Board of Directors
: Sng Sze Hiang Tong Jia Pi Julia Yap Hock Soon Raymond Koh Bock Swi Ng Leok Cheng Yo Nagasue
Chairman and CEO Executive Director Executive Director Independent Director Independent Director Independent Director
Audit Committee
: Raymond Koh Bock Swi (Chairman) Ng Leok Cheng Yo Nagasue : Yo Nagasue (Chairman) Ng Leok Cheng Raymond Koh Bock Swi Tong Jia Pi Julia : Ng Leok Cheng (Chairman) Raymond Koh Bock Swi Yo Nagasue Tong Jia Pi Julia : Sng Sze Hiang (Chairman) Tong Jia Pi Julia Yap Hock Soon : Koh Sock Tin, CPA : M&C Services Private Limited 138 Robinson Road #17-00 The Corporate Office Singapore 068906 : 47 Sungei Kadut Avenue Singapore 729670 Tel: 6793 0110 Fax: 6668 0797 : KPMG LLP Public Accountants and Certified Public Accountants 16 Raffles Quay #22-00 Hong Leong Building Singapore 048581 Partner-in-charge: Adrian Tan (commencing FYE 31 March 2011)
Nominating Committee
Remuneration Committee
Executive Committee
Registered Office
Auditors
Boards Conduct of its Affairs Principle 1: Effective Board to lead and control the Company
The Boards primary role is to protect and enhance long-term shareholder value. It sets the corporate strategy and directions of the Group and ensures effective management leadership and proper conduct of the Groups business by supervising the executive management. The Board has established a number of committees to assist in the execution of the Boards responsibilities. These committees include an Audit Committee (AC), an Executive Committee, a Nominating Committee (NC) and a Remuneration Committee (RC). Matters which require the approval of the Board for decision include corporate strategy, periodic results announcements, audited financial statements, proposal of final dividends and authorisation of major and interested person transactions. Other matters are delegated by the Board to committees which the Board monitors. The Board has adopted a set of internal controls which sets out approval limits for capital expenditures, investments and divestments and bank borrowings at Board level. To ensure efficient and effective running of the business, approval sub-limits are set for the Executive Committee which comprises the executive directors of the Company. The Board conducts regular scheduled meetings. When circumstances require, ad-hoc meetings are arranged or exchange of views are held outside the formal environment of Board meetings. Board meetings are conducted in Singapore and tele-conferencing is used when necessary. The Directors attendance at Board and Board Committee meetings held for the year ended 31 March 2011 are disclosed below. Board Meetings 4 5 5 5 2 5 5 Audit Committee Meetings 5 5 2 5 Nomination Committee Meeting 1 1 1 1 1 Remuneration Committee Meetings 2 2 2 1 2
Name of Director Sng Sze Hiang Tong Jia Pi Julia Raymond Koh Bock Swi Ng Leok Cheng Yo Nagasue Yap Hock Soon No. of meetings held
10
Board Composition and Balance Principle 2: Strong and independent element on the Board
The Board consists of three non-executive independent directors and three executive directors. The independence of each director is reviewed annually by the NC. The NC adopts the Codes definition of what constitutes an independent director in its review. As a result of the NCs review of the independence of each director, the NC is of the view that the non-executive directors of the Company are independent directors and further, no individual or small group of individuals dominate the Boards decision making process. The Board reviews the size of the Board on an annual basis, and considers the present Board size as appropriate for the current scope and nature of the Groups operations. The NC is of the view that the current Board comprises persons who as a group, provide core competencies necessary to meet the Groups targets. The NC is also of the view that the current board size of six directors is appropriate, taking into account the nature and scope of the Groups operations. Key information regarding the directors and key management personnel of the Group is set out in the section Profile of Directors and Key Management Personnel on pages 19 to 20.
Role of Chairman and Chief Executive Officer Principle 3: Clear division of responsibilities at the Board level to ensure a balance of power and authority
Mr. Sng Sze Hiang serves as both the Companys Chairman and Chief Executive Officer (CEO). As the independent directors formed half of the composition of the Board, the Company believes that there is a good balance of power and authority within the Board and no individual or small group can dominate the Boards decision-making process. In addition, the independent directors have demonstrated their commitment in their role and are expected to act in good faith and in the interest of the Company. In addition, the AC, NC and RC are chaired by independent directors.
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Board Membership Principle 4: Formal and transparent process for appointment of new Directors
The NC is set up to assist the Board on all Board appointments and re-appointments and to assess the effectiveness of the Board as a whole and the contribution of each director. The Chairman of the NC, Mr. Yo Nagasue, is an independent director. There are three other members in the NC: Mr. Raymond Koh Bock Swi, Independent Director Mr. Ng Leok Cheng, Independent Director Ms. Tong Jia Pi Julia, Executive Director
The main terms of reference of the NC are: (1) (2) make recommendations to the Board on new appointments to the Board; make recommendations to the Board on the re-nomination of retiring directors standing for reelection at the Companys annual general meeting, having regard to the directors contribution and performance; determine annually whether or not a director is independent; review the size and composition of the Board with the objective of achieving a balanced Board in terms of the mix of experience and expertise; formulate and implement a succession plan for directors and senior management; decide on how the Boards performance may be evaluated and recommend objective performance criteria to the Board; and assess the effectiveness of the Board as a whole and the contribution by each individual director to the effectiveness of the Board.
12
Access to Information Principle 6: Board members to have complete, adequate and timely information
To assist the Board in the discharge of its duties, the management provides the Board with periodic accounts of the Company and the Groups financial performance and position. The directors receive Board papers in advance of Board and Committee meetings and have separate and independent access to the Companys senior management and company secretary. There is a procedure whereby any director may in the execution of his duties, take independent professional advice. The company secretary attends all Board meetings and is responsible to ensure that Board procedures are followed. It is the company secretarys responsibility to ensure that the Company complies with the requirements of the Companies Act. Together with the other management staff, the company secretary is responsible for compliance with all other rules and regulations which are applicable to the Company.
Remuneration Committee (RC) Procedures for Developing Remuneration Policies Principle 7: Formal and transparent procedure for fixing the remuneration packages of directors Level and Mix of Remuneration Principle 8: Remuneration of directors should be adequate but not excessive
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Out of four members of the RC, three of them are non-executive independent directors and they as well as the board of directors are of the view that Ms. Tong Jia Pi Julia, an executive director should remain a member of the RC as her valued contribution is important to the RCs decision making process. The main terms of reference of the RC are: (1) (2) (3) (4) (5) (6) make recommendations to the Board on the framework of remuneration for the directors and senior management of the Company and its subsidiaries; make recommendations to the Board on specific remuneration packages for each executive director and CEO (or executive of equivalent rank) of the Company and its subsidiaries; review all benefits and long-term incentive schemes (including share schemes) and compensation packages for the directors and senior management of the Company and its subsidiaries; review service contracts for the directors and senior management of the Company and its subsidiaries; administer the employees share option scheme (ESOS) and performance share plan (Share Plan) adopted by the Company; and review remuneration packages of group employees who are immediate family members (spouse, child, adopted child, step-child, sibling or parent) of any of the directors or substantial shareholders of the company.
The Groups remuneration policy is to provide competitive remuneration packages at market rates which reward successful performance and attract, retain and motivate directors and staff. The executive directors remuneration packages include a variable bonus element which is performance-related. The RC determines the remuneration of executive directors based on the performance of the Group and the individual. Non-executive directors are paid directors fees, subject to approval at the Annual General Meeting. Executive directors do not receive directors fees. The remuneration of the directors of the Company for the year ended 31 March 2011 is as follows:
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Name Sng Sze Hiang Tong Jia Pi Julia Raymond Koh Bock Swi Ng Leok Cheng Yo Nagasue Yap Hock Soon
Band S$500,000 to S$1,000,000 S$500,000 to S$1,000,000 Below S$250,000 Below S$250,000 Below S$250,000 Below S$250,000
The Group adopts a remuneration policy for staff comprising a fixed component and a variable component. The fixed component is in the form of a base salary. The variable component is in the form of a variable bonus that is linked to the performance of the individual companies in the Group and of the individual staff. Staff appraisals are conducted at least once a year. To align the interests of staff with that of the shareholders, the Company has also implemented the TT International Employees Share Option Scheme, and Performance Share Plan as another element of the variable component of the staff remuneration. The Company will seek the approval of independent shareholders prior to any granting of options and/or shares to the controlling shareholders of the Company. To date, the Company has not granted any options to directors, staff and the controlling shareholders. The Company is of the view that disclosure of the remuneration of key management staff who are not directors, will be detrimental to the Groups interest because of the very competitive nature of the industry the Group operates in. Other than the Companys executive director, Mr. Yap Hock Soon who is a brother-in-law of the Chairman and CEO, there are no other family members that are holding managerial position in the Group.
Accountability and Audit Principle 10: The Board is accountable to the shareholders while the management is accountable to the Board
The Board believes in conducting itself in ways that deliver the maximum sustainable value to the shareholders. In presenting the financial statements and periodic results announcements to the shareholders, it is the Boards aim to provide a balanced and comprehensive assessment of the Groups performance and prospects. The management provides the Board with periodic accounts of the Company and the Groups performance and position.
Audit Committee Principle 11: Establishment of an Audit Committee (AC) with written terms of reference
The AC comprises three members, all of whom are independent directors. The chairman of the AC is Mr. Raymond Koh Bock Swi and the other members of the AC are: Mr. Ng Leok Cheng Mr. Yo Nagasue
15
The AC: has full access to and co-operation from management as well as full discretion to invite any director or personnel to attend its meetings; has been given reasonable resources to enable it to complete its functions properly; and has reviewed findings and evaluation of the system of internal controls with external auditors.
The AC met a total of 5 times during the year ended 31 March 2011. The Executive Directors, Company Secretary and the external auditors normally attend the meetings. The AC, having reviewed the volume of non-audit services to the Group by the external auditors, and being satisfied that the nature and extent of such services will not prejudice the independence and objectivity of the external auditors, has recommended their re-nomination. The AC reviews the independence of the external auditors annually. In accordance to Rule 716 of The Singapore Exchange Securities Trading Limited with respect to the appointment of the different external auditors for different subsidiaries, the Audit Committee and the Board confirmed that they are satisfied that such arrangement would not compromise the standard and effectiveness of the external audit of the Company.
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Communication with Shareholders Principle 14: Regular, effective and fair communication with shareholders Greater Shareholder Participation Principle 15: Greater shareholder participation at annual general meetings
The Company believes in regular and timely communication with shareholders and it is the Boards policy to inform all shareholders on all major developments that has an impact on the Group. The Groups quarterly results are published through the SGXNET, news releases and the Companys website and Shareinvestor.com investor relations website. All information on the Companys new initiatives are disseminated via SGXNET and/or by a news release. Price sensitive information is first publicly released, either before the Company meets with any group of investors or analysts or simultaneously with such meetings. Results are announced and annual reports are issued within the mandatory period and are available on the Companys website, except where extensions have been granted by the relevant authorities. All shareholders of the Company receive the annual report and notice of general meetings. The notice is also advertised in newspapers and made available on the SGXNET. The Board regards the annual general meeting as an opportunity to communicate directly with shareholders and encourages participative dialogue. The members of the Board will attend the annual general meeting and are available to answer questions from shareholders present. Key management personnel and external auditors are also present to assist directors in addressing relevant queries by shareholders.
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Material Contracts
Save for the service agreements between the Executive Directors and the Company, there were no material contracts entered into by the Company and its subsidiaries involving the interest of the Chief Executive Officer, directors or controlling shareholders of the Company for the financial year ended 31 March 2011.
Risk Management
The Group is continually reviewing and improving the business and operational activities to take into account the risk management perspective. This includes reviewing management and manpower resources, updating work flows, process and procedures to meet the current and future market conditions. The Group has also considered the various financial risk, details of which are found on pages 81 to 84 of the Annual Report.
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19
20
Directors Report
We are pleased to submit this annual report to the members of the Company together with the audited financial statements for the financial year ended 31 March 2011.
Directors
The directors in office at the date of this report are as follows: Sng Sze Hiang Tong Jia Pi Julia Raymond Koh Bock Swi Ng Leok Cheng Yo Nagasue Yap Hock Soon
Directors interests
According to the register kept by the Company for the purposes of Section 164 of the Singapore Companies Act, Chapter 50 (the Act), particulars of interests of directors who held office at the end of the financial year in shares in the Company and in related corporations, other than wholly owned subsidiaries, are as follows: Shareholdings in which the director has a direct interest At beginning At end As at of the year of the year 21 April 2011 Name of director and corporation in which interests are held The Company Ordinary shares Sng Sze Hiang^@ Tong Jia Pi Julia^ Raymond Koh Bock Swi Ng Leok Cheng Yap Hock Soon*>
@
Include shares held in the name of Sng Sze Hiangs nominee Include shares held in the name of Yap Hock Soons wife Tong Jia Pi Julia is the wife of Sng Sze Hiang. Yap Hock Soon is the brother-in-law of Sng Sze Hiang.
131,000,000 688,000
131,000,000 688,000
131,000,000 688,000
>
21
Directors Report
By virtue of Section 7 of the Companies Act, Chapter 50, Sng Sze Hiang and Tong Jia Pi Julia are deemed to have interests in those subsidiaries of the Company, which are wholly-owned by the Company or the Group, at the beginning and at the end of the financial year and in the following subsidiaries which are not wholly-owned by the Group: Shareholdings in which the director is deemed to have an interest At beginning At end of the year of the year Related Corporations T.T. International Limited Ordinary shares of MMK1,000 each Sng Sze Hiang Tong Jia Pi Julia T.T. Electrical Electronics Corporation (M) Sdn. Bhd. Ordinary shares of RM1 each Sng Sze Hiang Tong Jia Pi Julia Akira Middle East L.L.C Ordinary shares of AED1,000 each Sng Sze Hiang Tong Jia Pi Julia TTC Sales and Marketing (SA) (Proprietary) Limited Ordinary shares of ZAR1 each Sng Sze Hiang Tong Jia Pi Julia ITL (Middle East) L.L.C Ordinary shares of AED1,000 each Sng Sze Hiang Tong Jia Pi Julia AIMS Trading (Private) Limited Ordinary shares of LKR10 each Sng Sze Hiang Tong Jia Pi Julia Akira Electric Corporation Holdings Ltd Ordinary shares of BAHT100 each Sng Sze Hiang Tong Jia Pi Julia Athletic AGD Sp. z.o.o. Ordinary shares of PLN500 each Sng Sze Hiang Tong Jia Pi Julia
533 533
533 533
3,000,000 3,000,000
3,000,000 3,000,000
147 147
147 147
420,292 420,292
420,292 420,292
147 147
147 147
1,320,000 1,320,000
1,320,000 1,320,000
490 490
490 490
1,020 1,020
1,020 1,020
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Directors Report
Shareholdings in which the director is deemed to have an interest At beginning At end of the year of the year Related Corporations Athletic International S.A. Ordinary shares of PLN1 each Sng Sze Hiang Tong Jia Pi Julia A & D Sp. z.o.o. Ordinary shares of PLN500 each Sng Sze Hiang Tong Jia Pi Julia A-Beyond Tex Sp. z.o.o. Ordinary shares of PLN100 each Sng Sze Hiang Tong Jia Pi Julia Brahma (Polska) Sp. z.o.o. Ordinary shares of PLN500 each Sng Sze Hiang Tong Jia Pi Julia Athletic Manufacturing Sp. z.o.o. Ordinary shares of PLN50 each Sng Sze Hiang Tong Jia Pi Julia TTA Holdings Ltd Ordinary shares Sng Sze Hiang Tong Jia Pi Julia TEAC Australia Pty Ltd Ordinary shares Sng Sze Hiang Tong Jia Pi Julia Akira Iberia Ordinary shares Sng Sze Hiang Tong Jia Pi Julia 1,020 1,020 3,000,000 3,000,000 3,000,000 3,000,000 117,500,000 117,500,000 117,500,000 117,500,000 64,000 64,000 64,000 64,000 156 156 156 156 1,560 1,560 1,560 1,560 480 480 480 480 5,728,422 5,728,422 5,728,422 5,728,422
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Directors Report
Except as disclosed in this report, no director who held office at the end of the financial year had interests in shares, debentures, warrants or share options of the Company, or of related corporations, either at the beginning or at the end of the financial year. Except as disclosed under the Share Options section of this report, neither at the end of, nor at any time during the financial year, was the Company a party to any arrangement whose objects are, or one of whose objects is, to enable the directors of the Company to acquire benefits by means of the acquisition of shares in or debentures of the Company or any other body corporate. Except for salaries, bonuses, fees and benefits that are disclosed in note 28 to the financial statements, since the end of the last financial year, no director has received or become entitled to receive, a benefit by reason of a contract made by the Company or a related corporation with the director, or with a firm of which he is a member, or with a company in which he has a substantial financial interest.
Share options
The TT International Employees Share Option Scheme (the Option Scheme) and the TT International Performance Share Plan (the Share Plan) of the Company were approved and adopted by its members at an Extraordinary General Meeting held on 8 August 2002. The Option Scheme and Share Plan are administered by the Remuneration Committee, comprising four directors, Ng Leok Cheng (Chairman), Raymond Koh Bock Swi, Yo Nagasue and Tong Jia Pi Julia. Other information regarding the Option Scheme and the Share Plan are set out below: (i) Option Scheme The Remuneration Committee shall have the absolute discretion to grant the options with a subscription price at no discount, or at a discount of up to a maximum of 20% of the market price, being the average of the last dealt price of the Companys shares on the Singapore Exchange Trading Limited (SGX-ST) on the five market days immediately preceding the date of grant of such options. Subject to the rules and such other conditions as may be imposed by the Remuneration Committee from time to time, the options granted are exercisable in whole or in part at any time: (a) after the first anniversary of the date of grant of the option if the subscription price of the option granted was at market price; and after the second anniversary of the date of grant of the option if the subscription price of the option granted was at a discount to the market price,
(b)
24
Directors Report
provided always that an option that is granted to an eligible employee shall be exercised before the tenth anniversary of the date of grant of the option and an option which is granted to a non-executive director shall be exercised before the fifth anniversary of the date of grant of that option. The options granted by the Company do not entitle the holders of the options, by virtue of such holding, to any rights to participate in any share issue of any other company.
(ii)
Share Plan The Remuneration Committee may award an eligible participant with fully paid shares in the Company, their equivalent cash value or combinations thereof, free of charge, upon the participant achieving prescribed performance target(s). There are no vesting periods beyond the performance achievement periods.
The total number of shares issued and issuable in respect of all options and awards pursuant to the Option Scheme and Share Plan shall not exceed 15% of the total issued share capital of the Company on the day preceding the relevant date of the option or award. Since the commencement of the Option Scheme and Share Plan: (i) no options have been granted pursuant to the Option Scheme to any person to take up unissued shares in the Company or its subsidiaries; no shares in the Company have been awarded to any person pursuant to the Share Plan; and no shares have been issued by virtue of any exercise of option to take up unissued shares of the Company or its subsidiaries.
(ii) (iii)
As at the end of the financial year, there were no unissued shares of the Company and its subsidiaries under option.
Audit committee
The members of the Audit Committee during the financial year and at the date of this report are: Raymond Koh Bock Swi Ng Leok Cheng Yo Nagasue (Chairman)
The Audit Committee has held four meetings since the last directors report. Specific functions of the Audit Committee include reviewing the scope of work of the external auditors, and receiving and considering the auditors reports. The Audit Committee also recommends the appointment of the external auditors and reviews the level of audit fees.
25
Directors Report
In addition, the Audit Committee has, in accordance with Chapter 9 of the Singapore Exchange Listing Manual, reviewed the requirements of approval and disclosure of interested person transactions, reviewed the internal procedures set up by the Company to identify and report and where necessary, seek approval for interested person transactions and reviewed interested person transactions. The Audit Committee is satisfied with the independence and objectivity of the external auditors and has recommended to the Board of Directors that the auditors, KPMG LLP, be nominated for re-appointment as auditors at the forthcoming Annual General Meeting of the Company.
Auditors
The auditors, KPMG LLP, have indicated their willingness to accept re-appointment.
26
Statement by Directors
The Company is being restructured under a Scheme of Arrangement (the Scheme) sanctioned by the Court of Appeal in Singapore on 13 October 2010, with an effective date of 19 April 2010. At the date of this statement, the process of ascertaining the amounts of the claims of certain related party creditors is still on-going. In addition, there are claims that are currently contingent in nature, for which the amounts have not yet been determined. The ability of the Group and the Company to continue in operation in the foreseeable future and to meet their financial obligations as and when they fall due depend on the matters set out in note 2 to the financial statements. The directors consider that different possibilities regarding the future exist and that the differing outcomes can cause the financial position as at 31 March 2011, together with profit or loss, other comprehensive income and changes in equity for the year then ended, to be very different from what is currently presented in the financial statements. The directors also consider that there are no practical means available to resolve such difficulties, due to the effect of such differing outcomes, in the preparation of these financial statements. Accordingly, the directors are of the opinion that, notwithstanding these difficulties, the preparation of these financial statements on a going concern basis provides sufficient information to serve the interests of shareholders and other stakeholders who may use these financial statements. Further details on the basis of preparation of these financial statements are set out in note 2 to the financial statements. In our opinion: (a) having regard to and taking into consideration the matters disclosed in the financial statements, in particular note 2 to the financial statements, the financial statements set out on pages 30 to 88 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 March 2011 and the results, changes in equity and cash flows of the Group for the year ended on that date in accordance with the provisions of the Singapore Companies Act, Chapter 50 and Singapore Financial Reporting Standards; and at the date of this statement, subject to the matters referred to in note 2 to the financial statements, there are reasonable grounds to believe that the Company will be able to pay its debts as and when they fall due.
(b)
The Board of Directors has, on the date of this statement, authorised these financial statements for issue. On behalf of the Board of Directors
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28
In addition, due to the on-going restructuring of the Company, the directors assessments of the valuation of the Companys investments in subsidiaries and the recoverability of amounts due from its subsidiaries are subject to significant uncertainty. The above and other matters are discussed in greater detail in note 2 (and other notes) to these financial statements. Disclaimer of opinion Because of the significance of the matters described in the Basis for disclaimer of opinion paragraphs, we have not been able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion. Accordingly, we do not express an opinion on the consolidated financial statements of the Group or the financial position of the Company.
KPMG LLP Public Accountants and Certified Public Accountants Singapore 1 September 2011
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As at 31 March 2011
Balance Sheets
Group Note 2011 $000 2010 $000 (Restated) 123,399 6,777 15,652 2,957 4,097 152,882
Company 2011 2010 $000 $000 (Restated) 88,432 17,852 106,284 87,239 17,752 104,991
Non-current assets Property, plant and equipment Investment properties Subsidiaries Intangible assets Other investments Deferred tax assets
5 6 7 8 9 10
Current assets Inventories Trade and other receivables Cash and cash equivalents
11 12 13
Total assets Equity Share capital Reserves Equity attributable to owners of the Company Non-controlling interests Total equity Non-current liabilities Financial liabilities Other payables Deferred tax liabilities
310,123
14 15
16 10
251,895 251,895
301 301
Current liabilities Trade and other payables Financial liabilities Provisions Current tax payable
18 16 17
406,368 310,123
30
Note
2011 $000 426,452 295 426,747 (22,575) (328,952) (33,446) (6,023) (139,691) (103,940) 75,862 (9,232)
Revenue Other operating income Changes in inventories of finished goods Purchase of goods Staff costs Depreciation Other operating expenses (Loss)/Profit from operations Finance income Finance expense Net finance income/(expense) (Loss)/Profit before income tax Income tax credit/(expense) Loss for the year Attributable to: Owners of the Company Non-controlling interests Loss for the year 20
2010 $000 (Restated) 539,860 43,031 582,891 (9,090) (420,984) (39,752) (6,955) (96,674) 9,436 1,660 (7,599) (5,939) 3,497 (4,217) (720)
21 19
22
(4.16)
31
Note
2011 $000
Loss for the year Changes in fair value of available-for-sale investments Reclassification of impairment loss on available-for-sale investments to income statement Translation differences relating to financial statements of foreign subsidiaries Net surplus on revaluation of property, plant and equipment Income tax on other comprehensive income Other comprehensive income for the year, net of income tax Total comprehensive income for the year Total comprehensive income attributable to: Owners of the Company Non-controlling interests Total comprehensive income for the year
32
Group
Fair value and revaluation reserves $000 Accumulated profits/ (losses) $000 Total equity $000 Noncontrolling interests $000
At 1 April 2009
Total comprehensive income for the year Loss for the year, as previously reported Prior year adjustments 29 450 450 (1,170) (4,120) 4,570 (4,120) 4,570 (1,170) (5,290) 4,570 (720)
1,382
1,382
1,382
(2,678) (3,649) (2,618) (925) 9,488 (10,195) 450 2,678 3,649 2,618 9,488 (10,195) 3,550 (10,195) (10,195) 3,550 (707) (257) (925)
4,556
4,556
Other comprehensive income Changes in fair value of available for-sale investments Reclassification of impairment loss on available-for-sale investments to income statement Translation differences relating to financial statements of foreign subsidiaries Net surplus on revaluation of property, plant and equipment
Total comprehensive income for the year, as restated Realisation of fair value reserves upon liquidation of subsidiaries Disposal of property, plant and equipment Disposal of investment properties
Transactions with owners, recorded directly in equity Distributions to owners Dividend payments to non-controlling interest of subsidiaries 140,563 54 19,069
(28,370)
(201,253)
(69,937)
33
34
Note Share capital $000 Capital reserves $000 Fair value and revaluation reserves $000 Accumulated profits/ (losses) $000 Total equity $000 Noncontrolling interests $000 Foreign currency translation reserve $000 Total attributable to equity holders of the Company $000 29 140,563 54 19,069 (28,370) (201,253) (69,937) 3,690 (66,247) 140,563 54 19,069 (28,370) (205,823) 4,570 (74,507) 4,570 3,690 (70,817) 4,570 (33,963) (33,963) (3,175) (37,138) 4,866 2,098 (33,963) 4,866 2,098 4,201 4,201 6,964 (26,999) 2,098 2,098 665 665 475 475 (2,700) 665 2,573 4,201 7,439 (29,699) 140,563 54 23,935 (26,272) (235,216) (96,936) (299) (299) 691 (299) (299) (96,245)
Group
Total comprehensive income for the year Loss for the year
Other comprehensive income Changes in fair value of available-for-sale investments Translation differences relating to financial statements of foreign subsidiaries Net surplus on revaluation of property, plant and equipment
Transactions with owners, recorded directly in equity Distributions to owners Dividend payments to non-controlling interest of subsidiaries
At 31 March 2011
Note Operating activities Loss for the year Adjustments for: (Gain)/Loss on disposal of property, plant and equipment Loss on disposal of investment properties Gain on disposal of available-for-sale investments Impairment loss on goodwill Impairment loss on available-for-sale investments Loss on liquidation of subsidiaries Changes in fair value of investment properties Depreciation and amortisation Additional provision for potential liabilities arising from disputed contingent claims as defined under the Scheme of Arrangement and other Scheme-related expenses Finance income Finance expense Income tax (credit)/expense Unrealised exchange loss/(gain) Operating (loss)/profit before changes in working capital Changes in working capital: Inventories Trade and other receivables Trade and other payables Bills payable and trust receipts Provisions Deposits from customers Cash generated from operations Income tax refunded/(paid) Interest income received Interest paid on bills payable and trust receipts Net cash from/(used in) operating activities Investing activities Purchase of property, plant and equipment and intangible assets Net proceeds from disposal of property, plant and equipment Net proceeds from disposal of investment properties Proceeds from disposal of available-for-sale investments Proceeds from liquidation of subsidiaries, net of cash Net cash (used in)/from investing activities Financing activities Dividend payments to non-controlling interests of subsidiaries Interest paid on borrowings Proceeds from interest-bearing borrowings Proceeds from finance leases Repayment of debts under the Reverse Dutch Auction of the Scheme of Arrangement Repayment of interest-bearing borrowings Payment of obligations under finance leases Net cash used in financing activities Net increase/(decrease) in cash and cash equivalents Cash and cash equivalents at 1 April Effect of foreign exchange rate changes on balances held in foreign currencies Adjustments for bank overdrafts and other liabilities admitted as Scheme Creditors Cash and cash equivalents at 31 March
2011 $000 (37,138) (23) (1,204) 861 (1,430) 6,079 63,000 (75,862) 9,232 (172) 7,291 (29,366) 18,410 25,049 7,424 4,618 535 2,369 29,039 166 687 (5,361) 24,531 (3,843) 992 2,334 (517) (299) (5,728) 535 126 (14,750) (3,277) (372) (23,765) 249 (15,666) (423) 23,962 8,122
2010 $000 (Restated) (720) 3,282 636 4,556 2,964 (47) 7,013 (1,660) 7,599 4,217 (6,911) 20,929 (448) 5,693 (2,583) (24,376) 610 (1,268) (1,443) (1,156) 1,660 (1,107) (2,046) (9,333) 2,617 8,735 4,501 6,520 (173) (2,071) 1,399 98 (16,431) (695) (17,873) (13,399) (3,979) 1,712 (15,666)
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13
35
36
The financial statements of the Group and the Company have been prepared on a going concern basis, which assumes that the Group and the Company will continue in operation at least for a period of twelve months from the reporting date. The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or to the amounts and classification of liabilities that may be necessary if the Group and the Company are unable to continue in operation in the foreseeable future. Should the going concern assumption be inappropriate, adjustments would have to be made to reflect the situation that assets may need to be realised other than in the normal course of business and at amounts which could differ significantly from the amounts at which they are recorded in the balance sheet. In addition, the Group and the Company may have to provide for further liabilities that might arise, and to reclassify non-current assets and non-current liabilities as current assets and current liabilities, respectively. The status of implementation of the Scheme has also resulted in significant uncertainty in estimating: (i) the amounts at which assets and liabilities should be recorded as at 31 March 2011; and (ii) the accuracy and completeness of the prior year adjustments which the directors considered necessary for presentation in these financial statements (see note 29). The amount of assets and liabilities currently recorded in the accounting records of the Company and its subsidiaries, including amounts recoverable from or payable to group companies, are based on claims and payables which have arisen in the ordinary course of business. Accordingly, the amounts at which assets are currently recorded (including the carrying amounts of property, plant and equipment, intangible assets, investments in group companies and amounts recoverable from external parties and group companies) assume that the Group and the Company will, amongst other things, be able to operate profitably in the future. It is currently difficult to assess and estimate with any degree of certainty the amounts that will ultimately be realised or recovered due to the uncertainties caused by the current difficult operating conditions and the status of the Scheme. Further, as of the Scheme Effective Date and as of the reporting date, the amounts at which the liabilities (including amounts due to Scheme Creditors, claims from related party creditors, potential liabilities arising from disputed contingent claims as defined under the Scheme, and other Scheme-related expenses) should be recorded cannot be reliably estimated and, accordingly, no adjustments have been made for the purposes of these financial statements. The directors of the Company have taken note of the current status of the Scheme and the Groups ability to generate positive cash flows from its continuing operations, particularly in the past financial year.
37
(b)
Basis of measurement
The financial statements have been prepared on the historical cost basis except for certain financial assets and financial liabilities which are measured at fair value.
(c)
(d)
38
(e)
39
(a)
Basis of consolidation
(i) Business combinations Business combinations are accounted for using the acquisition method as at the acquisition date, which is the date on which control is transferred to the Group. Control is the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. In assessing control, the Group takes into consideration potential voting rights that are currently exercisable. The consideration transferred does not include amounts related to the settlement of pre-existing relationships. Such amounts are generally recognised in profit or loss. Costs related to the acquisition, other than those associated with the issue of debt or equity securities, that the Group incurs in connection with a business combination are expensed as incurred. Any contingent consideration payable is recognised at fair value at the acquisition date. If the contingent consideration is classified as equity, it is not remeasured and settlement is accounted for within equity. Otherwise, subsequent changes to the fair value of the contingent consideration are recognised in profit or loss.
40
(b)
Foreign currencies
Foreign currency transactions Transactions in foreign currencies are translated to the respective functional currencies of Group entities at exchange rate at the date of the transactions. Monetary assets and liabilities denominated in foreign currencies at the reporting date are retranslated to the functional currency at the exchange rate at the reporting date. Non-monetary assets and liabilities denominated in foreign currencies that are measured at fair value are retranslated to the functional currency at the exchange rate at the date on which the fair value was determined. Non-monetary items in a foreign currency that are measured in terms of historical cost are translated using the exchange rate at the date of the transaction. Foreign currency differences arising on retranslation are recognised in profit or loss, except for differences arising on the retranslation of monetary items that in substance form part of the Groups net investment in a foreign operation (see below) and available-for-sale equity instruments.
41
(c)
42
Depreciation methods, useful lives and residual values are reviewed, and adjusted as appropriate, at each reporting date. When the use of a property changes from owner-occupied to investment property, the property is remeasured to fair value and reclassified as investment property. Any gain arising on remeasurement is recognised in profit or loss to the extent that the gain reverses a previous impairment loss on the specific property, with any remaining gain recognised in other comprehensive income and presented in the revaluation reserve in equity. Any loss is recognised in other comprehensive income and presented in the revaluation reserve to the extent that an amount had previously been included in the revaluation reserve relating to the specific property, with any remaining loss recognised immediately in profit or loss.
(d)
Investment properties
Investment property is property held either to earn rental income or capital appreciation or both. It does not include properties held for sale in the ordinary course of business, used in the production or supply of goods or services, or for administrative purposes. Investment property is measured at fair value, with any change recognised in the income statement. Rental income from investment properties is accounted for in the manner described in note 4(m).
43
(e)
Intangible assets
Goodwill Goodwill represents the excess of: the fair value of the consideration transferred; plus the recognised amount of any non-controlling interests in the acquiree; plus if the business combination is achieved in stages, the fair value of the existing equity interest in the acquiree,
over the net recognised amount (generally fair value) of the identifiable assets acquired and liabilities assumed. When the excess is negative, a bargain purchase gain is recognised immediately in profit or loss. Goodwill is measured at cost less accumulated impairment losses. In respect of equityaccounted investees, the carrying amount of goodwill is included in the carrying amount of the investment, and an impairment loss on such an investment is not allocated to any asset, including goodwill, that forms part of the carrying amount of the equity-accounted investee. Trademarks Trademarks recorded in the financial statements are amortised over their estimated useful lives, taking into account the ability to renew the trademarks in their respective jurisdictions and after adjusting for impairment losses, if any. It is tested for impairment annually as described in note 4(g). Distribution rights Distribution rights for brands or products are stated at cost less accumulated amortisation and impairment loss and are tested for impairment annually as described in note 4(g). Amortisation is charged to the income statement on a straight-line basis over their estimated useful lives of 20 years.
44
45
46
47
48
(h)
Leases
When entities within the Group are lessees of a finance lease Leased assets in which the Group assumes substantially all the risks and rewards of ownership are classified as finance leases. Upon initial recognition, property, plant and equipment acquired through finance leases are capitalised at the lower of its fair value and the present value of the minimum lease payments. Subsequent to initial recognition, the asset is accounted for in accordance with the accounting policy applicable to that asset. Leased assets are depreciated over the shorter of the lease term and their useful lives. Lease payments are apportioned between finance expense and reduction of the lease liability. The finance expense is allocated to each period during the lease term so as to produce a constant periodic rate of interest on the remaining balance of the liability. Contingent lease payments are accounted for by revising the minimum lease payments over the remaining term of the lease when the lease adjustment is confirmed. When entities within the Group are lessees of an operating lease Where the Group has the use of assets under operating leases, payments made under the leases are recognised in the income statement on a straight-line basis over the term of the lease, unless another systematic basis is more representative of the time pattern of the benefit derived. Lease incentives received are recognised in the income statement as an integral part of the total lease payments made. Contingent rentals are charged to the income statement in the accounting period in which they are incurred. When entities within the Group are lessors of an operating lease Assets leased out under operating lease arrangements relate to the Groups warehouse and office facilities that were previously the subject of a sale and leaseback transaction. These assets are also used to generate rental income. Rental income (net of any incentives given to lessees) is recognised on a straight-line basis over the lease term.
49
(j)
Employee benefits
Defined contribution plans Obligations for contributions to defined contribution pension plans are recognised as an expense in profit or loss in the periods during which services are rendered by employees. Short-term employee benefits Short-term employee benefit obligations are measured on an undiscounted basis and are expensed as the related service is provided. These include salaries, annual bonuses and paid annual leave. A liability is recognised for the amount expected to be paid under short-term cash bonus or profit-sharing plans if the Group has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably. Share-based payments TT International Employees Share Option Scheme (Option Scheme) and TT International Performance Share Plan (Share Plan) have been put in place to grant options and award shares to eligible employees and participants, respectively. Details of the Option Scheme and Share Plan are disclosed in the Directors Report. The fair value of options granted is recognised as an employee expense with a corresponding increase in equity. The fair value is measured at grant date and spread over the period during which the employees become unconditionally entitled to the options. At each balance sheet date, the Company revises its estimates of the number of options that are expected to become exercisable. It recognises the impact of the revision of original estimates in employee expense and in a corresponding adjustment to equity over the remaining vesting period. The proceeds received net of any directly attributable transactions costs are credited to share capital when the options are exercised.
50
(l)
Intra-group guarantees
Where the Company enters into financial guarantee contracts to guarantee the indebtedness of other companies within the Group, the Company considers these to be insurance arrangements, and accounts for them as such. In this respect, the Company treats the guarantee contract as a contingent liability until such time as it becomes probable that the Company will be required to make a payment under the guarantee. A provision is recognised based on the Companys estimate of the ultimate cost of settling all claims incurred but unpaid at the balance sheet date. The provision is assessed by reviewing individual claims and tested for adequacy by comparing the amount recognised and the amount that would be required to settle the guarantee contract.
51
(n)
(o)
Government grants
Cash grants received from the government in relation to the Jobs Credit Scheme are recognised as income upon receipt.
(p)
52
(q)
(r)
Segment reporting
An operating segment is a component of the Group that engages in business activities from which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Groups other components. All operating segments operating results are reviewed regularly by the Chairman and Chief Executive Officer (CEO) to make decisions about resources to be allocated to the segment and to assess its performance, and for which discrete financial information is available.
53
(s)
Group Cost/Valuation At 1 April 2009 Translation differences on consolidation Additions Surplus on revaluation recognised directly in equity Liquidation of subsidiaries Disposals Reversal of depreciation on revaluation At 31 March 2010 Translation differences on consolidation Additions Surplus on revaluation recognised directly in equity Disposals Reversal of depreciation on revaluation At 31 March 2011
Note
1,838 278
(1,073)
4,613
(705) 222
(4,501) 2,447
1,187 583
391 793
188 397
(2,675) 9,333
704 24 (8,932)
2,846 (5,060)
(59) (1,192)
(478)
(112) (2,133)
(215) (663)
(70) (1,080)
(77) 4,390
(1,901) 22,068
86,459
6,222
9,493
12,292
8,273
4,779
(1,978) 153,976
35
(1,429)
1,430
1,165 101
21 880
(776) 535
114 550
(175) 347
(1,045) 3,843
120
4,081
(989)
(786)
(705)
(202)
(602)
4,201 (3,284)
(86) 4,459
(1,927) 22,793
87,889
6,499
9,608
11,346
8,735
4,349
(2,013) 155,678
54
Group Accumulated depreciation At 1 April 2009 Translation differences on consolidation Depreciation charge for the year Liquidation of subsidiaries Disposals Reversal of depreciation on revaluation At 31 March 2010 Translation differences on consolidation Depreciation charge for the year Disposals Reversal of depreciation on revaluation At 31 March 2011 Carrying amount At 1 April 2009 At 31 March 2010 At 31 March 2011
Note
Renovations $000
Total $000
4,765
9,589
8,613
6,065
3,886
32,918
(609)
(4,711)
654
140
169
(4,357)
255 24 (178)
1,937 (36)
1,872 (189)
(77)
(1,901)
3,929
6,561
9,610
6,625
3,852
(1,978) 30,577
(105)
(190)
(339)
(12)
(97)
(743)
86
1,927
131 (476)
1,502 (608)
1,196 (608)
824 (192)
357 (430)
6,023 (2,314)
(86)
(1,927)
3,479
7,265
9,859
7,245
3,682
(2,013) 31,530
55
Company Cost/Valuation At 1 April 2009 Additions Disposals At 31 March 2010 Additions Disposals At 31 March 2011 Accumulated depreciation At 1 April 2009 Depreciation charge for the year Disposals At 31 March 2010 Depreciation charge for the year Disposals At 31 March 2011 Carrying amount At 1 April 2009 At 31 March 2010 At 31 March 2011
Furniture, fittings and office equipment $000 508 1 509 48 (2) 555
97 5 102 4 106 17 12 8
5,478 355 (236) 5,597 311 (48) 5,860 82,799 87,239 88,432
Freehold and leasehold buildings comprise mainly commercial properties which were occupied by the Group and also used for the provision of warehousing and logistics services to third parties. The carrying amount of leasehold buildings available for provision of warehousing and logistics services to third parties as at 31 March 2011 is approximately $4,297,000 (2010: $4,935,000). Leasehold building under construction comprises the development of an 8-storey retail and warehousing complex under the Warehouse Retail Scheme in Jurong, Singapore. The construction activities of the retail and warehousing complex have been temporarily suspended. As at 31 March 2011, property, plant and equipment with a carrying amount of $410,000 (2010: $516,000) for the Group and $233,000 (2010: $371,000) for the Company were acquired under finance lease agreements. The amounts outstanding under the finance lease agreements are set out in note 16 to the financial statements.
56
INVESTMENT PROPERTIES
Group Note At 1 April Translation differences on consolidation Disposal of investment properties Changes in fair value At 31 March 2011 $000 6,777 (228) 1,430 7,979 2010 $000 19,580 171 (13,021) 47 6,777
19
Investment properties were revalued at close to the balance sheet date by firms of independent professional valuers who have appropriate recognised professional qualifications and recent experience in the locations and categories of the properties being valued. The fair values are based on market values, being the estimated amount for which a property could be exchanged on the date of the valuation between a willing buyer and a willing seller in an arms length transaction. Investment properties comprise a number of industrial buildings that are leased to external parties for a period ranging from 2 to 3 years. Subsequent renewals of the operating leases are negotiated with the lessees. Information on investment properties that are pledged as security for the Groups financial liabilities are set out in note 16 to the financial statements.
57
The movement in impairment losses in respect of cost of investments in subsidiaries is as follows: Company 2011 2010 $000 $000 4,721 4,221 1,002 4,721 (502) 4,721
At 1 April Impairment losses made Impairment losses written off against the cost of investment of subsidiaries liquidated At 31 March The list of significant subsidiaries is as follows:
Principal activities Trading in electrical and electronic products Trading and distribution of consumer electronics products Property investment and management and rental of leasehold building Retail, wholesale and export of furniture and furnishing products
Effective interest held by the Group 2011 2010 % % 100 100 100 100
Singapore
100
100
Singapore
100
100
58
Name of subsidiary * * * First Omni Sdn. Bhd. JSA Gulf FZE Intracorp (B) Sdn. Bhd. Novena Furnishing Centre Pte Ltd PT Electronic Solution
Principal activities Distribution of electrical and electronics products Trading in electrical and electronics products Distribution of electrical and electronics products Property investment and management and rental of leasehold building Trading and retailing of electrical and electronics products Trading and retailing of electrical and electronics products Trading in electrical and electronics products Distribution of electrical and electronics products Sourcing, trading and distribution of electrical and electronics products
Indonesia
100
100
Tainahong Trading Limited Tech Global Pte Ltd TTA Holdings Ltd and its subsidiary TTC Sales and Marketing (SA) (Proprietary) Limited
Auditors Auditors Auditors Auditors Auditors are are are are are
Hong Kong
100
100
100 85.5 51
100 85.5 51
* ^ @
KPMG LLP Singapore. other member firms of KPMG International. HLB Mann Judd (VIC Partnership), Australia. Andi, Arifin, Amita, Wisnu & Rekan, Indonesia. other firms of certified public accountants.
The consolidated financial statements of the Group are prepared based on the management accounts of the Company and its subsidiaries. The subsidiaries which are not significant constitute, in aggregate, less than 20% of the total assets and total revenue of the consolidated financial statements.
59
Note Group Cost At 1 April 2010 and 31 March 2011 Accumulated amortisation and impairment losses At 1 April 2009 Amortisation charge for the year At 31 March 2010 Impairment loss Amortisation charge for the year At 31 March 2011 Carrying amount At 1 April 2009 At 31 March 2010 At 31 March 2011
Total $000
8,650
14,042
22,692
19 19 19
Consumer electronics and private label business Furniture and furnishing business
The recoverable amount of the CGU in respect of the consumer electronics and private label business is determined based on cash flows projected from the five-year business plan and past operating results. The key assumptions used took into account the established network and managements assessment of the potential of key markets. The annual growth rates and discount rate used in the cash flow projections ranged from 0% to 9% and 10.7%, respectively (2010: 0% to 3% and 8%).
60
OTHER INVESTMENTS
Group 2011 $000 Available-for-sale investments quoted equity securities, at fair value 2,492 2010 $000 2,957
The quoted equity securities are denominated in Indonesian rupiah, and are held by a subsidiary with Singapore dollar as its functional currency.
10
DEFERRED TAX
Movements in deferred tax assets/(liabilities) of the Group (prior to offsetting of balances) during the year are as follows:
At 1 April 2009 $000 Group Inventories Tax value of loss carry-forward recognised Other items Property, plant and equipment 1,574 Exchange translation differences $000 133 Recognised in income Liquidation statement of (note 21) subsidiaries $000 $000 (309) At 31 March 2010 $000 1,398 Exchange translation differences $000 10 Recognised in income statement (note 21) $000 107 At 31 March 2011 $000 1,515
(101) 33 (68)
(533) 2 66 (455)
61
At the balance sheet date, tax losses amounting to $174,956,000 (2010: $217,741,000) and $84,134,000 (2010: $87,585,000) of the Company and certain subsidiaries, respectively, have not been recognised because it is not probable that future taxable profits will be available against which the entities concerned can utilise the benefits therefrom. The tax losses are subject to agreement by the tax authorities and compliance with tax regulations in the respective countries in which the entities operate.
11
INVENTORIES
Group 2011 $000 61,891 (10,055) 51,836 2010 $000 85,511 (11,100) 74,411 Company 2011 2010 $000 $000 28 28 (9) 19 (9) 19
Information on inventories that are pledged as security for the Groups financial liabilities are set out in note 16 to the financial statements. An additional allowance was made for inventories of the Group during the year of $1,787,000 (2010: $4,228,000) (see note 19). Allowances are offset against inventories when the inventories are sold or written off.
62
Trade receivables Allowance for doubtful receivables Net trade receivables Other receivables Allowance for doubtful receivables Net other receivables Trade amounts due from subsidiaries Allowance for doubtful receivables Net trade receivables from subsidiaries Non-trade amounts due from subsidiaries Allowance for doubtful receivables Advances to staff Deposits Advance payments to suppliers Prepaid operating expenses
The non-trade amounts due from subsidiaries are unsecured, interest-free and repayable on demand. Information on trade receivables that are pledged as security for the Groups financial liabilities are set out in note 16 to the financial statements. The Groups primary exposure to credit risk arises through its trade receivables. Concentration of credit risk relating to trade receivables is limited due to the Groups many varied customers. These customers are internationally dispersed, engage in a wide spectrum of distribution activities, and sell in a variety of end markets. The Group has been affected by the global liquidity crunch, adverse economic conditions and the resultant difficult trading environment. This gave rise to business disruptions in many of the countries the Group operates in and has resulted in the recorded allowances.
63
The ageing of trade receivables due from external parties at the reporting date is: Allowance for doubtful receivables 2010 $000 (19,312) (19,312) Allowance for doubtful receivables 2010 $000 (67,475) (67,475) (50,567) (50,567)
Gross 2011 $000 Group Not past due Past due 0 1 month Past due 1 2 months Past due 2 3 months Past due 3 4 months More than 4 months Company Not past due Past due 0 1 month Past due 1 2 months Past due 2 3 months Past due 3 4 months More than 4 months 28,982 9,031 3,018 320 616 30,048 72,015 544 5,871 6,415
Gross 2011 $000 32,461 11,739 11,322 10,146 6,288 75,425 147,381 9,287 598 2,989 1,734 2,982 51,171 68,761
64
19
(1,005) 19,312
1,264 67,475
50,567
For the year ended 31 March 2010, allowance utilised included receivables of subsidiaries which were liquidated, amounting to $1,243,000. Receivables denominated in currencies other than the respective Group entities and the Companys functional currencies include $12,730,000 (2010: $33,922,000) and $5,755,000 (2010: $17,955,000) of trade receivables denominated in US dollars, respectively. The change in allowance for doubtful receivables in respect of trade and other receivables due from related parties during the year is as follows: Company 2011 $000 107,397 2 107,399 2010 $000 91,232 16,421 (256) 107,397
An allowance has been made for estimated irrecoverable receivables from subsidiaries amounting to $2,000 (2010: $16,421,000) after taking into consideration the financial and liquidity position of these subsidiaries which are experiencing difficulties in the collection of their trade receivables. Please refer to note 2 for further details on the basis of accounting.
65
244
358
8,122
(15,666)
The weighted average effective interest rates per annum relating to fixed deposits at the balance sheet date for the Group is 1.91% (2010: 1.20%). The interest rates reprice at intervals of six months or one year. Cash and cash equivalents denominated in currencies other than the respective Group entities and the Companys functional currencies include $2,710,000 (2010: $2,461,000) and $107,000 (2010: $176,000) of cash and cash equivalents denominated in US dollars, respectively.
14
SHARE CAPITAL
2011 Number of shares 000 Fully paid ordinary shares, with no par value: At beginning and end of financial year 816,541 2010 Number of shares 000 816,541
The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at meetings of the Company. All shares rank equally with regard to the Companys residual assets. It is the policy of the Board of Directors to maintain an appropriate capital base to support the Groups businesses and maximise shareholders value through the optimisation of the debt and equity balance. It is also the policy of the Board of Directors to monitor the return on capital (comprising share capital and reserves) and the level of dividends to ordinary shareholders. The Companys ability to manage its capital has however been constrained by the current difficult operating conditions and the Scheme.
66
54 (262,572) (262,518)
54 (241,046) (240,992)
The fair value and revaluation reserves include the cumulative net change in the fair value of available-for-sale investment held until the investment is derecognised and the net surpluses arising from the revaluation of properties included in property, plant and equipment, including those transferred to investment properties. The foreign currency translation reserve comprises all foreign exchange differences arising from the translation of the financial statements of foreign operations whose functional currencies are different from the functional currency of the Company.
16
FINANCIAL LIABILITIES
Group Note Non-current liabilities Amounts due to Scheme Creditors Sustainable debts Non-sustainable debts Unsecured bank loans Secured bank loans Finance lease liabilities 2011 $000 2010 $000 (Restated) Company 2011 $000 2010 $000 (Restated)
(a) (a)
301 301
(b)
67
(b)
(b)
(c)
Financial liabilities denominated in currencies other than the respective Group entities and the Companys functional currencies include $18,694,000 (2010: $154,162,000) and Nil (2010: $130,089,000) of financial liabilities denominated in US dollars, respectively. (a) Pursuant to the Scheme, and as explained in note 2 to these financial statements, the Companys debts owing to the Scheme Creditors have been restructured during the year. Accordingly, financial liabilities and other payables of the Company as at 31 March 2010, amounting to $270,481,000 and $63,705,000, respectively, together with other additional current year liabilities amounting to $7,533,000, had been admitted as restructured debts under the Scheme. Subsequently, debts totalling $89,925,000 had been irrevocably, unconditionally and permanently extinguished as a result of the RDA. The remaining restructured debts, amounting to $251,794,000, which included claims from related parties of $22,054,000, are presented as sustainable and non-sustainable debts at their carrying amounts for the purpose of these financial statements, without discounting the amounts to their estimated present values or fair values, as the directors considered it impracticable to remeasure these financial liabilities at fair values as at 31 March 2011. The amounts due to the Scheme Creditors are to be secured by a fixed and floating charge over all the assets of the Company, subject to any prior rights of other creditors.
68
(ii)
(iii)
(c)
The unsecured fixed rate notes were issued under the Multi-Currency Medium Term Note Programmes totalling Nil (2010: $300,000,000).
69
Principal $000 Group Payable within 1 year Payable after 1 year but within 5 years Payable after 5 years
Payments $000
24 39 1 40 64 10 6 6 16
37 21 1 22 59 26 14 1 15 41
Company Payable within 1 year Payable after 1 year but within 5 years Payable after 5 years
70
Group 2011 Amounts due to Scheme Creditors Sustainable debts Secured bank overdrafts Unsecured bank overdrafts Secured bank loans Unsecured bank loans Bills payable and trust receipts Finance lease liabilities 2010 (Restated) Secured bank overdrafts Unsecured bank overdrafts Secured bank loans Unsecured bank loans Unsecured fixed rate notes Bills payable and trust receipts Finance lease liabilities Company 2011 Amount due to Scheme Creditors Sustainable debts Finance lease liabilities 2010 (Restated) Unsecured bank overdrafts Unsecured bank loans Unsecured fixed rate notes Bills payable and trust receipts Finance lease liabilities
Total $000
33 16 49
398 398
9 9
2.44 5.95
87,051 87,051
209 209
101 101
292 292
9 9
71
Total $000
91,242 91,242
7,730 7,730
2,197 2,197
The amount above excludes non-sustainable debts of $149,985,000 and $164,743,000 for the Group and the Company, respectively.
72
Group At 1 April Provision made Provision utilised At 31 March Company At 1 April Provision utilised At 31 March
Warranties
The provision for warranties is based on estimates made from historical warranty data associated with similar products and services.
Restructuring
The provision for restructuring includes the estimated cost of closure of business locations in certain markets made by the Group and the Company.
18
Payables denominated in currencies other than the respective Group entities and the Companys functional currencies include $11,096,000 (2010: $15,283,000) and Nil (2010: $170,000) of trade payables denominated in US dollars, respectively. Included in accrued operating expenses as at 31 March 2011 is an amount of $63,000,000 relating to additional provision for potential liabilities arising from disputed contingent claims as defined under the Scheme and other Scheme-related expenses.
73
19
24
8 12 11 8
74
21
Current tax expense Current year (Over)/Under provision in prior years Deferred tax expense Origination and reversal of temporary differences Over provision in prior years 10 Income tax (credit)/expense
75
(37,310) (6,343) (98) 1,141 15,473 (1,015) (8,933) 447 (844) (172)
The Global Traders Programme (GTP), which was awarded to the Company by the International Enterprise Singapore Board (IES) on 8 May 2003, had been subsequently renewed for a further period of five years commencing from 1 October 2007. IES also awarded the GTP status to a wholly-owned subsidiary of the Company for a period of five years commencing from 1 September 2007. With this GTP incentive, both the Company and the subsidiary concerned enjoy a concessionary tax rate of 10% on their qualifying income. However, the Company, together with its wholly-owned subsidiary, has voluntarily withdrawn from the GTP with effect from 1 April 2011.
22
76
Information regarding the results of each reportable segment is included below. Performance is measured based on segment profit before income tax, as included in the internal management reports that are reviewed by the Chairman and CEO. Segment profit is used to measure performance as management believes that such information is the most relevant in evaluating the results of certain segments relative to other entities that operate within these industries. Intersegment pricing is determined on an arms length basis.
(a)
Trading $000
(27,678)
(11,397)
(9)
1,774
(37,310)
77
Trading $000
(861)
(861)
(63,000)
(63,000)
12,293 15 62,831
387 20 734
23,442
(11,051)
461
(7,684)
5,168
(4,556)
(4,556)
20,597 40 66,470
1,112 30 2,032
8,493 41 1,119
78
Revenue Total revenue for reporting segments Elimination of inter-segment revenue Consolidated revenue Profit or loss Total (loss)/profit before tax for reportable segments Elimination of inter-segment profits Consolidated (loss)/profit before income tax Assets Total assets for reportable segments Other assets Consolidated total assets Liabilities Total liabilities for reportable segments Other liabilities Consolidated total liabilities
431,250 (4,798) 426,452 (37,310) (37,310) 218,509 91,614 310,123 403,462 2,906 406,368
549,604 (9,744) 539,860 5,168 (1,671) 3,497 268,279 90,556 358,835 422,272 2,810 425,082
(b)
Geographical segments
In presenting information on the basis of geographical segments, segment revenue is based on the geographical location of customers. Segment non-current assets are based on the geographical location of the assets.
79
2011 ASEAN East Asia and other countries Africa and Middle East CIS, Russia and Eastern Europe 2010 ASEAN East Asia and other countries Africa and Middle East CIS, Russia and Eastern Europe
24
LIQUIDATION OF SUBSIDIARIES
In the previous financial year, the Group and the Company liquidated the following subsidiaries: (i) Dai-Ichi Pte Ltd, (ii) Pick & Pay (Thailand) Ltd, (iii) Akitron Electronics (Pty) Ltd and (iv) American Appliances Pte Ltd. The effects of liquidation of subsidiaries are set out below: Note Net assets liquidated Cash and cash equivalents Trade and other receivables Property, plant and equipment Investment properties Inventories Trade and other payables Financial liabilities Current tax payables Deferred tax assets Deferred tax liabilities Net identifiable assets liquidated Loss on disposal of subsidiaries Cash proceeds from disposal Add: Cash and cash equivalents in subsidiaries liquidated Net cash inflow on disposal Carrying amounts $000 275 4,170 5,145 3,650 1,720 (4,392) (4,047) (91) 96 (28) 6,498 (2,964) 3,534 967 4,501
19
80
Credit risk
The Group has a credit policy in place which establishes credit limits for customers and monitors their balances on an ongoing basis. Credit evaluations are performed on all customers requiring credit over a certain amount. Cash and fixed deposits are placed with banks and financial institutions which are regulated. At the balance sheet date, there is no significant concentration of credit risk. The maximum exposure to credit risk is represented by the carrying amount of each financial asset in the balance sheet.
Liquidity risk
The Group monitors and maintains a level of cash and cash equivalents deemed adequate by management to meet the Groups operating commitments.
Market risk
Market risk exists due to changes in market prices that will affect the Groups income or the value of its holding in investments. The objective of the Groups market risk management is to manage and control market risk exposures within acceptable parameters while optimising the return on risk. At the reporting date, the Group is not subject to significant equity-price risk.
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82
Level 3:
2,492 2,957
2,492 2,957
The following summarises the significant methods and assumptions used in estimating the fair values of financial instruments of the Group and Company.
83
26
The Group sub-leases out its leased warehouse and office facilities. Non-cancellable operating lease rentals are receivable as follows: Group 2011 $000 Receivable: Within 1 year After 1 year but within 5 years 870 198 1,068 2010 $000 1,346 686 2,032
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The capital commitments of $206,000,000 disclosed in the prior year relate to the construction activities of the retail and warehousing complex which have been temporarily suspended. The contracts signed with the contractors have been terminated.
27
CONTINGENT LIABILITIES
The Company had provided unsecured guarantees amounting to $43,307,000 (2010: $69,918,000) to banks in respect of credit facilities granted to its subsidiaries. The facilities utilised by the subsidiaries as at 31 March 2011 amounted to $11,856,000 (2010: $17,009,000). One of the subsidiaries in the Group had provided unsecured guarantees amounting to $12,555,000 (2010: $13,985,000) to a bank in respect of credit facilities granted to its subsidiary. As at 31 March 2011, $12,455,000 was utilised. In 2010, the facilities were fully utilised. As disclosed in note 2 to the financial statements, there are additional claims that are currently contingent in nature, for which the amounts have not yet been determined at the date of this statement. Whilst the directors have made additional provision for such potential liabilities arising from these disputed contingent claims as defined under the Scheme, the amounts will be adjusted when the liabilities have been determined, crystallised, or can be reasonably measured.
28
Remuneration paid to key management personnel includes salaries, fees, bonuses and other benefits-in-kind. Key management personnel comprise the Board of Directors and other key/senior management staff.
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29
In addition, the Company is to translate the debts denominated in foreign currencies into Singapore Dollars at the interbank cross rates as at the Ascertainment Date (the Scheme Exchange Rates). As the Scheme Effective Date was 19 April 2010, and the High Court did not grant a stay of execution of the Scheme even upon the application of several opposing creditors in April 2010, the directors are of the view that the Groups financial statements for the year ended 31 March 2010 should have reflected the interest accruals based on the Scheme Interest Rates and the Scheme Exchange Rates, rather than based on the original contractual rates and the exchange rates as at 31 March 2010. However, given that there were pending court applications and the appeal required substantial focus from the management, this was inadvertently not done by the Company, even though the directors were confident, at that time, that the Scheme would be eventually sanctioned. Accordingly, the following items of financial liabilities and other payables in relation to the financial statements for the year ended 31 March 2010 were adjusted: a) Write-back of over accrual of interest costs arising from (i) differences between original contractual interest rates and the Scheme Interest Rates, and (ii) interest-free period between the Ascertainment Date and 31 March 2010. These amounted to a gain of $10,437,000 and
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2010 2010 2010 2010 As previously As previously reported As restated reported As restated $000 $000 $000 $000 Balance sheet Current liabilities Trade and other payables Financial liabilities Equity Reserves Total equity attributable to equity holders of the Company Total equity
119,795 300,072
109,358 305,939
79,153 264,614
68,716 270,481
(215,070)
(210,500)
(245,562)
(240,992)
(74,507) (70,817)
(69,937) (66,247)
(104,999) (104,999)
(100,429) (100,429)
Group 2010 2010 As previously reported As restated $000 $000 Income statement Other operating income Finance expense (Loss)/Profit before income tax Loss for the year 48,898 (18,036) (1,073) (5,290) 43,031 (7,599) 3,497 (720)
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The prior year adjustments do not have an effect on the financial position as at 31 March 2009. Other than the aforesaid prior year adjustments, there may also be other potential items and/or adjustments that may require restatement as a result of the Scheme. However, the directors are unable to determine the accuracy and completeness of the assets and liabilities to be recorded as at 31 March 2010 due to the uncertainties involved (see note 2).
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as at 31 August 2011
Statistics of Shareholdings
816,541,501 Ordinary shares On a show of hands: 1 vote for each member On a poll: 1 vote for each ordinary share
Analysis Of Shareholdings
Range of Shareholdings 1 999 1,000 10,000 10,001 1,000,000 1,000,001 and above No. of Shareholders 266 804 2,386 51 3,507 % 7.58 22.93 68.04 1.45 100.00 No. of Shares 63,933 4,712,951 187,049,104 624,715,513 816,541,501 % 0.01 0.58 22.90 76.51 100.00
Top 20 Shareholders
No. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 No. of Shares KBC Bank N.V. Sng Sze Hiang Tong Jia Pi Julia United Overseas Bank Nominees Pte Ltd Hong Leong Finance Nominees Pte Ltd Winmark Investments Pte Ltd HSBC (Singapore) Nominees Pte Ltd Koh Pau Moy Phillip Securities Pte Ltd Daw May Yee @ Htout Kyain DBS Nominees Pte Ltd Zeng Xiaohui Yim Ah Hoe Sng Chiap Guan @ Seng Ah Tee Low Hwa Beng Tan Boon Keng Kennedy OCBC Nominees Singapore Pte Ltd Poh Chor Tiang Chua Swee Hwa June Yap Choon Hong Name of Shareholders 131,000,000 124,963,583 100,454,245 87,878,430 34,922,200 21,118,000 12,815,200 7,669,000 7,194,862 5,850,000 5,495,287 4,569,100 4,087,000 3,954,600 3,900,000 3,591,000 3,456,400 3,255,000 3,000,000 2,839,000 572,012,907 % 16.04 15.30 12.30 10.76 4.28 2.59 1.57 0.94 0.88 0.72 0.67 0.56 0.50 0.48 0.48 0.44 0.42 0.40 0.37 0.35 70.05
89
as at 31 August 2011
Statistics of Shareholdings
Other shareholdings in which the substantial shareholder is deemed to have an interest No. of Shares 100,454,245 255,963,583 *114,734,300 Percentage (%) 12.30 31.35 14.05
Mr Lim Andy is deemed interested in the shares (registered in the name of Viking Offshore And Marine Limited) by virtue of Section 7 of the Companies Act, Cap. 50.
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Supplementary Information
Major property held for development:
Stage of completion Piling completed Expected date of completion Note 1 Approximate gross floor areas (sqm) 110,000 sqm Groups effective interest (%) 100
Note 1 Since the financial year ended 31 March 2009, the construction activities of the property have been temporarily suspended. The Company is exploring opportunities to complete the development of the property and to realise its investment therein, with interested parties.
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Ordinary Business
1 2 3 To receive and consider the audited accounts for the year ended 31 March 2011 and the reports of the Directors and Auditors thereon. To approve Directors Fees of S$150,000/- for the year ended 31 March 2011. (Year 2010: S$90,000/-) To re-elect the following Directors retiring by rotation in accordance with Article 93 of the Companys Articles of Association: (a) (b) 4 Mr Sng Sze Hiang Mr Yap Hock Soon
To re-appoint KPMG LLP as Auditors and to authorise the Directors to fix their remuneration.
Special Business
5 To consider and, if thought fit, to pass the following resolutions with or without amendments as ordinary resolutions: That pursuant to Section 161 of the Companies Act (Cap. 50) and the rules of the listing manual (Listing Manual) of the Singapore Exchange Securities Trading Limited (SGXST), authority be and is hereby given to the Directors of the Company to: (i) (ii) issue shares in the capital of the Company (Shares) (whether by way of rights, bonus or otherwise); and/or 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 warrants, debentures or other instruments convertible or exchangeable into Shares,
5(a) (1)
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 (2) 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 is in force, PROVIDED THAT: (i) 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 but excluding Shares which may be issued pursuant to any adjustments effected under any relevant Instrument) does not exceed 50 per cent. of the total number of issued shares (excluding treasury shares) in the capital of the Company (as calculated in accordance with sub-paragraph (ii) below), of which the aggregate
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(iii)
in exercising the authority conferred by this resolution, the Company shall comply with the requirements imposed by the SGX-ST from time to time and the provisions of the Listing Manual of the SGX-ST for the time being in force (unless such compliance has been waived by the SGX-ST) and the Articles of Association of the Company for the time being; and 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. [See Explanatory Note (a) set out below]
(iv)
5(b) That approval be and is hereby given to the Directors to offer and grant options in accordance with the provisions of the TT International Employees Share Option Scheme (the Option Scheme) (including options over shares at a subscription price per share set at a discount to the market price of a share), and to allot and issue from time to time such number of shares in the capital of the Company as may be required to be issued pursuant to the exercise of the options under the Option Scheme, provided that the total number of shares issued and issuable in respect of all options granted thereunder and all awards granted under the TT International Performance Share Plan shall not exceed 15 per cent. of the total number of issued shares (excluding treasury shares) in the capital of the Company from time to time. [See Explanatory Note (b) set out below]
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6.
BY ORDER OF THE BOARD KOH SOCK TIN COMPANY SECRETARY Singapore, Date: 15 September 2011
Proxies: A member entitled to attend and vote at the meeting is entitled to appoint a proxy to attend and vote in his stead. A proxy need not be a member of the Company. An instrument appointing a proxy must be deposited at the Companys registered office at 47 Sungei Kadut Avenue, Singapore 729670 not less than 48 hours before the time appointed for holding the Meeting. Notes: (a) Resolution no. 5(a), if passed, will empower the Directors from the date of the above Meeting until the date of the next Annual General Meeting, to issue shares and convertible securities in the Company up to a number not exceeding in total 50 per cent. of the total number of issued shares (excluding treasury shares) in the capital of the Company, with a sub-limit of 20 per cent. for issues other than on a pro-rata basis to shareholders, as more particularly set out in the resolution. Resolution no. 5(b), if passed, will empower the Directors to offer and grant options and to allot and issue shares in the capital of the Company pursuant to the exercise of the options under the Option Scheme. Resolution no. 5(c), if passed, will empower the Directors to offer and grant awards in accordance with the Share Plan and to issue shares in the capital of the Company pursuant to the granting of the awards under the Share Plan.
(b) (c)
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TT INTERNATIONAL LIMITED
(Incorporated in the Republic of Singapore) (Company Registration No. 198403771D)
IMPORTANT 1 For investors who have used their CPF monies to buy shares of TT International Limited, this report is forwarded to them at the request of their CPF Approved Nominees and is sent solely FOR INFORMATION ONLY. 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.
PROXY FORM
I/We of
, NRIC/Passport no.
being a member/members of TT International Limited hereby appoint Name Address NRIC/ Passport No. No. of Shares
and/or (delete as appropriate) Name Address NRIC/ Passport No. No. of Shares
as my/our proxy/proxies to attend and to vote for me/us on my/our behalf and, if necessary, to demand a poll at the Annual General Meeting of the Company to be held at 47 Sungei Kadut Avenue, Singapore 729670 on 30 September 2011 at 11.00 a.m. and at any adjournment thereof. (Please indicate with an X in the spaces provided whether you wish your vote(s) to be cast for or against the resolutions as set out in the Notice of Annual General Meeting. In the absence of specific directions, the proxy/proxies will vote or abstain as he/they may think fit, as he/they will on any other matters arising at the Annual General Meeting.)
No. 1 2 3 Resolutions To adopt the reports and accounts To approve directors fees To re-elect the following directors retiring under Article 93: (a) (b) 4 5 Mr Sng Sze Hiang Mr Yap Hock Soon For Against
To re-appoint KPMG LLP as auditors Special Business 5(a) 5(b) 5(c) To authorise directors to issue shares pursuant to Section 161 of the Companies Act, Cap. 50 To authorise directors to offer and grant options and issue shares pursuant to the TT International Employees Share Option Scheme To authorise directors to offer and grant awards and issue shares pursuant to the TT International Performance Share Plan
Dated this
day of
Notes 1 Please insert the total number of shares held by you. If you have shares entered against your name in the Depository Register (as defined in Section 130A of the Companies Act, Cap. 50), you should insert that number. If you have shares registered in your name in the Register of Members of the Company, you should insert that number. If you have shares entered against your name in the Depository Register and shares registered in your name in the Register of Members, you should insert the aggregate number. If no number is inserted, this form of proxy will be deemed to relate to all the shares held by you. A member entitled to attend and vote at a meeting of the Company is entitled to appoint not more than two proxies to attend and vote on his behalf. A proxy need not be a member of the Company. The instrument appointing a proxy or proxies must be deposited at the Companys registered office at 47 Sungei Kadut Avenue Singapore 729670 not less than 48 hours before the time appointed for the meeting. Where a member appoints more than one proxy, he shall specify the number of shares to be represented by each proxy, failing which, the appointment shall be deemed to be in the alternative. 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 its attorney or by an officer on behalf of the corporation. Where an instrument appointing a proxy or proxies is signed on behalf of the appointor by an attorney or other authority, the power of attorney or authority or a notarially certified copy thereof must be lodged with the instrument of proxy, failing which the instrument of proxy may be treated as invalid. A corporation which is a member may authorise by resolution of its directors or other governing body such person as it thinks fit to act as its representative at the meeting, in accordance with Section 179 of the Companies Act, Cap. 50. The Company shall be entitled to reject an instrument of proxy which is incomplete, improperly completed, illegible or where the true intentions of the appointor are not ascertainable from the instructions of the appointor specified on the instrument of proxy. In addition, in the case of shares entered in the Depository Register, the Company may reject an instrument of proxy 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.
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