chartered Scientist, is a harvard educated economist. he has been a Director since 1994 and presently sits on boards of the Great Eastern holdings Ltd Group and Silverlake Axis Limited in Singapore. he continues to serve the public interest, including member, Prime minister’s Economic Council Working Group, as well as a member of a number of Key national Committees on higher Education; and Economic Advisor, Associated Chinese Chambers of Commerce and industry of malaysia. Tan Sri Lin is Chairman Emeritus, harvard Graduate School of Arts & Sciences Alumni Council at harvard University as well as Advisor for Asia, harvard Alumni Association, in addition to being President, harvard Club of malaysia. Prior to 1998, he was Chairman and Chief Executive Officer of the Pacific Bank Group and for 14 years previously, Deputy Governor of Bank negara malaysia, having been a central banker for 34 years. Tan Sri Lin also served as director of Khazanah nasional malaysia (1994 to 2000) and was Chairman of its Executive Board (1999 to 2000).

BOArD OF D i R E C TO R S


mrs Elizabeth SamBA (Hons) Economics

Independent and Non-Executive DirectorLast re-appointed: 2010

mrs Sam brings with her more than 40 years of experience in the financial sector, having held senior positions in the ministry of Finance, the monetary Authority of Singapore, mercantile house holdings PLC (a company listed on the London Stock Exchange) and Oversea-Chinese Banking Corporation Limited. Currently a director of Boardroom Limited, SC Global Developments Ltd, The Banyan Tree holdings Ltd, AV Jennings Ltd and Kasikorn Bank, mrs Sam was also the Chairman of the Singapore international monetary Exchange of Singapore, 1987-1990 and 1990-1993 and investment management Association of Singapore, 1997-1999. She was a member of the Trade Development Board, 1989-1994.

in 1996, mrs Sam was awarded the Public Service Star (BBm), republic of Singapore, for her contributions to financial centre developments. mrs Sam graduated from the University of Singapore with a BA (hons) Economics.

Mr razman ariffinB Sc (Eng), ARSM, MIME(M)

Independent and Non-Executive DirectorLast re-elected: 2009

mr Ariffin was appointed to the Board in December 2006. he graduated from the imperial College of Science and Technology at the University of London, England with first class honours in mining engineering in 1972. mr Ariffin’s rich involvement in the mining, metallurgical and energy industries spans over 30 years, starting as production and planning engineer with Osborne & Chappel Sdn Bhd, then as petroleum engineer with Sarawak Shell Berhad. he was then attached to the malaysia mining Corporation Berhad Group (now known as mmC Corporation Berhad Group) serving in various capacities over the years. in 1985, mr Ariffin joined malaysia Smelting Corporation Berhad (mSC) as general manager and was its Chief Executive Officer and Executive Director when he left in 1994. Currently an independent strategic and corporate consultant, mr Ariffin also sits on the board of mSC and is Chairman of PT Koba Tin in indonesia. he was the former managing director of Trenergy (m) Berhad and Crest Petroleum Bhd, both companies listed on Bursa malaysia.


mr David Goh Kay yongBA (Hons), SM (MIT), CFA

Non-Independent and Non-Executive DirectorLast re-elected: 2009

mr Goh is the Chief investment Officer and Chief Strategist of the Tecity Group of investment companies, the parent company of Straits Trading Company. mr Goh started his investment career as an investment Analyst with Great Eastern Life in 1986, and taught at the nanyang Technological University (nTU), Singapore in the Bachelor of Business Financial Analyst programme in 1991. After joining Tecity Group in 1997, he remained from 1997-2003 as Adjunct Associate Professor of Finance at nTU. Presently the non-executive chairman of Yeoman Capital management Pte Ltd (an exempt fund manager), mr Goh also serves as director of Pastamatrix international Pte Ltd, Stewardship Capital Pte Ltd, Stewardship Equity Pte Ltd, and nPE Print Communications Pte Ltd. mr Goh holds a Bachelor of Arts (hons) degree in Economics from York University, Canada; a master of Science in management (System Dynamics, Finance and Strategy) from massachusetts institute of Technology’s Sloan School of management, as well as a CFA Charter.

BOArD OF D i R E C TO R S — continued

Ms Chew Gek hiangB Acc (Hons), CPA

Non-Independent and Non-Executive DirectorLast re-elected: 2009

An accountant by training, ms Chew has been with the Tecity Group of private investment companies, the parent company of Straits Trading Company, since 1991. As Executive Director and head of Finance, she is actively involved in the investment activities of the Tecity Group and is responsible for its securities trading portfolio. She also oversees the human resource and administrative functions in the Tecity Group. Currently serving on the advisory panel of the GST review Board, ms Chew is also a Council member of The Tan Chin Tuan Foundation in Singapore and The Tan Sri Tan Foundation in malaysia. She is also President of noah’s Ark CArES (Companion Animal rescue and Education Society), a non-profit animal welfare society which champions responsible pet ownership and active sterilisation and microchipping of stray dogs and cats in Singapore and Johor.

ms Chew graduated from the national University of Singapore in 1986. She joined Ernst & Young (London) in 1987 to pursue her chartered accountancy, and was admitted to the institute of Chartered Accountants in England and Wales in October 1990.


mr yap Chee KeongB acc, FCpa

Lead Independent DirectorLast re-elected: 2010

mr Yap Chee Keong was appointed as the Lead independent Director of Straits Trading Company with effect from 1 november 2009. mr Yap is an independent non-executive director of Capitamalls Asia Limited and the chairman of its audit committee. he is also an independent non-executive director of hup Soon Global Corporation Limited and Tiger Airways holdings Ltd and chairs the remuneration committee of Tiger Airways holdings Ltd. in addition, he serves as a Board member of the Accounting and Corporate regulatory Authority and as a non-executive director of SPi (Australia) Assets Pty Ltd and chairman of Singapore District Cooling Pte Ltd. mr Yap was previously Chief Financial Officer of the Singapore Power Group (SP) where he was also responsible for corporate planning and strategic investments as well as oversight of the overseas investments of SP which included its Australian investments. Prior to SP, mr Yap worked as the chief financial officer and in other senior management roles in several multinational and listed companies. mr Yap has 25 years of experience in senior management, strategic planning, merger and acquisitions, corporate finance, treasury, financial management and risk management functions in diverse industries. mr Yap holds a Bachelor of Accountancy from the national University of Singapore and is a Fellow of the institute of Certified Public Accountants of Singapore and CPA Australia.

mr Tham Kui SengBa (hons), engineering Science

Independent and Non-Executive DirectorLast re-elected: 2010

mr Tham is a director of raffles medical Group Ltd, Global Logistic Properties Limited, SPi (Australia) Assets Pty Ltd and Capitaland China holdings Pte Ltd. he also serves on the Board of The housing and Development Board (hDB) and chairs Em Services Private Limited. mr Tham was the former Chief Corporate Officer of CapitaLand Limited overseeing the corporate services functions of the listed real estate group, a position he held from 2002 until 31 December 2008. he also served as the Chief Executive Officer of CapitaLand residential Limited and before that, the Chief Operating Officer of Pidemco Land Limited.


mrs maureen LeongGroup Chief Financial Officer


mrs maureen Leong joined The Straits Trading Company Limited (STC) as its Group Chief Financial Officer (CFO) in September 2009. As Group CFO, mrs Leong has overall responsibility for the Group’s financial functions, including treasury, tax, insurance, risk management and capital management of STC and its group of companies. mrs Leong was appointed to the Board of mSC, a subsidiary of STC, listed on both the main Boards of Bursa and SGX-ST, as a non-independent and non-Executive Director in December 2009.

mrs Leong has more than 30 years of experience in corporate planning and finance, project financing, mergers and acquisitions, treasury, tax, financial management and risk management functions in various industries. She started her career with DBS Bank Ltd before moving on to Deloitte & Touche. Prior to joining STC, mrs Leong was with Sembcorp industries Ltd, where her last appointment was Executive Vice President of Group mergers and Acquisitions, Group Performance management and Corporate Planning of the Sembcorp Group of companies. She was appointed Director, Group Finance of Sembcorp marine Ltd between 2007 and 2008, and Group CFO of Sembcorp Logistics Ltd from 2004 to 2006, after having served as Group CFO of Sembcorp Utilities Pte Ltd. Both Sembcorp industries Ltd and Sembcorp marine Ltd are listed on the main board of SGX-ST.

mrs Leong holds a First Class honours degree in Accountancy from the University of Singapore and is a Fellow of both the institute of Certified Public Accountants of Singapore and CPA Australia.

mr Quah Ban HuatChief Investment Officer


mr Quah Ban huat was appointed Chief investment Officer (CiO) of The Straits Trading Company Limited (STC) on 1 march 2011. As the CiO, mr Quah is responsible for overseeing the development and execution of investment strategy for STC. in addition, he is also in-charge of all investor relations matters of the Group.

Prior to joining STC, mr Quah was the Chief Financial Officer of the Trustee-manager of rickmers maritime from 2006 to 2010. mr Quah had also worked as the Chief Financial Officer and thereafter the Financial Adviser of City Gas Pte. Ltd., a wholly-owned subsidiary of Temasek holdings (Private) Limited, an investment holding company of the Government of Singapore. After having spent several years in London, mr Quah joined Deutsche Bank in Singapore as their regional Business Area Controller for the investment banking arm. From 2000, he held various key finance positions including Chief Financial Officer at Growasia.com and Group Finance Director of the imC Group, which holds, among others, interests in transportation, real estate and natural resources.

mr Quah has more than 22 years of experience in finance and accounting, including fund raising, listing and initial public offerings, investments, financing and tax planning. he is a member of the institute of Chartered Accountants in England and Wales and a fellow member of the Association of Chartered Certified Accountants.

KEY P E R S O N N E L


yBhg. Dato’ Seri Dr mohd ajib anuarGroup Chief Executive Officer

Malaysia Smelting Corporation Berhad (MSC)

YBhg. Dato’ Seri Dr mohd Ajib Anuar, a malaysian, was first appointed to the Board of mSC, a subsidiary of The Straits Trading Company Limited, as a non-independent non-Executive Director in July 1986, and has been Chief Executive Officer and Executive Director of mSC since June 1994. he has more than 39 years of experience and expertise in the global tin and mineral resources industry. Currently, he serves as the Chairman of the Kuala Lumpur Tin market, the President of the malaysian Chamber of mines and the Chairman of the malaysian Tin industry (research and Development) Board as well as a Director of iTrL Ltd and iTri innovation Ltd, UK (the research and development body of the world’s tin industry).

Prior to his appointment as CEO of mSC, YBhg. Dato’ Seri Dr mohd Ajib Anuar spent 23 years in malaysia mining Corporation Berhad Group of Companies (now known as mmC Corporation Berhad Group of Companies), serving in various senior positions including as the General manager of the Finance Department, Director of Business Development and managing Director of mmC’s international marketing Division. he also served as the President of iTri Ltd, UK (2002-06), the Deputy Chairman of the Kuala Lumpur Commodity Exchange (1988-93) as well as Chairman of the malaysian Futures Clearing Corporation (1990-93).

he holds the professional qualification of the Association of Chartered Certified Accountants, United Kingdom.

mr Eric TengChief Executive Officer (Property & Hospitality)

& Advisor (Marketing and Communications)The Straits Trading Company Limited

mr Eric Teng was first seconded to head Straits Trading’s Property division from its parent company, the Tecity Group on 1 February 2009 before his permanent transfer on 1 January 2010. in his current appointment, mr Teng is responsible for driving the Property division’s strategy, investment, development and operations for Singapore, malaysia and Australia.

On 1 February 2011, mr Teng’s responsibilities was expanded to cover the hospitality division and concurrently, is the Chief Executive Officer of rendezvous hospitality Group (rhG).

mr Teng joined the Tecity Group in 2005 and has remained as an Advisor to the Tan Chin Tuan Foundation, Tan Sri Tan Foundation in malaysia and the Tecity Group after he had relinquished his role as the Chief Executive Officer of both Foundations upon his transfer to Straits Trading.

Before joining the Tecity Group in 2005, mr Teng has distinguished himself in the advertising, marketing and communications industry, where he had worked for more than 20 years.

mr Teng has held leadership positions in various charity and trade organisations, including the YmCA, national Council of Social Service (nCSS), the Tsunami reconstruction and Facilitation Committee (TrFC), and the national Volunteer and Philanthropy Centre (nVPC) and the Association of Accredited Advertising Agents (4As).

For his voluntary contributions, mr Teng was awarded the Public Service medal (PBm) in 2001 by the Singapore Government.

A marketer by training, mr Teng holds professional qualifications in marketing and an mBA from the nUS Business School.


i n F O R meffective communication remains the cornerstone of our organisation, and is achieved when the sum of all parts come together. Forging closer ties with

our customers and shareholders will enable us to make informed decisions and move towards a common goal.


The Star is a symbol of direction. Like the north Star that illuminates the

night, it is a constellation that offers guidance and navigation.


GrOUP FinAnCiAL H i G H L i G H T S

2010 2009 (a) 2008 2007 2006$’000 $’000 $’000 $’000 $’000

Total revenue 1,374,980 971,645 1,250,103 1,109,262 924,339Profit before tax and exceptional

gains13,287 23,587 23,975 116,777 78,713

Exceptional gains 10,585 163,781 49,940 420,028 145,822Profit before tax 23,872 187,368 73,915 536,805 224,535Profit attributable to owners of

the parent28,169 159,282 57,608 484,957 194,018

Shareholders’ funds 1,146,413 1,116,640 1,196,781 1,831,487 1,289,322earnings per share 8.6 cents 48.9 cents 17.7 cents 148.8 cents 57.9 centsreturn on equity 2.5% 14.3% 4.8% 26.5% 15.0%Gross dividend per share 2.0 cents 2.0 cents(b) 2.0 cents(c) 7.5 cents 10.0 cents(d)

net asset value per share $3.52 $3.43 $3.67 $5.62 $3.96net gearing ratio 29.8% 28.9% 17.6% – –share price $4.09 $4.22 $4.26 $5.00 $3.50market capitalisation 1,332,919 1,375,285 1,388,321 1,629,485 1,140,639

Note:(a) Pursuant to a purchase price allocation assessment completed during 2010, a gain on bargain purchase of $26.6

million in respect of the acquisition of a joint venture company, Km resources, inc. in December 2009 has been recognised as a prior year adjustment in accordance with FrS 103. The affected line items in the income statement and balance sheet for 2009 have been restated accordingly.

(b) This does not take into account the special dividend of $1.00 per share paid in 2 installments on 6 march 2009 (80

cents) and 30 April 2009 (20 cents), following the approval by the Company’s shareholders at an extraordinary general meeting (“EGm”) held on 19 December 2008, and the expiry of the 21-day statutory period on 12 January 2009.

(c) This does not take into account the special dividend of $1.50 per share paid on 31 July 2008, following the approval by the Company’s shareholders at an EGm held on 13 June 2008, and the expiry of the 21-day statutory period on 7 July 2008.

(d) included special dividend of 4 cents per share paid on 1 June 2007.


2010 2009 (a) 2008 2007 2006$’000 $’000 $’000 $’000 $’000

BaLaNCE SHEETassets

Non-current assetsProperty, plant and equipment 340,923 313,033 310,166 206,252 211,564investment properties 853,505 776,877 813,813 821,132 416,353Goodwill 22,425 35,052 22,211 24,089 23,249Other intangible assets 34,119 30,359 28,264 12,336 10,356investments in associates and joint ventures 67,143 118,410 76,280 11,833 19,112Deferred tax assets 10,722 10,584 14,242 13,114 8,626Other non-current receivables 2,315 1,085 – – –investment securities 213,683 235,299 106,576 434,065 304,128other non-current assets 18,025 49,335 19,489 4,922 1,321Total non-current assets 1,562,860 1,570,034 1,391,041 1,527,743 994,709Current assetsCurrent assets 439,362 380,034 537,706 723,572 656,298Assets/Disposal group classified as held for sale 10,680 – 2,078 – 7,020Total current assets 450,042 380,034 539,784 723,572 663,318

Total assets 2,012,902 1,950,068 1,930,825 2,251,315 1,658,027

equity and liabilitiesEquity share capital 265,928 265,928 265,928 265,928 265,928retained earnings 746,405 724,754 891,369 1,329,125 885,443Other reserves 135,253 125,958 39,484 236,434 137,951reserve of disposal group classified as held for sale (1,173) – – – –equity attributable to owners of the parent 1,146,413 1,116,640 1,196,781 1,831,487 1,289,322non-controlling interests 47,190 73,390 52,349 62,669 51,648Total equity 1,193,603 1,190,030 1,249,130 1,894,156 1,340,970non-current liabilitiesProvisions 13,165 6,478 6,572 5,244 6,056Deferred tax liabilities 75,868 69,056 54,746 38,554 28,687Borrowings 296,124 307,609 247,565 3,922 32Derivative financial instruments 576 2,928 4,934 – –Other non-current liabilities 7,532 13,682 26,915 40,165 44,514total non-current liabilities 393,265 399,753 340,732 87,885 79,289Current liabilitiesCurrent liabilities 421,293 360,285 340,963 269,274 237,768Liabilities directly associated with disposal group

classified as held for sale 4,741 – – – –total current liabilities 426,034 360,285 340,963 269,274 237,768

total liabilities 819,299 760,038 681,695 357,159 317,057

total equity and liabilities 2,012,902 1,950,068 1,930,825 2,251,315 1,658,027


GrOUP FinAnCiAL H i G H L i G H T S — continued

Total Revenue (S$million)

2006 2007 2008 2009 2010

1,375

972

1,250

924

1,109

profit Before tax (S$million)

2006 2007 2008 2009 2010

24

187

74

537

225

profit attributable to Owners of The Parent (S$million)

485

2006 2007 2008 2009 2010

28

159

58

194

Earnings Per Share (S$cents)

2006 2007 2008 2009 2010

8.6

48.9

17.7

148.8

57.9

Return on Equity (%)

2006 2007 2008 2009 2010

2.5

14.3

4.8

26.5

15.0

profit Before tax and exceptional Gains (S$million)

2006 2007 2008 2009 2010

132424

117

79


* As at 31 December

Shareholders’ Funds* (S$million)

2006 2007 2008 2009 2010

1,1461,1171,197

1,831

1,289

Market Capitalisation* (S$million)

2006 2007 2008 2009 2010

1,3331,375

1,388

1,629

1,141

Net asset value Per Share* (S$)

2006 2007 2008 2009 2010

3.523.433.67

5.62

3.96

net Gearing ratio* (%)

2006 2007 2008 2009 2010

29.828.9

17.6


(THE STRaiTS TRaDiNG COmPaNy LimiTED aND iTS SuBSiDiaRiES)

CoRpoRAte i N F O R m aT i O N

BOaRD OF DiRECTORSMs Chew Gek KhimExecutive ChairmanLLB (Hons)

Tan Sri Dato’ Dr Lin See-yanPSM, DPMP, DSAP, JMN, JSM, AMN, BA (Hons),MPA, MA, PhD, C Stat, C Sci

Mr razman ariffinB Sc (Eng), ARSM, MIME(M)

mrs Elizabeth SamBA (Hons) Economics

Ms Chew Gek hiangB Acc (Hons) , CPA

mr David Goh Kay yongBA (Hons), SM (MIT), CFA

mr yap Chee Keong B Acc, FCPA

mr Tham Kui Seng BA (Hons), Engineering Science

SECRETaRiESmrs maureen Leong B Acc (Hons), FCPA

ms Sng Kiat HuangLLB (Hons)

KEy PERSONNELmrs maureen LeongGroup Chief Financial OfficerThe Straits Trading Company Limited

mr Quah Ban HuatChief Investment OfficerThe Straits Trading Company Limited

yBhg. Dato’ Seri Dr mohd ajib anuarGroup Chief Executive Officermalaysia Smelting Corporation Berhad

mr Eric TengChief Executive Officer (Property & Hospitality) & Advisor (Marketing and Communications)The Straits Trading Company Limited

REGiSTERED OFFiCE9 Battery road #28-01Straits Trading Buildingsingapore 049910

CORPORaTE OFFiCES9 Battery road #28-01Straits Trading Buildingsingapore 049910Tel : (65) 6513 9288Fax : (65) 6534 7202E-mail : [email protected] : www.stc.com.sg

2 Lebuh Pasar BesarGround Floor, Straits Trading Building50050 Kuala LumpurTel : (03) 2698 7126Fax : (03) 2693 7542E-mail : [email protected]

SHaRE REGiSTRaRSTricor Barbinder Share registration Services(A division of Tricor Singapore Pte. Ltd.)

8 Cross Street #11-00 PWC BuildingSingapore 048424

auDiTORSErnst & young LLPOne raffles Quaynorth Tower, Level 18Singapore 048583

Partner-in-charge : mrs Lim Siew Koon(Appointed with effect from financial year ended 31 December 2010)

PRiNCiPaL BaNKERSUnited Overseas Bank Limited

DBS Bank Ltd

Oversea-Chinese Banking Corporation Limited

malayan Banking Berhad

Standard Chartered Bank


CoRpoRAte soCiAl R E S P O N S i B i L i T y

WHaT WE mEaN By CSRWe see CSr as a vital part of corporate life. it determines how we relate to the world around us. We firmly believe that following a course of Corporate Social responsibility will create value for the company and for all our stakeholders. We shall continue to take the view and needs of all our staff and stakeholders into account in plotting our path forward.

OuR STaRTiNG aPPROaCH TO CSRin line with the philosophy of giving of Tan Chin Tuan Foundation, our sister company and philanthropic arm of Tecity Group, the company decided not to focus on any one segment of society or a particular charity, but rather, support projects or causes that are viable, sustainable, and well-managed with definable social outcomes.

With the help of Tan Chin Tuan Foundation, nine charities that fulfil the following guidelines were identified and shortlisted for our consideration:• Causes that are within TCTF’s funding

parameters• Donation is needed and will be well managed

towards directly helping beneficiaries• healthy reserves • responsiveness to donor, keen to build bridges

and goodwill

Three charities were eventually selected and officially adopted on 4 may 2010, at the official opening of our flagship building, the Straits Trading Building:1) Children’s Cancer Foundation2) Club Rainbow Singapore3) Society for the Physically Disabled

To mark the building’s official opening, STC, Tan Chin Tuan Foundation and 34 business partners donated more than S$330,000 (or S$83,000 each charity) to these three adopted charities and The Straits Times School Pocket money Fund.

In line with StC’s tradition of giving and beyond our commitment to maximise returns for our shareholders, StC is determined to contribute to the wider

community. the Company, together with its parent company, tecity Group, officially launched its Corporate Social responsibility (CSr) programme to support

the underprivileged at the official opening of its flagship building, Straits trading Building, on 4 May 2010.


SNaPSHOTS OF WHaT WE aRE DOiNG Children’s Cancer Foundation (CCF)CCF was adopted jointly by parent company, Tecity Group and STC’s Corporate Office.

On 23 June 2010, more than 20 STC and Tecity staff volunteers brought 14 CCF children and their siblings to experience the plight of the visually handicapped through TCTF sponsored programme, Dialogue in the Dark (DiD) at ngee Ann Polytechnic. The children were pleasantly surprised to meet mr Kelvin Chen Wei Lian (winner of Singapore’s Project Superstar 2005 and a visually impaired singer) who was one of their guides.

The group then proceeded to the St Theresa’s home in the afternoon to bring more joy and happiness to 120 wheelchair bound senior citizens. They sang classic melodies, played games and got to bond with the elderly over tea and gave away gifts.

Society for the Physically Disabled (SPD)The Society for the Physically Disabled (SPD) was STC’s Property Division’s adopted charity.

On 18 July 2010, together with more than 30 STC volunteers, 20 SPD’s beneficiaries took a ride on the Singapore Flyer and most of them experienced the thrill on the world’s largest observation wheel for the first time. The fun-filled day ended with a hearty and enjoyable dinner with the beneficiaries.

The Property team organised a second CSr event for SPD at resorts World Sentosa - Universal Studios Singapore’s After hours on 26 november 2010. 25 of its beneficiaries were mesmerized by the world of movies making and had tremendous fun exploring the hollywood section of the famous theme park. The volunteers and beneficiaries had an enjoyable dinner, followed by gifts from STC to end off the fun evening.

Club Rainbow Singapore Club rainbow Singapore was the hospitality Division’s adopted charity.

Our colleagues from the hospitality division spent a delightful evening filled with music, dance and colour at the inaugural ARTitude - charity concert organised in a partnership with Club rainbow Singapore on 4 September 2010.

A platform designed to showcase budding talent within Club rainbow; ARTitude is an opportunity for children and youth who suffer from major chronic and potentially life-threatening illnesses to build their self esteem and self confidence through various forms of artistic endeavours.

30 rendezvous hotel Singapore employees volunteered their services as make-up artists for the performers and ushers for the guests and also sponsored the cocktail reception.

CoRpoRAte soCiAl R E S P O N S i B i L i T y — continued

Visit to St Theresa’s Home by staff volunteers and

CCF children


A fun-filled day at Singapore Flyer for staff volunteers and SPD’s beneficiaries

Staff volunteered as make-up artists for Club Rainbow Singapore charity concert


p e R F O R mWe will continue to develop winning strategies and

capitalise on new opportunities that will enable us toscale new heights of growth, thereby creating greatervalue for our customers and delivering higher returns

to our shareholders.


The Mountain is a symbol of strength and stability.

Conquering its imposing presence is an allusion to overcoming obstacles, while reaching its apex a sign of achievement

and success.


The Group’s international custom tin smelter at Butterworth, Malaysia managed to sustain its past

growth trend in refined tin metal production by achieving a 6.4 % increase in its

metal output to 38,737 tonnes from 36,407 tonnes in 2009.

Rahman Hydraulic Tin, the largest open pit tin mine in Malaysia today, have been in operation for over a hundred years

Tin ingots produced at MSC awaiting delivery to customers and warehouses. Each ingot generally weighs between 25kg and 30kg


Business R E v i E W

Following the strategic decision made in 2009 to reposition the malaysia Smelting Corporation Berhad (mSC) Group to focus on its original core tin business, extensive efforts were undertaken in 2010 to strengthen the Group’s financial and development resources to achieve its long-term objective in growing its tin business, as well as to improve on the operating performance of its existing mining and smelting operations.

The Group therefore has been actively pursuing divestment programmes for its non-tin assets which include investments in various mining assets that have interests in gold, copper, nickel, zinc, silver and coal.

London metal Exchange (LmE) prices for tin and some other base and precious metals such as copper and gold recovered strongly to new record highs in 2010. This was underpinned by improving supply/demand fundamentals amid a more positive macroeconomic backdrop. The surge in tin prices towards the later part of the year presented both opportunities as well as challenges in managing the Group’s smelting and funding requirements.

in the early part of 2011, mSC successfully undertook a secondary listing of its shares on the Singapore Exchange Securities Trading Limited (SGX-ST) to help enhance shareholders’ value. This secondary listing has enabled the Company

— r e S o u r C e S —

MSC’s secondary listing on SGX-ST in January 2011

to raise S$43.75 million from the issuance of 25 million new shares. The dual listing of the Company in malaysia and Singapore marks an important milestone for the Group and will enhance the liquidity and provide a much wider platform for mSC to access capital to help generate a sustainable long term growth.

TiN miNiNG aND SmELTiNG OPERaTiONSThe Group’s turnover in 2010 was higher boosted by a higher metal production as well as tin prices, and was a record rm2.7 billion compared with rm1.8 billion in 2009.

The Group’s international custom tin smelter at Butterworth, malaysia managed to sustain its growth trend in refined tin metal production by achieving a 6.4 % increase in its metal output of 38,737 tonnes from 36,407 tonnes in 2009. Together with Koba Tin, the Group’s two smelting facilities produced in aggregate approximately 45,381 tonnes of tin metal in 2010 (43,862 tonnes in 2009). This has propelled the mSC Group to become the second largest supplier of tin metal globally. The Group’s tin mining operations carried out at the rahman hydraulic Tin Sdn. Bhd (rhT) in Perak, malaysia and at PT Koba Tin in Bangka, indonesia performed well in 2010. Production of tin-in-concentrates at rhT totalling 1,769 tonnes was up by 5% over the previous year due to higher operating efficiencies. At PT Koba Tin, the production from small scale mining operations ceased altogether resulting in a decrease of its overall metal production from 7,455 tonnes in 2009 to 6,644 tonnes in 2010. This was partially offset by a start up of several new gravel pump mining operations in 2010, which is expected to provide mSC Group with greater control over its output and environmental management going forward.


Business R E v i E W — continued

rationalisation efforts were undertaken in respect of the Group’s other tin interests held through its subsidiary, PT mSC which is developing on-shore tin operations in indonesia, and its 18.54 % interest investment in Tmr Ltd/PT Tenaga Anugerah (PT TA), which undertakes off-shore tin mining operations in indonesia. These investments are expected to generate positive results in 2011. The Group continues to pursue opportunities by identifying, developing and expanding its tin resources in malaysia and indonesia.

dIveStMent oF non-tIn iNvESTmENTSAt the end of 2009, the Group’s non-tin investments comprised a 22.1% interest in a listed gold and copper associate in Australia, BCD resources nL; a 18.22% interest in a Canadian listed nickel associate, Asian mineral resources Limited (Amr); a 30% interest in an unlisted Km resources inc which owns a polymetallic mine (producing copper, zinc, gold and silver in concentrates) in the Philippines; a 76.91% interest in an Australian listed subsidiary, Australia Oriental minerals nL (AOm); and a 53% effective interest in a coal development project in indonesia.

The divestment of the Group’s interest in BCD was completed in December 2010 and the Group ceased to be a shareholder.

Amr has been actively pursuing equity and debt funding to complete the nickel mine project in Vietnam. Pending the conclusion of the proposed fund raising exercise, mSC will continue to evaluate its options on how best to maximise its value by divesting its investment in Amr.

The agreement for the sale of the coal development project in indonesia has been executed and the disposal is expected to be completed in the first half of 2011.

The divestment of the Group’s interest in Km resources inc. may take a bit longer than expected. The mine has performed very well to date and is expected to contribute significantly to mSC’s earnings. As a result of rising copper, gold and silver and zinc prices, the valuation of Km resources inc. has also risen and mSC is seeking to enhance shareholder value by ensuring it sells the project at prices reflecting this increase in value.

FiNaNCiaL RESuLTSThe Group achieved a higher rm 76.01 million pre-tax profit before exceptional items, a 69.5 % increase for the year compared with rm 44.84 million recorded in 2009. This was mainly contributed by a better performance of the Group’s tin business both in malaysia and indonesia. After providing for exceptional items totalling rm154.48 million, the Group recorded a loss before tax of rm78.46 million compared with a Group net profit before tax of rm109.84 million in 2009. The exceptional items mainly comprised the loss incurred on the disposal of investments in BCD, and impairment provisions on the Group’s non-tin assets. The 2009 net profit included a surplus of rm65 million on the valuation of the Group’s interest in Km resources inc.

mSC is optimistic on the long-term prospects of the tin industry and believes the Group will be able to capitalize on the strong global tin market fundamentals and the current uptrend in tin prices to better its performance.

The Group will focus on increasing its tin reserves and resources through investments in explorations and acquisition of new tin mining projects in malaysia and indonesia, as well as brownfield developments at its existing mines. The Group will also continue with the ongoing efforts to improve operating efficiencies.


— p r o p e r t y —

The Holland Collection

Five Chancery

SiNGaPORE2010 was a fruitful year for the Straits Trading Company (STC) property division, including Straits media, which delivered total revenue of S$57.8 million. Although this was lower than 2009 due to a lower number of residential units sold, we saw higher rental revenues from both our commercial and residential properties as a result of securing higher renewals.

We saw progress in the construction of our two new Good Class Bungalows (GCBs) along Cable road and 12 luxury strata bungalows at Five Chancery along Chancery Lane, with both developments on target, and expected completion dates at the end of third quarter of 2011.

The implementation of both the Five Chancery and the new GCB projects articulated our strategy to reposition STC as a niche developer and owner of high-end lifestyle properties.

We are pleased that our flagship Straits Trading Building has secured 96% occupancy in 2010. Occupancy for China Square Central was strong as

occupancy improved 94% in 2010 as compared to 85% in 2009. Our master Lease agreement for China Square Central would expire in march 2012.

We have continued our policy of divesting completed non-core residential properties. Selected units in Gallop Green and Gallop Gables were sold at their valuation in 2010 as investor demand for well-located and exclusive homes, built near desirable amenities such as the Singapore Botanic Gardens and the upcoming Farrer road mrT, remain extremely keen.


We are pleased that our flagship Straits Trading Building has secured 96% occupancy in 2010.

Occupancy for China Square Central was strong as occupancy improved 94% in 2010

as compared to 85% in 2009.


maLaySia

As part of our review of our land bank in malaysia, feasibility studies have been conducted on our existing land parcels to help formulate clear plans for the development of residential/commercial projects in various states in malaysia. This is in line with our strategy in malaysia of developing land where there is strategic and commercial value while disposing off those that are non-core and non-strategic.

Sale of the Thompson-Flora Tropika residences in ipoh, comprising 47 luxurious freehold bungalows along the prime Jalan Dr Tun ismail by Taiko-Straits Developments Sdn Bhd, a joint venture between Taiko Development Sdn Bhd and STC is progressing on schedule.

perth, auStraLIa

A major project which we are evaluating will be a residential development at rendezvous Observation City, Perth, which would offer luxurious waterfront living along Scarborough Beach. We are targeting to finalise plans by June 2011 for submission to the relevant authorities for development approval.

The Thompson-Flora Tropika Residences -Showhome



We would actively seek opportunities for both development and completed projects

that either offers attractive yields, recurrent income and/or capital appreciation

in Singapore and overseas.

STRaiTS mEDia

Sales revenue for Straits media Pte Ltd, the company’s media advertising subsidiary, increased 34% from S$3.5 million in 2009 to S$4.7 million in 2010. net advertising profit also doubled to S$0.6 million in 2010 from S$0.3 million in 2009. This was mainly due to increased revenues collected from existing sites at hotel rendezvous, Keppel Distripark, Tangs Plaza as well as two new sites acquired in the fourth quarter of 2010.

in conclusion, although the year saw new cooling measures by the Government on the property market being implemented, with the latest on 14 January 2011, we believe that the near term outlook for Singapore’s property market would remain stable although any increase in property prices would be contained.

Property which forms a very substantial part of our assets would continue to be an important “engine of growth” for STC as a niche developer and owner of high-end lifestyle properties. We would actively seek opportunities for both development and completed projects that either offers attractive yields, recurrent income and/or capital appreciation in Singapore and overseas.

The Thompson-Flora Tropika Residences


— h o S p I ta L I t y —

Rendezvous Hotel Adelaide, Penthouse Suite

With the strong rebound in global tourism, the revenue for the hospitality division - rendezvous hospitality Group (rhG) - has increased to S$146.7 million in 2010 from S$127.9 million in 2009. The operating environment however remained competitive and difficult and the Group’s hotel operations reported an operating loss of S$14 million in 2010, compared to an operating loss of S$8.5 million in 2009. This adverse operating result was due in part to the strengthening of Australian dollar against the Singapore dollar as well as challenging management contracts and leases.

Consequently, the Board made a prudent assessment of the business and appropriate provisions have been taken in the accounts for the financial year ended 2010. in addition, efforts were initiated in 2010 to streamline the operations of rendezvous hospitality Group (rhG), strengthen its service efficiency and improve operational effectiveness. in 2011, the Group would continue this effort and take advantage of efficiencies arising from the consolidation of hotel operations and prudent and appropriate capital expenditure. hotel management contract expansion would be carried out in high growth hotels and cities.

in 2010, the Group continued to own, lease and manage 14 hotels in the region, namely:

• in Singapore and China – rendezvous hotel Singapore and rendezvous merry hotel shanghai

• in australia - rendezvous Observation City hotel, Perth; rendezvous hotel, Adelaide; rendezvous hotel melbourne; rendezvous Stafford hotel, Sydney; rendezvous hotel, Brisbane; rendezvous reef resort, Port Douglas; The marque hotel, Perth; The marque hotel, Sydney; The marque hotel, Canberra (lease expiring november 2011 and will be closed for redevelopment)

• in New zealand – rendezvous hotel Auckland; the Marque Hotel, Christchurch

Key highlights for the year by region are as follows:

SiNGaPORE aND SHaNGHai

The Singapore economy rebounded by 15% in 2010, from the -1.3% in 2009 due to the global financial crisis. Coupled with the strong rebound of Asian economies, 2010 was a record year for visitors’ arrival to Singapore.

rendezvous hotel Singapore benefitted with significant increase to its Average Occupancy rates and Average Daily rate. in order to meet future demand and improve its revenue, plans were initiated to refurbish the hotel in 2010 and work has just begun in march 2011.

rendezvous merry hotel Shanghai had a mixed year, benefitting from the World Expo between April to October but saw a slowdown in occupancy after October.



Rendezvous Observation City Hotel, Perth

auSTRaLia

rhG’s footprint in Australia remained focused on being a branded three-and-a-half to four-and-a-half star business hotel chain in key cities, targeting the business travellers and the corporate segment.

With the business environment in Australia improving, rhG has been working to improve its product and service and increase its marketing awareness through strategic marketing partnership. This has resulted in an increase on our Average Daily room rate and/or Occupancy for most of the properties.

Capital expenditure plans to refurbish and/or upgrade were drawn up for rendezvous Observation City hotel, Perth, The marque hotel in Brisbane and Perth; and rendezvous hotel melbourne and when completed, is expected to increase market share and revenue.

Yield management was implemented to help better manage costs and the various channels for room reservation to improve revenue.

Whilst rendezvous hotel, Adelaide continued to be a leader in Adelaide’s five star accommodation market targeted at business travellers, rendezvous reef resort, Port Douglas faced another challenging year due to the natural disasters in Queensland, rate parity with the US dollar and poor local weather conditions.

The marque hotel, Canberra will be closed for redevelopment by the owner when the lease expires on 30 november 2011.

NEW zEaLaND

The marque hotel in Christchurch which is a new property commenced business on 18 march 2010 with good awareness and exposure created in the local market through targeted publicity. Unfortunately, as a consequence of the earthquake in Christchurch in September 2010 and the more recent one in February 2011, it is expected to resume operations only in first half of 2012.

Growth at the rendezvous hotel Auckland was marginal but for 2011, the plans to gear up which include capital expenditure plans for improvement and upgrade have been made to leverage on the advantage of the rugby World Cup in September 2011.

From the above assessment, it is apparent that however sound is our strategy, it will still require a proper process of execution and implementation to achieve the desired objective. in this regard, a management board comprising senior executives and advisors was formed to oversee the hospitality business with a view to creating a clearer brand, identifying areas of inefficiency, improving operational effectiveness and creating a leaner and nimbler organisation in the process, so as to ultimately raise the operating performance of this division.

investing in value accretive capital expenditure will be one of the approaches to transform the business, hence, a capital expenditure budget has been set aside for the refurbishment of our hotels and it is anticipated that upon completion, our hospitality division will have stronger brand presence, better customer experience and increased occupancies and rates resulting in improved profitability.

2011 will therefore mark a year of transformation for the hospitality division and work is already underway as we streamline the business and reduce wastage and inefficiencies.


Annual Report 2010 TRAns f o r m 37

r e p o r t o n c o r p o r at e g o v e r n a n c e

The Straits Trading Company Limited (the “Company”) is committed to high standards of corporate governance. This report describes the Company’s corporate governance policies and practices during the financial year ended 31 December 2010 (“FY2010”) with specific reference to the Code of Corporate Governance 2005 (the “Code”).

Board’s Conduct of Affairs

The Board, comprising a majority of independent Directors, provides policy direction, entrepreneurial leadership, approves the development and implementation of corporate strategies, and ensures that the necessary financial and human resources are in place for the Company to meet its objectives.

The Board also sets the Company’s values and standards, and ensures its obligations to all stakeholders are met and understood. While the Board remains responsible for providing oversight in the preparation and presentation of the financial statements, it has delegated to the Management the task of ensuring that the financial statements are drawn up and presented in compliance with the relevant provisions of the Singapore Companies Act, Cap. 50 and the Singapore Financial Reporting Standards.

With the appointment of the CEOs for each of the discrete business units, the Board has appointed the Chairman as Executive Chairman to oversee the Management, and the Lead Independent Director to ensure continued good governance. Supported by four Board Committees, namely the Audit Committee, Remuneration Committee, Nominating Committee and Finance Committee, the Board also approves the Group’s appointment of Board members, key business initiatives, major investments and funding decisions, and interested person transactions.

The Board met six times in FY2010. Meetings by means of a conference telephone or similar communication equipment are permitted in the Company’s Articles of Association. The Directors’ attendance at the Board and various committee meetings during FY2010 are as follows:

Directors’ Meetings in FY2010

Name of Director BoardFinance

CommitteeRemuneration

CommitteeNominating Committee

Audit Committee

a B a B a B a B a BMs Chew Gek Khim 6 6 3 3 1 1Tan Sri Dato’ Dr Lin See-Yan 5 6 1 1 1 1 5 6Mr Razman Ariffin 5 6 1 1Mrs Elizabeth Sam 6 6 1 1Ms Chew Gek Hiang 6 6 1 1 6 6Mr David Goh Kay Yong 6 6 3 3Mr Yap Chee Keong 6 6 3 3 6 6Mr Tham Kui Seng 6 6 3 3

Legend:A: Number of Board or Board Committees meetings attended during FY2010.B: Number of Board or Board Committees meetings held during FY2010.


Board Composition and Guidance

The Board comprises eight Directors, seven of whom are non-executive. The Nominating Committee considers Tan Sri Dato’ Dr Lin See-Yan, Mr Razman Ariffin, Mrs Elizabeth Sam, Mr Yap Chee Keong and Mr Tham Kui Seng to be independent. The Directors provided objective and independent judgment to the decision making of the Board. The non-executive Directors of the Company participated constructively and reviewed the Group’s operations, budgets and strategies. They also assessed the effectiveness of the Board’s processes and activities in meeting set objectives and corporate governance standards.

The Board as a group have the core competencies, such as accounting or finance, business or general management, legal and industry knowledge, and strategic planning experience. Key information on the Directors are set out in pages 10 to 13.

Executive Chairman

The Board is led by Ms Chew Gek Khim as the Executive Chairman. Ms Chew assumed the Chair on 24 April 2008 and was appointed Executive Chairman on 1 November 2009.

As Chairman of the Board, Ms Chew’s duties include leading the Board, setting the Board agenda and ensuring that all Directors receive sufficient relevant information (both financial and non-financial) to enable them to participate and contribute effectively in Board discussions and decisions. She aims to promote constructive relations between the Board members, and between the Board and the Management, and ensures effective communication with shareholders. Ms Chew also advocates high standards of corporate governance.

As the Executive Chairman, Ms Chew takes on executive oversight of the Management of the business units and is assisted by senior key personnel within the Company. The Management is responsible for the daily management of the businesses and implementation of the Board’s policies and decisions as well as ensuring compliance with the corporate governance policies of the Company as these relate to the respective business units. The Management reports to the Board and is managed through the strategies adopted and monitored through the key performance indicators set for them.

Lead Independent Director

In line with the recommendations set out in the Code, Mr Yap Chee Keong, currently an independent and non-executive Director as well as the Audit Committee Chairman, was appointed the Lead Independent Director of the Company on 1 November 2009.

As the Lead Independent Director, Mr Yap’s role includes being available to shareholders to address any of their concerns and acting as the principal liaison between the independent Directors and the Executive Chairman on critical issues.



Board Membership

The Company has adopted a formal and transparent process for the appointment of new Directors through the Nominating Committee which reviews the background of all appointees and makes recommendations accordingly to the Board for approval.

The Nominating Committee, chaired by Mrs Elizabeth Sam, comprises three Directors, the majority of whom are independent, including the Chairman. The other members of the Nominating Committee are Ms Chew Gek Khim and Tan Sri Dato’ Dr Lin See-Yan.

In accordance with Guideline 4.1 of the Code, the Chairman of the Nominating Committee is not directly associated with any substantial shareholder of the Company. The functions of the Nominating Committee include the evaluation of the Board’s effectiveness, each Director’s contributions and independence, as well as making recommendations on the appointment and re-nomination of Directors for the Board and Board Committees. The role and functions of the Nominating Committee are set out in its Terms of Reference.

Board performance

The Company has in place a process to assess the Board’s effectiveness as a whole. The evaluation is carried out annually with each Director making his assessment by providing feedback to the Nominating Committee through a Board assessment questionnaire.

Access to Information

Information and data are important to the Board’s understanding of the Group’s businesses and essential to preparing the Board members for effective meetings. Where required, the Management supplements the meeting papers with presentations on active operations and strategic issues to provide Directors with a better understanding of the Group’s operations. Senior management were also invited to attend the meetings to answer enquiries from the Directors.

The Directors have separate and independent access to the services of the company secretaries, who are responsible for ensuring that Board procedures are followed and applicable rules and regulations are complied with. The company secretaries also assist the Chairman by ensuring good information flows within the Board and its committees, and between senior management and non-executive Directors. The company secretaries attended all board meetings and their appointments or removals are subject to the Board’s approval.

In the furtherance of their duties and if the Management’s explanations are not satisfactory, the Directors may seek independent professional advice at the Company’s expense.



Procedures for Developing Remuneration Policies

The Board has a Remuneration Committee comprising three non-executive Directors, the majority of whom are independent. Mr Razman Ariffin chairs the Remuneration Committee and Tan Sri Dato’ Dr Lin See-Yan and Ms Chew Gek Hiang are the other two members.

The functions of the Remuneration Committee include the recommendation of a framework of remuneration for the Board and senior executives of the rank of senior vice president and above, and the recommendation of specific remuneration package for the Executive Chairman, for the Board’s approval. The role and functions of the Remuneration Committee are set out in the Terms of Reference of the Remuneration Committee.

Level and Mix of Remuneration

The Company adopts a performance-based approach to compensation where employees’ remuneration is linked to individual and corporate performances. The Remuneration Committee sees the importance of a market competitive remuneration strategy to attract, retain and motivate employees to high performance that creates value for the shareholders. Remuneration is determined according to the following general components: salary, contractual bonus and incentive bonus.

During the year under review, the Remuneration Committee met, discussed and approved the compensation for the senior executives of the Group. Presently, the Company does not have any share option scheme.

Taking into account the performance of the Group and the responsibilities and performance of the Directors, directors’ fees (for the Board and the various Board Committees) were set in accordance with a remuneration framework comprising responsibility fees and attendance fees. The Executive Chairman does not receive directors’ fees. Non-executive Directors are paid directors’ fees, subject to approval at the annual general meeting. The non-executive Directors have no service contracts. No individual Director fixes his own remuneration.



Disclosure on Remuneration

Summary compensation table for the Directors of the Company in all capacities for the year ended 31 December 2010:

Name of Director SalaryBonus / Share

Based Payment Benefits in kind Directors’ fees Total

S$750,000 – S$1,000,000Ms Chew Gek Khim 100% – – – 100%

Below S$250,000Tan Sri Dato’ Dr Lin See-Yan – – – 100% 100%Mr Razman Ariffin – – – 100% 100%Mrs Elizabeth Sam – – – 100% 100%Ms Chew Gek Hiang – – – 100% 100%Mr David Goh Kay Yong – – – 100% 100%Mr Yap Chee Keong – – – 100% 100%Mr Tham Kui Seng – – – 100% 100%

There are no employees of the Group who are immediate family members of a Director earning more than S$150,000 a year.

The five most highly compensated senior executives within each band of remuneration were as follows:

2010 2009S$500,000 to S$749,999 2 –S$250,000 to S$499,999 2 5Below S$250,000 1 –Total 5 5

Accountability

In presenting the annual financial statements and quarterly announcements to shareholders, it is the aim of the Board to provide shareholders with detailed analysis, explanations and assessment of the Company’s and the Group’s financial position and prospects.

The Management currently provides the Board with balanced and understandable accounts of the Company’s performance, financial position and business prospects on a regular basis.

Audit Committee

The Audit Committee comprises three non-executive Directors and is chaired by Mr Yap Chee Keong. The other two members of the Audit Committee are Tan Sri Dato’ Dr Lin See-Yan and Ms Chew Gek Hiang.

All members of the Audit Committee are financially literate and have accounting or related financial management expertise or experience.



The role of the Audit Committee is documented in a Charter (Terms of Reference) approved by the Board. The Charter, amended by the Board in 2005 to facilitate the Company’s compliance with the Code, defines the purpose, authority and responsibilities of the Committee. The Company has a whistle-blowing procedure in place for staff to raise matters of impropriety in confidence and for appropriate follow-up action to be taken, where necessary. The Audit Committee is authorised to investigate any matters specified in the Charter.

In performing its functions, the Audit Committee reviews the overall scope of both internal and external audits and the assistance given by the Company’s officers to the auditors. It meets with the Company’s internal and external auditors to discuss the results of their respective examinations and their evaluation of the Company’s system of internal accounting and financial controls on a quarterly basis. The Audit Committee reviews interested person transactions to ensure that they are carried out on normal commercial terms and are not prejudicial to the interests of the Company and its minority shareholders. The Audit Committee also reviews the consolidated financial statements and the auditors’ report, as well as related announcements to shareholders and The Singapore Exchange Securities Trading Limited before submission to the Board.

Finance Commitee

The Finance Committee comprises the following Directors:

Ms Chew Gek Khim (Chairman)Mr David Goh Kay YongMr Yap Chee KeongMr Tham Kui Seng

Established on 23 February 2010, the Finance Committee’s responsibilities include reviewing and recommending to the Board for approval the annual business plans and budgets for business units and entities within the Group. It also reviews and approves certain transactions of the Group within its delegated authority limits, such as financing plans and borrowings, acquisitions and disposals and capital expenditure.

Internal Controls and Risk Management

The Board recognises its role in ensuring that the Management maintains a sound system of internal controls to safeguard shareholders’ investments and the Group’s assets. The Group has adopted a group-wide risk assessment process, which identifies the key risks facing each major business unit, the potential impact and likelihood of those risks occurring, the control effectiveness and action plans being taken to mitigate those risks.

The Board appreciates that risk management is an on-going process in which the senior management and the operational managers continuously participate to evaluate and monitor the significant risks. The internal audit department regularly reviews all significant control policies and procedures and highlights all significant matters to the senior management and the Audit Committee. The Audit Committee has reviewed the Group’s risk assessment process and is satisfied that there are adequate internal controls in place to manage the significant risks identified.

The Group’s subsidiary, Malaysia Smelting Corporation Berhad, has established a risk management structure, which depicts the lines of reporting and responsibility at its Board, Audit Committee and Management levels.



Internal Audit

The Company has its own in-house internal audit department that is independent of the activities it audits. The internal auditors report directly to the Chairman of the Audit Committee on audit matters and reports to the Executive Chairman on administrative matters.

The Audit Committee met with the external and internal auditors, without the presence of Management, on a quarterly basis in FY2010.

In discharging its functions, the Audit Committee is provided with adequate resources, has full access to and co-operation by the Management and the internal auditors, and has full discretion to invite any Director or executive officer to attend its meetings. All major findings and recommendations are brought to the attention of the Board of Directors.

The Audit Committee reviewed all non-audit services provided by the firm of external auditors to the Company and was satisfied that the nature and extent of such services will not prejudice the independence and objectivity of the external auditors.

Having reviewed the independence of the external auditors, the Audit Committee has recommended that Ernst & Young LLP be nominated for re-appointment as auditors at the forthcoming annual general meeting to be held on 28 April 2011. Ernst & Young LLP have indicated their willingness to accept re-appointment.

During FY2010, the Audit Committee reviewed the effectiveness of the Group’s material internal controls, including financial, operational and compliance controls, and risk management. The processes used by the Audit Committee to review the effectiveness of the system of internal control and risk management included discussions with the Management, external and internal auditors on the risks identified and the review of significant issues arising from internal and external audits.

The Directors understand that they have responsibility for the Group’s system of internal control that covers all aspects of the business. In recognition of this responsibility, the Directors set policies and seek regular assurance that the system of internal controls is operating effectively. However, the Directors are also aware that such a system can only provide reasonable assurance against material misstatement or loss. The Directors are of the opinion that, based on the results of the internal and external audits, the system of internal controls is operating satisfactorily. The Directors are also satisfied that problems are identified on a timely basis and there is in place a process for follow-up actions to be taken promptly to minimise unnecessary lapses. Nothing has come to the attention of the Directors to indicate that any material breakdown in the controls has occurred during the year under review.

The Audit Committee reviews and approves the annual internal audit plans and ensures that the internal audit functions are adequately resourced with competence, and has appropriate standing within the Group to carry out its duties effectively.

Communication with Shareholders

The Company takes a serious view of maintaining full and adequate disclosure, in a timely manner, of material events and matters concerning its businesses through SGXNET, public announcements, press releases, circulars to shareholders and Annual Reports.




Greater Shareholder Participation

The Company endeavours to provide as much and as prompt information as is possible to its shareholders, taking into account the legal and regulatory framework governing the release of material and price-sensitive information. The Company releases all price-sensitive information through SGXNET.

At the annual general meeting, shareholders are encouraged to ask questions both about the resolutions being proposed and about the Group’s operations in general. The Articles of Association of the Company permit a member of the Company to appoint not more than two proxies to attend and vote instead of the member. As there is still a major concern on the security of information transmitted over the Internet, the Board has decided that it is not appropriate, for the time being, to amend its Articles of Association to allow for in absentia voting methods.

The Company ensures separate resolutions are proposed at general meetings on each distinct issue. The external auditors, the chairpersons of the various Board Committees and where necessary, the legal advisers are present to assist the Directors in addressing any relevant queries by shareholders.

Securities Transactions

The Group has issued internal guidelines on dealings in the securities of the Company to the Directors and employees of the Company and its subsidiaries, advising them, among others, not to deal in the securities of the Company on short-term considerations. On a quarterly basis, the Directors and employees are advised of the prohibitions in dealings in the securities of the Company during the period commencing two weeks before the announcement of the Group’s quarterly financial statements, and one month before the Group’s full year financial statements, and ending on the respective announcement dates, and while they are in possession of material price-sensitive information which is generally not available.

F I N A N C I A L R E P o R T


c o n t e n t S46.

Directors’ Report

49. Statement by the Directors

50. Additional Information Required

under the SGX Listing Manual

51. Independent Auditors’ Report

53. Consolidated Income Statement

54. Consolidated Statement

of Comprehensive Income

55. Balance Sheets

57. Consolidated Statement

of Changes in Equity

59. Consolidated Cash Flow Statement

61. Notes to the Financial Statements

176. Shareholders’ Information

178. Notice of Meeting

Proxy Form


D I R E C To R S’ R E P o R T

The Directors have pleasure in submitting their report together with the audited financial statements of The Straits Trading Company Limited (the Company) and consolidated financial statements of the Group for the year ended 31 December 2010.

Directorate

The Directors in office at the date of this report are:

Ms Chew Gek Khim (Executive Chairman)Tan Sri Dato’ Dr Lin See-YanMr Razman AriffinMrs Elizabeth SamMs Chew Gek HiangMr David Goh Kay YongMr Yap Chee KeongMr Tham Kui Seng

Mr Razman Ariffin and Ms Chew Gek Hiang retire pursuant to Article 99 of the Articles of Association and being eligible, offer themselves for re-election.

Tan Sri Dato’ Dr Lin See-Yan and Mrs Elizabeth Sam, both retire pursuant to Section 153(2) of the Companies Act, Cap.50. A resolution will be proposed for their re-appointment as Directors under Section 153(6) of the said Act to hold office until the next Annual General Meeting of the Company.

Arrangements To Enable Directors To Acquire Shares And Debentures

Neither at the end of nor at any time during the financial year was the Company a party to any arrangement whose objects are, or one of whose objects is, to enable the Directors of the Company to acquire benefits by means of the acquisition of shares in, or debentures of, the Company or any other body corporate. Directors’ Interest In Shares And Debentures

According to the register kept under Section 164 of the Companies Act, Cap.50, the Directors who held office at the end of the financial year had an interest in the shares of the Company and its related corporation as stated below:

Company

(Issued ordinary shares)

Shareholdings in whichshareholdings in the Directors are deemednames of Directors to have an interest

1.1.2010 31.12.2010 1.1.2010 31.12.2010

Ms Chew Gek Khim 41,200 41,200 – –Ms Chew Gek Hiang 23,000 23,000 – –



Subsidiary

Malaysia Smelting Corporation Berhad

(ordinary shares of RM1 each)

Shareholdings in whichshareholdings in the Directors are deemednames of Directors to have an interest

1.1.2010 31.12.2010 1.1.2010 31.12.2010

Mr Razman Ariffin 67,000 67,000 – –

There was no change in any of the above-mentioned interests between the end of the financial year and 21 January 2011.

Except as disclosed above, no Director who held office at the end of the financial year had an interest in any shares or debentures of the Company, or of related corporations, either at the beginning of the financial year, or date of appointment if later, or at the end of the financial year.

Directors’ Contractual Benefits

Except as disclosed in the financial statements, since the end of the previous financial year, no Director has received or become entitled to receive benefits by reason of a contract made by the Company or a related corporation with the Director, or with a firm of which the Director is a member, or with a company in which the Director has a substantial financial interest.

options

Australia Oriental Minerals NL (AOM), a subsidiary, granted a total of 43,000,000 options to its directors and company secretary in 2008, after the approval of its shareholders were obtained at an extraordinary general meeting convened on 31 October 2008. The 43,000,000 options comprised of 35,000,000 Director Options and 8,000,000 Secretary Options. The issue price of each Director Option and each Secretary Option is nil and the Option entitles the holder to subscribe for 1 new share in AOM and is exercisable at any time during the period commencing from the time AOM issued the Options and ending on 31 December 2013. The exercise price for each Option (which is payable immediately on exercise) is A$0.03. The basis upon which these Options may be exercised is by giving notice in writing to the board of directors of AOM. During the year under review:1. AOM did not grant any options; and2. AOM did not issue any shares arising from the exercise of the options granted before or during the financial year

under review.



The number and class of options over shares of AOM outstanding as at 31 December 2010 is:

Number of options Exercise Price Expiry Date Class of Shares

43,000,000 A$0.03 31/12/2013 Ordinary The holders of the above-mentioned options do not have any rights, by virtue of the said options, to participate in any share issue of any other company.

Audit Committee

The Audit Committee performs the functions specified in Section 201B(5) of the Companies Act, Cap.50. The Audit Committee reviews the overall scope of both internal and external audits and the assistance given by the Company’s officers to the auditors. It meets with the Company’s internal and external auditors to discuss the results of their respective examinations and the internal auditors’ evaluation of the Company’s system of internal accounting and financial controls. The Audit Committee reviews interested person transactions to ensure that they are carried out on normal commercial terms and are not prejudicial to the interests of the Company and its minority shareholders. The Audit Committee also reviews the consolidated financial statements and the auditors’ report, as well as announcements to shareholders and the SGX before submission to the Board. The Audit Committee meets with the external and internal auditors, without the presence of Management, four time a year. The Audit Committee annually reviews the independence of the external auditors and recommends to the Board, the external auditors to be appointed. Further details on the Audit Committee are disclosed in the Report of Corporate Governance.

Auditors

Ernst & Young LLP have expressed their willingness to accept re-appointment as auditors.

On behalf of the Board

Chew Gek Khim Yap Chee KeongDirector Director

singapore28 March 2011


S TAT E M E N T BY T H E D I R E C To R SP U R S UA N T To S E C T I o N 201(15)

We, Chew Gek Khim and Yap Chee Keong, being two of the Directors of The Straits Trading Company Limited, do hereby state that, in the opinion of the Directors:

(i) the accompanying balance sheets, consolidated income statements, consolidated statement of comprehensive income, consolidated statement of changes in equity and consolidated cash flow statement together with notes thereto are drawn up so as to give a true and fair view of the state of affairs of the Group and of the Company as at 31 December 2010 and the results of the business, changes in equity and cash flows of the Group, for the year then ended; and

(ii) at the date of this statement, there are reasonable grounds to believe that the Company will be able to pay its debts as and when they fall due.

On behalf of the Board

Chew Gek Khim Yap Chee KeongDirector Director



A D D I T I o N A L I N F o R M AT I o N R E q U I R E DU N D E R T H E S G X L I S T I N G M A N UA L

Material Contracts

No material contract involving the interests of any Director or controlling shareholder of the Company has been entered into by the Company or any of its subsidiaries since the end of the previous financial year and no such contract subsisted at the end of the financial year.

Interested Person Transactions

The aggregate value of interested person transactions entered into during the financial year pursuant to Rule 907 of the SGX-ST Listing Manual was as follows:

Name of interested person Aggregate value of all interested person transactions during the financial year under review (excluding transactions less than $100,000 and transactions conducted under shareholders’ mandate pursuant to Rule 920 of the SGX-ST’s Listing Manual)

Aggregate value of all interested person transactions conducted under sharehold-ers’ mandate pursuant to Rule 920 of the SGX-ST’s Listing Manual (excluding transactions less than $100,000)

Tecity Group of companies and its associates $7,867,922 not applicable


To The Members of The Straits Trading Company Limited

REPoRT oN THE CoNSoLIDATED FINANCIAL STATEMENTS

We have audited the accompanying consolidated financial statements of The Straits Trading Company Limited (the Company) and its subsidiaries (collectively the Group) set out on pages 53 to 175, which comprise the balance sheets of the Group and the Company as at 31 December 2010, the consolidated income statement, the consolidated statement of comprehensive income, the consolidated statement of changes in equity and consolidated cash flow statement of the Group for the year then ended, and a summary of significant accounting policies and other explanatory notes.

ManageMent’s responsibiLity for the consoLidated financiaL stateMents

Management is responsible for the preparation of consolidated 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 controls sufficient to provide a reasonable assurance that assets are safeguarded against loss from unauthorised use or disposition; and transactions are properly authorised and that they are recorded as necessary to permit the preparation of true and fair profit and loss accounts and balance sheets and to maintain accountability of assets.

auditors’ responsibiLity

Our responsibility is to express an opinion on these consolidated 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 about whether the consolidated financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the consolidated 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 the consolidated 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 consolidated financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

I N D E P E N D E N T A U D I To R S’ R E P o R Tfor the financial year ended 31 december 2010


I N D E P E N D E N T A U D I To R S’ R E P o R Tfor the financial year ended 31 december 2010

opinion

In our opinion, the consolidated financial statements of the Group and the balance sheet 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 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.

ERNST & YoUNG LLPPublic Accountants andCertified Public Accountants



note 2010 2009 $’000 $’000

(restated)

RevenueTin mining and smelting revenue 1,159,286 755,239Hotel revenue 146,675 127,861Property revenue 52,760 61,722Proceeds from sale of trading securities – 7,074

1,358,721 951,896

other items of incomeDividend income 3 5,082 4,373Interest income 4 3,581 4,520Other income/(loss) 5 7,596 10,856

Total revenue 1,374,980 971,645

Net exceptional gains 6 10,585 137,142

other items of expenseEmployee benefits expense 7 (100,158) (79,594) Depreciation expense 13 (22,649) (18,234) Amortisation expense 15 (5,583) (4,682) Costs of tin mining and smelting (1,053,649) (679,970) Costs of trading securities sold – (5,036) Finance costs 8 (23,881) (25,260) Other expenses 9 (157,551) (136,264)

Total expenses (1,363,471) (949,040)

Share of results of equity-accounted associates and joint ventures– Profit for the year 1,778 982– Exceptional item 2.1 – 26,639

1,778 27,621

Profit before tax 10 23,872 187,368Income tax expense 11 (17,155) (23,760)

Profit after tax 6,717 163,608

Profit/(Loss) attributable to:owners of the parent 28,169 159,282Non-controlling interests (21,452) 4,326

6,717 163,608

Earnings per share (cents per share) 12Basic 8.6 48.9Diluted 8.6 48.9

C o N S o L I D AT E D I N C o M E S TAT E M E N Tfor the financial year ended 31 december 2010

The accompanying accounting policies and explanatory notes form an integral part of the financial statements.


2010 2009

$’000 $’000

(restated)

Profit after tax 6,717 163,608

Other comprehensive income/(expense):

Net fair value changes in available-for-sale investment securities (35,601) 66,161

Net fair value changes in cash flow hedges 6,027 (2,623)

Net revaluation surplus/(deficit) on property, plant and equipment 33,247 (6,002)

Currency translation reserve (103) 28,305

other comprehensive income after tax for the year 3,570 85,841

Total comprehensive income for the year 10,287 249,449

Attributable to: owners of the parent 36,198 245,822Non-controlling interests (25,911) 3,627Total comprehensive income for the year 10,287 249,449

Co N S o L I DAT E D STAT E M E N T o F Co M P R E H E N S I V E I N Co M Efor the financial year ended 31 december 2010



Group Companynote 2010 2009 2010 2009

aSSetS $’000 $’000 $’000 $’000(restated)

non-current assetsProperty, plant and equipment 13 340,923 313,033 361 370Investment properties 14 853,505 776,877 112,734 106,313Goodwill 15 22,425 35,052 – –Other intangible assets 15 34,119 30,359 – –Investments in subsidiaries 16 – – 213,390 115,834Investments in associates and joint ventures 17 67,143 118,410 3,585 3,585Deferred tax assets 18 10,722 10,584 – –Other non-current receivables 19 2,315 1,085 106,465 150,166Investment securities 20 213,683 235,299 75,226 88,783Other non-current assets 22 18,025 49,335 – –Total non-current assets 1,562,860 1,570,034 511,761 465,051

current assetsAssets of disposal group classified as held for sale 23 10,680 – 564 –Development properties for sale 24 38,895 1,270 – –Inventories 25 171,215 157,608 – –Income tax receivables 26 11,107 16,384 11 155Prepayments and accrued income 7,414 6,337 3 244Trade and other receivables 19 138,630 141,895 149,286 357,426Marketable securities 20 17 16 – –Derivative financial instruments 21 487 330 – –Cash and cash equivalents 27 71,597 56,194 1,103 8,934Total current assets 450,042 380,034 150,967 366,759

Total assets 2,012,902 1,950,068 662,728 831,810

EqUITY AND LIABILITIES

Equityshare capital 28 265,928 265,928 265,928 265,928Retained earnings 29 746,405 724,754 108,890 105,015Other reserves 29 135,253 125,958 13,248 23,322Reserve of disposal group classified as held for sale 23 (1,173) – – –Equity attributable to owners of the parent 1,146,413 1,116,640 388,066 394,265Non-controlling interests 47,190 73,390 – –Total equity 1,193,603 1,190,030 388,066 394,265

Non-current liabilitiesProvisions 30 13,165 6,478 – –Deferred tax liabilities 18 75,868 69,056 2,077 1,797Other non-current payables 33 – – 143,213 135,411Borrowings 31 296,124 307,609 22,109 250,992Derivative financial instruments 21 576 2,928 – 2,589Other non-current liabilities 32 7,532 13,682 – –Total non-current liabilities 393,265 399,753 167,399 390,789

B A L A N C E S H E E T SAs at 31 December 2010


Group Companynote 2010 2009 2010 2009

$’000 $’000 $’000 $’000(restated)

Current liabilitiesLiabilities directly associated with disposal group

classified as held for sale 23 4,741 – – –Provisions 30 2,986 1,957 – –Income tax payable 26,837 27,020 900 713Trade and other payables 33 109,787 92,114 106,363 46,043Borrowings 31 281,683 233,106 – –Derivative financial instruments 21 – 6,088 – –Total current liabilities 426,034 360,285 107,263 46,756

Total liabilities 819,299 760,038 274,662 437,545

Total equity and liabilities 2,012,902 1,950,068 662,728 831,810


B A L A N C E S H E E T SAs at 31 December 2010 (Cont’d)


Reserve

Equity of disposal

attributable group

to owners share classified Non-

Total of the share Retained AFs Hedging Revaluation option Capital Translation as held controlling

equity parent capital earnings reserve reserve reserve reserve reserve reserve for sale interests

$’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000

Closing balance at 31 December 2009 as previously reported 1,163,391 1,097,260 265,928 705,374 76,179 (4,652) 64,460 84 – (10,113) – 66,131

Prior year adjustment (note 2.1) 26,639 19,380 – 19,380 – – – – – – – 7,259

Opening balance at 1 January 2010 as restated 1,190,030 1,116,640 265,928 724,754 76,179 (4,652) 64,460 84 – (10,113) – 73,390

Total comprehensive income/ (expenses) for the year 10,287 36,198 – 28,169 (35,708) 4,862 32,788 – – 6,087 – (25,911)

Contributions by and distributions to owners

Dividends on ordinary shares (note 34) (6,518) (6,518) – (6,518) – – – – – – – –

Dividends to non-controlling shareholders of subsidiary (196) – – – – – – – – – – (196)

Reserve attributable to disposal group classified as held for sale (note 23) – – – – – – – – – 1,173 (1,173) –

Total contributions by and distributions to owners (6,714) (6,518) – (6,518) – – – – – 1,173 (1,173) (196)

Changes in ownership interests in subsidiaries that do not result in a loss of control (note 16 (a)) – 93 – – – – – – 93 – – (93)

Total transactions with owners in their capacity as owners (6,714) (6,425) – (6,518) – – – – 93 1,173 (1,173) (289)

Closing balance at 31 December 2010 1,193,603 1,146,413 265,928 746,405 40,471 210 97,248 84 93 (2,853) (1,173) 47,190

C o N S o L I D AT E D S TAT E M E N T o F C H A N G E S I N E q U I T Y

for the financial year ended 31 december 2010


Equity

attributable

to owners share Non-

Total of the share Retained AFs Hedging Revaluation option Translation controlling

equity parent capital earnings reserve reserve reserve reserve reserve interests

$’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000

Opening balance at 1 January 2009 1,249,130 1,196,781 265,928 891,369 10,026 (2,729) 70,493 150 (38,456) 52,349

Total comprehensive income/ (expense) for the year (restated) 249,449 245,822 – 159,282 66,153 (1,923) (6,033) – 28,343 3,627

Contributions by and distributions to owners

Dividends on ordinary shares (note 34) (325,897) (325,897) – (325,897) – – – – – –

Adjustment of share-based payment (140) (66) – – – – – (66) – (74)

Total contributions by and distributions to owners (326,037) (325,963) – (325,897) – – – (66) – (74)

Changes in ownership interests in subsidiaries that do not result in a loss of control

Cash injection by non-controlling interest of a subsidiary 67 – – – – – – – – 67

Acquisition of non-controlling interests 17,421 – – – – – – – – 17,421

Total changes in ownership interests in subsidiaries 17,488 – – – – – – – – 17,488

Total transactions with owners in their capacity as owners (308,549) (325,963) – (325,897) – – – (66) – 17,414

Closing balance at 31 December 2009 (restated) 1,190,030 1,116,640 265,928 724,754 76,179 (4,652) 64,460 84 (10,113) 73,390


C o N S o L I D AT E D S TAT E M E N T o F C H A N G E S I N E q U I T Y

For the Financial Year Ended 31 December 2010 (Cont’d)


2010 2009

$’000 $’000

(restated)

Cash flows from operating activitiesProfit before tax 23,872 187,368Adjustments

Depreciation of property, plant and equipment 22,649 18,234Amortisation of intangible assets 5,583 4,682Amortisation of deferred income (3,625) (3,625) Dividend income (5,082) (4,373) Interest income (3,581) (4,520) Finance costs 23,881 25,260Currency realignment (2,954) (2,529) Fair value changes in investment properties and financial assets (103,256) (113,812)Net gain on disposal of investments, properties, plant and equipment (2,385) (40,983) Impairment of investments, goodwill, mining assets, properties, plant and equipment 91,080 3,204 (Write back)/Write off/Provisions for development/ rehabilitation/ exploration costs and

other assets (2,845) 5,772Provision for onerous contracts 5,927 – Provision for employee benefits and receivables 5,275 2,970Share of results of equity-accounted associates and joint ventures (1,778) (27,621)

operating cash flows before changes in working capital 52,761 50,027(Increase)/Decrease in development properties for sale (1,626) 6,523Increase in inventories (10,615) (45,029)Decrease in marketable securities – 5,020(Increase)/Decrease in trade and other receivables (26,425) 34,334 Increase in trade and other payables 9,519 15,080Cash flows from operations 23,614 65,955Income taxes paid (11,233) (11,974) Payment of finance costs (25,150) (28,160) Interest received 3,493 4,914Dividend income 5,082 4,373Dividends from associates and joint ventures 541 2,349Net cash flows (used in)/from operating activities (3,653) 37,457

C o N S o L I D AT E D C A S H F L o W S TAT E M E N Tfor the financial year ended 31 december 2010


2010 2009

$’000 $’000

(restated)

Cash flows from investing activitiesProceeds from disposal of property, plant and equipment and investment properties 48,920 172,412Cost incurred on property, plant and equipment (18,979) (4,167) Proceeds from disposal of investment securities – 50,334Purchase of investment securities – (73,547) Cost incurred on investment properties (3,073) (41,056) Payment of deferred mine development and exploration expenditure (15,737) (14,458) Net cash (outflow)/inflow on acquisition of a subsidiary (note 16(a)) (1,470) 1,219Proceeds from disposal of shares in an associate 7,254 –Payment for insurance scheme (4,480) (3,178) Additional shares in associates (2,847) (583) Acquisition of non-controlling interest – (5,081)Net cash flows from investing activities 9,588 81,895

Cash flows from financing activitiesDividends paid to shareholders (6,518) (325,897) Dividends paid to non-controlling shareholders of a subsidiary (196) – Drawdown of short-term borrowings 62,982 30,593Drawdown of term loans 244,121 153,533Repayment of term loans (290,301) (122,649) Pledge of security deposits for banker guarantees – (16,483)Loan to a joint venture – (1,085)Proceeds from issuance of shares by subsidiaries – 478Net cash flows from/(used in) financing activities 10,088 (281,510)

Net increase/(decrease) in cash and cash equivalents 16,023 (162,158) Effect of exchange rate changes on cash and cash equivalents (400) 2,510 Cash and cash equivalents, beginning balance 56,194 215,842Cash and cash equivalents, ending balance (note 27) 71,817 56,194

C o N S o L I D AT E D C A S H F L o W S TAT E M E N TFor the Financial Year Ended 31 December 2010 (Cont’d)




N o T E S To T H E F I N A N C I A L S TAT E M E N T Sfor the financial year ended 31 december 2010

1 CoRPoRATE INFoRMATIoN

The financial statements of The Straits Trading Company Limited (the Company) for the year ended 31 December 2010 were authorised for issue in accordance with a resolution of the Directors on 28 March 2011.

The Straits Trading Company Limited is a limited liability company incorporated and domiciled in Singapore. The registered office of the Company is located at 9 Battery Road #28-01, Straits Trading Building, Singapore 049910. The Company is listed on the Singapore Exchange Securities Trading Limited.

The immediate and ultimate holding company is The Cairns Private Limited, a company incorporated in Singapore.

The principal activity of the Company is that of an investment holding company. The subsidiaries, associates and joint ventures of the Group are primarily engaged in tin mining and smelting, investments in other metals and mineral resources, hotel investment and management as well as property investment and operations. There have been no significant changes in the nature of these activities during the financial year.

The consolidated financial statements relate to the Company and its subsidiaries (referred to as the Group) and the Group’s interests in associates and joint ventures.

2 SUMMARY oF SIGNIFICANT ACCoUNTING PoLICIES

2.1 BASIS OF PREPARATION

The consolidated financial statements of the Group and the balance sheet of the Company have been prepared in accordance with Singapore Financial Reporting Standards (FRS).

The financial statements have been prepared on a historical cost basis except as disclosed in the accounting policies below.

The financial statements are presented in Singapore dollars (SGD or $) and all values are rounded to the nearest thousand ($’000) except when otherwise indicated.

Prior year adjustment in accordance with FRS 103 Business Combinations

The financial statements for 2009 have been restated to reflect the effects of the retrospective adjustment of the gain on bargain purchase arising from the finalisation of the fair values of the assets and liabilities relating to the acquisition of the joint ventures which were acquired during the financial year ended 31 December 2009. In accordance with FRS 103 Business Combinations, the adjustments arising from the finalisation of such provisional purchase price allocation, which are to be made within twelve months from the date of acquisition, are to be made retrospectively.

Consequently, a gain on bargain purchase amounting to $26,639,000 has been included in the restated share of results of associates and joint ventures for the financial year ended 31 December 2009, and the carrying amount of the investment in associates and joint ventures has been increased by a corresponding amount. The adjustment has contributed to an increase in earnings per share of 6 cents for financial year 2009 (note 17.2(b)). As the acquisition was completed in December 2009, there is no impact to the balance sheet as at 1 January 2009.



2 SUMMARY oF SIGNIFICANT ACCoUNTING PoLICIES (CoNT’D)

2.2 CHANGES IN FINANCIAL REPORTING STANDARDS AND ACCOUNTING POLICIES

The accounting policies adopted are consistent with those of the previous financial year except in the current financial year, the Group has adopted all the new and revised standards and interpretations of FRS (INT FRS) that are effective for annual periods beginning on or after 1 January 2010.

Certain new FRS and INT FRS have been published that are mandatory for accounting periods beginning on or after 1 January 2010.

Effective for annual

periods beginning

on or after

Amendments to FRS 27 Consolidated and Separate Financial Statements 1 July 2009Revised FRS 103 Business Combinations 1 July 2009INT FRS 117 Distributions of Non-Cash Assets to Owners 1 July 2009Amendment to FRS 39 Financial Instruments: Recognition and Measurement –

eligible hedged item 1 July 2009Amendments to FRS 102 Share-based Payment – Group Cash-settled Share-based

Payment Transactions 1 January 2010

Improvement to FRSs issued in 2008:– Amendments to FRS 105 Non-Current Assets Held for Sale and Discontinued Operations 1 July 2009

Improvements to FRSs issued in 2009:– Amendments to FRS 1 Presentation of Financial Statements 1 January 2010– Amendments to FRS 7 Statement of Cash Flows 1 January 2010– Amendments to FRS 17 Leases 1 January 2010– Amendments to FRS 36 Impairment of Assets 1 January 2010– Amendments to FRS 38 Intangible Assets 1 July 2009– Amendments to FRS 39 Financial Instruments: Recognition and Measurement 1 January 2010– Amendments to FRS 102 Share-based Payment 1 July 2009– Amendments to FRS 105 Non-current Assets Held for Sale and Discontinued Operations 1 January 2010– Amendments to FRS 108 Operating Segments 1 January 2010– Amendments to INT FRS 109 Reassessment of Embedded Derivatives 1 July 2009– Amendments to INT FRS 116 Hedges of a Net Investment in a Foreign Operation 1 July 2009

The adoption of these standards and interpretations did not have any effect on the financial performance or position of the Group and the Company except as disclosed below:




2.2 CHANGES IN FINANCIAL REPORTING STANDARDS AND ACCOUNTING POLICIES (CONT’D)

Revised FRS 103 Business Combinations and Amendments to FRS 27 Consolidated and Separate Financial Statements

The revised standards are effective for annual periods beginning on or after 1 July 2009. As of 1 January 2010, the

Group adopted both revised standards at the same time in accordance with their transitional provisions.

Revised FRS 103 Business Combinations

The revised FRS 103 introduces a number of changes to the accounting for business combinations that will impact the amount of goodwill recognised, the reported results in the period that an acquisition occurs, and future reported results. Changes in significant accounting policies resulting from the adoption of the revised FRS 103 include:

– Transaction costs would no longer be capitalised as part of the cost of acquisition but will be expensed immediately;

– Consideration contingent on future events are recognised at fair value on the acquisition date and any changes in the amount of consideration to be paid will no longer be adjusted against goodwill but recognised in profit or loss;

– The Group elects for each acquisition of a business, to measure non-controlling interest at fair value, or at the non-controlling interest’s proportionate share of the acquiree’s identifiable net assets, and this impacts the amount of goodwill recognised; and

– When a business is acquired in stages, the previously held equity interests in the acquiree is remeasured to fair value at the acquisition date with any corresponding gain or loss recognised in profit or loss, and this impacts the amount of goodwill recognised.

According to its transitional provisions, the revised FRS 103 has been applied prospectively. Assets and liabilities that arose from business combinations whose acquisition dates are before 1 January 2010 are not adjusted.

Revised FRS 27 Consolidated and Separate Financial Statements

Changes in significant accounting policies resulting from the adoption of the revised FRS 27 include:

– A change in the ownership interest of a subsidiary that does not result in a loss of control is accounted for as an equity transaction. Therefore, such a change will have no impact on goodwill, nor will it give rise to a gain or loss recognised in profit or loss;

– 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; and

– When control over a subsidiary is lost, any interest retained is measured at fair value with the corresponding gain or loss recognised in profit or loss.





Revised FRS 27 Consolidated and Separate Financial Statements (cont’d)

According to its transitional provisions, the revised FRS 27 has been applied prospectively, and does not impact the Group’s consolidated financial statements in respect of transactions with non-controlling interests, attribution of losses to non-controlling interests and disposal of subsidiaries before 1 January 2010. The changes will affect future transactions with non-controlling interests.

Prior to adoption of the revised FRS 27, the Group applied the policy of treating transactions with non-controlling interests as transactions with parties external to the Group. Disposals to non-controlling interests which resulted in gains or losses for the Group are recorded in profit or loss. The difference between any consideration paid to non-controlling interests for purchase of additional equity interest in a subsidiary and the incremental share of the carrying value of the net assets of the subsidiary is recognised as goodwill.

The effects of the adoption of the revised FRS 27 on the Group’s consolidated financial statements, relating to the diluted ownership interest in Straits Resources Management Private Limited from 100% to 73% on 11 August 2010 resulted in $93,000 recognised directly in equity.

Early adoption of INT FRS 115 Agreements for the Construction of Real Estate on 26 August 2010

On 26 August 2010, the Singapore Accounting Standards Council issued INT FRS 115 Agreements for the Construction of Real Estate, which is effective for annual periods beginning on or after 1 January 2011. The Group has early adopted INT FRS 115 on its issuance date.

INT FRS 115 clarifies when revenue and related expenses from a sale of real estate unit should be recognised if an agreement between a developer and buyer is reached before the construction of real estate is completed. INT FRS 115 determines that contracts which do not qualify as construction contracts in accordance with FRS 11 can only be accounted for using the percentage of completion method if the entity continuously transfers to the buyer control and the significant risks and rewards of ownership of the work in progress in its current state as construction progresses.

The Singapore Accounting Standards Council has issued an Accompanying Note with INT FRS 115, which requires application of percentage of completion method of revenue recognition for pre-completion contracts for sale of Singapore residential property.





Early adoption of INT FRS 115 Agreements for the Construction of Real Estate on 26 August 2010 (cont’d)

This change in accounting policy has been applied retrospectively and there is no impact to the prior years as the sale of development properties commenced in the current financial year. The effects of adopting INT FRS 115 in the current financial year are as follows:

Group

2010

$’000

Increase/(decrease) in:Consolidated balance sheetDevelopment property for sale 37,585

Consolidated income statementRevenue from sales of development property 4,466Cost of sales of development property (3,634)Attributable profit for the year 832

Basic earnings per share (cents) 0.26

2.3 FUTURE CHANGES IN FINANCIAL REPORTING STANDARDS

Except for early adoption of INT FRS 115 Agreements for the Construction of Real Estate, the Group has not adopted the following standards and interpretations that have been issued but not yet effective:


periods beginning

on or after

Amendment to FRS 32 Financial Instruments: Presentation – Classification of Rights Issues 1 February 2010INT FRS 119 Extinguishing Financial Liabilities with Equity Instruments 1 July 2010Revised FRS 24 Related Party Disclosures 1 January 2011Amendments to INT FRS 114 Prepayments of a Minimum Funding Requirement 1 January 2011Amendments to FRS 12 Deferred Tax – Recovery of Underlying Assets 1 January 2012Amendments to FRS 107 Financial Instrument: Disclosures – Transfer of Financial Assets 1 July 2011




2.3 FUTURE CHANGES IN FINANCIAL REPORTING STANDARDS (CONT’D)


periods beginning

on or after

Improvements to FRSs issued in 2010:– Amendments to FRS 103 Business Combinations 1 July 2010– Amendments to FRS 107 Financial Instruments: Disclosures 1 January 2011– Amendments to FRS 1 Presentation of Financial Statements 1 January 2011– Transition requirements for amendments arising as a result of FRS 27 Consolidated and Separate Financial Statements 1 July 2010– Amendments to FRS 34 Interim Financial Reporting 1 January 2011– Amendments to INT FRS 113 Customer Loyalty Programmes 1 January 2011

Except for the revised FRS 24 and the amendments to FRS 12, the directors expect that the adoption of the other standards and interpretations mentioned above will have no material impact on the financial statements in the period of initial application. The nature of the impending changes is described below.

Revised FRS 24 Related Party Disclosures

The revised FRS 24 clarifies the definition of a related party to simplify the identification of such relationships and to eliminate inconsistencies in its application. The revised FRS 24 expands the definition of a related party and would treat two entities as related to each other whenever a person (or a close member of that person’s family) or a third party has control or joint control over the entity, or has significant influence over the entity. The revised standard also introduces a partial exemption of disclosure requirements for government-related entities. The Group is currently determining the impact of the changes to the definition of a related party on the disclosure of related party transactions. As this is a disclosure standard, it will have no impact on the financial position or financial performance of the Group when implemented in 2011.

Amendments to FRS 12 Deferred Tax – Recovery of Underlying Assets

The limited scope amendment to FRS 12 addresses the recognition of deferred tax in relation to investment properties that are measured using the fair value in FRS 40 Investment Property. The amendments introduce a rebuttable presumption where deferred tax in relation to such assets will be recognised on a sale basis, unless an entity has a business model which would indicate that the investment property will be consumed in the business. If consumed, a use basis may be adopted.

The amendments are effective for annual periods beginning on or after 1 January 2012, but earlier application is permitted.

Judgement is required in determining whether the carrying amount of investment properties held are to be recovered through sale or that its economic benefits will be consumed substantially over time. The Group is in the process of reviewing the implications of this amendment.




2.4 SIGNIFICANT ACCOUNTING ESTIMATES AND JUDGEMENTS

The preparation of financial statements in conformity with FRS requires management to make judgements, estimates and assumptions that affect the application of the Group’s accounting policies and reported amounts of assets, liabilities, income and expenses, and disclosures made. The estimates and associated assumptions are assessed on an on-going basis and are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis for making the judgements about carrying amounts of assets and liabilities that are not readily apparent from other sources.

Judgements made by management in the application of FRS that have a significant effect on the financial statements and in arriving at estimates with a significant risk of material adjustment in the following year are discussed in note 41.

2.5 BASIS OF CONSOLIDATION Business combinations from 1 January 2010

The consolidated financial statements comprise the financial statements of the Company and its subsidiaries as at the end of the reporting period. The financial statements of the subsidiaries used in the preparation of the consolidated financial statements are prepared for the same reporting date as the Company. Consistent accounting policies are applied to like transactions and events in similar circumstances.

All intra-group balances, income and expenses and unrealised gains and losses resulting from intra-group transactions are eliminated in full.

Subsidiaries are consolidated from the date of acquisition, being the date on which the Group obtains control, and continue to be consolidated until the date that such control ceases.

Business combinations are accounted for by applying the acquisition method. Identifiable assets acquired and liabilities assumed in a business combination are measured initially at their fair values at the date of acquisition. Acquisition-related costs are recognised as expenses in the periods in which the costs are incurred and the services are received.

When the Group acquires a business, it assesses the financial assets and liabilities assumed for appropriate classification and designation in accordance with the contractual terms, economic circumstances and pertinent conditions as at the acquisition date. This includes the separation of embedded derivatives in host contracts by the acquiree.

Any contingent consideration to be transferred by the acquirer will be recognised at fair value at the acquisition date. Subsequent changes to the fair value of the contingent consideration which is deemed to be an asset or liability, will be recognised either in profit or loss or other comprehensive income. If the contingent consideration is classified as equity, it is not re-measured until it is finally settled within equity.

In business combinations achieved in stages, previously held equity interests in the acquiree are re-measured to fair value at the acquisition date and any corresponding gain or loss is recognised in profit or loss.




2.5 BASIS OF CONSOLIDATION (CONT’D)

Business combinations from 1 January 2010 (cont’d)

The Group elects for each individual business combination, whether non-controlling interest in the acquiree (if any) is recognised on the acquisition date at fair value, or at the non-controlling interest’s proportionate share of the acquiree identifiable net assets.

Any excess of the sum of the fair value of the consideration transferred in the business combination, the amount of non-controlling interest in the acquiree (if any), and the fair value of the Group’s previously held equity interest in the acquiree (if any), over the net fair value of the acquiree’s identifiable assets and liabilities is recorded as goodwill. The accounting policy for goodwill is set out in note 2.14 (a). In instances where the latter amounts exceed the former, the excess is recognised as gain on bargain purchase in profit or loss on the acquisition date.

Business combinations before 1 January 2010

In comparison to the above mentioned requirements, the following differences applied:

Business combinations are accounted for by applying the purchase method. Transaction costs directly attributable to the acquisition formed part of the acquisition costs. The non-controlling interest (formerly known as minority interest) was measured at the proportionate share of the acquiree’s identifiable net assets.

Business combinations achieved in stages were accounted for as separate steps. Adjustments to those fair values relating to previously held interests are treated as a revaluation and recognised in equity.

Where the Group acquired a business, embedded derivatives separated from the host contract by the acquiree are not reassessed on acquisition unless the business combination results in a change in the terms of the contract that significantly modifies the cash flows that would otherwise be required under the contract.

Contingent consideration was recognised if, and only if, the Group had a present obligation, the economic outflow was more likely than not and a reliable estimate was determinable. Subsequent measurements to the contingent consideration affected goodwill.

2.6 TRANSACTIONS WITH NON-CONTROLLING INTERESTS

Transactions with non-controlling interests from 1 January 2010

Non-controlling interests represent the equity in subsidiaries not attributable, directly or indirectly, to owners of the parent, and are presented separately in the consolidated statement of comprehensive income and within equity in the consolidated balance sheet, separately from the equity attributable to owners of the parent.

Changes in the ownership interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions. In such circumstances, the carrying amounts of the controlling and non-controlling interests are adjusted to reflect the changes in their relative interests in the subsidiary. Any difference between the amount by which the non-controlling interest is adjusted and the fair value of the consideration paid or received is recognised directly in equity and attributed to owners of the parent.




2.6 TRANSACTIONS WITH NON-CONTROLLING INTERESTS (CONT’D)

Transactions with non-controlling interests before 1 January 2010

In comparison to the above mentioned requirements, the following differences applied:

The Group applied the policy of treating transactions with non-controlling interest as transactions with parties external to the Group. Disposals to non-controlling interest which resulted in gains or losses for the Group are recorded in profit or loss.

The difference between any consideration paid to non-controlling interest for purchase of additional equity interest in a subsidiary and the incremental share of the carrying value of the net assets of the subsidiary is recognised as goodwill.

2.7 FOREIGN CURRENCIES

The Group’s consolidated financial statements are presented in Singapore Dollars, which is also the parent company’s functional currency. Each entity in the Group determines its own functional currency and items included in the financial statements of each entity are measured using that functional currency.

(a) TRANSACTIONS AND BALANCES Transactions in foreign currencies are measured in the respective functional currencies of the Company

and its subsidiaries and are recorded on initial recognition in the functional currencies at exchange rates approximating those ruling at the transaction dates. Monetary assets and liabilities denominated in foreign currencies are translated at the rate of exchange ruling at the end of the reporting period. Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates as at the dates of the initial transactions. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined.

Exchange differences arising on the settlement of monetary items or on translating monetary items at the end of the reporting period are recognised in the profit or loss except for exchange differences arising on monetary items that form part of the Group’s net investment in foreign operations, which are recognised initially in other comprehensive income and accumulated under foreign currency translation reserve in equity. The foreign currency translation reserve is reclassified from equity to profit or loss of the Group on disposal of the foreign operation.

(b) GROUP COMPANIES The results and financial position of foreign operations are translated into SGD, presentation currency of the

Group, using the following procedures:

• Assets and liabilities for each balance sheet presented are translated at the rate of exchange ruling at the end of the reporting period; and

• Income and expenses for the profit or loss are translated at periodical average exchange rates which approximates the exchange rates at the date of the transactions.




2.7 FOREIGN CURRENCIES (CONT’D)

(b) GROUP COMPANIES (CONT’D) The exchange differences arising on the translation are recognised in other comprehensive income. On

disposal of a foreign operation, the cumulative amount recognised in other comprehensive income relating to that foreign operation is recognised in profit or loss.

In the case of partial disposal without loss of control of a subsidiary that includes a foreign operation, the proportionate share of the cumulative amount of the exchange differences are re-attributed to non-controlling interest and are not recognised in profit or loss. For partial disposals of associates or jointly controlled entities that are foreign operations, the proportionate share of the accumulated exchange differences is reclassified to profit or loss.

2.8 SUBSIDIARIES

Subsidiaries are entities controlled by the Company. Control exists when the Company has the power, directly or indirectly, to govern the financial and operating policies of an entity so as to obtain benefits from its activities. The Group generally has such power when it, directly or indirectly, holds more than 50% of the issued share capital, or controls more than half of the voting power, or controls the composition of the board of directors.

In the Company’s separate financial statements, investments in subsidiaries are stated at costs less accumulated impairment losses. At each end of the reporting period, the Company assesses whether there is any indication of impairment. If any such indication exists, the recoverable amount is estimated and allowance for impairment is made.

2.9 ASSOCIATES

An associate is an entity, not being a subsidiary or a joint venture, in which the Group has significant influence. An associate is equity accounted for from the date the Group obtains significant influence until the date the Group ceases to have significant influence over the associate.

The Group’s investments in associates are accounted for using the equity method. Under the equity method, the investment in associates is carried in the balance sheet at cost plus post-acquisition changes in the Group’s share of net assets of the associates. Goodwill relating to associate is included in the carrying amount of the investment and is neither amortised nor tested individually for impairment. Any excess of the Group’s share of the net fair value of the associate’s identifiable assets, liabilities and contingent liabilities over the cost of the investment is recognised as income as part of the Group’s share of results of the associate in the period in which the investment is acquired.

The profit or loss reflects the share of the results of operations of the associates. Where there has been a change recognised in other comprehensive income by the associates, the Group recognises its share of such changes in other comprehensive income. Unrealised gains and losses resulting from transactions between the Group and the associate are eliminated to the extent of the interest in the associates.

When the Group’s share of losses in an associate equals or exceeds its interest in the associate, the Group does not recognise further losses, unless it has incurred obligations or made payments on behalf of the associate.




2.9 ASSOCIATES (CONT’D)

After application of the equity method, the Group determines whether it is necessary to recognise an additional impairment loss on the Group’s investment in its associates. The Group determines at the end of each reporting period whether there is any objective evidence that the investment in the associate is impaired. If this is the case, the Group calculates the amount of impairment as the difference between the recoverable amount of the associate and its carrying value and recognises the amount in profit or loss. The most recent available audited financial statements of the associates are used by the Group in applying the equity method. Where the dates of the audited financial statements used are not co-terminous with those of the Group, the share of results is arrived at from the last audited financial statements available and un-audited management financial statements to the end of the accounting period. Consistent accounting policies are applied for like transactions and events in similar circumstances.

Upon loss of significant influence over the associate, the Group measures any retained investment at its fair value. Any difference between the carrying amount of the associate upon loss of significant influence and the fair value of the aggregate of the retained investment and proceeds from disposal is recognised in profit or loss.

In the Company’s separate financial statements, investments in associates are accounted for at cost less accumulated impairment losses.

2.10 JOINT VENTURES

A joint venture is a contractual arrangement whereby two or more parties undertake an economic activity that is subject to joint control, where the strategic financial and operating decisions relating to the activity require the unanimous consent of the parties sharing control.

The Group’s investments in the joint ventures are accounted for using the equity method of accounting as described in note 2.9.

Upon loss of joint control or significant influence, the Group measures any retained investment at its fair value. Any difference between the carrying amount of the former joint venture upon loss of joint control and the aggregate of the fair value of the retained investment and proceeds from disposal is recognised in profit or loss.

In the Company’s separate financial statements, investments in joint ventures are accounted for at cost less accumulated impairment losses.

2.11 PROPERTY, PLANT AND EQUIPMENT

All items of property, plant and equipment are initially recorded at cost. Such cost includes the cost of replacing part of the property, plant and equipment and borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying property, plant and equipment. The accounting policy for borrowing costs is set out in note 2.24. The cost of an item of property, plant and equipment is recognised as an asset if, and only if, it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably.




2.11 PROPERTY, PLANT AND EQUIPMENT (CONT’D)

Subsequent to recognition, plant and equipment and furniture and fixtures are measured at cost less accumulated depreciation and accumulated impairment losses. When significant parts of property, plant and equipment are required to be replaced in intervals, the Group recognises such parts as individual assets with specific useful lives and depreciation, respectively. Likewise, when a major inspection is performed, its cost is recognised in the carrying amount of the plant and equipment as a replacement if the recognition criteria are satisfied. All other repair and maintenance costs are recognised in profit or loss as incurred.

Land and buildings are measured at fair value less accumulated depreciation and impairment losses recognised after the date of the revaluation. Valuations are performed with sufficient regularity to ensure that the carrying amount does not differ materially from the fair value of the land and buildings at the end of the reporting period.

Any revaluation surplus is recognised in other comprehensive income and accumulated in equity under the asset revaluation reserve, except to the extent that it reverses a revaluation decrease of the same asset previously recognised in profit or loss, in which case the increase is recognised in profit or loss. A revaluation deficit is recognised in profit or loss, except to the extent that it offsets an existing surplus on the same asset carried in the asset revaluation reserve.

Any accumulated depreciation as at the revaluation date is eliminated against the gross carrying amount of the asset and the net amount is restated to the revalued amount of the asset. The revaluation surplus included in the asset revaluation reserve in respect of an asset is transferred directly to retained earnings on retirement or disposal of the asset.

An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss on derecognition of the asset is included in the profit or loss in the year the asset is derecognised.

2.12 DEPRECIATION AND RESIDUAL VALUES

In the tin mining subsidiary, plant and equipment used in mining are depreciated using the unit-of-production method based on economically recoverable ore reserves and resources over the estimated useful lives of the assets. Changes in estimated economically recoverable ore reserves and resources and useful lives of plant and equipment are accounted for on a prospective basis from the beginning of the year in which the change arises. Earthmoving vehicles are depreciated based on hour-worked basis over the estimated useful life of each asset.

Depreciation for the remaining assets of the Group is provided on the straight-line method to write off the cost or valuation of relevant assets to its residual value, if any, over their estimated useful lives or life of the mine where appropriate, whichever is shorter. No depreciation is provided on freehold or equivalent land. The estimated useful lives for these remaining assets are as follows:

Leasehold land – remaining lease term of up to 82 yearsBuildings – 8 to 40 years or the unexpired lease period or life of the mine, whichever is shorterPlant, equipment

and vehicles – 3 to 40 yearsFurniture – 3 to 10 yearsMine restoration – Life of mine



2. SUMMARY oF SIGNIFICANT ACCoUNTING PoLICIES (CoNT’D)

2.12 DEPRECIATION AND RESIDUAL VALUES (CONT’D)

The residual value, useful life and depreciation method are reviewed at the end of each reporting period to ensure that the amount, method and period of depreciation are consistent with previous estimates and the expected pattern of consumption of the future economic benefits embodied in the items of property, plant and equipment.

Capital work-in-progress included in property, plant and equipment are not depreciated as these assets are not available for use.

The carrying values of property, plant and equipment are reviewed for impairment when events or changes in circumstances indicate that the carrying value may not be recoverable.

2.13 INVESTMENT PROPERTIES

Investment properties are properties that are either owned by the Group or leased under a finance lease in order to earn rentals or for capital appreciation, or both, rather than for use in the production or supply of goods or services, or for administrative purposes, or in the ordinary course of business. Investment properties comprise completed investment properties and properties that are being constructed or developed for future use as investment properties. Properties held under operating leases are classified as investment properties when the definition of investment properties is met and they are accounted for as finance leases.

Investment properties are initially measured at cost, including transaction costs. The carrying amount includes the cost of replacing part of an existing investment property at the time that cost is incurred if the recognition criteria are met. Subsequent to initial recognition, investment properties are stated at fair value which reflects market conditions at the end of the reporting period. Gains or losses arising from changes in the fair values of investment properties are included in profit or loss in the year in which they arise.

Investment properties are derecognised when either they have been disposed of or when the investment property is permanently withdrawn from use and no future economic benefit is expected from its disposal. Any gain or loss on the retirement or disposal of an investment property is recognised in profit or loss in the year of retirement or disposal.

Transfers are made to or from investment property only when there is change in use. For a transfer from investment property to owner-occupied property, the deemed cost for subsequent accounting is the fair value at the date of change in use. For a transfer from owner-occupied property to investment property, the property is accounted for in accordance with the accounting policy for property, plant and equipment set out in note 2.11 up to the date of change in use.

For properties that are being redeveloped for continued future use as investment property, they are stated at fair values and the associated redevelopment expenditures are stated at cost until redevelopment is completed.

In note 14 to the financial statements, land held under 999 year’s leasehold is regarded as equivalent to freehold.




2.14 INTANGIBLE ASSETS

(a) GOODWILL Goodwill is initially measured at cost. Following initial recognition, goodwill is measured at cost less any

accumulated impairment losses. Goodwill is tested for impairment as described in note 2.22. Gain on bargain purchase is recognised immediately in profit or loss.

Where goodwill forms part of a cash-generating unit and part of the operation within that cash-generating unit is disposed of, the goodwill associated with the operation disposed of is included in the carrying amount of the operation when determining the gain or loss on disposal of the operation. Goodwill disposed of in this circumstance is measured based on the relative fair values of the operations disposed of and the portion of the cash-generating unit retained.

Goodwill and fair value adjustments arising on the acquisition of foreign operation on or after 1 January 2005

are treated as assets and liabilities of the foreign operations and are recorded in the functional currency of the foreign operations and translated in accordance with the accounting policy set out in note 2.7.

(b) MINING RIGHTS/MINING ASSETS Mining rights/mining assets acquired in a business combination are stated at their fair values as at the date

of acquisition. Following initial recognition, mining rights/mining assets are carried at cost less accumulated amortisation and impairment losses, if any. Mining rights/mining assets are amortised based on the unit-of-production method so as to write off the mining rights/mining assets in proportion to the depletion of the estimated economically recoverable ore reserves and resources. The amortisation period and the amortisation method are reviewed at least at each financial year end.

(c) MANAGEMENT RIGHTS Payments made to acquire management rights of hotels and properties of similar nature are capitalised and

amortised over their estimated useful lives of up to 12 years on a straight-line method. The amortisation period and amortisation method are reviewed at least at each financial year end.

(d) DEFERRED MINE EXPLORATION AND EVALUATION EXPENDITURE Deferred mine exploration and evaluation expenditure is stated at cost less accumulated amortisation and

impairment losses, if any.

Mine exploration and evaluation expenditure incurred in an area of interest is accumulated in respect of each identifiable area of interest. These costs are only carried forward to the extent that they are expected to be recouped through the successful development of the areas or activities in the areas which have not reached a stage that permit reasonable assessment of the existence of economically recoverable ore reserves and resources.

Accumulated costs in relation to an abandoned area are written off in full to profit or loss in the year in which the decision to abandon the area is made.




2.14 INTANGIBLE ASSETS (CONT’D)

(d) DEFERRED MINE EXPLORATION AND EVALUATION EXPENDITURE (CONT’D) When production commences, the accumulated cost for the relevant area of interest is amortised based

on the unit-of-production method so as to write off the expenditure in proportion to the depletion of the estimated economically recoverable ore reserves and resources.

A review is carried out annually on the carrying amount of deferred exploration and evaluation expenditure to determine whether there is any indication of impairment. Any impairment loss is recognised as an expense in profit or loss.

(e) DEFERRED MINE DEVELOPMENT EXPENDITURE Deferred mine development expenditure is stated at cost less accumulated amortisation and impairment

losses, if any.

Mine development expenditure incurred in connection with development activities in respect of each area of interest, which includes all activities conducted in the preparation of economically recoverable ore reserves and resources until commercial production is accumulated in respect of each identifiable area of interest. These costs are only deferred to the extent that they are expected to be recouped through the successful development of the area. Mine development expenditure which is considered to provide minimal benefit to future periods is recognised as an expense in profit or loss.

When production in an area of interest commences, the accumulated cost for the relevant area of interest is amortised based on the unit-of-production method so as to write off the expenditure in proportion to the depletion of the estimated economically recoverable ore reserves and resources.

A review is carried out annually on the carrying amount of deferred development expenditure to determine whether there is any indication of impairment. Any impairment loss is recognised as an expense in profit

or loss.

(f) MINE ENVIRONMENTAL EXPENDITURE Restoration, rehabilitation and environmental expenditure incurred during the production phase of

operations is recognised in profit or loss as part of the cost of production of the mine property concerned.

Significant restoration, rehabilitation and environmental expenditure to be incurred subsequent to the cessation of production of each mine property are provided based on the present value of the estimated expenditure to be incurred.

(g) OTHER INTANGIBLE ASSET Other intangible asset with finite life is amortised over the estimated economic useful life of up to 15 years

and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortisation period and the amortisation method for an intangible asset with a finite useful life are reviewed at each financial year end.




2.15 INVESTMENTS IN DEBT AND EQUITY SECURITIES

When investment securities are recognised initially, they are measured at fair value, plus, in the case of investment securities not at fair value through profit or loss, directly attributable transaction costs.

After initial recognition, investment securities classified as held-for-trading are measured at fair value with the gain or loss arising from the changes in fair value recognised in profit or loss. Investment securities are classified as held-for-trading if they are acquired principally for the purpose of selling in the near term.

Where the Group has the positive intent and ability to hold debt securities to maturity, they are subsequently measured at amortised cost. Amortised cost is computed as the amount initially recognised minus principal repayments, plus or minus the cumulative amortisation using the effective interest method of any difference between the initially recognised amount and the maturity amount and minus any reduction for impairment or uncollectibility. For investment securities carried at amortised cost, gains or losses are recognised in profit or loss when the investment securities are derecognised or impaired, and through the amortisation process.

Other investment securities held by the Group, only if they are non-derivatives, are classified as available-for-sale (AFS). After initial recognition, AFS are subsequently measured at fair value with the gain or loss arising from the changes in fair value recognised in other comprehensive income, except for impairment losses and foreign exchange gains and losses on AFS that are monetary items are recognised in profit or loss. When these AFS are derecognised, the cumulative gain or loss previously recognised in other comprehensive income is reclassified from equity to profit or loss as a reclassification adjustment.

All regular way purchases and sales of investment securities are recognised or derecognised on trade date.

The fair value of investment securities that are actively traded in organised financial markets is determined by reference to quoted market bid prices at the close of business on the end of the reporting period. For investment securities where there is no active market, fair value is estimated using a valuation technique based on certain assumptions that are not supported by observable market prices or rates. Management believes the estimated fair values resulting from the valuation technique which are recorded in the balance sheet are reasonable and the most appropriate at the end of the reporting period. These investment securities shall, however, be measured at cost less impairment losses if their fair values cannot be reliably estimated.

2.16 BASE INVENTORY

Base inventory is the base recirculating inventory in the smelting process. The value represents the lower of estimated recoverable amounts and cost of 381 tonnes of metallic tin content.




2.17 NON-CURRENT ASSETS AND DISPOSAL GROUP CLASSIFIED AS HELD FOR SALE Non-current assets and disposal group classified as held for sale are measured at the lower of carrying amount and fair value less costs to sell. Non-current assets and disposal group are classified as held for sale if their carrying amounts will be recovered through a sale transaction rather than through continuing use. This condition is regarded as met only when the sale is highly probable and the asset or disposal group is available for immediate sale in its present condition. Management must be committed to the sale, which should be expected to qualify for recognition as a completed sale within one year from the date of classification.

Upon classification as held for sale, non-current assets are not depreciated or amortised and equity accounting for investment in associate shall discontinue.

2.18 DEVELOPMENT PROPERTIES FOR SALE

Development properties are properties held or developed for sale in the ordinary course of business, rather than to be held for the Group’s own use, rental or capital appreciation. Development properties are measured at the lower of cost plus, where appropriate, a portion of attributable profit, and estimated net realisable value, net of progress billings.

The costs of development properties include:– Freehold and leasehold rights for land;– Amount paid to contractors for construction; and – Borrowings costs, planning and design costs, costs of site preparation, professional fees for legal services,

property transfer taxes, construction overheads and other related costs.

Non-refundable commissions paid to sales or marketing agents on the sale of real estate units are expensed when paid.

Net realisable value is the estimated selling price in the ordinary course of business, based on market prices at the end of the reporting period and discounted for the time value of money if material, less the estimated costs of completion and the estimated costs necessary to make to sale.

The costs of development properties recognised in profit or loss on disposal is determined with reference to the specific costs incurred on the property sold and an allocation of any non-specific costs based on the relative size of the property sold.

2.19 INVENTORIES

Inventories are stated at the lower of cost and net realisable value.

Cost of trading inventory of refined tin metal is determined on a first-in first-out basis. Cost of inventories of tin-in-concentrates and tin-in-process which have matching sales contract for refined tin metal from tin smelting operations, are stated at the value of such contract less allowance for conversion. This value is consistent with cost, as it is the practice of tin smelting operations of the subsidiary to buy tin-in-concentrates and sell refined tin metal on a back to back price basis.




2.19 INVENTORIES (CONT’D)

Absorption costing is used in the mining operations to assign costs to tin inventories using the weighted average cost method which includes both variable and fixed overhead cost components. The cost of purchased tin-in-concentrates prior to processing comprises cost of purchase.

Cost of other inventories comprising stores, spares, fuels and saleable by-products is determined on the weighted average cost method. Production cost is not allocated to by-products as it is not material.

Where necessary, allowance is provided for damaged, obsolete and slow moving items to adjust the carrying value of inventories to the lower of cost and net realisable value.

Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale.

2.20 TRADE AND OTHER RECEIVABLES

Trade and other receivables, including amounts due from subsidiaries, associates, related companies and loans to related companies are classified and accounted for as loans and receivables. When loans and receivables are recognised initially, they are measured at fair value. Subsequent to initial recognition, loans and receivables are measured at amortised cost using the effective interest method, less impairment. Gains and losses are recognised in profit or loss when the loans and receivables are derecognised or impaired, and through the amortisation process.

Trade and other receivables are recognised and carried at original invoice amounts less an allowance for any uncollectible amounts. Allowance is made when there is objective evidence that the Group will not be able to collect the debts. Bad debts are written off when identified.

Receivables from related parties are carried at cost, less an allowance for any uncollectible amount.

The carrying amount of trade receivables impaired by credit losses is reduced through the use of an allowance account unless on the date the impairment loss is recognised, the Group ascertains the amount to be uncollectible whereby it would be reduced directly. In subsequent periods when a trade receivable is ascertained to be uncollectible, it is written off against the allowance account.

Significant financial difficulties of the debtor, probability that the debtor will enter bankruptcy, and default or significant delay in payments are objective evidence that the trade receivable is impaired.

2.21 CASH AND CASH EQUIVALENTS

Cash and cash equivalents comprise cash at bank and on hand, and short-term deposits that are readily convertible to cash and which are not subject to a significant risk of changes in value. These also include bank overdrafts that form an integral part of the Group’s cash management.

Cash and short-term deposits carried in the balance sheets are classified and accounted for as loans and receivables as described in note 2.20.




2.22 IMPAIRMENT OF ASSETS

(a) NON-FINANCIAL ASSETS An assessment is made at each reporting date to determine whether there is an indication that an asset

may be impaired. If any such indication exists, or when annual impairment testing for an asset is required, the estimated recoverable amount of that asset is determined.

Where the carrying amount of an asset or cash-generating unit exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. Impairment losses of continuing operations are recognised in the profit or loss except for assets that are previously revalued where the revaluation was taken to other comprehensive income. In this case, the impairment is also recognised in other comprehensive income up to the amount of any previous revaluation.

Calculation of recoverable amount An asset’s recoverable amount is the higher of an asset’s or cash-generating unit’s fair value less costs

to sell and its value in use and is determined on an individual asset basis. If the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets, the recoverable amount is determined for the cash-generating unit to which the asset belongs to. In assessing value in use, the estimated future cash flows expected to be generated by the assets are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.

Reversal of impairment For assets excluding goodwill, an assessment is made at each reporting date as to whether there is any

indication that previously recognised impairment losses may no longer exist or may have decreased. If such indication exists, the Group estimates the asset’s or cash-generating unit’s recoverable amount. A previously recognised impairment loss is reversed only if there has been a change in the estimates used to determine the asset’s recoverable amount since the last impairment loss was recognised. If that is the case, the carrying amount of the asset is increased to its recoverable amount. That increase cannot exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognised previously. Such reversal is recognised in profit or loss unless the asset is measured at revalued amount, in which case the reversal is treated as a revaluation increase.

Goodwill For the purpose of impairment testing of goodwill, goodwill acquired in a business combination is, from the

acquisition date, allocated to each of the Group’s cash-generating units that are expected to benefit from synergies of the business combination, irrespective of whether other assets or liabilities of the acquiree are assigned to those units.

The cash-generating unit to which goodwill has been allocated is tested for impairment annually and whenever there is an indication that the cash-generating unit may be impaired. Impairment is determined for goodwill by assessing the recoverable amount of each cash-generating unit (or group of cash-generating units) to which the goodwill relates. Where the recoverable amount of the cash-generating unit is less than the carrying amount, an impairment loss is recognised in profit or loss. Impairment losses recognised for goodwill are not reversed in subsequent periods.




2.22 IMPAIRMENT OF ASSETS (CONT’D)

(b) FINANCIAL ASSETS The Group assesses at the end of each reporting period whether there is any objective evidence that a

financial asset or group of financial assets is impaired.

i) Financial assets carried at amortised cost For financial assets carried at amortised cost, the Group first assesses individually whether objective

evidence of impairment exists individually for financial assets that are individually significant, or collectively for financial assets that are not individually significant. If the Group determines that no objective evidence of impairment exists for an individually assessed financial asset, whether significant or not, it includes the asset in a group of financial assets with similar credit risk characteristics and collectively assesses them for impairment. Assets that are individually assessed for impairment and for which an impairment loss is, or continues to be recognised are not included in a collective assessment of impairment.

If there is objective evidence that an impairment loss on financial assets carried at amortised cost has incurred, the amount of the loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows discounted at the financial asset’s original effective interest rate. If a loan has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate. The carrying amount of the asset is reduced through the use of an allowance account. The impairment loss is recognised in the profit or loss.

When the assets become uncollectible, the carrying amount of impaired financial asset is reduced directly or if an amount was charged to the allowance account, the amounts charged to the allowance account are written off against the carrying value of the financial asset.

To determine whether there is objective evidence that an impairment loss on financial assets has incurred, the Group considers factors such as the probability of insolvency or significant financial difficulties of the debtor and default or significant delay in payments.

Reversal of impairment If in a subsequent period, the amount of the impairment loss decreases and the decrease can be related

objectively to an event occurring after the impairment was recognised, the previously recognised impairment loss is reversed to the extent that the carrying value of the asset does not exceed its amortised cost at the reversal date. The amount of reversal is recognised in profit or loss.

ii) Financial assets carried at cost If there is objective evidence (such as significant adverse changes in the business environment where

the issuer operates, probability of insolvency or significant financial difficulties of the issuer) that an impairment loss on financial assets carried at costs has been incurred, the amount of the loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows discounted at the current market rate of return for a similar financial asset.

Reversal of impairment Such impairment losses are not reversed in subsequent periods.




2.22 IMPAIRMENT OF ASSETS (CONT’D)

(b) FINANCIAL ASSETS (CONT’D) iii) Available-for-sale financial assets In the case of equity investments classified as available-for-sale, objective evidence of impairment

include (i) significant financial difficulty of the issuer or obligor, (ii) information about significant changes with an adverse effect that have taken place in the technological, market, economic or legal environment in which the issuer operates, and indicates that the cost of the investment in equity instrument may not be recovered; and (iii) a significant or prolonged decline in the fair value of the investment below its costs. ‘Significant’ is to be evaluated against the original cost of the investment and ‘prolonged’ against the period in which the fair value has been below its original cost.

If an available-for-sale financial asset is impaired, an amount comprising the difference between its

acquisition cost (net of any principal repayment and amortisation) and its current fair value, less any impairment loss previously recognised in profit or loss is transferred from other comprehensive income and recognised in profit or loss.

In the case of debt instruments classified as available-for-sale, impairment is assessed based on

the same criteria as financial assets carried at amortised cost. However, the amount recorded for impairment is the cumulative loss measured as the difference between the amortised cost and the current fair value, less any impairment loss on that investment previously recognised in profit or loss. Future interest income continues to be accrued based on the reduced carrying amount of the asset and is accrued using the rate of interest used to discount the future cash flows for the purpose of measuring the impairment loss. The interest income is recorded as part of finance income.

Reversal of impairment Reversals of impairment losses in respect of equity instruments are not recognised in profit or

loss; increase in their fair value after impairment are recognised directly in other comprehensive income.

For debt instrument, if, in a subsequent year, the fair value of a debt instrument increases and the increases can be objectively related to an event occurring after the impairment loss was recognised in profit or loss, the impairment loss is reversed in profit or loss.

2.23 INTEREST-BEARING LOANS AND BORROWINGS

All loans and borrowings are initially recognised at the fair value of the consideration received less directly attributable transaction costs.

After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost using the effective interest method.

Gains and losses are recognised in profit or loss when the liabilities are derecognised, and through the amortisation process.




2.24 BORROWING COSTS

Borrowing costs are capitalised as part of the cost of a qualifying asset if they are directly attributable to the acquisition, construction or production of that asset. Capitalisation of borrowing costs commences when the activities to prepare the asset for its intended use or sale are in progress and the expenditures and borrowing costs are being incurred. Borrowing costs are capitalised until the assets are substantially completed for their intended use or sale. All other borrowing costs are expensed in the period they occur. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds.

2.25 TRADE AND OTHER PAYABLES

Trade and other payables are recognised inititally at fair value plus directly attributable transaction costs.

After initial recognition, trade and other payables are subsequently measured at amortised cost using the effective interest rate method. Gains and losses are recognised in profit or loss when the liabilities are derecognised, and through the amortisation process.

2.26 PROVISIONS

Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of economic resources will be required to settle the obligation and the amount of obligation can be estimated reliably.

Provisions are reviewed at the end of each reporting period and adjusted to reflect the current best estimate. If it is no longer probable that an outflow of economic resources will be required to settle the obligation, the provision is reversed.

If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, where appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognised as finance costs.




2.27 SHARE-BASED PAYMENT TRANSACTIONS

(a) PHANTOM SHARE PLAN Under the Phantom Share Plan (PSP), Group Executives who have attained the age of twenty-one (21) years

and who hold the rank of manager and above or such rank as may be designated from time to time, shall be eligible to participate in the Plan. Grantees are granted a notional number of Shares (Phantom Shares) calculated by dividing the Non-Cash Bonus with the Value of a Share which is measured initially at fair value at the Grant Date pursuant to the Plan taking into account the terms and conditions upon which the Phantom Shares were granted. No Shares will be allotted and issued and Grantees of the plan are not entitled to, and have no voting rights or interest in the Shares of the Company.

A Grantee shall be entitled to redeem, and shall redeem, one-third (and not less) of each Grant of Phantom

Shares on the First Redemption Date, Second Redemption Date and Final Redemption Date of the Grant Date relating to that Grant. If the Phantom Shares which a Grantee is entitled to redeem on a Redemption Date is not redeemed, such Phantom Shares which are not redeemed shall be carried forward and added to the number of Phantom Shares redeemable on the next Redemption Date. Until the liability is settled, it is remeasured at each reporting date and fair value is expensed over the period till vesting with recognition of a corresponding liability. Any Phantom Shares relating to a Grant which are not redeemed on the Final Redemption Date shall be forfeited and the Grantee shall have no claim whatsoever against the Group in respect of the Phantom Shares so forfeited.

Upon redemption, the Group shall pay to the Grantee an amount in cash equal to the Value of the Share on the relevant Redemption Date which is based on the volume-weighted average price of a Share of its share listed on the Singapore Exchange Securities Trading Limited (SGX-ST) over the five (5) immediately preceding Trading Days on the Redemption Date, provided always that the Group shall not pay, in respect of each redemption more than three times the Value of a Share or less than 80 per cent of the Value of the Share on the Grant Date of that Phantom Share which is the subject of redemption. Details of outstanding Phantom Shares granted and not redeemed are disclosed in note 7.

(b) A SUBSIDIARY IN AUSTRALIA HAS PROVIDED SHARE-BASED COMPENSATION BENEFITS TO ITS DIRECTORS AND COMPANY SECRETARY

When the subsidiary issues share options for the provision of services received, an expense is recognised in profit or loss for the cost of the options, with a corresponding increase recognised in equity in the share option reserve, over the vesting period of the options. Where the options issued vest immediately upon grant (and hence there is no vesting period), the expense and corresponding increase in equity are recognised immediately.

Cost is measured with reference to the fair value of the options issued at the date of grant. In valuing options, no account is taken of any performance conditions, other than conditions linked to the price of the share of the subsidiary (market conditions), if applicable. At the end of each reporting period, the subsidiary revises its estimate of the number of options that are expected to become vested. The expense recognised each period takes into account the most recent estimate.




2.27 SHARE-BASED PAYMENT TRANSACTIONS (CONT’D)

(b) A SUBSIDIARY IN AUSTRALIA HAS PROVIDED SHARE-BASED COMPENSATION BENEFITS TO ITS DIRECTORS AND COMPANY SECRETARY (CONT’D)Upon the exercise of options, the balance of the share option reserve relating to those options is transferred to share capital.

The market value of shares issued to certain directors as a component of remuneration for no cash consideration is recognised as an expense, with a corresponding increase in equity when these directors become entitled to the shares.

2.28 EMPLOYEE BENEFITS

(a) DEFINED CONTRIBUTION PLAN The Group participates in the national pension schemes as defined by the laws of the countries in which it has

operations. In particular, the Singapore companies in the Group make contributions to the Central Provident Fund Scheme in Singapore, a defined contribution pension scheme. Contributions to defined contribution pension schemes are recognised as an expense in the period in which the related service is performed.

(b) EMPLOYEE LEAVE ENTITLEMENT Employee entitlements to annual leave are recognised as a liability when they accrue to employees. The estimated liability for leave is recognised for services rendered by employees up to the end of the reporting period.

(c) SEVERANCE BENEFITS The subsidiaries in Indonesia operate a partly funded, Severance Benefits Scheme (“the Scheme”) for their

eligible employees. The subsidiaries’ obligation under the Scheme, calculated using the Projected Unit Credit Method, is determined based on actuarial computations by independent actuaries, through which the amount of benefits that employees have earned in return for their service in the current and prior years is estimated. That benefit is discounted in order to determine its present value.

Actuarial gains and losses are recognised as income or expense over the expected average remaining working lives of eligible employees when the cumulative unrecognised actuarial gains or losses for the Scheme exceed 10% of the present value of the defined benefit obligation. Past service costs are recognised immediately to the extent that the benefits are already vested, and otherwise are amortised on a straight-line basis over the average period until the amended benefits become vested.

The amount recognised in the balance sheet represents the present value of the defined benefit obligations adjusted for unrecognised actuarial gains and losses and unrecognised past service cost. Any asset resulting from this calculation is limited to the net total of any unrecognised actuarial losses and past service cost.

(d) TERMINATION BENEFITSTermination benefits payable in cases of termination of employment within the framework of a restructuring are recognised as a liability and are expensed or charged against provision when there is a detailed formal plan for the termination and it is without possibility of withdrawal.




2.29 LEASES

The determination of whether an arrangement is, or contains a lease is based on the substance of the arrangement at inception date: whether fulfillment of the arrangement is dependent on the use of a specific asset or assets or the arrangement conveys a right to use the asset. For arrangements entered into prior to 1 January 2005, the date of inception is deemed to be 1 January 2005 in accordance with the transitional requirements of INT FRS 104.

(a) WHERE THE GROUP IS THE LESSEE Leases where the lessor effectively retains substantially all the risks and benefits of ownership of the leased

item are classified as operating leases. Operating lease payments (net of any incentives received from the lessor) are recognised as an expense in profit or loss on a straight-line basis over the lease term. Contingent rents are recognised as an expense in profit or loss in the financial year in which they are incurred.

Profit or loss on sale and leaseback transactions which constitute operating leases are recognised immediately in profit or loss when such sale and leaseback transactions are established at fair value. If the sale price is below fair value, any profit or loss shall be recognised immediately except that, if the loss is compensated for by future lease payments at below market price, it shall be deferred and amortised in proportion to the lease payments over the period for which the asset is expected to be used. If the sale price is above fair value, the excess over fair value shall be deferred and amortised over the period for which the asset is expected to be used.

(b) WHERE THE GROUP IS THE LESSOR Assets leased out under operating leases are included in property, plant and equipment, investment

properties and completed development properties for sale.

Rental income from operating leases (net of any incentives given to lessees) is recognised in profit or loss on a straight-line basis over the lease term.

Initial direct costs incurred by the Group in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised as an expense in profit or loss over the lease term on the same basis as the lease income.

Contingent rents are recognised as income in profit or loss in the financial year in which they are earned.

(c) WHERE THE GROUP IS THE LESSOR FOR SUB-LEASE AGREEMENT Rental income from operating leases (net of any incentives given to lessees) is recognised in profit or loss on

a straight-line-basis over the lease term.

Contingent rents are recognised as income in profit or loss in the financial year in which they are earned.




2.30 INCOME RECOGNITION

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured. Revenue is measured at the fair value of consideration received or recoverable, excluding discounts, rebates, and sales taxes or duty.

Interest income is recognised as interest accrues (using the effective interest method) unless collectibility is in doubt.

Revenue from sale and delivery of refined tin metal and by-products is recognised upon transfer of significant risks and rewards of ownership to the buyer. Revenue is not recognised to the extent where there are significant uncertainties regarding recovery of the consideration due, associated costs or the possible return of goods.

Revenue from tin warrant and other service charges are recognised upon performance of services.

Room income as well as management fee are recognised on an accrual basis.

Food and beverage income is recognised upon sale.

Rental income is accounted for on a straight-line basis over the lease terms. The aggregate costs of incentives provided to lessees are recognised as a reduction of rental income over the lease term on a straight-line basis.

Profits from sale of completed properties and marketable securities are recognised upon conclusion of the contract for sale.

Dividend income from investments is recognised when the Group’s right to receive payment is established.

Revenue from sale of properties in the course of developmentWhere property is under development and agreement has been reached to sell such property when construction is complete, the Directors consider whether the contract comprises:

– A contract to construct a property; or– A contract for sale of a completed property.

When a contract is judged to be for construction of a property, revenue is recognised using the percentage of completion method as construction progresses.

Where the contract is judged to be for the sale of completed property, revenue is recognised when the significant risks and rewards of ownership of the real estate have been transferred to the buyer. If, however, the legal terms of the contract are such that the construction represents continuous transfer of work in progress to the purchaser, the percentage of completion of revenue recognition method is applied and revenue is recognised as work progresses. In such situations, the percentage of work complete is measured based on the costs incurred up until the end of the reporting period as a proportion of total costs expected to be incurred.




2.31 TAXES

(a) CURRENT INCOME TAX Current income tax assets and liabilities for the current and prior periods are measured at the amount

expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted by the end of the reporting period, in the countries where the Group operates and generates taxable income.

Current income taxes are recognised in profit or loss except to the extent that the tax relates to items recognised outside profit or loss, either in other comprehensive income or directly in equity. Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate.

(b) DEFERRED TAX Deferred tax is provided using the liability method on temporary differences at the end of the reporting

period between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.

Deferred tax liabilities are recognised for all temporary differences, except:

• Where the deferred tax liability arises from the initial recognition of goodwill or of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; and

• In respect of taxable temporary differences associated with investments in subsidiaries, associates and interests in joint ventures, where the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future.

Deferred tax assets are recognised for all deductible temporary differences, carry forward of unused tax credits and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences and the carry forward of unused tax credits and unused tax losses can be utilised except:

• Where the deferred tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; and

• In respect of deductible temporary differences associated with investments in subsidiaries, associates and interests in joint ventures, deferred tax assets are recognised only to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable profit will be available against which the temporary differences can be utilised.




2.31 TAXES (CONT’D)

(b) DEFERRED TAX (CONT’D) The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to

the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised. Unrecognised deferred tax assets are reassessed at the end of each reporting period and are recognised to the extent that it has become probable that future taxable profit will allow the deferred tax asset to be recovered.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the end of the reporting period.

Deferred tax relating to items recognised outside profit or loss is recognised outside profit or loss. Deferred tax items are recognised in correlation to the underlying transaction either in other comprehensive income or directly in equity and deferred tax arising from a business combination is adjusted against goodwill on acquisition.

Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority.

(c) GOODS AND SERVICES TAX Revenues, expenses and assets are recognised net of the amount of goods and services tax except:

• Where the goods and services tax incurred on a purchase of assets or services is not recoverable from the taxation authority, in which case the goods and services tax is recognised as part of the cost of acquisition of the asset or as part of the expense item as applicable; and

• Receivables and payables that are stated with the amount of goods and services tax included.

The net amount of goods and services tax recoverable from, or payable to, the taxation authority is included as part of receivables or payables in the balance sheet.

2.32 DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING

The Group uses derivative financial instruments such as forward currency contracts, forward tin sales contracts and interest rate swap agreements to hedge its risks associated with foreign currency, tin price and interest rate fluctuations. It is not the Group’s policy to trade in derivative financial instruments. Details of the Group’s financial risk management objectives and policies are set out separately in note 39 to the financial statements.

These derivative financial instruments are initially recognised at fair value on the date on which the derivative contract is entered into and are subsequently remeasured at fair value. Such derivative financial instruments are carried as assets when the fair value is positive and as liabilities when the fair value is negative. Any gain or loss arising from the changes in fair value on derivative financial instruments that do not qualify for hedge accounting is taken directly to profit or loss.




2.32 DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING (CONT’D)

The fair value of forward currency and forward tin sales contracts are calculated by reference to current forward exchange rates and forward tin price respectively for contracts with similar maturity profiles. The fair value of interest rate swap agreements is determined by reference to market values for similar instruments.

At the inception of a hedge relationship, the Group formally designates and documents the hedge relationship to which the Group wishes to apply hedge accounting and the risk management objective and strategy for undertaking the hedge. The documentation includes identification of the hedging instrument, the hedged item or transaction, the nature of the risk being hedged and how the entity will assess the hedging instrument’s effectiveness in offsetting the exposure to changes in the hedged item’s fair value or cash flows attributable to the hedged risk. Such hedges are expected to be highly effective in achieving offsetting changes in fair value or cash flows and are assessed on an ongoing basis to determine that they actually have been highly effective throughout the financial reporting periods for which they were designated.

Hedges which qualify for hedge accounting are accounted for as follows:

(a) FAIR VALUE HEDGES Fair value hedges are hedges of the Group’s exposure to changes in fair value of a recognised asset or

liability or an unrecognised firm commitment, or an identified portion of such an asset, liability or firm commitment, that is attributable to a particular risk and could affect profit or loss. For fair value hedges, the carrying amount of the hedged item is adjusted for gains and losses attributable to the risk being hedged, the derivative is remeasured at fair value and gains and losses from both are taken to profit or loss.

The Group discontinues fair value hedge accounting if the hedging instrument expires or is sold, terminated or exercised, the hedge no longer qualifies for hedge accounting or the Group revokes the designation.

(b) CASH FLOW HEDGES Cash flow hedges are hedges of the Group’s exposure to variability in cash flows that is attributable to a

particular risk associated with a recognised asset or liability or a highly probable forecast transaction and could affect profit or loss. The portion of the gain or loss on the hedging instrument that is determined to be an effective hedge is recognised directly in other comprehensive income, while the ineffective portion is recognised in profit or loss.

Amounts recognised in other comprehensive income are transferred to profit or loss when the hedged transaction affects profit or loss, such as when hedged financial income or financial expense is recognised or when a forecast sale or purchase occurs. When the hedged item is the cost of a non-financial asset or liability, the amounts recognised in other comprehensive income are transferred to the initial carrying amount of the non-financial asset or liability.

If the forecast transaction is no longer expected to occur, the cumulative gain or loss previously recognised

in equity are transferred to profit or loss. If the hedging instrument expires or is sold, terminated or exercised, or if it’s designation as a hedge is revoked, any cumulative gain or loss previously recognised in other comprehensive income shall remain in equity until the forecast transaction affects profit or loss.




2.32 DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING (CONT’D)

(c) HEDGES OF A NET INVESTMENT Hedges of a net investment in a foreign operation, including a hedge of a monetary item that is accounted

for as part of the net investment, are accounted for in a way similar to cash flow hedges. On disposal of the foreign operation, the cumulative gain or loss previously recognised in other comprehensive income is transferred to profit or loss.

2.33 FINANCIAL GUARANTEES

A financial guarantee contract is a contract that requires the issuer to make specified payments to reimburse the holder for a loss it incurs because a specified debtor fails to make payment when due.

Financial guarantees are initially recognised at fair value, adjusted for transaction costs that are directly attributable to the issuance of the guarantee. Subsequent to initial measurement, financial guarantees are stated at the higher of the initial fair value less cumulative amortisation and the amount that would be recognised if they were accounted for as contingent liabilities. The amortisation of the financial guarantee contracts to the profit or loss is based on the period of the guarantee.

2.34 DERECOGNITION OF FINANCIAL ASSETS AND LIABILITIES

(a) FINANCIAL ASSETS A financial asset (or, where applicable a part of a financial asset or part of a group of similar financial assets)

is derecognised where:

(i) The contractual right to receive cash flows from the asset has expired; (ii) The Group retains the contractual rights to receive cash flows from the asset, but has assumed an obligation

to pay them in full without material delay to a third party under a ‘pass-through’ arrangement; or (iii) The Group has transferred its rights to receive cash flows from the asset and either has transferred

substantially all the risks and rewards of the asset, or has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.

Where the Group has transferred its rights to receive cash flows from an asset and has neither transferred nor retained substantially all the risks and rewards of the asset nor transferred control of the asset, the asset is recognised to the extent of the Group’s continuing involvement in the asset. Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original carrying amount of the asset and the maximum amount of consideration that the Group could be required to repay. Where continuing involvement takes the form of a written and/or purchased option on the transferred asset, the extent of the Group’s continuing involvement is the amount of the transferred asset that the Group may repurchase, except that in the case of a written put option on an asset measured at fair value, the extent of the Group’s continuing involvement is limited to the lower of the fair value of the transferred asset and the option exercise price.

On derecognition of a financial asset in its entirety, the difference between the carrying amount and the sum of the consideration received and any cumulative gain or loss that has been recognised in other comprehensive income is recognised in profit or loss.




2.34 DERECOGNITION OF FINANCIAL ASSETS AND LIABILITIES (CONT’D)

(b) FINANCIAL LIABILITIES A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expired.

When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as a derecognition of the original liability and the recognition of a new liability, and the difference in the respective carrying amounts is recognised in profit or loss.

2.35 GOVERNMENT GRANTS

Government grants are recognised at their fair value where there is reasonable assurance that the grant will be received and all attaching conditions will be complied with. Where the grant relates to an asset, the fair value is recognised as deferred capital grant on the balance sheet and is amortised to profit or loss over the expected useful life of the relevant asset by equal annual instalments.

Government grant shall be recognised in profit or loss on a systematic basis over the periods in which the entity recognises as expenses the related costs for which the grants are intended to compensate. Grants related to income may be presented as a credit in profit or loss, either separately or under a general heading such as “Other income”. Alternatively, they are deducted in reporting the related expenses.

2.36 CONTINGENCIES

A contingent liability is:

(a) a possible obligation that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Group; or

(b) a present obligation that arises from past events but is not recognised because:

(i) It is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation; or

(ii) The amount of the obligation cannot be measured with sufficient reliability.

A contingent asset is a possible asset that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Group.

Contingent liabilities and assets are not recognised on the balance sheet of the Group, except for contingent liabilities assumed in a business combination that are present obligations and for which the fair values can be reliably determined.




2.37 RELATED PARTIES A party is considered to be related to the Group if:

(a) The party, directly or indirectly through one or more intermediaries;

(i) controls, is controlled by, or is under common control with, the Group;

(ii) has an interest in the Group that gives it significant influence over the Group; or

(iii) has joint control over the Group;

(b) The party is an associate;

(c) The party is a joint-controlled entity;

(d) The party is a member of the key management personnel of the Group or its parent;

(e) The party is a close member of the family of any individual referred to in (a) or (d); or

(f) The party is an entity that is controlled, jointly controlled or significantly influence by or for which significant voting power in such entity resides with, directly or indirectly, any individual referred to in (d) or (e); or

(g) The party is a post-employment benefit plan for the benefit of the employees of the Group, or of any entity that is a related party of the Group.

2.38 SEGMENT REPORTING

For management purposes, the Group is organised into operating segments based on their products and services which are independently managed by the respective segment chief executives responsible for the performance of the respective segments under their charge. The segment chief executives report directly to the chief operating decision maker of the Company who regularly reviews the segment results in order to allocate resources to the segments and to assess the segment performance. Additional disclosures on each of these segments are shown in note 44, including the factors used to identify the reportable segments and the measurement basis of segment information.

3 DIVIDEND INCoME Group

2010 2009

$’000 $’000

Dividend from:– Available-for-sale investment securities 5,081 4,261– Held-for-trading marketable securities 1 112

5,082 4,373



4 INTEREST INCoME

Group

2010 2009

$’000 $’000

Interest income from:– Held-for-trading marketable securities – 35– Deposits 1,247 2,021– Receivables 2,288 2,463– Others 46 1

3,581 4,520

5 oTHER INCoME/(LoSS)

Group

2010 2009

$’000 $’000

Amortisation of deferred income 3,625 3,625Share of joint-operation loss (1,139) (2,463) Other operating income 3,779 3,272Fair value changes in financial assets:– Held-for-trading marketable securities 1 (1,038) – Derivatives (239) (340)– Ineffective portion of derivatives designated as hedging instruments in cash flow

hedge 1,569 (1,451)– Conversion option of convertible bonds – 9,251

7,596 10,856



6 NET EXCEPTIoNAL GAINS

Group

2010 2009

$’000 $’000

Fair value changes in investment properties (note 14) 101,925 107,390 Impairment of investment in associates (41,146) (168)Impairment of mining assets (note 22 (c)) (23,884) –Impairment of plant and equipment (note 13(c)) (11,179) (335)Impairment of goodwill (note 15) (13,188) (2,016)Provision for onerous contracts (5,927) –Write back of unutilised upgrading provisions/(Development cost written off) 3,278 (5,852)Revaluation deficit of properties (1,279) (685)Net gain on disposal/Liquidation of subsidiaries and associates 1,426 1,458(Impairment)/Net gain on disposal of investment securities (404) 29,671Net gain on disposal of investment properties 963 7,679

10,585 137,142

7 EMPLoYEE BENEFITS EXPENSE

Group

2010 2009

$’000 $’000

Wages, salaries and other allowances: 93,794 75,372Grant from jobs credit scheme (127) (285)Severance benefit (note 33) 3,598 1,895Defined contribution plans 3,176 2,710Share-based payments (239) (98)

100,202 79,594Less: Employee benefits expense capitalised in: – Investment properties undergoing development (note 14(c)) (36) – – Development properties for sale (note 24) (8) –

100,158 79,594

The Jobs Credit Scheme (“Scheme”) was announced by the Singapore Finance Minister on 22 January 2009 to encourage businesses to preserve jobs in the downturn. The Scheme has ceased with the final payment in June 2010. The Job credit grant is recognised in the month of receipt.



7 EMPLoYEE BENEFITS EXPENSE (CoNT’D)

Phantom Share Plan (“PSP”)

Under the PSP, the share-based payments are calculated by dividing the Non-Cash Bonus with the Value of a Share which is measured initially at fair value at the Grant Date and remeasured at each reporting date, taking into account the terms and conditions upon which the Phantom Shares were granted. Phantom Shares can only be settled in cash. No Shares will be allotted and issued and participants of the plan are not entitled to, and have no voting rights or interest in the Shares of the Company. The contractual life of the Phantom Shares is 3 years. If the Phantom Shares which a Grantee is entitled to redeem on a Redemption Date are not redeemed, such Phantom Shares which are not redeemed shall be carried forward and added to the number of Phantom Shares redeemable on the next Redemption Date. Any Phantom Shares relating to a Grant which are not redeemed on the Final Redemption Date shall be forfeited and the Grantee shall have no claim whatsoever against the Group in respect of the Phantom Shares so forfeited.

The number of Phantom Shares granted is as follows:

Grant DateBalance at

1.1.2010No. of Phantom

shares RedeemedNo. of Phantom

shares LapsedBalance at

31.12.2010Redemption

Price/Fair ValueRedemption

Date

15.7.2008 37,504 (16,665) (20,839) – $4.02 15.7.201015.7.2008 37,504 – (24,999) 12,505 $4.09 15.7.2011* * Final redemption date 15.7.2011

Share-based payments (adjustment)/expense recognised in profit or loss comprise:

(a) An adjustment of $239,000 (2009: expense of $37,000) under the PSP. The carrying amount of liability recognised in the Group’s balance sheet relating to such Phantom Shares at 31 December 2010 is $146,000 (2009: $453,000).

(b) An adjustment of $135,000 was made in 2009 for the equity-settled share options of $250,000 that was granted by a partly-owned subsidiary to its directors and company secretary in 2008 (note 29(d)). The expiry date of the share options is on 31 December 2013.



8 FINANCE CoSTS

Group

2010 2009

$’000 $’000

Interest on bank loans 15,486 20,087Interest cost from interest rate swap 2,178 2,340Interest rate swap closed out costs 3,198 990Fees incurred for credit facilities 3,299 3,159Discount adjustment on provision (note 30) 52 48

24,213 26,624Less: Interest expense capitalised in: – Investment properties undergoing development (note 14(d)) – (1,364) – Development properties for sale (note 24) (332) –

23,881 25,260

9 oTHER EXPENSES

Group

2010 2009

$’000 $’000

Costs of development properties sold and incidental costs 3,634 8,545Upkeep and maintenance expenses of properties 17,172 14,333Accommodation, food and beverage expenses 26,390 24,340Operating lease expenses 49,359 44,772Property related taxes 7,125 5,446Marketing and distribution expenses 14,885 14,280Administrative expenses 28,988 12,037Deferred exploration and evaluation expenditure written off (note 15(b)(ii)) 1,140 621Impairment of doubtful receivables 1,546 775Bad debts written off 20 435Exchange (gains)/losses (2,676) 455Other expenses 9,968 10,225

157,551 136,264



10 PRoFIT BEFoRE TAX

Profit before tax is stated after charging/(crediting) the following:Group

2010 2009

$’000 $’000

Non-audit fees paid to– Auditors of the Company 257 514– Other auditors 701 416Loss/(Gain) on disposal of property, plant and equipment 4 (2,175)Property, plant and equipment written off 195 135

11 INCoME TAX EXPENSE

(a) Major components of income tax expense

The major components of income tax expense for the years ended 31 December 2010 and 2009 are:

Group

2010 2009

$’000 $’000

(i) Income statement:Current income tax– Current income taxation 18,354 13,111– (Over)/Underprovision in respect of prior years (1,003) 7,256 – Benefits from previously unrecognised tax losses – (151)

17,351 20,216

Deferred tax– Movement in temporary differences 2,000 8,195– Reduction in tax rate – (2,360)– Overprovision in respect of prior years (2,196) (2,291)

(196) 3,544

Income tax expense recognised in profit or loss 17,155 23,760

(ii) Deferred tax related to other comprehensive income:– Net change in revaluation surplus of property, plant and equipment 7,084 6,046– Net change in AFS reserve for available-for-sale investment securities – 414 – Net change in hedging reserve for derivatives designated as hedging

instruments in cash flow hedges 1,270 (805) – Reduction in tax rate – (420)

8,354 5,235



11 INCoME TAX EXPENSE (CoNT’D)

(b) Relationship between tax expense and accounting profit

The reconciliation between tax expense and the product of accounting profit multiplied by the applicable statutory tax rate for the years ended 31 December 2010 and 2009 are as follows:

Group

2010 2009

$’000 $’000

(restated)

Profit before tax 23,872 187,368Less: Share of results of equity-accounted associates and joint ventures * (1,778) (27,621)

22,094 159,747

Tax at statutory rate of 17% (2009: 17%) 3,756 27,157Effect of different tax rates in other countries (6,889) (533)(Over)/Underprovision in respect of prior years (1,003) 7,256 Overprovision of deferred tax in respect of prior years (2,196) (2,291)Expenses/Losses not claimable 31,112 15,283Income not subject to tax (15,106) (22,295) Effect of reduction in tax rate – (2,360)Deferred tax asset not recognised 6,575 829Utilisation of previously unrecognised tax losses – (151) Others 906 865

17,155 23,760

* These are presented net of tax in profit or loss.

Taxation for other jurisdictions is calculated at the rates prevailing in the respective jurisdictions. During the current financial year, the income tax rate applicable to foreign subsidiaries are as follows:

2010 2009

Malaysia 25% 25%Indonesia 25% and 30% 28% and 30%Australia 30% 30%

Certain subsidiaries of Malaysia Smelting Corporation Berhad (“MSC”) Group are subjected to ongoing income tax audits and examination by the income tax authorities. The income tax expense for the current year does not include any potential tax adjustments which may arise upon the outcome of such examinations.

12 EARNINGS PER SHARE (CENTS)

The calculations of basic and diluted earnings per share are based on the profit attributable to owners of the parent of $28,169,000 (2009: $159,282,000) and on 325,897,000 ordinary shares in issue.

There are no potential dilutive shares of the Company.



13 PRoPERTY, PLANT AND EqUIPMENTPlant

Equipment CapitalFreehold Leasehold Vehicles Work-In- Mine

Land Land Buildings Furniture Progress Restoration Total$’000 $’000 $’000 $’000 $’000 $’000 $’000

GROUP At valuation

At cost or valuationAt 1 January 2010 57,814 59,738 138,074 225,304 1,931 770 483,631Additions – – 275 13,754 4,793 197 19,019Disposals – – – (2,862) – – (2,862)Transfer – – – 797 (797) – –Revaluation (deficit)/surplus, net (8,101) 31,513 15,640 – – – 39,052Elimination of accumulated

depreciation on revaluation – (736) (6,103) – – – (6,839)Attributable to disposal group

classified as held for sale (note 23) (21) – – (18) – – (39)

Exchange adjustment 2,496 (24) 2,161 (4,015) (732) 18 (96)At 31 December 2010 52,188 90,491 150,047 232,960 5,195 985 531,866

Accumulated depreciation and impairment

At 1 January 2010 – – – 169,971 435 192 170,598Depreciation charge for the year – 743 6,010 15,558 – 338 22,649Impairment charge (c) – – – 10,324 855 – 11,179Disposals – – – (2,573) – – (2,573)Elimination of accumulated

depreciation on revaluation – (736) (6,103) – – – (6,839)Attributable to disposal group

classified as held for sale (note 23) – – – (15) – – (15)

Exchange adjustment – (7) 93 (3,661) (482) 1 (4,056)At 31 December 2010 – – – 189,604 808 531 190,943

Net Carrying Amount

at 31 December 2010 52,188 90,491 150,047 43,356 4,387 454 340,923



13 PRoPERTY, PLANT AND EqUIPMENT (CoNT’D)Plant

Equipment CapitalFreehold Leasehold Vehicles Work-In- Mine

Land Land Buildings Furniture Progress Restoration Total

$’000 $’000 $’000 $’000 $’000 $’000 $’000

GROUP At valuation

At cost or valuationAt 1 January 2009 61,759 94,957 83,164 232,096 3,715 – 475,691Additions – 46 – 5,590 196 769 6,601Disposals – – – (15,707) – – (15,707)Deemed disposal of a subsidiary

(note 16(b)) – – – (9,648) – – (9,648)Acquisition of a subsidiary

(note 16(b)) – – – 10 – – 10Transfer – – – 1,927 (1,927) – –Revaluation (deficit)/surplus, net (17,875) (34,095) 50,890 – – – (1,080)Elimination of accumulated

depreciation on revaluation – (1,160) (3,819) – – – (4,979)Exchange adjustment 13,930 (10) 7,839 11,036 (53) 1 32,743At 31 December 2009 57,814 59,738 138,074 225,304 1,931 770 483,631

Accumulated depreciation and impairment

At 1 January 2009 – – – 165,203 322 – 165,525Depreciation charge for the year – 1,161 3,685 13,196 – 192 18,234Impairment charge (c) – – – 205 130 – 335Disposals – – – (14,601) – – (14,601)Acquisition of a subsidiary

(note 16(b)) – – – 1 – – 1Deemed disposal of a subsidiary

(note 16(b)) – – – (414) – – (414)Elimination of accumulated

depreciation on revaluation – (1,160) (3,819) – – – (4,979)Exchange adjustment – (1) 134 6,381 (17) – 6,497At 31 December 2009 – – – 169,971 435 192 170,598

Net Carrying Amount

At 31 December 2009 57,814 59,738 138,074 55,333 1,496 578 313,033



13 PRoPERTY, PLANT AND EqUIPMENT (CoNT’D)

Building

PlantEquipment

VehiclesFurniture Total

$’000 $’000 $’000

At valuation COMPANYAt cost or valuationAt 1 January 2010 160 355 515Additions – 5 5Revaluation surplus 24 – 24Elimination of accumulated depreciation on revaluation (12) – (12)Exchange adjustment 4 7 11At 31 December 2010 176 367 543

Accumulated depreciationAt 1 January 2010 – 145 145Depreciation charge for the year 12 33 45Elimination of accumulated depreciation on revaluation (12) – (12)Exchange adjustment – 4 4At 31 December 2010 – 182 182

Net Carrying Amount

at 31 December 2010 176 185 361

COMPANYAt cost or valuationAt 1 January 2009 174 358 532Additions – 153 153Disposals – (152) (152)Elimination of accumulated depreciation on revaluation (12) – (12)Exchange adjustment (2) (4) (6)At 31 December 2009 160 355 515

Accumulated depreciationAt 1 January 2009 – 237 237Depreciation charge for the year 12 36 48Disposals – (126) (126)Elimination of accumulated depreciation on revaluation (12) – (12)Exchange adjustment – (2) (2)At 31 December 2009 – 145 145

Net Carrying Amount

At 31 December 2009 160 210 370




(a) Land and buildings are stated at fair value, which has been determined based on valuations at or approximate the end of the reporting period. The properties are at valuations performed by accredited independent valuer with recent experience in the location and category of the properties being valued. The valuations are based on the following methods considering the nature of the property and/or the lack of comparable data:

(i) The comparison method that considers the sales of similar properties that have been transacted in the open market with adjustments made for differences in factors that affect value.

(ii) The depreciated replacement cost method that is based on an estimate of the current market value of the land, plus the current gross replacement of improvements, less allowances for physical deterioration, obsolescence and optimisation.

(iii) The discounted cash flow method that projects occupancy, average room rate and indicative cash flow, based on knowledge and understanding of the market and experience of the operating performance of properties of similar type and standard.

(b) If the land and buildings stated at valuation were included in the financial statements using the cost model, the net carrying amounts would be:

Group Company

2010 2009 2010 2009

$’000 $’000 $’000 $’000

Freehold land at 31 December– Cost and net carrying amount 32,554 31,274 – –

Leasehold land at 31 December– Cost 54,622 54,638 – –– Accumulated depreciation and impairment (4,831) (4,200) – –– Net carrying amount 49,791 50,438 – –

Buildings at 31 December– Cost 132,295 129,560 11 11– Accumulated depreciation and impairment (50,592) (43,705) (10) (10) – Net carrying amount 81,703 85,855 1 1

(c) During the financial year, an independent professional valuer was engaged to assess the recoverable values of certain hotel leases. Based on this valuation and management assessment of other hotel assets, the carrying values of plant and equipment in the hospitality operations were written down by $10,324,000 based on its value in use and pre-tax discount rate used of 20% per annum, as appropriate.

The impairment charge of $855,000 (2009: $130,000) was related to the write down of plant and equipment in resource operations after comparing the market value for a similar secondhand dredge (note 6).




(d) Details of properties included in Property, plant and equipment as at 31 December 2010 are as follows:

Description of Properties Tenure

UnexpiredLease Term

(year) Existing Use Professional Valuers Valuation Method

SingaporeRendezvous Hotel with 298

rooms at No. 9 Bras Basah Road

Leasehold 82 Hotel DTZ Debenham Tie Leung (SEA) Pte Ltd

Discounted cash flow method

AustraliaRendezvous Observation City

Hotel, Perth with 333 rooms at No. 148 The Esplanade, Scarborough, WA 6019

Freehold Hotel Jones Lang LaSalle Hotels (NSW) Pty

Limited


The Marque Hotel, Perth with 103 rooms at 24 Mount Street, Perth, WA 6000

Freehold Hotel HVS Discounted cash flow method

No. 255 Ann Street, Anzac Square, Brisbane, QLD 4000:

(i) Restaurant at Lot 1 Freehold Retail Colliers International

Consultancy and Valuation Pty

Limited


(ii) Manager unit at Lot 7 Freehold Residential Colliers International


Limited

Comparison method

Restaurant at Lot 177, Lullfitz Drive, Cable Beach, Broome, WA 6726

Freehold Retail Bottswee Pty Ltd/as Kimberley Valuers – Opteon


Central facilities at Lot 145 and 146 Port Douglas Road, QLD 4877

Freehold Retail and office

Colliers International


Limited

Comparison method




(d) Details of properties included in Property, plant and equipment as at 31 December 2010 are as follows (cont’d):


UnexpiredLease Term


MalaysiaWavertree Bungalow at Jalan

Lady Maxwell, 49000 Bukit Fraser, Pahang

Leasehold 13 Holiday bungalow

C H Williams Talhar & Wong

sdn Bhd

Comparison method

No. 27 Jalan Pantai, 12000 Butterworth:

(i) Offices and factory buildings at Lot 142 – 187 and 362

Freehold Office and factory

Knight Frank (Ooi & Zaharin

sdn Bhd)

Depreciated replacement cost

method

(ii) Carpark shed at Lot 268 Leasehold 18 Carpark shed


sdn Bhd)


method

(iii) Seabed leases with main wharf at PT 686

Leasehold 56 Main wharf Knight Frank (Ooi & Zaharin

sdn Bhd)


method

Offices at unit No. B-15-6, B-15-7, B-15-11, Megan Avenue II, 12 Jalan Yap Kwan Seng, 50450 Kuala Lumpur

Freehold Office Knight Frank (Ooi & Zaharin

sdn Bhd)

Comparison method

80 units of flats at Taman Desa Palma, Alma, 14000 Bukit Mertajam

Freehold Residential Knight Frank (Ooi & Zaharin

sdn Bhd)

Comparison method

Land at Lot 1203, Mukim 12, Daerah Seberang Perai Tengah

Freehold Agricultural Knight Frank (Ooi & Zaharin

sdn Bhd)

Comparison method

Mukim Belukar Semang and Mukim Pengkalan Hulu, Daerah Hulu Perak:

(i) Land and buildings at Lot 344 and 348

Freehold Dam and residential


sdn Bhd)


method

(ii) Land at Lot 1886 Freehold Agricultural Knight Frank (Ooi & Zaharin

sdn Bhd)


method




(d) Details of properties included in Property, plant and equipment as at 31 December 2010 are as follows (cont’d):


UnexpiredLease Term


(iii) Ø Land and buildings at Lot 1868, 2071, 2163, 879, 880, 6489

Leasehold up to 52 Dam, residential and power

station


sdn Bhd)


method

IndonesiaOffices, factory buildings and

houses at Bangka IslandMining

lease3 Office,

factory and residential

PT Ujatek Baru


method

Land and buildings at Bangka Island

Leasehold (land rights)

9 to 24 Office and warehouse

PT Ujatek Baru


method Ø Application for lease renewal of Lot 2163 which expired in year 2009 has been submitted and awaiting for approval.

14 INVESTMENT PRoPERTIES

Group Company

2010 2009 2010 2009

$’000 $’000 $’000 $’000

Balance sheets:At fair value:Balance as at 1 January 776,877 813,813 106,313 105,424Fair value changes recognised in profit or loss (note 6) 101,925 107,390 5,296 2,995Redevelopment expenditure 2,306 39,493 – –Disposal during the year (28,759) (181,696) – –Reclassified to assets held for sale (56) (1,505) (56) (1,505) Exchange adjustment 1,212 (618) 1,181 (601) Balance as at 31 December 853,505 776,877 112,734 106,313



14 INVESTMENT PRoPERTIES (CoNT’D)

Group

2010 2009

$’000 $’000

Income statement:Rental income from investment properties:– Minimum lease payments 20,643 15,199– Contingent rent based on tenant’s turnover – 5

20,643 15,204

Direct operating expenses (including repairs and maintenance) arising from:– Rental generating properties (6,018) (5,449)– Non-rental generating properties (183) (56)

(6,201) (5,505)

(a) Investment properties are stated at fair value. Valuation of investment properties has been determined based on valuations at or approximate the end of the reporting period. Valuations are performed by accredited independent valuers with recent experience in the location and category of the properties being valued. The valuations are based on the comparison method that considers the sales of similar properties that have been transacted in the open market with adjustments made for differences in factors that affect value.

(b) The land and building at No. 9 Battery Road, Singapore amounting to $362,000,000 (2009: $340,000,000) is mortgaged to secure bank loans. In 2009, 20 residential units at Gallop Green condominium, Singapore amounting to $118,600,000 were mortgaged to secure bank loans. The loan has been repaid and the discharge of mortgage on the mortgaged properties was executed during the financial year (note 31).

(c) During the financial year, employee benefits expense capitalised in investment properties while undergoing redevelopment amount to $36,000 (2009: Nil) (note 7).

(d) In 2009, interest cost of $1,364,000 was capitalised during the redevelopment of the property at No. 9 Battery Road for loan amount of $48,080,000 at interest ranging from 3.7% to 4.0% per annum (note 8).

(e) Details of investment properties as at 31 December 2010 are as follows:


UnexpiredLease Term

(year)

site Area

sq.m.

net Floor Area

sq.m.Existing

UseProfessional

ValuersValuation

Method

Singaporestraits Trading

Building, a 28-storey commercial building at No. 9 Battery Road, singapore

999 years Leasehold

814 to 851 1,340 14,762 Office DTZ Debenham

Tie Leung (SEA) Pte Ltd

Comparison method




(e) Details of investment properties as at 31 December 2010 are as follows (cont’d):


UnexpiredLease Term

(year)

site Area

sq.m.

net Floor Area

sq.m.Existing

UseProfessional

ValuersValuation

Method

Gourmet Gallery, a 3-storey commercial building at No. 9 Bras Basah Road

Leasehold 82 610 1,826 Retail DTZ Debenham


Comparison method

34 residential units at Gallop Green condominium

Freehold – 11,562 Residential DTZ Debenham


Comparison method

6A/6B/8/8A at Cable Road

Freehold 5,972 3,307 (gross)

Residential DTZ Debenham


Comparison method

3 plots of land for residential development at nathan Road, singapore

Freehold 4,548 – Residential DTZ Debenham


Comparison method

Malaysiastraits Trading

Building, a 7-storey commercial building at No. 2 Lebuh Pasar Besar, Kuala Lumpur

999 years Leasehold /

Freehold

872 to 874 2,224 9,996 Office Ravindra Dass Property

Services Sdn Bhd

Comparison method

A parcel of residential land Lot No. 11260, Mukim of Hulu Kinta, District of Kinta, Perak

999 years Leasehold

884 11,255 – Residential C H Williams Talhar &

Wong Sdn Bhd

Comparison method

A parcel of residential land, Lot No. 34612 Jalan Gopeng, Ipoh, Perak

999 years Leasehold

883 12,892 – Residential C H Williams Talhar &

Wong Sdn Bhd

Comparison method






Unexpired Lease Term

(year)

site Area

sq.m.

net Floor Area

sq.m.Existing

UseProfessional

ValuersValuation

Method

Commercial land with a few shophouses, Lot Nos. 1105 to 1110, 2122 and 2123 Town of Seremban, District of Seremban, Negeri sembilan

Freehold 3,826 478 Retail C H Williams Talhar &

Wong Sdn Bhd

Comparison method

Lot Nos. 197 and 199, Section 4 Town of Butterworth, Pulau Pinang

Freehold 7,949 – Retail C H Williams Talhar &

Wong Sdn Bhd

Comparison method

Lot Nos. 2569 and 2626, Section 4 Town of Butterworth, Pulau Pinang

Freehold 6,535 – Carpark C H Williams Talhar &

Wong Sdn Bhd

Comparison method

Lot Nos. 2499, 189, 190 and 270, Section 4 Town of Butterworth, Pulau Pinang; accommodating 6 residential units, a single-storey bungalow with 2 annex buildings, a single-storey club house and 1½ storey squash court and vacant plots

Freehold with two

minor Leasehold

plots

16 and 20 37,200 3,185 Residential/ Retail/

Carpark

C H Williams Talhar &

Wong Sdn Bhd

Comparison method






Unexpired Lease Term

(year)

site Area

sq.m.

net Floor Area

sq.m.Existing

UseProfessional

ValuersValuation

Method

Lot Nos. 195, 2502 and 2570, Section 4 Town of Butterworth, Pulau Pinang; accommodating a 3-storey club house with a guard house, three single-storey bungalows with/without annex building and vacant plots

Freehold 55,928 3,513 Office/ Residential/ Club house/

storage yard/ Car

showroom

C H Williams Talhar &

Wong Sdn Bhd

Comparison method

8 units of 3-storey shophouses, No. 4819 to 4826 Jalan Pantai, Taman Selat, Butterworth, Pulau Pinang

Freehold 1,322 2,883 Commercial C H Williams Talhar &

Wong Sdn Bhd

Comparison method

Investment properties undergoing development as at 31 December 2010 are as follows:

Site Area / Group’sGross Effective

Expected Floor InterestDescription Stage of Date of Area in Professional Valuationof Properties Tenure Completion Completion sq.m. Property Valuers Method

2 plots of land for residential development at Cable Road, singapore

Freehold Under Construction

2011 3,012 / 1,558

(estimated)

100% DTZ Debenham


Comparison method



15 GooDWILL/oTHER INTANGIBLE ASSETS

(a) Goodwill arising on consolidation

Group

2010 2009

$’000 $’000

At costAt 1 January 38,260 23,403Goodwill arising from subscription of rights issue – 1,706Goodwill arising from acquisitions – 13,438Exchange adjustment 561 (287) At 31 December 38,821 38,260

Accumulated impairment chargeAt 1 January 3,208 1,192Impairment charge (note 6) 13,188 2,016At 31 December 16,396 3,208

net Carrying Amount 22,425 35,052

The carrying amounts of goodwill allocated to each business segment are as follows:

Resources Hospitality Total2010 2009 2010 2009 2010 2009

$’000 $’000 $’000 $’000 $’000 $’000

Goodwill 22,425 29,998 – 5,054 22,425 35,052

Resources

(i) The recoverable amount of goodwill of the coal resource subsidiary held jointly by the listed subsidiaries of the Group was determined based on a fair value less cost to sell. Based on the impairment assessment by the management, the goodwill arising from the acquisition of this subsidiary of $8,134,000 has been impaired and recognised as a charge to profit or loss.

(ii) The recoverable amount of the resource subsidiary in Malaysia is determined based on value in use using 5-year cash flow projections based on financial budgets. Management has considered and determined the factors applied in these financial budgets, which included tin prices, exchange rates and fuel costs. The key assumptions made reflect past experience. The pre-tax discount rate applied to the cash flow projections at 8.02% was based on the estimated weighted average cost of capital. There is no impairment in the carrying amount of goodwill arising from this review.



15 GooDWILL/oTHER INTANGIBLE ASSETS (CoNT’D)

(a) Goodwill arising on consolidation (cont’d)

Hospitality

(i) The recoverable amount of the hotels and resorts management subsidiary in Singapore is determined based on value in use. After reviewing the performance of this subsidiary, management has assessed that it is not likely that the goodwill of $5,054,000 will be recoverable. Accordingly, an impairment loss of $5,054,000 was recognised as a charge to profit or loss.

(b) Other intangible assets

Group

2010 2009

$’000 $’000

(i) Mining rights 480 584 Management rights 287 414 Corporate club membership 91 98

858 1,096

(ii) Deferred exploration and evaluation expenditure 5,209 9,396 Deferred mine development expenditure 28,052 19,867

33,261 29,26334,119 30,359




(b) (i) Mining Rights, Management Rights and Corporate Club Membership

Corporate

Mining Management club

rights rights membership Total

$’000 $’000 $’000 $’000

GROUP

At CostAt 1 January 2010 6,052 1,951 131 8,134

Exchange adjustment 21 90 3 114

At 31 December 2010 6,073 2,041 134 8,248

Accumulated amortisationAt 1 January 2010 5,468 1,537 33 7,038

Amortisation to profit or loss 121 140 9 270Exchange adjustment 4 77 1 82At 31 December 2010 5,593 1,754 43 7,390

Net Carrying Amount 480 287 91 858

At CostAt 1 January 2009 6,205 1,556 132 7,893

Exchange adjustment (153) 395 (1) 241At 31 December 2009 6,052 1,951 131 8,134

Accumulated amortisation

At 1 January 2009 5,041 1,089 24 6,154Amortisation to profit or loss 573 156 9 738Exchange adjustment (146) 292 – 146

At 31 December 2009 5,468 1,537 33 7,038

net Carrying Amount 584 414 98 1,096




(b) (ii) Deferred Exploration and Evaluation Expenditure and Deferred Mine Development Expenditure

Deferred

exploration Deferred mine

and evaluation development

expenditure expenditure Total

$’000 $’000 $’000

GROUPAt 1 January 2010 9,396 19,867 29,263Additions 1,493 14,244 15,737Written off to profit or loss (note 9) (1,140) – (1,140)Amortisation to profit or loss (343) (4,970) (5,313)Attributable to disposal group classified as held for sale

(note 23) (3,929) – (3,929)Exchange adjustment (268) (1,089) (1,357)at 31 December 2010 5,209 28,052 33,261

At 1 January 2009 14,213 12,312 26,525Additions 3,761 10,697 14,458Written off to profit or loss (note 9) (621) – (621)Amortisation to profit or loss (991) (2,953) (3,944)Acquisition of a subsidiary (note 16(b)) 1,260 – 1,260Deemed disposal of a subsidiary (note 16(b)) (7,814) – (7,814)Exchange adjustment (412) (189) (601)At 31 December 2009 9,396 19,867 29,263

Note 15(b)(ii) represents mine exploration and evaluation as well as development expenditures incurred for several areas of interest. The costs are carried forward to the extent that they are expected to be recouped through the successful development of the areas or activities of the areas which have not reached a stage that permit reasonable assessment of the existence of economically recoverable ore reserves and resources.

The remaining amortisation periods are as follows: Group

Number of years

2010 2009

Mining rights 3 4Management rights 2 to 7 3 to 8Corporate club membership 10 11Deferred exploration and evaluation expenditure 3 to 9 1 to 7Deferred mine development expenditure 1 to 3 3 to 4



16 INVESTMENTS IN SUBSIDIARIES

Company

2010 2009

$’000 $’000

Quoted shares, at cost 25,402 25,966Unquoted shares, at cost 126,638 135,638Redeemable preference shares, at cost 112,000 –

264,040 161,604Impairment losses (50,650) (45,770)

213,390 115,834

Details of subsidiaries are included in note 45.

Capital reduction by a subsidiary During the financial year, a subsidiary, Straits Media Private Limited cancelled 9,000,000 shares at the price of $1.00 per share pursuant to capital reduction exercise under Section 78B of the Singapore Companies Act.

Investment in redeemable preference shares of subsidiaries

An amount of $112,000,000, which was previously recorded as amounts due from subsidiaries, has been capitalised as cost of investment. This amount represents redeemable preference shares issued by Malayan Securities Private Limited, Sword Investments Private Limited and Straits Trading Amalgamated Resources Private Limited. The redeemable preference shares carry no rights to dividends. Upon the winding up of the companies, the holders of the redeemable preference shares have the right to repayment of the capital in priority to the holders of the ordinary shares of the companies and to participate equally with the holders of the ordinary shares in the surplus assets of the companies. The issuers have the right at any time and from time to time to redeem in its absolute discretion the whole or some of the redeemable preference shares. Re-designation of investment in subsidiary to disposal group classified as held for sale

On 28 November 2008, a subsidiary, Australia Oriental Minerals NL (“AOM”) issued 5,000,000 unquoted options to the Company, due on 31 December 2013 and to be exercised at a price of A$0.03 each. The fair value of these options cannot be measured reliably and they are therefore carried at cost, that is nil.

Investment in AOM was re-designated to disposal group classified as held for sale as the divestment is highly probable with sale completion expected within the next twelve months (note 23).

Impairment of investment in subsidiary

After reviewing the performance of Rendezvous Hotels International Private Limited, management has assessed that it is not likely that the cost of investment of $4,880,000 will be recoverable. Accordingly, an impairment loss of $4,880,000 was recognised as a charge to profit or loss.



16. INVESTMENTS IN SUBSIDIARIES (CoNT’D)

Analysis of Acquisitions and Disposals of Subsidiaries:

(a) Acquisition and Disposal in 2010

Acquisition of Subsidiary

On 8 April 2010, the Group’s subsidiary company, Straits Developments Private Limited acquired the entire issued share capital of Tertius Development Pte Ltd (“Tertius”), a company incorporated in Singapore.

Cash flow effect on the acquisition of Tertius$’000

Development properties for sale 35,627Other receivables 6Cash and cash equivalents 18Borrowings (19,639)Payables (14,524)

1,488

Total consideration for 100% equity interest acquired (1,488)Less: Cash and cash equivalents of subsidiary acquired 18Net cash outflow on acquisition (1,470)

Change of Ownership Interest in Subsidiary On 11 August 2010, the Company transferred its 100% shareholding in Straits Resource Management Private Limited (“SRM”), to its listed subsidiary, Malaysia Smelting Corporation Berhad (“MSC”) in which the Group has a 73% interest. The Group’s effective interest in SRM has been diluted from 100% to 73%. An amount of $93,000 arising from the change in ownership interests has been recognised in equity.

(b) Acquisition and Disposal in 2009

Acquisition of Subsidiaries

(i) Net cash effect arising from the acquisition of Rendezvous Hospitality Group Private Limited on 7 October 2009 by the Company is $2. Rendezvous Hospitality Group Private Limited was a newly incorporated company with capital of $2 before the acquisition by the Company.

(ii) On 25 August 2009, Asiatic Coal Private Limited (“ACPL”), an associate of Australia Oriental Minerals NL, the Group’s listed subsidiary in Australia and MSC, the Group’s listed subsidiary in Malaysia became an indirect subsidiary of the Group. This gave rise to a goodwill arising of $8,074,000 and the Group’s additional share of mining assets of $15,280,000 as at 31 December 2009.



16 INVESTMENTS IN SUBSIDIARIES (CoNT’D)

(b) Acquisition and Disposal in 2009 (cont’d)

The fair value of the identifiable assets and liabilities of this subsidiary as at the date of acquisition were:

Recognised on

acquisitions

Carrying amount before

combinations $’000 $’000

Property, plant and equipment (note 13) 9 9Deferred exploration and evaluation expenditure (note 15(b)(ii)) 1,260 1,260Mining assets 32,008 –Deferred tax assets 22 22Inventories 405 405Other receivables 12 12Cash and cash equivalents 1,253 1,253

34,969 2,961

Trade and other payables (1,605) (1,605)Deferred tax liabilities (8,002) –Income tax payable (3) (3)

(9,610) (1,608)

Net identifiable assets 25,359 1,353

Consideration for equity interest previously held:– Cash paid 17,215

Consideration for acquisition of additional equity interest:– Cash paid 34

17,249

The effect of acquisition on cash flows was as follows:

Cash paid (34)Cash and cash equivalents of subsidiary acquired 1,253Net cash inflow on acquisition 1,219

The acquisition of ACPL had contributed $272,000 to the Group’s revenue and a loss of $518,000 to the Group’s results. There was no significant impact to the Group if the combination had taken place at the beginning of the financial year.



16 INVESTMENTS IN SUBSIDIARIES (CoNT’D)

(b) Acquisition and Disposal in 2009 (cont’d)

Deemed Disposal of a Subsidiary

Malaysia Smelting Corporation Berhad, the Group’s listed subsidiary was deemed to have disposed its equity interest in PT Tenaga Anugerah (“PT TA”) on 31 October 2009 following issuance of new shares to third parties. This has resulted in the dilution of its equity interest in PT TA from 60% to 40%.

The deemed disposal had the following effects on the financial position of the Group as at 31 December 2009:

$’000

Deferred exploration and evaluation expenditure (note 15(b)(ii)) 7,814Property, plant and equipment (note 13) 9,234Inventories 398Other receivables 2,723Cash and cash equivalents 282Trade and other payables (21,928)Non-controlling interest (112)Net liabilities deemed disposed (1,589)Total deemed disposal proceeds –Gain on deemed disposal to the Group (1,589)

Cash outflow arising on disposal:Cash and cash equivalents of subsidiary deemed disposed (282)Net cash outflow of the Group (282)

17 INVESTMENTS IN ASSoCIATES AND JoINT VENTURES

Group Company

2010 2009 2010 2009

$’000 $’000 $’000 $’000

(restated)

Investment in associates 20,467 73,168 3,585 3,585Investment in joint ventures 46,676 45,242 – –

67,143 118,410 3,585 3,585



17 INVESTMENTS IN ASSoCIATES AND JoINT VENTURES (CoNT’D)

17.1 INVESTMENT IN ASSoCIATES

Group Company

2010 2009 2010 2009

$’000 $’000 $’000 $’000

(restated)

Quoted shares, at cost 50,670 76,913 – –Share of post-acquisition reserves (4,539) (3,142) – –Exchange adjustment 270 (1,950) – –

46,401 71,821 – –

Impairment loss (note 17.1(e)) (39,235) (14,530) – –7,166 57,291 – –

Unquoted shares, at cost 14,592 14,760 3,585 3,585Share of post-acquisition reserves 3,394 4,610 – –

Net dividend received (474) (2,290) – –

Exchange adjustment (466) (1,035) – –17,046 16,045 3,585 3,585

Impairment loss (note 17.1(e)) (3,745) (168) – –

13,301 15,877 3,585 3,585

20,467 73,168 3,585 3,585

Market value of quoted shares 7,499 16,495 – –

(a) Details of associates are included in note 45.

(b) In January 2010, the Group subscribed for an additional 20,750,000 new common shares in Asian Mineral Resources Limited (“AMR”) via a private placement. As a result, the Group’s shareholding in AMR increased from 18.4% to 24.2%. Each common share entitles the holder to purchase one whole common share for C$0.15 for 12 months after its issue date.

(c) During the year, the Malaysia Smelting Corporation Berhad (“MSC”) re-designated its investment in BCD Resources NL (“BCD”) as asset held for sale. The investment was fully disposed by the end of the financial year.




17.1 INVESTMENT IN ASSoCIATES (CoNT’D)

(d) On 27 December 2010, MSC announced that it had entered into a Share Sale and Purchase Agreement with TMR Ltd (“TMR”), a Bermuda incorporated company, for the sale of 120,000 ordinary shares of US$1.00 each, representing 40.0% of the total issued and paid-up shares in PT TA. The consideration of US$5,515,790 was based on the revalued PT TA net tangible assets, on willing seller-willing buyer basis and was satisfied by allotment and issue of 27,578,950 shares of US$0.20 each in TMR. Concurrently, MSC also entered into a novation agreement with PT TA and TMR for novation of MSC’s loan from PT TA to TMR amounting to US$5,507,352, in exchange of new 27,536,760 shares at US$0.20 each issued to MSC. With the completion of this exercise on 23 November 2010, MSC now owns 55,115,710 TMR shares valued at US$0.20 per share which represent 18.54% of TMR’s enlarged share capital. TMR in turn has 99% shareholding in PT TA. The investment in TMR is included in unquoted available-for-sale investment securities in note 20. The gain on disposal of $8,826,000 was recognised in profit or loss for the year ended 31 December 2010.

(e) Impairment assessment

(i) AMR

The investment in AMR was tested for impairment as there was an indication of impairment as at 31 December 2010. The recoverable amount was determined based on higher of value in use and fair value less costs to sell. In the financial year ended 31 December 2008, an impairment loss of $14,530,000 was recognised in respect of the investment in AMR. A further impairment loss of $24,705,000 was recognised in the financial year ended 31 December 2010 based on the fair value less costs to sell, which is the market bid prices of C$0.14 per share, traded on Toronto Stock Exchange.

(ii) Guilin Hinwei Tin Co Ltd

The major shareholder of this investment has encountered difficulties in fulfilling certain obligations under the contractual agreement entered into with MSC within a specific time frame. For the purpose of the impairment assessment, the recoverable amount of this investment has been determined based on the estimated realisable value of the net assets in this investment. Consequently, an impairment loss of $3,745,000 has been recognised during the current year.

(iii) BCD

The investment in BCD, which was previously regarded as an investment in associate, has been reclassified as a non-current asset held for sale during the financial year. Upon the reclassification, this investment, which consists of 90 million shares in BCD and is traded on the Australian Securities Exchange (ASX), has been measured at the lower of its cost and fair value less cost to sell.

The fair value less cost to sell for the 45 million shares which have been disposed in July 2010 was

based on the cash consideration of A$0.115 received for the disposal of the shares. A net impairment loss of $12,696,000 based on market value at 30 September 2010 was recognised during the year. The remaining 45,000,000 BCD shares were disposed of in various tranches in December 2010. A loss on disposal of $7,274,000 was recognised for the year ended 31 December 2010.




17.1 INVESTMENT IN ASSoCIATES (CoNT’D)

(f) The summarised financial information of the associates, not adjusted for the proportion of ownership interest held by the Group, is as follows:

Group

2010 2009

$’000 $’000

(restated)

Assets and liabilitiesTotal assets 313,882 480,015

Total liabilities (19,977) (70,694)

net assets 293,905 409,321

ResultsRevenue 54,051 146,305

Net (loss)/profit for the year (3,052) 5,567

17.2 INVESTMENT IN JoINT VENTURES

Group

2010 2009

$’000 $’000

(restated)

Unquoted share, at cost 18,204 18,204Share of post-acquisition reserves 32,454 27,086Net dividend received (67) (59)Exchange adjustment (3,915) 11

46,676 45,242

(a) Details of joint ventures are included in note 45.




17.2 INVESTMENT IN JoINT VENTURES (CoNT’D)

(b) MSC completed the acquisition of KM Resources, Inc. (“KMR”) in December 2009. This joint venture is the holding company of certain companies which are involved in the Rapu Rapu Polymetallic Project in the Philippines. This investment has been classified as a joint venture as certain key operating and financial decisions require the joint approval of the shareholders of KMR.

As at 31 December 2009, the fair values of the assets and liabilities arising from the acquisition of this joint venture have been determined on a provisional basis. The fair values of such assets and liabilities have not been finalised by the date the audited financial statements were initially authorised for issue.

The fair values of the assets and liabilities have subsequently been finalised by external valuation. In accordance with FRS 103, Business Combinations, the adjustments arising from the finalisation of such provisional purchase price allocation, which are to be made within twelve months from the date of acquisition are to be made retrospectively.

Consequently, a gain on bargain purchase amounting to $26,639,000 has been included in the restated share of results of associates and joint ventures for the financial year ended 31 December 2009, and the restated carrying amount of the investment in associates and joint venture has been increased by a corresponding amount. The adjustment has contributed to an increase in earning per share of 6 cents for financial year 2009.

(c) The aggregate amounts of each of the non-current assets, current assets, non-current liabilities, current liabilities, income and expenses related to the joint venture, adjusted for the proportion of ownership interest held by the Group, are as follows:

Group2010 2009

$’000 $’000(restated)

Assets and liabilitiesNon-current assets 50,010 49,190Current assets 18,537 21,009Total assets 68,547 70,199

Non-current liabilities (10,012) (10,011)Current liabilities (11,859) (14,946)Total liabilities (21,871) (24,957)

net assets 46,676 45,242

ResultsRevenue 35,696 1,057

Expenses (30,096) (993)

Gain on bargain purchase – 26,639



18 DEFERRED TAX ASSETS AND LIABILITIES

Group CompanyConsolidatedbalance sheet

Consolidatedincome statement Balance sheet

2010 2009 2010 2009 2010 2009$’000 $’000 $’000 $’000 $’000 $’000

Deferred tax assets:Unutilised tax losses 200 1,582 1,382 2,656 – –Provisions 8,104 6,864 (918) 787 – –Difference in depreciation 2,174 645 (1,476) (584) – –Fair value changes on foreign currency forward

contracts, forward sales contracts and interest rate swap contracts 22 1,775 372 (508) – –

Revaluation of property, plant and equipment (788) (1,294) (741) – – –Others 1,010 1,012 21 (652) – –

10,722 10,584 – –Deferred tax liabilities:Difference in depreciation 2,668 5,805 (3,058) 1,244 798 632Unremitted foreign income and profits 9,160 8,527 633 585 87 –

Fair value changes on foreign currency forward contracts and forward sales contracts – 99 22 – – –

Fair value adjustments arising from acquisitions of subsidiaries – 7,972 (5,972) – – –

Fair value changes of investment properties 37,115 29,623 7,466 16 1,143 1,122Revaluation of property, plant and equipment 24,225 17,497 – – 49 43Others 2,700 (467) 2,073 – – –

75,868 69,056 2,077 1,797Deferred tax (credit)/expense (196) 3,544

Deferred tax assets are recognised for tax losses of certain subsidiaries on the basis that taxable profits will be generated to utilise these tax losses. Management has determined the future taxable profits based on cash flow projections in the foreseeable future.

As at 31 December 2010, certain subsidiaries have unutilised tax losses amounting to $58,523,000 (2009: $45,714,000) available for set off against future taxable income, subject to the provisions of the Income Tax Act and agreement by the relevant authorities, for which deferred tax assets have not been recognised. Included in these unutilised tax losses, $20,254,000 (2009: $19,174,000) arose in Indonesia with expiry period of between 1 to 5 years.

At the end of the reporting period, no deferred tax liability (2009: Nil) has been recognised for taxes that would be payable on the undistributed earnings of a foreign subsidiary of MSC Group. MSC Group has determined that the undistributed earnings of this foreign subsidiary will not be distributed in the foreseeable future. Such temporary differences for which no deferred tax liability has been recognised amounting to $57,370,000 (2009: $52,138,000). The deferred tax liability is estimated to be $8,606,000 (2009: $7,821,000).



19 TRADE AND oTHER RECEIVABLES

Group Company

2010 2009 2010 2009

$’000 $’000 $’000 $’000

Current:Trade receivables 74,204 66,807 20 26Amount due from an associate 337 – – –Impairment of doubtful receivables (3,093) (1,678) – (5)

71,448 65,129 20 21Other receivablesBalance receivable from sale of properties 7,628 28,044 – –Deposits 1,901 7,981 78 79Non-trade receivables * 57,075 34,085 46 29Amounts due from subsidiaries – – 212,136 358,803Amounts due from associates 1,426 7,642 1,426 1,394Amount due from joint venture 5 45 – –

68,035 77,797 213,686 360,305Impairment of doubtful receivables (853) (1,031) (64,420) (2,900)

67,182 76,766 149,266 357,405Trade and other receivables (current) 138,630 141,895 149,286 357,426Non-Current:Non-trade receivables * 1,222 – – –Loans to subsidiaries – – 106,465 150,166Amount due from joint venture 1,093 1,085 – –

2,315 1,085 106,465 150,166

Total trade and other receivables (current and non-current) 140,945 142,980 255,751 507,592

Add: Cash and cash equivalents (note 27) 71,597 56,194 1,103 8,934 Non-current security deposit (note 22) 16,767 16,483 – –Total loans and receivables 229,309 215,657 256,854 516,526 * Included in the Group’s non-trade receivables are:

(i) $1,406,000 (2009: $3,732,000) relating to a development project.

(ii) $13,493,000 (2009: $8,764,000) relating to value added tax receivable from the Indonesia tax authority.

(iii) $16,496,000 (2009: $5,696,000) being prepayment pending finalisation of accounts from mine contractor.

(iv) $2,807,000 (2009: $5,082,000) being advances paid before delivery of tin.

(v) $1,590,000 (2009: Nil) relating to an unsecured loan carried at amortised cost and repayable within 5 years.



19 TRADE AND oTHER RECEIVABLES (CoNT’D)

Trade receivables

Trade receivables are non-interest bearing and are generally on cash payment to 90 days. They are recognised at their original invoice amounts which represents their fair values on initial recognition.

At the end of the reporting period, trade receivables arising from export sales amounting to $6,438,000 (2009: $4,275,000) are arranged to be settled via letters of credits issued by reputable banks in countries where customers are based.

Included in the Group’s trade receivable is an amount due from key management personnel of the Company of $1,641,000 (2009: Nil) relating to sale of property. The amount is unsecured, non-interest bearing and repayable on demand in cash.

Amounts due from subsidiaries

The amounts due from subsidiaries are non-trade related, unsecured and repayable on demand in cash. No interest is charged except for amounts receivable of $67,257,000 (2009: $109,363,000) which bears interest ranging from 1.4% to 2.5% (2009: 2.4% to 3.2%) per annum.

Loans to subsidiaries

Loans to subsidiaries (except for the loans described below) are non-trade related, unsecured, bears interest based on prevailing market rate ranging from 4.2% to 4.9% (2009: 3.2% to 4.0%) per annum, has no fixed terms of repayment and are not expected to be repaid within 1 year. The loans are expected to mature in less than 10 years and to be settled in cash. In 2009, loans to a subsidiary of $48,080,000 bear interest ranging from 3.7% to 4.0% per annum to the extent of the interest incurred by the Company in obtaining bank borrowings to advance loans to the subsidiary, are expected to mature in less than 2 years and the loans have been fully repaid during the financial year.

The carrying amount of the loans receivable approximates its fair value as the implicit interest rates are based on prevailing market rates.

Amounts due from associates

The amount due from an associate under trade receivables is unsecured, non-interest bearing and subject to the Group’s normal credit terms which range from cash to 90 days.

The amounts due from associates under other receivables are non-trade related, unsecured, non-interest bearing and repayable on demand. These amounts are repayable in cash.

The amount of $6,241,000 as at 31 December 2009 was related to an advance to PT Tenaga Anugerah (“PT TA”). This was unsecured and non-interest bearing. The amount was converted to paid-up capital of TMR Ltd during the financial year. The investment in TMR is included in unquoted available-for-sale investment securities in note 20.




Amount due from joint venture

The amount due from joint venture under other receivables is non-trade related, unsecured and repayable on demand in cash. No interest is charged except for the non-current amount of $1,093,000 (2009: $1,085,000) due from a subsidiary of KM Resources Inc., which bears interest at 4% (2009: 4%) per annum. It is expected to be repaid within 4 years and to be settled in cash.

Trade and other receivables denominated in foreign currencies other than the functional currencies of the Group entities:

Group Company

2010 2009 2010 2009

$’000 $’000 $’000 $’000

Indonesian Rupiah 13,819 12,363 – –United States Dollar 58,422 42,871 – –Australian Dollar – 75 106,465 102,086Renminbi – 529 – –

The age analysis of trade and other receivables is as follows:

Group

2010 2009

$’000 $’000

grossImpairment

losses net GrossImpairment

losses net

• Not past due 112,594 – 112,594 112,504 (31) 112,473• Past due: Less than 30 days 7,022 – 7,022 7,504 – 7,504 30 to 60 days 12,962 – 12,962 14,139 – 14,139 61 to 90 days 2,467 (34) 2,433 2,828 (79) 2,749 91 to 120 days 500 (34) 466 331 (65) 266 More than 120 days 9,346 (3,878) 5,468 8,383 (2,534) 5,849

32,297 (3,946) 28,351 33,185 (2,678) 30,507Total 144,891 (3,946) 140,945 145,689 (2,709) 142,980




The age analysis of trade and other receivables is as follows (cont’d):Company

2010 2009

$’000 $’000

grossImpairment

losses net GrossImpairment

losses net

• Not past due 320,107 (64,420) 255,687 510,453 (2,900) 507,553• Past due: Less than 30 days 18 – 18 32 – 32 30 to 60 days 26 – 26 2 – 2 61 to 90 days 18 – 18 5 – 5 91 to 120 days – – – – – – More than 120 days 2 – 2 5 (5) –

64 – 64 44 (5) 39Total 320,171 (64,420) 255,751 510,497 (2,905) 507,592

Trade receivables that are individually determined to be impaired at the end of the reporting period relate to debtors that are in significant financial difficulties and have defaulted on payments. Included in the net carrying amount of trade receivables of $3,428,000 (2009: $3,802,000), which is secured by a charge on the share of tribute of a tin mining concession.

Trade and other receivables that are impaired at the reporting date and the movement of allowance accounts used to record the impairment are as follows:

Group Company2010 2009 2010 2009

$’000 $’000 $’000 $’000

Trade and other receivables – nominal amounts 9,029 8,422 81,361 15,807Less: Allowance for impairment (3,946) (2,709) (64,420) (2,905)

5,083 5,713 16,941 12,902

Movements in the allowance accounts:Group Company

2010 2009 2010 2009$’000 $’000 $’000 $’000

At 1 January (2,709) (1,941) (2,905) –Impairment for the year (1,704) (951) (61,520) (2,905)Amounts written-off 323 14 – –Reversal of impairment 158 176 5 –Exchange adjustment (14) (7) – –At 31 December (3,946) (2,709) (64,420) (2,905)



20 INVESTMENT SECURITIES / MARKETABLE SECURITIES

Group Company

2010 2009 2010 2009

$’000 $’000 $’000 $’000

Investment Securities:Available-for-sale shares– quoted, at fair value 199,292 235,295 75,222 88,779– unquoted, at fair value 14,387 – – –– unquoted, at cost 4 4 4 4

213,683 235,299 75,226 88,783

Information on the Group’s investment/marketable securities by country can be found in note 39(e).

At Group level, the quoted shares is net of impairment loss of $404,000 (2009: Nil) due to significant or prolonged decline in the fair value of this investment below its costs. The impairment loss is transferred from other comprehensive income and recognised in profit or loss.

The unquoted shares at fair value comprise of investment in TMR Ltd (“TMR”), a Bermuda incorporated company. Malaysia Smelting Corporation Berhad (“MSC”) had entered into a Share Sale and Purchase Agreement with TMR, for the sale of 120,000 ordinary shares of US$1.00 each, representing 40.0% of the total issued and paid-up shares in PT Tenaga Anugerah (“PT TA”). The consideration of US$5,515,790 was based on the revalued PT TA net tangible assets, on willing seller-willing buyer basis and was satisfied by allotment and issue of 27,578,950 shares of US$0.20 each in TMR. Concurrently, MSC also entered into a novation agreement with PT TA and TMR for novation of MSC’s loan from PT TA to TMR amounting to US$5,507,352, in exchange of new 27,536,760 shares at US$0.20 each issued to MSC. With the completion of this exercise on 23 November 2010, MSC now owns 55,115,710 TMR shares valued at US$0.20 per share which represent 18.54% of TMR’s enlarged share capital. TMR in turn has 99% shareholding in PT TA.

The fair value of investment in TMR was determined based on an external valuation. The valuation assumes the economically recoverable tin reserves of 25,767 tonnes in the tin concession areas, with tin prices ranging from US$20,000 to US$27,000 per tonne from year 2010 to year 2014. The discount rates used in the valuation is 14%.

Group

2010 2009

$’000 $’000

Marketable Securities:Held-for-trading, at fair value:Other quoted investments 17 16



21 DERIVATIVE FINANCIAL INSTRUMENTS

Derivative financial instruments included in the balance sheets as at 31 December are as follows:

Group Company

2010 2010 2009 2009 2010 2010 2009 2009

assets Liabilities Assets Liabilities assets Liabilities Assets Liabilities

$’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000

Interest rate swap contracts – (576) – (2,928) – – – (2,589)

Forward sales contracts – – – (5,825) – – – –Foreign currency forward

contracts 487 – 330 (263) – – – –Warrants – – – – – – – –

487 (576) 330 (9,016) – – – (2,589)

Current 487 – 330 (6,088) – – – –

Non-current – (576) – (2,928) – – – (2,589)

These represent the fair values of:

(a) interest rate swap contracts entered into for the purpose of managing interest rate risk. The fair value changes of this contract are recognised in the profit or loss. In 2009, included in interest rate swap contracts was an amount of $2,589,000 entered into for the purpose of hedging against interest rate risk where the fair value changes were recognised in the other comprehensive income and accumulated in equity under hedging reserve to the extent that the hedges were effective.

(b) forward sales contracts entered into for the purpose of hedging against market fluctuations in tin prices. The fair value changes of such contracts are recognised in the other comprehensive income and accumulated in equity under hedging reserve to the extent that the hedges are effective.

(c) foreign currency forward contracts entered into for the purpose of hedging against foreign exchange risk. The fair value changes are recognised in the other comprehensive income and accumulated in equity under hedging reserve to the extent that the hedges are effective.

(d) warrants issued by Asian Mineral Resources Limited (“AMR”) to purchase common shares at C$0.15 per share for 12 months from its issue date on 7 January 2010. The warrants carried at zero fair value as at 31 December 2010, as the market price of AMR shares was below its exercise price as at 31 December 2010.

Further details of the derivative financial instruments in item (a) to (c) are disclosed in note 40 to the financial statements.



22 oTHER NoN-CURRENT ASSETS

Group

2010 2009

$’000 $’000

Base inventory (a) 1,258 1,229security deposit (b) 16,767 16,483Mining assets (c) – 31,623

18,025 49,335

(a) Base inventory is used in the smelting process and comprises a metallic tin content of 381 tonnes (2009: 381 tonnes). It is stated at lower of estimated recoverable amounts and cost.

(b) Cash to the value of $16,767,000 at 31 December 2010 (2009: $16,483,000) denominated in Australian dollars and New Zealand dollars is held as security deposits against bank guarantees provided for certain hotel lease agreements.

(c) Mining assets were the fair value of economically recoverable coal reserves based on 1,500,000 tonnes of estimated recoverable coal resources at US$15 per tonne arising from acquisition of Asiatic Coal Private Limited in 2009.

For the purpose of the impairment assessment and review made by the management, the recoverable amount of the mining assets has been determined based on an external valuation which indicates a value ranging from US$1.0 million to US$7.5 million. The management represented that an average of US$4.25 million was taken as the recoverable amount of the mining assets. As a result of the assessment, an impairment loss of $23,884,000 has been recognised in relation to the mining assets. The carrying amount of the mining assets has been reclassified to assets of disposal group classified as held for sale as at 31 December 2010. Please refer to note 23 for details.



23 DISPoSAL GRoUP CLASSIFIED AS HELD FoR SALE

At 31 December 2010, the Group reclassified its 61.2% effective interest in Australia Oriental Minerals NL (“AOM”) and 40.2% effective interest in Asiatic Coal Private Limited (“ACPL”) as disposal group held for sale. These two subsidiaries are reported in “resources segment”.

Balance sheet disclosures

The major classes of assets, liabilities and the related translation reserve of AOM and ACPL classified as held for sale as at 31 December 2010 are as follows:

Group

$’000

Assets:Property, plant and equipment (note 13) 24Deferred exploration and evaluation expenditure (note 15(b)(ii)) 3,929Mining assets 6,012Inventories 316Prepayments 5Other receivables 174Cash and cash equivalents (note 27) 220

Assets of disposal group classified as held for sale 10,680

Liabilities:Trade and other payables (3,298)Provisions (note 30) (66)Deferred tax liabilities (1,377)

Liabilities directly associated with disposal group classified as held for sale (4,741)

Net assets directly associated with disposal group classified as held for sale 5,939

Reserve:Translation reserve (1,173)

The investment cost classified as held for sale on the Company’s balance sheet as at 31 December 2010 is as follows:

Company

$’000

Assets:Investment in subsidiary 564

The assets and liabilities classified as held for sale on the Group’s and Company’s balance sheet are measured at the lower of carrying amounts and fair values less costs to sell.



24 DEVELoPMENT PRoPERTIES FoR SALE

Group

2010 2009

$’000 $’000

Properties in the course of development, at costs 40,623 –Add: Attributable profit 832 –

41,455 –Less: Progress billings (3,870) –

37,585 –

Completed units, at costs 1,310 1,27038,895 1,270

During the financial year, the following amounts were capitalised as cost of development properties for sale:

Group

2010 2009

$’000 $’000

Employee benefits expense (note 7) 8 –Interest on bank loans (note 8) 332 –

The freehold land and strata bungalows development at Five Chancery, Singapore, amounting to $37,585,000, has been pledged as security for a bank loan bearing interest ranging from 1.7% to 4.0% per annum (note 31).

The Group uses the percentage of completion method to recognise revenue on its residential development projects in Singapore. Revenue arising from pre-completion properties sold during the year amounting to $4,466,000 (2009: Nil).

Details of the properties as at 31 December 2010 are as follows:

Description of properties

Group’sEffective

Interest inProperty

siteArea

sq.m.

GrossFloor Area

sq.m.

Stage ofcompletion

(expectedyear of

completion)

12 units strata bungalows development at Five Chancery, Singapore 100% 2,563 6,015 35% (2011)

1 (2009: 1) residential units at Gallop Gables Condominium, singapore 100% N/A

202(net) Completed

4 (2009: 4) units of 3-storey shop houses and 5 (2009: 5) units of 4-storey shop houses at Jalan Selat, Taman Selat, Butterworth 100% N/A

4,016(net) Completed



25 INVENToRIESGroup

2010 2009

$’000 $’000

At lower of cost or net realisable value:Inventories of:– Tin-in-concentrates 26,544 13,217– Tin-in-process 103,097 69,761– Refined tin metal 28,074 60,808Other inventories (stores, spares, fuels, coal and by-products) 11,779 12,167Food and beverage inventories 1,721 1,655

171,215 157,608

Cost of inventories sold during the year amounted to $1,065,556,000 (2009: $690,540,000).

The reversal of write-down of inventories recognised as a reduction of expense amounted to $3,308,000 (2009: $2,827,000). The reversal was for write-down no longer required as the particular inventory where the provision was made have been processed and sold. This is included in the costs of tin mining and smelting in profit or loss.

26 INCoME TAX RECEIVABLESGroup Company

2010 2009 2010 2009

$’000 $’000 $’000 $’000

Income tax receivables 11,107 16,384 11 155

27 CASH AND CASH EqUIVALENTSGroup Company

2010 2009 2010 2009

$’000 $’000 $’000 $’000

Cash at bank and in hand 49,906 34,430 516 7,994Short-term deposits 21,551 21,764 587 940Amounts held under the “Project Account Rules-

1997 Ed” 140 – – –71,597 56,194 1,103 8,934

Cash at bank earns interest at floating rates based on daily bank deposit rates. Short-term deposits are placed for varying periods depending on the immediate cash requirements of the Group, and earn interests at the respective short-term deposit rates. The weighted average effective interest rates as at 31 December 2010 for the Group and the Company were 2.0% (2009: 0.9%) per annum and 2.3% (2009: 2.0%) per annum respectively.



27 CASH AND CASH EqUIVALENTS (CoNT’D)

Included in cash at bank and deposits of the Group, is an amount of $1,991,000 (2009: $2,000,000) relating to Advertising and Promotion (A&P) Reserve Sum maintained with a financial institution by a subsidiary for A&P expenses and minor refurbishment works to the retail component on No. 18, 20, 22 Cross Street, Singapore, in accordance with the master lease agreement executed on 30 March 2006 and the variation of lease executed on 8 March 2010 by this subsidiary. Also refer to note 33.

Included in cash at bank and deposits of the Group is a project account amounting to $140,000 (2009: Nil) maintained with a financial institution for a housing development project undertaken by a subsidiary company. The operation of the project account is governed by the Housing Developers (Project Account) Rules (1997 Ed.).

Cash and cash equivalents denominated in foreign currencies other than the functional currencies of the Group entities:

Group Company

2010 2009 2010 2009

$’000 $’000 $’000 $’000

Malaysian Ringgit 13 14 – –Indonesian Rupiah 1,134 968 – –Australian Dollar 50 56 27 24United States Dollar 27,999 9,897 – –

For the purpose of the consolidated cash flow statement, cash and cash equivalents comprise the following at the end of the reporting period:

Group

2010 2009

$’000 $’000

Cash and cash equivalents of the Group 71,597 56,194Disposal group classified as held for sale (note 23) 220 –

71,817 56,194

28 SHARE CAPITAL Group and Company

2010 2009number of

sharesShare

capitalNumber of

sharesshare

capital

’000 $’000 ’000 $’000

Ordinary shares issued and fully paid:At 1 January and 31 December 325,897 265,928 325,897 265,928

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. The ordinary shares have no par value.



29 reServeSGroup Company

2010 2009 2010 2009$’000 $’000 $’000 $’000

(restated)

Retained earnings (a) 746,405 724,754 108,890 105,015

AFS reserve (b) 40,471 76,179 16,084 29,642Hedging reserve (c) 210 (4,652) – (2,573)Revaluation reserve (d) 97,248 64,460 147 129Share option reserve (e) 84 84 – –Capital reserve (f) 93 – – –Translation reserve (g) (2,853) (10,113) (2,983) (3,876)Other reserves 135,253 125,958 13,248 23,322

(a) Retained EarningsGroup Company

2010 2009 2010 2009$’000 $’000 $’000 $’000

(restated)

At 1 January 724,754 891,369 105,015 413,657Profit for the year 28,169 159,282 10,393 17,255Dividend on ordinary shares (note 34) (6,518) (325,897) (6,518) (325,897)At 31 December 746,405 724,754 108,890 105,015

(b) AFS Reserve

AFS reserve records the cumulative fair value changes of available-for-sale financial assets until they are derecognised or impaired.

Group Company

2010 2009 2010 2009

$’000 $’000 $’000 $’000

At 1 January 76,179 10,026 29,642 8,050Net changes in the reserve (35,708) 66,153 (13,558) 21,592 At 31 December 40,471 76,179 16,084 29,642

Net changes in the reserve:– Net fair value changes during the year (35,993) 84,793 (13,558) 36,270 – Recognised in profit or loss: – on disposal of investment securities – (18,640) – (14,678) – on impairment of investment securities 285 – – –

(35,708) 66,153 (13,558) 21,592



29 RESERVES (CoNT’D)

(c) Hedging Reserve

Hedging reserve records the portion of the fair value changes on derivative financial instruments designated as hedging instruments in cash flow hedges that is determined to be an effective hedge.

Group Company

2010 2009 2010 2009

$’000 $’000 $’000 $’000

At 1 January (4,652) (2,729) (2,573) (2,213)Net changes in the reserve 4,862 (1,923) 2,573 (360)At 31 December 210 (4,652) – (2,573)

Net changes in the reserve:– Net fair value changes during the year 202 (5,907) (2,803) (3,690)– Recognised in profit or loss:

– Loss on interest rate swap recognised in ‘Finance Costs’ 2,178 2,340 2,178 2,340

– Interest rate swap closed out costs 3,198 990 3,198 990– Ineffective cash flow hedge (716) 654 – –

4,862 (1,923) 2,573 (360)

(d) Revaluation Reserve

The revaluation reserve is used to record increases in the fair value of land and buildings and decreases to the extent that such decrease relates to an increase on the same asset previously recognised in equity.

Group Company

2010 2009 2010 2009

$’000 $’000 $’000 $’000

At 1 January 64,460 70,493 129 129Net changes in the reserve 32,788 (6,033) 18 –At 31 December 97,248 64,460 147 129

Net changes in the reserve:– Surplus/(Deficit) on revaluation of land and

buildings 32,788 (6,033) 18 –



29 RESERVES (CoNT’D)

(e) Share Option Reserve

Share option reserve of a subsidiary represents the equity-settled share options granted to its directors and company secretary as a component of remuneration. The reserve is made up of the cumulative value of equity-settled share options granted for services received.

Group

2010 2009

$’000 $’000

At 1 January 84 150

Adjustment of share-based payments (note 7(b)) – (135)Exchange adjustment – (5) Less: Non-controlling interest’s share – 74

– (66)At 31 December 84 84

(f) Capital Reserve

The capital reserves arise as a result of change in the ownership interest of subsidiaries that does not result in a loss of control and accounted for as an equity transaction.

(g) Translation Reserve

The exchange translation reserve is used to record exchange differences arising from the translation of the financial statements of foreign operations whose functional currencies are different from that of the Group’s and Company’s presentation currency. It is also used to record the effect of exchange differences arising from monetary items which form part of Group’s net investments in foreign operations.

Group Company

2010 2009 2010 2009

$’000 $’000 $’000 $’000

At 1 January (10,113) (38,456) (3,876) (3,391) Net effect of exchange adjustments 7,260 28,343 893 (485) At 31 December (2,853) (10,113) (2,983) (3,876)

Net effect of exchange adjustments:– Translation of foreign operations 9,494 44,401 893 (485) – Net investments in foreign operations (3,533) (16,189) – –– Transfer to profit or loss on liquidation of a

subsidiary 126 131 – –– Transfer to reserve of disposal group

classified as held for sale 1,173 – – –7,260 28,343 893 (485)



30 PRoVISIoNS

Mine Provisionrehabilitation for onerous

provision contracts Total$’000 $’000 $’000

GROUPAt 1 January 2010 8,435 – 8,435Provision made during the year 2,406 5,927 8,333Discount adjustment on provision (note 8) 52 – 52Attributable to disposal group classified as held for sale (note 23(b)) (66) – (66)Exchange adjustment (603) – (603)at 31 December 2010 10,224 5,927 16,151

Non-current 8,373 4,792 13,165Current 1,851 1,135 2,986

10,224 5,927 16,151

At 1 January 2009 6,602 – 6,602Provision made during the year 1,991 – 1,991Discount adjustment on provision (note 8) 48 – 48Reclass to other payables (38) – (38)Exchange adjustment (168) – (168)At 31 December 2009 8,435 – 8,435

Non-current 6,478 – 6,478Current 1,957 – 1,957

8,435 – 8,435

The provision is related to mine rehabilitation expenditure to be incurred subsequent to the cessation of production of each mine property. It is provided based on the present value of the estimated expenditure to be incurred.

Provision for onerous contracts relates to onerous leases of certain hotels where the unavoidable cost of meeting the obligations exceed the economic benefit expected to be derived over the remaining lease term.



31 BoRRoWINGS

Group Company

2010 2009 2010 2009

$’000 $’000 $’000 $’000

non-current Secured:Revolving credit facilities A – 55,888 – 55,888Term loan A – 159,533 – 159,533Term loan B – 35,571 – 35,571Term loan C 214,741 – – –

214,741 250,992 – 250,992

Unsecured:Revolving credit facilities 1 (a) 16,195 23,190 – –Revolving credit facilities 3 (c) 22,109 – 22,109 –Term Loan 1 (d) – 1,229 – –Term Loan 3 (f) 1,826 4,792 – –Term Loan 4 (g) 16,519 27,406 – –Term Loan 5 (h) 24,734 – – –

81,383 56,617 22,109 –non-current 296,124 307,609 22,109 250,992

currentSecured:Term loan D 22,339 – – –

Unsecured:Short-term trade financing (i) 16,903 85,763 – –Bankers’ acceptances (i) 213,005 108,111 – –Revolving credit facilities 1 (a) 5,182 3,514 – –Revolving credit facilities 2 (b) 11,660 – – –Term Loan 1 (d) 1,258 1,229 – –Term Loan 2 (e) – 24,299 – –Term Loan 3 (f) 2,591 2,811 – –Term Loan 4 (g) 8,745 7,379 – –

259,344 233,106 – –current 281,683 233,106 – –

Total borrowings 577,807 540,715 22,109 250,992



31 BoRRoWINGS (CoNT’D)

secured

In 2009, the secured term loan A and revolving credit facilities A were part of a 3-year secured loan facility due in September 2011. The facility is mainly secured by mortgages over the land and building at No. 9 Battery Road, Singapore and legal assignment of all rights, titles and interests under contracts in respect of the mortgaged properties. The loan has been repaid during the financial year and the discharge of mortgage on the mortgaged properties was executed during the financial year.

In 2009, the secured term loan B was part of a 3-year secured facility due in March 2012. The facility is mainly secured by mortgages over 20 units of the Gallop Green condominium in Singapore and legal assignment of all rights, titles and interests under contracts in respect of the mortgaged properties. The loan has been repaid and the discharge of mortgage on the mortgaged properties was executed during the financial year.

The secured term loan C, with the combination of fixed and floating rates, is part of a 4-year secured loan facility due in September 2014. The facility is mainly secured by mortgages over the land and building at No. 9 Battery Road, Singapore and legal assignment of all rights, titles and interests under contracts in respect of the mortgaged properties.

The secured term loan D is secured by, inter alia, legal mortgages over the land and strata bungalows erected on Five Chancery, Singapore. The loan shall be repaid 6 months after issuance of Temporary Occupation Permit or 25 December 2011, whichever is earlier.

Unsecured

(a) The unsecured revolving credit facilities 1 which is denominated in US Dollar was restructured to long-term facility and is repayable by 10 semi-annual principal repayments commencing on 30 September 2009.

(b) The unsecured revolving credit facilities 2 is utilised for working capital requirements.

(c) The unsecured revolving credit facilities 3 is part of 4-year floating facility due in November 2014.

(d) The unsecured term loan 1 is denominated in Malaysian Ringgit and is repayable by 8 semi-annual principal repayments of RM1.5 million each commencing on 1 May 2008.

(e) The unsecured term loan 2 is a 1 year term loan facility due in April 2008 and has been extended to 12 April 2010, and is denominated in Malaysian Ringgit. The term loan is guaranteed by the Company (note 38(c)). This unsecured term loan was fully repaid during the financial year.

(f) The unsecured term loan 3 is denominated in US Dollar and is repayable by 16-quarterly principal repayments commencing on 11 May 2009.

(g) The unsecured term loan 4 is denominated in US Dollar and is repayable by 20-quarterly principal repayments commencing on 20 September 2008.

(h) The unsecured term loan 5 is a 3-year term loan facility due in April 2013 and is denominated in Malaysian Ringgit. The term loan is guaranteed by the Company (note 38(c)).



31 BoRRoWINGS (CoNT’D)

Unsecured (cont’d)

(i) Short-term trade financing is denominated in US Dollar. Bankers’ acceptances are denominated in Malaysian Ringgit. All these facilities were utilised for working capital requirements involving purchases and sales in tin concentrates and tin metal.

The interest rates of the term loans are repriced at intervals of 1 month to 3 months (2009: 1 month or 3 months).

The range of interest rates incurred during the year for the borrowings are as follows:

Group Company

2010 2009 2010 2009

% per annum % per annum % per annum % per annum

securedRevolving credit facilities A 1.4 to 2.9 2.2 to 3.5 1.4 to 2.9 2.2 to 3.5Term loan A 3.0 to 4.0 2.4 to 3.1 3.0 to 4.0 2.4 to 3.1Term loan B 2.9 to 3.1 3.0 to 3.8 2.9 to 3.1 3.0 to 3.8Term loan C * 1.5 to 2.6 – – –Term loan D 1.7 to 4.0 – – –

UnsecuredTerm loan 1 4.4 to 4.8 4.9 – –Term loan 2 3.8 to 4.1 3.8 to 4.6 – –Term loan 3 1.9 to 2.5 2.3 to 6.0 – –Term loan 4 3.8 to 4.3 4.5 to 9.4 – –Term loan 5 4.1 to 4.6 – – –Short-term trade financing 1.1 to 1.8 0.8 to 3.7 – –Bankers’ acceptances 2.3 to 4.2 2.1 to 3.7 – –Revolving credit facilities 1 1.9 to 2.4 1.6 to 14.4 – –Revolving credit facilities 2 3.6 to 4.0 – – –Revolving credit facilities 3 1.6 to 1.7 – 1.6 to 1.7 –

* 2.6% is on the fixed rate loan.



32 oTHER NoN-CURRENT LIABILITIES

Group

2010 2009

$’000 $’000

Retention sum payables 416 –Deferred income on sale of No. 18, 20 and 22 Cross Street # 4,531 8,156Unrealised profit on sale of properties to associates 2,050 2,218Severance benefit obligations (note 33(a)) 39 2,129Other liabilities 496 1,179

7,532 13,682

# During the financial year, the Group amortised $3,625,000 (2009: $3,625,000) from deferred income to profit or loss.

33 TRADE AND oTHER PAYABLES

Group Company

2010 2009 2010 2009

$’000 $’000 $’000 $’000

Current:Trade payables 40,094 26,621 402 657

Other payablesAmounts due to subsidiaries – – 100,780 39,959Accrual for development cost 2,311 3,159 – –Accrual for other charges 12,980 14,436 655 784Other deposits 8,370 7,114 302 341Severance benefit obligations 702 1,038 – –Amounts due to associates – 219 – –Amount due to joint venture 57 55 – –Others # 45,273 39,472 4,224 4,302

69,693 65,493 105,961 45,386Trade and other payables (current) 109,787 92,114 106,363 46,043

Non-Current:Loan from a subsidiary – – 143,213 135,411

Total trade and other payables (current and non-current) 109,787 92,114 249,576 181,454Less: Severance benefit obligations (702) (1,038) – –

109,085 91,076 249,576 181,454Add: Other non-current liabilities (note 32) 912 1,179 – – Loans and borrowings (note 31) 577,807 540,715 22,109 250,992Total financial liabilities carried at amortised cost 687,804 632,970 271,685 432,446



33 TRADE AND oTHER PAYABLES (CoNT’D)

Trade payables

The Group’s normal trade credit range from cash payment to 90 days.

Other payables

# Included:

(i) $1,991,000 (2009: $2,000,000) relating to Advertising and Promotion (A&P) Reserve sum (note 27) of a subsidiary for A&P expenses and for minor refurbishment works to the retail component on No. 18, 20, 22 Cross Street, Singapore.

(ii) $8,019,000 (2009: $11,447,000) relating to amount withheld pending finalisation of accounts from mine contractor.

(iii) $13,708,000 (2009: $1,454,000) mainly value added tax payable to the Indonesian tax authority.

(iv) In 2009, $6,557,000 was related to an unutilised provision for upgrade works cost of a subsidiary which no further upgrading works are required and the subsidiary shall only be obliged to pay half share of this unutilised provision to the purchaser of the Property for upgrade works costs. During the financial year, $3,278,000 was written back (note 6) and the remaining amount of $3,279,000 was paid to the purchaser of the property.

(v) $2,178,000 at 31 December 2009 relating to advances from minority shareholder of a subsidiary for debts settlement on behalf. As 31 December 2010, the outstanding advances has been reclassified to disposal group classified as held for sale.

Amounts due to subsidiaries

The amounts payable to subsidiaries are non-trade related, unsecured, non-interest bearing and repayable on demand in cash.

Loan from a subsidiary

Loan from a subsidiary is non-trade related, unsecured, bear interest based on prevailing market rate at 4.7% (2009: 3.4%) per annum, has no fixed term of repayment, not expected to be paid in the foreseeable future and repayable in cash.

Amounts due to associates

In 2009, the amounts due to associates under other payables were unsecured and interest free except for an amount of $205,000 which represents security deposit received from Redring Solder (M) Sdn. Bhd. for its purchase of refined tin metal. The amount was placed in fixed deposit with a licensed bank and earned interest at an average rate of 2.9% per annum. The fixed deposit interest earned on the security deposit was paid to the associate. The amount has been repaid in 2010.




Amount due to joint venture The amount payable to joint venture is non-trade related, non-interest bearing and repayable on demand in cash.

Trade and other payables denominated in foreign currencies other than the functional currencies of the Group entities:

Group Company2010 2009 2010 2009

$’000 $’000 $’000 $’000

Singapore Dollar 1,904 556 – –Malaysian Ringgit 1,010 17 – –United States Dollar 13,346 6,959 – –Australian Dollar 198 69 143,213 135,411Indonesian Rupiah 5,334 3,231 – –Euro Dollar 599 – – –

Severance benefit obligations

The subsidiaries in Indonesia operate a partly funded, Severance Benefits Scheme (“the Scheme”) for their eligible employees. Under the Scheme, eligible permanent employees confirmed in service are entitled to severance benefits due to reduction or termination of operations, termination due to ill-health or death and on attainment of the normal retirement age of 55 or early retirement age of 50 due to ill-health. The obligations under the Scheme are determined based on actuarial valuation.

The following table summarises the components of the Scheme in the financial statements:

(a) The amounts recognised in the balance sheet are determined as follows:Group

2010 2009$’000 $’000

Present value of unfunded defined benefit obligations 16,618 14,811Fair value of plan assets (11,209) (7,871) Unrecognised actuarial losses (4,300) (3,076) Unrecognised past service costs (368) (697) net liability 741 3,167

Analysed as:Current 702 1,038

Non-currentLater than 1 year but not later than 2 years – –Later than 2 years but not later than 5 years – 2,099Later than 5 years 39 30 (note 32) 39 2,129

741 3,167




Severance benefit obligations (cont’d) (b) The amounts recognised in profit or loss are as follows:

Group2010 2009

$’000 $’000

Current service cost 2,324 674Interest cost 1,272 1,291net actuarial losses 230 269Past service costs 733 240Expected return on plan asset (961) (579) Total, included in employee benefits expense (note 7) 3,598 1,895

(c) Movements in the net liability in the current year are as follows:Group

2010 2009$’000 $’000

At 1 January 3,167 4,026Amounts recognised in profit or loss (note 7) 3,598 1,895Paid during the year (1,459) (266) Plan asset (4,480) (3,178) Exchange adjustment (85) 690At 31 December 741 3,167

(d) Principal actuarial assumptions used:2010 2009

% per annum % per annum

Discount rate 6.5 – 8.0 9.0 – 11.0Expected rate of return on assets 9.5 9.5Expected rate of salary increases 10.0 10.0

Plan asset

This is in respect of an insurance scheme for a severance pay product based on an agreement between a subsidiary in Indonesia and an insurance company in Indonesia.

The subsidiary will pay the funding for the future benefit payments to the insurer, and the insurer will accumulate the subsidiary’s funding in a managed pooled fund. The calculation for the benefits refers to the Collective Labour Agreement and in certain circumstances to Indonesian Labour Law.



34 DIVIDENDSGroup and Company

2010 2009

$’000 $’000

Declared and paid during the year:Dividends on ordinary shares:• Special dividend paid in 2009: $1.00 per share tax exempt (one-tier tax) # – 325,897• 2009 Interim dividend paid in 2010: 2 cents per share tax exempt (one-tier tax) 6,518 –

6,518 325,897

Declared but not recognised as a liability as at 31 December:Dividends on ordinary shares:• Interim dividend for 2010: 2 cents per share tax exempt (one-tier tax) 6,518 6,518 [Interim dividend for 2009: 2 cents per share tax exempt (one-tier tax)]

6,518 6,518

# This was paid in 2 installments on 6 March 2009 (80 cents) and 30 April 2009 (20 cents), following the approval by the Company’s shareholders at an EGM held on 19 December 2008, and the expiry of the 21-day statutory period on 12 January 2009.

There is no taxation consequence arising from the dividend declared on the Company.

35 CAPITAL CoMMITMENTS

Capital expenditure committed but not provided for in the financial statements are analysed as follows:

Group2010 2009

$’000 $’000

Property, plant and equipment 968 3,798Investment property 6,943 –Development properties for sale 20,216 –Investment in an associate 4,090 3,998

32,217 7,796



36 LEASE CoMMITMENTS

Operating Lease Commitments

(a) For Lessor

The Group and Company has entered into property lease agreements on its property, plant and equipment, investment properties and completed development properties for sale. These non-cancellable leases have remaining non-cancellable lease terms of up to 5 years. Contingent lease receipts are subject to the revenue exceeding a level stated in the respective agreements. Certain property lease agreements have renewal options of up to 5 years for each option term, up to 2 terms, and restrict any assignment and subletting of the lease properties.

At Group level, there is no contingent lease receipts recognised in profit or loss. The amount recognised in 2009 was $5,000.

Future minimum lease receivable under non-cancellable operating leases are as follows:

Group Company2010 2009 2010 2009

$’000 $’000 $’000 $’000

Not later than 1 year 19,607 18,263 1,414 1,487Later than 1 year but not later than 5 years 37,225 44,146 1,426 1,162Later than 5 years 91 3,445 – –

56,923 65,854 2,840 2,649

(b) For Lessee

The Group has entered into operating lease agreements for properties and office equipment. These non-cancellable operating leases have remaining non-cancellable lease terms of up to 9 years. Contingent rents are payable subject to the related revenue exceeding a level stated in the respective agreements. Certain property lease agreements, have renewal options of up to 6 years for each option term, up to 4 terms. The lessee shall not assign, mortgage or charge the lease property without prior consent of the landlord.

Operating lease payments recognised in profit or loss are as follows:

Group2010 2009

$’000 $’000

Minimum lease payments 42,879 39,276Contingent lease payments 6,480 5,496

49,359 44,772



36 LEASE CoMMITMENTS (CoNT’D)

(b) For Lessee (cont’d)

Future minimum lease payable under non-cancellable operating leases are as follows:

Group2010 2009

$’000 $’000

Not later than 1 year 46,236 43,112Later than 1 year but not later than 5 years 108,815 124,445Later than 5 years 36,086 62,707

191,137 230,264

For Sub-Lease Commitments as Lessor

The Group has entered into property lease agreements on the property at No. 18, 20 and 22 Cross Street. These non-cancellable operating leases have remaining non-cancellable lease terms of up to 3 years. Contingent lease receipts are subject to the revenue exceeding a level stated in the respective agreements. Certain property lease agreements have renewal options of up to 3 years, and restrict any assignment and subletting of the leases.

Contingent lease receipts recognised in profit or loss amounted to $71,000 (2009: $62,000).

Future minimum lease receivable under non-cancellable operating leases are as follows:

Group2010 2009

$’000 $’000

Not later than 1 year 19,933 17,464Later than 1 year but not later than 5 years 12,246 19,157

32,179 36,621



37 RELATED PARTY DISCLoSURES

(a) Sale and Purchase of Goods and Services

In addition to related party information disclosed elsewhere in the financial statements, significant transactions with related parties on terms agreed between the parties are as follows:

Group2010 2009

$’000 $’000

AssociatesSales of goods 22,813 15,161Purchase of goods – 1,517

Key management personnel of the CompanySale of property 6,565 –

Controlling shareholders of the CompanySale of property – 3,389

Other related partiesReceiving of services 152 –Purchase of investment securities – 51,209Sale of investment securities – 51,346Office leases 701 126

Please refer to notes 19 and 33 for information on amount due from/to subsidiaries, associates and joint ventures.

(b) Key Management Personnel Compensation

The key management personnel compensation are as follows:Group

2010 2009$’000 $’000

Directors’ fees 615 691Short-term employee benefits 2,849 4,196Share-based payments – 192Defined contribution plans 114 113

3,578 5,192Comprise amounts paid to:– Directors of the Company 1,608 2,738– Other key management personnel 1,970 2,454

3,578 5,192



38 CoNTINGENT LIABILITIES AND CoMMITMENTSCompany

2010 2009

$’000 $’000

(a) Financial support given to those subsidiaries having deficiencies in shareholders’ funds 140,592 40,345

(b) At 31 December 2010, material outstanding litigations against MSC as follows:

(i) In May 2008, the Minister of Energy and Mineral Resources, Indonesia issued a new regulation regarding mine reclamation and closure as detailed in the Minister Regulation No. 18 year 2008, which requires a company to provide a mine closure guarantee in the form of a time deposit placed in a state owned bank in Indonesia. The subsidiary in Indonesia does not believe that a deposit is required under the terms of its Contract of Work but it is working with the Indonesian Mining Association to review these requirements with the Indonesian government and discuss other options for the mine closure guarantee.

(ii) On 9 February 2011, the Penang High Court delivered a decision that MSC has to pay $51,000, interest at the rate of 4% per annum from the date of claim to the date of judgement and further interest at 8% per annum after date of judgment to date of payment. This is in respect of a statement of claim received by MSC on 7 February 2006 from a party for $537,000 with interest at 8% per annum from the date of summons to the date of settlement plus costs for an alleged cost overrun for the implementation of an Enterprise Resource Planning System. The party filed an appeal to the Court of Appeal against the judgement of Penang High Court allowing only part of its claim.

(c) Guarantees

Group

(i) A bank guarantee for $419,000 (2009: $410,000) issued by Malaysia Smelting Corporation Berhad (“MSC”) to Kuala Lumpur Tin Market.

(ii) A guarantee for $2,733,000 (2009: Nil) issued by a subsidiary to Controller of Residential Property.

(iii) A bank guarantee for $6,000,000 (2009: Nil) issued by a subsidiary to British and Malayan Trustees Limited.

(iv) Jointly undertaking by the Company and its subsidiary, Rendezvous Hotels International Private Limited (“RHI”) for indemnity in respect of bank guarantee facilities utilised by subsidiaries under RHI Group amounting to $16,767,000 (2009:$16,483,000).

(v) A bank guarantee for $280,000 (2009: $238,000) issued by the Company to Tuas Power Supply Pte Ltd, for electricity supply to subsidiary, Hotel Rendezvous Private Limited.

Company

In addition to the undertaking/guarantee issued by the Company in item (iv) and (v) above, the Company has also provided a corporate guarantee to a bank for a $24,734,000 (2009: $24,299,000) loan (note 31) taken by a subsidiary.



39 FINANCIAL RISK MANAGEMENT

The Group’s activities expose it to a variety of financial risks. Apart from those risks generated from operations such as extending credits and cash flow management, other risks include the effects of changes in debt and equity market prices, foreign currency exchange rates, interest rates and commodity prices.

The Group’s management monitors its financial position closely with an objective to minimise potential adverse effects on the financial performance of the Group. The Group uses derivative financial instruments, where appropriate, for its risk management activities but does not hold or issue derivative financial instruments for trading purposes.

There has been no change to the Group’s exposure to these risks or the manner in which it manages the risks.

The policies for managing these risks are summarised below.

(a) Foreign exchange risk

The Group operates mainly in Asia Pacific and has exposure to foreign exchange risk as a result of sales or purchase transactions that are denominated in currency other than the respective functional currencies of the Group entities. These foreign exchange risk exposures are mainly in Malaysian Ringgit, Australian Dollar, United States Dollar and Indonesian Rupiah. The Group uses foreign currency forward contracts to manage these exposures which are relatively certain in their timing and extent. The Group also uses term loans in foreign currency to hedge its exposure to foreign exchange risk on investments in foreign operations.

At the end of the reporting period, approximately:

(i) 51% (2009: 39%) of the Group’s trade and other receivables as well as 20% (2009: 12%) of the Group’s trade and other payables are denominated in foreign currencies other than the functional currencies of the Group entities, mainly in United States Dollar and Indonesian Rupiah.

(ii) 41% (2009: 20%) of the Group’s cash and cash equivalents are denominated in foreign currencies other than the functional currencies of the Group entities, mainly in United States Dollar and Indonesian Rupiah.

(iii) 7% (2009: 22%) of the Group’s borrowings are denominated in foreign currencies other than the functional currencies of the Group entities which are United States Dollar.



39 FINANCIAL RISK MANAGEMENT (CoNT’D)

(a) Foreign exchange risk (cont’d)

Sensitivity analysis for foreign currency risk

The following table demonstrates the sensitivity of the Group’s profit after tax to a reasonably possible change in the United States Dollar, Malaysian Ringgit, Australian Dollar, Singapore Dollar and Indonesian Rupiah, exchange rates against the respective functional currencies of the Group entities, with all other variables held constant.

Group2010 2009

Profit after tax Equity Profit after tax Equity$’000 $’000 $’000 $’000

United States Dollar strengthened 5% (2009: 5%) 368 (1,070) (5,012) (2,384)weakened 5% (2009: 5%) 230 1,071 5,012 2,384

Malaysian Ringgit strengthened 5% (2009: 5%) (36) – – –weakened 5% (2009: 5%) 36 – – –

Australian Dollar strengthened 5% (2009: 5%) (5) (3,920) (4) (3,778)weakened 5% (2009: 5%) 5 3,920 4 3,778

Singapore Dollar strengthened 5% (2009: 5%) – (837) – (837)weakened 5% (2009: 5%) – 837 – 837

Indonesian Rupiah strengthened 5% (2009: 5%) 332 – 50 (351)weakened 5% (2009: 5%) (332) – (50) 351

(b) Interest rate risk

The Group’s exposure to market risk for changes in interest rates relates primarily to its cash deposits and debt obligations.

The Group’s policy is to manage its interest cost using a combination of fixed and floating rate debts and also derivative financial instruments such as interest rate swaps and cross currency swaps to hedge interest rate risks.

Surplus funds are placed with reputable banks to generate interest income for the Group.




(b) Interest rate risk (cont’d)

The table below demonstrates the sensitivity to a possible reasonable change in interest rates with all other variables held constant, of the Group’s profit after tax through the impact on interest income from bank deposits and interest expense on floating rate borrowings:

GroupIncrease/decrease Effect on profit

in basis point after tax$’000

31 december 2010– Singapore Dollar + 50 (618)

– 50 618

– Malaysian Ringgit + 25 (424)– 25 424

– Australian Dollar + 50 33– 50 (33)

– New Zealand Dollar + 50 29– 50 (29)

– United States Dollar + 25 (98)– 25 98

– Renminbi + 50 4– 50 (4)

31 december 2009– Singapore Dollar + 50 (359)

– 50 359

– Malaysian Ringgit + 25 (230)– 25 230

– Australian Dollar + 50 30– 50 (30)

– New Zealand Dollar + 50 28– 50 (28)

– United States Dollar + 25 (227)– 25 227

At the end of the reporting period, for the increase/decrease in the various basis points on interest rates for the various currencies, the effects associated with such changes are on the Group’s profit after tax as illustrated above.




(c) Credit risk

The Group has no significant concentrations of credit risk due to its diverse customer base. The credit risk arising from the Group’s normal commercial operations is controlled by individual operating units within strict credit control and guidelines. Policies are in place to ensure on-going credit evaluation and active account monitoring.

At the end of the reporting period, the Group’s and the Company’s maximum exposure to credit risk is represented by the carrying amount of each class of financial assets recognised on the balance sheet.

Financial assets that are neither past due nor impaired

Trade and other receivables that are neither past due nor impaired are creditworthy debtors with good payment record with the Group. Cash and cash equivalents, investment/marketable securities and derivatives that are neither past due nor impaired are placed with or entered into with reputable financial institutions or companies.

Information regarding credit enhancements for trade and other receivables is disclosed in note 19.

Credit risk concentration profile

The Group determines concentrations of credit risk by monitoring the country profile of its trade and other receivables on an on-going basis. The credit risk concentration profile of the Group’s trade and other receivables at the end of the reporting period is as follows:

Group Company2010 2009 2010 2009

$’000 % of total $’000 % of total $’000 % of total $’000 % of total

By country:singapore 20,883 15 48,523 34 228,878 90 482,731 95Malaysia 9,498 7 8,133 6 2,712 1 1,486 –Indonesia 73,352 52 42,639 30 – – – –United States 7 – 7,000 5 – – – –Australia 18,221 13 18,628 13 24,161 9 23,375 5New Zealand 1,831 1 3,015 2 – – – –China, including Hong

Kong and Taiwan 4,603 3 3,608 2 – – – –Philippines 1,098 1 1,085 1 – – – –South Africa 7,173 5 6,790 5 – – – –Other countries 4,279 3 3,559 2 – – – –

140,945 100 142,980 100 255,751 100 507,592 100

At the end of the reporting period, approximately 26% of the Group’s trade and other receivables were due from 2 major customers who deal in tin, located in Indonesia, and value added tax receivable from the Indonesia tax authority.

At 31 December 2009, approximately 16% of the Group’s trade and other receivables were due from 2 major customers who deal in tin, located in Indonesia and Australia, and value added tax receivable from the Indonesia tax authority.




(d) Liquidity risk

The Group manages its asset and debt maturity profile, operating cash flows and the availability of fundings so as to ensure that all refinancing, repayment and funding needs are met in a timely and cost-effective manner. Procedures have been established to monitor and control liquidity on a daily basis by adopting a cash flow management approach.

The following summarises the maturity profile of the Group’s and Company’s financial assets and liabilities used for managing liquidity risk at the end of the reporting period based on contractual undiscounted repayments obligation, including estimated interest payments:

2010$‘000

2009$‘000

1 yearor less

1 to 5years

over 5 years Total

1 yearor less

1 to 5years

Over 5years Total

GroupFinancial assets:Marketable

securities 17 – – 17 16 – – 16Trade and other

receivables 138,630 2,315 – 140,945 141,895 1,085 – 142,980Cash and cash

equivalents 71,597 – – 71,597 56,194 – – 56,194Non-current

security deposit – 217 16,550 16,767 – 207 16,276 16,483Derivatives 487 – – 487 330 – – 330Total undiscounted

financial assets 210,731 2,532 16,550 229,813 198,435 1,292 16,276 216,003

Financial liabilities:Trade and other

payables 109,085 811 101 109,997 91,076 1,126 53 92,255Loans and

borrowings 290,255 314,317 – 604,572 242,608 317,653 – 560,261Derivatives – 576 – 576 6,088 5,176 – 11,264Total undiscounted

financial liabilities 399,340 315,704 101 715,145 339,772 323,955 53 663,780Total net

undiscounted financial assets/(liabilities) (188,609) (313,172) 16,449 (485,332) (141,337) (322,663) 16,223 (447,777)




(d) Liquidity risk (cont’d)2010$‘000

2009$‘000

1 yearor less

1 to 5years

over 5 years Total

1 yearor less

1 to 5years

Over 5years Total

CompanyFinancial assets:Trade and other

receivables 149,286 – 106,465 255,751 357,426 48,080 102,086 507,592Cash and cash

equivalents 1,103 – – 1,103 8,934 – – 8,934Total undiscounted

financial assets 150,389 – 106,465 256,854 366,360 48,080 102,086 516,526

Financial liabilities:Trade and other

payables 106,363 – 143,213 249,576 46,043 – 135,411 181,454Loans and

borrowings 582 24,079 – 24,661 6,424 257,402 – 263,826Derivative – – – – – 4,752 – 4,752Total undiscounted

financial liabilities 106,945 24,079 143,213 274,237 52,467 262,154 135,411 450,032Total net

undiscounted financial assets/(liabilities) 43,444 (24,079) (36,748) (17,383) 313,893 (214,074) (33,325) 66,494

Investment securities held for strategic purpose are excluded from the tables above.

The table below shows the contractual expiry by maturity of the Group and Company’s contingent liabilities and commitments. The maximum amount of the financial guarantee contracts are allocated to the earliest period in which the guarantee could be called.

2010$‘000

2009$‘000

1 yearor less

1 to 5years

over 5 years Total

1 yearor less

1 to 5years

Over 5years Total

GroupFinancial

guarantees 699 8,950 16,550 26,199 648 207 16,276 17,131

CompanyFinancial

guarantees 280 24,951 16,550 41,781 24,537 207 16,276 41,020




(e) Equity price risk

Changes in the market value of investment securities can affect the net income and financial position of the Group. The Group diversifies its investments by business sector and by country. It manages the risk of unfavourable changes by cautious review of the investments before investing and continuous monitoring of their performance and risk profiles.

The investment securities are classified as held-for-trading or available-for-sale (AFS).

At the end of the reporting period, 100 per cent (2009: 100 per cent) of the Group’s held-for-trading equity portfolio consist of shares of companies in Malaysia. If the Malaysia equity prices had been 5 per cent higher/lower with all other variables held constant, the Group’s profit after tax would have been $1,000 (2009: $1,000) higher/lower, arising as a result of higher/lower fair value gains.

At the end of the reporting period, 100 per cent (2009: 100 per cent) of the Group’s AFS equity portfolio consist of shares of companies in Singapore. If the Singapore equity prices had been 5 per cent higher/lower with all other variables held constant, the Group’s AFS reserve in equity would have been $10,052,000 (2009: $11,761,000) higher/lower, arising as a result of higher/lower fair value gains.

(f) Commodity price risk

Commodity price risk is the risk of financial loss resulting from movements in the price of the Group’s commodity inputs and outputs. The Group is exposed to commodity price risk arising from revenue derived from sales of tin and coal as well as to the impact of crude oil prices on the cost of fuel consumed in the mining and processing of tin.

The tin price risk is managed through contractual arrangements with customers and derivative instruments such as forward sales contracts.

Fuel is purchased at the spot rate available at time of purchase, which exposes the Group to the impact of changes to world prices for crude oil. However, the Group continues to assess the potential financial risk associated with rising crude oil prices and whether the risk requires the use of derivative instruments.

At the end of the reporting period, there was no outstanding forward tin sales contract. At 31 December 2009, in relation to the forward tin sales contracts, if the forward tin price had increased by 5 per cent, with all other variables held constant, profit after tax for the year would have been $494,000 lower, and other components of equity would have been $2,836,000 lower. Conversely, if the forward tin prices had decreased by 5 per cent with all other variables held constant, profit after tax would have been $741,000 higher, and other components of equity would have been $2,590,000 higher.




(g) Capital Management

The Group’s objective is to provide a reasonable return to shareholders by investing and developing into businesses commensurate with the level of risks. This also take into account synergies with other operations and activities, the availability of management and other resources, and the fit of the activities with the Group’s longer strategic objectives.

The Group’s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the various core businesses. The Group allocates the amount of capital in proportion to risk, manages the capital structure and makes adjustments to it in the light of changes in economic conditions and the risk characteristic of the underlying assets. In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares, sell assets or increase borrowings. The Group monitors the return of capital, which is defined as total shareholders’ equity (excluding non-controlling interests), gearing ratio, which is defined as borrowings net of cash over the aggregate of total equity and borrowings net of cash and the level of dividends to shareholders. No changes were made in the objectives, policies or processes during the year ended 31 December 2010 and 31 December 2009.

The Group seeks to maintain a balance between the higher returns that might be possible with higher level of borrowings and the advantages and security afforded by a sound capital position.

Neither the Company nor any of its subsidiaries are subject to externally imposed capital requirement.

Group

2010 2009

$’000 $’000

(restated)

share capital 265,928 265,928Retained earnings 746,405 724,754Other reserves 135,253 125,958Reserve of disposal group classified as held for sale (1,173) –Equity attributable to owners of the parent 1,146,413 1,116,640Non-controlling interests 47,190 73,390Total equity 1,193,603 1,190,030

Borrowings net of cash 506,210 484,521

Total equity and borrowings net of cash 1,699,813 1,674,551

Gearing ratio 29.8% 28.9%



40 DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES

The Group has the following derivative financial instruments accounted as:

At 31 December 2010:

(i) Cash flow hedges

(a) Foreign currency forward contracts designated as hedges against expected future sales in United States Dollar (USD):

Sell USD Range of Maturity Period Average Exchange Rate(In million) RM/USD

22.0 From January 2011 to February 2011 3.1423

At 31 December 2010, net fair value gain of $681,000 with a deferred tax expense of $170,000 relating to the cash flow hedges of the expected future sales that were assessed to be highly effective was included in other comprehensive income. Certain forward contracts were assessed to be ineffective. Accordingly, the fair value gain of $91,000 with a deferred tax expense of $22,000 was recognised in the profit or loss.

(b) Foreign currency forward contracts designated as hedges against expected future purchase in Singapore Dollar (SGD):

Buy SGD Maturity Period Average Exchange Rate(S$’000) RM/SGD

73.0 January 2011 2.388

The cash flow hedge on this forward contract was assessed to be ineffective. Accordingly, the fair value loss of $500 was recognised in the profit or loss.

(c) Interest rate swap contracts designated as hedges against interest rate risk arising from floating rate

borrowings in Singapore dollars (SGD):

Notional Amount Maturity Period Receive Floating Interest Rate Pay Fixed Interest Rate(s$ million)

40.0 September 2011 3 month 2.87%Swap Offer Rate






40 DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES (CoNT’D)

(i) Cash flow hedges (cont’d)

The cash flow hedges of the interest rate risk were assessed to be highly effective. The contracts were closed out during the financial year. Fair value loss of $2,178,000 and settlement cost of $3,198,000 relating to the hedging instruments were transferred from hedging reserve to profit or loss.

(ii) Interest rate swap contract

(a) Interest rate swap contracts to manage interest rate risk arising from floating rate borrowings in United States dollars (USD):

Notional Amount Maturity Period Receive Floating Interest Rate Pay Fixed Interest Rate(US$ miilion)

16.5 March 2014 3 month London 2.47%Inter-bank Offer Rate

During the financial year, a fair value loss of $239,000 with a deferred tax credit of $60,000 relating to the interest rate swap contract was charged to profit or loss.

At 31 December 2009:

(i) Cash flow hedges

(a) Foreign currency forward contracts designated as hedges against expected future purchases in Indonesian Rupiah (IDR) and United States Dollar (USD):

Buy IDR Range of Maturity Period Average Exchange Rate(In million) IDR/USD

67,822.0 From January to November 2010 10,434

The cash flow hedges of the expected future purchases were assessed to be highly effective and as at 31 December 2009, a fair value gain of $3,408,000 with a deferred tax expense of $852,000 relating to the hedging instruments was included in other comprehensive income in respect of the contracts.

(b) Foreign currency forward contracts designated as hedges against expected future sales in United States Dollar (USD):

Sell USD Range of Maturity Period Average Exchange Rate(In million) RM/USD

41.3 From January to December 2010 3.41

The cash flow hedges of the expected future sales were assessed to be highly effective and as at 31 December 2009, a fair value loss of $126,000 with a deferred tax credit of $31,000 relating to the hedging instruments was included in other comprehensive income in respect of the contracts.



40 DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES (CoNT’D)

(i) Cash flow hedges (cont’d)

(c) Forward sales contracts of tin designated as hedges against market fluctuations in tin prices:

Contract Amount Range of Maturity Period Average Price(US$ million)

61.8 From January to December 2010 US$15,739 per tonne

The fair value loss of $6,354,000 with a deferred tax credit of $1,792,000 on such contracts that relate to effective hedges was included in other comprehensive income in respect of the contracts. The cash flow hedges of certain future sale contracts were assessed to be ineffective. Accordingly, the fair value loss of $1,451,000 on these contracts was recognised in the profit or loss.

(d) Interest rate swap contracts designated as hedges against interest rate risk arising from floating rate borrowings in Singapore dollars (SGD):

Notional Amount Maturity Period Receive Floating Interest Rate Pay Fixed Interest Rate(s$ million)





The cash flow hedges of the interest rate risk were assessed to be highly effective and as at 31 December 2009, a fair value loss of $2,573,000 relating to the hedging instruments was included in other comprehensive income in respect of the contracts.

(ii) Interest rate swap contract

(a) Interest rate swap contracts to manage interest rate risk arising from floating rate borrowings in United States dollars (USD):

Notional Amount Maturity Period Receive Floating Interest Rate Pay Fixed Interest Rate(US$ million)

19.0 March 2014 3 month London 2.47%Inter-bank Offer Rate

As at 31 December 2009, a fair value loss of $340,000 with a deferred tax credit of $85,000 relating to the interest rate swap contract was charged to profit or loss.



41 SIGNIFICANT ACCoUNTING ESTIMATES AND JUDGEMENT

(a) Estimation Uncertainty

The key assumptions concerning the future and other key sources of estimation uncertainty at the end of the reporting period, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are discussed below:

(i) Impairment of goodwill

The Group determines whether goodwill is impaired at least on an annual basis. The recoverable amount of the cash-generating unit is determined based on higher of fair value less cost to sell and value in use. Management also reviews other economic factors and market conditions to assess whether the recoverable amount as determined using this method is sustainable. Changes in the market value of the cash-generating unit could affect the recoverable amount. The carrying amount of goodwill at 31 December 2010 was $22,425,000 (2009: $35,052,000). More details are given in note 15.

(ii) Depreciation of property, plant and equipment

Property, plant and equipment are depreciated using the appropriate basis as outlined in note 2.12 over the estimated useful lives of these assets. The carrying amount of the Group’s property, plant and equipment at 31 December 2010 was $340,923,000 (2009: $313,033,000). Changes in the estimated economically recoverable ore reserves and resources and expected level of usage and technological developments could impact the economic useful lives and the residual values of these assets, therefore, future depreciation charges could be revised.

(iii) Impairment and amortisation for deferred mine exploration and evaluation expenditure, deferred mine development expenditure, mining rights and mining assets

These require estimates and assumptions on the quantity of economically recoverable ore reserves and resources, expected future costs and expenses to produce the metal or minerals, effective interest rates, expected future prices used in the impairment test for deferred mine development, mine exploration expenditures, mining rights and mining assets. The estimate of the quantity of economically recoverable ore reserves and resources are also used for the amortisation of deferred development and exploration expenditures, mining rights and mining assets. Actual outcomes could differ from these estimates and assumptions.

The carrying amounts are as follows:Group

2010 2009

$’000 $’000

Deferred exploration and evaluation expenditure 5,209 9,396

Deferred mine development expenditure 28,052 19,867

Mining rights 480 584

Mining assets – 31,623



41 SIGNIFICANT ACCoUNTING ESTIMATES AND JUDGEMENT (CoNT’D)

(a) Estimation Uncertainty (cont’d)

(iv) Fair value of properties

Properties are stated at fair value, which has been determined based on valuations as at 31 December 2010. The properties are at valuations performed by registered independent professionally qualified valuers, based on the comparison method, depreciated replacement cost method or discounted cash flow method for existing use. The fair value of the Group’s investment properties at 31 December 2010 was $853,505,000 (2009: $776,877,000), and land and buildings was $292,726,000 (2009: $255,626,000). The basis and assumptions and methods used are outlined in notes 13 and 14.

(v) Impairment loss on investments in associates and joint ventures

MSC has associates and a joint venture which are principally involve in exploration and mining of various minerals and metals. The impairment assessments were based on projected value of the estimated quantity of economically recoverable reserves and resources. These require estimates and assumptions on the quantity of economically recoverable reserves and resources, expected future costs and expenses to produce the minerals and metals, effective interest rates, weighted average cost of capital, expected commencement date for commercial production and future prices used. Actual outcomes could differ from these estimates and assumptions. The carrying amount of the Group’s investments in associates and joint ventures at 31 December 2010 was $67,143,000 (2009: $118,410,000).

(vi) Inventories

Inventories are stated at the lower of cost and net realisable value. Significant management judgement and in certain circumstances estimate on the physical stock quantity are required to determine their cost and net realisable value.

The write down of obsolete or slow moving inventories is based on assessment of its ageing. Inventories are written down when events or changes in circumstances indicate that the carrying amounts may not be recoverable. The management specifically analyses sales trend and current economic trends when making a judgement to evaluate the adequacy of the write down for obsolete or slow moving inventories. Where expectations differ from the original estimates, the differences will impact the carrying amount of inventories.

(vii) Provision for mine rehabilitation and restoration costs

Provision for mine rehabilitation and restoration costs are provided based on the present value of the estimated future expenditure to be incurred. Significant management judgement and estimation is required in determining the discount rate and the expenditure to be incurred subsequent to the cessation of production of each mine property. Where expectations differ from the original estimates, the differences will impact the carrying amount of provision for mine rehabilitation and restoration costs.




(a) Estimation Uncertainty (cont’d)

(viii) Economically recoverable ore reserves and resources

Economically recoverable ore reserves and resources are estimates of the amount of ore that can be economically and legally recoverable from the mining properties. The Group estimates its ore reserves and resources based on information compiled by appropriately qualified persons relating to the geological data on the size, depth and shape of the ore body, and requires complex geological judgements to interpret the data. The estimation of recoverable reserves and resources is based upon factors such as estimates of foreign exchange rates, commodity prices, future capital requirements, and production costs along with geological assumptions and judgements made in estimating the size and grade of the ore body. Changes in the reserve or resource estimates may impact upon the carrying value of mining rights, mining assets, deferred mine development expenditure, deferred exploration and evaluation expenditure, mine properties, property, plant and equipment, goodwill, provision for rehabilitation, recognition of deferred tax assets, and depreciation and amortisation charges.

(b) Judgement

In the process of applying the Group’s accounting policies, management has made the following judgement, apart from those involving estimations, which has the most significant effect on the amounts recognised in the financial statements:

(i) Income taxes

The Group has exposure to income taxes in various jurisdictions. Significant judgement is involved in determining the group-wide provision for income taxes. There are certain transactions and computations for which the ultimate tax determination is uncertain during the ordinary course of business. The Group recognises liabilities for expected tax issues based on estimates of whether additional taxes will be due. Where the final tax outcome of these matters is different from the amounts that were initially recognised, such differences will impact the income tax and deferred tax provisions in the period in which such determination is made.

The carrying amounts are as follows:Group

2010 2009

$’000 $’000

Income tax receivables 11,107 16,384

Income tax payable 26,837 27,020

Deferred tax assets 10,722 10,584

Deferred tax liabilities 75,868 69,056




(b) Judgement (cont’d)

(ii) Disposal group held for sale

At 31 December 2010, the net assets in Australia Oriental Minerals NL (“AOM”), Asiatic Coal Private Limited (“ACPL”) and its subsidiary, PT Asiatic Coal Nusantara are classified as disposal group held for sale. The Board of MSC considered the subsidiaries met the criteria to be classified as held for sale at that date for the following reasons:

– AOM, ACPL and PT Asiatic Coal Nusantara are available for immediate sale and can be sold to a potential buyer in its current condition.

– The Board of MSC had a plan to sell AOM, ACPL and PT Asiatic Coal Nusantara and had entered into preliminary negotiations with a potential buyer. Should negotiations with the party not lead to a sale, a number of other potential buyers had been identified.

– The Board of MSC expects negotiations to be finalised and the sale to be completed within twelve months from 31 December 2010.

42 FAIR VALUE oF FINANCIAL INSTRUMENTS

A. Fair value of financial instruments that are carried at fair value

The following table shows an analysis of financial instruments carried at fair value by level of fair value hierarchy:

Group2010$’000

Quoted prices inactive markets for

identical instrumentsSignificant other

observable inputs

Significantunobservable

inputs Total(Level 1) (Level 2) (Level 3)

Financial assets:Held for trading investments (note 20)– Equity instruments (quoted) 17 – – 17Available-for-sale financial assets (note 20)– Equity instruments (quoted) 199,292 – – 199,292– Equity instruments (unquoted) – – 14,387 14,387Derivatives (note 21)– Foreign currency forward contracts – 487 – 487At 31 December 2010 199,309 487 14,387 214,183

Financial liabilities:Derivatives (note 21)– Interest rate swap contracts – 576 – 576At 31 December 2010 – 576 – 576



42 FAIR VALUE oF FINANCIAL INSTRUMENTS (CoNT’D)

A. Fair value of financial instruments that are carried at fair value (cont’d)

Group2009$’000

Quoted prices inactive markets for

identical instrumentsSignificant other

observable inputs

Significant unobservable

inputs Total(Level 1) (Level 2) (Level 3)

Financial assets:Held for trading investments (note 20)– Equity instruments (quoted) 16 – – 16Available-for-sale financial assets (note 20)– Equity instruments (quoted) 235,295 – – 235,295Derivatives (note 21)– Foreign currency forward contracts – 330 – 330At 31 December 2009 235,311 330 – 235,641

Financial liabilities:Derivatives (note 21)– Forward sales contracts – (5,825) – (5,825)– Foreign currency forward contracts – (263) – (263)– Interest rate swap contracts – (2,928) – (2,928)At 31 December 2009 – (9,016) – (9,016)

Fair value hierarchy

The Group classified fair value measurement using a fair value hierarchy that reflects the significance of the inputs used in making the measurements. The fair value hierarchy has the following levels:

Level 1– Quoted prices (unadjusted) in active markets for identical assets or liabilities

Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices), and

Level 3 – Inputs for the asset or liability that are not based on observable market data (unobservable inputs)

There have been no transfer between Level 1 and Level 2 during the financial years ended 2010 and 2009.




A. Fair value of financial instruments that are carried at fair value (cont’d)

Determination of fair value

Quoted equity instruments (note 20): Fair value is determined by direct reference to their bid price quotations in an active market at the end of the reporting period.

Unquoted equity instruments (note 20): These investments are valued using valuation models which uses both observable and non-observable data. The non-observable inputs to the models include assumptions regarding the future financial performance of the investee, its risk profile, and economic assumptions regarding the industry and geographical jurisdiction in which the investee operates.

Derivatives (note 21): Forward sales contracts, foreign currency forward contracts and interest rate swap contracts are valued using a valuation technique with market observable inputs. These contracts are valued by financial institutions.

Movements in Level 3 financial instruments measured at fair value

The following table presents the reconciliation for all financial instruments measured at fair value based on significant unobservable inputs (Level 3).

Assets measured at fair value based on Level 3Group

2010$’000

Available-for-sale financial assets Equity investements (unquoted)

At 1 January 2010 –Purchases 14,387At 31 December 2010 14,387

There has been no transfer from Level 1 and Level 2 to Level 3 during the financial year ended 2010.

B. Fair value of financial instruments by classes that are not carried at fair value and whose carrying amounts are reasonable approximation of fair value

Current trade and other receivables and payables, Non-current other receivables and payables (notes 19 and 33), Current borrowings and Non-current borrowings at floating rate (note 31).

The carrying amounts of these financial assets and liabilities are reasonable approximation of fair values, either due to their short-term nature or that they are floating rate instruments that are re-priced to market interest rates on or near the end of the reporting period.

Included in the other receivables, an unsecured loan is amortised at fixed rate cost. Its carrying amount is reasonable approximation of fair value at the end of the reporting period.




C. Fair value of financial instruments by classes that are not carried at fair value and whose carrying amounts are not reasonable approximation of fair value

The fair value of financial assets and liabilities by classes that are not carried at fair value and whose carrying amounts are not reasonable approximation of fair value are as follows:

Group Company2010 2009 2010 2009

note $’000 $’000 $’000 $’000Carrying Fair Carrying Fair Carrying Fair Carrying Fair amount Value Amount Value amount Value Amount Value

Financial assets:Available-for-sale

investment securities 20 4 * 4 * 4 * 4 *

Financial liabilities:Fixed rate term loan 31 107,432 112,285 – – – – – –

Available-for-sale investment securities carried at cost* Fair value information has not been disclosed for these investment securities because fair value cannot be

measured reliably and the amount is immaterial. These investment securities represent shares in a company that are not quoted on any market.

Fixed rate term loanThe fair value as disclosed in the table above is estimated based on the present value of future cash flows, discounted at the market rate of interest for similar types of lending or borrowings at the end of the reporting period.

43 EVENTS AFTER THE BALANCE SHEET DATE

(a) On 7 January 2011, a subsidiary company, Sword Investments Private Limited (“SIPL”) exercised all its warrants to purchase 10 million shares at C$0.15 per share for an additional 10,000,000 new common shares in Asian Mineral Resources Limited (“AMR”). As a result, the Group’s shareholding in AMR increased from 24.2% to 25.4%. There is no material impact to the Group financial statements.

(b) The secondary listing of Malaysia Smelting Corporation Berhad (“MSC”) on the Main Board of the Singapore Exchange Securities Trading Limited (“SGX-ST”) has been completed on 27 January 2011, by issuance of additional 25 million shares at issue price of S$1.75 per share. This resulted in an enlarged issued and paid-up share capital of 100 million shares.

Consequent to the secondary listing, the Group’s shareholding in MSC has reduced from 73.1% to 54.8%. Accordingly, non-controlling interests will increase by $43.4 million and there is no impact to the Group profit or loss.



43 EVENTS AFTER THE BALANCE SHEET DATE (CoNT’D)

(c) Subsequent to 31 December 2010, a subsidiary company, Rendezvous Hotels (NZ) Limited was affected by an earthquake in Christchurch on the 22 February 2011. The hotel is currently closed as the city centre is not yet accessible. At 31 December 2010, no write down, other costs or insurance recoveries have been recognised in relation to this event.

44 SEGMENT INFoRMATIoN

For management purposes, the Group is organised into business units based on their products and services, and has four reportable operating segments as follows:

(a) The Resources’ principal activities are in the smelting of tin concentrates and tin bearing materials, the production of various grades of refined tin metal under the MSC brand name and the sale and delivery of refined tin metal and by-products, as well as investments in other metals and mineral resources.

(b) The Hospitality business includes hotel ownership and hotel management under the “Rendezvous” and the “Marque” brands, with strong regional hotel presence in strategic cities.

(c) The Property segment comprises property investment, sales and leasing, property development as well as media advertising. The Group will continue to divest non-core property assets.

(d) The segment for Others comprises strategic financial investments and Group-level corporate services and treasury functions. Non-strategic financial investments were divested in prior years.

Management monitors the operating results of each business unit separately for the purpose of making decisions about resource allocation and performance assessment. Segment performance is evaluated based on profit before tax, as explained in the table below. Certain Group financing (including finance costs), and income taxes are managed on a group basis and are not allocated to operating segments.

Transactions between operating segments are based on terms agreed between the parties.



44 SEGMENT INFoRMATIoN (CoNT’D)

2010 operating Segments

Resources Hospitality Property Others Elimination Consolidated$’000 $’000 $’000 $’000 $’000 $’000

RevenueExternal revenue 1,159,286 146,675 52,760 – – 1,358,721Inter-segment revenue – 274 463 – (737) –Dividend income – – – 5,082 – 5,082Interest income 2,705 812 60 4 – 3,581Fair value changes in financial assets 1,333 – – (2) – 1,331Other income 2,471 74 3,718 2 – 6,265Total Revenue 1,165,795 147,835 57,001 5,086 (737) 1,374,980

Segment resultsOperating profit/(loss) 40,961 (20,217) 11,295 3,351 – 35,390Exceptional gains/(losses) (72,982) (20,973) 104,666 (126) – 10,585Finance costs (10,667) – (2,803) (10,411) – (23,881)Share of results from equity-accounted

associates and joint ventures 1,541 101 136 – – 1,778Profit/(Loss) before tax (41,147) (41,089) 113,294 (7,186) – 23,872Income tax expense (17,155)Profit after tax 6,717

Profit/(Loss) attributable to:Owners of the parent 28,169Non-controlling Interests (21,452)

6,717

segment Assets 455,261 358,599 910,282 199,788 – 1,923,930Investments in associates and joint

ventures 62,582 448 4,113 – – 67,143517,843 359,047 914,395 199,788 – 1,991,073

Unallocated assets 21,829Total assets 2,012,902

Segment Liabilities 396,208 26,072 259,729 23,178 – 705,187Unallocated liabilities 114,112Total liabilities 819,299

other information:Depreciation 7,221 14,861 567 – – 22,649Amortisation 5,443 140 – – – 5,583Other material non-cash items:Impairment of goodwill 8,134 5,054 – – – 13,188Impairment of plant and equipment 855 10,324 – – – 11,179Impairment of investment in associates 41,146 – – – – 41,146Impairment of mining assets 23,884 – – – – 23,884

Additions to non-current assets 26,675 6,247 4,140 – – 37,062




2009 operating Segments

Resources Hospitality Property Others Elimination Consolidated$’000 $’000 $’000 $’000 $’000 $’000

(restated)RevenueExternal revenue 755,239 127,861 61,722 7,074 – 951,896Inter-segment revenue – 127 1,169 – (1,296) –Dividend income – – – 4,373 – 4,373Interest income 2,722 469 967 362 – 4,520Fair value changes in financial assets (1,791) – – 8,213 – 6,422Other income 391 47 3,634 362 – 4,434Total Revenue 756,561 128,504 67,492 20,384 (1,296) 971,645

Segment resultsOperating profit/(loss) 22,094 (7,826) 21,006 12,591 – 47,865Exceptional gains/(losses) (416) (6,051) 114,069 29,540 – 137,142Finance costs (10,528) – (796) (13,936) – (25,260)Share of results from equity-accounted

associates and joint ventures – profit for the year 526 64 392 – – 982 – Exceptional item 26,639 – – – – 26,639Profit/(Loss) before tax 38,315 (13,813) 134,671 28,195 – 187,368Income tax expense (23,760)Profit after tax 163,608

Profit attributable to:Owners of the parent 159,282Non-controlling Interests 4,326

163,608

segment Assets 403,548 338,961 818,722 243,459 – 1,804,690Investments in associates and joint

ventures 113,673 399 4,338 – – 118,410517,221 339,360 823,060 243,459 – 1,923,100

Unallocated assets 26,968Total assets 1,950,068

Segment Liabilities 345,835 17,099 78,971 206,983 – 648,888Unallocated liabilities 111,150Total liabilities 760,038

other information:Depreciation 5,437 12,233 564 – – 18,234Amortisation 4,526 156 – – – 4,682Other material non-cash items:Impairment of goodwill 1,706 310 – – – 2,016Impairment of plant and equipment 130 205 – – – 335Impairment of investment in an associate 168 – – – – 168

Additions to non-current assets 45,096 7,090 40,087 – – 92,273




Geographical Information

Revenues attributable to geographic areas are based on the location for which the revenue is earned or the business is transacted. Geographical assets are based on the location or operation of the Group’s assets.

2010 Geographical Information

singapore Malaysia Indonesia Australia Others Elimination Consolidated$’000 $’000 $’000 $’000 $’000 $’000 $’000

Segment Revenue Revenue and income from

external parties 85,382 1,158,307 9,360 100,986 20,945 – 1,374,980 Inter-segment revenue 625 546 175,418 – – (176,589) –Total Revenue 86,007 1,158,853 184,778 100,986 20,945 (176,589) 1,374,980

Non-current assets 984,874 104,649 47,927 114,206 574 – 1,252,230

2009 Geographical Information

singapore Malaysia Indonesia Australia Others Elimination Consolidated

$’000 $’000 $’000 $’000 $’000 $’000 $’000

Segment Revenue Revenue and income from

external parties 106,220 752,829 5,764 89,833 16,999 – 971,645 Inter-segment revenue 1,119 246 148,858 – – (150,223) –Total Revenue 107,339 753,075 154,622 89,833 16,999 (150,223) 971,645

Non-current assets 884,676 97,412 82,278 120,618 3,189 – 1,188,173 Non-current assets information presented above consist of property, plant and equipment, investment properties, goodwill, other intangible assets, and other non-current assets* as presented in the consolidated balance sheet.

* excluding security deposit.

Information about major customers

Revenue from one major customer amount to $170,161,000 (2009: $179,149,000), arising from sales by the Resources segment.



45 SUBSIDIARIES, ASSoCIATES AND JoINT VENTURES

Effective cost ofshareholding % investment

Country of 2010 2009 2010 2009Incorporation Business % % $’000 $’000

SubsidiariesHeld by the Company:Australia Oriental Minerals NL* ˆ ß ± Australia Tin and base

metals exploration5(a) 5(a) – 564

Malaysia Smelting Corporation Berhad*ˆ Malaysia Tin mining & smelting

37(b) 37(b) 25,402 25,402

Atbara Holdings Private Limited singapore Property 100 100 1,000 1,000Baxterley Holdings Private Limited singapore Investment 100 100 20,000 20,000Bushey Park Private Limited singapore Investment 100 100 29,992 29,992Glade Holdings Sendirian BerhadØ Malaysia Property – 100 – –Malayan Securities Private Limited singapore Investment 100 100 83,500 5,500Malayan Tin Smelting Company Sendirian

Berhad*Malaysia Investment 100 100 702 702

Merevale Holdings Private Limited singapore Investment 100 100 40,000 40,000Rendezvous Hotels International Private

Limitedsingapore Hotels & resorts

management100 100 4,880 4,880

STC International Private Limited singapore Restaurant 100 100 – –STC Realty (Butterworth) Sendirian Berhad* Malaysia Property 100 100 10,979 10,979Straits Developments Private Limited singapore Property 100 100 5,988 5,988Straits Equities Private LimitedØØ singapore Investment 100 100 1,000 1,000Straits Media Private Limited singapore Media Advertising 100 100 1,000 10,000straits Trading Amalgamated Resources

Private Limitedsingapore Investment 100 100 20,597 597

Sword Investments Private Limited singapore Investment 100 100 19,000 5,000Sword Private Limited singapore Investment 100 100 – –Wavertree Holdings Private Limited singapore Investment 100 100 – –Rendezvous Hospitality Group Private

Limitedsingapore Investment 100 100 – –

264,040 161,604Held through subsidiaries:Allegra Hotel Pty Ltd* Australia Hotel management 100 100Hotel Rendezvous Private Limited singapore Hotel owning &

management100 100

Marque Hotels International Pty Limited* Australia Hotel management 100 100Rendezvous Hotels (Australia) Pty Ltd* Australia Hotels & resorts

management100 100

Rendezvous Hotels (NZ) Limited* New Zealand Hotel management 100 100Rendezvous Hotels Management Pty Ltd* Australia Hotel management 100 100



45 SUBSIDIARIES, ASSoCIATES AND JoINT VENTURES (CoNT’D)



SubsidiariesHeld through subsidiaries:Rendezvous India Hospitality Private

Limited**India Hotel management 100 100

Rendezvous Properties Private Limited singapore Property 100 100Straits Tinfields Private Limited singapore Tin Mining 100 100Straits Trading Private Limited singapore Property 100 100straits Trading Amalgamated Resources

Sendirian Berhad*Malaysia Investment 100 100

Straits Unit Trust* Australia Property Trust 100 100Sword Properties Pty Ltd* Australia Trustee Company 100 100Sword Unit Trust* Australia Property Trust 100 100Unicorn Square Limited singapore Property 100 100Rendezvous Hotels Asia Private Limited singapore Hotels & resorts

management100 100

Shanghai Rendezvous Hotels Management Co Ltd*

People’s Republic of

China

Hotels & resorts management

100 100

Malaysia Smelting Corporation (Warehousing) Sdn. Bhd.* ß

Malaysia Tin warehousing 73 73

MSC Properties Sdn. Bhd.* ß Malaysia Property holding and rental

73 73

Rahman Hydraulic Tin Sdn. Bhd.* ß Malaysia Tin mining 73 73Bemban Corporation Ltd.* ß British Virgin

IslandsInvestment holding 73 73

Kajuara Mining Corporation Pty. Ltd.* ß Australia Investment holding 73 73PT Bangka Resources** ß Indonesia Dormant 73 73Straits Resource Management Private

Limited ß

singapore Investment holding 73(c) 100

PT MSC Indonesia* ß Indonesia Tin exploration and mining

73 73

PT Koba Tin* ß Indonesia Tin mining and smelting

55 55

PT SRM Indonesia** ß Indonesia Providing tin exploration, management and consulting services

73(c) 100

Asiatic Coal Private Limited ß ± singapore Investment holding 40(d) 40(d)PT Asiatic Coal Nusantara* ß ± Indonesia Coal mining 40 40Tertius Development Pte Ltd singapore Property 100 –






AssociatesHeld by the Company:Johan Kekal Sendirian Berhad** Malaysia Property

development45 45 1,123 1,123

Taiko-Straits Developments Sdn. Bhd.* Malaysia Property development

30 30 2,462 2,462

3,585 3,585Held through subsidiaries:Asian Mineral Resources Limited** ß New

Zealand (i)Exploration and development of mineral property interests (ii)

19(f) 13(f)

BCD Resources NL** ß Australia Mining and refining of gold, and exploration of base metals

–(g) 16(g)

Guilin Hinwei Tin Co Ltd** ß China Smelting, refining and sales of tin and tin products

25 25

PT Tenaga Anugerah** ß Indonesia Off-shore tin mining –(e) 29(e)Redring Solder (M) Sdn. Bhd.* ß Malaysia Manufacture and sale

of solder products29 29

Joint VenturesHeld through subsidiaries:Coastal Coffees Pty Ltd** Australia Restaurant 50 50KM Resources, Inc.* ß Labuan,

Malaysia Investment holding 22 22




The subsidiaries and associates are audited by Ernst & Young LLP, Singapore unless stated otherwise.

* Audited by member firms of Ernst & Young Global in the respective countries.** These subsidiaries, associates and joint ventures are audited by other firms of auditors.ˆ Companies listed on the Stock Exchange Ltd in the respective countries where it was incorporated.ß Subsidiaries/Associates of listed subsidiaries.Ø This subsidiary was voluntarily liquidated in 2010.ØØ Voluntary liquidation in progress.± These subsidiaries were re-designated to disposal group classified as held for sale in 2010.

(i) Asian Mineral Resources Limited (AMR) was originally incorporated in New Zealand in year 1988 and was subsequently incorporated under the laws of the Province of British Columbia, Canada by a certificate of continuance as of December 2004.

(ii) AMR principal mineral property interest, held through a joint venture is in Ban Bhuc Project area located in Son La Province, in northwestern Vietnam.

(a) Direct interest held jointly with other subsidiaries is 82% (2009: 82%)(b) Combined interest held jointly with other subsidiaries and an associate is 73% (2009: 73%).(c) The entire shareholding of this subsidiary was transferred by the Company to Malaysia Smelting Corporation

Berhad in August 2010. The Group’s effective ownership interest was reduced from 100% to 73%.(d) This is considered as a subsidiary because direct interest held by Australia Oriental Minerals NL and MSC is

30% each.(e) This associate was divested in 2010. In 2009, direct interest held by MSC Group was 40%.(f) This is considered as an associate because direct interest held by MSC is 18% (2009: 18%). MSC exercises

significant influence by virtue of its representative on the Board of this associate.(g) This associate was divested in 2010. In 2009, this was considered as an associate because direct interest held

by MSC was 22%.


VoTING RIGHTS

Shareholders’ voting rights are set out in Article 72 of the Company’s Articles of Association:

On a show of hands, every member present in person or by proxy shall have one vote and upon a poll, every member present in person or by proxy shall have one vote for every share which he holds.

DISTRIBUTIoN oF SHAREHoLDERS BY SIZE oF SHAREHoLDING

Size of ShareholdingsNo. of

shareholders % No. of Shares %

1 – 999 1,036 27.52 330,237 0.101,000 – 10,000 2,238 59.44 7,118,926 2.1810,001 – 1,000,000 486 12.91 21,299,491 6.541,000,001 and above 5 0.13 297,148,346 91.18

Total 3,765 100.00 325,897,000 100.00

LIST oF TWENTY LARGEST SHAREHoLDERS

No. Name No. of Shares %

1 THE CAIRNS PTE LTD 289,839,552 88.94 2 LOKE WAN YAT REALTY SENDIRIAN BERHAD 2,519,632 0.77 3 UOB KAY HIAN PTE LTD 2,111,912 0.65 4 BANK OF SINGAPORE NOMINEES PTE LTD 1,519,257 0.47 5 HSBC (SINGAPORE) NOMINEES PRIVATE LIMITED 1,157,993 0.36 6 UNITED OVERSEAS BANK NOMINEES PRIVATE LIMITED 705,528 0.22 7 MAYBAN NOMINEES (SINGAPORE) PRIVATE LIMITED 597,768 0.18 8 UOB NOMINEES (2006) PRIVATE LIMITED 591,608 0.18 9 LOKE YUEN KIN RUBY 424,841 0.13 10 CHOO MEILEEN 414,432 0.13 11 HOO YAN MENG 410,184 0.13 12 MARIAN HOLMES 410,000 0.13 13 AU YONG AH NGOH 396,984 0.12 14 TEO SOO CHUAN (PTE) LTD 345,300 0.11 15 DBS NOMINEES PRIVATE LIMITED 318,544 0.10 16 CITIBANK NOMINEES SINGAPORE PRIVATE LIMITED 290,365 0.09 17 PAVILION FOUNDATION LIMITED 236,393 0.07 18 ESTATE OF CHEAH SIEW HOON ROSIE, DECEASED 234,127 0.07 19 PHILLIP SECURITIES PTE LTD 228,748 0.07 20 ESTATE OF LIM KOON EE @ EILEEN KHOO, DECEASED 227,436 0.07 Total: 302,980,604 92.99

S H A R E H o L D E R I N F o R M AT I o NAs at 23 March 2011


S H A R E H o L D E R I N F o R M AT I o NAs at 23 March 2011

SUBSTANTIAL SHAREHoLDERS

No. of SharesDirect Interest Deemed Interest %

The Cairns Private Limited 289,839,552 – 88.94Raffles Investments Limited – 289,839,552 * 88.94Aequitas Private Limited – 289,839,552 * 88.94Siong Lim Private Limited – 289,839,552 * 88.94Tecity Private Limited – 289,839,552 * 88.94Dr Tan Kheng Lian 4,860 289,839,552 * 88.94

* Deemed to have an interest in the shares held by The Cairns Private Limited.

PERCENTAGE oF SHAREHoLDING HELD BY THE PUBLIC

Based on information availabe to the Company as at 23 March 2011, approximately 11.01% of the issued share ordinary shares of the Company was held by the public and thus, Rule 723 of the SGX Listing Manual has been complied with.


N o T I C E o F A N N UA L G E N E R A L M E E T I N G

The Straits Trading Company Limited(A member of The Tecity Group)(Company No.: 188700008D)(Incorporated in Singapore)

NOTICE IS HEREBY GIVEN that the Annual General Meeting of members of The Straits Trading Company Limited (the “Company”) will be held at 9 Battery Road, Level 21, Sky Garden, Straits Trading Building, Singapore 049910, on Thursday, 28 April 2011 at 2:30 p.m. for the following business:

1. To receive and consider the report of the Directors and the financial statements for the year ended 31 December 2010.

2. To re-elect the following Directors:

(a) Mr Razman Ariffin who retires by rotation pursuant to Article 99 of the Articles of Association of the Company.

(b) Ms Chew Gek Hiang who retires by rotation pursuant to Article 99 of the Articles of Association of the Company.

Note: Mr Razman Ariffin, if re-appointed, will continue as the Chairman of the Remuneration Committee and will be considered as an independent Director. Ms Chew Gek Hiang, if re-appointed, will continue as a member of the Audit and Remuneration Committees and will be considered as a non-independent non-executive Director.

3. To consider and, if thought fit, pass the resolutions pursuant to Section 153(6) of the Companies Act, Cap. 50, to re-appoint the following directors as Directors of the Company to hold office until the next Annual General Meeting of the Company:

(a) Tan Sri Dato’ Dr Lin See-Yan

(b) Mrs Elizabeth Sam

Note: Tan Sri Dato’ Dr Lin See-Yan, if re-appointed, will continue as a member of the Audit, Nominating and Remuneration Committees and will be considered as an independent Director. Mrs Elizabeth Sam, if re-appointed, will continue as the Chairman of the Nominating Committee and will be considered as an independent Director.

4. To approve the payment of Directors’ fees of S$615,079 for the year ended 31 December 2010 (2009: S$690,479).

5. To re-appoint auditors and to authorise the Board to fix the remuneration of the auditors.


6. As Special Business:

To consider and, if thought fit, pass the following resolution as an Ordinary Resolution:

“That authority be and is hereby given to the Directors of the Company to:

(a) (i) issue shares in the capital of the Company (“shares”) whether by way of rights, bonus or otherwise; and/or

(ii) make or grant offers, agreements or options (collectively, “Instruments”) that might or would require shares to be issued, including but not limited to the creation and issue of (as well as adjustments to) warrants, debentures or other instruments convertible into shares,

at any time and upon such terms and conditions and for such purposes and to such persons as the Directors may in their absolute discretion deem fit; and

(b) (notwithstanding the authority conferred by this Resolution may have ceased to be in force) issue shares in pursuance of any Instrument made or granted by the Directors while this Resolution was in force,

provided that:

(1) the aggregate number of shares to be issued pursuant to this Resolution (including shares to be issued in pursuance of Instruments made or granted pursuant to this Resolution) does not exceed 50% of the issued shares in the capital of the Company (as calculated in accordance with sub-paragraph (2) below), of which the aggregate number of shares to be issued other than on a pro-rata basis to shareholders of the Company (including shares to be issued in pursuance of Instruments made or granted pursuant to this Resolution) does not exceed 20% of the issued shares in the capital of the Company (as calculated in accordance with sub-paragraph (2) below);

(2) (subject to such manner of calculation as may be prescribed by the Singapore Exchange Securities Trading Limited) for the purpose of determining the aggregate number of shares that may be issued under sub-paragraph (1) above, the percentage of issued shares shall be based on the number of issued shares in the capital of the Company at the time of the passing of this Resolution, after adjusting for:

A. new shares arising from the conversion or exercise of any convertible securities or share options or vesting of share awards which are outstanding or subsisting at the time of the passing of this Resolution; and

B. any subsequent consolidation or subdivision of shares;

(3) in exercising the authority conferred by this Resolution, the Company shall comply with the provisions of the Listing Manual of the Singapore Exchange Securities Trading Limited for the time being in force (unless such compliance has been waived by the Singapore Exchange Securities Trading Limited) and the Articles of Association for the time being of the Company; and




(4) (unless revoked or varied by the Company in general meeting) the authority conferred by this Resolution shall continue in force until the conclusion of the next Annual General Meeting of the Company or the date by which the next Annual General Meeting of the Company is required by law to be held, whichever is the earlier.”

7. To transact any other ordinary business of the Company.

By Order of the Board

Sng Kiat HuangSecretary

singapore12 April 2011



Notes:

A member of the Company is entitled to appoint a proxy to attend the meeting and vote in his stead. A proxy need not be a member of the Company. Proxy forms must be deposited at the Company’s registered office not less than 48 hours before the time for holding the meeting or any adjournment thereof.

Additional information relating to Notice of Annual General Meeting:

The Ordinary Resolution in item 6 above, if passed, will renew the authority for the Directors, effective until the next Annual General Meeting, to issue shares, make or grant instruments convertible into shares and to issue shares pursuant to such instruments, up to an amount not exceeding, in total, 50% of the issued shares in the capital of the Company, of which up to 20% may be issued other than on a pro-rata basis to shareholders. For determining the aggregate number of shares that may be issued, the percentage of issued shares in the capital will be calculated based on the number of issued shares in the capital of the Company at the time that this Resolution is passed, after adjusting for new shares arising from the conversion or exercise of any convertible securities or share options or vesting of share awards which are outstanding or subsisting at the time that this Resolution is passed, and any subsequent consolidation or subdivision of shares.

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P R oX Y F o R MThe Straits Trading Company Limited(A member of The Tecity Group)(Company No.: 188700008D)(Incorporated in Singapore)

I/We, (Name) of

(Address)

being a member/members of THE STRAITS TRADING COMPANY LIMITED hereby appoint :

name address NRIC/Passport Number

Proportion ofShareholdings (%)

and/or (delete as appropriate)

name address NRIC/Passport Number

Proportion ofShareholdings (%)

failing him/her, the Chairman of the Meeting, as my/our proxy/proxies to vote for me/us on my/our behalf, at the Annual General Meeting of the Company, to be held at 9 Battery Road, Level 21, Sky Garden, Straits Trading Building, Singapore 049910, on Thursday, 28 April 2011 at 2:30 p.m., and at any adjournment thereof. I/We direct my/our proxy/proxies to vote for or against the Resolutions to be proposed at the Meeting as indicated hereunder. If no specific direction as to voting is given, the proxy/proxies will vote or abstain from voting at his/their discretion, as he/they will on any other matter arising at the Meeting.

no. Resolutions for Against1. To adopt Directors’ Report and Audited Financial Statements2. To re-elect Directors retiring under the Articles of Association:

(a) Mr Razman Ariffin(b) Ms Chew Gek Hiang

3. To re-appoint Directors pursuant to Section 153(6) of Companies Act, Cap. 50:(a) Tan Sri Dato’ Dr Lin See-Yan(b) Mrs Elizabeth Sam

4. To approve Directors’ fees5. To appoint Auditors and to authorise Directors to fix their remuneration6. To empower Directors to issue shares pursuant to Section 161 of the Companies Act,

Cap. 507. Any other business

Dated this day of 2011

Signature(s) of Member(s)/Common Seal

IMPORTANT: PLEASE READ NOTES OVERLEAF

IMPORTANT:1. For investors who have used their CPF monies to buy THE STRAITS

TRADING COMPANY LIMITED shares, this Annual Report is sent solely FOR INFORMATION ONLY.

2. This Proxy Form is not valid for use by CPF investors and shall be ineffective for all intents and purposes if used or purported to be used by them.

Total Numberof Shares

noteS

1. A member entitled to attend and vote at the Meeting is entitled to appoint one or two proxies to attend and vote in his stead. Such proxy need not be a member of the Company.

2. Where a member appoints two proxies, the appointments shall be invalid unless he specifies the proportion of his holding (expressed as a percentage of the whole) to be represented by each proxy.

3. A member should insert the total number of shares held. If the member has shares entered against his name in the Depository Register (as defined in Section 130A of the Companies Act, Cap.50 of Singapore), he should insert that number. If the member has shares registered in his name in the Register of Members of the Company, he should insert that number. If the member has shares entered against his name in the Depository Register and registered in his name in the Register of Members, he should insert the aggregate number. If no number is inserted, the instrument appointing a proxy or proxies will be deemed to relate to all the shares held by the member.

4. The instrument appointing a proxy or proxies must be deposited at the registered office of the Company at 9 Battery Road, #28-01 Straits Trading Building, Singapore 049910 not less than 48 hours before the time set for holding the Meeting.

5. The instrument appointing a proxy or proxies must be under the hand of the appointor or of his attorney duly authorised in writing. Where the instrument appointing a proxy or proxies is executed by a corporation, it must be executed under its common seal or under the hand of an attorney duly authorised in writing.

6. Where an instrument appointing a proxy or proxies is signed on behalf of the appointor by an attorney, the letter or power of attorney or a duly certified copy thereof must (failing previous registration with the Company) be lodged with the instrument of proxy, failing which the instrument may be treated as invalid.

7. The Company shall be entitled to reject the instrument appointing a proxy or proxies if it is incomplete, improperly completed, illegible or where the true intentions of the appointor are not ascertainable from the instructions of the appointor specified in the instrument appointing a proxy or proxies. In addition, in the case of shares entered in the Depository Register, the Company may reject any instrument appointing a proxy or proxies if the member, being the appointor, is not shown to have shares entered against his name in the Depository Register as at 48 hours before the time appointed for holding the Meeting, as certified by The Central Depository (Pte) Limited to the Company.

This annual report is printed on environmentally-friendly paper.

9 Battery road, #28-01, Singapore 049910Tel: (65) 6513 9288Fax: (65) 6534 7202Website: www.stc.com.sgEmail: [email protected]

Company registration no.: 188700008D

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