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