YOUR INTEGRATED SOLUTION PROVIDERgke.listedcompany.com/misc/ar2013.pdf4 GKE Corporation Limited /...

GK

E CO

RP

OR

ATIO

N LIM

ITED A

NN

UA

L REP

OR

T 2013

YOUR INTEGRATEDSOLUTION PROVIDER

CORPORATION LIMITED

CORPORATION LIMITED

Vision

Mission

To become a leading integrated logistics service provider in the region, offering

efficient, reliable and quality warehousing and logistics support to the local and

overseas market by leveraging on technology and operational excellence.

Constantly seeking opportunities for rapid growth through investments and joint

ventures while dedicating sufficient effort and focus to ensure sustainability in all

our business segments. To delivery effective solutions for our clients and value

for our stakeholder.

Values

Customer focused – strive to understand our customers’ needs and offer

innovative and effective solutions.

People – value and develop staff who are passionate and

committed.

Integrity – honest and deliver what we promised.

Team work – practice open communication with trust and respect for

achieving common goals.

Safety – take personal responsibility to think safety and act

safety.

Designed and produced by

(65) 6578 6522

BOARD OF DIRECTORS

Mr. Chen Yong Hua

Executive Chairman and

Executive Director

Mr. Neo Cheow Hui

Chief Executive Officer and

Executive Director

Mr. Neo Kok Ching

Executive Investment Director

Mr. Er Kwong Wah

Independent Director

Mr. Mahtani Bhagwandas


Ms. Angelic Cheah Yee Ping


Mr. Liu Ji Chun

Non-Executive Director

Mr. Wang Jian Wen


Mr. Wang Jian Ping

Alternate Director to

Mr. Wang Jian Wen

COMPANY SECRETARY

Ms. Shirley Tan Sey Liy (ACIS)

SHARE REGISTRAR

M & C Services Private Limited

112 Robinson Road #05-01

Singapore 068902

AUDIT COMMITTEE

Mr. Er Kwong Wah – Chairman



NOMINATING COMMITTEE


– Chairman

Mr. Er Kwong Wah


REMUNERATION COMMITTEE




AUDITORS

Ernst & Young LLP

Certified Public Accountants

One Raffles Quay

North Tower, Lever 18

Singapore 048583

Partner-in-charge:

Mr. Tan Swee Ho

(Appointed on 30 September 2011)

LEGAL COUNSEL

Opal Lawyers LLC

30 Raffles Place #19-04

Chevron House

Singapore 0408622

CONTINUING SPONSORS

RHT Capital Pte. Ltd.

Six Battery Road #10-01

Singapore 049909

Registered Professional:

Mr. Wong Chee Meng Lawrence

PRINCIPAL BANKER

United Overseas Bank Limited

80 Raffles Place

UOB Plaza

Singapore 048624

REGISTERED OFFICE

30 Pioneer Road

Singapore 628502

Tel:(65) 6261 7770

Fax:(65) 6266 2557

Website: www.gke.com.sg

Corporate Information /

Contents

2 Corporate Profile

3 Group Financial Highlights

5 Corporate Structure as at 31 May 2013

12 Chairman’s & CEO’s Statement

15 Operational Review

18 Board of Directors

22 Senior Management

24 Report of Corporate Governance

42 Directors’ Report

46 Statement by Directors

47 Independent Auditor’s Report

49 Consolidated Income Statement

50 Consolidated Statement of Comprehensive Income

51 Balance Sheets

53 Statements of Changes in Equity

56 Consolidated Statement of Cash Flows

58 Notes to the Financial Statements

147 Statistics of Shareholdings

149 Notice of Annual General Meeting

Proxy Form

This annual report has been reviewed by the Company’s Sponsor, RHT Capital Pte. Ltd., for compliance with the relevant rules of the Singapore Exchange Securities Trading Limited (‘SGX-ST’). The Company’s Sponsor has not independently verified the contents of this annual report.

This annual report has not been examined or approved by the SGX-ST and the SGX-ST assumes no responsibility for the contents of this annual report, including the correctness of any of the statements or opinions made or reports contained in this annual report.

The details of the contact person for the Sponsor is:

Name: Mr. Wong Chee Meng Lawrence (Registered Professional, RHT Capital Pte. Ltd.)Address: Six Battery Road, #10-01, Singapore 049909Tel: 6381 6757

GKE Corporation Limited / Annual Report 2013 1

2 GKE Corporation Limited / Annual Report 2013

Corporate Profile /

The business activity of GKE Corporation Limited (“GKE”)’s group of companies is currently focused mainly

on Third Party Logistics.

Third Party Logistics

GKE operates the logistics business under the brand name of GKE, providing a total integrated

comprehensive logistics service. Operations are broadly classified into:

• General Warehousing

• Containers Trucking

• Conventional Transportation

• Projects Logistics

• International Multimodal Freight Forwarding Services

• Cranes Services

• Non-ferrous Metal Storage

General logistics services are provided by GKE Warehousing & Logistics Pte Ltd. Its includes a wide range

of logistics services for customer in consumer products, oil & gas and retail industries supported by our

multimodal transportation in sea, air and land through GKE Freight Pte Ltd and GKE Air Logistics Pte Ltd.

Adding to GKE’s capabilities, GKE Express Logistics Pte Ltd provides heavy haulage, out-of-gauge (OOG) or

non-standard/abnormal-sized cargo transportation through a large fleet or prime movers and trailers. On top

on this, GKE & Mohseng Pte. Ltd. also provides crane services for loading and unloading cargo which will

expand the current range of logistics services and enhance our project logistics capabilities and allow GKE

to strategically develop into a stronger logistics player in the long term.

Metal logistics services are operated in Singapore and Shanghai by GKE’s associate, GKE Metal Logistics

Pte Ltd, a warehouse operator approved by the London Metal Exchange (LME) to take custody of non-ferrous

metals traded on the LME.


Group Financial Highlights /

FY2011

28,492

FY2012

35,558 26,538

FY2013

FY2011

4,904

FY2012

2,255

10,128

FY2013

FY2011

62,940

FY2012

56,962 77,913

FY2013

FY2011

0.94

FY2012

0.11

2.20

FY2013

REVENUE (S$’000)

OPERATING PATMI (S$’000)

NET ASSETS VALUE (S$’000)

EPS (cents)


Group Financial Highlights /

Financial Year Ended 31 May

2013 2012 2011

FOR ThE YEAR (S$’000)

Revenue 26,538 35,558 28,492

Profit

EBITDA 13,235 5,846 8,579

Operating 9,963 2,329 5,128

Before tax 9,870 3,142 6,230

PATMI 10,128 523 4,365

Operating PATMI 10,128 2,255 4,904

PER ShARE

Earnings (Singapore cents)

Before tax 2.14 0.68 1.34

PATMI 2.20 0.11 0.94

Operating PATMI 2.16 0.50 1.11

Weighted average number of issued shares (thousand) 460,744 463,364 463,364

Number of issued shares as at 31 May (thousand) 463,364 463,364 463,364

AT YEAR-ENd (S$’000)

Net assets 77,913 56,962 62,940

Net tangible assets 74,316 53,393 62,940

Shareholders’ funds 74,225 54,670 60,557

Minority interests 3,688 2,292 2,383

Capital employed 62,215 62,215 62,215

Total borrowings 6,594 293 1,985

Debt-to-equity ratio 8.5% 0.5% 3.2%

RETURN ON ShAREhOLdERS’ FUNdS (%)

Profit before tax 13.3% 5.7% 10.3%

PATMI 13.6% 1.0% 7.2%

ShAREhOLdERS’ VALUE

Distribution

Final dividend (Singapore cents per share) 0.3 0.3 1.0

Share price as at 31 May (S$) 0.14 0.14 0.13

Note:

EBITDA – Earnings Before Interest, Taxes, Depreciation and Amortisation.PATMI – Profit After Tax and Non-Controlling Interests.Operating PATMI – Profit from continuing operations After Tax and Non-Controlling Interests.


Corporate Structure as at 31 May 2013 /

GKE CORPORATION LIMITED

SHIPPING LOGISTICS

THIRD PARTY LOGISTICS

GKE WAREHOUSING & LOGISTICS PTE LTD

GKE EXPRESS LOGISTICS PTE LTD

GKE FREIGHT PTE LTD

GKE AIR LOGISTICS PTE. LTD.

GKE PRIVATE LIMITED

PT GKE INDONESIA

PT GKE INVESTMENT

100% 100%

100%

100%

100%

100%

1%

GKE SHIPPING CO., LTD GKE HOLDINGS (HK) CO., LTD

WUzHOU XING JIAN READyMIX CO., LTD.

INFRASTRUCTURAL LOGISTICS

100%

1%99%

60%

GKE & MOHSENG PTE. LTD.

60%

65%

49%

VAN DER HORST LOGISTICS LIMITED (BVI)

GKE METAL LOGISTICS PTE LTD (Associate)

GKE (SHANGHAI) METAL LOGISTICS CO., LTD

SHANGHAI GKE LOGISTICS CO., LTD

VAN DER HORST (SHANGHAI) LOGISTICS

CO., LTD

100%

65%

100%

99%


GKE Freight Pte LtdGKE Freight has a team of staff who are committed

and responsive to meet the freight forwarding

requirement of all our customers. We have a

worldwide network of overseas agents to cater to all

our International Freight requirement.

GKE Express Logistics Pte LtdGKE Express Logistics operates our specialized

project logistics business. The services provided

by this business unit include the provision of heavy

haulage services, marine transportation services and

project management services.

GKE Warehousing & Logistics Pte LtdGKE Warehousing & Logistics has a dedicated team

of personnel who are trained and experienced to

provide the general logistics services.

GKE Metal Logistics Pte LtdGKE Metal Logistics is an approved London Metal

Exchange (LME) warehouse service provider.

We act as custodians for the storage and handling of

the non-ferrous metals that are traded on the LME,

where the strict criteria of the LME are to be met and

adhered to at all time.

GKE Metal Warehouse Receipts are international

recognised and accepted as a transferable and

negotiable document for the trading and warehouse

financing of the cargoes managed by us.

EffectiveSolutions


No. 30 Pioneer Road, with approximately Gross Floor Area of 280,000 squa

re foo

t


Delivering Solutions,Building Value

No. 6 Pioneer Walk, with approximately Gross Floor Area of 290,000 square foot

10 GKE Corporation Limited / Annual Report 201310 GKE Corporation Limited / Annual Report 2013

Striving for


Excellence

12 GKE Corporation Limited/Annual Report 2013

Chairman’s & CEO’s Statement /

DEar SharEholDErSYear in Review

We begin the year with continued efforts from last year to expand our core logistics business and revaluating business segments. In financial year 2013, we have incorporated several subsidiaries in anticipation of our expansion plans both locally and overseas. The Group intends to further expand the provision of logistics services into the various niche market here in Singapore, for example; chemical storage and shipping logistics. Amid the challenging business landscape, it is critical that we differentiate ourselves to enhance our market position.

Towards the financial year end, the Group has announced the proposed acquisition of two warehouses at No. 6 Pioneer Walk and No. 39 Benoi Road (subject to shareholders’ approval). Along with our current facilities at No. 1 Jalan Besut and No. 30 Pioneer Road, the Group now has close to 900,000 square foot of warehousing cum office facilities in Singapore.

During the financial year, the Group was involved in several mergers and acquisitions which will continue to keep us busy going into the new financial year.

Following the disposal of partial shareholdings in GKE Metal Logistics Pte Ltd during the financial year, the Group recorded a decrease in revenue. But however, the remaining logistics subsidiaries continued to be profitable and experienced a marginal volume increase in Singapore accordingly.

Administrative expenses rose in tandem with the higher volume of operational activities, as the Group continued to ramp up its business development and expansion efforts. Overall, the Group registered a net profit before taxes of S$10 million, translating to earnings per share of 2.20 Singapore cents in financial year 2013.

Strengthening Our Capabilities

The Group is focused on expansion by strengthening our capabilities via acquisitions of new assets and diversification into the provision of niche logistics services to our customers.

During the financial year, the Group has incorporated a wholly-owned subsidiary in Wuzhou, China which principal activities will be the production and manufacturing of cement products. We hope to find success with our first step into the infrastructural logistics in China and ride along the rising infrastructure developments in the region.

As announced subsequent to the financial year end, the Group has also proposed to acquire a warehouse which is strategically located within the Shanghai Waigaoqiao Free Trade Zone, the first free trade zone established in China. Together with the due to be completed warehouse in Shanghai, Yangshan, the Group would have 400,000 square foot of warehousing facility in Shanghai, China. With these new additions, we expect to strengthen our presence in this region.

In August 2013, the China’s State Council has approved the establishment of a pilot free trade zone in Shanghai.

The new zone will be built on the basis of existing bonded zones, which are the Waigaoqiao Free Trade Zone, Waigaoqiao Free Trade Logistics Park, Yangshan Free Trade Port Area and Pudong Airport Comprehensive Free Trade Zone. The State Council has submitted plans to the Standing Committee of the National People’s Congress, the country’s top legislature, to revise some administrative approval procedures in the zone.

The Group is of the view that these new changes will further stimulate the business volumes at these areas in China.

Pending your endorsement this coming Annual General Meeting, we expect our proposed acquisitions of the warehouse at No. 39 Benoi Road and Waigaoqiao, Shanghai to greatly enhance our operational capabilities and propel the Group to a higher platform.

Looking ahead, the growth in Asia is likely to continue to be moderate. However, with our newly acquired assets, the Group is in a better position to expand further in this sector.

Our expansion has not ended and we will continue to invest strategically to enhance our capabilities and value-added services. Moving forward, we will continue to focus on our expansion strategy to position the Group for long-term sustainable growth.

delivering Shareholder Value

The Board of Directors have recommended the first and final dividend of 0.3 Singapore cents per share for the financial year ended 31 May 2013. The first and final dividend will be paid at the payment date determined by the Directors of the Company after shareholders’ approval of the Company at the Annual General Meeting, which will convene on 30 September 2013.

Acknowledgements and Appreciation

On behalf of the Board of Directors, I sincerely acknowledge the contribution made by all my fellow Directors and staff of their dedicated services to the Company. I would also like to express my sincere thanks to all customers, vendors, business partners, bankers and shareholders for the continued support throughout the year.

GKE will be experiencing exciting years ahead and we look forward to everyone’s support as we strive to bring the Group to the next level of growth.

GKE Corporation Limited/Annual Report 2013 13

Chairman’s & CEO’s Statement /

Mr Chen Yong huaExecutive Chairmanand Executive Director

Mr Neo Cheow huiChief Executive Officerand Executive Director

“”

The Group now has close to 900,000 square foot of warehouse cum office facilities in Singapore

14 GKE Corporation Limited/Annual Report 2013

主席与总裁致詞 /

尊敬的各位股東：

本年度回顧

2013財政年度，是錦佳集團邁向新里程的重要一年。集團秉承持續發展的良好態勢，拓展核心物流業務，對旗下各業務部門重新進行評估。集團按照業務發展計劃，構建多元化業務，涉及多項企業合併與收購，在新加坡本地及海外分別開設分公司，為進入新加坡市場做好充分準備，例如：高危化學物品的倉儲與運輸。我們將把握機遇，繼續向目標邁進。

本財政年內，因集團出售部分旗下子公司股份——錦佳金屬物流私人有限公司，對比上年度營業額有所下滑，但其余物流子公司業績仍保持強勁利潤回報率，新加坡本地市場的邊際交易量呈上升趨勢。

集團積極拓展業務，高業務量的運營活動提升行政成本的增長。縱觀2013財政年，錦佳集團創收了1,000萬新加坡元的稅前利潤，每股收益達到2.20新加坡分。

根據本財政年度的公告，集團提議收購位於先驅走道6號以及萬萊路39號的二間倉庫。連同現擁有的位於加冷巴蘇1號及先驅路30號的倉庫与辦公樓，集團在新加坡的倉庫与辦公樓總面積將接近於900, 000平方英尺。

我們將繼續努力，昂首闊步的邁入新的一年。

提高加強集團自身能力

在本財政年，集團在中國梧州市投資成立了全資子公司，製造生產混凝土產品。我們希望，這將是我們在中國邁入基礎設施物流領域成功的第一步，將推動區域基礎設施發展。

根據財政年度後所做出的公告，集團已提議收購一間具有戰略意義的倉庫。該倉庫位於上海市外高橋免稅區，中國首個免稅地塊。2013年8月，中國國務院已批准在上海建立自由貿易試點區。自由貿易區將在現有免稅區的基礎上建立，分為外高橋免稅區，外高橋自由貿易物流園，洋山自由貿易港口及浦東機場綜合自由貿易區。我們收購的倉庫位於自由貿易區內。加上我們位於上海洋山深水港倉庫落成後，集團在中國上海的倉庫總面積將會達到400,000平方英尺。新資產投入運營後，中國區的倉儲業務將不斷拓展，將會大大增加集團的實力。

新加坡萬萊路39號和上海外高橋倉庫的收購提議，在來臨的年度大會上穫得股東的批准後，我們預期將會大幅提高集團運營能力，引領集團進入又一新的巔峰。

放眼未來，亞洲經濟增長將會繼續保持適中步伐。相比之下，擁有新購資產的集團正蓄勢待發。我們將以戰略性投資眼光，時刻不忘加強集團自身發展能力，提高各項增值業務。集團的擴展計劃將更注重於可提供長期穩定增長的項目及業務。我們堅信：在瞬息萬變的市場中，唯有憑借矢志不移的信念，勇於嘗試，我們才能脫穎而出，公司業務才能保持高效穩定增長，為公司股東進一步創造更美好的未來。

實現股東價值

集團董事會已建議為2013財政年派發每股0.3新加坡分的年初和年終股息，在2013年9月30日所召開的年度股東大會上，董事會將向股東提交此申請。待批准後，公司董事將擇日向各位股東派發。

鳴謝

我謹代表錦佳集團董事會，向做出卓越貢獻的各位董事及各位員工、向所有一如既往支持集團的客戶、供應商、商業伙伴、銀行及股東表示衷心的感謝。

錦佳集團在新的一年裡將會面對各種挑戰，各位的支持是幫助集團茁壯成長的力量源泉，即使未來充滿坎坷，我們團結一致，天塹也將變通途。

陳永华梁昭輝主席總裁


Operational Review /

Investment holding Segment

During the financial year under review, the Group ramped up its expansion strategy in growing our existing core logistics business which forms the backbone of our extended presence in the local market.

In March 2013, the Group entered into a joint venture with Moh Seng Cranes Pte Ltd who has more than 50 years of experience in the crane services business and is well recognised as one of the top 20 crane suppliers in Singapore. The tie up will expand the current range of logistics services and enhance our project logistics capabilities which could be provided to customers and the Group could strategically develop into a stronger logistics player in the long term.

The Group has also incorporated a wholly owned subsidiary on May 2013, Wuzhou Xing Jian Readymix Co., Ltd in China with a paid up capital of RMB25 million. The Group is of the opinion that the divestment into infrastructural logistics will further enhance the capabilities in the long term and also ride along the growing construction economy in China.

Subsequent to the financial year end, the Group has completed the acquisition of property at No. 6 Pioneer Walk on 21 June 2013. In August 2013, the Group has obtained the in-principle approval from JTC to purchase the property at No. 39 Benoi Road which is adjacent to our current warehouse cum office facility at No. 30 Pioneer Road. The completed and potential acquisitions will strategically enhance the value of our current warehouse and which will greatly increase the warehousing capacity of the Group locally.

Our expansion plans were not only limited to Singapore. In August 2013, the Group had also entered into a sale and purchase agreement to acquire an industrial property situated in Waigaoqiao Free Trade Zone, Shanghai, China. The potential acquisition will enable the Group to utilise the existing warehouse facilities and expand its warehousing capacity for its logistics business in Shanghai.

The Group’s construction of a three-storey warehouse at the new port area of Shanghai, Yangshan for a lease period of 50 years will be completed by November 2013. Together with the potential acquisition of Waigaoqiao, the Group will have approximately 400,000 square foot of warehouse space at strategic locations which will solidify our presence in Shanghai.


Operational Review /Operational Review /

Logistics Segment

For the financial year 2013, our warehousing division continued its strong performance and has been enjoying close to 95% capacity utilisation. We have also enhanced our IT infrastructure to better provide solutions to our customers. The solution we provide to our clients involves setting up of system interfaces with our client’s processes so as to achieve greater flow of inventory information. The availability of information on a timely basis provides for better planning and decision making, thereby enhancing efficiency. Our Warehouse Management System records all events and activities in the receipt, handling, storage of products and orders in the warehouse, including the location of inventory.

Our IT infrastructure consists of

– EDI

– Radio frequency bar coding

– Warehouse Management System

– Portnet and tradenet

As the global market remained volatile and unpredictable, the volume growth for our transportation and freight division were marginal for this financial year. In order to improve our business model, our freight division has incorporated a subsidiary, GKE Air Logistics Pte. Ltd. specializing in the aerospace industry. It has also expanded its existing services to offer customers Cross Border transportation from Singapore up to as far as Thailand (vice versa) via road not only for LCL/FCL consignments but also project cargoes across borders.

Our transportation division has also further secured another 3 years contract for the PSA Inter-gateway haulage offering movement of containers between PSA gateways.

Financials

The Group’s revenue decreased by 25.4% from S$35.6 million to S$26.5 million mainly due to the disposal of 51% shareholdings in GKE Metal Logistics Pte Ltd and its subsidiaries (“Metal Group”) and therefore minimal revenue contributed by Metal Group during the financial year.

The Group’s gross profit reduced by 34.4% from S$11.9 million to S$7.8 million which is in tandem with the decrease in revenue.

The significant increase in other income from S$0.9 million to S$12.9 million is mainly due to the one-time gain on revaluation of investment in associate to fair value, gain on disposal of available-for-sale investments and gain on disposal and liquidation of subsidiaries.

The decrease in marketing and distribution costs is largely due to the disposal of Metal Group.

Administrative expenses registered a 16.9% increase from S$9.5 million to S$11.1 million mainly due to allowance for doubtful debts, increase in staff costs and impairment of available-for-sale investments during the financial year.

Finance cost increase by 7.7% mainly due to additional finance lease liabilities drawdown by the Group during the financial year.

Other expenses for the financial year represents loss on foreign exchange resulted from the appreciation of US dollars payables.

The share of results of associate represent the share of profit from investment in an associate, GKE Metal Logistics Pte Ltd.

The increase in property, plant and equipment from S$36.8 million to S$56.4 million mainly relates to renovation works performed at our warehouse located at No. 1 Jalan Besut, preliminar y construction of the warehouse in Shanghai, China and upwards revaluation of the warehouses located at No. 1 Jalan Besut and No. 30 Pioneer Road in Singapore.

Investment in associate represents the investment of 49% interest in GKE Metal Logistics Pte Ltd.


Operational Review /Operational Review /

Available-for-sale investments decreased from S$2.3 million to S$1.2 million due to disposal of unquoted investment and impairment of quoted investments during the financial year.

Non-current prepayments represent prepayments relating to acquisition of No. 39 Benoi Road and No. 6 Pioneer Walk in Singapore and the prepayment for construction of the warehouse in Shanghai, China.

Increase in trade and other receivables from S$4.4 million to S$6.1 million mainly due to increase in sales volume towards the end of the financial year.

Cash and cash equivalents increased mainly due to proceeds from disposal of subsidiaries received and proceeds from disposal of available-for-sale investments.

Non-current borrowings represent the loan drawdown by the Group’s subsidiary, Van der Horst (Shanghai) Logistics Co., Ltd (“VDHS”) to finance the construction of the warehouse in Shanghai, China. While the current borrowings

represent shor t-term loan drawdown by the Group to finance the acquisition of the warehouse located at No. 6 Pioneer Walk in Singapore.

Deferred tax liabilities increased mainly due to recognition of deferred tax on the revaluation surplus of the 2 warehouses, No. 1 Jalan Besut and No. 30 Pioneer Road in Singapore during the financial year.

Loan from non-controlling interests represents interest-bearing loan given by non-controlling interests to VDHS to finance the construction of the warehouse in Shanghai, China.

Increase in trade and other payables from S$1.2 million to S$1.4 million is in line with the increase in business volume during the financial year.

Finance lease liabilities increased from S$0.3 million to S$3.3 million mainly due to acquisition of cranes under finance lease arrangements during the financial year.


Board of Directors /Board of Directors /

MR. ChEN YONG hUAExecutive Chairman and Executive Director

Mr. Chen Yong Hua was appointed as Executive

Chairman and Executive Director on 12 January 2012.

He has more than 20 years of experience in corporate

leadership and company management. Currently,

Mr. Chen holds several directorships in a few China

companies namely, Dongguan Tian Hua Chuang Zhan

Print Co., Ltd, Shenzhen Huayue Chuangzhan Industrial

Co.,Ltd and Shenzhen Jiachen Investment Co., Ltd.

These companies operate in various industries

mainly building materials, real estate development,

logistics as well as newspaper printing. With his vast

experience, Mr. Chen has an in depth understanding

of China’s economic environment and will be able to

spearhead the Group’s expansion in future.

MR. NEO ChEOW hUIChief Executive Officer and Executive Director

Mr. Neo Cheow Hui was promoted to Chief Executive

Officer on 3 January 2012. He joined the Group in

1995 and has since been directly involved in the

marketing, overall management and daily operations

of the general and metal logistics businesses. With

his extensive experience in strategic and logistics

business management, Mr. Neo leads the senior

management in strengthening the Group’s businesses

and competitiveness for the long-term success of

Group.

Prior to his promotion, Mr. Neo was the Chief

Operating Officer of the Group from 2005 to 2011. He

was responsible for all logistics business operations

and brings with him more than 15 years of experience

in warehousing and logistics industry.


Board of Directors /

MR. NEO KOK ChINGExecutive Investment Director

Mr. Neo Kok Ching was re-designated as the Executive

Investment Director of the Company on 3 January

2012.

Since the inception of the Group in 1995, Mr. Neo is

responsible for its strategic business development

and spearheads its global expansions. He has

numerous years of experience in trading, warehousing

and logistics, and plays a pivotal role in pioneering

the Group’s development.

He is relentlessly committed to the growth of the

Group and will continue to play a leading role in

guiding its future business expansions. Mr. Neo has

former directorships with Chip Hup Timber Pte Ltd and

with both Chip Hup Kee Building Construction Pte Ltd

and Paratrans Industries Sdn Bhd for a period of 11

years respectively.

MR. ER KWONG WAhIndependent Director

Mr. Er Kwong Wah was appointed as an Independent

Director of our Company on 16 April 2007. Mr. Er

is the Chairman of the Audit and Remuneration

Committees. He is also a member of the Nominating

Committee. He has spent 27 years in the service

of the Singapore Government serving various

ministries. He has held Permanent Secretary Position

with Ministry of Education from 1987 – 1994 and

then with Ministry of Community Development until

his retirement in 1998. Currently, Mr. Er holds

directorship of several public listed companies. Mr. Er

was a Colombo Plan and Bank of Tokyo Scholar and

graduated from the University of Toronto, Canada with

a first class honors degree in Electrical Engineering in

1970 and an MBA from Manchester Business School,

University of Manchester in 1978.



MR. MAhTANI BhAGWANdASIndependent Director

Mr. Mahtani Bhagwandas was appointed as an

Independent Director of our Company on 16 December

2002. Mr. Mahtani is the Chairman of the Nominating

Committee and is also a member of the Audit and

Remuneration Committees. He has been practising

as an advocate and solicitor of the Supreme Court of

Singapore since 1993 and is currently a Partner of

LegalStandard LLP, a law firm in Singapore, and has

been, in the preceding seven years, also a director of

Nam Foundation Limited, ECKA Granules of Asia Pte

Ltd, R.S. Hotel Services Pte Ltd, Centre For Cognitive

Technologies Pte Ltd, Ban Joo & Company Limited,

Metalent Resources Pte Ltd, 3 K Engineering Pte

Ltd, Rockingham Singapore Pte Ltd, Arcap Pte Ltd,

Arcam Pte Ltd, Trio B Tech Pte Ltd, UEI Investments

Pte Ltd, IBIS Capital Pte Ltd, Arpharma Pte Ltd and

Superbound Technologies Inc Pte Ltd. Mr. Mahtani

graduated from the National University of Singapore

with a Bachelor of Laws (Honours) degree in 1992.

MS. ANGELIC ChEAh YEE PINGIndependent Director

Ms. Angelic Cheah was appointed as an Independent

Director of our Company on 14 January 2008. She is

a member of the Audit, Remuneration and Nominating

Committees. Currently she is the Managing Director

of PACAL Consulting Pte Ltd, specializing in corporate

advisory services for investments; acquisitions; fund

raising and financing for clienteles worldwide. She

is also the Director on the Board of various private

limited companies.

She has been involved in high profile restructuring

work; recapitalization for the companies and

successfully turn the companies around. Her

discerning ability in sieving out valued investments

through her thorough knowledge of business models

had produced respectable returns for investors and

stakeholders.

As a strong advocate in helping under-privileged

children, she is active in volunteering; producing

and managing community development and social

programs in Singapore and in the region.



MR. LIU JI ChUNNon-Executive Director

Mr. Liu Ji Chun was appointed as

a Non-Executive Director of our

company on 1 November 2005.

Mr. Liu has been involved for

more than 20 years in corporate

operations and management and has

accumulated rich experiences in the

fields of shipping management as

well as logistics. At present, he is the

Chairman of Wideshine Enterprises

Ltd. with headquarter in Guangzhou

PRC. Wideshine covers a wide-range

of business including shipbuilding

& trade, special-ship operations

especially in LPG tankers and asphalt

carriers, international freight forwarding

service, warehousing, manufacture of

stainless steel kettles and cookware

accessories and other investments.

Mr. Liu plays a key role in its business

expansion and development. He is

also the vice-chairman of Guangdong

Hunan Chamber of Commerce and he

has been continuously contributing

to the economic communication and

cooperation between Guangdong and

Hunan. Mr. Liu holds a Master Degree

in Business Administration from

University of Western Sydney, Australia.

MR. WANG JIAN WENNon-Executive Director(not in picture)

Mr. Wang Jian Wen was appointed

as a Non-Executive Director on

12 January 2012. He is currently

the Chairman of Shandong Ruihua

Construction Machinery Co., Ltd and

Shandong Jiacheng Construction

Machiner y Co., Ltd. Under his

leadersh ip , Shandong Ru ihua

Construction Machinery Co., Ltd

is the sole agent in Shandong

for Komatsu. In 2005, Shandong

Ruihua Construction Machinery Co.,

Ltd. has invested in a 4S factory

which has high-grade and high-

specification in Jining. It is now a

well-known enterprise in the province

of Shandong.

MR. WANG JIAN PINGAlternate Director to Wang Jian Wen

Mr. Wang Jian Ping was appointed

as an Alternate Director to Wang

Jian Wen on 12 January 2012. He

is currently the General Manager

of Shantui Construction Machinery

Co., Ltd, Vice-president of KOMATSU

China Agent Association, Chairman

of Hunan Xiangsong Construction

Machinery Co., Ltd. which is the

sole agent of KOMATSU in Hunan,

Shareholder of Guang Dong Komatsu

Construction Machinery Co., Ltd.

which is the sole agent of KOMATSU

in Guangdong and Fujian Komatsu

Construction Machinery Co., Ltd.

which is the sole agent of KOMATSU

in Fujian. With his more than 20

years of experience in Construction

Machinery, Mr. Wang has a strong

business network in China and

has over the years congealed his

reputation in this industry.


Senior Management /

MR. CLARENCE TAN

Financial Controller

Mr. Clarence Tan joined the Group in June 2009 as the Financial Controller and is responsible for

overseeing the full spectrum of financial activities of the Group.

Prior to joining, Mr. Tan was the Finance Manager of CNA Group Ltd. Before that, he held various audit

related positions in Deloitte & Touche LLP and Ernst & Young LLP. He holds a professional qualification

from the Association of Chartered Certified Accountants and is a non-practicing member of the Institute of

Singapore Chartered Accountants.

MS. dOREEN ChAI hWEE hOON

Group General Manager

Managing Director of GKE Freight Pte Ltd

Managing Director of GKE Express Logistics Pte Ltd

Ms. Chai started the Freight division for the Group since October 2004. She was promoted to Group

General Manager in 2006 to assist the CEO to promote the Logistics activities. She is now responsible to

develop and expand the Freight and Project Logistics division for the Group.

Ms. Chai brings with her more than 20 years of experience in the Freight Forwarding Industry and holds a

Diploma in Business Studies.

MS. MARINA NEO

Managing Director of GKE Warehousing & Logistics Pte Ltd

Ms. Marina Neo is the Managing Director of GKE Warehousing & Logistics Pte Ltd, has been with GKE

since the inception of the Group in 1995. In all these years, she has worked in customer service, finance,

administration and human resource departments before she took up the role of General Manager in

2008, she was promoted to Deputy Managing Director in 2010 and to Managing Director in 2011. Ms.

Neo graduated from Charles Sturt University with a Bachelor’s degree in Business Administration and

Economics.


Senior Management /Senior Management /

MR. GLEN CREIGhTON

General Manager of GKE Metal Logistics Pte Ltd

Mr. Glen Creighton joined GKE Metal Logistics Pte Ltd in July 2012 and is responsible for the overall day

to day management of the company. In 1997, Mr. Creighton joined the Singapore office of the Cornelder

Group in Singapore, a Dutch owned warehousing and logistics company which was later acquired by the

CWT Group. He was a Director of CWT Commodities (SEA) Pte Ltd specialising in the provision of collateral

management services, to banks and the trade. In 2011, he joined the Structured Trade & Commodity

Finance Department of CIMB Bank Berhad (Singapore Branch) as Associate Director and, was involved in

origination, structuring and growing the loan book from a start-up. Mr. Creighton brings with him a wealth of

experience in the shipping, transportation, warehousing and trade finance business.

MR. JASON LI JING

Managing Director of GKE (Shanghai) Metal Logistics Co., Ltd

Mr. Jason has more than 13 years of experience in freight logistics and 7 years of experience in metal

logistics warehousing. Presently he is the Managing Director of GKE (Shanghai) Metal Logistics Co., Ltd,

which was set up in Shanghai in September 2009. He has a Master degree in Business Administration

from University of Management & Technology America.

MR. LI hAO QUAN

Deputy Investment Manager of GKE Corporation Limited

Mr. Li Hao Quan joined the Investment Department of GKE Corporation Limited in March 2013 and is

responsible for the investment management of GKE Holdings (HK) Co., Ltd.

Prior to joining, Mr. Li Hao Quan joined the Bank of Dongguan in Shenzhen as Risk Control Manager

in 2007 and is familiar with the process of business valuation. Mr. Li Hao Quan graduated from Jinan

University with a Bachelor’s Degree in Economics.


Report of Corporate Governance /

The Board of Directors (the “Board”) of GKE Corporation Limited (the “Company”) is committed to

maintaining a high standard of corporate governance within the Company and its subsidiaries (the

“Group”). The Company believes that good corporate governance establishes and maintains an

ethical environment and enhances the interests of all shareholders.

The Company has adopted the recommendations of the Code of Corporate Governance 2005 (the

“Code”). The Company confirms that it has adhered to the principles and guidelines as set out in the

Code. The Board has also considered certain corporate practices with reference to the revised Code

of Corporate Governance issued on 2 May 2012 which is effective from financial year commencing

on or after 1 November 2012.

(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 is entrusted with the responsibility for the overall management of the business and

corporate affairs of the Group.

Matters which specifically require the Board’s decision or approval are those involving:

• corporate strategy and business plans;

• investment and divestment proposals;

• funding decisions of the Group;

• nominations of Directors for appointment to the Board and appointment of key personnel;

• announcements of quarterly, half-year and full-year results, the annual report and financial

statements, circulars and all other announcements broadcasted via SGXNET;

• material acquisitions and disposal of assets; and

• all matters of strategic importance.

To assist in the execution of its responsibilities, the Board is supported by three Board Committees;

namely the Audit Committee (“AC”), the Nominating Committee (“NC”) and the Remuneration

Committee (“RC”). These Committees operate within clearly defined terms of reference and they

play an important role in ensuring good corporate governance in the Company and within the Group.



The Board holds regular scheduled meetings to review the Group’s key activities, business

strategies, funding decisions, financial performance and to approve the release of the results of

the Group. Ad-hoc meetings are convened when circumstances require. Meetings via telephone are

permitted by the Company’s Articles of Association. The Board also approves transactions through

circular resolutions which are circulated to the Board together with all relevant information to the

proposed transaction.

The following table sets out the number of Board and Board Committees meetings held during the

financial year ended 31 May 2013 and the attendance of each Director at these meetings:

Name of directors

Board Audit Committee

Nominating

Committee

Remuneration

Committee

No. of

meetings

held

No. of

meetings

attended

No. of

meetings

held

No. of

meetings

attended

No. of

meetings

held

No. of

meetings

attended

No. of

meetings

held

No. of

meetings

attended

Chen Yong Hua 4 4 4 4* 1 1* 1 1*

Neo Cheow Hui 4 4 4 4* 1 1* 1 1*

Neo Kok Ching 4 4 4 4* 1 1* 1 1*

Er Kwong Wah 4 4 4 4 1 1 1 1

Mahtani Bhagwandas 4 3 4 3 1 1 1 1

Angelic Cheah

Yee Ping 4 4 4 4 1 1 1 1

Liu Ji Chun 4 3 4 3* 1 1* 1 1*

Wang Jian Wen

(Alternate Director,

Wang Jian Ping) 4 2 4 2* 1 1* 1 1*

Note:

* By invitation

Newly-appointed Directors undergo an orientation program with materials provided to help them get

familiarised with the business and organisation structure of the Group. To get a better understanding

of the Group’s business, the Directors are also given the opportunity to visit the Group’s operational

facilities and meet with the Management.



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.

Presently, the Board comprises three Executive Directors, two Non-Executive Directors and three

Independent Directors:

Executive directors

Mr. Chen Yong Hua Executive Chairman and Executive Director

Mr. Neo Kok Ching Executive Director (Investment)

Mr. Neo Cheow Hui Chief Executive Officer

Non-Executive directors

Mr. Liu Ji Chun

Mr. Wang Jian Wen (his alternate, Wang Jian Ping)

Independent directors

Mr. Er Kwong Wah



The NC is of the view that the current Board, with Independent Directors making up at least one

third of the Board, has a strong and independent element to exercise objective judgement on

corporate affairs.

The NC considers an “independent” Director as one who has no relationship with the Company, its

related corporations or its officers that could interfere or be reasonably perceived to interfere, with

the exercise of the Director’s independent business judgment with a view to the best interests of

the Company.

The NC has reviewed the independence of each Independent Director and is of the view that these

Directors are independent.

The Board has examined its size and is of the view that it is an appropriate size for effective

decision-making, taking into account the scope and nature of the operations of the Company. The

NC is of the view that no individual or small group of individuals dominates the Board’s decision-

making process.



There is adequate relevant competence on the part of the Directors, who, as a group, carry specialist

backgrounds in accounting, finance, business and management, strategic planning and law.

Chairman and Chief Executive Officer

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

of the Board and the executives responsibility of the company’s business – which will ensure a balance

of power and authority, such that no one individual represent a considerable concentration of power.

There is a clear division of responsibilities between the Chairman and Chief Executive Officer, which

ensures there are a balance of power, increased accountability and greater capacity for the Board in

terms of independent decision making. The Group keeps the posts of Chairman and Chief Executive

Officer separate. Mr. Chen Yong Hua is the Executive Chairman while Mr. Neo Cheow Hui is the

Chief Executive Officer. The Chairman is responsible for the formulation of the Group’s strategic

direction and expansion plans, while the Chief Executive Officer is responsible for the conduct of

the Group’s daily business operations.

The Chairman ensures that Board members are provided with complete, adequate and timely

information. The Chairman ensures that procedures are introduced to comply with the Code and

ensures effective communications within the Board and with the shareholders.

All major decisions made by the Board are subject to majority approval of the Board. The Board

believes that there are adequate safeguards in place to ensure an appropriate balance of power

and authority within the spirit of good corporate governance.

Board Membership

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

to the Board.

The NC comprises three (3) Independent Directors as follows:

Nominating Committee

Mr. Mahtani Bhagwandas (Chairman)

Mr. Er Kwong Wah




The NC is regulated by its terms of reference and its principal functions are as follows:

• to re-nominate existing Directors, having regard to their contribution and performance;

• to determine on an annual basis whether or not a Director is independent; and

• to decide whether a Director is able to and has been adequately carrying out his duties as a

Director of the Company, particularly when the Director has multiple board representations.

New Directors are appointed by way of a Board resolution following which they are subject to

re-election at the next Annual General Meeting (“AGM”).

The Company’s Articles of Association requires one-third of the Board to retire by rotation at every

AGM every three years. Directors who retire are eligible to offer themselves for re-election.

Each member of the NC shall abstain from voting on any resolutions in respect to his re-nomination

as a Director.

The NC has recommended to the Board that Mr. Neo Kok Ching, Mr. Liu Ji Chun and Ms. Angelic

Cheah Yee Ping be nominated for re-election at the forthcoming AGM. The Board had accepted the

recommendations and the retiring Directors will be offering themselves for re-election.

For the financial year under review, the NC is of the view that the Independent Directors of the

Company are independent (as defined in the Code) and are able to exercise judgment on the

corporate affairs of the Group that is independent of the Management.

Despite some of the Directors having other Board representations, the NC is satisfied that these

Directors are able to and have adequately carried out their duties as Directors of the Company.



The key information regarding Directors is set out below:

Name of director Board AppointmentExecutive/

Non-executive

Board Committees asChairman or Member

directorship date First Appointed/

date of Last Re-election

due for re-election/

re-appointment on forthcoming Annual General

Meeting

Mr Chen Yong Hua

Executive Chairman and Executive Director

Board Member 12 January 2012/

28 September 2012

–

Mr Neo Cheow Hui

Chief Executive Officer and Executive Director

Board Member 21 July 2005/

28 September 2012

–

Mr Neo Kok Ching


Board Member 8 March 2000/

30 September 2010

√

Mr Er Kwong Wah


Board Member,Chairman of Audit Committee, Chairman of Remuneration Committee andMember of Nominating Committee

16 April 2007/

30 September 2011

–

Mr Mahtani Bhagwandas


Board Member, Chairman of Nominating Committee,Member of Audit Committee and Member of Remuneration Committee

16 December 2002/

28 September 2012

–

Ms Angelic Cheah Yee Ping


Board Member, Member of Audit Committee, Member of Nominating Committee and Member of Remuneration Committee

14 January 2008/

30 September 2010

√

Mr Liu Jichun Non-Executive Director

Board Member 1 November 2005/

30 September 2010

√

Mr Wang Jian Wen


Board Member 12 January 2012/

28 September 2012

–

Mr Wang Jian Ping

Alternate Director to Mr Wang Jian Wen

Board Member 12 January 2012/ N/A

–

Note: Information on the Directors’ shareholding in the Company is set out in the Directors’ Report.



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 NC decides on how the Board’s performance is to be evaluated and to propose objective

performance criteria, subject to the Board’s approval, which address how the Directors have

enhanced long-term shareholders’ value. The performance evaluation takes into consideration the

Company’s share price performance vis-à-vis the Singapore Straits Times Index. The Board has also

implemented a process to be carried out by the NC for assessing the effectiveness of the Board

as a whole and for assessing the contribution from each individual Director to the effectiveness

of the Board. Each member of the NC shall abstain from voting on any resolution in respect of the

assessment of his performance or re-nomination as a Director.

Access to Information

Principle 6: In order to fulfill their responsibilities, Board members should be provided with complete,

adequate and timely information prior to Board meetings and on an on-going basis.

The Company makes available to all Directors the quarterly management accounts, as well as the

relevant background information relating to the business to be discussed at Board meetings. The

Directors are also provided with the contact details of the Company’s Senior Management and

Company Secretary to facilitate separate and independent access.

Directors are provided with regular updates from time to time by professional advisors and the

Management. In addition, all relevant information on material events and transactions are circulated

to the Board as and when they arise. The Board has separate independent access to the Company’s

Senior Management and the Company Secretaries.

The Company Secretary and/or her representative administer, attend and prepare minutes of Board

and Board Committees meetings. Together with members of the Company’s Management, the

Company Secretary and/or her representative administer assists the Chairman of the Board and/or

the AC, NC, and RC in ensuring that proper procedures at such meetings are followed and reviewed

so that the Board and the Board Committees function effectively. Each Director has the right to seek

independent legal and other professional advice in furtherance their duties and responsibilities,

at the Company’s expense, concerning any aspect of the Group’s operations or undertakings. The

decision to appoint or remove the Company Secretary is a decision made by the Board as a whole.



(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 fixing the remuneration packages of individual directors. No director should be

involved in deciding his own remuneration.

The RC comprises three (3) Independent Directors as follows:

Remuneration Committee

Mr. Er Kwong Wah (Chairman)



The members of the RC carried out their duties in accordance with the terms of reference which

include recommending to the Board, a framework of remuneration for each Director.

The RC recommends to the Board a framework for the remuneration for the Board and key executives

and to determine specific remuneration packages for each Executive Director which is based on

accountability, capability and performance.

The RC is regulated by its terms of reference and its key functions include:

• Reviewing and recommending to the Board a framework of remuneration for all Directors of

the Company and Senior Management;

• Reviewing the service contracts of the executive Directors; and

• Reviewing and submitting its recommendations for endorsement by the Board.

The RC was formed with the mandate to oversee the general compensation of Senior Management

of the Group with a goal to motivate, recruit and retain employees and Directors through competitive

compensation and progressive policies.

No Director will be involved in determining his own remuneration.



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 significant proportion of executive directors’ remuneration should be

structured so as to link rewards to corporate and individual performance.

The Company has a remuneration policy, which comprises a fixed component and a variable

component. The fixed and variable components are in the form of a base salary and a variable

bonus, respectively, and take into account the performance of the Company and the performance

of the individual Director.

The Independent and Non-Executive Directors do not have service agreements with the Company.

They are paid fixed Directors’ fees, which are determined by the Board, appropriate to the level

of their contribution, taking into account factors such as the effort and time spent and the

responsibilities of the Independent Directors. The fees are subject to approval by the shareholders

at each AGM. Except as disclosed, Independent Directors do not receive any other remuneration

from the Company.

The Company had entered into service agreements with each of Mr. Neo Kok Ching and Mr. Neo

Cheow Hui on 2 September 2002 and 1 November 2005 respectively, which are subject to automatic

renewal on a yearly basis on such terms and conditions as the Company may agree with them.

The Company does not have any employee share option scheme or other long-term employee

incentive scheme.

disclosure on 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, showing the level and mix of each individual Director’s remuneration for the financial

year ended 31 May 2013 are as follows:

Name of directordirectors’

Fees#

(%)Salary

(%)Bonus

(%)Benefits

(%)Total(%)

Above S$500,000

Chen Yong Hua – 41 59 – 100

Neo Cheow Hui – 45 53 2 100

Neo Kok Ching – 45 53 2 100

Below S$250,000

Liu Ji Chun 100 – – – 100

Wang Jian Wen 100 – – – 100

Er Kwong Wah 100 – – – 100

Mahtani Bhagwandas 100 – – – 100

Angelic Cheah Yee Ping 100 – – – 100

Note:

# These fees are subject to the approval of the shareholders at the forthcoming AGM.

A breakdown, showing the level and mix of top key executives who are not Directors of the Company

for the financial year ended 31 May 2013 are as follows:

Name of Top Key Executive Salary Bonus Benefits Total

(%) (%) (%) (%)

S$250,000 to S$500,000

Clarence Tan 53 47 – 100

Chai Hwee Hoon, Doreen 58 42 – 100

Neo Hwee Lee, Marina(1) 53 47 – 100

Below S$250,000

Li Hao Quan 81 19 – 100

Note:

(1) Ms. Neo Hwee Lee is the daughter of Mr. Neo Kok Ching and sister of Mr. Neo Cheow Hui.



In view of confidentiality of remuneration matters, the Board is of the opinion that it is in the best

interests of the Group not to disclose the exact remuneration of Executive Officers in Annual Report.

(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 understands its accountability to the shareholders on the Group’s position, performance

and progress. The objectives of the presentation of the annual audited financial statements, full-

year, half-yearly and quarterly results to its shareholders are to provide the shareholders with a

balanced and understandable analysis and explanation of the Group’s financial performance and

position and prospects. The Management is accountable to the Board by providing the Board with

the necessary financial information for the discharge of its duties.

In line with the Listing Manual Section B: Rules of Catalist (“Rules of Catalist”) of the Singapore

Exchange Securities Trading Limited (the “SGX-ST”), the Board provides a negative assurance

statement to the shareholders in respect of the interim financial statements.

Risk Management and Internal Controls

Principle 11: The Board is responsible for the governance of risk. The Board should ensure that the

management maintains a sound system of risk management and internal controls to safeguard the

shareholders’ interests and the company’s assets, and should determine the nature and extent of the

significant risks which the Board is willing to take in achieving its strategic objectives.

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

effective internal controls 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 financial, operational and compliance risks, and the objectives of these

controls are to provide reasonable assurance that there are no material financial misstatements or

material loss and assets are safeguarded.



Relying on the reports from the internal auditors and external auditors, the AC carried out

assessments of the effectiveness of key internal controls during the financial year. Any material

non-compliance or weaknesses in internal controls or recommendations from the internal auditors

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 and on the recommendations made by both

the internal auditors and external auditors. Based on the reports submitted by the internal auditors

and external auditors received by the AC and the Board, nothing material has come to the attention

of the AC and the Board to cause the AC and the Board to believe that the internal controls are not

satisfactory for the type and size of business conducted.

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

steps to strengthen the Group’s overall system of internal controls. The Board and the AC also

noted that all internal controls contain inherent limitations and no systems of internal controls could

provide absolute assurance against the occurrence of material errors, poor judgment in decision

making, human error, losses, fraud or other irregularities.

Based on the work performed by both the external auditors and internal auditors, the assurance

from Management and the on-going review as well as the continuing efforts in enhancing controls

and processes which currently in place, the Board, with the concurrence of the AC, is of the view

that there are adequate internal controls in place for the Group to address financial, operational

and compliance risks of the Group for the financial year ended 31 May 2013.

Audit Committee

Principle 12: The Board should establish an Audit Committee with written terms of reference which

clearly set out its authority and duties.

The AC comprises three (3) Independent Directors as follows:

Audit Committee

Mr. Er Kwong Wah (Chairman)



The Company has adopted the written terms of reference clearly setting out the roles and

responsibilities of the AC.



The Chairman of the AC, Mr. Er Kwong Wah (“Mr. Er”), is a former senior civil servant. Mr. Er is the

Executive Director of the EASB Institute of Management. He also sits as an independent director on

the Board of public companies. Mr. Mahtani Bhagwandas has been practising as an advocate and

solicitor of the Supreme Court of Singapore since 1993 and is presently a partner of LegalStandard

LLP, a law firm in Singapore. Ms. Angelic Cheah Yee Ping has been the Managing Director of PACAL

Consulting Pte Ltd since 2005. The Board is of the view that the members of the AC are appropriately

qualified, having the necessary experience and expertise required to discharge their responsibilities.

The AC schedules a minimum of four meetings in each financial year. The meetings are held, inter

alia, for the following purposes:

• reviewing the announcement of the quarterly, half-yearly and full-year results and the financial

statements of the Group;

• reviewing the audit plans and reports of the external auditors and considering the

effectiveness of the actions taken by Management on the auditors’ recommendations;

• appraising and reporting to the Board on the audits undertaken by the external auditors, the

adequacy of disclosure of information, and the appropriateness and quality of the system

of management and internal controls;

• reviewing the assistance and co-operation given by Management to the external auditors;

• discussing problems and concerns, if any, arising from the external audits;

• nominating external auditors for re-appointment;

• reviewing interested person transactions, as defined in the Rules of Catalist of the SGX-ST;

and

• reviewing the effectiveness of the Company’s material internal controls.

In addition, the AC is given the task of commissioning investigations into matters where there is

suspected fraud or irregularity, or failure of internal controls or infringement of any law, rule or

regulation, which has or is likely to have a material impact on the Company’s operating results

or financial position, and to review the findings thereof. The AC has also conducted reviews of

interested person transactions.

The Group has implemented a whistle blowing policy whereby accessible channels are provided for

employees to raise concerns about possible improprieties in matters of financial reporting or other

matters which they become aware and to ensure that:

(i) independent investigations are carried out in an appropriate and timely manner;



(ii) appropriate action is taken to correct the weakness in internal controls and policies which

allowed the perpetration of fraud and/or misconduct and to prevent a recurrence; and

(iii) administrative, disciplinary, civil and/or criminal actions that are initiated following the

completion of investigations are appropriate, balance and fair, while providing reassurance

that employees will be protected from reprisals or victimisation for whistle-blowing in good

faith and without malice.

As of to-date, there were no reports received through the whistle-blowing mechanism.

The AC will meet with the external auditors, without the presence of Management, as and when

necessary, to review the adequacy of audit arrangements, with emphasis on the scope and quality

of its audit, and the independence, objectivity and observations of the external auditors. Annually,

the AC meets with the external auditors without the presence of Management and conduct a

review of all non-audit services provided by the external auditors to the Group, is satisfied that the

nature and extent of such services does not affect the independence and objectivity of the external

auditors. Fees paid or payable by the Company to the external auditors for non-audit services and

audit services for the financial year ended 31 May 2013 amounted to S$62,000 and S$139,000

respectively.

The AC has recommended to the Board that Messrs Ernst & Young LLP be nominated for the

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

in compliance with Rules 712 and 715 of the Rules of Catalist of the SGX-ST in relation to the

engagement of its external auditors.

Internal Audit

Principle 13: The Company should establish an internal audit function that is independent of the

activities it audits.

The Company has appointed Messrs BDO LLP as its outsourced internal auditors. BDO LLP assists

the Company in reviewing the adequacy and effectiveness of the Company’s internal controls based

on an annual internal audit plan that covers applicable financial, operational, compliance and

information technology controls. As part of the internal audits, they also provide recommendations

to the AC to address any weaknesses in its internal controls.



BDO LLP performs annual internal audit planning in consultation with, but independent of the

Management. The internal audit plan is submitted to the AC for approval prior to the commencement

of the internal audit work. In addition, the internal auditors may be involved in ad hoc projects

initiated by the Management which require the assurance of the internal auditors in specific areas

of concerns. BDO LLP is provided with access to the Group’s properties, information and records

and performs their reviews in accordance with the BDO Global IA methodology which is consistent

with the Standards for the Professional Practice of Internal Auditing set by The Institute of Internal

Auditors. As the Company’s outsourced internal auditors, BDO LLP is required to provide staff of

adequate expertise and experience to conduct the internal audits.

BDO LLP reports to the AC on internal audit matters. The AC also reviews and approves the

annual internal audit plans and resources to ensure that BDO LLP has the necessary resources to

adequately perform its functions.

(D) CoMMUNICaTIoN WITh SharEholDErS

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

In line with the continuous disclosure obligations of the Company and pursuant to the provisions of

the Rules of Catalist of the SGX-ST and the Companies Act, Chapter 50, the Board’s policy is that all

shareholders should equally and on a timely basis be informed of all major developments that impact

the Group. Where there is inadvertent disclosure made to a selected Group, the Company will make

the same disclosure publicly to all others as soon as practicable. Communication is made through:

• Annual report that are prepared and sent to all shareholders. The Board ensures that the

annual report includes all relevant information about the Company and the Group, including

future developments and other disclosures required by the Singapore Companies Act and

Singapore Financial Reporting Standards;

• Quarterly announcements containing a summary of the financial information and affairs of

the Group for that period;

• Notices of explanatory memoranda for AGMs and Extraordinary General Meetings (“EGMs”).

The notice of AGM and EGM are also advertised in a national newspaper;

The Company’s website at http://www.gke.com.sg/ which our shareholders can access financial

information, corporate announcements, press releases, annual reports and profile of the Group.



The Company does not practice selective disclosure. Price-sensitive information is first publicly

released through SGX-Net, before the Company meets with any group of investors or analysts. All

shareholders of the Company will receive the Company’s annual report with an accompanying notice

of AGM by post. The notice of AGM is also published in the newspaper within the mandatory period,

the AGM of which is to be held within four months after the close of the financial year.

(E) GrEaTEr SharEholDEr ParTICIPaTIoN

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 shareholders are encouraged to attend the Company’s general meetings to ensure a high level

of accountability and to stay informed of the Group’s strategies and growth plans. Notice of the

AGM is dispatched to shareholder, together with explanatory notes or a circular on items of special

businesses (if necessary), at least 14 clear calendar days before the meeting. The Board welcomes

questions from shareholders who wish to raise issues, either informally or formally before or

during the AGM. The Chairman of the AC, NC and RC are normally present and available to address

questions relating to the work of their respective Committees at general meetings. Furthermore,

the external auditors are present to assist the Board in addressing any relevant queries raised by

the shareholders.

If any shareholder is unable to attend, he/she is allowed to appoint up to two proxies to vote on

his/her behalf at the general meeting through proxy forms sent in advance.

Each item of special business included in the notice of the general meetings will be accompanied

by explanation of the effects of a proposed resolution. Separate resolutions are proposed for each

substantially separate issue at general meetings.

(F) DEalINGS IN SECUrITIES

In compliance with Rule 1204(19) of the Rules of Catalist of the SGX-ST, the Company has adopted

policies to provide guidance to its officers on securities transactions by the Company and its officers.

The Company and its officers are not allowed to deal in the Company’s shares during the period

commencing two weeks before the announcement of the Company’s financial results for each of the

first three quarters of its financial year, and one month before the announcement of the Company’s

full-year financial results, and ending on the date of the announcement of the relevant results.



Directors and executives are also expected to observe insider-trading laws at all times even when

dealing with securities within the permitted trading period or when they are in possession of

unpublished price-sensitive information and they are not to deal in the Company’s securities on

short-term considerations.

(G) INTErESTED PErSoN TraNSaCTIoNS

The Company has adopted an internal policy in respect of any transaction with an interested person,

which sets out the procedures for review and approval of such transaction.

All interested person transactions will be documented and submitted periodically to the AC for their

review to ensure that such transactions are carried out on an arm’s length basis and on normal

commercial terms and are not prejudicial to the Company.

The AC reviewed the following transactions entered into by the Company with its interested persons

for the financial year ended 31 May 2013 in accordance with its existing procedures:

Name of interested person

Aggregate value of all interested person transactions during the financial year under review (excluding transactions

less than $100,000 and transactions conducted

under shareholders’ mandate pursuant to Rule 920)

Aggregate value of all interested person

transactions conducted under shareholders’ mandate

pursuant to Rule 920 (excluding transactions less

than $100,000)

Chippel Overseas Supplies Rental income – $2,934

Nil

LegalStandard LLP Professional fee – $1,902

Nil

The Board confirms that each of these interested person transactions were entered into on an

arm’s length basis and on normal commercial terms and are not prejudicial to the interests of the

shareholders of the Company.



(h) MaTErIal CoNTraCTS aND loaNS

Pursuant to Rule 1204(8) of the Rules of Catalist of the SGX-ST, the Company confirms that except

as disclosed in the Financial Statements, there were no other material contracts and loans of

the Company and its subsidiaries involving the interests of the CEO or any Director or controlling

shareholder, either still subsisting at the end of the financial year or if not then subsisting, which

were entered into since the end of the previous financial year.

(I) USE oF ProCEEDS

During the financial year, no funds were raised from the public. The Group and its subsidiaries use

its internal sources and bank borrowings as its short term working capital.

(J) rISK MaNaGEMENT

The Group has strategies for the management of financial risks which have been reviewed by the

external auditors. The issues are outlined in Note 31 of the financial statements.

(K) CaTalIST SPoNSor

The Company is currently under the SGX-ST Catalist sponsor-supervised regime and the continuing

sponsor of the Company is RHT Capital Pte. Ltd. In compliance with Rule 1204(21) of the Rules

of Catalist, there was no non-sponsor fee paid to the sponsor for the financial year ended 31 May

2013.


Directors’ Report / For the financial year ended 31 May 2013

The Directors are pleased to present their report to the members together with the audited

consolidated financial statements of GKE Corporation Limited (the “Company”) and its subsidiaries

(collectively, the “Group”) and the balance sheet and statement of changes in equity of the Company

for the financial year ended 31 May 2013.

directors

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

Chen Yong Hua (Executive Chairman and Executive Director)

Neo Cheow Hui (Chief Executive Officer and Executive Director)

Neo Kok Ching (Executive Director (Investment))

Er Kwong Wah (Independent Director)

Mahtani Bhagwandas (Independent Director)

Angelic Cheah Yee Ping (Independent Director)

Liu Ji Chun (Non-Executive Director)

Wang Jian Wen (Non-Executive Director)

Wang Jian Ping (Alternate Director to Wang Jian Wen)

In accordance with Article 107 of the Company’s Articles of Association, Neo Kok Ching, Liu Ji Chun

and Angelic Cheah Yee Ping retire and, being eligible, offer themselves for re-election.

Arrangements to enable directors to acquire shares and debentures

Neither at the end of nor at any time during the financial year was the Company a party to any

arrangement whose objects are, or one of whose objects is, to enable the Directors of the Company

to acquire benefits by means of the acquisition of shares or debentures of the Company or any

other body corporate.


For the financial year ended 31 May 2013

Directors’ Report /

directors’ interests in shares and debentures

The following Directors, who held office at the end of the financial year, had, according to the register

of Directors’ shareholdings required to be kept under Section 164 of the Singapore Companies Act,

Chapter 50 (the “Act”), an interest in shares of the Company and related corporations (other than

wholly-owned subsidiaries) as stated below:

direct interest deemed interest

Name of director

At the beginning

of financial year

At the end of

financial year

At the beginning

of financial year

At the end of

financial year

GKE Corporation Limited

Ordinary shares

Chen Yong Hua 47,000,000 48,000,000 – –

Neo Kok Ching – – 33,346,660 34,366,660

Neo Cheow Hui 10,000,000 10,000,000 17,445,300 17,445,300

Liu Ji Chun – – 15,720,000 19,520,000

Wang Jian Wen – – 40,000,000 40,000,000

Wang Jian Ping – – 12,848,000 13,498,000

There was no change in any of the above-mentioned interests in the Company between the end of

the financial year and 21 June 2013.

Except as disclosed in this report, no Director who held office at the end of the financial year

had interests in shares, share options, warrants or debentures of the Company, or of related

corporations, either at the beginning of the financial year, or at the end of the financial year.

directors’ contractual benefits

Except as disclosed in the financial statements, since the end of the previous financial year, no

Director of the Company has received or become entitled to receive a benefit by reason of a contract

made by the Company or a related corporation with the Director, or with a firm of which the Director

is a member, or with a company in which the Director has a substantial financial interest.




Share options

No option to take up unissued shares of the Company or its subsidiaries was granted during the

financial year.

There were no shares issued during the financial year by virtue of the exercise of options to take up

unissued shares of the Company or its subsidiaries whether granted before or during the financial

year.

There were no unissued shares of the Company or its subsidiaries under option at the end of the

financial year.

Audit Committee

The Audit Committee (“AC”) carried out its functions in accordance with Section 201B (5) of the

Singapore Companies Act, Chapter 50, including the following:

• Reviews the audit plans of the internal and external auditors of the Company, and reviews the

internal auditors’ evaluation of the adequacy of the Company’s system of internal accounting

controls and the assistance given by the Company’s management to the external and internal

auditors

• Reviews the quarterly, half year and annual financial statements and the auditors’ report on the

annual financial statements of the Company before their submission to the Board of Directors

• Reviews effectiveness of the Company’s material internal controls, including financial, operational

and compliance controls and risk management via reviews carried out by the internal auditors

• Meets with the external auditors, other committees, and management in separate executive

sessions to discuss any matters that these groups believe should be discussed privately with

the AC

• Reviews legal and regulatory matters that may have a material impact on the financial

statements, related compliance policies and programmes and any reports received from

regulators

• Reviews the cost effectiveness and the independence and objectivity of the external auditors

• Reviews the nature and extent of non-audit services provided by the external auditors

• Recommends to the Board of Directors the external auditors to be nominated, approves the

compensation of the external auditors, and reviews the scope and results of the audit




Audit Committee (cont’d)

• Reports actions and minutes of the AC to the Board of Directors with such recommendations

as the AC considers appropriate

• Reviews interested person transactions in accordance with the requirements of the Singapore

Exchange Securities Trading Limited’s Listing Manual

The AC, having reviewed all non-audit services provided by the external auditors to the Group, is

satisfied that the nature and extent of such services would not affect the independence of the

external auditors. The AC has also conducted a review of interested person transactions.

The AC convened four meetings during the year with full attendance from all members, except for

one where a member was absent. The AC has also met with internal and external auditors, without

the presence of the Company’s management, at least once a year.

Further details regarding the AC are disclosed in the Report on Corporate Governance.

Auditor

Ernst & Young LLP have expressed their willingness to accept reappointment as auditor.

On behalf of the Board of Directors:

Neo Kok Ching

Director

Neo Cheow Hui

Director

Singapore

26 August 2013


Statement by Directors / For the financial year ended 31 May 2013

We, Neo Kok Ching and Neo Cheow Hui, being two of the Directors of GKE Corporation Limited, do

hereby state that, in the opinion of the Directors:

(i) the accompanying balance sheets, consolidated income statement, consolidated statement

of comprehensive income, statements of changes in equity, and consolidated statement of

cash flows together with notes thereto are drawn up so as to give a true and fair view of

the state of affairs of the Group and of the Company as at 31 May 2013 and the results of

the business, changes in equity and cash flows of the Group and the changes in equity of

the Company for the year ended on that date, and

(ii) at the date of this statement, there are reasonable grounds to believe that the Company

will be able to pay its debts as and when they fall due.

On behalf of the Board of Directors:

Neo Kok Ching

Director

Neo Cheow Hui

Director

Singapore

26 August 2013


Independent Auditor’s Report /For the financial year ended 31 May 2013

To the Members of GKE Corporation Limited

Report on the Financial Statements

We have audited the accompanying financial statements of GKE Corporation Limited (the “Company”)

and its subsidiaries (the “Group”) set out on pages 49 to 146, which comprise the balance sheets

of the Group and the Company as at 31 May 2013, the statements of changes in equity of the Group

and the Company and the consolidated income statement, consolidated statement of comprehensive

income and consolidated statement of cash flows of the Group for the year then ended, and a

summary of significant accounting policies and other explanatory information.

Management’s Responsibility for the Financial Statements

Management is responsible for the preparation of financial statements that give a true and fair

view in accordance with the provisions of the Singapore Companies Act, Chapter 50 (the “Act”) and

Singapore Financial Reporting Standards, and for devising and maintaining a system of internal

accounting controls sufficient to provide a reasonable assurance that assets are safeguarded against

loss from unauthorised use or disposition; and transactions are properly authorised and that they

are recorded as necessary to permit the preparation of true and fair profit and loss accounts and

balance sheets and to maintain accountability of assets.

Auditor’s Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We

conducted our audit in accordance with Singapore Standards on Auditing. Those standards require

that we comply with ethical requirements and plan and perform the audit to obtain reasonable

assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures

in the financial statements. The procedures selected depend on the auditor’s judgment, including

the assessment of the risks of material misstatement of the financial statements, whether due to

fraud or error. In making those risk assessments, the auditor considers internal control relevant

to the entity’s preparation of financial statements that give a true and fair view in order to design

audit procedures that are appropriate in the circumstances, but not for the purpose of expressing

an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating

the appropriateness of accounting policies used and the reasonableness of accounting estimates

made by management, as well as evaluating the overall presentation of the financial statements.

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

for our audit opinion.



Independent Auditor’s Report /

Opinion

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

statement of changes in equity of the Company are properly drawn up in accordance with the

provisions of the Act and Singapore Financial Reporting Standards so as to give a true and fair

view of the state of affairs of the Group and of the Company as at 31 May 2013 and the results,

changes in equity and cash flows of the Group and the changes in equity of the Company for the

year ended on that date.

Report on Other Legal and Regulatory Requirements

In our opinion, the accounting and other records required by the Act to be kept by the Company and

by those subsidiaries incorporated in Singapore of which we are the auditors have been properly

kept in accordance with the provisions of the Act.

Ernst & Young LLP

Public Accountants and

Chartered Accountants

Singapore

26 August 2013


Consolidated Income Statement /For the financial year ended 31 May 2013

Note 2013 2012$’000 $’000

Continuing operationsRevenue 4 26,538 35,558Cost of sales (18,769) (23,706)

Gross profit 7,769 11,852Other income 5 12,871 897ExpensesMarketing and distribution (151) (257)Administrative expenses (11,064) (9,468)Finance costs 6 (14) (13)Other (expenses)/credits 7 (82) 131Share of results of associate 541 –

Profit before tax from continuing operations 8 9,870 3,142Income tax credit/(expense) 9 93 (813)

Profit from continuing operations, net of tax 9,963 2,329discontinued operationLoss from discontinued operation, net of tax 10 – (3,369)

Profit/(loss) for the year 9,963 (1,040)

Attributable to:Owners of the Company Profit from continuing operations, net of tax 10,128 2,255 Loss from discontinued operation, net of tax – (1,732)

Profit for the year attributable to the owners of the Company 10,128 523

Non-controlling interests(Loss)/profit from continuing operations, net of tax (165) 74Loss from discontinued operation, net of tax – (1,637)

Loss for the year attributable to non-controlling interests (165) (1,563)

Earnings per share from continuing operations attributable to owners of the Company (cents per share)Basic 11 2.20 0.49

Diluted 11 2.20 0.49

Earnings per share (cents per share)Basic 11 2.20 0.11

Diluted 11 2.20 0.11

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


Consolidated Statement of Comprehensive Income /For the financial year ended 31 May 2013

2013 2012

$’000 $’000

Profit/(loss) for the year 9,963 (1,040)

Other comprehensive income:

Fair value gain/(loss) on available-for-sale investments 392 (1,058)

Fair value transfer to profit or loss on disposal of

available-for-sale investments – (583)

Foreign currency translation 535 566

Revaluation gain on property, plant and equipment 10,805 –

Impairment loss on property, plant and equipment – (936)

Share of foreign currency translation of associate 40 –

Other comprehensive income for the year, net of tax 11,772 (2,011)

Total comprehensive income for the year 21,735 (3,051)

Attributable to:

Owners of the Company 21,793 (1,253)

Non-controlling interests (58) (1,798)

Total comprehensive income for the year 21,735 (3,051)

Attributable to:

Owners of the Company

Total comprehensive income from continuing operations,

net of tax 21,793 820

Total comprehensive income from discontinued operation,

net of tax – (2,073)

Total comprehensive income for the year attributable to

owners of the Company 21,793 (1,253)



Balance Sheets /As at 31 May 2013

Group Company

Note 2013 2012 2013 2012

$’000 $’000 $’000 $’000

ASSETS

Non-current assets

Property, plant and equipment 12 56,400 36,815 185 336

Land use rights 13 3,597 3,569 – –

Investments in subsidiaries 14 – – 42,909 32,735

Investment in associate 15 6,902 – 6,615 –

Available-for-sale investments 16 1,181 2,257 1,181 2,257

Deferred tax assets 17 – 26 – 26

Other receivables 18 – – 597 –

Prepayments 19 8,722 – – –

Total non-current assets 76,802 42,667 51,487 35,354

Current assets

Trade and other receivables 18 6,143 4,358 9,872 5,792

Prepaid operating expenses 295 326 23 14

Cash and cash equivalents 20 10,924 7,964 193 4,705

17,362 12,648 10,088 10,511

Assets of disposal groups

classified as held for sale 10 – 15,612 – 799

Total current assets 17,362 28,260 10,088 11,310

Total assets 94,164 70,927 61,575 46,664

EQUITY ANd LIABILITIES

Equity

Share capital 21 62,215 62,215 62,215 62,215

Treasury shares 22 (848) – (848) –

Accumulated losses (2,911) (12,878) (6,299) (16,975)

Other reserves 23 15,769 4,278 13 (379)

Reserves of disposal groups classified

as held for sale 10 – 1,055 – –

Equity attributable to owners of

the Company 74,225 54,670 55,081 44,861

Non-controlling interests 3,688 2,292 – –

Total equity 77,913 56,962 55,081 44,861



As at 31 May 2013

Balance Sheets /

Group Company

Note 2013 2012 2013 2012

$’000 $’000 $’000 $’000

Non-current liabilities

Borrowings 24 1,035 – – –

Deferred tax liabilities 17 4,432 2,258 25 –

Loan from non-controlling interests 25 347 – – –

Total non-current liabilities 5,814 2,258 25 –

Current liabilities

Trade and other payables 25 1,443 1,171 4,958 541

Other liabilities 26 3,251 2,197 1,511 1,020

Borrowings 24 2,300 – – –

Finance lease liabilities 27 3,259 293 – –

Tax payable 184 524 – 242

10,437 4,185 6,469 1,803

Liabilities directly associated with

disposal groups classified

as held for sale 10 – 7,522 – –

Total current liabilities 10,437 11,707 6,469 1,803

Total liabilities 16,251 13,965 6,494 1,803

Total equity and liabilities 94,164 70,927 61,575 46,664



Statements of Changes in Equity /For the financial year ended 31 May 2013

Gro

upN

ote

Shar

e ca

pita

lTr

easu

ry

shar

esA

ccum

ulat

ed

loss

esO

ther

re

serv

es

Res

erve

s of

di

spos

al

grou

ps

clas

sifi

ed a

s he

ld f

or s

ale

Tota

l eq

uity

at

trib

utab

le

to o

wne

rs o

f th

e C

ompa

ny

Non

-co

ntro

lling

in

tere

sts

Tota

l

equi

ty$

’00

0$

’00

0$

’00

0$

’00

0$

’00

0$

’00

0$

’00

0$

’00

0

Ope

ning

bal

ance

at

1 J

une

20

12

62

,21

5–

(12

,87

8)

4,2

78

1,0

55

54

,67

02

,29

25

6,9

62

Pro

fit/

(los

s) f

or t

he y

ear

––

10

,12

8–

–1

0,1

28

(16

5)

9,9

63

Oth

er c

ompr

ehen

sive

inc

ome:

– Fa

ir v

alue

gai

n on

ava

ilabl

e-

f

or-s

ale

inve

stm

ents

––

–3

92

–3

92

–3

92

– R

eval

uati

on g

ain

on p

rope

rty,

pla

nt a

nd e

quip

men

t–

––

10

,80

5–

10

,80

5–

10

,80

5–

Fore

ign

curr

ency

tra

nsla

tion

––

–2

54

17

44

28

10

75

35

– S

hare

of

othe

r co

mpr

ehen

sive

inc

ome

of a

ssoc

iate

––

–4

0–

40

–4

0

Oth

er c

ompr

ehen

sive

inc

ome

for

the

year

, ne

t of

tax

––

–1

1,4

91

17

41

1,6

65

10

71

1,7

72

Tota

l co

mpr

ehen

sive

inc

ome

for

the

year

––

10

,12

81

1,4

91

17

42

1,7

93

(58

)2

1,7

35

Con

trib

utio

ns b

y an

d

di

stri

buti

ons

to o

wne

rs–

Div

iden

ds p

aid

by t

he C

ompa

ny2

8–

–(1

,39

0)

––

(1,3

90

)–

(1,3

90

)–

Div

iden

ds p

aid

to n

on-c

ontr

ollin

g

int

eres

ts–

––

––

–(3

26

)(3

26

)–

Pur

chas

e of

tre

asur

y sh

ares

22

–(8

48

)–

––

(84

8)

–(8

48

)

Tota

l co

ntri

buti

ons

by a

nd

di

stri

buti

ons

to o

wne

rs–

(84

8)

(1,3

90

)–

–(2

,23

8)

(32

6)

(2,5

64

)

Cha

nges

in

owne

rshi

p in

tere

sts

in

su

bsid

iari

es–

Dis

posa

l of

sub

sidi

arie

s–

–1

,22

9–

(1,2

29

)–

(27

)(2

7)

– C

apit

al c

ontr

ibut

ion

from

non

-con

trol

ling

inte

rest

tha

t

d

o no

t re

sult

in

a lo

ss o

f

c

ontr

ol–

––

––

–1

,80

71

,80

7

Tota

l ch

ange

s in

ow

ners

hip

int

eres

t

in s

ubsi

diar

ies

––

1,2

29

–(1

,22

9)

–1

,78

01

,78

0

Tota

l tr

ansa

ctio

ns w

ith o

wne

rs i

n

th

eir

capa

city

as

owne

rs–

(84

8)

(16

1)

–(1

,22

9)

(2,2

38

)1

,45

4(7

84

)

Clo

sing

bal

ance

at

31

May

20

13

62

,21

5(8

48

)(2

,91

1)

15

,76

9–

74

,22

53

,68

87

7,9

13

The

acco

mpa

nyin

g ac

coun

ting

polic

ies

and

expl

anat

ory

note

s fo

rm a

n in

tegr

al p

art of

the

fina

ncia

l sta

tem

ents

.



Statements of Changes in Equity /

Gro

upN

ote

Shar

e ca

pita

lTr

easu

ry

shar

esA

ccum

ulat

ed

loss

esO

ther

re

serv

es

Res

erve

s of

di

spos

al

grou

ps

clas

sifi

ed a

s he

ld f

or s

ale

Tota

l eq

uity

at

trib

utab

le

to o

wne

rs o

f th

e C

ompa

ny

Non

-co

ntro

lling

in

tere

sts

Tota

l

equi

ty$

’00

0$

’00

0$

’00

0$

’00

0$

’00

0$

’00

0$

’00

0$

’00

0

Ope

ning

bal

ance

at

1 J

une

20

11

62

,21

5–

(8,7

67

)7

,10

9–

60

,55

72

,38

36

2,9

40

Pro

fit/

(los

s) f

or t

he y

ear

––

52

3–

–5

23

(1,5

63

)(1

,04

0)

Oth

er c

ompr

ehen

sive

inc

ome:

– Fa

ir v

alue

los

s on

ava

ilabl

e-

f

or-s

ale

inve

stm

ents

––

–(1

,05

8)

–(1

,05

8)

–(1

,05

8)

– Fa

ir v

alue

tra

nsfe

r to

pro

fit

or

l

oss

on d

ispo

sal

of

a

vaila

ble-

for-sa

le i

nves

tmen

ts–

––

(58

3)

–(5

83

)–

(58

3)

– Im

pair

men

t lo

ss o

n pr

oper

ty,

p

lant

and

equ

ipm

ent

––

–(4

86

)–

(48

6)

(45

0)

(93

6)

– Fo

reig

n cu

rren

cy t

rans

lati

on–

––

35

1–

35

12

15

56

6

Oth

er c

ompr

ehen

sive

inc

ome

for

the

year

, ne

t of

tax

––

–(1

,77

6)

–(1

,77

6)

(23

5)

(2,0

11

)

Tota

l co

mpr

ehen

sive

inc

ome

for

the

year

––

52

3(1

,77

6)

–(1

,25

3)

(1,7

98

)(3

,05

1)

Con

trib

utio

ns b

y an

d

di

stri

buti

ons

to o

wne

rs–

Div

iden

ds o

n or

dina

ry s

hare

s2

8–

–(4

,63

4)

––

(4,6

34

)–

(4,6

34

)–

Res

erve

s at

trib

utab

le t

o

d

ispo

sal

grou

ps c

lass

ifie

d

a

s he

ld f

or s

ale

10

––

–(1

,05

5)

1,0

55

––

–

Tota

l co

ntri

buti

ons

by a

nd

di

stri

buti

ons

to o

wne

rs–

–(4

,63

4)

(1,0

55

)1

,05

5(4

,63

4)

–(4

,63

4)

Cap

ital

con

trib

utio

n fr

om

no

n-co

ntro

lling

int

eres

ts t

hat

do n

ot r

esul

t in

a l

oss

of c

ontr

ol,

re

pres

enti

ng t

otal

cha

nges

in o

wne

rshi

p in

tere

sts

in

su

bsid

iari

es–

––

––

–1

,70

71

,70

7

Tota

l tr

ansa

ctio

ns w

ith o

wne

rs i

n

th

eir

capa

city

as

owne

rs–

–(4

,63

4)

(1,0

55

)1

,05

5(4

,63

4)

1,7

07

(2,9

27

)

Clo

sing

bal

ance

at

31

May

20

12

62

,21

5–

(12

,87

8)

4,2

78

1,0

55

54

,67

02

,29

25

6,9

62

The

acco

mpa

nyin

g ac

coun

ting

polic

ies

and

expl

anat

ory

note

s fo

rm a

n in

tegr

al p

art of

the

fina

ncia

l sta

tem

ents

.



Statements of Changes in Equity /

Com

pany

Not

eS

har

e ca

pita

lTr

easu

ry

shar

esA

ccum

ulat

ed

loss

esO

ther

re

serv

esTo

tal

equi

ty$

’00

0$

’00

0$

’00

0$

’00

0$

’00

0

Ope

ning

bal

ance

at

1 J

une

20

12

62

,21

5–

(16

,97

5)

(37

9)

44

,86

1

Pro

fit

for

the

year

––

12

,06

6–

12

,06

6O

ther

com

preh

ensi

ve i

ncom

e:–

Fair

val

ue g

ain

on a

vaila

ble-

for-sa

le i

nves

tmen

ts,

repr

esen

ting

oth

er

c

ompr

ehen

sive

inc

ome

for

the

year

, ne

t of

tax

––

–3

92

39

2

Tota

l co

mpr

ehen

sive

inc

ome

for

the

year

––

12

,06

63

92

12

,45

8C

ontr

ibut

ions

by

and

dist

ribu

tion

s to

ow

ners

– D

ivid

ends

on

ordi

nary

sha

res

28

––

(1,3

90

)–

(1,3

90

)–

Pur

chas

e of

tre

asur

y sh

ares

22

–(8

48

)–

–(8

48

)

Tota

l co

ntri

buti

ons

by a

nd d

istr

ibut

ions

to

owne

rs–

(84

8)

(1,3

90

)–

(2,2

38

)

Clo

sing

bal

ance

at

31

May

20

13

62

,21

5(8

48

)(6

,29

9)

13

55

,08

1

Ope

ning

bal

ance

at

1 J

une

20

11

62

,21

5–

(14

,48

6)

1,2

62

48

,99

1Pro

fit

for

the

year

––

2,1

45

–2

,14

5O

ther

com

preh

ensi

ve i

ncom

e:–

Fair

val

ue t

rans

fer

to p

rofit

or l

oss

on d

ispo

sal

of a

vaila

ble-

for-sa

le

i

nves

tmen

ts–

––

(58

3)

(58

3)

– Fa

ir v

alue

los

s on

ava

ilabl

e-fo

r-sa

le i

nves

tmen

ts–

––

(1,0

58

)(1

,05

8)

Oth

er c

ompr

ehen

sive

inc

ome

for

the

year

, ne

t of

tax

––

–(1

,64

1)

(1,6

41

)

Tota

l co

mpr

ehen

sive

inc

ome

for

the

year

––

2,1

45

(1,6

41

)5

04

Con

trib

utio

ns b

y an

d di

stri

buti

ons

to o

wne

rs

– D

ivid

ends

on

ordi

nary

sha

res

28

––

(4,6

34

)–

(4,6

34

)

Tota

l co

ntri

buti

ons

by a

nd d

istr

ibut

ions

to

owne

rs–

–(4

,63

4)

–(4

,63

4)

Clo

sing

bal

ance

at

31

May

20

12

62

,21

5–

(16

,97

5)

(37

9)

44

,86

1

The

acco

mpa

nyin

g ac

coun

ting

polic

ies

and

expl

anat

ory

note

s fo

rm a

n in

tegr

al p

art of

the

fina

ncia

l sta

tem

ents

.


Consolidated Statement of Cash Flows / For the financial year ended 31 May 2013


Note 2013 2012

$’000 $’000

Cash flows from operating activities:

Profit before tax for continuing operations 9,870 3,142

Loss before tax for discontinued operation – (3,369)

Profit/(loss) before tax 9,870 (227)

Adjustments for:

Depreciation of property, plant and equipment 12 3,279 6,048

Amortisation of land use rights 13 72 12

Dividend income from available-for-sale investments 5 (4) (47)

Gain on disposal of available-for-sale investments 5 (405) (574)

Gain on disposal of property, plant and equipment 5 (189) (69)

Gain on disposal of subsidiaries 5 (6,943) –

Gain on revaluation of investment in associate

to fair value 5 (5,168) –

Allowance for doubtful debts 1,004 322

Bad debts written off 8 46 189

Impairment loss on property, plant and equipment 12 – 187

Impairment of available-for-sale investments 8 1,144 448

Allowance of inventories obsolescence – 406

Interest expense 14 215

Interest income 5 (47) (69)

Property, plant and equipment written off 8 4 4

Share of results of associate (541) –

Effect of exchange rate changes (230) (105)

Operating cash flows before changes in working capital 1,906 6,740

Changes in working capital:

Inventories – 104

Trade and other receivables (5,387) (1,942)

Prepaid operating expenses 31 707

Trade and other payables 1,711 3,256

Other liabilities 1,054 (1,996)

Cash (used in)/generated from operations (685) 6,869

Interest received 47 69

Income tax paid (382) (74)

Net cash (used in)/generated from operating activities (1,020) 6,864



Consolidated Statement of Cash Flows /

Note 2013 2012

$’000 $’000

Cash flows from investing activities:

Dividend income from available-for-sale investments 4 47

Dividend income from associate company 294 –

Investment in available-for-sale investments – (19)

Net cash inflow on disposal of subsidiaries 14 6,936 –

Prepayments relating to acquisition of property,

plant and equipment (8,722) –

Proceeds from disposal of available-for-sale

investments 810 1,239

Capital contribution from non-controlling interests 1,807 1,707

Proceeds from disposal of property, plant

and equipment 241 134

Purchase of land use rights – (3,497)

Purchase of property, plant and equipment (6,290) (3,738)

Net cash used in investing activities (4,920) (4,127)

Cash flows from financing activities:

Repayment of obligations under finance leases (217) (162)

Interest paid (14) (215)

Dividend paid 28 (1,390) (4,634)

Proceeds from borrowings 3,335 1,945

Repayment of loans and borrowings – (1,642)

Loan from non-controlling interests 347 –

Purchase of treasury shares 22 (848) –

Net cash generated from/(used in) financing activities 1,213 (4,708)

Net decrease in cash and cash equivalents (4,727) (1,971)

Cash and cash equivalents at the beginning of

financial year 15,374 17,128

Effect of exchange rate changes on cash and

cash equivalents 277 217

Cash and cash equivalents at the end of financial year 20 10,924 15,374



Notes to the Financial Statements /For the financial year ended 31 May 2013

1. Corporate information

GKE Corporation Limited (the “Company”) is a limited liability company incorporated and

domiciled in Singapore and is listed on Catalist which is a market on Singapore Exchange

Securities Trading Limited.

The registered office and principal place of business of the Company is located at 30 Pioneer

Road, Singapore 628502.

The principal activities of the Company are those of an investment holding company and the

provision of management services. The principal activities of the subsidiaries are disclosed

in Note 14 to the financial statements.

2. Summary of significant accounting policies

2.1 Basis of preparation

The consolidated financial statements of the Group and the balance sheet and

statement of changes in equity of the Company have been prepared in accordance

with Singapore Financial Reporting Standards (“FRS”).

The financial statements have been prepared on the historical cost basis except as

disclosed in the accounting policies below.

The financial statements are presented in Singapore Dollars (SGD or $) and all values

in the tables are rounded to the nearest thousand ($'000) as indicated.

2.2 Changes in accounting policies

The accounting policies adopted are consistent with those of the previous financial

year except in the current financial year, the Group has adopted all the new and

revised standards that are effective for annual periods beginning on or after 1 June

2012. The adoption of these standards did not have any effect on the financial

performance or position of the Group and the Company.


Notes to the Financial Statements /


2. Summary of significant accounting policies (cont’d)

2.3 Standards issued but not yet effective

The Group has not adopted the following standards and interpretations that have

been issued but not yet effective:

description

Effective for annual

periods beginning

on or after

Amendments to FRS 1 Presentation of Items of Other

Comprehensive Income 1 July 2012

Revised FRS 19 Employee Benefits 1 January 2013

FRS 113 Fair Value Measurement 1 January 2013

Amendments to FRS 107 Disclosures – Offsetting Financial

Assets and Financial Liabilities 1 January 2013

Improvements to FRSs 2012 1 January 2013

– Amendment to FRS 1 Presentation of Financial Statements 1 January 2013

– Amendment to FRS 16 Property, Plant and Equipment 1 January 2013

– Amendment to FRS 32 Financial Instruments: Presentation 1 January 2013

INT FRS 120 Stripping Costs in the Production Phase of a

Surface Mine 1 January 2013

Revised FRS 27 Separate Financial Statements 1 January 2014

Revised FRS 28 Investments in Associates and Joint

Ventures 1 January 2014

FRS 110 Consolidated Financial Statements 1 January 2014

FRS 111 Joint Arrangements 1 January 2014

FRS 112 Disclosure of Interests in Other Entities 1 January 2014

Amendments to FRS 32 Offsetting Financial Assets and

Financial Liabilities 1 January 2014

Amendments to FRS 110, FRS 112 and FRS 27: Investment

Entities 1 January 2014

Except for the Amendments to FRS 1, FRS 112 and FRS 113, the directors expect

that the adoption of the other standards and interpretations above will have no

material impact on the financial statements in the period of initial application. The

nature of the impending changes in accounting policy on adoption of the Amendments

to FRS 1, FRS 112 and FRS 113 are described below.





2.3 Standards issued but not yet effective (cont’d)

Amendments to FRS 1 Presentation of Items of Other Comprehensive Income

The Amendments to FRS 1 Presentation of Items of Other Comprehensive Income

(OCI) is effective for financial periods beginning on or after 1 July 2012.

The Amendments to FRS 1 changes the grouping of items presented in OCI. Items

that could be reclassified to profit or loss at a future point in time would be

presented separately from items which will never be reclassified. As the Amendments

only affect the presentations of items that are already recognised in OCI, the Group

does not expect any impact on its financial position or performance upon adoption

of this standard.

FRS 112 Disclosure of Interests in Other Entities

FRS 112 Disclosure of Interests in Other Entities is effective for financial periods

beginning on or after 1 January 2014.

FRS 112 is a new and comprehensive standard on disclosure requirements for all

forms of interests in other entities, including joint arrangements, associates, special

purpose vehicles and other off balance sheet vehicles. FRS 112 requires an entity

to disclose information that helps users of its financial statements to evaluate the

nature and risks associated with its interests in other entities and the effects of

those interests on its financial statements. As this is a disclosure standard, it will

have no impact to the financial position and financial performance of the Group when

implemented in 2015.

FRS 113 Fair Value Measurement

FRS 113 Fair Value Measurement provides a single source of guidance for all fair

value measurements. FRS 113 does not change when an entity is required to use

fair value, but rather provides guidance on how to measure fair value under FRS

when fair value is required or permitted by FRS. The adoption of FRS 113 does not

have any impact to the financial position and financial performance of the Group.





2.4 Basis of consolidation and business combinations

(a) Basis of consolidation

Basis of consolidation from 1 June 2010

The consolidated financial statements comprise the financial statements

of the Company and its subsidiaries as at the end of the reporting period.

The financial statements of the subsidiaries used in the preparation of

the consolidated financial statements are prepared for the same reporting

date as the Company. Consistent accounting policies are applied to like

transactions and events in similar circumstances.

All intra-group balances, income and expenses and unrealised gains and

losses resulting from intra-group transactions and dividends are eliminated

in full. Subsidiaries are consolidated from the date of acquisition,

being the date on which the Group obtains control, and continue to be

consolidated until the date that such control ceases.

Losses within a subsidiary are attributed to the non-controlling interest

even if that results in a deficit balance.

A change in the ownership interest of a subsidiary, without a loss of

control, is accounted for as an equity transaction. If the Group loses

control over a subsidiary, it:

– De-recognises the assets (including goodwill) and liabilities of the

subsidiary at their carrying amounts at the date when controls is lost;

– De-recognises the carrying amount of any non-controlling interest;

– De-recognises the cumulative translation differences recorded in equity;

– Recognises the fair value of the consideration received;

– Recognises the fair value of any investment retained;

– Recognises any surplus or deficit in profit or loss;

– Re-classifies the Group’s share of components previously recognised in

other comprehensive income to profit or loss or retained earnings, as

appropriate.





2.4 Basis of consolidation and business combinations (cont’d)

(a) Basis of consolidation (cont’d)

Basis of consolidation prior to 1 June 2010

Certain of the above-mentioned requirements were applied on a prospective

basis. The following differences, however, are carried forward in certain

instances from the previous basis of consolidation:

– Acquisition of non-controlling interests, prior to 1 June 2010, were

accounted for using the parent entity extension method, whereby, the

difference between the consideration and the book value of the share

of the net assets acquired were recognised in goodwill.

– Losses incurred by the Group were attributed to the non-controlling

interest until the balance was reduced to nil. Any further losses were

attributed to the Group, unless the non-controlling interest had a

binding obligation to cover these. Losses prior to 1 June 2010 were

not reallocated between non-controlling interest and the owners of the

Company.

– Upon loss of control, the Group accounted for the investment retained

at its proportionate share of net asset value at the date control was

lost. The carrying value of such investments as at 1 June 2010 have

not been restated.

(b) Business combinations

Business combinations from 1 June 2010

Business combinations are accounted for by applying the acquisition

method. Identifiable assets acquired and liabilities assumed in a business

combination are measured initially at their fair values at the acquisition

date. Acquisition-related costs are recognised as expenses in the periods

in which the costs are incurred and the services are received.






(b) Business combinations (cont’d)

Business combinations from 1 June 2010 (cont’d)

When the Group acquires a business, it assesses the financial assets

and liabilities assumed for appropriate classification and designation

in accordance with the contractual terms, economic circumstances

and pertinent conditions as at the acquisition date. This includes the

separation of embedded derivatives in host contracts by the acquiree.

Any contingent consideration to be transferred by the acquirer will be

recognised at fair value at the acquisition date. Subsequent changes to the

fair value of the contingent consideration which is deemed to be an asset

or liability, will be recognised in accordance with FRS 39 either in profit

or loss or as a change to other comprehensive income. If the contingent

consideration is classified as equity, it is not be remeasured until it is

finally settled within equity.

In business combinations achieved in stages, previously held equity

interests in the acquiree are remeasured to fair value at the acquisition

date and any corresponding gain or loss is recognised in profit or loss.

The Group elects for each individual business combination, whether non-

controlling interest in the acquiree (if any) is recognised on the acquisition

date at fair value, or at the non-controlling interest’s proportionate share

of the acquiree’s identifiable net assets.

Any excess of the sum of the fair value of the consideration transferred

in the business combination, the amount of non-controlling interest in the

acquiree (if any), and the fair value of the Group’s previously held equity

interest in the acquiree (if any), over the net fair value of the acquiree’s

identifiable assets and liabilities is recorded as goodwill. In instances

where the latter amount exceeds the former, the excess is recognised as

gain on bargain purchase in profit or loss on the acquisition date.






(b) Business combinations (cont’d)

Business combinations prior to 1 June 2010

In comparison to the above mentioned requirements, the following

differences applied:

Business combinations are accounted for by applying the purchase method.

Transaction costs directly attributable to the acquisition formed part of the

acquisition costs. The non-controlling interest (formerly known as minority

interest) was measured at the proportionate share of the acquiree’s

identifiable net assets.

Business combinations achieved in stages were accounted for as separate

steps. Adjustments to those fair values relating to previously held interests

are treated as a revaluation and recognised in equity. Any additional

acquired share of interest did not affect previously recognised goodwill.

When the Group acquired a business, embedded derivatives separated

from the host contract by the acquiree were not reassessed on acquisition

unless the business combination resulted in a change in the terms of the

contract that significantly modified the cash flows that otherwise would

have been required under the contract.

Contingent consideration was recognised if, and only if, the Group had

a present obligation, the economic outflow was more likely than not and

a reliable estimate was determinable. Subsequent adjustments to the

contingent consideration were recognised as part of goodwill.





2.5 Transactions with non-controlling interests

Non-controlling interest represents the equity in subsidiaries not attributable,

directly or indirectly, to owners of the Company, and are presented separately

in the consolidated statement of comprehensive income and within equity in the

consolidated balance sheet, separately from equity attributable to owners of the

Company.

Changes in the Company's ownership interest in a subsidiary that do not result in

a loss of control are accounted for as equity transactions. In such circumstances,

the carrying amounts of the controlling and non-controlling interests are adjusted

to reflect the changes in their relative interests in the subsidiary. Any difference

between the amount by which the non-controlling interest is adjusted and the fair

value of the consideration paid or received is recognised directly in equity and

attributed to owners of the Company.

2.6 Foreign currency

The Group's consolidated financial statements are presented in Singapore Dollars,

which is also the Company's functional currency. Each entity in the Group determines

its own functional currency and items included in the financial statements of each

entity are measured using that functional currency.

(a) Transactions and balances

Transactions in foreign currencies are measured in the respective functional

currencies of the Company and its subsidiaries and are recorded on initial

recognition in the functional currencies at exchange rates approximating those

ruling at the transaction dates. Monetary assets and liabilities denominated

in foreign currencies are translated at the rate of exchange ruling at the end

of the reporting period. Non-monetary items that are measured in terms of

historical cost in a foreign currency are translated using the exchange rates

as at the dates of the initial transactions. Non-monetary items measured at

fair value in a foreign currency are translated using the exchange rates at

the date when the fair value was determined.





2.6 Foreign currency (cont’d)

(a) Transactions and balances (cont’d)

Exchange differences arising on the settlement of monetary items or on

translating monetary items at the end of the reporting period are recognised

in profit or loss except for exchange differences arising on monetary items

that form part of the Group's net investment in foreign operations, which are

recognised initially in other comprehensive income and accumulated under

foreign currency translation reserve in equity. The foreign currency translation

reserve is reclassified from equity to profit or loss of the Group on disposal

of the foreign operation.

(b) Consolidated financial statements

For consolidation purpose, the assets and liabilities of foreign operations are

translated into SGD at the rate of exchange ruling at the end of the reporting

period and their profit or loss are translated at the exchange rates prevailing

at the date of the transactions. The exchange differences arising on the

translation are recognised in other comprehensive income. On disposal of a

foreign operation, the component of other comprehensive income relating to

that particular foreign operation is recognised in profit or loss.

In the case of a partial disposal without loss of control of a subsidiary that

includes a foreign operation, the proportionate share of the cumulative

amount of the exchange differences are re-attributed to non-controlling

interest and are not recognised in profit or loss. For partial disposals of

associates or jointly controlled entities that are foreign operations, the

proportionate share of the accumulated exchange differences is reclassified

to profit or loss.





2.7 Property, plant and equipment

All items of property, plant and equipment are initially recorded at cost. Subsequent

to recognition, furniture, fittings and office equipment, motor vehicles, trailers and

forklifts, warehouse equipment and cranes and cranes equipment are measured

at cost less accumulated depreciation and any accumulated impairment losses.

The cost includes the cost of replacing part of the property, plant and equipment

and borrowing costs that are directly attributable to the acquisition, construction

or production of a qualifying property, plant and equipment. The accounting policy

for borrowing costs is set out in Note 2.18. The cost of an item of property, plant

and equipment is recognised as an asset if, and only if, it is probable that future

economic benefits associated with the item will flow to the Group and the cost of

the item can be measured reliably.

When significant parts of property, plant and equipment are required to be replaced

in intervals, the Group recognises such parts as individual assets with specific useful

lives and depreciation, respectively. Likewise, when a major inspection is performed,

its cost is recognised in the carrying amount of the plant and equipment as a

replacement if the recognition criteria are satisfied. All other repair and maintenance

costs are recognised in profit or loss as incurred.

Leasehold buildings and improvements and plant and machineries are measured

at fair value less accumulated depreciation and any impairment losses recognised

after the date of the revaluation. Valuations are performed with sufficient regularity

to ensure that the carrying amount does not differ materially from the fair value of

the leasehold buildings and improvements and plant and machineries at the end of

the reporting period.

Any revaluation surplus is recognised in other comprehensive income and accumulated

in equity under the asset revaluation reserve, except to the extent that it reverses

a revaluation decrease of the same asset previously recognised in profit or loss,

in which case the increase is recognised in profit or loss. A revaluation deficit is

recognised in profit or loss, except to the extent that it offsets an existing surplus

on the same asset carried in the asset revaluation reserve.

Any accumulated depreciation as at the revaluation date is eliminated against the

gross carrying amount of the asset and the net amount is restated to the revalued

amount of the asset. The revaluation surplus included in the asset revaluation

reserve in respect of an asset is transferred directly to retained earnings on

retirement or disposal of the asset.





2.7 Property, plant and equipment (cont’d)

Depreciation is computed on a straight-line basis over the estimated useful lives of

the assets as follows:

Leasehold buildings and improvements – The remaining lease terms of 25

to 30 years

Furniture, fittings and office equipment – 1 to 5 years

Motor vehicles, trailers and forklifts – 5 to 10 years

Plant and machineries – 2 to 15 years

Warehouse equipment – 2 to 5 years

Cranes and cranes equipment – 14 to 26 years

Assets under construction included in property, plant and equipment are not

depreciated as these assets are not yet available for use.

The carrying values of property, plant and equipment are reviewed for impairment

when events or changes in circumstances indicate that the carrying value may not

be recoverable.

The residual value, useful life and depreciation method are reviewed at each financial

year-end, and adjusted prospectively, if appropriate.

An item of property, plant and equipment is derecognised upon disposal or when

no future economic benefits are expected from its use or disposal. Any gain or loss

on de-recognition of the asset is included in profit or loss in the year the asset is

derecognised.

2.8 Land use rights

Land use rights are initially measured at cost. Following initial recognition, land use

rights are measured at cost less accumulated amortisation. The land use rights are

amortised on a straight-line basis over the lease term of 50 years.





2.9 Impairment of non-financial assets

The Group assesses at each reporting date whether there is an indication that an

asset may be impaired. If any indication exists, or when an annual impairment testing

for an asset is required, the Group makes an estimate of the asset's recoverable

amount.

An asset's recoverable amount is the higher of an asset's or cash-generating unit's

fair value less costs to sell and its value in use and is determined for an individual

asset, unless the asset does not generate cash inflows that are largely independent

of those from other assets or group of assets. Where the carrying amount of an asset

or cash-generating unit exceeds its recoverable amount, the asset is considered

impaired and is written down to its recoverable amount. In assessing value in

use, the estimated future cash flows expected to be generated by the asset are

discounted to their present value using a pre-tax discount rate that reflects current

market assessments of the time value of money and the risks specific to the asset.

In determining fair value less costs to sell, recent market transactions are taken

into account, if available. If no such transactions can be identified, an appropriate

valuation model is used. These calculations are corroborated by valuation multiples

or other available fair value indicators.

The Group bases its impairment calculation on detailed budgets and forecast

calculations which are prepared separately for each of the Group's cash-generating

units to which the individual assets are allocated. These budgets and forecast

calculations are generally covering a period of five years. For longer periods, a

long-term growth rate is calculated and applied to project future cash flows after

the fifth year.

Impairment losses of continuing operations are recognised in profit or loss in those

expense categories consistent with the function of the impaired asset, except

for assets that are previously revalued where the revaluation was taken to other

comprehensive income. In this case, the impairment is also recognised in other

comprehensive income up to the amount of any previous revaluation.





2.9 Impairment of non-financial assets (cont’d)

For assets excluding goodwill, an assessment is made at each reporting date as to

whether there is any indication that previously recognised impairment losses may no

longer exist or may have decreased. If such indication exists, the Group estimates

the asset's or cash-generating unit's recoverable amount. A previously recognised

impairment loss is reversed only if there has been a change in the estimates used

to determine the asset's recoverable amount since the last impairment loss was

recognised. If that is the case, the carrying amount of the asset is increased to its

recoverable amount. That increase cannot exceed the carrying amount that would

have been determined, net of depreciation, had no impairment loss been recognised

previously. Such reversal is recognised in profit or loss unless the asset is measured

at revalued amount, in which case the reversal is treated as a revaluation increase.

2.10 Subsidiaries

A subsidiary is an entity over which the Group has the power to govern the financial

and operating policies so as to obtain benefits from its activities. The Group

generally has such power when it directly or indirectly, holds more than 50% of the

issued share capital, or controls more than half of the voting power, or controls the

composition of the board of directors. The existence and effect of potential voting

rights that are currently exercisable or convertible are considered when assessing

whether the Group has control over another entity.

In the Company's separate financial statements, investments in subsidiaries are

accounted for at cost less accumulated impairment losses. On disposal of the

investment, the difference between disposal proceeds and the carrying amounts of

the investments are recognised in profit or loss.

2.11 Associates

An associate is an entity, not being a subsidiary or a joint venture, in which the

Group has significant influence. An associate is equity accounted for from the date

the Group obtains significant influence until the date the Group ceases to have

significant influence over the associate.





2.11 Associates (cont’d)

The Group's investments in associates are accounted for using the equity method.

Under the equity method, the investment in associates is carried in the balance

sheet at cost plus post-acquisition changes in the Group's share of net assets of

the associates. Goodwill relating to associates is included in the carrying amount

of the investment and is neither amortised nor tested individually for impairment.

Any excess of the Group's share of the net fair value of the associate's identifiable

assets, liabilities and contingent liabilities over the cost of the investment is included

as income in the determination of the Group's share of results of the associate in

the period in which the investment is acquired.

The profit or loss reflects the share of the results of operations of the associates.

Where there has been a change recognised in other comprehensive income by the

associates, the Group recognises its share of such changes in other comprehensive

income. Unrealised gains and losses resulting from transactions between the Group

and the associate are eliminated to the extent of the interest in the associates.

The Group's share of the profit or loss of its associates is the profit attributable

to equity holders of the associate and, therefore is the profit or loss after tax and

non-controlling interests in the subsidiaries of associates.

When the Group's share of losses in an associate equals or exceeds its interest in

the associate, the Group does not recognise further losses, unless it has incurred

obligations or made payments on behalf of the associate.

After application of the equity method, the Group determines whether it is necessary

to recognise an additional impairment loss on the Group's investment in its

associates. The Group determines at the end of each reporting period whether there

is any objective evidence that the investment in the associate is impaired. If this is

the case, the Group calculates the amount of impairment as the difference between

the recoverable amount of the associate and its carrying value and recognises the

amount in profit or loss.

The financial statements of the associates are prepared as of the same reporting

date as the Company. Where necessary, adjustments are made to bring the

accounting policies in line with those of the Group.





2.11 Associates (cont’d)

Upon loss of significant influence over the associate, the Group measures and

recognises any retained investment at its fair value. Any difference between the

carrying amount of the associate upon loss of significant influence and the fair

value of the aggregate of the retained investment and proceeds from disposal is

recognised in profit or loss.

2.12 Financial assets

Initial recognition and measurement

Financial assets are recognised when, and only when, the Group becomes a party

to the contractual provisions of the financial instrument. The Group determines the

classification of its financial assets at initial recognition.

When financial assets are recognised initially, they are measured at fair value,

plus, in the case of financial assets not at fair value through profit or loss, directly

attributable transaction costs.

Subsequent measurement

The subsequent measurement of financial assets depends on their classification

as follows:

(a) Loans and receivables

Non-derivative financial assets with fixed or determinable payments that

are not quoted in an active market are classified as loans and receivables.

Subsequent to initial recognition, loans and receivables are measured at

amortised cost using the effective interest method, less impairment. Gains

and losses are recognised in profit or loss when the loans and receivables

are derecognised or impaired, and through the amortisation process.





2.12 Financial assets (cont’d)

(b) Available-for-sale financial assets

Available-for-sale financial assets include equity and debt securities. Equity

investments classified as available-for-sale are those, which are neither

classified as held for trading nor designated at fair value through profit or

loss. Debt securities in this category are those which are intended to be held

for an indefinite period of time and which may be sold in response to needs

for liquidity or in response to changes in the market conditions.

After initial recognition, available-for-sale financial assets are subsequently

measured at fair value. Any gains or losses from changes in fair value of

the financial assets are recognised in other comprehensive income, except

that impairment losses, foreign exchange gains and losses on monetary

instruments and interest calculated using the effective interest method are

recognised in profit or loss. The cumulative gain or loss previously recognised

in other comprehensive income is reclassified from equity to profit or loss

as a reclassification adjustment when the financial asset is de-recognised.

Investments in equity instruments whose fair value cannot be reliably

measured are measured at cost less impairment loss.

De-recognition

A financial asset is derecognised where the contractual right to receive cash flows

from the asset has expired. On de-recognition of a financial asset in its entirety, the

difference between the carrying amount and the sum of the consideration received

and any cumulative gain or loss that had been recognised in other comprehensive

income is recognised in profit or loss.

Regular way purchase or sale of a financial asset

All regular way purchases and sales of financial assets are recognised or

derecognised on the trade date i.e., the date that the Group commits to purchase

or sell the asset. Regular way purchases or sales are purchases or sales of financial

assets that require delivery of assets within the period generally established by

regulation or convention in the marketplace concerned.





2.13 Impairment of financial assets

The Group assesses at each reporting date whether there is any objective evidence

that a financial asset is impaired.

(a) Financial assets carried at amortised cost

For financial assets carried at amortised cost, the Group first assesses

whether objective evidence of impairment exists individually for financial

assets that are individually significant, or collectively for financial assets

that are not individually significant. If the Group determines that no objective

evidence of impairment exists for an individually assessed financial asset,

whether significant or not, it includes the asset in a group of financial assets

with similar credit risk characteristics and collectively assesses them for

impairment. Assets that are individually assessed for impairment and for

which an impairment loss is, or continues to be recognised are not included

in a collective assessment of impairment.

If there is objective evidence that an impairment loss on financial assets

carried at amortised cost has been incurred, the amount of the loss is

measured as the difference between the asset's carrying amount and the

present value of estimated future cash flows discounted at the financial

asset's original effective interest rate. If a loan has a variable interest rate,

the discount rate for measuring any impairment loss is the current effective

interest rate. The carrying amount of the asset is reduced through the use

of an allowance account. The impairment loss is recognised in profit or loss.

When the asset becomes uncollectible, the carrying amount of impaired

financial assets is reduced directly or if an amount was charged to the

allowance account, the amounts charged to the allowance account are written

off against the carrying value of the financial asset.

To determine whether there is objective evidence that an impairment loss

on financial assets has been incurred, the Group considers factors such as

the probability of insolvency or significant financial difficulties of the debtor

and default or significant delay in payments.





2.13 Impairment of financial assets (cont’d)

(a) Financial assets carried at amortised cost (cont’d)

If in a subsequent period, the amount of the impairment loss decreases and the

decrease can be related objectively to an event occurring after the impairment

was recognised, the previously recognised impairment loss is reversed to the

extent that the carrying amount of the asset does not exceed its amortised cost

at the reversal date. The amount of reversal is recognised in profit or loss.

(b) Available-for-sale financial assets

In the case of equity investments classified as available-for-sale, objective

evidence of impairment include (i) significant financial difficulty of the issuer

or obligor, (ii) information about significant changes with an adverse effect that

have taken place in the technological, market, economic or legal environment in

which the issuer operates, and indicates that the cost of the investment in equity

instrument may not be recovered; and (iii) a significant or prolonged decline in

the fair value of the investment below its costs. 'Significant' is to be evaluated

against the original cost of the investment and 'prolonged' against the period in

which the fair value has been below its original cost.

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

difference between its acquisition cost (net of any principal repayment and

amortisation) and its current fair value, less any impairment loss previously

recognised in profit or loss, is transferred from other comprehensive income and

recognised in profit or loss. Reversals of impairment losses in respect of equity

instruments are not recognised in profit or loss; increase in their fair value after

impairment are recognised directly in other comprehensive income.

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

assessed based on the same criteria as financial assets carried at amortised

cost. However, the amount recorded for impairment is the cumulative loss

measured as the difference between the amortised cost and the current fair

value, less any impairment loss on that investment previously recognised in profit

or loss. Future interest income continues to be accrued based on the reduced

carrying amount of the asset, using the rate of interest used to discount the

future cash flows for the purpose of measuring the impairment loss. The interest

income is recorded as part of finance income. If, in a subsequent year, the fair

value of a debt instrument increases and the increases can be objectively related

to an event occurring after the impairment loss was recognised in profit or loss,

the impairment loss is reversed in profit or loss.





2.14 Cash and cash equivalents

Cash and cash equivalents comprise cash at bank and on hand, deposits with

financial institutions, and short-term, highly liquid investments that are readily

convertible to known amount of cash and which are subject to an insignificant risk

of changes in value.

2.15 Provisions

Provisions are recognised when the Group has a present obligation (legal or

constructive) as a result of a past event, it is probable that an outflow of resources

embodying economic benefits will be required to settle the obligation and the amount

of the obligation can be estimated reliably.

Provisions are reviewed at the end of each reporting period and adjusted to reflect

the current best estimate. If it is no longer probable that an outflow of economic

resources will be required to settle the obligation, the provision is reversed. If the

effect of the time value of money is material, provisions are discounted using a

current pre tax rate that reflects, where appropriate, the risks specific to the liability.

When discounting is used, the increase in the provision due to the passage of time

is recognised as a finance cost.

2.16 Government grants

Government grants are recognised at their fair value where there is reasonable

assurance that the grant will be received and all attaching conditions will be complied

with. Where the grant relates to income, the fair value is recognised in profit or loss

on a systematic basis over the period in which the entity recognises as expenses

the related costs for which the grants are intended to compensate. Grants related to

income may be presented as a credit in profit or loss, either separately or under a

general heading such as “Other income”. Alternatively, they are deducted in reporting

the related expenses.





2.17 Financial liabilities

Initial recognition and measurement

Financial liabilities are recognised when, and only when, the Group becomes a party

to the contractual provisions of the financial instrument. The Group determines the

classification of its financial liabilities at initial recognition.

All financial liabilities are recognised initially at fair value plus in the case of financial

liabilities not at fair value through profit or loss, directly attributable transaction costs.

Subsequent measurement

After initial recognition, financial liabilities are subsequently measured at amortised

cost using the effective interest rate method. Gains and losses are recognised in

profit or loss when the liabilities are derecognised, and through the amortisation

process.

Derecognition

A financial liability is derecognised when the obligation under the liability is

discharged or cancelled or expires. When an existing financial liability is replaced

by another from the same lender on substantially different terms, or the terms of

an existing liability are substantially modified, such an exchange or modification is

treated as a derecognition of the original liability and the recognition of a new liability,

and the difference in the respective carrying amounts is recognised in profit or loss.

2.18 Borrowing costs

Borrowing costs are capitalised as part of the cost of a qualifying asset if they are

directly attributable to the acquisition, construction or production of that asset.

Capitalisation of borrowing costs commences when the activities to prepare the

asset for its intended use or sale are in progress and the expenditures and borrowing

costs are incurred. Borrowing costs are capitalised until the assets are substantially

completed for their intended use or sale. All other borrowing costs are expensed in

the period they occur. Borrowing costs consist of interest and other costs that an

entity incurs in connection with the borrowing of funds.





2.19 Employee benefits

(a) Defined contribution plans

The Group participates in the national pension schemes as defined by the

laws of the countries in which it has operations. In particular, the Singapore

companies in the Group make contributions to the Central Provident Fund

scheme in Singapore, a defined contribution pension scheme. Contributions

to defined contribution pension schemes are recognised as an expense in

the period in which the related service is performed.

(b) Employee leave entitlement

Employee entitlements to annual leave are recognised as a liability when

they accrue to employees. The estimated liability for leave is recognised for

services rendered by employees up to the end of the reporting period.

2.20 Leases

The determination of whether an arrangement is, or contains a lease is based

on the substance of the arrangement at inception date: whether fulfilment of

the arrangement is dependent on the use of a specific asset or assets or the

arrangement conveys a right to use the asset, even if that right is not explicitly

specified in an arrangement.

For arrangements entered into prior to 1 June 2006, the date of inception is deemed

to be 1 June 2006 in accordance with the transitional requirements of INT FRS 104.

(a) As lessee

Finance leases which transfer to the Group substantially all the risks and

rewards incidental to ownership of the leased item, are capitalised at the

inception of the lease at the fair value of the leased asset or, if lower, at

the present value of the minimum lease payments. Any initial direct costs

are also added to the amount capitalised. Lease payments are apportioned

between the finance charges and reduction of the lease liability so as to

achieve a constant rate of interest on the remaining balance of the liability.

Finance charges are charged to profit or loss. Contingent rents, if any, are

charged as expenses in the periods in which they are incurred.





2.20 Leases (cont’d)

(a) As lessee (cont’d)

Capitalised leased assets are depreciated over the shorter of the estimated

useful life of the asset and the lease term, if there is no reasonable certainty

that the Group will obtain ownership by the end of the lease term.

Operating lease payments are recognised as an expense in profit or loss on

a straight-line basis over the lease term. The aggregate benefit of incentives

provided by the lessor is recognised as a reduction of rental expense over

the lease term on a straight-line basis.

(b) As lessor

Leases where the Group retains substantially all the risks and rewards of

ownership of the asset are classified as operating leases. Initial direct costs

incurred in negotiating an operating lease are added to the carrying amount

of the leased asset and recognised over the lease term on the same bases

as rental income. The accounting policy for rental income is set out in Note

2.22(b). Contingent rents are recognised as revenue in the period in which

they are earned.

2.21 Non-current assets held for sale and discontinued operations

Non-current assets and disposal groups classified as held for sale are measured

at the lower of their carrying amount and fair value less costs to sell. Non-current

assets and disposal groups are classified as held for sale if their carrying amounts

will be recovered principally through a sale transaction rather than through continuing

use. This condition is regarded as met only when the sale is highly probable and

the asset or disposal group is available for immediate sale in its present condition.

Management must be committed to the sale, which should be expected to qualify

for recognition as a completed sale within one year from the date of classification. A

component of the Group is classified as a “discontinued operation” when the criteria

to be classified as held for sale have been met or it has been disposed of and such

a component represents a separate major line of business or geographical area of

operations or is part of a single coordinated plan to dispose of a separate major

line of business or geographical area of operations.





2.21 Non-current assets held for sale and discontinued operations (cont’d)

In profit or loss of the current reporting period, and of the comparative period of the

previous year, all income and expenses from discontinued operations are reported

separately from income and expenses from continuing operations, down to the

level of profit after taxes, even when the Group retains a non-controlling interest in

the subsidiary after the sale. The resulting profit or loss (after taxes) is reported

separately in profit or loss.

Property, plant and equipment and intangible assets once classified as held for sale

are not depreciated or amortised.

2.22 Revenue

Revenue is recognised to the extent that it is probable that the economic benefits will

flow to the Group and the revenue can be reliably measured, regardless of when the

payment is made. Revenue is measured at the fair value of consideration received or

receivable, taking into account contractually defined terms of payment and excluding

taxes or duty. The Group assesses its revenue arrangements to determine if it is

acting as principal or agent. The Group has concluded that it is acting as a principal

in all of its revenue arrangements. The following specific recognition criteria must

also be met before revenue is recognised:

(a) Rendering of services

Revenue from services is recognised during the financial year in which the

services are rendered, by reference to completion of the specific transaction

assessed on the basis of the actual services provided as a proportion of the

total services to be performed.

(b) Rental income

Rental income arising from operating leases is accounted for on a straight-

line basis over the lease terms. The aggregate costs of incentives provided

to lessees are recognised as a reduction of rental income over the lease

term on a straight-line basis.





2.23 Taxes

(a) Current income tax

Current income tax assets and liabilities for the current and prior periods

are measured at the amount expected to be recovered from or paid to the

taxation authorities. The tax rates and tax laws used to compute the amount

are those that are enacted or substantively enacted at the end of the

reporting period, in the countries where the Group operates and generates

taxable income.

Current income taxes are recognised in profit or loss except to the extent

that the tax relates to items recognised outside profit or loss, either in

other comprehensive income or directly in equity. Management periodically

evaluates positions taken in the tax returns with respect to situations in

which applicable tax regulations are subject to interpretation and establishes

provisions where appropriate.

(b) Deferred tax

Deferred tax is provided using the liability method on temporary differences at

the end of the reporting period between the tax bases of assets and liabilities

and their carrying amounts for financial reporting purposes.

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

– Where the deferred tax liability arises from the initial recognition of

goodwill or of an asset or liability in a transaction that is not a business

combination and, at the time of the transaction, affects neither the

accounting profit nor taxable profit or loss; and





2.23 Taxes (cont’d)

(b) Deferred tax (cont’d)

– In respect of taxable temporary differences associated with investments

in subsidiaries, associates and interests in joint ventures, where the

timing of the reversal of the temporary differences can be controlled

and it is probable that the temporary differences will not reverse in the

foreseeable future.

Deferred tax assets are recognised for all deductible temporary differences,

carry forward of unused tax credits and unused tax losses, to the extent

that it is probable that taxable profit will be available against which the

deductible temporary differences, and the carry forward of unused tax credits

and unused tax losses can be utilised except:

– Where the deferred tax asset relating to the deductible temporary

difference arises from the initial recognition of an asset or liability in a

transaction that is not a business combination and, at the time of the

transaction, affects neither the accounting profit nor taxable profit or

loss; and

– In respect of deductible temporary differences associated with

investments in subsidiaries, associates and interests in joint ventures,

deferred tax assets are recognised only to the extent that it is probable

that the temporary differences will reverse in the foreseeable future and

taxable profit will be available against which the temporary differences

can be utilised.

The carrying amount of deferred tax assets is reviewed at the end of each

reporting period and reduced to the extent that it is no longer probable that

sufficient taxable profit will be available to allow all or part of the deferred

tax asset to be utilised. Unrecognised deferred tax assets are reassessed

at the end of each reporting period and are recognised to the extent that it

has become probable that future taxable profit will allow the deferred tax

asset to be recovered.






(b) Deferred tax (cont’d)

Deferred tax assets and liabilities are measured at the tax rates that are

expected to apply in the year when the asset is realised or the liability

is settled, based on tax rates (and tax laws) that have been enacted or

substantively enacted at the end of each reporting period.

Deferred tax relating to items recognised outside profit or loss is recognised

outside profit or loss. Deferred tax items are recognised in correlation to

the underlying transaction either in other comprehensive income or directly

in equity and deferred tax arising from a business combination is adjusted

against goodwill on acquisition.

Deferred tax assets and deferred tax liabilities are offset, if a legally

enforceable right exists to set off current income tax assets against current

income tax liabilities and the deferred taxes relate to the same taxable entity

and the same taxation authority.

Tax benefits acquired as part of a business combination, but not satisfying

the criteria for separate recognition at that date, would be recognised

subsequently if new information about facts and circumstances changed.

The adjustment would either be treated as a reduction to goodwill (as long

as it does not exceed goodwill) if it incurred during the measurement period

or in profit or loss.

(c) Sales tax

Revenues, expenses and assets are recognised net of the amount of sales

tax except:

– Where the sales tax incurred on a purchase of assets or services is not

recoverable from the taxation authority, in which case the sales tax is

recognised as part of the cost of acquisition of the asset or as part of

the expense item as applicable; and






(c) Sales tax (cont’d)

– Receivables and payables that are stated with the amount of sales tax

included.

The net amount of sales tax recoverable from, or payable to, the taxation

authority is included as part of receivables or payables in the balance sheet.

2.24 Segment reporting

For management purposes, the Group is organised into operating segments based

on their products and services which are independently managed by the respective

segment managers responsible for the performance of the respective segments

under their charge. The segment managers report directly to the management of the

Company who regularly review the segment results in order to allocate resources to

the segments and to assess the segment performance. Additional disclosures on

each of these segments are shown in Note 33, including the factors used to identify

the reportable segments and the measurement basis of segment information.

2.25 Share capital and share issuance expenses

Proceeds from issuance of ordinary shares are recognised as share capital in

equity. Incremental costs directly attributable to the issuance of ordinary shares are

deducted against share capital.

2.26 Treasury shares

The Group’s own equity instruments, which are reacquired (treasury shares) are

recognised at cost and deducted from equity. No gain or loss is recognised in profit

or loss on the purchase, sale, issue or cancellation of the Group’s own equity

instruments. Any difference between the carrying amount of treasury shares and

the consideration received, if reissued, is recognised directly in equity. Voting rights

related to treasury shares are nullified for the Group and no dividends are allocated

to them respectively.





2.27 Contingencies

A contingent liability is:

(a) a possible obligation that arises from past events and whose existence will be

confirmed only by the occurrence or non-occurrence of one or more uncertain

future events not wholly within the control of the Group; or

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

because:

(i) It is not probable that an outflow of resources embodying economic

benefits will be required to settle the obligation; or

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

reliability.

A contingent asset is a possible asset that arises from past events and whose

existence will be confirmed only by the occurrence or non-occurrence of one or more

uncertain future events not wholly within the control of the Group.

Contingent liabilities and assets are not recognised on the balance sheet of the

Group, except for contingent liabilities assumed in a business combination that are

present obligations and which the fair values can be reliably determined.

2.28 Related parties

A related party is defined as follows:

(a) A person or a close member of that person’s family is related to the Group

and Company if that person:

(i) Has control or joint control over the Company;

(ii) Has significant influence over the Company; or

(iii) Is a member of the key management personnel of the Group or

Company.





2.28 Related parties (cont’d)

(b) An entity is related to the Group and the Company if:

(i) The entity and the Company are members of the same group (which

means that each parent, subsidiary and fellow subsidiary is related

to the others);

(ii) One entity is an associate or joint venture of the other entity (or an

associate or joint venture of a member of a group of which the other

entity is a member);

(iii) Both entities are joint ventures of the same third party;

(iv) One entity is a joint venture of a third entity and the other entity is

an associate of the third entity;

(v) The entity is a post-employment benefit plan for the benefit of

employees of either the Company or an entity related to the Company.

If the Company is itself such a plan, the sponsoring employers are

also related to the Company;

(vi) The entity is controlled or jointly controlled by a person identified in

(a); or

(vii) A person identified in (a) (i) has significant influence over the entity

or is a member of the key management personnel of the entity.

3. Significant accounting judgments and estimates

The preparation of the Group’s consolidated financial statements requires management to

make judgments, estimates and assumptions that affect the reported amounts of revenue,

expenses, assets and liabilities, and the disclosure of contingent liabilities at the end of

each reporting period. However, uncertainty about these assumptions and estimates could

result in outcomes that require a material adjustment to carrying amount of the asset or

liability affected in the future periods.




3. Significant accounting judgments and estimates (cont’d)

3.1 Judgments made in applying accounting policies

In the process of applying the Group’s accounting policies, management has made

the following judgments apart from those involving estimations, which has the most

significant effect on the amounts recognised in the consolidated financial statements:

(a) Income taxes

Significant judgment is involved in determining the capital allowance and

deductibility of certain expenses during the estimation of the provision

for income tax. There are many transactions and calculations for which

the ultimate tax determination is uncertain during the ordinary course of

business. The Group recognises liabilities for anticipated tax audit issues

based on estimates whether additional taxes will be due. Where the final tax

outcome of these matters is different from the amounts that were initially

recorded, such difference will impact the income tax and deferred tax

provisions in the period in which such determination is made.

The carrying amounts of the Group’s and Company’s tax payables at 31 May

2013 were approximately $184,000 (2012: $524,000) and $Nil (2012:

$242,000) respectively.

The carrying amounts of the Group’s and Company’s deferred tax liabilities

at 31 May 2013 were approximately $4,432,000 (2012: $2,258,000) and

$25,000 (2012: $ Nil) respectively.

The carrying amount of the Group’s and Company’s deferred tax assets at

31 May 2013 was approximately $Nil (2012: $26,000).

(b) Impairment of available-for-sale investments

The Group records impairment charges on available-for-sale equity investments

when there has been a significant or prolonged decline in the fair value below

their cost. The determination of what is “significant” or “prolonged” requires

judgment. In making this judgment, the Group evaluates, among other factors

historical share price movements and the duration and extent to which the

fair value of an investment is less than its cost. For the financial year ended

31 May 2013, the amount of impairment loss recognised for available-for-sale

equity investments was $1,144,000 (2012: $448,000).




3. Significant accounting judgments and estimates (cont’d)

3.2 Key sources of estimation uncertainty

The key assumptions concerning the future and other key sources of estimation

uncertainty at the end of each reporting period, that have a significant risk of causing

a material adjustment to the carrying amounts of assets and liabilities within the

next financial year are discussed below. The Group based its assumptions and

estimates on parameters available when the financial statements were prepared.

Existing circumstances and assumptions about future development, however, may

change due to market changes or circumstances arising beyond the control of the

Group. Such changes are reflected in the assumptions when they occur.

Impairment of loans and receivables

The Group assesses at the end of each reporting period whether there is any

objective evidence that a financial asset is impaired. To determine whether there

is any objective evidence of impairment, the Group considers factors such as the

probability of insolvency or significant financial difficulties of the debtor and default

or significant delay in payments.

Where there is objective evidence of impairment, the amount and timing of future

cash flows are estimated based on historical loss experience for assets with similar

credit risk characteristics. The carrying amount of the Group’s loans and receivables

at the end of the reporting period is disclosed in Note 18 to the financial statements.

4. revenue

Group

2013 2012

$’000 $’000

Services rendered 8,712 14,257

Rental income 17,826 21,301

26,538 35,558




5. other income

Group

2013 2012

$’000 $’000

Dividend income 4 47

Gain on disposal of available-for-sale investments 405 574

Gain on disposal of property, plant and equipment 189 69

Gain on disposal of subsidiaries 6,943 –

Gain on revaluation of investment in associate to fair value 5,168 –

Grant received from government 39 98

Interest income 47 69

Others 76 40

12,871 897

6. Finance costs

Group

2013 2012

$’000 $’000

Interest expense on:

– Bank loans 26 –

– Obligations under finance leases 14 13

– Loan from non-controlling interests 16 –

56 13

Less: Interest capitalised in property, plant and equipment

(Note 12) (42) –

Total finance costs 14 13




7. other (expenses)/credits

Group

2013 2012

$’000 $’000

Net foreign exchange (loss)/gain (82) 131

8. Profit before tax from continuing operations

Group

2013 2012

$’000 $’000

Profit before tax from continuing operations is arrived

at after (crediting)/charging:

Audit fees paid to:

– Auditors of the Company 138 147

– Other auditors 1 2

Non-audit fees paid to auditors of the Company

– Auditors of the Company 21 57

– Other auditors 41 –

Amortisation of land use rights 72 12

Allowance for doubtful receivables written back – (7)

Allowance for doubtful trade receivables 28 4

Allowance for doubtful non-trade receivables 976 –

Bad debts written off 46 189

Depreciation of property, plant and equipment 3,279 3,804

Impairment of available-for-sale investments 1,144 448

Personnel costs

– Salaries and related cost 10,626 8,923

– Contribution to defined contribution plans 666 654

Property, plant and equipment written off 4 4

Personnel costs are arrived at after crediting government grants for Job Credit Scheme

of approximately $Nil (2012: $3,000). Personnel costs are inclusive of directors and key

management personnel remuneration as set out in Note 34(b).




9. Income tax (credit)/expense

(a) Major components of income tax (credit)/expense

The major components of income tax (credit)/expense for the years ended 31 May

2013 and 2012 are:

Group

Note 2013 2012

$’000 $’000

Current income tax – continuing

operations:

Current income taxation 210 879

Over provision in respect of previous

years (168) (1,135)

42 (256)

Deferred income tax – continuing

operations:

Origination and reversal of temporary

differences 107 (25)

Benefits from previously unrecognised

tax losses – 1,094

Over provision in respect of previous

years (242) –

(135) 1,069

Income tax attributable to continuing

operations (93) 813

Income tax attributable to discontinued

operation 10 – –

Income tax (credit)/expense recognised in

profit or loss (93) 813




9. Income tax (credit)/expense (cont’d)

(b) Relationship between tax (credit)/expense and accounting profit/(loss)

The reconciliation between tax (credit)/expense and the product of accounting profit/

(loss) multiplied by the applicable corporate tax rate for the years ended 31 May

2013 and 2012 is as follows:

Group

2013 2012

$’000 $’000

Profit before tax from continuing operations 9,870 3,142

Loss before tax from discontinuing operation – (3,369)

Accounting profit/(loss) before tax 9,870 (227)

Tax at the domestic rates applicable to profits

in the countries where the Group operates 1,651 (277)

Adjustments:

Effect of tax incentives (120) (105)

Expenses not deductible for tax purposes 1,036 1,418

Income not subject to tax (2,138) (111)

Over provision in respect of previous years

current income tax (168) (1,135)

Benefits from previously unrecognised tax losses – 1,094

Over provision in respect of previous years

deferred income tax (242) –

Share of results of associate (92) –

Singapore statutory stepped income exemption (26) (78)

Others 6 7

Income tax (credit)/expense recognised in

profit or loss (93) 813

The above reconciliation is prepared by aggregating separate reconciliations for each

national jurisdiction.




10. Disposal groups classified as held for sale/Discontinued operation

Disposal of GKE Metal Logistics Pte Ltd and its subsidiaries (“GKEMLPL”)

On 9 March 2012, the Company entered into an agreement and subject to certain conditions,

to dispose its 51% shareholder interest in GKEMLPL, which was previously reported in the

logistics segment and, therefore classified it as disposal group for sale.

As at 31 May 2012, the assets, liabilities and reserves related to GKEMLPL have been

presented in the balance sheet as “Assets of disposal groups classified as held for

sale”, “Liabilities directly associated with disposal groups classified as held for sale” and

“Reserves of disposal groups classified as held for sale”.

The disposal of its 51% shareholder interest of GKEMLPL was completed on 22 June 2012.

The remaining 49% of its shareholder interest has been classified as investment in associate

as the Group is able to exercise significant influence over the operational and financial

decision of GKEMLPL through board representation in GKEMLPL and 49% voting rights during

the general meetings of GKEMLPL.

Disposal of Liaoning China Starzyme Co., Ltd and its subsidiaries (“LCS”)

On 2 March 2012, the Company entered into an agreement and subject to certain conditions,

to dispose its entire 52% shareholding interest in LCS to the minority shareholder. LCS

comprises the entire micro biotechnology segment reported in the previous year.

As at 31 May 2012, the assets, liabilities and reserves related to LCS have been presented

in the balance sheet as “Assets of disposal groups classified as held for sale”, “Liabilities

directly associated with disposal groups classified as held for sale” and “Reserves of

disposal groups classified as held for sale”, and its results are presented separately on

profit or loss as “Loss from discontinued operation, net of tax”. The disposal of LCS was

completed in June 2012.




10. Disposal groups classified as held for sale/Discontinued operation (cont’d)

(i) Disposal groups classified as held for sale

Balance sheet disclosure

The major classes of assets and liabilities of GKEMLPL and LCS classified as held

for sale and the related reserves as at 31 May 2012 were as follows:

2012

GKEMLPL LCS Total

$’000 $’000 $’000

Assets:

Property, plant and equipment 207 4,112 4,319

Trade and other receivables 3,743 140 3,883

Cash and cash equivalents 6,548 862 7,410

Assets of disposal groups classified

as held for sale 10,498 5,114 15,612

Liabilities:

Trade and other payables 1,299 945 2,244

Other liabilities 1,344 293 1,637

Borrowings – 1,945 1,945

Tax payable 599 28 627

Deferred tax liabilities – 1,069 1,069

Liabilities directly associated with


as held for sale 3,242 4,280 7,522

Net assets directly associated with


as held for sale 7,256 834 8,090

Reserves:

Revaluation reserves and foreign

currency translation reserve 24 1,031 1,055





(ii) Discontinued operation

Income statement disclosures

The results of LCS for the years ended 31 May were as follows:

LCS

2013 2012

$’000 $’000

Revenue – 1,013

Other income – 287

Expenses – (3,745)

Loss from operations – (2,445)

Finance costs – (202)

Impairment loss on property, plant and equipment – (187)

Allowance for inventories obsolescence – (406)

Allowance for doubtful receivables – (129)

Loss before tax from discontinued operation – (3,369)

Income tax expense – –

Loss from discontinued operation, net of tax – (3,369)

Cash flow statement disclosures

The cash flows attributable to LCS are as follows:

LCS

2013 2012

$’000 $’000

Operating – (1,040)

Investing – (58)

Financing – 1,945

Net cash inflow – 847





(ii) Discontinued operation (cont’d)

Loss per share disclosures

LCS

2013 2012

Loss per share from discontinued operation

attributable to owners of the Company

(cents per share)

Basic – 0.37

Diluted – 0.37

The basic and diluted loss per share from discontinued operation were calculated

by dividing the loss from discontinued operation, net of tax, attributable to owners

of the Company by the weighted average number of ordinary shares in issue of

463,363,636 shares.

11. Earnings per share

(a) Continuing operations

Basic and diluted earnings per share from continuing operations are calculated by

dividing profit from continuing operations, net of tax, attributable to owners of the

Company by the weighted average number of ordinary shares outstanding during the

financial year.




11. Earnings per share (cont’d)

(a) Continuing operations (cont’d)

The following tables reflect the profit and share data used in the computation of

basic and diluted earnings per share for the years ended 31 May:

Group

2013 2012

$’000 $’000

Profit for the year attributable to owners of the

Company 10,128 523

Add back: Loss from discontinued operation,

net of tax, attributable to owners of

the Company – 1,732

Profit from continuing operations, net of tax,

attributable to owners of the Company used in

the computation of basic and diluted earnings

per share from continuing operations 10,128 2,255

No. of shares No. of shares

’000 ’000

Weighted average number of ordinary shares for

basic and diluted earnings per share

computation* 460,744 463,364

* The weighted average number of shares takes into account the weighted

average effect of changes in treasury shares transactions during the year.

(b) Earnings per share

The basic and diluted earnings per share are calculated by dividing the profit for

the year attributable to owners of the Company by the weighted average number

of ordinary shares for basic earnings per share computation and weighted average

number of ordinary shares for diluted earnings per share computation respectively.

These profit and share data are presented in the tables in Note 11(a) above. The

basic and diluted earnings per share are the same because there are no dilutive

securities.




12

. P

rope

rty,

pla

nt a

nd e

quip

men

t

At

valu

atio

nA

t co

st

Gro

up

Leas

ehol

d

build

ings

an

d

impr

ovem

ents

Pla

nt a

nd

mac

hin

erie

s

Furn

itur

e,

fitt

ings

an

d of

fice

eq

uipm

ent

Mot

or

vehic

les,

tr

aile

rs a

nd

fork

lifts

War

ehou

se

equi

pmen

t

Cra

nes

an

d cr

anes

eq

uipm

ent

Ass

ets

un

der

co

nstr

ucti

onTo

tal

$’0

00

$’0

00

$’0

00

$’0

00

$’0

00

$’0

00

$’0

00

$’0

00

Cos

t or

val

uati

on:

At

1 J

une

20

12

31

,99

44

71

,30

38

,90

71

,28

3–

1,6

19

45

,15

3Add

itio

ns7

41

–3

03

78

62

33

,96

53

,65

59

,47

3D

ispo

sals

––

(15

)(4

48

)(8

)–

–(4

71

)W

ritt

en o

ff–

–(9

9)

(13

)(2

08

)–

–(3

20

)R

eval

uati

on s

urpl

us

(N

ote

23

(ii))

13

,05

9–

––

––

–1

3,0

59

Elim

inat

ion

of a

ccum

ulat

ed

de

prec

iati

on o

n

re

valu

atio

n(3

,49

2)

––

––

––

(3,4

92

)Exc

hang

e di

ffer

ence

s–

––

5–

–3

84

38

9

At

31

May

20

13

42

,30

24

71

,49

29

,23

71

,09

03

,96

55

,65

86

3,7

91

Acc

umul

ated

dep

reci

atio

n

an

d im

pair

men

t lo

ss:

At

1 J

une

20

12

1,7

09

68

85

5,0

96

64

2–

–8

,33

8D

epre

ciat

ion

char

ge f

or

th

e ye

ar1

,78

35

20

69

23

32

93

3–

3,2

79

Dis

posa

ls–

–(1

5)

(40

0)

(4)

––

(41

9)

Wri

tten

off

––

(99

)(8

)(2

09

)–

–(3

16

)Elim

inat

ion

of a

ccum

ulat

ed

de

prec

iati

on o

n

re

valu

atio

n(3

,49

2)

––

––

––

(3,4

92

)Exc

hang

e di

ffer

ence

s–

––

1–

––

1

At

31

May

20

13

–1

19

77

5,6

12

75

83

3–

7,3

91

Net

car

ryin

g am

ount

:At

31

May

20

13

42

,30

23

65

15

3,6

25

33

23

,93

25

,65

85

6,4

00




12

. P

rope

rty,

pla

nt a

nd e

quip

men

t (c

ont’

d)

At

valu

atio

nA

t co

st

Gro

up

Leas

ehol

d bu

ildin

gs a

nd

impr

ovem

ents

Pla

nt a

nd

mac

hin

erie

s

Furn

itur

e,

fitt

ings

an

d of

fice

eq

uipm

ent

Mot

or

vehic

les,

tr

aile

rs a

nd

fork

lifts

War

ehou

se

equi

pmen

tA

sset

s un

der

cons

truc

tion

Tota

l$

’00

0$

’00

0$

’00

0$

’00

0$

’00

0$

’00

0$

’00

0C

ost

or v

alua

tion

:At

1 J

une

20

11

36

,59

63

,27

21

,36

58

,25

68

46

41

50

,37

6Add

itio

ns2

62

42

50

1,0

82

59

81

,65

43

,85

0D

ispo

sals

/wri

tten

off

––

(65

)(2

25

)(2

6)

–(3

16

)Exc

hang

e di

ffer

ence

s2

62

20

51

01

43

42

53

6Att

ribu

tabl

e to

dis

posa

l gr

oups

(N

ote

10

)(5

,12

6)

(3,4

34

)(2

57

)(2

20

)(1

38

)(1

18

)(9

,29

3)

At

31

May

20

12

31

,99

44

71

,30

38

,90

71

,28

31

,61

94

5,1

53

Acc

umul

ated

dep

reci

atio

n an

d

im

pair

men

t lo

ss:

At

1 J

une

20

11

14

63

63

83

54

,44

15

03

–6

,28

8D

epre

ciat

ion

char

ge f

or t

he y

ear

2,9

84

1,6

15

26

29

46

24

1–

6,0

48

Dis

posa

ls/w

ritt

en o

ff–

–(5

9)

(17

3)

(13

)–

(24

5)

Impa

irm

ent

loss

cha

rged

to

prof

it o

r lo

ss–

–2

34

6–

11

81

87

Impa

irm

ent

loss

cha

rged

to

reva

luat

ion

rese

rve

93

6–

––

––

93

6Exc

hang

e di

ffer

ence

s2

66

24

51

–9

8Att

ribu

tabl

e to

dis

posa

l gr

oups

(N

ote

10

)(2

,38

3)

(2,0

34

)(1

80

)(1

69

)(9

0)

(11

8)

(4,9

74

)

At

31

May

20

12

1,7

09

68

85

5,0

96

64

2–

8,3

38

Net

car

ryin

g am

ount

:At

31

May

20

12

30

,28

54

14

18

3,8

11

64

11

,61

93

6,8

15




12. Property, plant and equipment (cont’d)

Furniture, fittings

and office equipment

Motorvehicles Total

$’000 $’000 $’000

CompanyCost:At 1 June 2012 100 910 1,010Additions 10 – 10Disposals (5) – (5)

At 31 May 2013 105 910 1,015

Accumulated depreciation:At 1 June 2012 86 588 674Depreciation charge for the year 13 147 160Disposals (4) – (4)

At 31 May 2013 95 735 830

Net carrying amount:At 31 May 2013 10 175 185

Cost:At 1 June 2011 78 910 988Additions 22 – 22

At 31 May 2012 100 910 1,010

Accumulated depreciation:At 1 June 2011 70 406 476Depreciation charge for the year 16 182 198

At 31 May 2012 86 588 674

Net carrying amount:At 31 May 2012 14 322 336

Capitalisation of borrowing costs

The Group’s property, plant and equipment include borrowing costs arising from bank loans

borrowed specifically for the purpose of the construction of a plant and equipment. During

the financial year, the borrowing costs capitalised as cost of plant and equipment amounted

to $42,000 (2012: $Nil). The rate used to determine the amount of borrowing costs eligible

for capitalisation is 7.68% (2012: Nil), which is the effective interest rate of the specific

borrowing.





Revaluation of leasehold buildings and improvements

The Group’s leasehold properties as at 31 May 2013 comprise the following:

Location Title description

No. 30 Pioneer Road

Singapore 628502

Leasehold 30 years from

16 February 2007

4-storey single-user

warehouse building with

7-storey ancillary office

No. 1 Jalan Besut

Singapore 619554

Leasehold 25 years from

11 August 1994

3 single-storey warehouses

and one open sided shed

The Group engaged Knight Frank Pte. Ltd., an independent valuer to determine the fair

value of the leasehold buildings and improvements. Fair value is determined by reference

to market based evidence. This means that valuations performed by the valuer are based

on active market prices, adjusted for any difference in the nature, location or condition of

the specific property. The date of the revaluation was 31 May 2013.

If the leasehold buildings and improvements and plant and machineries were measured

using the cost model, the carrying amounts would be as follows:

Group

2013 2012

$’000 $’000

Leasehold buildings and improvements at 31 May:

Cost 29,370 28,625

Accumulated depreciation (4,407) (3,007)

Net carrying amount 24,963 25,618

Plant and machineries at 31 May:

Cost 47 47

Accumulated depreciation (11) (6)

Net carrying amount 36 41





Assets held under finance leases

During the financial year, the Group acquired motor vehicles, trailers and forklifts and cranes

with an aggregate cost of $3,916,000 (2012: $112,000) by means of finance leases. The

cash outflow on acquisition of property, plant and equipment amounted to $6,290,000

(2012: $3,738,000).

The carrying amount of motor vehicles, trailers and forklifts and cranes held under finance

leases at the end of the reporting period were $4,389,000 (2012: $569,000) respectively.

Leased assets are pledged as security for the related finance lease liabilities.

Assets pledged as security

In addition to assets held under finance leases, the Group’s leasehold buildings and

improvements with a carrying amount of $42,302,000 (2012: $30,285,000) are mortgaged

to secure the Group’s bank loans (Note 24).

Impairment of assets

In 2012, a subsidiary of the Group reported in the micro biotechnology segment, Liaoning

China Starzyme Co., Ltd carried out a review of the recoverable amount of its property, plant

and equipment. Impairment losses of $187,000, representing the write-down of the property,

plant and equipment to its recoverable amounts, were recognised in “Loss from discontinued

operation” in profit or loss for the financial year ended 31 May 2012.




13. land use rights

Group

2013 2012

$’000 $’000

Cost:

At 1 June 3,581 –

Additions – 3,497

Exchange differences 103 84

At 31 May 3,684 3,581

Accumulated amortisation:

At 1 June 12 –

Charge for the year 72 12

Exchange differences 3 –

At 31 May 87 12

Net carrying amount:

At 31 May 3,597 3,569

Amount to be amortised:

– Not later than one year 72 72

– Later than one year but not later than five years 288 288

– Later than five years 3,237 3,209

The Group has land use rights over a plot of state-owned land in People’s Republic of China

(“PRC”) where the Group’s PRC warehouse under construction. The land use rights are not

transferable and have a remaining tenure of 49 years (2012: 50 years).




14. Investments in subsidiaries

Company

2013 2012

$’000 $’000

Unquoted equity shares, at cost

At 1 June 56,079 57,662

Increase in investment 11,060 3,177

Written off against allowance for impairment (22,617) –

Written off to profit or loss (10) –

Reclassified as assets held for sale – (4,760)

At 31 May 44,512 56,079

Less: Impairment losses (1,603) (23,344)

42,909 32,735

Movement in allowance for impairment during the financial year is as follows:

At 1 June 23,344 25,597

Allowance for the year 876 1,708

Written off (22,617) –

Reclassified as assets held for sale – (3,961)

At 31 May 1,603 23,344

Impairment testing of investment in subsidiaries

During the financial year, the Company performed an impairment test for the investment in

GKE Freight Pte Ltd as this subsidiary had been persistently making losses. An impairment

loss of $876,000 (2012:$Nil) was recognised for the year ended 31 May 2013 to write

down this subsidiary to its recoverable amount.

In 2012, the Company recorded allowance for impairment losses of approximately

$1,708,000 for the investment in Liaoning China Starzyme Co., Ltd. to write down the

investment to its recoverable amount in view of the continuous losses caused by the

competitive business environment in China.




14. Investments in subsidiaries (cont’d)

Details of subsidiaries are as follows:

Name of subsidiaries

(Country of incorporation

and place of operations) Principal activities

Effective percentage

of equity held by

Group

2013 2012

% %

Held by the Company

i GKE Private Limited

(Singapore)

Dormant 100 100

i GKE Warehousing &

Logistics Pte Ltd

(Singapore)

Provision of warehousing,

packing and transportation

services

100 100

ii GKE Metal Logistics Pte Ltd

(Singapore)

Provision of storage, freight

forwarding, warehousing,

packing, removal and delivery

services

–* 100

i GKE Express Logistics

Pte Ltd

(Singapore)

Provision of freight forwarding,

transportation, warehousing

and logistics services

100 100

i GKE Freight Pte Ltd

(Singapore)

Provision of freight forwarding

and transportation services

100 100

iv Van der Horst Biodiesel

Pte Ltd

(Singapore)

Establishment of biodiesel

industry related plantations

and refinery

– 100

vi Liaoning China Starzyme

Co., Ltd.

(People’s Republic of China)

Enzymes blending – 52

iv Van der Horst Enzyme

Private Limited

(Singapore)

Dormant – 100

iii Van der Horst Logistics

Limited

(British Virgin Islands)

Investment holding 65 65

v GKE & Mohseng Pte. Ltd.

(Singapore)

Provision of crane services for

loading and unloading of cargo

60 –









of equity held by

Group

2013 2012

% %

Held by the Company (cont’d)

v GKE Holdings (HK) Co., Ltd.

(Hong Kong)

Investment holding 100 –

v GKE Shipping Co., Ltd.

(Hong Kong)

Dormant 100 –

Held by GKE Metal Logistics Pte Ltd

ii GKE (Shanghai) Metal

Logistics Co., Ltd.





services

–* 65

Held by Van der Horst Biodiesel Pte Ltd

iv VDH-UR Plantations Pte Ltd

(Singapore)

Dormant – 90

Held by Liaoning China Starzyme Co., Ltd.

vi Shenyang Sunrise Bio-tech

Co., Ltd.


Blending for animal feed – 52

vi Chaoyang China Starzyme

Co., Ltd.


Enzymes fermentation factory – 52

Held by GKE (Shanghai) Metal Logistics Co., Ltd.

ii Shanghai GKE Logistics

Co., Ltd





services

–* 65









of equity held by

Group

2013 2012

% %

Held by Van der Horst Logistics Limited

ii Van der Horst (Shanghai)

Logistics Co., Ltd.


Provision of storage and

warehousing

65 65

Held by GKE Freight Logistics Pte Ltd

v GKE Air Logistics Pte. Ltd.

(Singapore)



60 –

v PT GKE Investment

(Indonesia)

Investment holding 100 –

Held by PT GKE Investment

v PT GKE Indonesia

(Indonesia)



100 –

Held by GKE Holdings (HK) Co., Ltd

v Wuzhou Xing Jian Readymix

Co., Ltd


Producing and manufacturing

of environmental friendly

lightweight brick, building

materials and cement

products

100 –

i Audited by Ernst & Young LLP.

ii Audited by Ernst & Young LLP for the sole purpose of preparation of the consolidated

financial statements.

iii Not required to be audited in the country of incorporation.

iv Struck off under Section 344 of the Singapore Companies Act, Chapter 50.

v Incorporated during the financial year.

vi Disposed during the financial year.

* Became an associate company during the financial year.





Disposal of subsidiaries

On 22 June 2012, the disposal of the 51% interest in GKE Metal Logistics Pte Ltd

(“GKEMLPL”) was completed and GKEMLPL, together with its subsidiaries, GKE (Shanghai)

Metal Logistics Co., Ltd and Shanghai GKE Logistics Co., Ltd ceased to be subsidiaries of the

Company. The remaining 49% of its shareholder interest has been classified as investment

in associate as the Group is able to exercise significant influence over the operational and

financial decision of GKEMLPL through board representation in GKEMLPL and 49% voting

rights during the general meetings of GKEMLPL.

On 30 June 2012, the disposal of the 52% interest in Liaoning China Starzyme Co., Ltd.

(“LCS”) was completed and LCS, together with its subsidiaries, Shenyang Sunrise Bio-tech

Co., Ltd. and Chaoyang China Starzyme Co., Ltd. ceased to be subsidiaries of the Company.

The aggregated value of assets and liabilities of GKEMLPL and LCS recorded in the

consolidated financial statements as at 22 June 2012 and 30 June 2012, and the effects

of the disposal were:

Carrying amounts of aggregated assets and liabilities disposed of

2013 2012$’000 $’000

Property, plant and equipment 4,255 –Trade and other receivables 5,329 –Cash and cash equivalents 2,059 –

Total assets 11,643 –

Trade and other payables 7,544 –Tax payables 673 –Deferred tax liabilities 1,069 –

Total liabilities 9,286 –

Net assets derecognised 2,357 –Non-controlling interests (27) –

Net assets disposed of 2,330 –Less: 49% of net assets of GKEMLPL retained by the Group (1,447) –Add: Reclassification of translation reserves 174 –Gain on disposal 6,943 –

Cash proceeds from disposal 8,000 –Less: Cash and cash equivalents in subsidiaries disposed of (1,064) –

Net cash inflow on disposal of subsidiaries 6,936 –




15. Investment in associate

Group Company

2013 2012 2013 2012

$’000 $’000 $’000 $’000

Shares, at cost 1,447 – 392 –

Share of post-acquisition reserves 247 – – –

Share of changes recognised directly

in associate’s equity 40 – – –

Revaluation to fair value 5,168 – 6,223 –

6,902 – 6,615 –

Details of associate are as follows:

Name of associate (Country of incorporation and place of operations) Principal activities

Proportion (%) of ownership interest

2013 2012% %

Held by the Companyi GKE Metal Logistics Pte Ltd

(Singapore)Provision of storage, freight forwarding, warehousing, packing, removal and delivery services

49* –

Held by GKE Metal Logistics Pte Ltdi GKE (Shanghai) Metal

Logistics Co., Ltd. (People’s Republic of China)

Provision of storage, freight forwarding, warehousing, packing, removal and delivery services

32* –

Held by GKE (Shanghai) Metal Logistics Co., Ltd.i Shanghai GKE Logistics

Co., Ltd. (People’s Republic of China)

Provision of storage, freight forwarding, warehousing, packing, removal and delivery services

32* –

i Audited by Ernst & Young LLP for the sole purpose of preparation of the consolidated

financial statements.

* Became an associate during the financial year.




15. Investment in associate (cont’d)

The Group has recognised it share of current year profit of $541,000 related to GKE Metal

Logistics Pte Ltd and its subsidiaries at the end of the reporting period.

The summarised financial information of the associate, not adjusted for the proportion of

ownership interest held by the Group, is as follows:

Group

2013 2012

$’000 $’000Assets and liabilities:Total assets 6,928 –

Total liabilities 2,276 –

Results:Revenue 18,171 –

Profit for the year 1,533 –

16. available-for-sale investments

Group and Company

Note 2013 2012

$’000 $’000Quoted equity shares, at fair value (a)At 1 June 2,300 4,294Additions – 19Fair value adjustment 23(iii) 473 (1,347)Transfer from unquoted equity shares – 582Disposals – (1,248)

At 31 May 2,773 2,300Less: Impairment losses (1,592) (448)

1,181 1,852

Unquoted equity shares, at cost (b)At 1 June 405 987Disposals (405) –Transfer to quoted equity shares – (582)

At 31 May – 405

Total available-for-sale investments 1,181 2,257




16. available-for-sale investments (cont’d)

Impairment of available-for-sale investments

Movement in allowance for impairment during the financial year is as follows:

Group and Company

2013 2012

$’000 $’000

At 1 June 448 –

Allowance for the year (Note 8) 1,144 448

At 31 May 1,592 448

Impairment losses

During the financial year, the Group recognised impairment loss of $1,144,000 (2012:

$448,000) for quoted equity shares as there were “significant” or “prolonged” decline in the

fair value of these investments below their costs. The Group treats “significant” generally

as 30% and “prolonged” as greater than 12 months.

(a) The market values of quoted equity shares are determined by reference to the

Singapore Exchange Securities Trading Limited and Australian Securities Exchange

quoted prices.

(b) Unquoted equity shares represent interest in companies in Singapore which are

engaged in pharmaceutical activities. The unquoted equity shares of $405,000 were

carried at cost as the fair value of these unquoted equity shares cannot be measured

reliably.

In 2013, the Group has disposed off the unquoted equity shares.




17. Deferred tax assets/liabilities

The movements in the deferred tax account are as follows:

Group Company

Note 2013 2012 2013 2012

$’000 $’000 $’000 $’000

Deferred tax assets:At 1 June 26 – 26 –Tax charged/(credited) to profit or loss– Current year – 31 – 31– Prior years – (83) – (83)Tax charged to equity– Fair value reserve (26) 78 (26) 78

At 31 May – 26 – 26

Tax effect of temporary differences in excess of capital allowances – (52) – (52)Fair value loss on available- for-sale investments – 78 – 78

– 26 – 26

Deferred tax liabilities:At 1 June 2,258 2,457 – 211Tax charged/(credited) to profit or loss– Current year 107 6 (30) –– Prior years (242) 1,011 – –Tax charged to equity– Revaluation reserve 23(ii) 2,254 – – –– Fair value reserve 55 (211) 55 (211)Attributable to disposal group 10 – (1,069) – –Foreign exchange adjustment – 64 – –

At 31 May 4,432 2,258 25 –

Tax effect of temporary differences in excess of capital allowances 1,253 1,398 – –Fair value gain on available- for-sale investments 3 – 3 –Revaluation gain on property, plant and equipment 3,165 911 – –Others 11 (51) 22 –

4,432 2,258 25 –




17. Deferred tax assets/liabilities (cont’d)

Tax consequences of proposed dividends

There are no income tax consequences (2012: Nil) attached to the dividends to the

shareholders proposed by the Company but not recognised as a liability in the financial

statements (Note 28).

18. Trade and other receivables

Group Company

2013 2012 2013 2012

$’000 $’000 $’000 $’000

Trade and other receivables (current):

Trade receivables 4,710 3,908 – –

Amounts due from associate

– Trade 191 – – –

– Non-trade 3 – 3 –

Amounts due from a related party

– Trade 3 – – –

– Non-trade 11 – – –

Amounts due from subsidiaries – – 9,773 4,914

SGD loan to a subsidiary – – – 834

Staff advances 8 10 – 4

Refundable deposits 319 246 33 37

GST recoverable 726 – – –

Deposits for purchase of property,

plant and equipment 65 – – –

Other receivables 107 194 63 3

6,143 4,358 9,872 5,792

Other receivables (non-current):

SGD loan to a subsidiary – – 597 –

Total trade and other receivables

(current and non-current) 6,143 4,358 10,469 5,792

Add: Cash and cash equivalents

(Note 20) 10,924 7,964 193 4,705

Total loans and receivables 17,067 12,322 10,662 10,497




18. Trade and other receivables (cont’d)

Trade receivables

Trade receivables are non-interest bearing and are generally on 30 to 90 days’ terms. They are recognised at their original invoice amounts which represent their fair values on initial recognition.

The trade receivables denominated in foreign currencies as at 31 May are as follows:

Group Company

2013 2012 2013 2012$’000 $’000 $’000 $’000

United States Dollar 174 220 – –

Related party balances and staff advances

The trade amount due from associate is non-interest bearing and are generally on 30 to 90 days’ terms. They are recognised at their original invoice amounts which represent their fair values on initial recognition.

The non-trade amount due from associate is unsecured, interest-free, repayable on demand and to be settled in cash.

The trade amount due from a related party is non-interest bearing and are generally on 30 to 90 days’ terms. They are recognised at their original invoice amounts which represent their fair values on initial recognition.

The non-trade amount due from a related party is unsecured, interest-free, repayable on demand and to be settled in cash.

The amounts due from subsidiaries are non-trade in nature, unsecured, interest-free, repayable on demand and to be settled in cash. The amounts due from subsidiaries are stated after allowance for doubtful receivables of $Nil (2012: $152,000).

Staff advances are unsecured, non-interest bearing, repayable on demand and are to be settled in cash.

The non-current SGD loan to a subsidiary is unsecured, bears interest at 6% per annum and repayable on 27 January 2018. The loan is repayable in one lump sum on the fifth year from its first drawdown. In 2012, the current SGD loan to a subsidiary is unsecured, bears interest at 5.5% per annum and has been fully repaid in December 2012. The SGD loan to a subsidiary is stated after allowance for doubtful receivable $Nil (2012: $824,000).





Trade receivables that are past due but not impaired

The Group has trade receivables amounting to $2,629,000 (2012: $2,157,000) that are past

due at the end of the reporting period but not impaired. These receivables are unsecured

and the analysis of their aging at the end of the reporting period is as follows:

Group

2013 2012

$’000 $’000

Trade receivables past due but not impaired:

0 – 30 days 1,431 1,263

31 – 60 days 838 649

61 – 90 days 107 104

More than 90 days 253 141

2,629 2,157

Trade receivables that are impaired

The Group’s trade receivables that are impaired at the end of the reporting period and the

movement of the allowance accounts used to record the impairment are as follows:

Group

Individually impaired

2013 2012

$’000 $’000

Trade receivables – nominal amounts 28 4

Less: Allowance for impairment (28) (4)

– –





Trade receivables that are impaired (cont’d)

Movements in allowance account:

Group

Individually impaired

2013 2012

$’000 $’000

At 1 June 4 74

Allowance made 28 4

Write-back of allowance – (7)

Written off (4) (67)

At 31 May 28 4

Trade receivables that are individually determined to be impaired at the end of the reporting

period relate to debtors that are in significant financial difficulties and have defaulted on

payments. These receivables are not secured by any collateral or credit enhancements.

19. Prepayments

Group

2013 2012

$’000 $’000

Prepayments relating to acquisition of warehouses 7,477 –

Prepayments relating to construction of warehouse 1,245 –

8,722 –




20. Cash and cash equivalents

Group Company

2013 2012 2013 2012

$’000 $’000 $’000 $’000

Cash at banks and on hand 10,924 7,964 193 4,705

The interest earning balances earn interest at floating rates based on daily bank deposit

rates.

Cash and cash equivalents denominated in foreign currencies as at 31 May are as follows:

Group Company

2013 2012 2013 2012

$’000 $’000 $’000 $’000

United States Dollar 602 191 – –

For the purpose of the consolidated statement of cash flows, cash and cash equivalents

comprise the following at the end of the reporting period:

Group

Note 2013 2012

$’000 $’000

Cash and cash equivalents:

– Continuing operations 10,924 7,964

– Discontinued operation 10 – 7,410

10,924 15,374




21. Share capital

Group and Company

2013 2012

No. of

shares

’000 $’000

No. of

shares

’000 $’000

Issued and fully paid ordinary shares:

At beginning and end of financial year 463,364 62,215 463,364 62,215

The holders of ordinary shares (except for treasury shares) are entitled to receive dividends

as and when declared by the Company. All ordinary shares carry one vote per share without

restrictions. The ordinary shares have no par value.

22. Treasury shares

Group and Company

2013 2012

No. of

shares

’000 $’000

No. of

shares

’000 $’000

At 1 June – – – –

Acquired during the financial year (5,417) (848) – –

At 31 May (5,417) (848) – –

Treasury shares relate to ordinary shares of the Company that is held by the Company.

The Company acquired 5,417,000 (2012: Nil) shares in the Company through purchases

on the Singapore Exchange during the financial year. The total amount paid to acquire

the shares was $848,000 (2012: $Nil) and this was presented as a component within

shareholders’ equity.




23. other reserves

Other reserves comprise the following:

Group Company

Note 2013 2012 2013 2012

$’000 $’000 $’000 $’000

Foreign currency translation

reserve (i) 500 206 – –

Revaluation reserve (ii) 15,256 4,451 – –

Fair value reserve (iii) 13 (379) 13 (379)

15,769 4,278 13 (379)

Movements in other reserves are as follow:

(i) Foreign currency translation reserve

At 1 June 206 (319) – –

Net exchange

differences on

translation of

financial statements

of foreign

subsidiaries 254 351 – –

Attributable to

disposal groups – 174 – –

Share of foreign

currency translation

of associate 40 – – –

At 31 May 500 206 – –

The foreign currency translation reserve represents exchange differences arising from

the translation of the financial statements of foreign operations whose functional

currencies are different from that of the Group’s presentation currency.




23. other reserves (cont’d)

(ii) Revaluation reserve

Group Company

Note 2013 2012 2013 2012

$’000 $’000 $’000 $’000

At 1 June 4,451 6,166 – –

Revaluation gain on

property, plant and

equipment 12 13,059 – – –

Deferred tax

revaluation gain on

property, plant and

equipment 17 (2,254) – – –

Impairment loss on

property, plant and

equipment – (486) – –

Attributable to

disposal groups – (1,229) – –

At 31 May 15,256 4,451 – –

The revaluation reserve represents increases in the fair value of leasehold

buildings and improvements, net of tax, and decreases to the extent that such

decrease relates to an increase on the same asset previously recognised in other

comprehensive income.




23. other reserves (cont’d)

(iii) Fair value reserve

Group Company

Note 2013 2012 2013 2012

$’000 $’000 $’000 $’000

At 1 June (379) 1,262 (379) 1,262

Fair value gain/(loss)

on available-for-sale

investments 16 473 (1,347) 473 (1,347)

Deferred tax on

fair value gain on

available-for-sale

investments (81) 289 (81) 289

Transfer to profit or

loss on disposal – (583) – (583)

At 31 May 13 (379) 13 (379)

Fair value adjustment reserve represents the cumulative fair value changes, net

of tax, of available-for-sale financial assets until they are disposed of or impaired.

Reserves classified on the face of the balance sheet as accumulated profits

represent past accumulated earnings and are distributable. The other reserves are

not available for cash dividends unless realised.

24. Borrowings

Group

2013 2012

$’000 $’000

Current:

Bank loan (secured) 2,300 –

Non-current:

Bank loan (secured) 1,035 –

Total borrowings 3,335 –




24. Borrowings (cont’d)

The Group’s bank borrowings comprise the following:

(i) Current bank loan

The Money Market Loan (“MML”) of $2,300,000 bore interest at 3.1% per annum and

matured on 20 June 2013. The MML is secured by legal mortgage of the leasehold

buildings and improvements of the subsidiary, corporate guarantee from subsidiary

and corporate guarantee from the Company (Note 12).

The MML was fully settled on 20 June 2013.

(ii) Non-current bank loan

The 5-years term loan of RMB5,067,000 (S$1,035,000) bore interest at 7.68% per

annum. The term loan is secured by legal mortgage of the land use rights of the

subsidiary and corporate guarantee from the Company. The first principal instalment

will be repayable on the 21st month from first drawdown date. The loan includes a

financial covenant which requires the Group to maintain a gearing ratio of less than

1.5 times.

25. Trade and other payables

Group Company

2013 2012 2013 2012

$’000 $’000 $’000 $’000

Trade and other payables (current):

Trade payables 862 696 – –

Other payables 68 475 8 511

Amount due to a related party

– Trade 66 – – –

– Non-trade 440 – – –

Amounts due to subsidiaries – – 4,950 30

Amount due to associate 7 – – –

1,443 1,171 4,958 541




25. Trade and other payables (cont’d)

Group Company

Note 2013 2012 2013 2012

$’000 $’000 $’000 $’000

Total trade and other

payables (cont’d) 1,443 1,171 4,958 541

Other payables (non-current):

Loan from non-controlling

interests 347 – – –

Total trade and other

payables 1,790 1,171 4,958 541

Add: Borrowings 24 3,335 – – –

Finance lease

liabilities 27 3,259 293 – –

Other liabilities 26 3,251 2,197 1,511 1,020

Less: Accrual for unutilised

leave (87) (77) (26) (30)

Advance billings 26 (3) – – –

Total financial liabilities at

amortised cost 11,545 3,584 6,443 1,531

Trade payables/other payables

Trade and other payables are unsecured, non-interest bearing and repayment is based on

payment terms and conditions agreed.

Trade and other payables denominated in foreign currencies as at 31 May are as follows:

Group Company

2013 2012 2013 2012

$’000 $’000 $’000 $’000

United States Dollars 163 162 – –




25. Trade and other payables (cont’d)

Related party balances

The trade amount due to a related party is unsecured, non-interest bearing and repayment

is based on payment terms and conditions agreed.

The non-trade amount due to a related party is unsecured, interest-free, repayable on demand

and are to be settled in cash.

The amounts due to subsidiaries are non-trade in nature, unsecured, interest-free, repayable

on demand and are to be settled in cash.

The amount due to associate is trade in nature, unsecured, non-interest bearing and

repayment is based on payment terms and conditions agreed.

Loan from non-controlling interests is unsecured, interest bearing at 6% per annum, repayable

in the fifth year and are to be settled in cash. The loan is denominated in Renminbi.

26. other liabilities

Group Company

Note 2013 2012 2013 2012

$’000 $’000 $’000 $’000

Advance billings 25 3 – – –

Accrued operating expenses 3,033 1,935 1,510 1,020

Deposits received 215 262 1 –

3,251 2,197 1,511 1,020




27. Finance lease liabilities

The Group has finance leases for certain items of plant and equipment. These leases have

no purchase options and escalation clauses.

Future minimum lease payments under finance leases together with the present value of

the net minimum lease payments are as follows:

Group

2013 2012

Minimum

lease

payments

Present

value of

payments

Minimum

lease

payments

Present

value of

payments

$’000 $’000 $’000 $’000

Not later than one year 894 838 40 37

Later than one year but not

later than five years 2,584 2,421 272 256

Total minimum lease

payments 3,478 3,259 312 293

Less: Amounts representing

finance charges (219) – (19) –

Present value of minimum

lease payments 3,259 3,259 293 293

Obligations under finance lease

It is the Group’s policy to lease certain of its plant and equipment under finance leases.

The average lease term is 3 to 5 years. The rate of interest for finance leases range from

1.4% to 2.2% (2012: 2.2%) per annum. All leases are on a fixed repayment basis and no

arrangements have been entered into for contingent rental payments. All lease obligations

are denominated in Singapore dollars. The obligations under finance leases are secured

by the lessor’s charge over the leased assets and corporate guarantee provided by the

Company.

Finance lease liabilities of the Group are callable finance leases, therefore the amounts are

classified under current liabilities.




28. Dividend

Group

2013 2012

$’000 $’000

declared and paid during the financial year

Dividends on ordinary shares:

Final exempt (one-tier) dividend for 2012: 0.3 cent

(2011: 1 cent) per ordinary share 1,390 4,634

Proposed but not recognised as a liability as at 31 May

Dividends on ordinary shares, subject to shareholders’

approval at the AGM:

Final exempt (one-tier) dividend for 2013: 0.3 cent

(2012:0.3 cent) per ordinary share 1,374 1,390

29. Commitments

(a) Capital commitments

Capital commitments not provided for in the financial statements:

Group

2013 2012

$’000 $’000

Commitments to purchase leasehold properties 51,840 –

Commitments to construct a warehouse building 4,799 7,213

Commitments to purchase property, plant

and equipment 749 48




29. Commitments (cont’d)

(b) Operating lease commitments – as lessee

At the end of the reporting period, the total of future minimum lease payments under

non-cancellable operating leases are as follows:

Group

2013 2012

$’000 $’000

Not later than one year 2,238 943

Later than one year but not later than five years 7,607 2,818

Later than five years 45,083 6,526

54,928 10,287

The existing operating lease payments mainly represent rentals payable by the Group

for its leasehold premises, offices and warehouses in Singapore located at No. 1

Jalan Besut and No. 30 Pioneer Road. The leases from Jurong Town Corporation

are for 25 and 30 years respectively from 11 August 1994 and 16 February 2007

respectively.

Subsequent to year end, the Group has entered into an operating lease for its

leasehold premise, office and warehouse in Singapore located at No. 6 Pioneer

Walk. The lease from Jurong Town Corporation is for 23 years from 21 June 2013.

Both existing and new leases have negotiable lease term to a rate based on the

market rent on the date of negotiation. Rentals are subject to an escalation clause

but the amount of the rent increase is not to exceed a certain percentage. Such

increases are not included in the above amounts.

Prior year’s operating lease payments also include rentals payables by the Group for

its leasehold premise at No. 19 Sungei Kadut Street 2. The lease term has ended

in July 2012.

Minimum lease payments recognised as an expense in profit or loss for the financial

year ended 31 May 2013 amounted to $943,000 (2012: $1,781,000).




29. Commitments (cont’d)

(c) Operating lease income commitments – as lessor

At the end of the reporting period, the total of future minimum leases receivables

under non-cancellable operating leases are as follows:

Group

2013 2012

$’000 $’000

Not later than one year 978 879

Later than one year but not later than five years 17 494

995 1,373

Operating lease income mainly represents rental receivables by the Group from

provision of warehousing in Singapore located at No. 1 Jalan Besut and No. 30

Pioneer Road respectively.

Prior year’s operating lease income also include rental receivables from provision of

warehousing in Singapore located at No. 19 Sungei Kadut Street 2. The lease term

has ended in July 2012.




30. Fair value of financial instruments

(a) Fair value of financial instruments that are carried at fair value

Group and Company

Quoted prices

in active

markets for

identical

instruments

Level 1

Significant

other

observable

inputs

Level 2

Significant

unobservable

inputs

Level 3 Total

$’000 $’000 $’000 $’000

2013

Financial assets

Available-for-sale

investments

– Quoted equity shares 1,181 – – 1,181

2012

Financial assets

Available-for-sale

investments

– Quoted equity shares 1,852 – – 1,852

Fair value hierarchy

The Group classifies fair value measurement using a fair value hierarchy that reflects

the significant of inputs used in making the measurements. The fair value hierarchy

have the following levels:

(i) Level 1 – Quoted prices (unadjusted) inactive markets for identical assets or

liabilities;

(ii) Level 2 – Inputs other than quoted prices included within Level 1 that are

observable for the asset or liability, either directly (i.e. as prices) or indirectly

(i.e. derived from prices); and




30. Fair value of financial instruments (cont’d)

(a) Fair value of financial instruments that are carried at fair value (cont’d)

Fair value hierarchy (cont’d)

(iii) Level 3 – Inputs for the asset or liability that are not based on observable

market date (unobservable inputs).

There has been no transfer between Level 1, Level 2 and Level 3 during the financial

year ended 2013.

Determination of fair value

The fair value of financial instruments traded in active markets (such as trading

and available-for-sale securities) is based on quoted market prices at the end of

the reporting period. The quoted market prices used for financial assets held by the

Group and Company are determined by reference to the SGX and ASX quoted prices.

These instruments are included in Level 1.

(b) Fair value of financial instruments by classes that are not carried at fair value and

whose carrying amounts are reasonable approximation of fair value

The carrying amounts of loans and receivables, trade and other payables, other

liabilities, finance lease liabilities and short-term borrowings are reasonable

approximation of fair values, due to their short-term nature or that they are floating

rate instruments that are re-priced to market interest rates on or near the reporting

date.




30. Fair value of financial instruments (cont’d)

(c) Fair value of financial instruments by classes that are not carried at fair value and

whose carrying amounts are not reasonable approximation of fair value

The fair value of financial assets and liabilities by classes that are not carried at

fair value and whose carrying amounts are not reasonable approximation of fair

value are as follows:

Group Company

2013 2012 2013 2012

$’000 $’000 $’000 $’000

Carrying

amount

Fair

value

Carrying

amount

Fair

value

Carrying

amount

Fair

value

Carrying

amount

Fair

value

Financial assets:

Other receivables

(Note 18) – – – – 597 526 – –

Available-for-sale

investments

(Note 16) – – 405(1) – – – 405(1) –

Financial

liabilities:

Loan from

non-controlling

interests

(Note 25) 347 312 – – – – – –

Borrowings

(Note 24) 1,035 1,035 – – – – – –

(1) In FY2012, the unquoted equity shares included under available-for-sale

investments are carried at cost because fair value cannot be measured reliably.

The unquoted equity shares are derecognised in the current financial year.

Determination of fair value

Other receivables and loan from non-controlling interests

The fair values as disclosed in the table above are estimated by discounting expected

future cash flows at market incremental lending rate for similar types of lending,

borrowing or leasing arrangements at the end of the reporting period.




31. Financial risk management objectives and policies

The Group and the Company is exposed to financial risks arising from its operations and

the use of financial instruments. The key financial risks include credit risk, liquidity risk,

foreign currency risk, interest rate risk and market price risk. The Board of Directors reviews

and agrees policies and procedures for the management of these risks, which are executed

by the Chief Executive Officer. The audit committee provides independent oversight to the

effectiveness of the risk management process. It is, and has been throughout the current

and previous financial year, the Group’s policy that no trading in derivatives for speculative

purposes shall be undertaken.

The following sections provide details regarding the Group’s and Company’s exposure to

the above-mentioned financial risks and the objectives, policies and processes for the

management of these risks.

There has been no change to the Group’s exposure to these financial risks or the manner

in which it manages and measures the risks.

(a) Credit risk

Credit risk is the risk of loss that may arise on outstanding financial instruments

should a counterparty default on its obligations. The Group’s and the Company’s

exposure to credit risk arises primarily from trade and other receivables. For other

financial assets, the Group and the Company minimise credit risk by dealing

exclusively with high credit rating counterparties.

The Group’s objective is to seek continual revenue growth while minimising losses

incurred due to increased credit risk exposure. The Group trades only with recognised

and creditworthy third parties. It is the Group’s policy that all customers who wish

to trade on credit terms are subject to credit verification procedures. In addition,

receivable balances are monitored on an ongoing basis with the result that the

Group’s exposure to bad debts is not significant. For transactions that do not occur

in the country of the relevant operating unit, the Group does not offer credit terms

without the approval of the Head of Department.




31. Financial risk management objectives and policies (cont’d)

(a) Credit risk (cont’d)

Excessive risk concentration

Concentration arise when a number of counterparties are engaged in similar business

activities, or activities in the same geographical region, or have economic features

that would cause their ability to meet contractual obligations to be similarly affected

by changes in economic, political or other conditions. Concentrations indicate the

relative sensitivity of the Group’s performance to developments affecting a particular

industry.

In order to avoid excessive concentrations of risk, the Group’s policies and

procedures include specific guidelines to focus on maintaining a diversified portfolio.

Identified concentrations of credit risks are controlled and managed accordingly.

Selective hedging is used within the Group to manage risk concentrations at both

the relationship and industry levels.

Exposure to credit risk

At the end of the reporting period, the Group’s and the Company’s maximum

exposure to credit risk is represented by:

– the carrying amount of each class of financial assets recognised in the

balance sheets; and

– corporate guarantees issued by the Company to banks in respect of banking

facilities utilised by certain subsidiaries amounted to $6,834,000 (2012:

$449,000).





(a) Credit risk (cont’d)

Financial assets that are neither past due nor impaired

Trade and other receivables that are neither past due nor impaired are with

creditworthy debtors with good payment record with the Group. Cash and cash

equivalents are placed with or entered into with reputable financial institutions with

high credit ratings and no history of default.

Financial assets that are either past due or impaired

Information regarding financial assets that are either past due or impaired is

disclosed in Note 18 (Trade and other receivables).

(b) Liquidity risk

Liquidity risk is the risk that the Group or the Company will encounter difficulty in

meeting financial obligations due to shortage of funds. The Group’s and Company’s

exposure to liquidity risk arises primarily from mismatches of the maturities of

financial assets and liabilities. The Group’s and the Company’s objective is to

maintain a balance between continuity of funding and flexibility through the use of

stand-by credit facilities.

The Group and the Company assessed the concentration of risk with respect to

refinancing its debt and concluded it to be low. Access to sources of funding is

sufficiently available.





(b) Liquidity risk (cont’d)

The table below summarises the maturity profile of the Group and the Company’s

financial assets and liabilities at the end of the reporting period based on contractual

undiscounted repayment obligations.

One year

or less

One to

five years Total

$’000 $’000 $’000

Group

2013

Financial assets:

Trade and other receivables 6,143 – 6,143

Cash and cash equivalents 10,924 – 10,924

Total undiscounted financial assets 17,067 – 17,067

Financial liabilities:

Borrowings 2,306 1,432 3,738

Loan from non-controlling interests – 452 452

Trade and other payables 1,443 – 1,443

Other liabilities 3,161 – 3,161

Finance lease liabilities 894 2,584 3,478

Total undiscounted financial liabilities 7,804 4,468 12,272

Total net undiscounted financial

assets/(liabilities) 9,263 (4,468) 4,795

2012

Financial assets:







Finance lease liabilities 40 272 312

Total undiscounted financial liabilities 3,331 272 3,603


assets/(liabilities) 8,991 (272) 8,719






One year

or less

One to

five years Total

$’000 $’000 $’000

Company

2013

Financial assets:

Trade and other receivables 9,872 749 10,621

Cash and cash equivalents 193 – 193

Total undiscounted financial assets 10,065 749 10,814




Total undiscounted financial liabilities 6,443 – 6,443


assets 3,622 749 4,371

2012

Financial assets:





Trade and other payables 541 – 541

Other liabilities 990 – 990

Total undiscounted financial liabilities 1,531 – 1,531


assets 8,966 – 8,966






The table below shows the contractual expiry by maturity of the Company’s contingent

liabilities. The maximum amount of the financial guarantee contracts are allocated

to the earliest period in which the guarantees could be called.

Company

2013 2012

$’000 $’000

Within one year 4,792 449

After one year but within five years 2,042 –

6,834 449

(c) Foreign currency risk

The Group has transactional currency exposures arising from sales or purchases

that are denominated in a currency other than the respective functional currencies

of Group entities, primarily Singapore Dollar (SGD), Renminbi (RMB) and Indonesian

Rupiah (IDR). The foreign currencies in which these transactions are denominated

are mainly USD, which are not significant to the Group.

The Group also hold cash denominated in foreign currencies for working capital

purposes. At the end of the reporting period, such foreign currency balances are

mainly in USD.

The Group is also exposed to currency translation risk arising from its net

investments in foreign operations, including People’s Republic of China (PRC) and

Indonesia (IND). The Group’s net investments in PRC and IND are not hedged as

currency positions in RMB and IDR are considered to be long-term in nature.





(d) Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of the Group’s

and the Company’s financial instruments will fluctuate because of changes in

market interest rates. The Group’s and the Company’s exposure to interest rate

risk arises primarily from their loans and borrowings, interest-bearing loans given

to subsidiary and loan from non-controlling interests. The Group and the Company

manage its exposure to interest risk by sourcing for the most favourable interest

rates. The interest-bearing loans and borrowings are mainly at fixed rates of interest

and accordingly the Group and the Company’s exposure to interest rate volatility are

not significant.

(e) Market price risk

Market price risk is the risk that the fair value or future cash flows of the Group’s

financial instruments will fluctuate because of changes in market prices (other than

interest or exchange rates). The Group is exposed to equity price risk arising from

its investment in quoted equity instruments. These instruments are quoted on the

Singapore Exchange Securities Trading Limited (“SGX”) and the Australian Securities

Exchange (“ASX”) and are classified as available-for-sale investments. The Group

does not have exposure to commodity price risk.

Sensitivity analysis for market price risk

At the end of the reporting period, if the share prices of the quoted shares on the

SGX and ASX had been 5% (2012: 5%) higher or lower with all other variables held

constant, the Group fair value adjustments reserve in equity/other comprehensive

income would have been $49,000 (2012: $77,000) higher or lower, arising as a

result of an increase or decrease in the fair value of equity instruments classified

as available-for-sale.




32. Capital management

Capital includes debt and equity items as disclosed in the table below.

The primary objective of the Group’s capital management is to ensure that it maintains a

strong credit rating and healthy capital ratios in order to support its business and maximise

shareholder value.

The Group manages its capital structure and makes adjustments to it, in light of changes

in economic conditions. To maintain or adjust the capital structure, the Group may adjust

the dividend payment to shareholders, return capital to shareholders or issue new shares.

No changes were made in the objectives, policies or processes during the years ended 31

May 2013 and 31 May 2012.

The only externally imposed capital requirement for the Group to maintain its listing on the

Singapore Stock Exchange is to have share capital with at least a free float of at least 10%

of the shares. Management receives a report from the registrars regularly on substantial

share interests showing the non-free float and it demonstrated continuing compliance with

the 10% limit throughout the year.

The Group monitors the capital using a gearing ratio, which is total debt, divided by total

equity.

Group Company

2013 2012 2013 2012

$’000 $’000 $’000 $’000

Debt 6,594 293 – –

Total equity 77,913 56,962 55,081 44,861

Debt-to-equity ratio 8.5% 0.5% – –




33. Segment information

For management purposes, the Group has organised its business units based on their

products and services, and has two reportable segments as follows:

(a) The investment holding segment is involved in Group-level corporate services and

investment activities.

(b) The logistics segment provides integrated and comprehensive logistics services which

can be classified into non-ferrous metal storage; general warehousing; containers

trucking; conventional transportation; projects logistics and international multimodal

freight forwarding services.

The management has terminated the renewable energy and micro biotechnology segments

during the current financial year.

Management monitors the operating results of its business units separately for the purpose

of making decisions about resource allocation and performance assessment. Segment

performance is evaluated based on operating profit or loss which in certain aspects, as

explained in the table below, is measured differently from operating profit or loss in the

consolidated financial statements. Group financing (including interest income and finance

costs) and tax expense are managed on a group basis and are not allocated to operating

segments.

Transfer prices between operating segments are on an arm’s length basis in a manner similar

to transactions with third parties.




33. Segment information (cont’d)

Investmentholding Logistics Eliminations Total

$’000 $’000 $’000 $’00031 May 2013Revenue– External customers – 26,538 – 26,538– Inter-segment(1) – 347 (347) –

Total revenue – 26,885 (347) 26,538

Results: (687) 3,245 (422) 2,136Depreciation and amortisation (160) (3,191) – (3,351)Allowance for doubtful trade receivables – (28) – (28)Allowance for doubtful non-trade receivables – – (976) (976)Bad debts written off – (46) – (46)Property, plant and equipment written off – (4) – (4)Impairment of investments in subsidiaries (876) – 876 –Impairment of available-for-sale investments (1,144) – – (1,144)Gain on disposal of available-for-sale investments 405 – – 405Gain on disposal of subsidiaries 7,592 – (649) 6,943Gain on revaluation of investment in associate 6,223 – (1,055) 5,168Gain on disposal of property, plant and equipment – 189 – 189Share of associate results – 541 – 541Dividend income 298 – (294) 4

Segment profit/(loss) 11,651 706 (2,520) 9,837

Finance costs (14)Interest income 47Tax credits 93

Profit from continuing operations, net of tax 9,963

Investments in associates 6,615 – 287 6,902Additions to non-current assets(2) 11 18,184 – 18,195

Segment assets(3) 69,059 83,046 (57,941) 94,164

Segment liabilities(3) 6,468 20,476 (15,309) 11,635Unallocated liabilities: Tax payable 184 Deferred tax liabilities 4,432

Total liabilities 16,251

(1) Inter-segment revenues are eliminated on consolidation.(2) Additions to non-current assets consist of additions to property, plant and equipment

and prepayments relating to acquisition of property, plant and equipment.(3) Inter-segment assets and liabilities are eliminated to arrive at the total assets and

liabilities reported in the consolidated balance sheet.





Investmentholding

Renewableenergy Logistics

Microbiotechnology(discontinued

operation) Eliminations Total$’000 $’000 $’000 $’000 $’000 $’000

31 May 2012Revenue– External customers – – 35,558 1,013 (1,013) 35,558– Inter-segment(1) – – 336 – (336) –

Total revenue – – 35,894 1,013 (1,349) 35,558

Results: 334 (83) 7,262 (201) 181 7,493Depreciation and amortisation (199) (6) (3,611) (2,244) 2,244 (3,816)Allowance for doubtful trade receivables – (154) (39) (129) 129 (193)Allowance for doubtful non-trade receivables (976) – – – 976 –Allowance for doubtful receivables written back – – 7 – – 7Property, plant and equipment written off – (2) (2) – – (4)Impairment of investments in subsidiaries (1,708) – – – 1,708 –Allowance of inventories obsolescence – – – (406) 406 –Impairment of available- for-sale investments (448) – – – – (448)Impairment of property, plant and equipment – – – (187) 187 –Dividend income 4,747 – – – (4,700) 47

Segment profit/(loss) 1,750 (245) 3,617 (3,167) 1,131 3,086

Finance costs (13)Interest income 69Tax expense (813)

Profit from continuing operations, net of tax 2,329

Additions to non-current assets(2) 22 – 7,261 64 – 7,347

Segment assets(3) 46,637 – 58,796 5,114 (39,646) 70,901Unallocated assets:Deferred tax assets 26

Total assets 70,927

Segment liabilities(3) 1,560 – 10,136 4,953 (7,162) 9,487Unallocated liabilities:Tax payable 1,151Deferred tax liabilities 3,327

Total liabilities 13,965

(1) Inter-segment revenues are eliminated on consolidation.(2) Additions to non-current assets consist of additions to property, plant and equipment

and land use rights.(3) Inter-segment assets and liabilities are eliminated to arrive at the total assets and

liabilities reported in the consolidated balance sheet.





Geographical segments

Revenue and non-current assets information (excluding financial instruments and intangible

assets) based on the geographical location of customers and assets respectively are as

follows:

Revenue Non-current assets(4)

2013 2012 2013 2012

$’000 $’000 $’000 $’000

Singapore 25,968 22,773 58,280 35,036

United States of America 206 2,876 – –

People’s Republic of China – 7,198 10,434 9,460

Europe – 3,724 – –

Indonesia 364 – 5 –

Discontinued operation – (1,013) – (4,112)

26,538 35,558 68,719 40,384

(4) Non-current assets information presented above consist of property, plant and equipment,

land use rights and prepayments relating to acquisition of property, plant and equipment

as presented in the consolidated balance sheet.

Information about major customer

The Group did not have any single customer contributing 10% or more of its revenue for the

financial years ended 2013 and 2012.




34. related party transactions

(a) Related parties

Other than disclosed elsewhere in the financial statements, the Group had significant

transactions with related parties on terms agreed between the parties as follows:

Group

Note 2013 2012

$’000 $’000

Rendering of services to a company related to a director (i) (3) (27)Provision of storage space to a company related to a director (i) – (89)Lease of office space, office equipment and motor vehicles and rendering of services from a firm related to a director of a subsidiary (ii) 435 3,159Rendering of professional services from a firm related to a director (iii) 2 –Consultancy fees paid to a company related to a director of a subsidiary (iv) 39 –

(i) The brother of one of the directors of the Company is a director of Chippel

Overseas Supplies Pte Ltd and Chip Hup Timber Pte Ltd whereby a subsidiary

rendered logistic services and provided storage space for an amount of

$3,000 (2012: $27,000) and $Nil (2012: $89,000) respectively.

(ii) The Group has entered into a contract with Shanghai Hung King Logistics

Co., Ltd., a firm of which the spouse of one of the directors of a subsidiary

is a director, for transportation services rendered and leasing of office

space, office equipment and motor vehicles amounting to $430,000 (2012:

$3,113,000) and $5,000 (2012: $46,000) respectively.




34. related party transactions (cont’d)

(a) Related parties (cont’d)

(iii) One of the directors of the Company is a director of Legal Standard LLP which

provided professional services to the Company.

(iv) In 2013, the Group has entered into a contract with Hung King Logistics

Limited, a firm of which one of the directors of a subsidiary is also a director

of Hung King Logistics Limited, for consultation services to the Group

amounting to $39,000 (2012:$Nil).

(b) Key management compensation

Group

2013 2012

$’000 $’000

Directors of the Company

– Salaries, fees and benefits-in-kind 1,881 1,656


Directors of subsidiaries

– Salaries, fees and benefits-in-kind 768 628


Other key management personnel

– Salaries, fees and benefits-in-kind 298 218


Key management personnel are the directors and key personnel having authority

and responsibility for planning, directing and controlling the activities of the Group,

directly or indirectly.




35. Events occurring after the reporting period

On 22 June 2013, GKE Private Limited, a wholly-owned subsidiary of the Company completed

the acquisition of the property located at No. 6 Pioneer Walk at a total consideration of

$32,000,000.

On 23 July 2013, the Group and its related party, Hung King Holdings Limited has

incorporated a subsidiary, GKE China Investment Pte. Ltd. in Singapore. The Group holds

2,340,000 ordinary shares, representing 65% of the entire issued and paid up capital in the

subsidiary while the remaining 1,260,000 ordinary shares, representing 35% of the entire

issued and paid up share capital is held by Hung King Holdings Limited. On 19 August

2013, GKE China Investment Pte. Ltd. has entered into a sale and purchase agreement with

Njoo Soe Zen and Lai Mun Kin for the proposed acquisition of the entire issued and paid

up capital of Uniplas (Shanghai) Co., Ltd (“Uniplas”) for cash consideration amounting to

RMB72.2 million. Uniplas is the owner of the land use right over industrial land situated at

No.261, Fa Sai Road, Waigaoqiao Free Trade Zone, Pu Dong New District, Shanghai, PRC.

36. authorisation of financial statements for issue

The financial statements for the year ended 31 May 2013 were authorised for issue in

accordance with a resolution of the directors on 26 August 2013.


Statistics of Shareholdings /As at 26 August 2013

Class of shares : Ordinary shares

No. of shares (excluding treasury shares) : 457,946,636

Voting rights : One vote per ordinary share

As at 26 August 2013, the total number of treasury shares held is 5,417,000 (1.18%).

DISTrIBUTIoN oF SharEholDINGS

Range of Shareholdings

Number of

Shareholders

Percentage

(%)

Number of

Shares

Percentage

(%)

1 – 999 6 0.31 2,641 0.00

1,000 – 10,000 522 26.92 3,833,015 0.83

10,001 – 1,000,000 1,376 70.96 112,716,000 24.32

1,000,001 and above 35 1.81 346,811,980 74.85

TOTAL 1,939 100.00 463,363,636 100.00

TWENTY larGEST SharEholDErS

No. Name of ShareholderNumber of

Shares heldPercentage

(%)

1 HSBC (Singapore) Nominees Pte Ltd 53,498,020 11.682 Chen Yong Hua 48,000,000 10.483 Mayban Nominees (S) Pte Ltd 43,164,000 9.434 OCBC Securities Private Limited 31,133,000 6.805 Kwan Chee Seng 25,184,000 5.506 Citibank Nominees Singapore Pte Ltd 23,051,000 5.037 Far Eastern Bank Nominees Pte Ltd 20,045,300 4.388 Hong Leong Finance Nominees Pte Ltd 17,433,000 3.819 UOB Kay Hian Pte Ltd 11,925,000 2.6010 Chai Hwee Hoon Doreen 10,000,000 2.1811 Neo Cheow Hui 10,000,000 2.1812 DBS Nominees Pte Ltd 3,943,000 0.8613 CIMB Securities (Singapore) Pte Ltd 3,626,000 0.7914 Teng Beng Hua 3,306,660 0.7215 Maybank Kim Eng Securities Pte Ltd 3,199,000 0.7016 Tan Poh Soon 2,996,000 0.6617 Phillip Securities Pte Ltd 2,373,000 0.5218 United Overseas Bank Nominees Pte Ltd 2,328,000 0.5119 Ng Song Ing 2,300,000 0.5020 Tan Ai Meng 2,249,000 0.49

319,753,980 69.82


Statistics of Shareholdings /

As at 26 August 2013

SUBSTaNTIal SharEholDErS aS aT 26 aUGUST 2013(As recorded in the Register of Substantial Shareholders)

direct Interest Indirect Interest

Number of Shares % Number of Shares %

Chen Yong Hua 48,000,000 10.48 – –

Neo Kok Ching(1) – – 34,366,660 7.50

Neo Cheow Hui(2) 10,000,000 2.18 17,445,300 3.81

Wang Jian Wen(3) – – 40,000,000 8.73

Kwan Chee Seng 25,184,000 5.50 – –

Notes:

(1) Mr Neo Kok Ching is deemed to be interested in the shares held by his spouse, Mdm Teng

Beng Hua, who has an interest in 3,306,660 shares. A total of 31,060,000 shares held by

Mr Neo Kok Ching are registered in the names of Mayban Nominees (S) Pte Ltd, Far Eastern

Bank Nominees Pte Ltd and Hong Leong Finance Nominees Pte Ltd as his nominees.

(2) The shares are registered in the name of Far Eastern Bank Nominees Pte Ltd, where Mr Neo

Cheow Hui has beneficial interest.

(3) The shares are registered in name of HSBC (Singapore) Nominees Pte Ltd, where Mr Wang

Jian Wen has beneficial interest.

PErCENTaGE oF SharEholDING IN PUBlIC’S haNDS

As at 26 August 2013, 54.58% of the Company’s shares are held in the hands of public. Accordingly,

the Company has complied with Rule 723 of the Listing Manual – Section B: Rules of Catalist of the

SGX-ST which requires at least 10% of the number of issued shares (excluding preference shares,

convertible equity securities and treasury shares) in a class that is listed at all times to be in the

hands of the public.

Notice of Annual General Meeting /


GKE Corporation Limited (Registration No. 200001941G)

NOTICE IS HEREBY GIVEN that the Annual General Meeting of GKE Corporation Limited (the

“Company”) will be held at 30 Pioneer Road, Singapore 628502 on Monday, 30 September 2013

at 10.00 a.m. for the following purposes:

AS ORdINARY BUSINESS

1. To receive and adopt the Directors’ Report and the Audited Financial Statements of the

Company and the Group for the financial year ended 31 May 2013 together with the Auditors’

Report thereon.

(Resolution 1)

2. To declare a one-tier tax exempt first and final dividend of S$0.003 per ordinary share for

the financial year ended 31 May 2013.

(Resolution 2)

3. To approve the payment of Directors’ fees of S$168,000 for the financial year ended 31 May

2013 (2012: S$275,000).

(Resolution 3)

4. To re-elect the following Directors of the Company retiring pursuant to Article 107 of the

Articles of Association of the Company:

Mr. Neo Kok Ching (Resolution 4)

Mr. Liu Ji Chun (Resolution 5)

Ms. Angelic Cheah Yee Ping (Resolution 6)

[See Explanatory Note (i)]

5. To re-appoint Messrs Ernst & Young LLP, Certified Public Accountants, as the Auditors of the

Company and to authorise the Directors of the Company to fix their remuneration.

(Resolution 7)

6. To transact any other ordinary business which may properly transacted at an Annual General

Meeting.




AS SPECIAL BUSINESS

To consider and if thought fit, to pass the following resolutions as Ordinary Resolutions, with or

without any modifications:

7. Authority to issue shares in the capital of the Company pursuant to Section 161 of the

Companies Act, Chapter 50 and Rule 806 of the Listing Manual – Section B: Rules of Catalist

of the Singapore Exchange Securities Trading Limited.

That pursuant to Section 161 of the Companies Act, Chapter 50 and Rule 806 of the Listing

Manual – Section B: Rules of Catalist 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 fit; and

(b) (notwithstanding the authority conferred by this Resolution may have ceased to be

in force) issue shares pursuant to 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 pursuant to the

Instruments, made or granted pursuant to this Resolution) and Instruments to be

issued pursuant to this Resolution shall not exceed one hundred per centum (100%)

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 fifty 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);

(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 percentage 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 – Section B: Rules of Catalist 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 (“AGM”) of the Company or the date by which the next AGM 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.

[See Explanatory Note (ii)] (Resolution 8)

By Order of the Board

Shirley Tan Sey Liy

Company Secretary

Singapore, 13 September 2013




Explanatory Notes:

(i) Ms Angelic Cheah Yee Ping will, upon re-election as a Director of the Company, remain as

a member of the Audit Committee, Nominating Committee and Remuneration Committee

and will be considered independent for the purpose of Rule 704(7) of the Listing Manual –

Section B: Rules of Catalist of the SGX-ST.

(ii) Resolution 8, if passed, will empower the Directors of the Company from the date of this

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, one hundred per centum (100%) of the total number of

issued shares (excluding treasury shares) in the capital of the Company, of which up to fifty

per centum (50%) 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.

Notes:

1. A Member entitled to attend and vote at the AGM (the “Meeting”) is entitled to appoint not

more than two proxies to attend and vote in his/her stead. A proxy need not be a Member

of the Company.

2. Where a member appoints two proxies, he shall specify the proportion of his shareholding

to be represented by each proxy in the instrument appointing the proxies. A proxy need not

be a member of the Company.

3. If the member is a corporation, the instrument appointing the proxy must be under seal or

the hand of an officer or attorney duly authorised.

4. The instrument appointing a proxy must be deposited at the Registered Office of the Company

at 30 Pioneer Road, Singapore 628502 not less than forty-eight (48) hours before the time

appointed for holding the Meeting.

GKE CORPORATION LIMITEd(Company Registration No. 200001941G)(Incorporated In the Republic of Singapore)

ANNUAL GENERAL MEETING

PROXY FORM(Please see notes overleaf before completing this Form)

IMPORTANT:

1. For investors who have used their CPF monies to buy GKE Corporation Limited’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 specified. If they also wish to vote, they must submit their voting instructions to the CPF Approved Nominees within the time frame specified to enable them to vote on their behalf.

I/We*, (Name) NRIC/Passport number*

of (Address)

being a member/members of GKE CORPORATION LIMITEd (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 30 Pioneer Road, Singapore 628502 on Monday, 30 September 2013 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 specific 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 Against

Ordinary Business

1 Directors’ Report and Audited Financial Statements for the financial year ended 31 May 2013

2 Payment of proposed first and final dividend

3 Approval of Directors’ fees amounting to S$168,000 for the financial year ended 31 May 2013

4 Re-election of Mr. Neo Kok Ching as a Director

5 Re-election of Mr. Liu Ji Chun as a Director

6 Re-election of Ms. Angelic Cheah Yee Ping as a Director

7 Re-appointment of Messrs Ernst & Young LLP as Auditors and to authorise the Directors of the Company to fix their remuneration

Special Business

8 Authority to allot and issue shares

Dated this day of 2013Total number of Shares in: No. of Shares

(a) CDP Register

(b) Register of Members Signature of Shareholder(s) or, Common Seal of Corporate Shareholder

*Delete where inapplicable

IMPORTANT: PLEASE REAd NOTES OVERLEAF

Notes:

1. Please insert the total number of Shares held by you. If you have Shares entered against your name in the Depository Register (as defined in Section 130A of the Companies Act, 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 Meeting of the Company is entitled to appoint not more than 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 and, if no percentage is specified, the first named proxy shall be deemed to represent 100 per cent of the shareholding and the second named proxy shall be deemed to be on alternate to the first named.

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 office of the Company at 30 Pioneer Road, Singapore 628502 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 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 officer 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 certified 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 fit 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 specified in the instrument appointing a proxy or proxies. In addition, in the case of Shares entered in the Depository Register, the Company may reject any instrument appointing a proxy or proxies lodged if the member, being the appointor, is not shown to have Shares entered against his name in the Depository Register as at forty-eight (48) hours before the time appointed for holding the Meeting, as certified by The Central Depository (Pte) Limited to the Company.

This page has been intentionally left blank

Vision

Mission

To become a leading integrated logistics service provider in the region, offering

efficient, reliable and quality warehousing and logistics support to the local and

overseas market by leveraging on technology and operational excellence.

Constantly seeking opportunities for rapid growth through investments and joint

ventures while dedicating sufficient effort and focus to ensure sustainability in all

our business segments. To delivery effective solutions for our clients and value

for our stakeholder.

Values

Customer focused – strive to understand our customers’ needs and offer

innovative and effective solutions.

People – value and develop staff who are passionate and

committed.

Integrity – honest and deliver what we promised.

Team work – practice open communication with trust and respect for

achieving common goals.

Safety – take personal responsibility to think safety and act

safety.

Designed and produced by

(65) 6578 6522

BOARD OF DIRECTORS

Mr. Chen Yong Hua

Executive Chairman and

Executive Director

Mr. Neo Cheow Hui

Chief Executive Officer and

Executive Director

Mr. Neo Kok Ching


Mr. Er Kwong Wah






Mr. Liu Ji Chun


Mr. Wang Jian Wen


Mr. Wang Jian Ping

Alternate Director to

Mr. Wang Jian Wen

COMPANY SECRETARY

Ms. Shirley Tan Sey Liy (ACIS)

SHARE REGISTRAR

M & C Services Private Limited

112 Robinson Road #05-01

Singapore 068902

AUDIT COMMITTEE




NOMINATING COMMITTEE


– Chairman

Mr. Er Kwong Wah


REMUNERATION COMMITTEE




AUDITORS

Ernst & Young LLP

Certified Public Accountants

One Raffles Quay

North Tower, Lever 18

Singapore 048583

Partner-in-charge:

Mr. Tan Swee Ho

(Appointed on 30 September 2011)

LEGAL COUNSEL

Opal Lawyers LLC

30 Raffles Place #19-04

Chevron House

Singapore 0408622

CONTINUING SPONSORS

RHT Capital Pte. Ltd.

Six Battery Road #10-01

Singapore 049909

Registered Professional:

Mr. Wong Chee Meng Lawrence

PRINCIPAL BANKER

United Overseas Bank Limited

80 Raffles Place

UOB Plaza

Singapore 048624

REGISTERED OFFICE

30 Pioneer Road

Singapore 628502

Tel:(65) 6261 7770

Fax:(65) 6266 2557

Website: www.gke.com.sg

Corporate Information /

GK

E CO

RP

OR

ATIO

N LIM

ITED A

NN

UA

L REP

OR

T 2013

YOUR INTEGRATEDSOLUTION PROVIDER

CORPORATION LIMITED

CORPORATION LIMITED

YOUR INTEGRATED SOLUTION PROVIDERgke.listedcompany.com/misc/ar2013.pdf4 GKE Corporation Limited /...

Documents

Transcript of YOUR INTEGRATED SOLUTION PROVIDERgke.listedcompany.com/misc/ar2013.pdf4 GKE Corporation Limited /...