Strong Foundation Gradual Expansion - listed companyryobi.listedcompany.com/misc/ar2012.pdf ·...

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Annual Report 2012 Strong Foundation Gradual Expansion

Transcript of Strong Foundation Gradual Expansion - listed companyryobi.listedcompany.com/misc/ar2012.pdf ·...

Annual Report 2012

Strong Foundation Gradual Expansion

04 Ryobi Kiso Holdings Ltd. Annual Report 2012

01 Corporate Profile02 Chairman’s Statement04 CEO’s Statement06 Financial Highlights08 Our Business10 Board of Directors12 Key Management14 Group Structure15 Corporate Social Responsibility16 People Development and Workplace Safety Management17 Investor Relations18 Risk Factors and Risk Management Corporate Information

CONTENTS

Annual Report 2012 Ryobi Kiso Holdings Ltd. 01

CORPORATE PROFILE

As one of the leading ground engineering solutions providers in Singapore, Ryobi Kiso is principally engaged in bored piling, eco-friendly piling and geoservices.

With more than 600 staff, Ryobi Kiso has built a strong portfolio comprising many prominent projects from private and public sectors and a diverse clientele base over the years. Supported by our quality products and services, we have developed strong rapport and relationships with our clientele, many of whom are our loyal customers.

Our strengths lie in the dynamic synergy between ourselves and our clients, our farsighted planning, our innovative solutions using ultra-modern technology, and last but not least, our uncompromising focus on quality and excellence.

CHAIRMAN’S STATEMENT

With more than 600 staff, Ryobi

Kiso has built a strong portfolio

comprising many prominent

projects from private and public

sectors and a diverse clientele

base over the years. Supported by

our quality products and services,

we have developed strong rapport

and relationships with our clientele,

many of whom are our loyal

customers.

Annual Report 2012 Ryobi Kiso Holdings Ltd. 03

CHAIRMAN’S STATEMENT

Dear Shareholders,

On behalf of the Board of Directors (the “Board”), I am pleased to present to you the Annual Report of Ryobi Kiso Holdings Ltd. (“the Group”) for the financial year ended 30 June 2012 (“FY2012”).

Review

FY2012 had been a mixed year for us. For the year under review, the Group managed to grow our revenue to $153.3 million, a significant increase of 24.4% from the previous year. Our net profit after tax in FY2012, however, was down 52.1% to $4.2 million, from $8.9 million the year before. Earnings per share was $0.44 cents. This was due to rising material and labour costs as well as increasing competition in the Singapore construction sector. While our profit margin declined, we remained healthy financially. As of 30 June 2012, our cash and cash equivalent stood at $33.0 million against total borrowings of $46.9 million.

Outlook and Strategy

Since 2009, we have been riding on the strategy of regionalisation by seeking other geographical markets. Against the backdrop of a weak global economy, currently, South East Asia is relatively resilient. Our regional market, Vietnam is still growing economically and attracting foreign investments. In April 2012, we were able to secure two large projects in Ho Chi Minh City, worth $27.3 million and $10.3 million. Our entry into Vietnam has opened up good opportunities for the Group and we have since continued our foray into other overseas markets. In July 2012, the Group completed the acquisitions of two piling companies in Australia. There is an on-going mining and construction boom in Western Australia where our two new companies are based, and we are excited by the long term prospects of our latest venture.

There are inherent risks in the current business environment and the Group is adopting a prudent approach in striking a good balance between overseas expansion and strengthening local operations.

Going forward, Singapore will remain as our key revenue contributor. In the next two years, Singapore’s total construction demand is expected to moderate between $21 billion and $27 billion annually, with total demand mainly from the public sector. While we will be participating actively in open tenders to compete for public projects and seeking to land more projects in private developments, we remain cognisant of growing our local operations at a sustainable pace and we are committed to deliver customer satisfaction in the projects that we engage in.

In addition to ground engineering, we have moved into industrial property development in Vietnam and we have also set up a plant engineering business segment locally. The diversification of our businesses, into other markets and different sectors, will strengthen our position for growth in the future.

Words of Appreciation

On behalf of the Board, I would like to take this opportunity to thank the management and staff for their hard work and dedication to the Group. I also wish to express my heartfelt gratitude to our customers, suppliers and business associates for their support and continued confidence in the Group.

Lastly, we sincerely thank all our shareholders for their loyal support in the past three years since our listing and we look forward to achieving greater heights in the years to come.

Mr Lee Yiok SengChairman

04 Ryobi Kiso Holdings Ltd. Annual Report 2012

CEO’S STATEMENT

Mindful of the challenges that lie

ahead in the local construction

sector, we are actively seeking to

expand our presence and develop

new markets in the Asia Pacific. We

will move forward with the same spirit

of entrepreneurship and prudency

that the Group is known for.

Dear Shareholders,

Review of FY2012 Performance

FY2012 was an eventful year for the Group. We managed to win more and higher value contracts, despite the competitive business environment. As a result, revenue for the Group rose significantly by 24.4% to $153.3 million in FY2012.

Although we recorded a significant improvement over our revenue, gross profit for the Group decreased to $19.1 million in FY2012, from $27.4 million in FY2011 and gross profit margin declined to 12.5% in FY2012, from 22.2% in FY2011. Profitability was affected by the intense competition as well as rising raw material and labour costs in Singapore.

In tandem with the lower gross profit level, overall net profit came down to $4.2 million in FY2012, from $8.9 million in FY2011 and net profit margin was reduced to 2.8% in FY2012, from 7.2% in FY2011.

As at 30 June 2012, cash and cash equivalents stood at $33.0 million against total borrowings of $46.9 million. Gross gearing remained at a healthy level of 0.41x.

The Group’s shareholders’ funds dipped by $2.1 million to $114.1 million. This was mainly attributable to payments of dividends of $4.7 million and purchases of 5,960,000 treasury shares under the share buyback mandate of $0.8 million.

Operational Highlights

In FY2012, our Bored Piling segment remained the main contributor, with revenue amounting to $124.2 million (81.0% of total revenue). Meanwhile, revenue from our Eco-friendly Piling and Geoservices segment decreased to $29.1 million (19.0% of total revenue).

Some of the piling and geoservices projects undertaken by our Group during the financial year were:

Infrastructure:

• DowntownLineII,Contracts912and920• Land Transport Authority, Contract 937 (instrumentation and

monitoring works)• MarinaCoastalExpressway,Contract481• NationalParksBoard(slopestabilisationworks)• SentosaGatewayTunnel,LTAContractER290IM(instrumentation

and monitoring works)

04 Ryobi Kiso Holdings Ltd. Annual Report 2012

Annual Report 2012 Ryobi Kiso Holdings Ltd. 05

CEO’S STATEMENT

Public Housing:

• HDBPunggolEastC38• HDBPunggolEastC41• HDBSengkangN3C18• HDBSengkangN4C11• HDBSengkangN4C18• HDBTremorsMonitoringSystemBatch5• HDBWoodlandsN1C19• LakeVista• TheArc• Trivelis

Private Residential:

• TomlinsonHeights• BoathouseResidences• HedgesPark• Luxurie• RVResidences• Sorrento• TheLakefrontResidences• TheMeyerise• TheNautical

Commercial and Institutional:

• 76ShentonWay• InstituteofMentalHealth• MD01atNationalUniversityofSingapore• MedicalTechnologyHub• Mediapolis@One-North• NationalUniversityofSingapore(soilstabilisationworks)• SingaporeInstituteofManagementUniversity-Extension• TemasekPolytechnicWestWing• BenThanhToweratHoChiMinh• SaigonGolfandCountryResidencesatHoChiMinh• SSGTowerOneatHoChiMinh

For FY2012, Singapore operations contributed 91.2% of our revenue and the balance 8.8% was derived from our overseas operations.

Revenue from Vietnam grew significantly from $0.2 million in FY2011 to $13.4 million in FY2012. We have been gaining much traction in our Vietnam market and have been awarded with more and higher value contracts in this country. In April 2012, we were awarded with two contracts worth about $37.6 million from our existing Vietnamese customers.

The Group’s total net order book as at 30 June 2012 stood at $104.4 million, comprising projects from public infrastructure, public housing, private residential condominium, commercial and institutional, as well as geoservices.

Regionalisation Strategy

We are also pleased to share that we have extended our geographical presence with the acquisition of two Australia piling companies in July 2012. These acquisitions will enable us to tap on the opportunities in a new geographical market.

Other Achievements

The Group received accolades and awards for its outstanding reputation and strong brand recognition within our sector. Earlier this year, we were conferred the Singapore 2012 Business Superbrands Status a second consecutive year as a testimony to our strong brand. In addition, we were listed once again in the “Singapore 1000” rankings in 2012.

Outlook

Going forward, we believe that there are a significant number of private and public projects coming into the pipeline for the rest of 2012 and for the beginning of 2013. The Building and Construction Authority of Singapore (BCA) has stated that Singapore’s total construction demand for 2012 is projected to be between $21 billion and $27 billion; for 2013 to be between $19 billion and $27 billion.

In Vietnam, the outlook remains robust with the continued Foreign Direct Investments into the country. The government’s recent intention to reform the laws governing the property sector will lead to greater clarity and add stability to property and land ownership. We believe this will spur higher and more sustainable demand for construction activities in the Vietnam market and that our Group can make significant progress in the Vietnam market in the long term.

We remain cautious of the global economic environment with the ongoingweaknessinEurope,theslowrecoveryoftheUSeconomyand their impact on the emerging economies such as China and India. While external environment are often beyond our control, we believe continued productivity improvement together with effective cost controls will enable us to steer through all these challenges.

Appreciation

On behalf of the Group, I would like to take this opportunity to express my heartfelt gratitude to the Board, management and staff of Ryobi Kiso for their diligence, commitment and integrity. Special mention also goes to our partners in Vietnam for continuing to build deeper in-roads into this exciting market. I would also like to take this opportune time to warmly welcome our Australian partners to our Group.

Finally, to our shareholders, I thank you for your patience and support of Ryobi Kiso as we continue achieving greater heights together.

Mr Ong Tiong SiewChief Executive Officer

06 Ryobi Kiso Holdings Ltd. Annual Report 2012

Revenue $’million

Gross Profit $’million

Shareholders’ Funds$’million

Profit after Tax $’million

120.8

46.752.4

112.7

41.6

116.2

27.734.6

27.4

8.9

20102009 20102009

201020102009 2009

2011 2011

20112011

2012 2012

20122012

123.3

153.3160.3

19.1

114.1

200 60

15050

15050

100

40

100

40

50

30

50

30

20

20

10

10

0 0

00

47.1 30

.1

29.131

.7

124.

2

128.

6

73.7 93

.2

Bored Piling

Eco-friendly Piling and Geoservices

GROUP

Revenue

- Bored Piling

- Eco-friendly Piling and Geoservices

Total

Gross Profit

Profit after Tax

Shareholders’ Funds

FY2012

$’million

124.2

29.1

153.3

19.1

4.2

114.1

FY2011

$’million

93.2

30.1

123.3

27.4

8.9

116.2

FY2010

$’million

73.7

47.1

120.8

46.7

27.7

112.7

FY2009

$’million

128.6

31.7

160.3

52.4

34.6

41.6

4.2

FINANCIAL HIGHLIGHTS

Annual Report 2012 Ryobi Kiso Holdings Ltd. 07

Regional ExpansionFollowing our successful foray into Vietnam since 2009, the Group is also venturing into Australia with the recent acquisition of two Australia piling companies. With Vietnam’s economy attracting more foreign investments and the population becoming more affluent and urbanised under the local Government’s initiatives, demand for property and construction sectors is expected to accelerate. Ryobi Kiso is in the right position to tap into Vietnam’s long term strong growth in those sectors and benefit from the development as it demands for more advanced and high quality construction capabilities.

Besides Vietnam and Australia, the Group is also looking to further expand our presence in the region, capturing any new opportunities for growth and diversification through collaborations with our business associates and partners.

08 Ryobi Kiso Holdings Ltd. Annual Report 2012

OUR BUSINESS

Bored Piling

Bored Piling is one of the common

and modern-day techniques for

building a solid pile foundation for

construction of various building

types and structures.

The Process

Bored Piling is a process whereby steel circular casings are installed into the ground by the simultaneous process of drilling and soil removal. This is then followed by the concreting of the piles, which then forms a strong pile foundation for the structure. This process is usually used when soil replacement instead of soil displacement is required.

Usage and Advantages

In many of today’s rapidly-developing cities, redevelopment and new construction works commonly require the use of bored piles. This is usually the case when surrounding site conditions, especially adjacent structures require minimal vibration and noise.

This method also offers considerable flexibility in pile length, ground and soil conditions, without the hassle of large excavations and subsequent backfill of soil. To facilitate boring into hard rock strata, Ryobi Kiso uses ancillary equipment such as the “Down-the-hole” hammer. Ryobi Kiso combines the strategic use of conventional or advanced hydraulic drilling rigs to carry out bored piling works according to the onsite soil composition, quality and project requirements.

Annual Report 2012 Ryobi Kiso Holdings Ltd. 09

OUR BUSINESS

Eco-friendly Piling and Geoservices

In today’s environmentally-conscious world,

construction sites and processes are

designed to ensure eco-friendliness so that

environmental pollution or resource wastage is

kept to the minimal. Ryobi Kiso understands

the importance of sustainability in construction

today; therefore it advocates and employs eco-

friendly piling methods in its projects. Reputed

for its strong expertise in eco-friendly and low

pollution piling works, Ryobi Kiso is the brand

that champions the eco-friendly era.

Environmental Protection Engineering

Apart from building foundation works, Ryobi Kiso also offers Environmental Protection Engineering services. Our Environmental Protection Engineering services are employed whenever there is a need to prevent the contamination of ground water beyond the polluted areas affected by industrial chemicals, products and waste. The cut-off walls or slurry diaphragm walls are used to segregate the protected and polluted areas, whereby the walls can serve to contain the contaminants within the specified area.

10 Ryobi Kiso Holdings Ltd. Annual Report 2012

BOARD OF DIRECTORS

Mr Lee Yiok Seng, Age 72Chairman

MrLeewasappointedasChairmanandNon-ExecutiveDirectoron7December2009.He is a member of the Remuneration Committee, Audit Committee and NominatingCommittee. Mr Lee was a former elected Member of Parliament of the Republic of Singapore from 1972 to 1996, where he served in various capacities, including as a Senior ParliamentarySecretaryintheMinistryofNationalDevelopmentandMinistryofLabour,theChief Government Whip, Chairman of the Construction Industry Development Board and Chairman of Town Council. He is a Director of various companies in Singapore, People’s Republic of China and Hong Kong.

MrLeegraduatedwithaBachelorofSciencefromtheNanyangUniversityinSingapore.

Mr Ong Tiong Siew, Age 58Chief Executive Officer/Executive Director

Mr Ong is a co-founder of our Group and was appointed as a Chief Executive Officer and Executive Director on 28 February 2008. He is responsible for the formulation of our Group’s strategic direction and expansion plans, and the management of our Group’s overall business development. He has more than 30 years of experience in the area of civil engineering and foundation business. Prior to forming Ryobi Singapore in 1990, Mr Ong was a merit Scholar of the Government of the Republic of Singapore and participated in feasibility studies, master planning and implementation of national infrastructure projects. He also worked in various construction-related companies, including QBS System Pte. Ltd., Chee Hup Construction Pte. Ltd., Soh Beng Tee Civil Engineering Pte Ltd, ECA Construction Pte Ltd and Kiso Engineering (S) Pte Ltd.

MrOnggraduatedwithaBachelorDegreeofCivilEngineeringfromtheNationalUniversityof Singapore and is a Fellow of the Institute of Engineers, Singapore.

Mr Ong Teng Choon, Age 53Executive Director

Mr Ong was appointed as an Executive Director on 28 February 2008. He is in charge of the Procurement and Resources Planning Departments and is responsible for overseeing the procurement and resources planning which includes appointment of sub-contractors, allocation of resources, procurement of materials/ equipment and logistics. He has more than 27 years of experience in the area of civil engineering and foundation business. He worked in various construction-related companies, including Kong Siong Construction Pte Ltd, ECA Construction Pte Ltd and Kiso Engineering (S) Pte Ltd.

MrOnggraduatedwithaBachelorDegreeinCivilEngineeringfromtheNationalUniversityof Singapore and is a senior member of the Institute of Engineers, Singapore.

10 Ryobi Kiso Holdings Ltd. Annual Report 2012

Annual Report 2012 Ryobi Kiso Holdings Ltd. 11

BOARD OF DIRECTORS

Ms Lai Chin Yee, Age 46Lead Independent Director

Ms Lai was appointed as our Lead Independent Director on 7 December 2009. She is the Chairman of the Audit Committee; and a member of the Remuneration Committee and NominatingCommittee.Shehasmorethan20yearsofexperienceinauditing,taxation,finance and accounting and is currently the Finance Director of Qian Hu Corporation Limited, a company listed on the Singapore Exchange Securities Trading Limited (“SGX-ST”). She is also the Lead Independent Director of the companies listed on SGX-ST, namely China Sports International Limited and CCM Group Limited. Prior to joining Qian Hu Corporation Limited in 2000, Ms Lai was an auditor with international public accounting firms since 1987. From December 2006 to August 2007, she was appointed by the Ministry of Finance as a Council Member of the Council on Corporate Disclosure and Governance (CCDG). She serves as a member of the CFO Committee of the Institute of Certified Public Accountant of Singapore since May 2009.

Ms Lai graduated with a Bachelor Degree in Accountancy fromNational University ofSingapore and is a Fellow of the Institute of Certified Public Accountants of Singapore (FCPA). In 2009, Ms Lai was named the Chief Financial Officer of the Year (for companies listed on SGX-ST with less than $300 million in market capitalisation) at the Singapore Corporate Awards.

Dr Lau Teik Soon, Age 73Independent Director

Dr Lau was appointed as our Independent Director on 7 December 2009. He is the Chairmanof theRemunerationCommitteeandNominatingCommittee;andamemberof the Audit Committee. He is presently a sole proprietor of Lau Teik Soon & Associates, a firm of advocates and solicitors in Singapore. He has been in legal practice since 1998 when he was called as an Advocate and Solicitor by the Supreme Court of Singapore. He is also a Commissioner for Oaths. He has been involved in various areas of practice, including construction law and is experienced in dealing with insurance and contract claims in the construction industry. He was an elected Member of Parliament of Singapore from 1976to1996andanAssociateProfessorintheDepartmentofPoliticalScience,NationalUniversityofSingaporebetween1972to1995.HeisalsoanIndependentDirectorofacompany listed on SGX-ST, namely Hock Lian Seng Holdings Limited.

DrLauhasthefollowingacademicqualifications:FirstClassHonoursinHistory(Universityof Singapore), Doctor of Philosophy in International Relations (Australian NationalUniversity),SecondClassHonoursinLaw(UniversityofLondon),Barristeratlaw(Lincoln’sInn,London),PostgraduateDiploma inCriminalJusticeStudies (UniversityofLeicester)andProfessionalCertificateinArbitration(UniversityofAdelaide).HeisaMemberoftheChartered Institute of Arbitrators in London.

12 Ryobi Kiso Holdings Ltd. Annual Report 2012

KEY MANAGEMENT

Ms Tan Ghee HwaDirector, Corporate Development

Ms Tan joined our Group as Chief Financial Officer in December 2007 and was promoted to Director of Corporate Planning, Human Resource and Administration in April 2009. She was re-designated to Director, Corporate Development in January 2011. She is responsible for our Group’s corporate development, corporate communications and investor relations matters. She has over 30 years of working experience in the area of auditing, accounting and finance. She worked in various companies, including international public accounting firms and companies listed on SGX-ST such as KPMG LLP, ABR Holdings Ltd and Meiban Plastic Ltd.

Ms Tan is a Fellow of the Association of Chartered Certified Accountants (FCCA) and a Member of the Institute of Certified Public Accountants of Singapore (CPA).

Ms Lim Soh Hoon Chief Financial Officer

Ms Lim joined our Group as Chief Financial Officer in May 2010. She is responsible for the Group’s accounting, finance, treasury and tax functions. She has over 18 years of working experience in the area of auditing, accounting, corporate finance and taxation. She worked in various companies including international public accounting firms and companies listed on SGX-ST such as KPMG LLP and Sapphire Corporation Limited.

MsLimgraduatedfromNanyangTechnologicalUniversitywithaBachelorDegreeinAccountancyandis a member of the Institute of Certified Public Accountants of Singapore (CPA).

Mr Lau Chin ChooGeneral Manager, Contracts

Mr Lau joined our Group as a Contract Manager in March 2002 and was promoted to Assistant General Manager (Contracts) in August 2006. He was promoted to General Manager (Contracts) in May 2011. He is in charge of the Contracts Department and is responsible for overseeing the overall marketing and contracting functions. He has over 25 years of working experience in the area of construction and foundation business. He worked in various companies including Balken Piling (S) Pte Ltd, PSC Freyssinet (S) Pte. Ltd. and Econ Corporation Limited.

Mr Lau graduated with a Diploma in Civil Engineering from the Singapore Polytechnic and a Diploma in Financial Management from the Singapore Institute of Management.

Executive Officers

Mr Wong Po KwanChief Operating Officer

Mr Wong joined our subsidiary, Raffles Piling Vietnam Company Limited as General Manager in April 2010 and was promoted to Chief Operating Officer in September 2012. He oversees the operations, business development, commercial and contractual functions. He has over 30 years of working experience in Singapore and overseas. He worked in various companies, including Jurong International Consulting Pte Ltd, IPCO International Ltd, Fujita Corp., Asia Food & Properties Land Pte Ltd and SembCorp Engineers and Constructors Pte Ltd.

MrWonggraduatedwithaBachelorofScience(Honours)inQuantitySurveyingfromtheUniversityofReading,UnitedKingdom.

12 Ryobi Kiso Holdings Ltd. Annual Report 2012

Annual Report 2012 Ryobi Kiso Holdings Ltd. 13

KEY MANAGEMENT

Mr Wong Kam SengAssistant General Manager (Grout Mix Piling), Ryobi Kiso (S) Pte. Ltd.

Mr Wong joined our subsidiary, Ryobi Kiso (S) Pte. Ltd. as Assistant General Manager (Grout Mix Piling) in December 2009. He is in charge of the Technical, Project and Operation Departments and responsible for overseeing the project operations of Grout Mix Pile Division. He has over 25 years of working experience in the area of project management in construction industry. He worked in various companies including Marina Bay Sands Pte Ltd, Heritage Construction (S) Pte. Ltd., Heritage Reliance (M) Sdn. Bhd., PSC Freyssinet (S) Pte. Ltd. and Pilecon Engineering Sdn. Bhd.

MrWong graduatedwith aBachelorDegree inCivil Engineering from theUniversity of Auckland,New Zealand and aMaster Degree in International ConstructionManagement from the NanyangTechnologicalUniversity.

Mr Thung Chun Heng Assistant General Manager, Raffles Piling Singapore Pte. Ltd.

Mr Thung joined our subsidiary, Raffles Piling Singapore Pte. Ltd. as a Senior Project Manager in February 2010 and was promoted to Assistant General Manager in July 2010. He is in charge of the Technical, Project and Operation Departments and responsible for overseeing the overall project operations. He has over 20 years of working experience in the area of construction and foundation piling business. He worked in various companies, including Rhino Industries Sdn. Bhd., L&M Foundation Specialist Pte. Ltd., Pilecon Pte. Ltd., Gammon Pte. Ltd. and Kian Tat Building Contractor Pte. Ltd..

Mr Thung graduated with a Bachelor Degree in Civil Engineering (Class Two) Division One from theUniversityof Leeds,UnitedKingdom,aDiploma inCivil Engineering from theFederal Instituteof Technology, Malaysia and a Diploma in Business Administration from the Singapore Institute of Management. He is a Professional Engineer registered with the Institute of Engineers, Malaysia.

Operations Team - Vietnam

Operations Team - Singapore

Mr Lim Kok HinChief Executive Officer, Raffles Piling Vietnam Company Limited

Mr Lim joined our subsidiary, Raffles Piling Vietnam Company Limited as Chief Executive Officer in April 2010. He is responsible for the overall strategy and project operations. He has over 30 years of working experience and served in the capacity as Project Directors in various companies, including SembCorp Design and Construction Pte Ltd, Asia Projects Consultant Pte Ltd and SembCorp Engineers and Constructors Pte Ltd.

MrLimgraduatedwithaBachelorDegreeinEngineeringandMasterofScienceinBuildingfromtheNationalUniversityofSingapore.Heis a Professional Engineer registered with the Professional Engineers Board, Singapore.

14 Ryobi Kiso Holdings Ltd. Annual Report 2012

GROUP STRUCTURE

Ryobi Kiso Holdings Ltd.

100%

Raffles Piling Singapore Pte. Ltd.

100%

Ryobi Kiso (S) Pte. Ltd.

100%

Ryobi Ground Engineering

Pte. Ltd.

100%

Ryobi-Kiso (M)

Sdn. Bhd.

100%

Wellford Limited

100%

RyobiDevelopment

Pte. Ltd.

100%

Raffles Piling Vietnam Company

Limited

100%

Raffles Geosystems

Pte. Ltd.

74.1%

Ryobi Geotechnique

Pte Ltd

100%

Ryobi Machinery

Pte Ltd

100%

Ryobi Compile Holdings Pty Ltd

100%

Widelink Limited

80%

Ryobi Geotechnique International

Pte. Ltd.

80%

Ryobi Plant Engineering

Pte. Ltd.

70%

Compile-Ryobi Australia Pty Ltd*

70%

CompileAustralia Pty Ltd*

100%

RDV Realty Pte. Ltd.

100%

RDV Binh Duong CompanyLimited

100%

Ryobi Geotechnique (M)

Sdn. Bhd.

100%

Ryobi Geoproducts

Pte. Ltd.

100%

Ryobi Geotech Pte. Ltd.

100%

Ryobi Geosystems

Pte. Ltd.

100%

Ryobi Geomonitoring

Pte. Ltd.

* Became subsidiary on 16 July 2012

Annual Report 2012 Ryobi Kiso Holdings Ltd. 15

CORPORATE SOCIAL RESPONSIBILITY

Environment

As a leading ground engineering solutions provider, Ryobi Kiso is

strongly committed to preserve the environment and has always

advocate the need of eco-friendly piling methods as to achieve

benefits in a sustainable way for the general public as well as for

its customers and stakeholders. Over the years since its inception,

Ryobi Kiso had regularly introduced eco-friendly piling techniques

and methodologies to minimise the impacts on the eco-system

that arose from piling activities.

Our eco-friendly piling technologies allow us to conduct piling

works in an eco-friendly and low pollution manner. We are able to

achieve relatively lower noise level, lesser vibration and soil removal/

disposal and usage of lesser raw material with such technologies.

Thus besides achieving the objective of environment protection,

our technologies also enable the enhancing of productivity at the

work site. We continue to be guided by the stringent standards

of environmental management under the ISO 14000 certification

program.

Going forward, we will continue to innovate and introduce eco-

friendly technologies and construction processes that minimise

pollution and other adverse impacts to the environment.

Community

Ryobi Kiso is a strong believer of giving back to the community. We

support and participate in numerous programs that promote the

communities’ social well-being, particularly in the area of helping

the elderly, disabled and the needy. The Group also gives financial

support to educational institutions to assist needy students to

pursue their education.

During the financial year, Ryobi Kiso contributed to organisations

andcharitiessuchasNanyangTechnologicalUniversity(forneedy

students),NationalUniversityofSingapore(ShearesHallCharity),

AssociationforPersonswithSpecialNeeds(APSN),TheBusiness

Times Budding Artists Fund, PCS-Lifeblood Centre, SASCO Senior

Citizens Home and others.

We are also a proud partner and sponsor of the Singapore Table

TennisAssociation(“STTA”).TheRyobiKisoYishunZoneTraining

Centre under STTA offers training for promising young players

whereoutstandingmembersare identified for theNationalYouth

Squads. The emphasis on youth development at the STTA has

never been greater and a key goal for STTA is to identify and groom

talented athletes from a very young age.

Overall, community engagement remains an important ethos for

the Group as this reinforces a sense of pride and promotes a

culture of contribution in the workplace.

16 Ryobi Kiso Holdings Ltd. Annual Report 2012

PEOPLE DEVELOPMENT ANDWORKPLACE SAFETY MANAGEMENT

The success of Ryobi Kiso’s business is predicated upon our

investment in people and people development. Investing in our

people means actively identifying relevant training programmes to

support our employees’ growth in terms of job scopes. Operational

level training for employees continued to be a key priority in FY2012

through a number of training programmes, from certification

courses to practical on-the-job training.

Cohesion and effective internal communication are also a key

part of our corporate training programme. A cooperative and

communicative culture improves the work environment and leads

to higher productivity and job satisfaction. The Group strives for

good staff retention rates to enhance continuity in our service and

quality standards.

For management staff, we actively identify and groom future

leaders amongst our employees and put these selected employees

through mentorship and external leadership courses. We believe

in providing them ample opportunities to exercise and realise their

potential.

Besides creating a work environment where our employees can

grow and excel in their jobs, Ryobi Kiso is committed towards

providing a safe workplace for our employees.

Ryobi Kiso is certified under OHSAS 18001:2007, an internationally

recognised assessment specification for occupational health and

safety management systems. This rigorous framework allows the

Group to consistently identify and control its health and safety

risk and reduce potential accidents at our work sites. Some of

the initiatives that have been put in place to create a safe work

environment and ensure compliance with government safety

regulations include:

• Making sure employees have adequate training and well

equipped to carry out their tasks safely;

• Methodical identification and assessment of risks before the

commencement of any project;

• Having clearly defined roles and responsibilities in relation to

safety;

• Conducting drills for better preparedness in the event of an

emergency;

• Regular periodic review on Group’s safety targets and

discussion on all safety issues, as well as remedial actions and

preventive measures for near-miss incidents; and

• Clear and timely communication on safety issues and

precautionary measures amongst staff to create awareness.

These help to reduce loss of man hours, increase productivity at

our work sites and most importantly, ensure that our employees are

able to work with a peace of mind.

Annual Report 2012 Ryobi Kiso Holdings Ltd. 17

PEOPLE DEVELOPMENT ANDWORKPLACE SAFETY MANAGEMENT

INVESTOR RELATIONS

As part of our efforts to maintain regular and timely communication

to the shareholders and general investment community, the Group

has put in place a series of communication programmes to ensure

that all material information are disseminated in a timely manner.

The Group’s Investor Relations (IR) function is headed by Ms Tan

Ghee Hwa, Director, Corporate Development and assisted by Ms

Lim Soh Hoon, Chief Financial Officer. During the year under review,

an external IR firm, Capital Access Communications Pte Ltd, was

appointed to support our communication efforts with the current

corporate development and strategy.

In our proactive efforts to continuously engage the investment

community and keep them abreast of the Group’s latest

developments and prospects, Ryobi Kiso hosts a media and

analysts corporate briefing every 6 months. In addition to the

regular dialogue sessions, the Group is always open to engage

fund managers, analysts, representatives from brokerage houses in

one-to-one or small group meetings. During the year under review,

we received separate interviews and profiling from The Edge, The

BusinessTimesaswellasLianheZaobao.

Ryobi Kiso also places great emphasis on research coverage but

understands that we are a relatively young listed entity on the SGX

bourse.Nevertheless,weproactivelyseektoexpandourresearch

coverage and are putting much time and effort to enable research

analysts better understand the unique investment proposition of

our Group. Currently, we participate in the SERI Scheme where

Standard & Poor’s is responsible for the research and analysis. For

independent research coverage, we have engaged SIAS research,

allowing existing and potential shareholders access to professional

research insights.

The Group recognises the prevalent trend of online access to

corporate information and thereby adopts an online-friendly

communication approach. For example, corporate announcements,

press releases and the latest financial results are disseminated

simultaneouslyonSGX-STviaSGXNetandourcorporatewebsite.

Our corporate website includes a stock information page and

also a dedicated Investor Relations page that hosts all publicly

disclosed information. We also encourage enquiries by providing

contact details for investor who requires more clarifications. Other

than our website, we use ShareInvestor.com’s email alerts service

(www.shareinvestors.com) and SIAS Communications Services

Online (www.sias.org.sg) to help keep interested parties abreast of

our latest announcements.

18 Ryobi Kiso Holdings Ltd. Annual Report 2012

RISK FACTORS AND RISK MANAGEMENT

Risk management is critical to Ryobi Kiso’s business and financial

performance on a day-to-day operational basis as well as in

strategic planning for the future. The Board and Management are

keenly aware of the Group’s exposure to volatility in the domestic

and foreign economic and business environments that may raise

the level of operating risks. The Board has identified the following

key risks and mitigating actions, with a policy to continually assess

and improve the Group’s risk management policies and processes.

Market Risk

Besides having extensive operations in Singapore, the Group also

has operating subsidiaries in countries such as Vietnam, Malaysia

and Australia. These subsidiaries are exposed to changes in

government regulations and unfavourable political developments,

which may limit the realisation of business opportunities and

investments in those countries. In addition, the Group’s business

operations are exposed to economic uncertainties that continue to

affect the global economy and international capital markets. While

these circumstances may be beyond its control, the Board and

the Management consistently keep themselves up-to-date on the

changes in political and industry regulations so as to be able to

anticipate or respond to any adverse changes in market conditions

in an efficient and timely manner.

Our mitigating strategy for market risk is to seek geographical

diversification while seeking emerging business opportunities in

new markets.

Business Risk

The construction industry is highly competitive. We will be impacted

by the entry of new players that compete at lower rates or existing

competitors who price down to increase their business volume. In

responding to intense competition, innovation remains a key ethos

within the Group. Hence, the Group continues to explore innovative

and customised solutions that help its customers improve efficiency

while already having a leading edge in eco-friendly piling technology

currently. We believe this will serve the Group well in the long run.

The Group’s performance is also affected by the continuity and

value of order book for new projects. The nature of the business

undertaken by the Group is generally on a project basis and of a

non-recurring nature. Hence, a degree of volatility is expected. To

maintain stability of contract flow, the Group maintains a strong track

record of successful projects and excellent working relationships

with developers, main contractors and project consultants. These

help to continually secure new contracts.

Fluctuations in cost or shortage of supply of key raw materials,

e.g. concrete and steel bars, equipment and/or labour affect the

Group’s performance. Factors contributing to these fluctuations or

shortage will hence inevitably affect the Group, should the Group be

unable to pass on increase in costs to customers or find alternative

sources of cheaper supplies. To reduce cost fluctuation and supply

shortages, the Group has established long-standing business

relationships with certain suppliers which enable the Group to

purchase supplies in bulk and negotiate for more competitive

pricing for the supply of raw materials. This allows the Group to

tender competitively and secure contracts effectively.

Annual Report 2012 Ryobi Kiso Holdings Ltd. 19

RISK FACTORS AND RISK MANAGEMENT

Operational Risk

Given the limited pool of workers and the labour intensive nature

of its business, the Group is dependent on foreign labour for our

construction projects. Factors that can affect the supply and cost

of foreign labour will have a financial bearing on the Group as

well as its operations. These factors include, but are not limited

to, policies changes in foreign workers’ countries of origin and

changes in foreign labour policies and regulations imposed by the

relevant government authorities.

The contract value quoted by the Group in tender submissions

to developers or main contractor of a project is determined

after evaluating all related costs including indicative pricing from

suppliersandsub-contractors.Unforeseencircumstancessuchas

adverse weather conditions, unanticipated constraints at worksite

which may arise during the course of construction and factors

that could increase the budgeted cost or other costs that were

not previously factored into the contract value, will result in cost

overrun that may have to be borne by the Group. To mitigate the

risk of project cost overrun, the Group ensures that projects are

led by industry veterans with over 20 years of experience in the

business and well versed in the workings of this industry.

In the day-to-day operations of the Group, accidents or mishaps

may occur at its project construction sites or storage yards, which

could threaten the continuity of its operations. To enable the Group

to consistently identify and control its health and safety risks, reduce

potential accidents, aid legislative compliance and improve overall

performance, its principal subsidiary has complied and is certified

under the internationally recognised assessment specifications

for occupation health and safety management systems - OHSAS

18001:2007.

Credit Risk

As the Group’s businesses are project-based and payments are

made by customers progressively, the Group has to secure

adequate financing either from internal sources or through

external borrowings to fund the working capital of these projects.

The Group’s ability to secure adequate financing will affect

the day-to-day operations of the Group and its growth. Also,

notwithstanding the promulgation of the BCISPA which provides a

statutory procedure for collection of progress payment, the Group

may still be exposed to credit risks and significant delays and/or

default in payment from its customers. To reduce credit risk, the

Group adopts the policy of working with customers with good

credit worthiness, market reputation and long working relationship

with the Group. The Group performs ongoing credit evaluation of

its customers’ financial condition.

20 Ryobi Kiso Holdings Ltd. Annual Report 2012

RISK FACTORS AND RISK MANAGEMENT

Foreign Exchange Risk

As the Group has operating subsidiaries in Malaysia, Vietnam and

Australia respectively, it is exposed to foreign exchange legislation

and regulations implemented by Central Bank of Malaysia, State

Bank of Vietnam and the Reserve Bank of Australia that aim to

influence capital flows and to facilitate currency risk management.

While any future restrictions on repatriation of funds may limit

the Group’s ability to distribute dividends to its shareholders

or expand its business, its operations in Malaysia, Vietnam and

Australia remains a relatively small portion of the Group’s business.

Furthermore, funding for the Group’s business expansion can

be obtained from its Singapore’s operations or through external

financing.

The Group incurs foreign currency risk on purchases that are

denominated in a currency other than the respective functional

currencies in the Group’s entities. The currencies giving rise to this

riskareprimarily, theUnitedStatesDollar,AustralianDollar,Euro

and Japanese Yen. The Group does not have a formal hedging

policy but it minimises such risks by actively monitoring its foreign

currency exposure on an on-going basis and keeping the net

exposure to an acceptable level.

Interest Rate Risk

The Group obtains additional financing through bank borrowings

and finance lease arrangement, hence it is exposed to interest rate

risk from such interest-bearing liabilities. To limit the extent to which

net interest expense can be affected by an adverse movement

in interest rate, the Group monitors its exposure to interest rates

closely and maintains a policy of obtaining the most favourable

interest rate available without increasing its exposure. The Group

also limits its interest rate risk relating to interest-earning financial

assets by placing its cash balances with reputable banks and

financial institutions.

Liquidity Risk

Liquidity risk occurs when the Group is unable to meet its

contractual and financial obligations as and when they fall due.

The Group actively manages such risk through diligent monitoring

of its net operating cash flow and maintains a level of cash and

cash equivalents deemed adequate by Management for working

capital purposes. Regular reporting and consultation between

operating entities and corporate management are a routine part of

the Group’s financial management process.

22 Corporate Governance Report

34 Directors’ Report

37 Statement by Directors

38 Independent Auditor’s Report

39 Statements of Financial Position

41 Consolidated Income Statement

42 Consolidated Statement of Comprehensive Income

43 Consolidated Statement of Changes in Equity

44 Consolidated Statement of Cash Flows

46 Notes to the Financial Statements

97 Additional Information

98 Statistics of Shareholdings

100 Notice of Annual General Meeting

Proxy Form

CONTENTS

CORPORATE GOVERNANCE REPORT

22 Ryobi Kiso Holdings Ltd. Annual Report 2012

The Board of Directors (the “Board”) of Ryobi Kiso Holdings Ltd. (the “Company”) together with its subsidiaries (the “Group”) is

committed to maintaining a high standard of corporate governance by complying with the benchmark set by the Singapore Code

of Corporate Governance 2005 (the “Code”).

This report describes the Company’s corporate governance processes and activities with specifi c reference made to the

principles and guidelines of the Code. Unless otherwise stated, these practices were in place throughout the fi nancial year.

THE CODE

The Code is divided into four main sections:

(A) Board Matters

(B) Remuneration Matters

(C) Accountability and Audit

(D) Communication with Shareholders

(A) BOARD MATTERS

The Board’s Conduct of its Affairs

Principle 1: Every company should be headed by an effective Board to lead and control the company. The Board is collectively

responsible for the success of the company. The Board works with Management to achieve this and the

Management remains accountable to the Board.

The Board oversees the business affairs of the Company. It carries out this oversight function by assuming responsibility for

effective stewardship and corporate governance of the Company and the Group.

The key roles of the Board are:

guide the corporate strategy and directions of the Group, approve the broad policies, strategies and fi nancial objectives of

the Group and monitoring the performance of Management;

establish and oversee the framework for internal controls and risk management and ensure good corporate governance;

ensure effective management leadership of the highest quality and integrity;

review and approve quarterly, interim and annual results;

approve annual budgets, major funding proposals, investment and divestment proposals; and

provide overall insight in the proper conduct of the Group’s business.

Board Committees

In order to provide an independent oversight and to discharge its responsibilities more effi ciently, the Board has delegated certain

functions to various Committees. The Board Committees consist of the Audit Committee (“AC”), Nominating Committee (“NC”)

and Remuneration Committee (“RC”). These Committees operate under clearly defi ned terms of reference. The Chairman of the

respective Committee will report to the Board on the outcome of the Committee meetings and their recommendations on the

specifi c agendas mandated to the Committee by the Board.

Matters which are specifi cally reserved to the Board for decision are those involving corporate plans and budgets, material

acquisitions and disposals of assets, share issuances, dividends and other returns to shareholders.

CORPORATE GOVERNANCE REPORT

Annual Report 2012 Ryobi Kiso Holdings Ltd. 23

The Board conducts at least four meetings on a quarterly basis to review the Company’s fi nancial results and where necessary,

additional Board meetings are held to address signifi cant issues or transactions. The Board held four meetings during the

fi nancial year. The Company’s Articles of Association allow a Board meeting to be conducted by way of a telephone conference

or by means of similar communication equipment whereby all Directors participating in the meeting are able to hear each other.

The attendance of the Directors’ and various Board Committees’ meetings held as well as the frequency of such meetings during

the fi nancial year ended 30 June 2012 is as follows:

BoardAudit

CommitteeNominating Committee

Remuneration Committee

Name of DirectorsNumber of

MeetingNumber of

MeetingNumber of

MeetingNumber of

Meeting

Held Attended Held Attended Held Attended Held Attended

Lee Yiok Seng @ Lee Geok Seng

@ Lee Yok Seng

4 4 4 4 1 1 2 2

Ong Tiong Siew 4 4 4 4* 1 1* 2 1*

Ong Teng Choon 4 4 4 4* 1 1* 2 1*

Lai Chin Yee 4 4 4 4 1 1 2 2

Lau Teik Soon 4 4 4 4 1 1 2 2

* By invitation

Notwithstanding the above disclosures, the Board is of the view that the contribution of each Director should not be focused only

on his/her attendance at meetings of the Board and/or Board Committees. A Director’s contribution may also extend beyond the

confi nes of the formal environment of such meetings, through the sharing of views, advices, experiences and strategic networking

relationships which would further the interests of the Company.

All Directors are provided with relevant information on the Company’s policies, procedures and practices relating to the

governance issues, including disclosures of interest in securities, dealings in Company’s securities, restrictions on disclosures of

price sensitive information and disclosures of interests relating to the Group’s businesses. Directors are also updated regularly on

key regulatory and accounting changes at Board Meetings. Directors and senior executives are encouraged to undergo relevant

training to enhance their skills and knowledge, especially on new laws and regulations affecting the Group’s operations.

Board Composition and Balance

Principle 2: There should be a strong and independent element on the Board, which is able to exercise objective judgement on

corporate affairs independently, in particular, from Management. No individual or small group of individuals should be

allowed to dominate the Board’s decision making.

The Board comprises two Executive Directors and three Non-Executive Directors. Two of the Non-Executive Directors are

independent of the Management and substantial shareholders and they are Ms Lai Chin Yee and Dr Lau Teik Soon.

The list of the Directors is as follows:

Executive Directors

Mr Ong Tiong Siew Chief Executive Offi cer

Mr Ong Teng Choon Executive Director

Non-Executive Directors

Mr Lee Yiok Seng @ Lee Geok Seng Chairman of the Board

@ Lee Yok Seng (“Mr Lee Yiok Seng”)

Ms Lai Chin Yee Lead Independent Director

Dr Lau Teik Soon Independent Director

CORPORATE GOVERNANCE REPORT

24 Ryobi Kiso Holdings Ltd. Annual Report 2012

The profi les of the Directors are set out on pages 10 and 11 of this Annual Report.

The Board has examined its size and is of the view that the current Board size is appropriate, taking into account the nature

and scope of the Group’s operations. The Board consists of respected individuals from different backgrounds whose core

competencies, qualifi cations, skills and experiences are extensive and complementary.

With two out of fi ve Directors deemed to be independent, the Board is able to exercise independent judgment on corporate

affairs and provide Management with a diverse and objective perspective on issues. Furthermore, the Board will be able to

interact and work with the Management team through a robust exchange of ideas and views to help shape the Company’s

strategic direction.

The composition of the Board is reviewed on an annual basis by the NC. The NC adopts the Code’s defi nition of what constitutes

an Independent Director.

Chairman and Chief Executive Offi cer

Principle 3: There should be a clear division of responsibilities at the top of the company – the working of the Board and the

executive responsibility of the company’s business – which will ensure a balance of power and authority, such that

no one individual represents a considerable concentration of power.

There is a clear division of responsibilities at the top Management with clearly defi ned lines of responsibility between the Board

and executive functions of the Management of the Company’s business.

The roles and responsibilities between the Chairman and the Chief Executive Offi cer (“CEO”) are held by separate individuals

to ensure an appropriate distribution of power. Mr Lee Yiok Seng is our Non-Executive Chairman and Mr Ong Tiong Siew is

our CEO. In view of the Chairman and the CEO are related by close family ties, Ms Lai Chin Yee has been appointed as our

Lead Independent Director, pursuant to the recommendation in Guideline 3.3 of the Code. Where a situation arises that may

involve confl ict of interests between the roles of the Chairman and the CEO, it is the Lead Independent Director’s responsibility,

together with the other Independent Directors, to ensure that shareholders’ rights are protected. Ms Lai Chin Yee, being the

Lead Independent Director of the Company, is available to shareholders where they have concerns, which contact through the

normal channels of the Chairman and the CEO has failed to resolve or for which such contact is inappropriate.

Hence, the Board believes that notwithstanding the close family ties between the Chairman and the CEO, the current

composition of the Board is able to make objective and prudent judgment on the Group’s corporate affairs. The Board is of the

view that there are suffi cient safeguards and checks to ensure that the process of decision making by the Board is independent

and based on collective decisions without any individual exercising any considerable concentration of power or infl uence.

The Chairman, who is a Non-Executive Director, oversees the Group’s corporate governance structure and conduct, in particular,

the effective functioning of the Board and its Board Committees. The Chairman also ensures that shareholders’ questions

and concerns are addressed at the general meetings of the Company. The Chairman is free to act independently in the best

interests of the Group and shareholders. The CEO leads the Management team by providing entrepreneurial leadership and

strategic operations. The CEO is responsible for the formulation of the Group’s strategic direction and expansion plans and the

management of the Group’s overall business development as well as oversees the business operations and affairs of the Group.

The Chairman is assisted by the Company Secretaries or their representatives to schedule and prepare agendas for Board

meetings. The Chairman ensures that the members of the Board work together with the Management with the capability and

authority to engage the Management in constructive views on various matters, including strategic issues and business planning

processes. The CEO ensures that the quality and timeliness of information fl ow between the Board and the Management, which

comprises key executive personnel of the Company.

CORPORATE GOVERNANCE REPORT

Annual Report 2012 Ryobi Kiso Holdings Ltd. 25

Board Membership

Principle 4: There should be a formal and transparent process for the appointment of new directors to the Board.

The NC was formed in January 2010 and had adopted the written terms of reference approved and adopted by the Board. The

NC held one meeting during the fi nancial year. The NC comprises three Non-Executive Directors, two of whom are independent

of the Management and substantial shareholders.

The members of the NC are:

Dr Lau Teik Soon Chairman

Ms Lai Chin Yee Member

Mr Lee Yiok Seng Member

The key roles of the NC are:

review and recommend the nomination or re-nomination of the Directors having regard to the Director’s contribution and

performance; and senior Management and family members related to the Management or the controlling shareholders;

determine the independence of Directors on an annual basis in accordance with Guideline 2.1 of the Code;

assess the performance of the Board and contribution of each Director to the effectiveness of the Board; and

review and approve any new employment of related persons and the proposed terms of employment.

The Articles of Association of the Company require the number nearest to one-third of the Directors to retire by rotation and

subject themselves to re-election by shareholders at the Annual General Meeting (“AGM”). It was also provided in the Articles of

Association of the Company that additional Directors appointed during the year shall hold offi ce only until the next AGM and shall

then be eligible for re-election at that AGM.

The dates of initial appointment and last re-election of each Director are set out below:

Name of DirectorPosition held on

the BoardDate of fi rst appointment

to the BoardDate of last re-election

as Director

Lee Yiok Seng Chairman 7 December 2009 20 October 2011

Ong Tiong Siew Director 28 February 2008 20 October 2010

Ong Teng Choon Director 28 February 2008 20 October 2011

Lai Chin Yee Director 7 December 2009 20 October 2010

Dr Lau Teik Soon Director 7 December 2009 20 October 2011

Although the Non-Executive Directors hold directorships in other listed companies, the Board is of the view that such multiple

board representations do not hinder them from carrying out their duties as Directors. These Directors would contribute their

invaluable experiences to the Board and give it a broader perspective. For the current fi nancial year, the NC has reviewed the

multiple directorships disclosed by each Non-Executive Director of the Company and is satisfi ed that each Director has allocated

suffi cient time and attention to the affairs of the Company to adequately discharge their duties as Director of the Company.

The Board has accepted the NC’s nomination of the retiring Directors who have given their consent for re-election at the

forthcoming AGM of the Company. The retiring Directors are Ms Lai Chin Yee and Dr Lau Teik Soon who will retire pursuant to

Article 91 of the Company’s Articles of Association.

In accordance with Section 153(6) of the Companies Act, Cap.50, a Director of or over 70 years of age is required to vacate

offi ce every year. The Director is eligible to offer himself for re-appointment.

The Board has accepted the NC’s nomination of the re-appointment of Mr Lee Yiok Seng and Dr Lau Teik Soon as Directors of

the Company pursuant to Section 153(6) of the Companies Act, Cap.50 at the forthcoming AGM of the Company.

The NC has assessed the independence of the Non-Executive Directors, Dr Lau Teik Soon and Ms Lai Chin Yee, and is satisfi ed

that there are no relationships which would deem them not to be independent.

CORPORATE GOVERNANCE REPORT

26 Ryobi Kiso Holdings Ltd. Annual Report 2012

Board Performance

Principle 5: There should be a formal assessment of the effectiveness of the Board as a whole and the contribution by each

director to the effectiveness of the Board.

The Company has in place a formal process for assessment of the effectiveness of the Board as a whole and the contribution by

each Director to the effectiveness of the Board.

The NC evaluates the Board’s performance as a whole on an annual basis based on performance criteria set out by the Board.

Each individual Director assesses the performance of the Board. The assessment parameters include attendance record at the

meetings of the Board and the Board Committees, intensity of participation at meetings, quality of discussions and any special

contributions. The performance measurements ensure that the mix of skills and experience of the Directors continue to meet the

needs of the Group.

During the fi nancial year, the NC had met to discuss and assessed the evaluation of the Board’s performance as a whole and the

results of the assessment had been communicated to and accepted by the Board.

Access to Information

Principle 6: In order to fulfi ll their responsibilities, Board members should be provided with complete, adequate and timely

information prior to board meetings and on an on-going basis.

The Board has separate and independent access to the Management and the Company Secretaries at all times. The Company

Secretaries or their representatives attend all Board and Board Committees meetings and assist the Board to ensure that Board

procedures, rules and regulations are complied with. The Management keeps the Board informed of the Company’s operations

and performance through regular updates and reports as well as through separate meetings and discussions. The Management

will present reports and updates on the Group’s performance, fi nancial position, prospects and other relevant information for

review at each Board meeting. In addition, all other relevant information on material events and transactions are circulated by

electronic mail and facsimile to the Directors for review and approval. The key Management staff may be invited to attend the

Board and the AC meetings to answer queries and to provide insights into its Group’s operations.

The Board takes independent professional advice as and when necessary to enable it or the Independent Directors to discharge

its or their responsibilities effectively. Each Director has the right to seek independent legal and other professional advice, at the

Company’s expense, to assist them in their duties.

(B) REMUNERATION MATTERS

Procedures for Developing Remuneration Policies

Principle 7: There should be a formal and transparent procedure for developing policy on executive remuneration and for fi xing

the remuneration packages of individual directors. No director should be involved in deciding his own remuneration.

The RC was formed in January 2010 and had adopted the written terms of reference approved and adopted by the Board. The

RC held two meetings during the fi nancial year. The RC comprises three Non-Executive Directors, two of whom are independent

of the Management and substantial shareholders.

The members of the RC are:

Dr Lau Teik Soon Chairman

Ms Lai Chin Yee Member

Mr Lee Yiok Seng Member

CORPORATE GOVERNANCE REPORT

Annual Report 2012 Ryobi Kiso Holdings Ltd. 27

The main functions of the RC are:

review and recommend to the Board in consultation with the Management and the Chairman of the Board, a framework

of remuneration and to determine specifi c remuneration packages and terms of employment for each of the Executive

Director of the Group including those employees related to Executive Directors and substantial shareholders of the Group;

recommend to the Board in consultation with the Management and the Chairman of the Board, the Ryobi Kiso Share

Award Schemes or any long term incentive schemes which may be set up from time to time and to do all acts necessary

in connection therewith; and

carry out its duties in the manner that it deemed expedient, subject always to any regulations or restrictions that may be

imposed upon the RC by the Board from time to time.

As part of its review, the RC shall ensure that:

all aspects of remuneration including Directors’ fees, salaries, allowances, bonuses, options and benefi ts-in-kinds should

be covered;

the remuneration packages should be comparable within the industry practices and norms and shall include a

performance related element coupled with appropriate and meaningful measures of assessing individual Executive

Director’s performance; and

the remuneration packages of employees related to Executive Directors and controlling shareholders of the Group are

in line with the Group’s staff remuneration guidelines and commensurate with their respective job scope and level of

responsibilities.

The recommendation of the RC would be submitted to the Board for endorsement. The RC is assisted by the Group’s Human

Resource Department. External professional advice may be sought by the RC as and when required. No individual Director shall

be involved in determining his/her own remuneration.

Each member of the RC shall abstain from making any recommendation on or voting on any resolutions in respect of his/her own

remuneration package.

Level and Mix of Remuneration

Principle 8: The level of remuneration should be appropriate to attract, retain and motivate the directors needed to run the

company successfully but companies should avoid paying more than is necessary for this purpose. A signifi cant

proportion of executive directors’ remuneration should be structured so as to link rewards to corporate and

individual performance.

The Non-Executive and Independent Directors do not have any service contracts. They receive Directors’ fees, which takes into

account their level of contribution and responsibilities. Their fees are recommended by the Board for approval by the shareholders

at the AGM of the Company.

The Executive Directors do not receive Directors’ fees. The remuneration of the Executive Directors and the key executives

comprises primarily a basic salary component and a variable component which is inclusive of bonuses and other benefi ts.

Service Contracts for Executive Directors are for a fi xed appointment period of three years with effect from 27 January 2010,

the date where the Company is admitted to the Offi cial List of the Singapore Exchange Securities Trading Limited (the “SGX-

ST”). The RC will review the Executive Directors’ remuneration on an annual basis. Executive Directors’ remuneration packages

consist of salary and incentive bonuses. They are entitled to the personal use of Company’s cars and reimbursement of running

expenses relating to the use of the cars. They are also entitled to benefi ts of membership of not more than two country clubs and

the reimbursement of subscription fees and all expenses incurred in the use of such club memberships. Their service contracts

will continue for a further term of three years unless otherwise terminated by either party giving not less than six months’ notice

in writing to the other or in lieu of notice, payment of an amount equivalent to six months’ salary based on their last drawn salary.

The RC is of the view that the Executive Directors’ service contracts are not excessively long or with onerous removal clauses.

CORPORATE GOVERNANCE REPORT

28 Ryobi Kiso Holdings Ltd. Annual Report 2012

Disclosure of Remuneration

Principle 9: Each company should provide clear disclosure of its remuneration policy, level and mix of remuneration, and the

procedure for setting remuneration in the company’s annual report. It should provide disclosure in relation to its

remuneration policies to enable investors to understand the link between remuneration paid to directors and key

executives, and performance.

A breakdown of the remuneration of the Directors, in percentage terms showing the level and mix, for the fi nancial year ended 30

June 2012 falling within the broad bands are set out below:

Name of Director Remuneration Band Salary BonusOther

Benefi tsDirectors’

Fees Total

% % % % %

Executive Directors

Ong Tiong Siew Above $500,000 and below

$750,000

96.9 – 3.1 – 100

Ong Teng Choon Above $250,000 and below

$500,000

95.7 – 4.3 – 100

Non-Executive Directors

Lee Yiok Seng Below $250,000 – – – 100 100

Lai Chin Yee Below $250,000 – – – 100 100

Dr Lau Teik Soon Below $250,000 – – – 100 100

The Company adopts a remuneration policy for staff comprising a fi xed component and a variable component. The fi xed

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

Company’s and individual’s performance. Staff appraisals are conducted once a year. The Board will respond to any queries

raised at the AGM of the Company pertaining to such policies. Accordingly, it is the opinion of the Board that there is no

necessity for such policies to be approved by the shareholders.

The Code requires the names of at least the top fi ve key executives (who are not Directors) earning remuneration within bands of

$250,000 to be disclosed. The RC believes that the disclosure of the remuneration of individual executives is disadvantageous to

the Group’s business interests, given the highly competitive industry conditions, where poaching of executive is prevalent.

All of the top fi ve key executives (excluding Executive Directors of the Company) received remuneration within the bands of

$250,000 for the fi nancial year ended 30 June 2012.

Ms Tan Ghee Hwa, an Executive Offi cer who works for the Group as the Director, Corporate Development, is the sister-in-law of

the spouse of the Executive Director, Mr Ong Teng Choon.

Save as disclosed, there is no employee of the Group who is an immediate family member of any Director or the CEO or a

controlling shareholder and whose remuneration exceeded $150,000 during the fi nancial year ended 30 June 2012. The

remuneration of the employees who are related to our Directors and substantial shareholders shall be subjected to an annual

review and approval of the RC.

Each member of the RC shall abstain from voting on any resolutions in respect of his/her remuneration package or that of

employees related to him/her.

The RC also administers the Ryobi Kiso Share Award Scheme (the “RKSAS”). The shareholders of the Company have approved

and adopted the RKSAS on 13 January 2010. The RKSAS conforms to the requirements as set out in Chapter 8 Part VIII of the

Listing Manual of the SGX-ST. The rationale for adopting the RKSAS is to give the Company greater fl exibility to align the interests

of employees, especially key executives, with those of the shareholders. It is also intended to reward, retain and motivate

employees to achieve superior performance which creates and enhances economic value for the shareholders. A performance

based target award shares may be granted.

Details of the RKSAS are set out on pages 149 to 159 of the Prospectus dated 18 January 2010.

At the end of the fi nancial year, there has been no share granted under the RKSAS.

CORPORATE GOVERNANCE REPORT

Annual Report 2012 Ryobi Kiso Holdings Ltd. 29

(C) ACCOUNTABILITY AND AUDIT

Accountability

Principle 10: The Board should present a balanced and understandable assessment of the company’s performance, position

and prospects.

The Board recognises that it has overall responsibility to provide a balanced and fair assessment of the Group’s performance,

fi nancial position and prospects in its annual fi nancial statements and results announcements. The Management provides

the Directors on a quarterly basis, fi nancial reports and other information on the Group’s performance, fi nancial position and

prospects for their effective monitoring and decision-making. The Board provides the shareholders with quarterly results

announcements and annual fi nancial statements on a timely manner.

Audit Committee

Principle 11: The Board should establish an Audit Committee with written terms of reference which clearly set out its authority

and duties.

The AC was formed in January 2010 and had adopted the written terms of reference approved and adopted by the Board. The

AC held four meetings during the fi nancial year. The AC comprises three Non-Executive Directors, two of whom are independent

of the Management and the substantial shareholders.

The members of the AC are:

Ms Lai Chin Yee Chairman

Dr Lau Teik Soon Member

Mr Lee Yiok Seng Member

The AC meets regularly with the Group’s external and internal auditors and its Management to review accounting, auditing and

fi nancial reporting matters so as to ensure that an effective system of control is maintained in the Group.

The AC also monitors proposed changes in accounting policies, reviews the internal audit functions and discusses the

accounting implications of major transactions. In addition, it advises the Board regarding the adequacy of the Group’s internal

controls and the contents and presentation of its reports.

The Board considers that the members of the AC are appropriately qualifi ed to fulfi ll their responsibilities as the members bring

with them invaluable managerial and professional expertise in the fi nancial, legal and industry domain.

The AC meets, at a minimum, on a quarterly basis to perform the following functions:

review with the audit plan of the external and internal auditors and evaluate their overall effectiveness through regular

meetings with each group of auditors;

evaluate the adequacy of the internal control systems of the Group by reviewing written reports from the internal and

external auditors, and the Management’s responses and actions to correct any defi ciencies;

review the quarterly and annual fi nancial statements and results announcements before submission to the Board for

approval, focusing in particular on changes in accounting policies and practices, major risk areas, signifi cant adjustments

resulting from the audit, compliance with accounting standards and compliance with the Listing Manual of the SGX-ST

and any other relevant statutory or regulatory requirements;

review the assistance given by the Management to the external and internal auditors, and discuss problems and

concerns, if any, arising from audits, and any matters which the auditors may wish to discuss;

review and discuss with the external and internal auditors on any suspected fraud or irregularity, or suspected infringement

of any relevant laws, rules or regulations, which has or is likely to have a material impact on the Group’s operating results

or fi nancial position, and the Management’s response;

consider and recommend the appointment or re-appointment of the external and internal auditors and matters relating to

the resignation or dismissal of the auditors;

CORPORATE GOVERNANCE REPORT

30 Ryobi Kiso Holdings Ltd. Annual Report 2012

review interested person transactions to ensure that they are on normal commercial terms and not prejudicial to the

interests of the Company or its shareholders;

review potential confl icts of interest;

review the effectiveness and adequacy of the administrative, operating, internal accounting and fi nancial control

procedures;

review the key fi nancial risk areas, with a view to providing an independent oversight on the Group’s fi nancial reporting,

the outcome of such review to be disclosed in the annual report and if the fi ndings are material, immediately announced

via SGXNet;

undertake such other reviews and projects as may be requested by the Board, and report to the Board its fi ndings on

matters arising and requiring the attention of the AC; and

generally undertake such other functions and duties as may be required by statute or the Listing Manual of the SGX-ST.

The external and internal auditors have full access to the AC and the AC has full access to the Management. The AC has the

authority to commission investigations on any matters, which has or is likely to have material impact on the Group’s operating

and fi nancial results. The AC meets with the external and internal auditors, separately without the presence of Management,

annually. The AC reviews the fi ndings from the auditors and the assistance given to the auditors by the Management.

The AC will undertake a review of the scope of services provided by the external auditors, the independence and objectivity of

the external auditors on annual basis. Messrs Nexia TS Public Accounting Corporation, the external auditors of the Company, has

confi rmed that they are a Public Accounting Firm registered with Accounting and Corporate Regulatory Authority and provided a

confi rmation of their independence to the AC. The AC had assessed the external auditors based on factors such as performance,

adequacy of resources and experience of the external auditors. The AC, having reviewed the scope and value of non-audit

services provided to the Group by the external auditors, which comprise tax advisory services and is satisfi ed that the nature

and extent of such services will not prejudice and affect the independence and objectivity of the external auditors. The audit and

non-audit fees paid/payable to the external auditors of the Company (including its associated fi rm) for the fi nancial year ended

30 June 2012 were $117,124 and $7,100 respectively. Accordingly, the AC is satisfi ed that Rule 712 of the Listing Manual of the

SGX-ST is complied with and has recommended the Board that Messrs Nexia TS Public Accounting Corporation be nominated

for re-appointment as external auditors at the forthcoming AGM of the Company.

The Company has complied with Rule 715 of the Listing Manual of the SGX-ST as all subsidiaries of the Company in Singapore

are audited by Messrs Nexia TS Public Accounting Corporation for the purposes of the consolidated fi nancial statements of the

Group.

The external auditors, during their course of audit, will evaluate the effectiveness of the Company’s internal controls and report to

the AC, together with their recommendations, any material weakness and non-compliance of the internal controls. The AC has

reviewed the external audit reports and based on the controls in place, is satisfi ed that there are adequate internal controls in the

Group.

In July 2010, the Singapore Exchange Limited and Accounting and Corporate Regulatory Authority had launched the “Guidance

to Audit Committees on Evaluation of Quality of Work performed by External Auditors” which aims to facilitate the AC in

evaluating the external auditors. Accordingly, the AC had evaluated the performance of the external auditors based on the key

indicators of audit quality set out in the guidance.

The Company has put in place the Whistle Blowing Framework, endorsed by the AC, which provides the mechanisms

to encourage and provide a channel to employees to report in good faith and in confi dence, their concerns about possible

corporate improprieties in fi nancial reporting or other matters to Ms Lai Chin Yee, the Chairman of the AC. Details of the whistle

blowing procedures and arrangements have been made available to all employees. It has a well-defi ned process which ensures

independent investigation of such matters and for appropriate follow-up action. It also provides the assurance that employees will

be protected from reprisal within the limits of the law.

In the event that a member of the AC is interested in any matter being considered by the AC, he/she will abstain from reviewing

that particular transaction and voting on that particular resolution.

The AC has explicit authority to investigate any matter within its terms of reference. The AC has, within its terms of reference, the

authority to obtain independent professional advice at the Company’s expense as and when the need arises.

CORPORATE GOVERNANCE REPORT

Annual Report 2012 Ryobi Kiso Holdings Ltd. 31

Internal Controls

Principle 12: The Board should ensure that the Management maintains a sound system of internal controls to safeguard the

shareholders’ investments and the company’s assets.

The Board is responsible for the overall internal control framework, but acknowledges that no cost-effective internal control

system will preclude all errors and irregularities. The system is designed to manage rather than eliminate the risk of failure to

achieve business objectives and can provide only reasonable and not absolute assurance against material misstatement or loss.

The internal controls in place will address the fi nancial, operational and compliance risks and the objectives of these controls are

to provide reasonable assurance that there are no material fi nancial misstatements or material loss and assets are safeguarded.

Relying on the reports from the internal and external auditors, the AC carried out assessment of the effectiveness of key internal

controls during the year. Any material non-compliance or weaknesses in internal controls or recommendations from the internal

and external auditors to further improve the internal controls were reported to the AC. The AC will also follow up on the actions

taken by the Management on the recommendations made by the internal and external auditors.

Based on the various management controls in place, the reports from the internal and external auditors, reviews conducted by

the Management, the Board with the concurrence of the AC, is of the opinion that the system of internal controls addressing

fi nancial, operational and compliance risks maintained by the Group during the year are adequate in meeting the needs of the

Group’s business operations and provide reasonable assurance against material fi nancial misstatements or material loss and to

safeguarding the Group’s assets.

The Board also notes that all internal controls and risk management systems contain inherent limitations and no system of

internal controls or risk management system could provide absolute assurance against the occurrence of material errors, poor

judgement in decision making, human error, losses, fraud or other irregularities.

As the Group continues to grow the business, the Board will continue to review and take appropriate steps to strengthen the

Group’s overall system of internal controls and risk management.

Internal Audit

Principle 13: The company should establish an internal audit function that is independent of the activities it audits.

The Board recognises the importance of maintaining a system of internal controls, procedures and processes for the Group to

safeguard the shareholders’ investments and the Company’s assets.

The Company has outsourced its internal audit functions of the Group to Messrs KPMG Services Pte Ltd, an international

public accounting fi rm providing internal audit, risk and compliance services. The appointed internal auditors are responsible

for evaluating the reliability, adequacy and effectiveness of the internal controls and risk management processes of the Group,

assisting the AC in the review of interested person transactions and ensuring that the internal controls of the Group are adequate

in proper recording of transactions and safeguarding the assets of the Group. The AC is of the view that the internal auditors are

suitably qualifi ed and the audit function is adequately resourced and has appropriate standing within the Group.

During the fi nancial year ended 30 June 2012, the internal auditors conducted its annual review and reported its fi ndings and

recommendations to the AC. The AC reviewed the effectiveness of the key internal controls, including fi nancial, operational and

compliance controls and risk management on an on-going basis. The AC and the Board have reviewed the internal audit reports

and based on the controls in place, is satisfi ed that there are adequate internal controls in the Group.

CORPORATE GOVERNANCE REPORT

32 Ryobi Kiso Holdings Ltd. Annual Report 2012

(D) COMMUNICATION WITH SHAREHOLDERS

Principle 14: Companies should engage in regular, effective and fair communication with shareholders.

Principle 15: Companies should encourage greater shareholder participation at AGMs, and allow shareholders the opportunity

to communicate their views on various matters affecting the company.

The Company recognises the need to communicate with the shareholders on all material matters affecting the Group and does

not practice selective disclosure. Price sensitive announcements including interim and full year results are released through

SGXNet. Shareholders and investors can access information on the Company’s website at www.ryobi-kiso.com which provides,

inter-alia, corporate announcements, press releases and the latest fi nancial results as disclosed by the Company on SGXNet.

A copy of the Annual Report and Notice of AGM will be sent to every shareholder. The Notice of AGM is also advertised in the

press and released via SGXNet. Separate resolutions on each distinct issue are proposed at general meetings for approval.

In accordance with the Articles of Association of the Company, shareholders may appoint one or two proxies to attend and vote

at general meetings in their absence. All shareholders are allowed to vote in person or by proxy. Central Provident Fund investors

of the Company’s securities may attend shareholders’ meetings as observers provided they have submitted to do so with the

agent banks within the specifi ed time frame.

At general meetings of the Company, shareholders are given the opportunity to air their views and ask the Directors and the

Management questions regarding the Group and its businesses. The Chairman of the AC, NC and RC are usually available at the

AGM to answer those questions relating to the work of these Board Committees. The external auditors are also present to assist

the Board in addressing any relevant queries by the shareholders.

DEALINGS IN SECURITIES

The Group has adopted its Code of Best Practices on dealing in securities by setting out the implications of insider trading

and its regulations with regard to dealings in the Company’s securities by its Directors and offi cers, that is modeled, with some

modifi cations, on Rule 1207(19) of the Listing Manual of the SGX-ST. The Group’s Code of Best Practices provides guidance for

Directors, offi cers and employees on their dealings in the Company’s securities.

The Group’s Code of Best Practices prohibits the Directors, key executives and employees who have access to unpublished

material price sensitive information from dealing in Company’s securities. They are advised not to deal in the Company’s securities

during the period commencing two weeks immediately preceding the announcement of the Company’s quarterly fi nancial results

and one month immediately preceding the announcement of the Company’s full year fi nancial results and ending on the date of

announcement of such results on the SGX-ST, or when they are in possession of the unpublished price sensitive information of

the Group. In addition, the Directors, key executives and employees are expected to observe insider trading laws at all times even

when dealing in securities within the permitted trading period. They are also discouraged from dealing in Company’s securities on

short term considerations.

MATERIAL CONTRACTS

Save as disclosed under “Material Contracts” on pages 186 and 187 of the Company’s Prospectus dated 18 January 2010 and

in the Directors’ Report and fi nancial statements, there were no material contracts to which the Company or any of its subsidiary,

is a party and which involve the interests of the CEO, any Director or the controlling shareholder, subsisting at the end of the

fi nancial year ended 30 June 2012 or entered into since the date of listing of the Company.

RISK MANAGEMENT

The Management reviews regularly the Group’s business and operational activities to identify areas of signifi cant business risks

as well as appropriate measures to control and mitigate these risks within the Group’s policies and strategies. In addition, the

AC engages the internal auditors to review the Group’s processes and key areas as well as recommend measures of controls to

mitigate risks. The internal auditors will review policies and procedures as well as key controls and will highlight any issues to the

Board and the AC together with their recommendations. The Management will follow up on the auditors’ recommendations so as

to strengthen the Group’s risk management procedures.

Information relating to the risk management policies and processes are set out on pages 18 to 20 of this Annual Report.

CORPORATE GOVERNANCE REPORT

Annual Report 2012 Ryobi Kiso Holdings Ltd. 33

INTERESTED PERSON TRANSACTIONS

The Company has established internal control policies to ensure that transactions with interested persons are properly reviewed,

approved and conducted at arms’ length basis.

The following is the aggregate value of all transactions with interested persons (as defi ned in Chapter 9 of the Listing Manual of

the SGX-ST) for the fi nancial year ended 30 June 2012:

Name of Interested Persons and Transactions

Aggregate value of all interested person transactions during the fi nancial year under review (excluding transactions less than $100,000 and transactions conducted under shareholders’ mandate pursuant to Rule 920)

Aggregate value of all interested person transactions conducted under shareholders’ mandate pursuant to Rule 920 (excluding transactions less than $100,000)

$’000 $’000

HL Suntek Insurance Brokers Pte Ltd(1)

- Insurance expense 717 –

Compile-Ryobi Australia Pty Ltd(2)

- Loan and interest income 814 –

- Sales of tools and hardware 133 –

Notes:

(1) Mr Lee Yiok Seng, Chairman of the Board and Non-Executive Director of the Company, is a Director of HL Suntek Insurance Brokers Pte

Ltd.

(2) Mr Ong Tiong Siew, Chief Executive Offi cer and Executive Director of the Company, is a Director and shareholder of Compile-Ryobi

Australia Pty Ltd.

The Company does not have any shareholders’ mandate for interested person transactions.

Prior to entering into an interested person transactions by the Group, the Board and the AC will review such a transaction to

ensure that the relevant rules under Chapter 9 of the Listing Manual of the SGX-ST are complied with.

DIRECTORS’ REPORT

34 Ryobi Kiso Holdings Ltd. Annual Report 2012

The directors present their report to the members together with the audited fi nancial statements of the Group for the fi nancial

year ended 30 June 2012 and the statement of fi nancial position of the Company as at 30 June 2012.

Directors

The directors of the Company in offi ce at the date of this report are as follows:

Ong Tiong Siew

Ong Teng Choon

Lai Chin Yee

Lau Teik Soon

Lee Yiok Seng @ Lee Geok Seng @ Lee Yok Seng

Arrangements to enable directors to acquire shares and debentures

Neither at the end of nor at any time during the fi nancial year was the Company a party to any arrangement whose object was to

enable the directors of the Company to acquire benefi ts by means of the acquisition of shares in, or debentures of, the Company

or any other body corporate.

Directors’ interests in shares or debentures

According to the register of directors’ shareholdings, none of the directors holding offi ce at the end of the fi nancial year had any

interests in the shares or debentures of the Company or its related corporation, except as follows:

Holdings registered in name of director or nominee

Holdings in which director is deemed to have an interest

At

30.06.2012

At

01.07.2011

At

30.06.2012

At

01.07.2011

Company

(No. of ordinary shares)

Ong Tiong Siew 37,438,240 37,438,240 479,756,060 479,756,060

Ong Teng Choon 26,857,880 26,857,880 479,756,060 479,756,060

Lee Yiok Seng @ Lee Geok Seng @ Lee Yok Seng 3,200,000 3,200,000 – –

Immediate and Ultimate Holding Corporation

- Tanglin Capital Pte. Ltd.

(No. of ordinary shares)

Ong Tiong Siew 46 46 – –

Ong Teng Choon 33 33 – –

The directors’ interests in the ordinary shares of the Company as at 21 July 2012 were the same as those as at 30 June 2012.

By virtue of Section 7 of the Singapore Companies Act, Cap. 50, Ong Tiong Siew and Ong Teng Choon are deemed to have an

interest in the shares of all the Company’s subsidiaries at the end of the fi nancial year.

Directors’ contractual benefi ts

Since the end of the previous fi nancial year, no director has received or become entitled to receive a benefi t by reason of a

contract made by the Company or a related corporation with the director or with a fi rm of which he is a member or with a

company in which he has a substantial fi nancial interest, except as disclosed in the accompanying fi nancial statements and in

this report.

DIRECTORS’ REPORT

Annual Report 2012 Ryobi Kiso Holdings Ltd. 35

Share options

Ryobi Kiso Share Award Scheme

Ryobi Kiso Share Award Scheme (the “RKSAS”) of the Company was approved and adopted by shareholders on 13 January

2010. The RKSAS conforms to the requirements as set out in Chapter 8 Part VIII of the Listing Manual issued by the Singapore

Exchange Securities Trading Limited (“SGX-ST”). The RKSAS is administered by the Remuneration Committee comprising three

non-executive directors, Lai Chin Yee, Lau Teik Soon and Lee Yiok Seng @ Lee Geok Seng @ Lee Yok Seng (“Lee Yiok Seng”).

Other information regarding the RKSAS is set out below:

(i) Awards represent the right of a participant to receive fully paid shares free of charge, upon the participant satisfying the

criteria set out in the RKSAS;

(ii) The Remuneration Committee has the absolute discretion on the following in relation to an award:

(a) select eligible directors, employees and controlling shareholders or associates of controlling shareholders to

participate in the RKSAS;

(b) determine the date on which the award is to be vested;

(c) determine the number of shares to be offered to each participant;

(d) determine the prescribed performance targets and vesting periods;

(e) determine the performance period during which the prescribed performance targets are to be satisfi ed; and

(f) assess the service and performance of the participants.

(iii) The aggregate number of shares to be delivered (“Award Shares”) pursuant to the vesting of the Awards on any date shall

not exceed fi fteen per cent (15%) of the total number of issued shares of the Company on the day preceding that date;

(iv) All awards are settled by physical delivery of shares; and

(v) RKSAS shall continue in force at the discretion of the Remuneration Committee, subject to a maximum period of ten years

commencing on 13 January 2010.

No shares have been granted to the directors or the controlling shareholders of the Company or their associates or participants

under the RKSAS since the commencement of the RKSAS. At the end of the fi nancial year, there were no shares granted under

the RKSAS.

Audit committee

The members of the Audit Committee at the end of the fi nancial year were as follows:

Lai Chin Yee (Chairman), independent non-executive director

Lau Teik Soon, independent non-executive director

Lee Yiok Seng, non-executive director

All members of the Audit Committee were non-executive directors.

The Audit Committee performs the functions specifi ed in Section 201B(5) of the Singapore Companies Act, the SGX-ST Listing

Manual and the Code of Corporate Governance.

The Audit Committee has held four meetings since the last directors’ report. In performing its functions, the Audit Committee met

with the Company’s independent and internal auditors to discuss the scope of their work, the results of their examination and

evaluation of the Company’s internal accounting control system.

DIRECTORS’ REPORT

36 Ryobi Kiso Holdings Ltd. Annual Report 2012

Audit committee (Cont’d)

The Audit Committee also reviewed the followings:

assistance provided by the Company’s management to the internal and independent auditors;

quarterly fi nancial information and annual fi nancial statements of the Group and the Company prior to their submission to

the directors of the Company for adoption; and

interested person transactions (as defi ned in Chapter 9 of the SGX-ST Listing Manual).

The Audit Committee has full access to management and has given the resources required for it to discharge its functions.

It has full authority and discretion to invite any director or executive offi cer to attend its meetings. The Audit Committee also

recommends the appointment of the independent auditor and reviews the level of audit and non-audit fees.

The Audit Committee is satisfi ed with the independence and objectivity of the independent auditor and has recommended to the

Board of Directors that the independent auditor, Nexia TS Public Accounting Corporation, be nominated for re-appointment as

auditor at the forthcoming Annual General Meeting of the Company.

Independent auditor

The independent auditor, Nexia TS Public Accounting Corporation, has expressed its willingness to accept

re-appointment.

On behalf of the Directors

Ong Tiong SiewDirector

Ong Teng ChoonDirector

14 September 2012

STATEMENT BY DIRECTORS

Annual Report 2012 Ryobi Kiso Holdings Ltd. 37

In the opinion of the directors,

(a) the statement of fi nancial position of the Company and the consolidated fi nancial statements of the Group as set out on

pages 39 to 96 are drawn up so as to give a true and fair view of the state of affairs of the Company and of the Group as

at 30 June 2012 and of the results of the business, changes in equity and cash fl ows of the Group for the fi nancial year

then ended; and

(b) at the date of this statement, there are reasonable grounds to believe that the Company will be able to pay its debts as

and when they fall due.

The Board of Directors has, on the date of this statement, authorised these fi nancial statements for issue.

On behalf of the Directors

Ong Tiong SiewDirector

Ong Teng ChoonDirector

14 September 2012

INDEPENDENT AUDITOR’S REPORTto the Members of Ryobi Kiso Holdings Ltd.

38 Ryobi Kiso Holdings Ltd. Annual Report 2012

Report on the Financial Statements

We have audited the accompanying fi nancial statements of Ryobi Kiso Holdings Ltd. (the “Company”) and its subsidiaries

(the “Group”) set out on pages 39 to 96, which comprise the consolidated statement of fi nancial position of the Group and

the statement of fi nancial position of the Company as at 30 June 2012, the consolidated income statement, the consolidated

statement of comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash

fl ows of the Group for the fi nancial year then ended, and a summary of signifi cant accounting policies and other explanatory

information.

Management’s Responsibility for the Financial Statements

Management is responsible for the preparation of fi nancial 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 suffi cient 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 profi t and loss accounts and balance sheets and to maintain accountability of

assets.

Auditor’s Responsibility

Our responsibility is to express an opinion on these fi nancial 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 fi nancial statements are free from material

misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the fi nancial statements.

The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of

the fi nancial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control

relevant to the entity’s preparation of fi nancial 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 fi nancial statements.

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

Opinion

In our opinion, the consolidated fi nancial statements of the Group and the statement of fi nancial position of the Company are

properly drawn up in accordance with the provisions of the Act and Singapore Financial Reporting Standards so as to give a true

and fair view of the state of affairs of the Group and of the Company as at 30 June 2012, and the results, changes in equity and

cash fl ows of the Group for the fi nancial 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.

Nexia TS Public Accounting Corporation Public Accountants and Certifi ed Public Accountants

Director-in-charge: Kristin YS KimAppointed since fi nancial year ended 30 June 2009

Singapore

14 September 2012

STATEMENTS OF FINANCIAL POSITIONAs at 30 June 2012

Annual Report 2012 Ryobi Kiso Holdings Ltd. 39

Group Company

Note 2012 2011 2012 2011

$’000 $’000 $’000 $’000

ASSETS

Current assets

Cash and cash equivalents 4 33,026 41,337 3,558 17,393

Derivative fi nancial instruments 5 82 – – –

Trade and other receivables 6 74,380 55,001 44,113 33,656

Inventories 7 1,105 782 – –

Construction contract work-in-progress 8 6,802 10,396 – –

Finance lease receivables 9 133 – – –

115,528 107,516 47,671 51,049

Non-current assets

Investment in subsidiaries 10 – – 41,894 41,644

Investment in associated company 11 – 379 – –

Club memberships 12 220 220 – –

Available-for-sale fi nancial assets 13 1,322 1,480 – –

Property, plant and equipment 14 92,100 89,467 – –

Finance lease receivables 9 9 – – –

Deferred income tax assets 18 132 – – –

93,783 91,546 41,894 41,644

TOTAL ASSETS 209,311 199,062 89,565 92,693

LIABILITIES

Current liabilities

Trade and other payables 15 34,164 27,841 270 280

Current income tax liabilities 29 595 79 121 62

Derivative fi nancial instruments 5 218 – – –

Construction contract work-in-progress 8 1,138 – – –

Borrowings 16 30,492 20,047 – –

66,607 47,967 391 342

Non-current liabilities

Borrowings 16 16,435 22,892 – –

Deferred income tax liabilities 18 8,406 9,009 – –

24,841 31,901 – –

TOTAL LIABILITIES 91,448 79,868 391 342

NET ASSETS 117,863 119,194 89,174 92,351

STATEMENTS OF FINANCIAL POSITIONAs at 30 June 2012

40 Ryobi Kiso Holdings Ltd. Annual Report 2012

Group Company

Note 2012 2011 2012 2011

$’000 $’000 $’000 $’000

EQUITY

Capital and reserves attributable to equity holders of the Company

Share capital 19(a) 88,385 88,385 88,385 88,385

Treasury shares 19(b) (1,483) (656) (1,483) (656)

Other reserves 20 (174) (40) – –

Retained profi ts 21 27,323 28,505 2,272 4,622

114,051 116,194 89,174 92,351

Non-controlling interests 3,812 3,000 – –

TOTAL EQUITY 117,863 119,194 89,174 92,351

The accompanying notes form an integral part of the fi nancial statements.

CONSOLIDATED INCOME STATEMENTFor the fi nancial year ended 30 June 2012

Annual Report 2012 Ryobi Kiso Holdings Ltd. 41

Note 2012 2011

$’000 $’000

Revenue 23 153,319 123,288

Cost of sales (134,203) (95,890)

Gross profi t 19,116 27,398

Other income 24 1,402 1,292

Administrative expenses (16,633) (15,135)

Other operating income/(expenses) 25 964 (1,324)

Finance costs 26 (1,474) (1,311)

Share of losses of associated company (1) (313)

Profi t before income tax 27 3,374 10,607

Income tax credit/(expense) 29 874 (1,735)

Profi t for the year 4,248 8,872

Attributable to:

Equity holders of the Company 3,363 7,813

Non-controlling interests 885 1,059

4,248 8,872

Earnings per share (cents)

Basic 30 0.44 1.02

Diluted 30 0.44 1.02

The accompanying notes form an integral part of the fi nancial statements.

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOMEFor the fi nancial year ended 30 June 2012

The accompanying notes form an integral part of the fi nancial statements.

42 Ryobi Kiso Holdings Ltd. Annual Report 2012

Note 2012 2011

$’000 $’000

Profi t for the year 4,248 8,872

Other comprehensive (loss)/income:

Currency translation differences arising from consolidation 1 93

Fair value (losses)/gains on available-for-sale fi nancial assets 20 (134) 40

Other comprehensive (loss)/income, net of tax (133) 133

Total comprehensive income for the year 4,115 9,005

Attributable to:

Equity holders of the Company 3,229 7,944

Non-controlling interests 886 1,061

4,115 9,005

CONSOLIDATED STATEMENT OF CHANGES IN EQUITYFor the fi nancial year ended 30 June 2012

The accompanying notes form an integral part of the fi nancial statements.

Annual Report 2012 Ryobi Kiso Holdings Ltd. 43

NoteSharecapital

Treasuryshares

Retainedprofi ts

Other reserves

Totalattributable

to equity holdersof the

Company

Non-controllinginterests

Totalequity

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

Group

2012

Beginning of fi nancial year 88,385 (656) 28,505 (40) 116,194 3,000 119,194

Purchase of treasury shares 19(b) – (827) – – (827) – (827)

Total comprehensive income

for the year – – 3,363 (134) 3,229 886 4,115

Dividends 22 – – (4,545) – (4,545) (174) (4,719)

Non-controlling interest

contributions – – – – – 100 100

End of fi nancial year 88,385 (1,483) 27,323 (174) 114,051 3,812 117,863

2011

Beginning of fi nancial year 88,385 – 24,518 (171) 112,732 2,122 114,854

Purchase of treasury shares 19(b) – (656) – – (656) – (656)

Total comprehensive income

for the year – – 7,813 131 7,944 1,061 9,005

Dividends 22 – – (3,826) – (3,826) (183) (4,009)

End of fi nancial year 88,385 (656) 28,505 (40) 116,194 3,000 119,194

CONSOLIDATED STATEMENT OF CASH FLOWSFor the fi nancial year ended 30 June 2012

44 Ryobi Kiso Holdings Ltd. Annual Report 2012

Note 2012 2011

$’000 $’000

Cash fl ows from operating activities

Profi t before income tax 3,374 10,607

Adjustments for:

Interest income 24 (707) (712)

Dividend income 24 (28) (37)

Gain on disposal of property, plant and equipment 25 (815) (300)

Gain from bargain purchase 24 (44) –

Property, plant and equipment written off 25 44 11

Depreciation of property, plant and equipment 14 12,786 10,942

Interest expense 26 1,474 1,311

Allowance for impairment on trade receivable 25 24 –

Share of losses of associated company 11 1 313

Reversal of allowance for liquidated damages 27 – (790)

Reversal of allowance for foreseeable losses on 27 (241) –

construction contract work-in-progress

Foreign exchange arising from translation (10) 653

15,858 21,998

Changes in working capital

Trade and other receivables (19,072) (2,290)

Inventories (322) (461)

Construction contract work-in-progress 6,213 (7,247)

Trade and other payables 2,826 (10,885)

Cash generated from operations 5,503 1,115

Income tax refund/(paid) 29(b) 2,813 (5,444)

Net cash generated from/(used in) operating activities 8,316 (4,329)

Cash fl ows from investing activities

Interest received 694 712

Dividends received 28 37

Proceeds from disposal of property, plant and equipment 1,136 510

Purchases of:

- available-for-sale fi nancial assets (4) –

- property, plant and equipment (10,109) (21,839)

Acquisition of subsidiary, net of cash acquired 37(c) (19) –

Net cash used in investing activities (8,274) (20,580)

CONSOLIDATED STATEMENT OF CASH FLOWSFor the fi nancial year ended 30 June 2012

Annual Report 2012 Ryobi Kiso Holdings Ltd. 45

Note 2012 2011

$’000 $’000

Cash fl ows from fi nancing activities

Proceeds from bank borrowings 19,438 26,975

Dividends paid (4,719) (4,009)

Interest paid (1,474) (1,311)

Repayments of:

- bank borrowings (14,788) (7,450)

- fi nance lease liabilities (6,080) (3,721)

(Increase)/decrease of short-term bank deposits pledged (100) 625

Purchase of treasury shares (827) (656)

Capital contribution from non-controlling interest of a subsidiary 100 –

Net cash (used in)/generated from fi nancing activities (8,450) 10,453

Net decrease in cash and cash equivalents (8,408) (14,456)

Cash and cash equivalents at beginning of fi nancial year 41,137 55,593

Effect of currency translation on cash and cash equivalents (3) –

Cash and cash equivalents at end of fi nancial year 4 32,726 41,137

The accompanying notes form an integral part of the fi nancial statements.

NOTES TO THE FINANCIAL STATEMENTSFor the fi nancial year ended 30 June 2012

46 Ryobi Kiso Holdings Ltd. Annual Report 2012

These notes form an integral part of and should be read in conjunction with the accompanying fi nancial statements.

1 Corporate information

Domicile and activities

Ryobi Kiso Holdings Ltd. (the “Company”) is listed on the Singapore Exchange Securities Trading Limited (“SGX-ST”) and

incorporated and domiciled in the Republic of Singapore. The registered offi ce and principal place of business is at 58A

Sungei Kadut Loop, Ryobi Industrial Building, Singapore 729505.

The principal activity of the Company is that of investment holding. The principal activities of the subsidiaries are disclosed

in Note 10 to the fi nancial statements.

The Company’s holding corporation is Tanglin Capital Pte. Ltd. and it is incorporated in the Republic of Singapore.

The consolidated fi nancial statements relate to the Company and its subsidiaries (referred to as the “Group”) and the

Group’s interests in associated company.

2 Signifi cant accounting policies

2.1 Basis of preparation

These fi nancial statements have been prepared in accordance with Singapore Financial Reporting Standards

(“FRS”). The fi nancial statements have been prepared under the historical cost convention, except as disclosed in

the accounting policies below.

The fi nancial statements are presented in Singapore Dollar (“SGD or $”) and all values in the tables are rounded to

the nearest thousand ($’000) as indicated.

The preparation of fi nancial statements in conformity with FRS requires management to exercise its judgement

in the process of applying the Group’s accounting policies. It also requires the use of certain critical accounting

estimates and assumptions. The areas involving a higher degree of judgement or complexity, or areas where

assumptions and estimates are signifi cant to the fi nancial statements, are disclosed in Note 3 to the fi nancial

statements.

Interpretations and amendments to published standards effective in 2011

On 1 July 2011, the Group adopted the new or amended FRS and Interpretations to FRS (“INT FRS”) that

are mandatory for application from that date. Changes to the Group’s accounting policies have been made as

required, in accordance with the transitional provisions in the respective FRS and INT FRS.

The adoption of these new or amended FRS and INT FRS did not result in substantial changes to the Group’s and

Company’s accounting policies and had no material effect on the amounts reported for the current or prior fi nancial

years.

NOTES TO THE FINANCIAL STATEMENTSFor the fi nancial year ended 30 June 2012

Annual Report 2012 Ryobi Kiso Holdings Ltd. 47

2 Signifi cant accounting policies (Cont’d)

2.2 Group accounting

(a) Subsidiaries

(i) Consolidation

Subsidiaries are entities over which the Group has power to govern the fi nancial and operating

policies so as to obtain benefi ts from its activities, generally accompanied by a shareholding giving

rise to a majority of the voting rights. The existence and effect of potential voting rights that are

currently exercisable or convertible are considered when assessing whether the Group controls

another entity. Subsidiaries are consolidated from the date on which control is transferred to the

Group. They are de-consolidated from the date on which control ceases.

In preparing the consolidated fi nancial statements, transactions, balances and unrealised gains on

transactions between group entities are eliminated. Unrealised losses are also eliminated but are

considered an impairment indicator of the asset transferred. Accounting policies of subsidiaries have

been changed where necessary to ensure consistency with the policies adopted by the Group.

Non-controlling interests are that part of the net results of operations and of net assets of

a subsidiary attributable to the interests which are not owned directly or indirectly by the

equity holders of the Company. They are shown separately in the consolidated statement of

comprehensive income, statement of changes in equity and statement of fi nancial position. Total

comprehensive income is attributed to the non-controlling interests based on their respective

interests in a subsidiary, even if their results in the non-controlling interests having a defi cit balance.

(ii) Acquisitions

The acquisition method of accounting is used to account for business combinations by the Group.

The consideration transferred for the acquisition of a subsidiary or business comprises the fair value

of the assets transferred, the liabilities incurred and the equity interests issued by the Group. The

consideration transferred also includes the fair value of any contingent consideration arrangement

and the fair value of any pre-existing equity interest in the subsidiary.

Acquisition-related costs are expensed as incurred.

Identifiable assets acquired and liabilities and contingent liabilities assumed in a business

combination are, with limited exceptions, measured initially at their fair values at the acquisition date.

On an acquisition-by-acquisition basis, the Group recognises any non-controlling interest in the

acquiree at the date of acquisition either at fair value or at the non-controlling interest’s proportionate

share of the acquiree’s net identifi able assets.

The excess of the consideration transferred, the amount of any non-controlling interest in the

acquiree and the acquisition-date fair value of any previous equity interest in the acquiree over the

fair value of the net identifi able assets acquired is recorded as goodwill.

NOTES TO THE FINANCIAL STATEMENTSFor the fi nancial year ended 30 June 2012

48 Ryobi Kiso Holdings Ltd. Annual Report 2012

2 Signifi cant accounting policies (Cont’d)

2.2 Group accounting (Cont’d)

(a) Subsidiaries (Cont’d)

(iii) Disposals

When a change in the Group ownership interest in a subsidiary results in a loss of control over

the subsidiary, the assets and liabilities of the subsidiary including any goodwill are derecognised.

Amounts previously recognised in other comprehensive income in respect of that entity are also

reclassifi ed to profi t or loss or transferred directly to retained earnings if required by a specifi c

Standard.

Any retained equity interest in the entity is remeasured at fair value. The difference between the

carrying amount of the retained investment at the date when control is lost and its fair value is

recognised in profi t or loss.

Please refer to the paragraph “Investment in subsidiaries and associated companies” for the

accounting policy on investment in subsidiaries in the separate fi nancial statements of the Company.

(b) Transactions with non-controlling interests

Changes in the Group’s ownership interest in a subsidiary that do not result in a loss of control over the

subsidiary are accounted for as transactions with equity owners of the Company. Any difference between

the change in the carrying amounts of the non-controlling interest and the fair value of the consideration

paid or received is recognised within equity attributable to the equity holders of the Company.

(c) Associated company

Associated company are entities over which the Group has signifi cant infl uence, but not control, generally

accompanied by a shareholding giving rise to voting rights of 20% and above but not exceeding 50%.

Investment in associated company is accounted for in the consolidated fi nancial statements using the

equity method of accounting less impairment losses, if any.

(i) Acquisitions

Investment in associated company is initially recognised at cost. The cost of an acquisition is

measured at the fair value of the assets given, equity instruments issued or liabilities incurred or

assumed at the date of exchange, plus costs directly attributable to the acquisition.

(ii) Equity method of accounting

In applying the equity method of accounting, the Group’s share of its associated company post-

acquisition profi ts or losses are recognised in profi t or loss and its share of post-acquisition other

comprehensive income is recognised in other comprehensive income. These post-acquisition

movements and distributions received from the associated company are adjusted against the

carrying amount of the investments. When the Group’s share of losses in the associated company

equals or exceeds its interest in the associated company, including any other unsecured non-current

receivables, the Group does not recognise further losses, unless it has obligations or has made

payments on behalf of the associated company.

Unrealised gains on transactions between the Group and its associated company are eliminated to

the extent of the Group’s interest in the associated company. Unrealised losses are also eliminated

unless the transaction provides evidence of an impairment of the asset transferred. The accounting

policies of associated company have been changed where necessary to ensure consistency with

the accounting policies adopted by the Group.

NOTES TO THE FINANCIAL STATEMENTSFor the fi nancial year ended 30 June 2012

Annual Report 2012 Ryobi Kiso Holdings Ltd. 49

2 Signifi cant accounting policies (Cont’d)

2.2 Group accounting (Cont’d)

(c) Associated company (Cont’d)

(iii) Disposals

Investment in associated company is derecognised when the Group loses signifi cant infl uence. Any

retained interest in the entity is remeasured at its fair value. The difference between the carrying

amount of the retained investment at the date when signifi cant infl uence is lost and its fair value is

recognised in profi t or loss.

Gains and losses arising from partial disposals or dilutions in investment in associated company is

recognised in profi t or loss

Please refer to the paragraph “Investment in subsidiaries and associated company” for the

accounting policy on the investment in associated company in the separate fi nancial statements of

the Company.

2.3 Investment in subsidiaries and associated company

Investment in subsidiaries and associated company are carried at cost less accumulated impairment losses in the

Company’s statement of fi nancial position. On disposal of investment in subsidiaries and associated company, the

difference between disposal proceeds and the carrying amounts of the investments are recognised in profi t or loss.

2.4 Property, plant and equipment

(a) Measurement

(i) Property, plant and equipment

Property, plant and equipment are initially recognised at cost and subsequently carried at cost less

accumulated depreciation and accumulated impairment losses.

(ii) Components of costs

The cost of an item of property, plant and equipment initially recognised includes its purchase

price and any cost that is directly attributable to bringing the asset to the location and condition

necessary for it to be capable of operating in the manner intended by management.

(b) Depreciation

Depreciation is calculated using the straight-line method to allocate their depreciable amounts over their

estimated useful lives as follows:

Useful lives

Leasehold property 13 to 25 years

Leasehold improvement 3 to 5 years

Computer and offi ce equipment 2 to 5 years

Furniture and fi ttings 3 to 5 years

Machinery and equipment 2 to 15 years

Motor vehicles 5 years

The residual values, estimated useful lives and depreciation method of property, plant and equipment

are reviewed, and adjusted as appropriate, at each balance sheet date. The effects of any revision are

recognised in profi t or loss when the changes arise.

Assets under construction included in property, plant and equipment are not depreciated as these assets

are not yet available for use.

NOTES TO THE FINANCIAL STATEMENTSFor the fi nancial year ended 30 June 2012

50 Ryobi Kiso Holdings Ltd. Annual Report 2012

2 Signifi cant accounting policies (Cont’d)

2.4 Property, plant and equipment (Cont’d)

(c) Subsequent expenditure

Subsequent expenditure relating to property, plant and equipment that has already been recognised is

added to the carrying amount of the asset only when it is probable that future economic benefi ts

associated with the item will fl ow to the Group and the cost of the item can be measured reliably. All other

repair and maintenance expense are recognised in profi t or loss when incurred.

(d) Disposal

On disposal of an item of property, plant and equipment, the difference between the disposal proceeds and

its carrying amount is recognised in profi t or loss.

2.5 Impairment of non-fi nancial assets

Property, plant and equipment

Investment in subsidiaries and associated companies

Property, plant and equipment, investment in subsidiaries and associated companies are tested for impairment

whenever there is any objective evidence or indication that these assets may be impaired.

For the purpose of impairment testing, the recoverable amount (i.e. the higher of the fair value less cost to sell and

the value-in-use) is determined on an individual asset basis unless the asset does not generate cash infl ows that

are largely independent of those from other assets. If this is the case, the recoverable amount is determined for the

cash-generating-units (“CGU”) to which the asset belongs.

If the recoverable amount of the asset (or CGU) is estimated to be less than its carrying amount, the carrying

amount of the asset (or CGU) is reduced to its recoverable amount.

The difference between the carrying amount and recoverable amount is recognised as an impairment loss in profi t

or loss.

An impairment loss for an asset is reversed if, and only if, there has been a change in the estimates used to

determine the asset’s recoverable amount since the last impairment loss was recognised. The carrying amount

of this asset is increased to its revised recoverable amount, provided that this amount does not exceed the

carrying amount that would have been determined (net of any accumulated amortisation or depreciation) had

no impairment loss been recognised for the asset in prior years. A reversal of impairment loss for an asset is

recognised in profi t or loss.

2.6 Financial assets

(a) Classifi cation

The Group classifi es its fi nancial assets in the following categories: loans and receivables and available-

for-sale. The classifi cation depends on the nature of the asset and the purpose for which the assets were

acquired. Management determines the classifi cation of its fi nancial assets at initial recognition.

(i) Loans and receivables

Loans and receivables are non-derivative fi nancial assets with fi xed or determinable payments that

are not quoted in an active market. They are presented as current assets, except for those expected

to be realised later than 12 months after the balance sheet date which are presented as non-current

assets. Loans and receivables are presented as “trade and other receivables” and “cash and cash

equivalents” in the statement of fi nancial position.

NOTES TO THE FINANCIAL STATEMENTSFor the fi nancial year ended 30 June 2012

Annual Report 2012 Ryobi Kiso Holdings Ltd. 51

2 Signifi cant accounting policies (Cont’d)

2.6 Financial assets (Cont’d)

(a) Classifi cation (Cont’d)

(ii) Available-for-sale fi nancial assets

Available-for-sale fi nancial assets are non-derivatives that are either designated in this category

or not classifi ed in any of the other categories. They are presented as non-current assets unless

management intends to dispose of the assets within 12 months after the balance sheet date.

(b) Recognition and derecognition

Regular way purchases and sales of fi nancial assets are recognised on trade date - the date on which the

Group commits to purchase or sell the asset.

Financial assets are derecognised when the rights to receive cash fl ows from the fi nancial assets have

expired or have been transferred and the Group has transferred substantially all risks and rewards of

ownership. On disposal of a fi nancial asset, the difference between the carrying amount and the sale

proceeds is recognised in profi t or loss. Any amount in fair value reserve relating to that asset is reclassifi ed

to profi t or loss.

(c) Initial measurement

Financial assets are initially recognised at fair value plus transaction costs.

(d) Subsequent measurement

Available-for-sale financial assets are subsequently carried at fair value. Loans and receivables is

subsequently carried at amortised cost using the effective interest method.

Interest and dividend income on available-for-sale fi nancial assets are recognised separately in income.

Changes in the fair values of available-for-sale equity securities (i.e. non-monetary items) are recognised in

other comprehensive income and accumulated in the fair value reserve, together with the related currency

translation differences.

(e) Impairment

The Group assesses at each balance sheet date whether there is objective evidence that a fi nancial asset

or a group of fi nancial assets is impaired and recognises an allowance for impairment when such evidence

exists.

(i) Loans and receivables

Signifi cant fi nancial diffi culties of the debtor, probability that the debtor will enter bankruptcy, and

default or signifi cant delay in payments are objective evidence that these fi nancial assets are

impaired.

The carrying amount of these assets is reduced through the use of an impairment allowance

account which is calculated as the difference between the carrying amount and the present value

of estimated future cash fl ows, discounted at the original effective interest rate. When the asset

becomes uncollectible, it is written off against the allowance account. Subsequent recoveries of

amounts previously written off are recognised against the same line item in profi t or loss.

The impairment allowance is reduced through profi t or loss in a subsequent period when the

amount of impairment loss decreases and the related decrease can be objectively measured. The

carrying amount of the asset previously impaired is increased to the extent that the new carrying

amount does not exceed the amortised cost had no impairment been recognised in prior periods.

NOTES TO THE FINANCIAL STATEMENTSFor the fi nancial year ended 30 June 2012

52 Ryobi Kiso Holdings Ltd. Annual Report 2012

2 Signifi cant accounting policies (Cont’d)

2.6 Financial assets (Cont’d)

(e) Impairment (Cont’d)

(ii) Available-for-sale fi nancial assets

In addition to the objective evidence of impairment described above, a signifi cant or prolonged

decline in the fair value of an equity security below its cost considered as an indicator that the

available-for-sale fi nancial assets are impaired.

If any evidence of impairment exists, the cumulative loss that was recognised in the fair value

reserve is reclassifi ed to profi t or loss. The cumulative loss is measured as the difference between

the acquisition cost (net of any principal repayments and amortisation) and the current fair value,

less any impairment loss previously recognised as an expense. The impairment losses recognised

as an expense on equity securities are not reversed through profi t or loss.

2.7 Construction contracts

When the outcome of a construction contract can be estimated reliably, contract revenue and contract costs are

recognised as revenue and expenses respectively by reference to the stage of completion of the contract activity

at the balance sheet date (“percentage-of-completion method”). When the outcome of a construction contract

cannot be estimated reliably, contract revenue is recognised to the extent of contract costs incurred that are likely

to be recoverable. When it is probable that total contract costs will exceed total contract revenue, the expected

loss is recognised as an expense immediately.

Contract revenue comprises the initial amount of revenue agreed in the contract and variations in the contract

work and claims that can be measured reliably. A variation or a claim is recognised as contract revenue when it is

probable that the customer will approve the variation or negotiations have reached an advanced stage such that it

is probable that the customer will accept the claim.

The stage of completion is measured by reference to the value of work done certifi ed by Group’s quantity surveyor.

At the balance sheet date, the cumulative costs incurred plus recognised profi t (less recognised loss) on each

contract is compared against the progress billings. Where the cumulative costs incurred plus the recognised profi ts

(less recognised losses) exceed progress billings, the balance is presented as due from customers on construction

contracts within “trade and other receivables”. Where progress billings exceed cumulative costs incurred plus

recognised profi ts (less recognised losses), the balance is presented as due to customers on construction

contracts within “trade and other payables”.

Progress billings not yet paid by customers and retentions by customers are included within “trade and other

receivables”. Advances received are included within “trade and other payables”.

2.8 Inventories

Inventories comprise materials and supplies to be consumed in the course of rendering of services.

Cost comprises all costs of purchase and other costs incurred in bringing the inventories to their present location

and condition. Net realisable value is the estimated selling price in the ordinary course of business less applicable

variable selling expenses.

Inventories are carried at the lower of cost and net realisable value. Cost is calculated using the weighted average

cost basis.

2.9 Cash and cash equivalents

For the purpose of presentation in the consolidated statement of cash fl ows, cash and cash equivalents include

cash on hand, cash at banks and short-term bank deposits with fi nancial institutions which are subject to an

insignifi cant risk of change in value, less cash subject to restriction.

NOTES TO THE FINANCIAL STATEMENTSFor the fi nancial year ended 30 June 2012

Annual Report 2012 Ryobi Kiso Holdings Ltd. 53

2 Signifi cant accounting policies (Cont’d)

2.10 Club memberships

Transferable corporate club memberships are stated at cost less impairment loss.

2.11 Trade and other payables

Trade and other payables represent liabilities for goods and services provided to the Group prior to the end of

fi nancial year which are unpaid. They are classifi ed as current liabilities if payment is due within one year or less (or

in the normal operating cycle of the business if longer). If not, they are presented as non-current liabilities.

Trade and other payables are initially recognised at fair value, and subsequently carried at amortised costs using

effective interest method.

2.12 Leases

(a) When the Group is the lessee

The Group leases motor vehicles and certain plant and machinery under fi nance leases and premises and

machineries under operating leases from non-related parties.

(i) Lessee - Finance leases

Leases where the Group assumes substantially all risks and rewards incidental to ownership of the

leased assets are classifi ed as fi nance leases.

The leased assets and the corresponding lease liabilities (net of fi nance charges) under fi nance

leases are recognised in the statement of fi nancial position as property, plant and equipment and

fi nance lease liabilities respectively, at the inception of the leases based on the lower of the fair value

of the leased assets and the present value of the minimum lease payments.

Each lease payment is apportioned between the fi nance cost and the reduction of the outstanding

lease liability. The fi nance cost is recognised in profi t or loss on a basis that refl ects a constant

periodic rate of interest on the fi nance lease liability.

(ii) Lessee - Operating leases

Leases where substantially all risks and rewards incidental to ownership are retained by the lessors

are classifi ed as operating leases. Payments made under operating lease (net of any incentives

received from the lessors) are recognised in profi t or loss on a straight-line basis over the period of

the lease.

(b) When the Group is the lessor

The Group leases certain plant and machinery under fi nance lease and leasehold property under operating

leases to related parties and non-related parties.

(i) Lessor - Finance leases

Leases where the Group has transferred substantially all risks and rewards incidental to ownership

of the leased assets to the lessee, are classifi ed as fi nance leases.

The leased asset is derecognised and the present value of the lease receivable (net of initial direct

costs for negotiating and arranging the lease) is recognised on the statement of fi nancial position.

The difference between the gross receivable and the present value of the lease receivable is

recognised as unearned fi nance income.

NOTES TO THE FINANCIAL STATEMENTSFor the fi nancial year ended 30 June 2012

54 Ryobi Kiso Holdings Ltd. Annual Report 2012

2 Signifi cant accounting policies (Cont’d)

2.12 Leases (Cont’d)

(b) When the Group is the lessor (Cont’d)

(i) Lessor - Finance leases (Cont’d)

Each lease payment received is applied against the gross investment in the fi nance lease receivable

to reduce both the principal and the unearned fi nance income. The fi nance income is recognised in

profi t or loss on a basis that refl ects a constant periodic rate of return on the net investment in the

fi nance lease receivable.

Initial direct costs incurred by the Group in negotiating and arranging fi nance leases are added on

fi nance lease receivables and recognised as an expense in profi t or loss over the lease term on the

same basis as the lease income.

(ii) Lessor - Operating leases

Leases of leasehold property where the Group retains substantially all risks and rewards incidental to

ownership are classifi ed as operating leases. Rental income from operating leases (net of incentives

given to the lessees) is recognised in profi t or loss on a straight-line basis over the lease term.

Initial direct costs incurred by the Group in negotiating and arranging operating leases are added to

the carrying amount of the leased assets and recognised as an expense in profi t or loss over the

lease term on the same basis as the lease income.

2.13 Revenue recognition

Revenue comprises the fair value of the consideration received or receivable for the rendering of services in the

ordinary course of the Group’s activities. Revenue are presented, net of goods and services tax, rebates and

discounts, and after eliminating sales within the Group.

The Group recognises revenue when the amount of revenue and related cost can be reliably measured, it is

probable that the collectability of the related receivables is reasonably assured and when the specifi c criteria for

each of the Group’s activities are met as follows:

(i) Contract revenue

Revenue from construction contracts are recognised on percentage of completion method. The percentage

of completion is measured by reference to the stage of completion of the contract activity at the balance

sheet date.

Revenue from the provision of services is recognised upon the performance of service to the customer.

(ii) Interest income

Interest income is recognised on a time-proportion basis using the effective interest rate method.

(iii) Dividend income

Dividend income is recognised when the right to receive payment is established.

(iv) Rental income

Rental income from operating leases is recognised on a straight-line basis over the lease term.

NOTES TO THE FINANCIAL STATEMENTSFor the fi nancial year ended 30 June 2012

Annual Report 2012 Ryobi Kiso Holdings Ltd. 55

2 Signifi cant accounting policies (Cont’d)

2.14 Income taxes

Current income tax for current and prior periods is recognised at the amount expected to be paid to or recovered

from the tax authorities, using the tax rates and tax laws that have been enacted or substantively enacted by the

balance sheet date.

Deferred income tax is recognised for all temporary differences arising between the tax bases of assets and

liabilities and their carrying amounts in the fi nancial statements except when the deferred income tax arises from

the initial recognition of goodwill or an asset or liability in a transaction that is not a business combination and

affects neither accounting nor taxable profi t or loss at the time of the transaction.

A deferred income tax liability is recognised on temporary differences arising on investment in subsidiaries and

associated companies, except where the Group is able to control the timing of the reversal of the temporary

difference and it is probable that the temporary difference will not reverse in the foreseeable future.

A deferred income tax asset is recognised to the extent that it is probable that future taxable profi t will be available

against which the deductible temporary differences and tax losses can be utilised.

Deferred income tax is measured:

(i) at the tax rates that are expected to apply when the related deferred income tax asset is realised or

the deferred income tax liability is settled, based on tax rates and tax laws that have been enacted or

substantively enacted by the balance sheet date; and

(ii) based on the tax consequence that will follow from the manner in which the Group expects, at the balance

sheet date, to recover or settle the carrying amounts of its assets and liabilities.

Current and deferred income taxes are recognised as income or expense in profi t or loss.

2.15 Financial guarantees

The Company has issued corporate guarantees to banks for borrowings of its subsidiaries. These guarantees are

fi nancial guarantees as they require the Company to reimburse the banks if the subsidiaries fail to make principal

or interest payments when due in accordance with the terms of the borrowings.

Financial guarantees are initially recognised at their fair values plus transaction costs in the Company’s statement

of fi nancial position. Financial guarantees are subsequently amortised to profi t or loss over the period of the

subsidiaries’ borrowings, unless it is probable that the Company will reimburse the banks for an amount higher

than the unamortised amount. In this case, the fi nancial guarantees shall be carried at the expected amount

payable to the banks in the Company’s statement of fi nancial position.

Intra-group transactions are eliminated on consolidation.

2.16 Provisions

Provisions for other liabilities and charges are recognised when the Group has a present legal or constructive

obligation as a result of past events, it is more likely than not that an outfl ow of resources will be required to settle

the obligation and the amount has been reliably estimated.

2.17 Borrowings

Borrowings are presented as current liabilities unless the Group has an unconditional right to defer settlement for at

least 12 months after the balance sheet date, in which case they are presented as non-current liabilities.

Borrowings are initially recognised at fair value (net of transaction costs) and subsequently carried at amortised

cost. Any difference between the proceeds (net of transaction costs) and the redemption value is recognised in

profi t or loss over the period of the borrowings using the effective interest method.

NOTES TO THE FINANCIAL STATEMENTSFor the fi nancial year ended 30 June 2012

56 Ryobi Kiso Holdings Ltd. Annual Report 2012

2 Signifi cant accounting policies (Cont’d)

2.18 Derivative fi nancial instruments

A derivative fi nancial instrument is initially recognised at its fair value on the date the contract is entered into and is

subsequently carried at its fair value. The method of recognising the resulting gain or loss depends on whether the

derivative is designated as a hedging instrument, and if so, the nature of the item being hedged.

The Group has entered into currency options for currency risk arising from purchases denominated in foreign

currencies. These contracts do not qualify for hedge accounting and consequently, the changes in fair values of

these contracts are recognised in profi t or loss.

2.19 Employee compensation

Employee benefi ts are recognised as an expense, unless the cost qualifi es to be capitalised as an asset.

(a) Defi ned contribution plans

Defined contribution plans are post-employment benefit plans under which the Group pays fixed

contributions into separate entities such as Central Provident Fund on a mandatory, contractual or voluntary

basis. The Group has no further payment obligations once the contributions have been paid. The Group’s

contributions are recognised as expense in the period in which the related services is performed.

(b) Employee leave entitlement

Employee entitlements to annual leave are recognised when they accrue to employees. A provision is made

for the estimated liability for annual leave as a result of services rendered by employees up to the balance

sheet date.

2.20 Currency translation

(a) Functional and presentation currency

Items included in the fi nancial statements of each entity in the Group are measured using the currency

of the primary economic environment in which the entity operates (“functional currency”). The fi nancial

statements are presented in Singapore Dollar, which is the functional currency of the Company.

(b) Transactions and balances

Transactions in a currency other than the functional currency (“foreign currency”) are translated into the

functional currency using the exchange rates at the dates of the transactions. Currency translation

differences resulting from the settlement of such transactions and from the translation of monetary

assets and liabilities denominated in foreign currencies at the closing rates at the balance sheet date are

recognised in profi t or loss.

Non-monetary items measured at fair values in foreign currencies are translated using the exchange rates at

the date when the fair values are determined.

(c) Translation of Group entities’ fi nancial statements

The results and financial position of all the Group entities (none of which has the currency of a

hyperinfl ationary economy) that have a functional currency different from the presentation currency are

translated into the presentation currency as follows:

(i) Assets and liabilities are translated at the closing exchange rates at the date of the balance sheet

date;

(ii) Income and expenses are translated at average exchange rates (unless the average is not a

reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates,

in which case, income and expenses are translated using the exchange rates at the dates of the

transactions); and

(iii) All resulting currency translation differences are recognised in the currency translation reserve.

NOTES TO THE FINANCIAL STATEMENTSFor the fi nancial year ended 30 June 2012

Annual Report 2012 Ryobi Kiso Holdings Ltd. 57

2 Signifi cant accounting policies (Cont’d)

2.21 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

Group’s other components. All operating segments’ results are reviewed by the Group’s Chief Executive Offi cer

and Executive Directors to make decisions about resources to be allocated to the segment and assess its

performance, and for which discrete fi nancial information is available.

2.22 Share capital and treasury shares

Ordinary shares are classifi ed as equity. Incremental costs directly attributable to the issuance of new ordinary

shares are recognised against the share capital account.

When any entity within the Group purchases the Company’s ordinary shares (“treasury shares”), the consideration

paid including any directly attributable incremental cost is presented as a component within equity attributable to

the Company’s equity holders, until they are cancelled, sold or reissued.

When treasury shares are subsequently cancelled, the cost of treasury shares are deducted against the share

capital account if the shares are purchased out of capital of the Company, or against the retained profi ts of the

Company if the shares are purchased out of earnings of the Company.

When treasury shares are subsequently sold or reissued pursuant to the employee share option scheme, the cost

of treasury shares is reversed from the treasury share account and the realised gain or loss on sale or reissue,

net of any directly attributable incremental transaction costs and related income tax, is recognised in the capital

reserve.

2.23 Dividends

Interim dividends are recorded in the fi nancial year in which they are declared payable. Final dividends are recorded

in the fi nancial year in which the dividends are approved by the shareholders.

2.24 Fair value estimation of fi nancial assets and liabilities

The fair values of fi nancial instruments traded in active markets (such as available-for-sale fi nancial assets and

derivatives) are based on quoted market prices at the balance sheet date. The quoted market prices used for

fi nancial assets are the current bid prices; the appropriate quoted market prices for fi nancial liabilities are the

current asking prices.

The fair values of currency options are determined using actively quoted foreign exchange rates at the balance

sheet date.

The fair values of current fi nancial assets and liabilities carried at amortised cost approximate their carrying

amounts.

2.25 Government grants

Grants from the government are recognised as a receivable at their fair value when there is reasonable assurance

that the grants will be received and the Group will comply with all the attached conditions.

Government grants receivable are recognised as income over the periods necessary to match them with the

related costs which they are intended to compensate, on a systematic basis. Government grants relating to

expenses are shown separately as other income.

2.26 Borrowing costs

Borrowing costs are recognised in profi t or loss in the period in which they are incurred using the effective interest

method.

NOTES TO THE FINANCIAL STATEMENTSFor the fi nancial year ended 30 June 2012

58 Ryobi Kiso Holdings Ltd. Annual Report 2012

3 Critical accounting estimates, assumptions and judgements

Estimates, assumptions and judgements are continually evaluated and are based on historical experience and other

factors, including expectations of future events that are believed to be reasonable under the circumstances.

3.1 Critical accounting estimates and assumptions

(a) Construction contracts

The Group uses the percentage-of-completion method to account for its contract revenue. The stage of

completion is measured by reference to the value of work done certifi ed by Group’s quantity surveyor.

Signifi cant judgement is required in determining the stage of completion, the extent of the contract cost

incurred, the estimated total contract revenue and contract costs, as well as the recoverability of the

contracts. Total contract revenue also includes an estimation of the recoverable variation works that

are recoverable from the customers. In making the judgement, the Group evaluates by relying on past

experience.

If the revenue on uncompleted contracts increases/decreases by 10% from management’s estimates, the

Group’s revenue and profi t will increase/decrease by $3,690,000 and $1,559,000 respectively.

(b) Impairment of loans and receivables

Management reviews its loans and receivables for objective evidence of impairment at least quarterly.

Signifi cant fi nancial diffi culties of the debtor, the probability that the debtor will enter bankruptcy, and

default or signifi cant delay in payments are considered objective evidence that a receivable is impaired.

In determining this, management makes judgement as to whether there is observable data indicating

that there has been a signifi cant change in the payment ability of the debtor, or whether there have been

signifi cant changes with adverse effect in the technological, market, economic or legal environment in which

the debtor operates in.

Where there is objective evidence of impairment, management makes judgement as to whether an

impairment loss should be recorded as an expense. In determining this, management uses estimates

based on historical loss experience for assets with similar credit risk characteristics. The methodology and

assumptions used for estimating both the amount and timing of future cash fl ows are reviewed regularly to

reduce any differences between the estimated loss and actual loss experience.

If the net present value of estimated cash fl ows increase/decrease by 10% from management’s estimate for

all past due loans and receivables, the Group’s impairment loss on receivables will increase by $155,000.

The carrying amounts of trade and other receivables are disclosed in Note 6 to the fi nancial statements.

NOTES TO THE FINANCIAL STATEMENTSFor the fi nancial year ended 30 June 2012

Annual Report 2012 Ryobi Kiso Holdings Ltd. 59

4 Cash and cash equivalents

Group Company

2012 2011 2012 2011

$’000 $’000 $’000 $’000

Cash on hand 67 57 – –

Cash at banks 26,309 35,360 3,558 17,393

Short-term bank deposits 6,650 5,920 – –

33,026 41,337 3,558 17,393

Short-term bank deposits amounting to $300,000 (2011: $200,000) have been pledged to banks as securities for the

banking facilities of the Group (Note 16).

Short-term bank deposits are made for varying periods of between one week and three months depending on the

immediate cash requirements of the Group, and earn interests at the respective short-term deposit rates.

For the purpose of presenting the consolidated statement of cash fl ows, the cash and cash equivalents comprise the

following:

Group

2012 2011

$’000 $’000

Cash and bank balances (as above) 33,026 41,337

Less: Short-term bank deposits pledged (300) (200)

Cash and cash equivalents as per consolidated statement of cash fl ows 32,726 41,137

5 Derivative fi nancial instruments

Contractnotionalamount

Fair valueAsset Liability

$’000 $’000 $’000

2012

Non-hedging instruments

- Currency forward contracts 7,520 82 218

2011

Non-hedging instruments

- Currency forward contracts – – –

Currency forward contracts are entered for currency risk arising from purchases denominated in foreign currencies.

These contracts do not qualify for hedge accounting and consequently, the changes in fair value of these contracts are

recognised in profi t or loss.

NOTES TO THE FINANCIAL STATEMENTSFor the fi nancial year ended 30 June 2012

60 Ryobi Kiso Holdings Ltd. Annual Report 2012

6 Trade and other receivables

Group Company

2012 2011 2012 2011

$’000 $’000 $’000 $’000

Trade receivables

- Non-related parties 13,628 7,442 – –

- Related parties – 117 – –

- Associated company – 397 – –

13,628 7,956 – –

Less: Allowance for impairment on trade

receivable (Note 25) (24) – – –

13,604 7,956 – –

Construction contracts

- Due from customers (Note 8) 41,158 34,025 – –

- Retentions (Note 8) 13,104 7,579 – –

54,262 41,604 – –

Other receivables

- Non-related parties 4,219 630 12 –

- Associated company – 1,778 – –

- Subsidiaries – – 159 509

- Related party 160 – – –

4,379 2,408 171 509

Income tax recoverable (Note 29(b)) – 2,127 – –

Dividend receivable from subsidiary – – 2,400 4,600

Loans to subsidiaries – – 40,747 28,515

Loans to related party 773 – 773 –

Deposits 1,131 616 – –

Prepayments 231 290 22 32

74,380 55,001 44,113 33,656

The non-trade amount due from associated company and subsidiaries are unsecured, interest-free and repayable on

demand.

The loans to subsidiaries by the Company are unsecured, interest-bearing at 2.5% to 3.0% (2011: 2.5%) per annum and

repayable on demand.

The loans to a related party by the Company are unsecured, interest-bearing of 10% (2011: Nil) per annum and repayable

on demand.

NOTES TO THE FINANCIAL STATEMENTSFor the fi nancial year ended 30 June 2012

Annual Report 2012 Ryobi Kiso Holdings Ltd. 61

7 Inventories

Group

2012 2011

$’000 $’000

Raw materials 22 124

Hardware and spare parts 1,083 658

1,105 782

The cost of inventories recognised as an expense and included in “cost of sales” amounted to $73,112,000 (2011:

$35,640,000).

8 Construction contracts

Group

2012 2011

$’000 $’000

Construction contract work-in-progress:

Beginning of fi nancial year 10,396 3,149

Contract costs incurred 116,085 93,386

Contract expenses recognised in profi t or loss (121,058) (86,139)

Reversal of allowance for foreseeable losses (Note 27) 241 –

End of fi nancial year 5,664 10,396

Presented as:

Construction contract work-in-progress, current asset 6,802 10,396

Construction contract work-in-progress, current liability (1,138) –

5,664 10,396

Aggregate costs incurred and profi ts recognised (less losses recognised)

to date on uncompleted construction contracts 139,071 122,573

Less: Progress billings (97,913) (88,548)

41,158 34,025

Presented as:

Due from customers on construction contracts (Note 6) 41,158 34,025

Retentions on construction contracts (Note 6) 13,104 7,579

NOTES TO THE FINANCIAL STATEMENTSFor the fi nancial year ended 30 June 2012

62 Ryobi Kiso Holdings Ltd. Annual Report 2012

9 Finance lease receivables

The Group leases equipment to a non-related party under fi nance lease.

Group

2012 2011

$’000 $’000

Gross receivables due

- Not later than one year 138 –

- Between one and fi ve years 12 –

150 –

Less: Unearned fi nance income (8) –

Net investment in fi nance lease 142 –

The net investment in fi nance lease is analysed as follows:

Group

2012 2011

$’000 $’000

Not later than one year 133 –

Between one and fi ve years 9 –

142 –

The fair values of non-current fi nance lease receivables approximate their carrying amounts.

10 Investment in subsidiaries

Company

2012 2011

$’000 $’000

Equity investment at cost

Beginning of fi nancial year 41,644 41,644

Incorporation of subsidiaries 250 #

End of fi nancial year 41,894 41,644

# Amount less than $1,000.

NOTES TO THE FINANCIAL STATEMENTSFor the fi nancial year ended 30 June 2012

Annual Report 2012 Ryobi Kiso Holdings Ltd. 63

10 Investment in subsidiaries (Cont’d)

Details of the subsidiaries are as follows:

Name of companies Principal activities

Country ofbusiness/incorporation Equity holding

2012%

2011

%

Held by the Company:

Ryobi Kiso (S) Pte. Ltd.(a) Ground engineering and piling

contractors

Singapore 100 100

Ryobi Ground Engineering

Pte. Ltd.(a)

Soil improvements and civil

engineering

Singapore 100 100

Raffl es Piling Singapore Pte. Ltd.(a) Ground engineering and piling

contractors

Singapore 100 100

Ryobi-Kiso (M) Sdn. Bhd.(b) Construction works Malaysia 100 100

Ryobi Development Pte. Ltd.(a) Property development and

investment

Singapore 100 100

Held by Ryobi Kiso (S) Pte. Ltd.:

Ryobi Geotechnique Pte Ltd(a) Instrumentation and geotechnical

engineering

Singapore 74 74

Ryobi Machinery Pte Ltd(a) Trading in machinery and

equipment and provision of

engineering services

Singapore 100 100

Raffl es Geosystems Pte. Ltd(a)

(Formerly known as Seafco-

Ryobi Pte. Ltd.)

Construction and piling work, soil

improvement and diaphragm wall

Singapore 100 –

Held by Ryobi Ground Engineering Pte. Ltd.:

Ryobi Compile Holdings Pty Ltd(d) Investment holdings Australia 100 –

Held by Raffl es Piling Singapore Pte. Ltd.:

Raffl es Piling Vietnam

Company Limited(c)

General construction services

in relation to civil construction,

foundation work and building

completion work

Vietnam 100 100

Held by Ryobi Development Pte. Ltd.:

Wellford Limited(d) Investment holdings Cayman Island 100 –

NOTES TO THE FINANCIAL STATEMENTSFor the fi nancial year ended 30 June 2012

64 Ryobi Kiso Holdings Ltd. Annual Report 2012

10 Investment in subsidiaries (Cont’d)

Name of companies Principal activities

Country ofbusiness/incorporation Equity holding

2012%

2011

%

Held by Wellford Limited:

Widelink Limited(d) Investment holdings Cayman Island 100 –

Held by Widelink Limited:

RDV Realty Pte. Ltd.(a) Investment holdings Singapore 100 –

Held by RDV Realty Pte. Ltd.:

RDV Binh Duong Company

Limited(c)

Property development and

investment; and provision of

real estate consultancy and

management

Vietnam 100 –

Held by Ryobi Geotechnique Pte Ltd:

Ryobi Geotechnique

International Pte. Ltd.(a)

Instrumentation and geotechnical

engineering

Singapore 80 80

Held by Ryobi Geotechnique International Pte. Ltd.:

Ryobi Geoproducts Pte. Ltd.(a) Sale of geotechnical products Singapore 100 100

Ryobi Geomonitoring Pte. Ltd (a) Instrumentation and geotechnical

engineering

Singapore 100 100

Ryobi Geosystems Pte. Ltd.(a) Instrumentation and geotechnical

engineering

Singapore 100 100

Ryobi Geotech Pte. Ltd.(a) Instrumentation and geotechnical

engineering

Singapore 100 100

Ryobi Geotechnique (M) Sdn.

Bhd.(b)

Instrumentation and geotechnical

engineering

Malaysia 100 100

Held by Ryobi Machinery Pte. Ltd.:

Ryobi Plant Engineering Pte. Ltd.(a) Installation of industrial machinery

and equipment and provision of

mechanical engineering works

Singapore 80 –

(a) Audited by Nexia TS Public Accounting Corporation, Singapore

(b) Audited by W. S. Tan & Associates, Chartered Accountants, Malaysia

(c) Audited by Nexia ACPA Co Ltd, Vietnam, a member fi rm of Nexia International

(d) Not required to be audited by the law in its country of incorporation

In accordance to Rule 716 of the Singapore Exchange Securities Trading Limited-Listing Rules, the Audit Committee and

the Board of Directors of the Company confi rmed that they are satisfi ed that the appointment of different auditors for its

subsidiaries would not compromise the standard and effectiveness of the audit of the consolidated fi nancial statements.

NOTES TO THE FINANCIAL STATEMENTSFor the fi nancial year ended 30 June 2012

Annual Report 2012 Ryobi Kiso Holdings Ltd. 65

11 Investment in associated company

Group

2012 2011

$’000 $’000

Beginning of fi nancial year 379 692

Share of losses (1) (313)

Disposals (Note 37(b)) (378) –

End of fi nancial year – 379

The summarised fi nancial information of associated company, not adjusted for the proportion ownership interest held by

the Group, is as follows:

Group

2012 2011

$’000 $’000

Assets – 3,815

Liabilities – 3,016

Revenue – 2,627

Net loss – (659)

Details of the associated company are as follows:

Name of company Principal activity

Country of business/ incorporation Equity holding

2012%

2011

%

Held by Ryobi Kiso (S) Pte. Ltd.:

Raffl es Geosystems Pte. Ltd.(a)

(Formerly known as Seafco-

Ryobi Pte. Ltd.)

Construction and piling work,

soil improvement and

diaphragm wall

Singapore – 47.5

(a) Audited by Nexia TS Public Accounting Corporation, Singapore

Raffl es Geosystems Pte. Ltd. became a wholly-owned subsidiary of the Company during the fi nancial year (Note 10).

Accordingly, the Group’s share of attributable net assets and goodwill at the date on which the Group obtained control

were reclassifi ed and included in the separate assets and liabilities of the Group.

12 Club memberships

Group

2012 2011

$’000 $’000

Club memberships - at cost 312 312

Less : Accumulated impairment loss (92) (92)

220 220

NOTES TO THE FINANCIAL STATEMENTSFor the fi nancial year ended 30 June 2012

66 Ryobi Kiso Holdings Ltd. Annual Report 2012

13 Available-for-sale fi nancial assets

Group

2012 2011

$’000 $’000

Beginning of fi nancial year 1,480 1,431

Additions 4 –

Fair value (losses)/gains recognised in other comprehensive income (Note 20) (162) 49

End of fi nancial year 1,322 1,480

Available-for-sale fi nancial assets are analysed as follows:

Listed securities

Equity securities - Singapore 1,322 1,480

14 Property, plant and equipment

Leasehold property

Leasehold improvement

Computer and offi ce

equipment

Furnitureand

fi ttings

Machineryand

equipmentMotor

vehiclesConstruction

in progress Total

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

Group

2012

Cost

Beginning of fi nancial

year 5,827 623 685 435 122,935 3,229 – 133,734

Acquisition of subsidiary – – – 5 358 – – 363

Additions 6,796 216 152 43 7,700 448 172 15,527

Disposals – – – (5) (3,624) (195) – (3,824)

Currency translation

differences – – – – 24 – – 24

End of fi nancial year 12,623 839 837 478 127,393 3,482 172 145,824

Accumulated depreciation

Beginning of fi nancial

year 3,202 257 451 205 38,579 1,573 – 44,267

Acquisition of subsidiary – – – 5 112 – – 117

Depreciation charge

(Note 27) 649 132 143 89 11,273 500 – 12,786

Disposals – – – (4) (3,394) (60) – (3,458)

Currency translation

differences – – – – 12 – – 12

End of fi nancial year 3,851 389 594 295 46,582 2,013 – 53,724

Net book value

End of fi nancial year 8,772 450 243 183 80,811 1,469 172 92,100

NOTES TO THE FINANCIAL STATEMENTSFor the fi nancial year ended 30 June 2012

Annual Report 2012 Ryobi Kiso Holdings Ltd. 67

14 Property, plant and equipment (Cont’d)

Leasehold property

Leasehold improvement

Computer and offi ce

equipment

Furnitureand

fi ttings

Machineryand

equipmentMotor

vehicles Total

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

Group

2011

Cost

Beginning of fi nancial year 5,827 287 490 250 95,184 2,538 104,576

Additions – 336 196 185 29,513 799 31,029

Disposals – – – – (1,136) (108) (1,244)

Currency translation differences – – (1) – (626) – (627)

End of fi nancial year 5,827 623 685 435 122,935 3,229 133,734

Accumulated depreciation

Beginning of fi nancial year 2,968 148 328 130 29,663 1,167 34,404

Depreciation charge (Note 27) 234 109 124 75 9,909 491 10,942

Disposals – – – – (937) (85) (1,022)

Currency translation differences – – (1) – (56) – (57)

End of fi nancial year 3,202 257 451 205 38,579 1,573 44,267

Net book value

End of fi nancial year 2,625 366 234 230 84,356 1,656 89,467

(a) Included in additions are machinery and equipment and motor vehicles acquired under fi nance leases amounting

to $5,417,000 (2011: $9,163,000) and $Nil (2011: $27,000) respectively.

The carrying amounts of machinery and equipment and motor vehicles held under fi nance leases are $25,229,000

(2011: $23,307,000) and $408,000 (2011: $602,000) respectively at the balance sheet date.

(b) Bank borrowings are secured on machinery and equipment and motor vehicles of the Group with carrying

amounts of $31,018,000 (2011: $34,587,000) (Note 16(a)).

15 Trade and other payables

Group Company

2012 2011 2012 2011

$’000 $’000 $’000 $’000

Trade payables

- Non-related parties 22,119 17,349 – –

- Related party 120 145 – –

- Associated company – 1,038 – –

22,239 18,532 – –

Other payables

- Non-related parties 798 733 1 1

- Related party – 4 – –

798 737 1 1

Accrued operating expenses 11,127 8,572 269 279

34,164 27,841 270 280

The non-trade amount due to related party is unsecured, interest-free and repayable on demand.

NOTES TO THE FINANCIAL STATEMENTSFor the fi nancial year ended 30 June 2012

68 Ryobi Kiso Holdings Ltd. Annual Report 2012

16 Borrowings

Group

2012 2011

$’000 $’000

Current (secured)

Bank borrowings 24,894 14,951

Finance lease liabilities (Note 17) 5,598 5,096

30,492 20,047

Non-current (secured)

Bank borrowings 8,817 14,110

Finance lease liabilities (Note 17) 7,618 8,782

16,435 22,892

Total borrowings 46,927 42,939

The exposure of the borrowings of the Group to interest rate changes and the contractual repricing dates at the balance

sheet dates are as follows:

Group

2012 2011

$’000 $’000

Not later than one year 30,492 20,047

Between one and fi ve years 16,435 22,892

46,927 42,939

(a) Security granted

Bank borrowings of the Group are secured over certain machinery and equipment and motor vehicles of the Group

(Note 14(b)) and corporate guarantees from the Company. Finance lease liabilities of the Group are secured over

the leased machinery and equipment and motor vehicles (Note 14(a)) and corporate guarantees from the Company

and certain subsidiaries; and personal guarantees from the directors of certain subsidiaries, as the legal title is

retained by the lessor and will be transferred to the Group upon full settlement of the fi nance lease liabilities.

(b) Fair value of non-current borrowings

Group

2012 2011

$’000 $’000

Bank borrowings 30,802 22,396

Finance lease liabilities 13,191 14,363

NOTES TO THE FINANCIAL STATEMENTSFor the fi nancial year ended 30 June 2012

Annual Report 2012 Ryobi Kiso Holdings Ltd. 69

16 Borrowings (Cont’d)

(b) Fair value of non-current borrowings (Cont’d)

The fair values are determined from the cash fl ow analysis, discounted at annual market borrowing rate of an

equivalent instrument at the balance sheet date which directors expect to be available to the Group as follows:

Group

2012 2011

Bank borrowings 5.2% 5.3%

Finance lease liabilities 4.0% 4.2%

17 Finance lease liabilities

The Group leases certain machinery and equipment and motor vehicles from non-related parties under fi nance leases.

The lease agreements do not have renewal clauses but provide the Group with options to purchase the leased assets at

nominal values at the end of the lease term.

Group

2012 2011

$’000 $’000

Minimum lease payments due

- Not later than one year 5,917 5,536

- Between one and fi ve years 7,942 9,231

13,859 14,767

Less: Future fi nance charges (643) (889)

Present value of fi nance lease liabilities 13,216 13,878

The present values of fi nance lease liabilities are analysed as follows:

Group

2012 2011

$’000 $’000

Not later than one year (Note 16) 5,598 5,096

Between one and fi ve years (Note 16) 7,618 8,782

13,216 13,878

NOTES TO THE FINANCIAL STATEMENTSFor the fi nancial year ended 30 June 2012

70 Ryobi Kiso Holdings Ltd. Annual Report 2012

18 Deferred income taxes

Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current income tax

assets against current income tax liabilities and when the deferred income taxes relate to the same fi scal authority. The

amounts, determined after appropriate offsetting, are shown on the statement of fi nancial position as follows:

Group

2012 2011

$’000 $’000

Deferred income tax assets

- Other 132 –

Deferred income tax liabilities

- Accelerated tax depreciation 8,708 9,297

- Available-for-sale fi nancial assets (230) (201)

- Other (72) (87)

8,406 9,009

Movement in the deferred income tax account is as follows:

Group

2012 2011

$’000 $’000

Deferred income tax assets

Beginning of fi nancial year – –

Tax credited to:

- profi t or loss 130 –

- currency translation 2 –

End of fi nancial year 132 –

Deferred income tax liabilities

Beginning of fi nancial year 9,009 7,334

Tax (credited)/charged to

- profi t or loss (575) 1,666

- equity (Note 20(b)) (28) 9

End of fi nancial year 8,406 9,009

Deferred income tax assets are recognised for tax losses and capital allowances carried forward to the extent that

realisation of the related tax benefi ts through future taxable profi ts is probable. At the balance sheet date, the Group

has unrecognised tax losses of approximately $4,410,000 (2011: $5,155,000) and capital allowances of approximately

$3,605,000 (2011: $2,138,000) at the balance sheet date which can be carried forward and used to offset against future

taxable income subject to the agreement of the tax authorities and compliance with certain provisions of the tax legislation

of the respective countries in which the companies operate. The tax losses have no expiry date.

NOTES TO THE FINANCIAL STATEMENTSFor the fi nancial year ended 30 June 2012

Annual Report 2012 Ryobi Kiso Holdings Ltd. 71

19 Share capital and treasury shares

(a) Share capital

2012 2011

Number of ordinary shares

Amount$’000

Number of

ordinary shares

Amount

$’000

Group and Company

Beginning and end of fi nancial year 765,268,240 88,385 765,268,240 88,385

All issued ordinary shares are fully paid. There is no par value for these ordinary shares.

The holders of ordinary shares (excluding treasury shares) are entitled to receive dividends as declared from time to

time and are entitled to one vote per share at meeting of the Company. All shares (excluding treasury shares) rank

equally with regards to the Company’s residual assets.

(b) Treasury shares

2012 2011

Number of ordinary shares

Amount$’000

Number of

ordinary shares

Amount

$’000

Group and Company

Beginning of fi nancial year 3,991,000 656 – –

Treasury shares purchased 5,926,000 827 3,991,000 656

End of fi nancial year 9,917,000 1,483 3,991,000 656

The Company acquired 5,926,000 (2011: 3,991,000) of the ordinary shares in the open market during the fi nancial

year. The total amount paid to acquire the shares was $827,000 (2011: $656,000) and this was presented as a

component within shareholders’ equity.

20 Other reserves

Group

2012 2011

$’000 $’000

(a) Composition:

Fair value reserve (229) (95)

Currency translation reserve 55 55

(174) (40)

NOTES TO THE FINANCIAL STATEMENTSFor the fi nancial year ended 30 June 2012

72 Ryobi Kiso Holdings Ltd. Annual Report 2012

20 Other reserves (Cont’d)

Group

2012 2011

$’000 $’000

(b) Movements:

(i) Fair value reserve

Beginning of fi nancial year (95) (135)

Available-for-sale fi nancial assets

- Fair value (losses)/gains (Note 13) (162) 49

- Tax on fair value changes (Note 18) 28 (9)

(134) 40

End of fi nancial year (229) (95)

(ii) Currency translation reserve

Beginning of fi nancial year 55 (36)

Net currency translation differences of fi nancial statements of

foreign subsidiaries # 91

End of fi nancial year 55 55

# Amount less than $1,000.

The fair value reserve represents the cumulative fair value changes, net of tax, of available-for-sale fi nancial assets until

they are disposed of or impaired.

The currency translation reserve represents exchange differences arising from the translation of the fi nancial statements of

foreign operations whose functional currencies are different from that of the Group’s presentation currency.

Other reserves are non-distributable.

21 Retained profi ts

Retained profi ts of the Group and the Company are distributable.

Movement in retained profi ts of the Company is as follows:

Company

2012 2011

$’000 $’000

Beginning of fi nancial year 4,622 1

Net profi t 2,195 8,447

Dividends paid (Note 22) (4,545) (3,826)

End of fi nancial year 2,272 4,622

NOTES TO THE FINANCIAL STATEMENTSFor the fi nancial year ended 30 June 2012

Annual Report 2012 Ryobi Kiso Holdings Ltd. 73

22 Dividends

Group and Company

2012 2011

$’000 $’000

Ordinary dividends declared and paid

Final tax exempt (one-tier) dividend paid in respect of the previous

fi nancial year ended of 0.6 cents (2011: 0.5 cents) per share (Note 21) 4,545 3,826

At the Annual General Meeting on 24 October 2012, a fi nal tax exempt (one-tier) dividend of 0.3 cents per share will be

recommended. These fi nancial statements do not refl ect this dividend, which will be accounted for in shareholders’ equity

as an appropriation of retained profi ts in the fi nancial year ending 30 June 2013.

23 Revenue

Group

2012 2011

$’000 $’000

Bored piling 124,231 93,163

Eco-friendly piling and geoservices 29,069 30,125

Plant engineering services 19 –

153,319 123,288

24 Other income

Group

2012 2011

$’000 $’000

Interest income

- bank deposits 650 712

- a related party 57 –

707 712

Rental income 74 135

Dividend income 28 37

Scrap sales 440 350

Gain from bargain purchase (Note 37(d)) 44 –

Administrative charges 58 21

Miscellaneous income 51 37

1,402 1,292

NOTES TO THE FINANCIAL STATEMENTSFor the fi nancial year ended 30 June 2012

74 Ryobi Kiso Holdings Ltd. Annual Report 2012

25 Other operating income/(expenses)

Group

2012 2011

$’000 $’000

Allowance for impairment on trade receivable (Note 6) (24) –

Foreign exchange gains/(losses), net 217 (1,613)

Gain on disposal of property, plant and equipment 815 300

Property, plant and equipment written off (44) (11)

964 (1,324)

26 Finance costs

Group

2012 2011

$’000 $’000

Interest expense

- bank borrowings 971 925

- fi nance lease liabilities 503 386

1,474 1,311

27 Profi t before income tax

The following items have been included in arriving at profi t before income tax:

Group

2012 2011

$’000 $’000

Audit fees paid/payable to:

- Auditor of the Company 107 92

- Other auditors# 11 7

Non-audit fees paid to the auditor of the Company 7 3

Depreciation of property, plant and equipment (Note 14) 12,786 10,942

Employee compensation (Note 28) 19,554 18,210

Insurance 800 739

Inventories recognised as an expense in cost of sales (Note 7) 73,112 35,640

Professional fees 1,272 835

Rental on operating leases - premises 531 803

Rental of machinery and equipment 882 3,554

Reversal of allowance for liquidated damages – (790)

Reversal of allowance for foreseeable losses on construction

work-in-progress (Note 8) (241) –

Subcontractors’ fees 18,021 18,717

Survey, testing and other fees 1,816 1,560

Telecommunication 313 240

Tools and hardware 1,485 1,412

Transportation costs 9,522 8,027

Upkeep of machinery and equipment 7,089 7,399

# Includes the fees paid to network of member fi rm of Nexia International

NOTES TO THE FINANCIAL STATEMENTSFor the fi nancial year ended 30 June 2012

Annual Report 2012 Ryobi Kiso Holdings Ltd. 75

28 Employee compensation

Group

2012 2011

$’000 $’000

Wages, salaries and short-term benefi ts 18,701 17,470

Employer’s contribution to defi ned contribution plans including Central Provident

Fund 853 740

19,554 18,210

29 Income taxes

(a) Income tax expense

Group

2012 2011

$’000 $’000

Tax (credit)/expense attributable to profi t is made up of:

- Profi t from current year:

Current income tax 480 81

Deferred income tax 209 1,731

689 1,812

- Overprovision in prior years:

Current income tax (649) (12)

Deferred income tax (914) (65)

(1,563) (77)

(874) 1,735

The tax on the Group’s profi t before income tax differs from the theoretical amount that would arise using the

Singapore standard rate of income tax as follows:

Group

2012 2011

$’000 $’000

Profi t before income tax 3,374 10,607

Share of losses of associated company 1 313

Profi t before income tax and share of losses of associated company 3,375 10,920

NOTES TO THE FINANCIAL STATEMENTSFor the fi nancial year ended 30 June 2012

76 Ryobi Kiso Holdings Ltd. Annual Report 2012

29 Income taxes (Cont’d)

(a) Income tax expense (Cont’d)

Group

2012 2011

$’000 $’000

Tax calculated at tax rate of 17% (2011: 17%) 574 1,856

Effects of:

Different tax rates in other countries 72 (129)

Statutory stepped income exemption (78) (48)

Expenses not deductible for tax purposes 447 202

Income not subject to tax (6) (76)

Tax incentive (555) (688)

Utilisation of previously unrecognised capital allowances

- tax losses (241) –

- capital allowances – (8)

Deferred tax assets not recognised 476 704

Others – (1)

689 1,812

(b) Movement in current income tax liabilities and income tax recoverable:

Group Company

2012 2011 2012 2011

$’000 $’000 $’000 $’000

Beginning of fi nancial year (2,048) 3,337 62 71

Income tax refund/(paid) 2,813 (5,444) (38) (71)

Income tax expense 480 81 121 62

Over provision in prior years (649) (12) (24) –

Currency translation differences (1) (10) – –

End of fi nancial year 595 (2,048) 121 62

Presented as:

Income tax recoverable (Note 6) – 2,127 – –

Current income tax liabilities (595) (79) (121) (62)

(595) 2,048 (121) (62)

NOTES TO THE FINANCIAL STATEMENTSFor the fi nancial year ended 30 June 2012

Annual Report 2012 Ryobi Kiso Holdings Ltd. 77

30 Earnings per share

Basic and diluted earnings per share is calculated by dividing the net profi t attributable to equity holders of the Company

by the weighted average number of ordinary shares outstanding during the fi nancial year.

2012 2011

Net profi t attributable to equity holders of the Company ($’000) 3,363 7,813

Weighted average number of ordinary shares outstanding 758,102,306 764,804,708

Basic and diluted earnings per share (cents) 0.44 1.02

There were no dilutive potential ordinary shares during the fi nancial year.

31 Related party transactions

In addition to the information disclosed elsewhere in the fi nancial statements, the following signifi cant related party

transactions took place between the Group and related parties at terms agreed between the parties:

(a) Sales and purchases of goods and services

Group

2012 2011

$’000 $’000

Related parties:

Sales of raw materials 133 –

Loan interest income 57 –

Warehouse and equipment rental income received 4 73

Purchase of tools, machinery and equipment – (31)

Insurance expenses paid (717) (704)

Associated company:

Equipment rental income – 342

Sales of raw materials – 101

Contract costs – (2,627)

Related parties comprise mainly companies which are controlled or signifi cantly infl uenced by the Group’s key

management personnel and their immediate family members.

Outstanding balances as at 30 June 2012 and 30 June 2011, arising from sales/purchases of goods and services,

are unsecured and receivable/payable within 12 months from balance sheet date and are disclosed in Notes 6 and

15 respectively.

NOTES TO THE FINANCIAL STATEMENTSFor the fi nancial year ended 30 June 2012

78 Ryobi Kiso Holdings Ltd. Annual Report 2012

31 Related party transactions (Cont’d)

(b) Key management personnel compensation

Key management personnel compensation is as follows:

Group

2012 2011

$’000 $’000

Salaries and other short term employee benefi ts 2,964 3,147

Employer’s contribution to defi ned contribution plans,

including Central Provident Fund 127 123

Directors’ fees 394 260

3,485 3,530

Comprise amounts paid to:

Directors of the Company 1,138 1,265

Other key management personnel 2,347 2,265

3,485 3,530

32 Commitments

(a) Capital commitment

Capital expenditures contracted for at the balance sheet date but not recognised in the fi nancial statements are as

follows:

Group

2012 2011

$’000 $’000

Property, plant and equipment 225 6,360

(b) Operating lease commitments - Where the Group is a lessee

The Group leases premises from non-related parties under non-cancellable operating lease agreements. The

leases have varying terms, escalation clauses and renewal rights.

The future minimum lease payables under non-cancellable operating leases contracted for at the balance sheet

date but not recognised as liabilities, are as follows:

Group

2012 2011

$’000 $’000

Not later than one year 351 152

Between one and fi ve years 1,404 607

Later than fi ve years 2,723 1,266

4,478 2,025

NOTES TO THE FINANCIAL STATEMENTSFor the fi nancial year ended 30 June 2012

Annual Report 2012 Ryobi Kiso Holdings Ltd. 79

32 Commitments (Cont’d)

(c) Operating lease commitment - Where the Group is a lessor

The Group leases out premises to related and non-related parties under non-cancellable operating leases. The

leases have varying terms, escalation clauses and renewal rights.

The future minimum lease receivables under non-cancellable operating leases contracted for at the balance sheet

date but not recognised as receivables, are as follows:

Group

2012 2011

$’000 $’000

Not later than one year 12 36

Between one and fi ve years 4 –

16 36

33 Financial risk management

The Group is exposed to fi nancial risks arising from its operations and the use of fi nancial instruments. The key fi nancial

risks include market risk (including price risk, interest rate risk and currency risk), credit risk and liquidity risk. The Group’s

overall risk management strategy seeks to minimise adverse effects from the unpredictability of fi nancial markets on the

Group’s fi nancial performance. The Board of Directors is responsible for setting the objectives and underlying principles of

fi nancial risk management for the Group. The Audit Committee provides independent oversight to the effectiveness of the

risk management process.

(a) Market risk

(i) Price risk

The Group is exposed to equity securities price risk arising from the investments held by the Group

which are classifi ed on the statement of fi nancial position as available-for-sale fi nancial assets. The equity

securities are listed in Singapore. To manage its price risk arising from investments in equity securities, the

Group diversifi ed its portfolio. Diversifi cation of the portfolio is done in accordance with the limits set by the

Group.

Sensitivity analysis

If prices for equity securities change by 5% (2011: 5%) with all other variables including tax rate being held

constant, the effects on equity will be increased/decreased by approximately $66,000 (2011: $74,000).

(ii) Interest rate risk

The Group’s exposure to interest rates relates primarily to interest-earning fi nancial assets and interest-

bearing fi nancial liabilities. Interest rate risk is managed by the Group on an on-going basis with the primary

objective of limiting the extent to which net interest expense could be affected by an adverse movement in

interest rates.

The Group obtains additional fi nancing through bank borrowings and fi nance lease arrangements. The

Group’s policy is to obtain the most favourable interest rates available without increasing its exposure.

NOTES TO THE FINANCIAL STATEMENTSFor the fi nancial year ended 30 June 2012

80 Ryobi Kiso Holdings Ltd. Annual Report 2012

33 Financial risk management (Cont’d)

(a) Market risk (Cont’d)

(ii) Interest rate risk (Cont’d)

The following table sets out the carrying amounts as at 30 June, by maturity or repricing, whichever is

earlier, of the fi nancial instruments of the Group that are exposed to interest rate risk:

Less than one year

Between one and fi ve years Total

$’000 $’000 $’000

GroupAt 30 June 2012Financial assetsFixed rate

Fixed deposits 6,650 – 6,650

Financial liabilitiesFixed rate

Finance lease liabilities 5,598 7,618 13,216

Floating rate

Bank term loans 24,894 8,817 33,711

At 30 June 2011

Financial assets

Fixed rate

Fixed deposits 5,920 – 5,920

Financial liabilities

Fixed rate

Finance lease liabilities 5,096 8,782 13,878

Floating rate

Bank term loans 14,951 14,110 29,061

NOTES TO THE FINANCIAL STATEMENTSFor the fi nancial year ended 30 June 2012

Annual Report 2012 Ryobi Kiso Holdings Ltd. 81

33 Financial risk management (Cont’d)

(a) Market risk (Cont’d)

(ii) Interest rate risk (Cont’d)

Sensitivity analysis

Fair value sensitivity analysis for fi xed rate instruments

The Group is not exposed to changes in interest rates for fi xed rate fi nancial assets and fi nancial liabilities.

Cash fl ow sensitivity analysis for variable rate instruments

For the variable rate fi nancial liabilities, a change of 30 basis points (2011: 30 basis points) in interest rate

at the reporting date would increase/(decrease) profi t before income tax by the amounts shown below. This

analysis assumes that all other variables, including tax rate being held constant.

Profi t or loss

30 basis pointsincrease

30 basis pointsdecrease

$’000 $’000

Group

2012

Floating rate instruments 101 (101)

2011

Floating rate instruments 87 (87)

(iii) Currency risk

The Group incurs currency risk on purchases that are denominated in a currency other than the respective

functional currencies of the Group’s entities. The currencies giving rise to this risk are primarily, the United

States Dollar (“USD”), Australian Dollar (“AUD”), Euro Dollar (“Euro”) and Vietnamese Dong (“VND”).

The Group also holds cash and cash equivalents denominated in foreign currencies for working capital

purposes.

There is no formal hedging policy with respect to foreign currency exposure. Exposure to currency risk is

monitored on an on-going basis and the Group endeavours to keep the net exposure at an acceptable

level.

NOTES TO THE FINANCIAL STATEMENTSFor the fi nancial year ended 30 June 2012

82 Ryobi Kiso Holdings Ltd. Annual Report 2012

33 Financial risk management (Cont’d)

(a) Market risk (Cont’d)

(iii) Currency risk (Cont’d)

The Group’s foreign currency exposure based on the information provided to key management is as

follows:

SGD Euro AUD USD VND Others Total

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

At 30 June 2012

Financial assets

Cash and cash equivalents 19,021 4,023 2,607 597 6,497 281 33,026

Trade and other receivables 65,317 – 773 – 7,949 110 74,149

Available-for-sale fi nancial

assets 1,322 – – – – – 1,322

Receivables from subsidiaries 70,636 – – 72 17 – 70,725

156,296 4,023 3,380 669 14,463 391 179,222

Financial liabilities

Trade and other payables (31,665) (92) – – (2,387) (20) (34,164)

Payables to subsidiaries (70,636) – – (72) (17) – (70,725)

Borrowings (46,927) – – – – – (46,927)

(149,228) (92) – (72) (2,404) (20) (151,816)

Net fi nancial assets 7,068 3,931 3,380 597 12,059 371 27,406

Less: Net fi nancial assets

denominated in functional

currencies (5,988) – – – (12,059) (322) (18,369)

Less: Currency forwards – (5,017) (2,503) – – – (7,520)

Currency exposure on fi nancial assets/(liabilities) net of those denominated in the respective entities functional currencies 1,080 (1,086) 877 597 – 49 1,517

NOTES TO THE FINANCIAL STATEMENTSFor the fi nancial year ended 30 June 2012

Annual Report 2012 Ryobi Kiso Holdings Ltd. 83

33 Financial risk management (Cont’d)

(a) Market risk (Cont’d)

(iii) Currency risk (Cont’d)

SGD Euro AUD USD VND Others Total

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

At 30 June 2011

Financial assets

Cash and cash equivalents 31,796 17 2,748 6,183 374 219 41,337

Trade and other receivables 51,983 – – 111 312 178 52,584

Available-for-sale fi nancial

assets 1,480 – – – – – 1,480

Receivables from subsidiaries 43,513 – – 397 13 – 43,923

128,772 17 2,748 6,691 699 397 139,324

Financial liabilities

Trade and other payables (27,718) (67) – (20) (8) (28) (27,841)

Payables to subsidiaries (43,513) – – (397) (13) – (43,923)

Borrowings (42,939) – – – – – (42,939)

(114,170) (67) – (417) (21) (28) (114,703)

Net fi nancial assets/ (liabilities) 14,602 (50) 2,748 6,274 678 369 24,621

Less: Net fi nancial assets

denominated in functional

currencies (14,374) – – – (678) (364) (15,416)

Currency exposure on fi nancial assets/(liabilities) net of those denominated in the respective entities functional currencies 228 (50) 2,748 6,274 – 5 9,205

Sensitivity analysis

A 5% (2011: 5%) strengthening of Singapore Dollar against the following currencies at the reporting date

would increase/(decrease) profi t before income tax by the amounts shown below. This analysis assumes

that all other variables, including tax rate being held constant.

Group

2012 2011

$’000 $’000

Euro (54) (2)

AUD 44 137

USD 30 314

Others 2 –

A 5% (2011: 5%) weakening of Singapore Dollar against the above currencies would have had the equal

but opposite effect on the above currencies to the amounts shown above, on the basis that all other

variables, including tax rate being held constant.

NOTES TO THE FINANCIAL STATEMENTSFor the fi nancial year ended 30 June 2012

84 Ryobi Kiso Holdings Ltd. Annual Report 2012

33 Financial risk management (Cont’d)

(b) Credit risk

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in fi nancial loss to

the Group. The major classes of fi nancial assets of the Group are bank deposits and trade receivables. For trade

receivables, the Group adopts the policy of working with customers with good credit worthiness, market reputation

and long working relationship with the Group. The Group performs ongoing credit evaluation of its customers’

fi nancial condition and requires no collateral from its customers. For other fi nancial assets, the Group adopts the

policy of dealing only with high credit quality counterparties.

As the Group and the Company do not hold any collateral, the maximum exposure to credit risk for each

class of fi nancial instruments is the carrying amount of that class of fi nancial instruments presented  on  the

statement of fi nancial position, including:

Company

2012 2011

$’000 $’000

Corporate guarantee provided to banks on subsidiaries’ borrowings 58,122 39,104

The trade receivables of the Group comprise 4 debtors (2011: 6 debtors) respectively that individually represented

5% to 10% of trade receivables.

The subsidiaries have not defaulted in the payment of borrowings in the fi nancial year ended 30 June 2012 and 30

June 2011. As at balance sheet date, no claims on the fi nancial guarantee are expected.

The credit risk for trade receivables based on the information provided to key management is as follows:

Group2012 2011

$’000 $’000

By geographical areas

Singapore 11,140 7,513

Malaysia 108 173

Vietnam 2,356 270

13,604 7,956

By types of customers

Related parties – 514

Non-related parties 13,604 7,442

13,604 7,956

(i) Financial assets that are neither past due nor impaired

Bank deposits that are neither past due nor impaired are mainly deposits with banks with high credit-ratings

assigned by international credit-rating agencies. Trade receivables that are neither past due nor impaired

are substantially companies with a good collection track record with the Group.

NOTES TO THE FINANCIAL STATEMENTSFor the fi nancial year ended 30 June 2012

Annual Report 2012 Ryobi Kiso Holdings Ltd. 85

33 Financial risk management (Cont’d)

(b) Credit risk (Cont’d)

(ii) Financial assets that are past due and/or impaired

There is no other class of fi nancial assets that is past due and/or impaired except for trade receivables.

The age analysis of trade receivables past due but not impaired is as follows:

Group2012 2011

$’000 $’000

Past due 0 to 30 days 558 804

Past due 31 to 60 days 366 239

Past due above 60 days 650 672

1,574 1,715

Less: Allowance for impairment on trade receivable (24) –

1,550 1,715

Beginning of fi nancial year – –

Allowance made 24 –

End of fi nancial year 24 –

The impaired trade receivable of the Group relates to a customer that is in fi nancial diffi culty and whose

payment is not forthcoming.

The Group believes that the amounts that are past due are collectible, based on historic payment behaviour

and credit-worthiness of the customers.

(c) Liquidity risk

Liquidity risk is the risk that the Group will not able to meet its fi nancial obligations as they fall due. The Group’s

approach to managing liquidity is to ensure, as far as possible, that it will always have suffi cient liquidity to meet its

liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking

damage to the Group’s reputation.

The Group monitors its liquidity risk and maintains a level of cash and cash equivalents deemed adequate by

management to fi nance the Group’s operations and to mitigate the effects of fl uctuation in cash fl ows.

NOTES TO THE FINANCIAL STATEMENTSFor the fi nancial year ended 30 June 2012

86 Ryobi Kiso Holdings Ltd. Annual Report 2012

33 Financial risk management (Cont’d)

(c) Liquidity risk (Cont’d)

The table below analyses the Group’s and the Company’s fi nancial liabilities into relevant maturity groupings based

on the remaining period from the balance sheet date to the contractual maturity date. The amounts disclosed in

the table are contractual undiscounted cash fl ows. Balances due within 12 months equal their carrying amounts as

the impact of discounting is not signifi cant.

Less than one year

Between one and fi ve years Total

$’000 $’000 $’000

Group

At 30 June 2012

Trade and other payables 34,164 – 34,164

Borrowings 30,668 16,920 47,588

Derivative fi nancial instruments 218 – 218

65,050 16,920 81,970

At 30 June 2011

Trade and other payables 27,841 – 27,841

Borrowings 20,857 23,617 44,474

48,698 23,617 72,315

Company

At 30 June 2012

Trade and other payables 270 – 270

Financial guarantee contract 58,122 – 58,122

58,392 – 58,392

At 30 June 2011

Trade and other payables 280 – 280

Financial guarantee contract 39,104 – 39,104

39,384 – 39,384

(d) Capital risk

The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern

and to maintain an optimal capital structure so as to maximise shareholder value. In order to maintain or achieve

an optimal capital structure, the Group may adjust the amount of dividend payment, return capital to shareholders,

issue new shares, buy back issued shares, obtain new borrowings or sell assets to reduce borrowings.

Management monitors capital based on a gearing ratio and compliance of externally imposed capital requirements.

The Group’s strategy is to maintain: (i) gearing ratio within 1 times; (ii) net worth at not less than $30 million at all

times; and (iii) debt to earnings before tax, depreciation and amortisation (“EBITDA”) ratio at not more than 3 times.

NOTES TO THE FINANCIAL STATEMENTSFor the fi nancial year ended 30 June 2012

Annual Report 2012 Ryobi Kiso Holdings Ltd. 87

33 Financial risk management (Cont’d)

(d) Capital risk (Cont’d)

(i) Gearing ratio

The gearing ratio is calculated as total borrowings divided by shareholders’ funds.

Group

2012 2011

$’000 $’000

Total borrowings 46,927 42,939

Shareholders’ funds 114,051 116,194

Gearing ratio (times) 0.41 0.37

(ii) Net worth

Net worth is calculated as total assets less total liabilities.

Group

2012 2011

$’000 $’000

Total assets 209,311 199,062

Total liabilities 91,448 79,868

Net worth 117,863 119,194

(iii) Debt to earnings before tax, depreciation and amortisation (“EBITDA”)

Debt to EBITDA is calculated as total borrowings divided by EBITDA. EBITDA is calculated as profi t for the

year plus interest expense, income tax expense, depreciation and amortisation.

Group

2012 2011

$’000 $’000

Total borrowings 46,927 42,939

EBITDA

Profi t for the year 4,248 8,872

Interest expense 1,474 1,311

Income tax (credit)/expense (874) 1,735

Depreciation 12,786 10,942

17,634 22,860

Debt to EBITDA (times) 2.7 1.9

The Group and the Company are in compliance with all externally imposed capital requirements for the

fi nancial years ended 30 June 2012 and 30 June 2011.

NOTES TO THE FINANCIAL STATEMENTSFor the fi nancial year ended 30 June 2012

88 Ryobi Kiso Holdings Ltd. Annual Report 2012

33 Financial risk management (Cont’d)

(e) Fair value measurements

The following table presents assets and liabilities measured at fair value and classifi ed by level of the following fair

value measurement hierarchy:

(i) quoted prices (unadjusted in active markets for identical assets or liabilities) (Level 1);

(ii) 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) (Level 2); and

(iii) inputs for the asset or liability that are not based on observable market date (unobservable inputs) (Level 3).

Level 1 Level 2 Total

$’000 $’000 $’000

Group

2012

Assets

Available-for-sale fi nancial assets 1,322 – 1,322

Derivative fi nancial instruments – 82 82

Liabilities

Derivative fi nancial instruments – 218 218

2011

Assets

Available-for-sale fi nancial assets 1,480 – 1,480

Liabilities

Derivative fi nancial instruments – – –

The fair value of fi nancial instruments traded in active markets (such as available-for-sale securities) is based on

quoted market prices at the balance sheet date. The quoted market price used for fi nancial assets held by the

Group is the current bid price. These instruments are included in Level 1.

The fair value of fi nancial instruments that are not traded in an active market (for example, over-the counter

derivatives) is determined by using valuation techniques. The fair value of currency forward contracts is determined

using quoted forward currency rates at the balance sheet date. These investments are classifi ed as Level 2.

The carrying value of fi nancial assets and fi nancial liabilities are assumed to approximate their fair values. The fair

value of current borrowings approximates their carrying amount.

NOTES TO THE FINANCIAL STATEMENTSFor the fi nancial year ended 30 June 2012

Annual Report 2012 Ryobi Kiso Holdings Ltd. 89

34 Segment information

(a) Business segments

The Group has two reportable segments, as described below, which are the Group’s strategic business units.

The strategic business units offer different products and services, and are managed separately because they are

require different marketing strategies. For each of the strategic business units, the Group’s Chief Executive Offi cer

and Executive Directors review the internal management reports on a monthly basis. The following summary

describes the operations in each of the Group’s reportable segments:

Bored piling : Piling work to carry heavy vertical loads from structures (such

as buildings and bridges) and horizontal loads in earth retaining

structures for deep excavation (such as MRT tunnels and

basements of buildings).

Eco-friendly piling and Geoservices

(a) Eco-friendly piling : Eco-friendly and low pollution piling works with minimal noise,

vibration and soil removal/disposal and use of lesser raw

materials.

(b) Geoservices : Environmental protection engineering, micro-piling, ground

anchoring, slope protection and stabilisation works such

as soil nailing and graniting, soil investigation geophysical

surveying and vibration/seismic monitoring, and sale of strong

motion seismic equipment, geophysical survey equipment and

geotechnical sensors.

Plant engineering services : Metal fabrication on truck body, work for liquid petroleum gas

tanks, high pressure vessels, chemical tanks, aircrafts refi llers

and oil and gas refi llers, installation of industrial machinery and

equipment and mechanical engineering works.

The bases of measurement of the reportable segments are in accordance with the Group’s accounting policies.

Information regarding the results of each reportable segment is included below. Performance is measured based

on segment results, as included in the internal management reports that are reviewed by the Group’s Chief

Executive Offi cer and Executive Directors. Segment result is used to measure performance as management

believes that such information is the most relevant in evaluating the results of certain segments. Inter-segment

pricing is determined on an arm’s length basis.

NOTES TO THE FINANCIAL STATEMENTSFor the fi nancial year ended 30 June 2012

90 Ryobi Kiso Holdings Ltd. Annual Report 2012

34 Segment information (Cont’d)

(a) Business segments (Cont’d)

The segment information provided to the Group’s Chief Executive Offi cer and Executive Directors for the reportable

segments for the fi nancial year ended 30 June 2012 is as follows:

GroupBoredPiling

Eco-friendlyPiling and

Geoservices

PlantEngineering

Services Elimination Total$’000 $’000 $’000 $’000 $’000

RevenueExternal sales

Inter-segment sales

124,231

29,069

7,453

19

3

(7,456)

153,319

Total revenue 124,231 36,522 22 (7,456) 153,319

Segment results 1,974 2,431 (11) 4,394

Interest income

Unallocated income

Unallocated costs

Finance costs

Share of loss of associated

company (1)

707

695

(947)

(1,474)

(1)

Profi t before income tax

Income tax credit

3,374

874

Profi t for the year 4,248

AssetsSegment assets

Unallocated assets

117,300 42,418 48 159,766

49,545

Total assets 209,311

LiabilitiesSegment liabilities

Unallocated liabilities

18,145 3,926 250 22,321

69,127

Total liabilities 91,448

Other segment informationCapital expenditure

Unallocated capital expenditure

4,042 3,704 – 7,746

7,781

Total capital expenditure 15,527

Depreciation 8,411 3,319 – 11,730

Unallocated depreciation 1,056

Total depreciation 12,786

Gain on disposal of property,

plant and equipment 813 2 – 815

Property, plant and equipment

written off – (44) – (44)

Reversal of allowance

for foreseeable losses on

construction work in progress

Allowance for impairment on

trade receivable

241

(24)

241

(24)

NOTES TO THE FINANCIAL STATEMENTSFor the fi nancial year ended 30 June 2012

Annual Report 2012 Ryobi Kiso Holdings Ltd. 91

34 Segment information (Cont’d)

(a) Business segments (Cont’d)

The segment information provided to the Group’s Chief Executive Offi cer and Executive Directors for the reportable

segments for the fi nancial year ended 30 June 2011 is as follows:

GroupBored Piling

Eco-friendly Piling and

Geoservices Elimination Total$’000 $’000 $’000 $’000

RevenueExternal sales 93,163 30,125 – 123,288

Inter-segment sales – 4,408 (4,408) –

Total revenue 93,163 34,533 (4,408) 123,288

Segment results 6,768 6,364 13,132

Interest income 712

Unallocated income 580

Unallocated costs (2,193)

Finance costs (1,311)

Share of loss of associated company (313) (313)

Profi t before income tax 10,607

Income tax expense (1,735)

Profi t for the year 8,872

AssetsSegment assets 106,296 40,972 147,268

Investment in associated company 379 379

Unallocated assets 51,415

Total assets 199,062

LiabilitiesSegment liabilities 12,714 5,752 18,466

Unallocated liabilities 61,402

Total liabilities 79,868

Other segment informationCapital expenditure 14,814 15,317 30,131

Unallocated capital expenditure 898

Total capital expenditure 31,029

Depreciation 7,461 2,796 10,257

Unallocated depreciation 685

Total depreciation 10,942

Gain on disposal of property, plant and

equipment 284 16 300

Property, plant and equipment written off – (11) (11)

Reversal of allowance for liquidated damages 790 – 790

NOTES TO THE FINANCIAL STATEMENTSFor the fi nancial year ended 30 June 2012

92 Ryobi Kiso Holdings Ltd. Annual Report 2012

34 Segment information (Cont’d)

(a) Business segments (Cont’d)

(i) Segment assets

The amounts provided to the G roup’s Chief Executive Offi cer and Executive Directors with respect to

total assets are measured in a manner consistent with that of the fi nancial statements. These assets are

allocated based on the operations of the segment. All assets are allocated to reportable segments other

than cash and cash equivalents, trade and other receivables, club memberships, available-for-sale fi nancial

assets and property, plant and equipment.

Segment assets are reconciled to total assets as follows:

Group

2012 2011

$’000 $’000

Segment assets for reportable segments 159,766 147,647

Other segment assets 4,594 17,425

Unallocated:

Cash and cash equivalents 29,469 23,944

Trade and other receivables 2,895 4,063

Finance lease receivables 143 –

Derivative fi nancial instruments 82 –

Club memberships 220 220

Available-for-sale fi nancial assets 1,322 1,480

Property, plant and equipment 10,688 4,283

Deferred income tax assets 132 –

209,311 199,062

(ii) Segment liabilities

The amounts provided to the Group’s Chief Executive Offi cer and Executive Directors with respect to total

liabilities are measured in a manner consistent with that of the fi nancial statements. These liabilities are

allocated based on the operations of the segment. All liabilities are allocated to the reportable segments

other than trade and other payables, current income tax liabilities, derivative fi nancial instruments, deferred

income tax liabilities and borrowings.

NOTES TO THE FINANCIAL STATEMENTSFor the fi nancial year ended 30 June 2012

Annual Report 2012 Ryobi Kiso Holdings Ltd. 93

34 Segment information (Cont’d)

(a) Business segments (Cont’d)

(ii) Segment liabilities (Cont’d)

Segment liabilities are reconciled to total liabilities as follows:

Group

2012 2011

$’000 $’000

Segment liabilities for reportable segments 22,321 18,466

Other segment liabilities 391 342

Unallocated:

Trade and other payables 12,711 9,095

Current income tax liabilities 474 17

Derivative fi nancial instruments 218 –

Deferred income tax liabilities 8,406 9,009

Borrowings 46,927 42,939

91,448 79,868

(b) Geographical segments

Geographical segments are analysed by three principal geographical areas, namely Singapore, Vietnam and

Malaysia. In presenting information on the basis of geographical segments, segment revenue is based on the

geographical location of the customers which the sales are made to regardless of where the sales originate.

Segment assets are based on the geographical location of the assets.

Revenue Non-current assets Total assets

Group 2012 2011 2012 2011 2012 2011

$’000 $’000 $’000 $’000 $’000 $’000

Singapore 139,843 122,652 90,698 90,085 188,780 196,308

Vietnam 13,388 249 3,084 1,459 20,189 2,375

Malaysia 88 387 1 2 342 379

Total 153,319 123,288 93,783 91,546 209,311 199,062

Revenue of approximately $16,445,000 (2011: $20,609,000) are derived from two external customers. These

revenues are attributable to the Singapore bored piling segment.

35 Contingent liabilities

Company

The Company has issued corporate guarantees to bank borrowings of certain subsidiaries. These bank borrowings

amount to $58,122,000 (2011: $39,104,000) at the balance sheet date. The Company gives letter of fi nancial support

to certain subsidiaries in the Group with capital defi ciency at year end. The Company has evaluated the fair value of the

corporate guarantees and is of the view that the consequential benefi ts derived from its guarantees to the banks and

fi nancial institutions with regard to the subsidiaries is minimal. The subsidiaries for which the guarantees were provided are

in favourable equity positions and are profi table.

NOTES TO THE FINANCIAL STATEMENTSFor the fi nancial year ended 30 June 2012

94 Ryobi Kiso Holdings Ltd. Annual Report 2012

36 New or revised accounting standards and interpretations

Below are the mandatory standards, amendments and interpretations to existing standards that have been published,

and are relevant for the Group’s accounting periods beginning on or after 1 January 2012 or later periods and which the

Group has not early adopted:

Amendments to FRS 1 - Presentation of Items of Other Comprehensive Income (effective for annual periods

beginning on or after 1 July 2012)

FRS 19 - Employee Benefi ts (effective for annual periods beginning on or after 1 January 2013)

FRS 27 - Separate fi nancial statements (effective for annual periods beginning on or after 1 January 2014)

FRS 28 - Investments in Associates and Joint Ventures (effective for annual periods beginning on or after 1 January

2014)

Amendments to FRS 107 - Financial Instruments: Disclosures - Offsetting of Financial Assets and Financial

Liabilities (effective for annual periods beginning on or after 1 January 2013)

FRS 110 - Consolidated Financial Statements (effective for annual periods beginning on or after 1 January 2014)

FRS 111 - Joint Arrangements (effective for annual periods beginning on or after 1 January 2014)

FRS 112 - Disclosure of Interests in Other Entities (effective for annual periods beginning on or after 1 January

2014)

FRS 113 - Fair Value Measurements (effective for annual periods beginning on or after 1 January 2013)

Amendments to FRS 32 - Financial Instruments: Presentation - Offsetting of Financial Assets and Financial

Liabilities (effective for annual periods beginning on or after 1 January 2014)

The management anticipates that the adoption of the above FRSs, INT FRSs and amendments to FRS in the future

periods will not have a material impact on the fi nancial statements of the Group and of the Company in the period of their

initial adoption.

37 Business combination

On 31 October 2011, the Group acquired remaining 52.5% equity interest in an associated company, Raffl es Geosystems

Pte. Ltd. (formerly known as Seafco-Ryobi Pte. Ltd.) and became a wholly-owned subsidiary. The principal activities

of Raffl es Geosystems Pte. Ltd. are those of construction and piling work, soil improvement and diaphragm wall in

Singapore. As a result of the acquisition, the Group expects to reduce costs through economies of scale. Details of

the consideration paid, the asset acquired and liabilities assumed and the effect on the cash fl ows of the Group, at the

acquisition date, are as follows:

$’000

(a) Purchase consideration

Cash paid 375

Consideration transferred for the business 375

NOTES TO THE FINANCIAL STATEMENTSFor the fi nancial year ended 30 June 2012

Annual Report 2012 Ryobi Kiso Holdings Ltd. 95

37 Business combination (Cont’d)

(b) Identifi able assets acquired and liabilities assumed

$’000

Cash and cash equivalents 356

Property, plant and equipment (Note 14) 246

Trade and other receivables 3,910

Total assets 4,512

Trade payables 3,713

Accrued operating expenses 2

Total liabilities 3,715

Total identifi able net assets 797

Amount previously accounted as associated company (Note 11) (378)

Net assets acquired 419

Gain from bargain purchases (44)

Consideration transferred for the business 375

(c) Effect on cash fl ow of the Group

Cash paid (as above) 375

Less : cash and cash equivalents in subsidiary acquired (356)

Cash outfl ow on acquisition 19

(d) Goodwill

Consideration transferred for the business 375

Add: Acquisition date fair value of any previously held equity interest in entity acquired 378

753

Less : Fair value of identifi able assets and liabilities assumed (797)

Gain from bargain purchase (Note 24) 44

(e) Acquisition-related costs

Acquisition-related costs of $7,000 are included in administrative expenses in the consolidated income statement

and in operating cash fl ows in the consolidated statement of cash fl ows.

(f) Revenue and loss contribution

The acquired business contributed revenue and net loss of $1,173,000 and $1,502,000 respectively to the Group

from the period from 1 November 2011 to 30 June 2012.

Had Raffl es Geosystems Pte Ltd been consolidated from 1 July 2011, consolidated revenue and consolidated net

loss for the fi nancial year ended 30 June 2012 would have been $1,656,000 and $1,503,000 respectively.

NOTES TO THE FINANCIAL STATEMENTSFor the fi nancial year ended 30 June 2012

96 Ryobi Kiso Holdings Ltd. Annual Report 2012

38 Events occurring after the balance sheet date

On 16 July 2012, a wholly-owned subsidiary, Ryobi Compile Holdings Pty Ltd acquired 70% interest in Compile

Australia Pty Ltd and Compile-Ryobi Australia Pty Ltd respectively for a purchase consideration of AUD1,863,316 and

AUD196 respectively. Both companies are incorporated and domiciled in Australia and are primarily engaged in piling

and geotechnical services. The fair value of the Group’s share of the identifi able net liabilities of Compile Australia Pty

Ltd and Compile-Ryobi Australia Pty Ltd at the date of acquisition has been provisionally determined at AUD526,289

and AUD1,343,027 respectively. Acquisition-related costs of S$507,000 have been incurred during the fi nancial year and

included in administrative expenses in the consolidated income statement and in operating cash fl ows in the consolidated

statement of cash fl ows. Details of the assets acquired and liabilities assumed, non-controlling interest that will be

recognised, revenue and profi t contribution of Compile Australia Pty Ltd and Compile-Ryobi Australia Pty Ltd and the

effect on the cash fl ows for the Group are not disclosed, as the accounting for this acquisition is still incomplete at the

time these fi nancial statements have been authorised and issue. Compile Australia Pty Ltd and Compile-Ryobi Australia

Pty Ltd will be consolidated with effect from 16 July 2012.

39 Authorisation of fi nancial statements

These consolidated fi nancial statements were authorised for issue in accordance with a resolution of the Board of

Directors of Ryobi Kiso Holdings Ltd. on 14 September 2012.

ADDITIONAL INFORMATIONFor the fi nancial year ended 30 June 2012

Annual Report 2012 Ryobi Kiso Holdings Ltd. 97

UTILISATION OF PROCEEDS FROM THE INITIAL PUBLIC OFFERING

As at 14 September 2012, the status on the use of proceeds raised from the Initial Public Offering (“IPO”) of the Company is as follows:

S/N Purpose of IPO ProceedsIntended Amount

Amount Utilised Balance

$’000 $’000 $’000

1. Acquisition of additional piling equipment and machinery and

upgrade of our existing piling equipment and machinery

15,000 14,800 200

2. Acquisition of land and acquisition and/or construction of new

industrial buildings and offi ce premises

10,000 7,258 2,742

3. Expansion of our Group’s operations/acquisition of new

businesses

10,000 10,000 –

4. Repayment of bank borrowings 5,000 5,000 –

5. Working capital 6,920 6,920 –

6. Listing expenses 3,000 3,000 –

Gross Proceeds 49,920 46,978 2,942

The above utilisation is in accordance with the intended use of proceeds of IPO as stated in the Prospectus dated 18 January 2010.

STATISTICS OF SHAREHOLDINGSAs at 14 September 2012

98 Ryobi Kiso Holdings Ltd. Annual Report 2012

SHAREHOLDERS’ INFORMATION

Total number of shares excluding treasury shares : 754,442,240

Class of Shares : Ordinary Shares

Voting Rights : One vote per ordinary share (excluding treasury shares)

TREASURY SHARES

Total number of shares held as treasury shares : 10,826,000

Voting Rights : None

Percentage of holding against the total number : 1.4%

of issued shares excluding treasury shares

ANALYSIS OF SHAREHOLDINGS

Size of ShareholdingNumber of

Shareholders %Number of

Shares %

1 - 999 1 0.06 200 0.00

1,000 - 10,000 601 37.85 3,477,000 0.46

10,001 - 1,000,000 955 60.14 97,956,000 12.98

1,000,001 and above 31 1.95 653,009,040 86.56

1,588 100.00 754,442,240 100.00

SUBSTANTIAL SHAREHOLDERS (As recorded in the Register of Substantial Shareholders)

Number of Shares

Direct Interest % Deemed Interest %

Tanglin Capital Pte. Ltd.(1) 479,756,060 63.59 – –

Ong Tiong Siew(2) 37,438,240 4.96 479,756,060 63.59

Ong Teng Choon(2) 26,857,880 3.56 479,756,060 63.59

Ong Huay Chin(2) 7,521,760 1.00 479,756,060 63.59

The percentage of shareholding above is computed based on the total number of issued shares of 754,442,240 excluding

treasury shares.

Notes:

(1) Tanglin Capital Pte. Ltd. is deemed to be interested in the 4,600,000 Shares held through Raffl es Nominees (Pte) Ltd.

(2) Tanglin Capital Pte. Ltd. is an investment holding company incorporated in Singapore. The shareholders are Ong Tiong Siew, Ong Teng

Choon and Ong Huay Chin. Ong Huay Chin is the sister of Ong Tiong Siew and Ong Teng Choon. By virtue of Section 7 of the Companies

Act Chapter 50, Ong Tiong Siew, Ong Teng Choon and Ong Huay Chin are deemed to be interested in the 479,756,060 Shares held by

Tanglin Capital Pte. Ltd..

STATISTICS OF SHAREHOLDINGSAs at 14 September 2012

Annual Report 2012 Ryobi Kiso Holdings Ltd. 99

TWENTY LARGEST SHAREHOLDERS

No. Name of Shareholders Number of Shares %

1. Tanglin Capital Pte. Ltd. 475,156,060 62.98

2. Ong Tiong Siew 37,438,240 4.96

3. UOB Kay Hian Pte Ltd 34,026,000 4.51

4. Ong Teng Choon 26,857,880 3.56

5. Shiga Shuntaro 17,329,300 2.30

6. Ong Huay Chin 7,521,760 1.00

7. Raffl es Nominees (Pte) Ltd 5,025,000 0.67

8. Ong Yee Khong 5,000,000 0.66

9. Soon Li Heng Civil Engineering Pte Ltd 3,748,000 0.50

10. DBS Vickers Securities (S) Pte Ltd 3,360,000 0.45

11. Lee Yiok Seng @ Lee Geok Seng @ Lee Yok Seng 3,200,000 0.42

12. Ong Siew Hoon 3,125,000 0.41

13. Maybank Kim Eng Securities Pte Ltd 2,832,000 0.38

14. DBS Nominees Pte Ltd 2,827,800 0.37

15. OCBC Securities Private Ltd 2,621,000 0.35

16. Tan Hiok Ju Julia 2,126,000 0.28

17. Wong Shaw Seng Regi 1,700,000 0.23

18. United Overseas Bank Nominees Pte Ltd 1,688,000 0.22

19. Phillip Securities Pte Ltd 1,673,000 0.22

20. Teow Boon Ling 1,610,000 0.21

638,865,040 84.68

PERCENTAGE OF SHAREHOLDINGS IN PUBLIC’S HANDS

22.79% of the Company’s shares are held in the hands of public. Accordingly, the Company has complied with Rule 723 of the

Listing Manual of the SGX-ST.

NOTICE OF ANNUAL GENERAL MEETING

100 Ryobi Kiso Holdings Ltd. Annual Report 2012

NOTICE IS HEREBY GIVEN that the Annual General Meeting of Ryobi Kiso Holdings Ltd. (the “Company”) will be held at

Conference Room, 6 Battery Road, #10-01, Singapore 049909, on Wednesday, 24 October 2012 at 10.00 a.m. for the following

purposes:

AS ORDINARY BUSINESS

1. To receive and adopt the Directors’ Report and the Audited Accounts of the Company for the fi nancial year ended 30

June 2012 together with the Auditors’ Report thereon.

(Resolution 1)

2. To declare a tax exempt one-tier fi nal dividend of 0.30 Singapore cents per ordinary share for the fi nancial year ended 30

June 2012 (2011: 0.60 Singapore cents per ordinary share).

(Resolution 2)

3. To re-elect Ms Lai Chin Yee, a Director of the Company, retiring pursuant to Article 91 of the Articles of Association of the

Company.

(Resolution 3) [See Explanatory Note (i)]

4. To re-elect Dr Lau Teik Soon (“Dr Lau”), a Director of the Company, retiring pursuant to Article 91 of the Articles of

Association of the Company and to re-appoint Dr Lau who is over 70 years of age, pursuant to Section 153(6) of the

Companies Act, Chapter 50, to hold offi ce from the date of this Annual General Meeting until the next Annual General

Meeting of the Company.

(Resolution 4) [See Explanatory Note (ii)]

5. To re-appoint Mr Lee Yiok Seng @ Lee Geok Seng @ Lee Yok Seng, a Director of the Company who is over 70 years of

age, pursuant to Section 153(6) of the Companies Act, Chapter 50, to hold offi ce from the date of this Annual General

Meeting until the next Annual General Meeting of the Company.

(Resolution 5) [See Explanatory Note (iii)]

6. To approve the payment of Directors’ Fees of $204,000 for the fi nancial year ended 30 June 2012 (2011: $204,000).

(Resolution 6)

7. To re-appoint Messrs Nexia TS Public Accounting Corporation, Certifi ed Public Accountants, as the independent auditors

of the Company and to authorise the Directors of the Company to fi x their remuneration.

(Resolution 7)

8. To transact any other ordinary business which may properly be transacted at the Annual General Meeting.

AS SPECIAL BUSINESS

To consider and if thought fi t, to pass the following resolutions as Ordinary Resolutions, with or without any modifi cations:

9. General Mandate to authorise the Directors to issue shares or convertible securities

That pursuant to Section 161 of the Companies Act, Chapter 50 and Rule 806 of the Listing Manual of the Singapore

Exchange Securities Trading Limited (“SGX-ST”), the Directors of the Company be authorised and empowered to:

(a) (i) issue shares in 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) options,

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 of

the Company may in their absolute discretion deem fi t; and

NOTICE OF ANNUAL GENERAL MEETING

Annual Report 2012 Ryobi Kiso Holdings Ltd. 101

(b) (notwithstanding the authority conferred by this Resolution may have ceased to be in force) issue shares in

pursuant of any Instrument made or granted by the Directors of the Company while this Resolution was in force,

(the “Share Issue Mandate”)

provided that:

(1) the aggregate number of shares (including shares to be issued in pursuant to the Instruments, made or

granted pursuant to this Resolution) and Instruments to be issued pursuant to this Resolution shall not

exceed fi fty per centum (50%) of the total number of issued shares (excluding treasury shares) in the capital

of the Company (as calculated in accordance with sub-paragraph (2) below), of which the aggregate

number of shares and Instruments to be issued other than on a pro rata basis to existing shareholders of

the Company shall not exceed twenty per centum (20%) of the total number of issued shares (excluding

treasury shares) in the capital of the Company (as calculated in accordance with sub-paragraph (2) below);

(2) (subject to such calculation as may be prescribed by the SGX-ST) for the purpose of determining the

aggregate number of shares and Instruments that may be issued under sub-paragraph (1) above, the total

number of issued shares and Instruments shall be based on the total number of issued shares (excluding

treasury 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 the Instruments or any convertible securities;

(b) new shares arising from exercising share options or vesting of share awards outstanding and

subsisting at the time of the passing of this Resolution; and

(c) any subsequent bonus issue, consolidation or subdivision of shares;

(3) in exercising the Share Issue Mandate conferred by this Resolution, the Company shall comply with the

provisions of the Listing Manual of the SGX-ST for the time being in force (unless such compliance has

been waived by the SGX-ST) and the Articles of Association of the Company; and

(4) unless revoked or varied by the Company in a general meeting, the Share Issue Mandate shall continue in

force (i) 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 earlier or (ii) in the

case of shares to be issued in pursuance of the Instruments, made or granted pursuant to this Resolution,

until the issuance of such shares in accordance with the terms of the Instruments.

(Resolution 8) [See Explanatory Note (iv)]

10. Renewal of the Share Buyback Mandate

That for the purposes of Sections 76C and 76E of the Companies Act, Chapter 50, the Directors of the Company be and

are hereby authorised to make purchases or otherwise acquire issued shares in the capital of the Company from time to

time (whether by way of market purchases or off-market purchases on an equal access scheme) of up to ten per centum

(10%) of the total number of issued shares (excluding treasury shares) in the capital of the Company (as ascertained as

at the date of Annual General Meeting of the Company) at the price of up to but not exceeding the Maximum Price as

defi ned in the Appendix to this Notice of Annual General Meeting dated 9 October 2012 (the “Letter”), in accordance with

the terms of the Share Buyback Mandate set out in the Letter, and this mandate shall, unless revoked or varied by the

Company in general meeting, 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 earlier.

(Resolution 9) [See Explanatory Note (v)]

NOTICE OF ANNUAL GENERAL MEETING

102 Ryobi Kiso Holdings Ltd. Annual Report 2012

NOTICE OF BOOK CLOSURE DATE FOR FINAL DIVIDEND

NOTICE IS HEREBY GIVEN that the Share Transfer Books and the Register of Members of the Company will be closed from

5.00 p.m. (Books Closure Date) on 2 November 2012 for the preparation of dividend warrants.

Duly completed registrable transfer received by the Company’s Share Registrar, B.A.C.S. Private Limited, 63 Cantonment Road,

Singapore 089758, up to 5.00 p.m. on the Books Closure Date will be registered to determine shareholders’ entitlement to the

fi nal dividend. In respect of the ordinary shares in securities accounts with The Central Depository (Pte) Limited (CDP), the fi nal

dividend will be paid by the Company to CDP which will, in turn, distribute the fi nal dividend entitlements to the CDP account

holders in accordance with its normal practice.

Payment of the fi nal dividend, if approved by the members at the Annual General Meeting, will be paid on 14 November 2012.

By Order of the Board

Wong Chee Meng Lawrence

Tan Ghee Hwa

Joint Company Secretaries

Singapore

9 October 2012

Explanatory Notes:

(i) Ms Lai Chin Yee will, upon re-election as a Director of the Company, remain as Chairman of the Audit Committee, a member of the

Nominating Committee and Remuneration Committee respectively and will be considered independent.

(ii) Dr Lau Teik Soon will, upon re-election and re-appointment as a Director of the Company, remain as Chairman of the Nominating

Committee and Remuneration Committee, and a member of the Audit Committee respectively and will be considered independent.

(iii) Mr Lee Yiok Seng @ Lee Geok Seng @ Lee Yok Seng will, upon re-appointment as a Director of the Company, remain as Chairman of the

Board, a member of the Audit Committee, Remuneration Committee and Nominating Committee respectively and will be considered non-

independent.

(iv) Resolution 8 above, if passed, will empower the Directors of the Company from the date of this Annual General Meeting (“AGM”) until the

date of the next AGM of the Company, or the date by which the next AGM of the Company is required by law to be held or such authority

is varied or revoked by the Company in a general meeting, whichever is the earlier, to issue shares, make or grant instruments convertible

into shares and to issue shares pursuant to such instruments, up to a number not exceeding, in total, fi fty per centum (50%) of the total

number of issued shares (excluding treasury shares) in the capital of the Company, of which up to twenty per centum (20%) may be issued

other than on a pro rata basis to existing shareholders of the Company.

For determining the aggregate number of shares that may be issued, the percentage of issued shares in the capital of the Company

will be calculated based on the total number of issued shares (excluding treasury shares) in the capital of the Company at the time this

Resolution is passed after adjusting for new shares arising from the conversion or exercise of the Instruments or any convertible securities,

the exercise of share options or the vesting of share awards outstanding or subsisting at the time when this Resolution is passed and any

subsequent bonus issue, consolidation or subdivision of shares.

(v) Resolution 9 above, if passed, will empower the Directors of the Company from the date of this AGM until the next AGM of the Company

or the date by which the next AGM of the Company is required by law to be held, whichever is the earlier, to purchase ordinary shares of

the Company by way of market purchases or off-market purchases of up to ten per centum (10%) of the total number of issued shares

(excluding treasury shares) in the capital of the Company up to the Maximum Price as defi ned in Appendix to the Letter. The rationale for,

the authority and limitation on, the sources of funds to be used for the purchase or acquisition including the amount of fi nancing and the

fi nancial effects of the purchase or acquisition of ordinary shares by the Company pursuant to the Share Purchase Mandate on the audited

consolidated fi nancial statements of the Company for the fi nancial year ended 30 June 2012 are set out in greater detail in the Letter.

Notes:

1. A Member entitled to attend and vote at the AGM is entitled to appoint a proxy to attend and vote in his/her stead. A proxy need not be a

Member of the Company.

2. The instrument appointing a proxy must be deposited at the Registered Offi ce of the Company at 58A Sungei Kadut Loop, Ryobi Industrial

Building, Singapore 729505 not less than forty-eight (48) hours before the time appointed for holding the AGM.

RYOBI KISO HOLDINGS LTD.(Company Registration No. 200803985D) (Incorporated in the Republic of Singapore)

PROXY FORM(Please see notes overleaf before completing this Form)

I/We,

of

being a member/members of RYOBI KISO HOLDINGS LTD. (the “Company”), hereby appoint:

Name NRIC/Passport No. Proportion of Shareholdings

No. of Shares %

Address

and/or (delete as appropriate)

Name NRIC/Passport No. Proportion of Shareholdings

No. of Shares %

Address

or failing the person, or either or both of the persons, referred to above, the Chairman of the Meeting as my/our proxy/proxies to

vote for me/us on my/our behalf at the Annual General Meeting (the “Meeting”) of the Company to be held at Conference Room,

6 Battery Road, #10-01, Singapore 049909, on Wednesday, 24 October 2012 at 10.00 a.m. and at any adjournment thereof. I/

We direct my/our proxy/proxies to vote for or against the Resolutions proposed at the Meeting as indicated hereunder. If no

specifi c direction as to voting is given or in the event of any other matter arising at the Meeting and at any adjournment thereof,

the proxy/proxies will vote or abstain from voting at his/her discretion. The authority herein includes the right to demand or to join

in demanding a poll and to vote on a poll.

(Please indicate your vote “For” or “Against” with a tick [] within the box provided.)

No. Resolutions relating to: For AgainstOrdinary Business1 Directors’ Report and Audited Accounts for the fi nancial year ended 30 June 2012

2 Payment of proposed tax exempt one-tier fi nal dividend of 0.30 Singapore cents per ordinary

share for the fi nancial year ended 30 June 2012

3 Re-election of Ms Lai Chin Yee as a Director

4 Re-election and re-appointment of Dr Lau Teik Soon as a Director

5 Re-appointment of Mr Lee Yiok Seng @ Lee Geok Seng @ Lee Yok Seng as a Director

6 Approval of Directors’ Fees amounting to $204,000

7 Re-appointment of Messrs Nexia TS Public Accounting Corporation as independent auditors

Special Business8 Authority to issue shares

9 Renewal of Share Buyback Mandate

Dated this day of 2012

Signature of Shareholder(s)

or, Common Seal of Corporate Shareholder

IMPORTANT: PLEASE READ NOTES OVERLEAF

IMPORTANT:1. For investors who have used their CPF monies to buy Ryobi Kiso Holdings

Ltd.’s shares, this Report is forwarded to them at the request of the CPF

Approved Nominees and is sent solely FOR INFORMATION ONLY.

2. This Proxy Form is not valid for use by CPF investors and shall be ineffective

for all intents and purposes if used or purported to be used by them.

3. CPF investors who wish to attend the Meeting as an observer must submit

their requests through their CPF Approved Nominees within the time frame

specifi ed. If they also wish to vote, they must submit their voting instructions

to the CPF Approved Nominees within the time frame specifi ed to enable

them to vote on their behalf.

Total number of Shares in: No. of Shares

(a) CDP Register

(b) Register of Members

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 defi ned

in Section 130A of the Companies Act, Chapter 50 of Singapore), you should insert that number of Shares. If you have Shares registered

in your name in the Register of Members, you should insert that number of Shares. If you have Shares entered against your name in the

Depository Register and Shares registered in your name in the Register of Members, you should insert the aggregate number of Shares

entered against your name in the Depository Register and registered in your name in the Register of Members. If no number is inserted, the

instrument appointing a proxy or proxies shall be deemed to relate to all the Shares held by you.

2. A member of the Company entitled to attend and vote at a meeting of the Company is entitled to appoint one or two proxies to attend and

vote in his/her stead. A proxy need not be a member of the Company.

3. Where a member appoints more than one proxy, he/she shall specify the proportion of his/her shareholding to be represented by each

proxy. If no such proportion or number is specifi ed the appointments shall be invalid unless he/she specifi es the proportion of his/her

shareholding (expressed as a percentage of the whole) to be represented by each proxy.

4. Completion and return of this instrument appointing a proxy shall not preclude a member from attending and voting at the Meeting. Any

appointment of a proxy or proxies shall be deemed to be revoked if a member attends the meeting in person, and in such event, the

Company reserves the right to refuse to admit any person or persons appointed under the instrument of proxy to the Meeting.

5. The instrument appointing a proxy or proxies must be deposited at the registered offi ce of the Company at 58A, Sungei Kadut Loop, Ryobi

Industrial Building, Singapore 729505 not less than forty-eight (48) hours before the time appointed for the Meeting.

6. The instrument appointing a proxy or proxies must be under the hand of the appointor or of his/her attorney duly authorised in writing.

Where the instrument appointing a proxy or proxies is executed by a corporation, it must be executed either under its seal or under the

hand of an offi cer or attorney duly authorised. Where the instrument appointing a proxy or proxies is executed by an attorney on behalf of

the appointor, the letter or power of attorney or a duly certifi ed copy thereof must be lodged with the instrument.

7. A corporation which is a member may authorise by resolution of its directors or other governing body such person as it thinks fi t to act as

its representative at the Meeting, in accordance with Section 179 of the Companies Act, Chapter 50 of Singapore.

General:

The Company shall be entitled to reject the instrument appointing a proxy or proxies if it is incomplete, improperly completed or illegible, or where

the true intentions of the appointor are not ascertainable from the instructions of the appointor specifi ed in the instrument appointing a proxy

or proxies. In addition, in the case of Shares entered in the Depository Register, the Company may reject any instrument appointing a proxy or

proxies lodged if the member, being the appointor, is not shown to have Shares entered against his/her name in the Depository Register as at

forty-eight (48) hours before the time appointed for holding the Meeting, as certifi ed by The Central Depository (Pte) Limited to the Company.

Annual Report 2012 Ryobi Kiso Holdings Ltd. 21

Board of DirectorsLeeYiokSeng@LeeGeokSeng@LeeYokSeng

(Chairman and Non-Executive Director)

Ong Tiong Siew (Chief Executive Officer and Executive Director)

Ong Teng Choon (Executive Director)

Lai Chin Yee (Lead Independent Director)

Dr Lau Teik Soon (Independent Director)

Audit CommitteeLai Chin Yee (Chairman)

Lee Yiok Seng

Dr Lau Teik Soon

Nominating CommitteeDr Lau Teik Soon (Chairman)

Lee Yiok Seng

Lai Chin Yee

Remuneration CommitteeDr Lau Teik Soon (Chairman)

Lee Yiok Seng

Lai Chin Yee

Company SecretariesWong Chee Meng Lawrence, LL.B (Hons)

Tan Ghee Hwa, FCCA

Registered Office58A Sungei Kadut Loop

Ryobi Industrial Building

Singapore 729505

Tel: 65060000

Fax: 65060003

Website: www.ryobi-kiso.com

Share RegistrarB.A.C.S Private Limited

63 Cantonment Road

Singapore 089758

Tel: 65934848

Fax: 65934847

Email:[email protected]

Investor RelationsCapital Access Communications Pte. Ltd.

12 Prince Edward Road

Bestway Building #06-05 Podium B Singapore 079212

Tel: 62207567/ 62207728

Fax: 62207229

Contact: Edwin Lee/Neo Aik Kee

Email:[email protected]/

[email protected]

Independent AuditorNexia TS Public Accounting Corporation

Public Accountants and Certified Public Accountants

100 Beach Road

Shaw Tower #30-00

Singapore 189702

Director-in-charge: Kristin YS Kim (Appointed since Financial Year

Ended 30 June 2009)

Principal BankersOverseas-Chinese Banking Corporation Limited

Standard Chartered Bank

CORPORATE INFORMATION

58A Sungei Kadut LoopRyobi Industr ia l Bui ldingSingapore 729505Tel : +65 6506 0000Fax : +65 6506 0003

Company Registration No. 200803985D

www.ryobi-kiso.com