ACHIEVING GREATER HEIGHTS - listed companykimsengheng.listedcompany.com/misc/ar2014/ar2014.pdfcontract by United World College of South East Asia, an established International School

KSH Holdings Limited

ACHIEVING GREATER HEIGHTS

A N N U A L R E P O R T 2 0 1 4

CONTENTS001OUR VISION • OUR MISSION

003CORPORATE PROFILE

004ONGOING PROJECTS

005GROUP STRUCTURE

006MESSAGE FROM EXECUTIVE CHAIRMANAND MANAGING DIRECTOR

012 REVIEW OF FINANCIALS AND OPERATIONS

016 FINANCIAL HIGHLIGHTS

018 BOARD OF DIRECTORS & MANAGEMENT

020 CORPORATE DIRECTORY

021 FINANCIAL CONTENTS

022 STATEMENT OF CORPORATE GOVERNANCE

KSH HOLDINGS LIMITEDANNUAL REPOR T 2014 001

OURVISIONTo be a leader in building construction services in Singapore

and a sizeable investor in property development business in

the region.

OURMISSIONWe are committed to contributing social and economic benefits

to our society through the provision of high quality and cost

effective services in building construction and niche property

development activities in the region.

We provide innovative solutions in an efficient and professional

manner to meet our customers’ requirements in building and

property businesses by bringing together the best available

resources and continually improving upon our processes to

deliver excellence.

As we achieve the above, we shall also generate fair and

satisfying economic value for our shareholders.

Since listing, KSH had broadened its business

portfolio and grown its geographical presence.

Beyond its core construction business, the Group

is also actively engaged in property development

and investment with projects geographically

diversified across Southeast Asia and PRC.

ANNUAL REPOR T 2014KSH HOLDINGS LIMITED002

CORPORATEPROFILEKSH Holdings Limited (“KSH” or the “Group”) (“金成興控股有限公司”) is a well-established Construction, Property Development and Property Investment group that

was incorporated in 1979 and listed on the Mainboard of SGX-ST on February 8, 2007.

KSH is an A1-graded contractor under BCA CW01, with the ability to tender for Public

Sector Construction projects of unlimited value, and is a main contractor for both

public and private sectors in Singapore. KSH also has an A2 grading under BCA’s CW02

category for civil engineering, which allows KSH to tender for Public Sector projects

for values of up to $85 million.

KSH has a proven capability of handling construction projects across a broad

spectrum of industries and its projects have performed well in CONQUAS, a standard

assessment system on the quality of building projects. For the construction of

Fullerton Bay Hotel and NUS University Town’s Education Resource Centre, KSH had

won two BCA Construction Excellence Awards in May 2013.

The Group is also engaged in property development, by way of joint ventures.

KSH has successfully launched 12 residential and mixed use development projects

in Singapore and four phases of Liang Jing Ming Ju, a mixed use development

project in Beijing, the People’s Republic of China (“PRC”). KSH is also looking at other

property development and investment opportunities in Southeast Asia, particularly

in Singapore, Klang, Negeri Selangor in Malaysia, and the PRC.

In Property Investment, the Group has a 69.0% equity interest in the property

developer and manager of Tianxing Riverfront Square in Tianjin, PRC. Tianxing

Riverfront Square has a valuation of S$104.1 million1, with 44% of its offices being

sold. The remaining 56% of the offices and the shopping podium have been

leased out with an average occupancy of more than 90%. Separately, KSH has

also entered into sales and purchases agreement for the acquisition of Prudential

Tower, a 30-storey, Grade A office building located at the Raffles Place precinct in

Singapore. Prudential Tower has a remaining lease period of over 80 years and a 100%

committed occupancy with 40 tenants as at March 31, 2014. The aggregate purchase

consideration is S$512 million as at May 15, 2014.

Since listing, KSH had broadened its business portfolio and grown its geographical

presence. Beyond its core construction business, the Group is also actively engaged

in property development and investment with projects geographically diversified

across Southeast Asia and PRC.

1 Based on the valuation performed by DTZ Debenham Tie Leung Property Advisory (Tianjin) Co Ltd as at March 2014.


NEWest – Condo – Westcoast – triplexN

Sky GreenSKAP & KAP Residences

The BoutiqSeastrandSeSeaQ Bay Residences

CONSTRUCTION PROJECTS

PROPERTY DEVELOPMENT

Ardmore Three

Eight Courtyards

The Palacio

United World CollegeSequoia Mansion

KAP & KAP Residences

Newest-condo-Westcoast-triplex

Flora Vista & Floraview

Cityscape@Ferrer Park

Hexacube

Trio

ONGOINGPROJECTS

KSH HOLDINGS LIMITEDANNUAL REPOR T 2014004


GROUPSTRUCTURE

AS AT 31 MARCH 2014

50% SINO SINGAPORE KIM SENG HENG

(BEIJING) ENGINEERING CONSTRUCTION CO. LTD

100% TECHPATH

CONSTRUCTION SDN BHD

100% KIM SENG HENG REALTY PTE LTD

100% KSH OVERSEAS

PTE. LTD.100%

FERRIS RISE PTE. LTD.

100% KSH PROPERTY DEVELOPMENT

PTE. LTD.

45% BEIJING JIN HUA TONG

DA REAL ESTATE DEVELOPMENT CO., LTD

100% KSH ASIA INVESTMENT

PTE. LTD.

34.70% IMPERIAL SOUTH

EAST ASIA INVESTMENT

PTE. LTD.

KSH HOLDINGS LIMITED

100% KSH PROPERTY

INVESTMENT PTE. LTD.

45% DEVELOPMENT 32 PTE.

LTD.

35% UNIQUE COMMERCIAL

PTE. LTD.

25% PHILEAP PTE. LTD.

25% UNIQUE REALTY PTE.

LTD.

25% UNIQUE CAPITAL PTE.

LTD.

20% UNIQUE WELLNESS

PTE. LTD.

50% KSH (CHINA) VENTURE

PTE. LTD.

35% MERGUI DEVELOPMENT

PTE. LTD.

35% UNIQUE DEVELOPMENT

PTE. LTD.

45% DEVELOPMENT 26 PTE.

LTD.

32% RESIDENZA PTE. LTD.

35% UNIQUE CONSORTIUM

PTE. LTD.

42% UNIQUE REZI PTE. LTD.

30% UNIQUE RESI ESTATE

PTE. LTD.

30% WEALTH DEVELOPMENT

PTE. LTD.

25% GREAT DEVELOPMENT

PTE. LTD.

69% TIANJIN TIAN

XING REAL ESTATE DEVELOPMENT

CO., LTD.

100% DUFORD INVESTMENT(HONG KONG) LIMITED

40% KLANG CITY

DEVELOPMENT PTE. LTD.

100% KIM SENG HENG

ENGINEERING CONSTRUCTION

(PTE) LTD

69% TIANJIN TIAN

XING PROPERTY MANAGEMENT

CO., LTD.

MAINTAINING OUR MOMENTUM, KSH CONTINUED

OUR STRATEGY TO REBALANCE AND

DIVERSIFY OUR BUSINESS PORTFOLIO,

AND SUCCESSFULLY TAPPED INTO GROWTH

OPPORTUNITIES IN BOTH CONSTRUCTION

AND REAL ESTATE SECTORS IN ASIA.

MESSAGE FROM EXECUTIVE CHAIRMAN

AND MANAGING DIRECTOR

Dear Shareholders,

The financial year ended March 31, 2014 (“FY2014”) has been a record year for KSH. Maintaining our momentum, KSH continued our strategy to rebalance and diversify our business portfolio, and successfully tapped into growth opportunities in both construction and real estate sectors in Asia.

Through the execution of our strategy, we delivered a string of achievements throughout the year and saw increased contribution from both the construction and property development segments.

Not only did we win several new construction projects from a spectrum of industries; our joint ventures’ property development, property management and property investment projects also progressed well, and KSH had further expanded into Asia steadily.

KSH’s success in FY2014 is also built on several strengths: our strong working relationships with joint venture partners and business network; the ability to leverage on our construction experience to support our property development business in Singapore and PRC; an established, proven track record and reputation in construction; the ability to be

cost competitive; and very importantly, a committed and experienced management team that is supported by capable and dedicated workforce.

With our unique strengths and the execution of our strategy, our revenue grew 40.1% to S$324.5 million in FY2014; the share of results from our associate companies was also up 66.2% to S$27.7 million; and we achieved record earnings of S$44.8 million.

CORE CONSTRUCTION BUSINESS REMAINS STRONGFor the Construction Industry in Singapore, an estimated S$31.0 billion to S$38.0 billion in spending is expected for 2014, buoyed by public sector jobs. Private sector jobs on the other hand, may moderate to between S$12.0 billion to S$16.0 billion in 2014.

Amid this backdrop, our core construction business remained strong and achieved high quality standards, performing well in CONQUAS, a standard assessment system on the quality of building projects. Our construction business also has an order book of more than S$410.0 million as at March 31, 2014 that will contribute to the Group’s financial performance over the next two years.


Through our strong working relationships with joint venture partners and business network, we won three mandates to construct mixed-use developments in Singapore – a S$76.9 million contract to build a mixed-use development at King Albert Park – KAP and KAP Residences; a S$98.94 million contract to build a mixed-use development, NeWest at West Coast Drive; and a contract worth approximately RMB157.0 million to construct Sequoia M a n s i o n (靚景明居 –紅杉公館 ) i n Beijing. These contracts were awarded by consortiums in which KSH had equity stakes of 12% to 45%.

Having developed expertise in construction for educational institutions, including the award-winning Education Resource Centre and two residential colleges for the National University of Singapore, KSH was awarded a S$42.5 million construction contract by United World College of South East Asia, an established International School in Singapore, for the construction of an additional block at the existing campus in Dover Road.

The public sector also continues to recognise KSH’s expertise in building high quality projects, with Jurong Town Corporation (JTC) awarding a S$59.9 million contract to KSH. For this contract, KSH is

erecting a single-storey building with a basement, landscape park, carpark, storage space and shell space for a district cooling system plant at Ayer Rajah Avenue.

A DIVERSIFIED PORTFOLIO OF REAL ESTATE PROJECTSWe are also excited to complement the strengths of our joint venture partners for various attractive opportunities in the real estate space in FY2014. Based on our construction experience, we have the ability to offer value-added services when carrying on property development work. Notwithstanding moderating prices of residential properties in Singapore, there are pockets of good opportunities within the real estate sector.

In Singapore, KSH acquired Prudential Tower, an attractive Grade A office building in the Raffles Place precinct. The property is a gem, given the attractive rental returns and potential gains from subsequent strata sale of commercial properties in the Raffles Place precinct at large. This investment will further strengthen the growth of KSH’s property development and investment business in Singapore.

In Malaysia, KSH entered the property development business and acquired 26 plots of freehold land measuring

MESSAGE FROM EXECUTIVE CHAIRMAN AND MANAGING DIRECTOR

approximately 679,460 sq ft in Klang, Negeri Selangor in Malaysia. The land may potentially be developed into a mixed development, with a potential plot ratio of 1:5, including hotel, serviced apartment, SOHO and shopping mall. It will form part of a proposed business park, with a unique mix of residential and commercial spaces.

In the PRC, our Property Investment continues to profit from rental income from Tianxing Riverfront Square, a 36-storey Retail and Office Complex in which we have a 69.0% equity interest. Early in 2014, the launch of Liang Jin Ming Ju Phase 4 – Sequoia Mansion (紅杉公館), our property development project in Beijing received good response, which further boosted our confidence in our investments overseas.

A HIGH DIVIDEND FOR SHAREHOLDERSTo share our joy of achieving a strong year with our faithful shareholders, we are pleased to propose a final dividend of 1.75 SGD cents per ordinary share. Together with our interim dividend of 1.25 SGD cents per ordinary share, our total dividend in FY2014 amounts to 3.0 SGD cents per ordinary share, which is equivalent to a dividend yield of 5.6%1.

CLOSING REMARKSIn closing, I would like to express my gratitude to our management team for their service. Each of our Executive Directors has at least 30 years of experience in the construction industry. I am also proud that we have a pool of long serving and committed staff including engineers, quantity surveyors and site coordinators that supports our management team.

We are privileged to also have a Board with varied and complementing expertise, which has provided invaluable guidance to the Group. Notably, I would like to take this opportunity to thank Mr Lai Meng Seng for his valued service as Independent Director on KSH’s Board for approximately 7 years. Mr Lai has since retired from his service as Chairman of the Remuneration Committee, Member of Audit Committee and Member of Nominating Committee in July 2013. At the same time, the Board welcomes Mr Ko Chuan Aun to our Board as Independent Director. Mr Ko joined the Board in August 2013 and is a member of the Audit Committee.

To our shareholders, customers, suppliers, and partners, I also thank you for your

faithful support to the Group, which has allowed us to maintain our growth momentum and achieve record results in FY2014.

I look forward to your continued support as we continue to pursue construction opportunities in Singapore, build our property development business in Singapore and overseas, and explore other overseas opportunities in Southeast Asia. Thank You.

CHOO CHEE ONNExecutive Chairman and Managing Director

June 26, 2014

1 Based on closing share price of S$0.535 as of 26 June 2014.


“BASED ON OUR CONSTRUCTION EXPERIENCE, WE HAVE THE ABILITY TO OFFER VALUE-ADDED SERVICES WHEN CARRYING ON PROPERTY DEVELOPMENT WORK.”



執行主席兼董事经理

致詞各位股東，

金成興在截至2014年3月31日的財政年度(“2014財年”)取得了創紀錄的一年。維持着我們的良好勢頭，金成興繼續推動我們的業務組合調整及分化策略並順利的在亞洲區域的建築及房地產行業發掘新發展機會。

通過策略的順利執行，我們在回顧年裡交出了一連串的成績，建築及房地產業務的貢獻也取得了增長。

我們不僅從諸多行業裡獲得了新的建築項目；我們的合資房地產開發、物業管理以及房地產投資項目也進展順利，而金成興也逐步的開拓亞洲市場。

金成興在2014財年的成就建立在幾個優勢上：我們與合資伙伴良好的工作關係以及強大的業務網絡、善用我們在建築方面的經驗以支持我們在新加坡及中國的房地產開發業務、在建築行業建立起的良好信譽和往績記錄、成本競爭力還有更重要的－堅定且經驗豐富的管理層和協助管理層的精幹敬業工作團隊。

憑借我們獨特的優勢和策略的執行，我們2014財年收入增長40.1%達3億2,450萬新元；分佔聯營公司的業績上揚了66.2%達2,770萬新元；我們也創下了4,480萬新元的盈利記錄。

核心建築業務保持穩健新加坡建築業在2014年的開支預計將會在310億新元至380億新元之間，主要由公共設施項目所推動。私人領域的合同總額在2014年則預計放緩至120億新元至160億新元之間。

在這個大背景下，我們的核心建築業務保持穩健及高質量水準，在評估建築工程質量的建築質量評估指數(CONQUAS)取得了傑出的表現。我們建築業務截至2014年3月31日總額達4億1,000萬新元的建築合同訂單將會為集團接下來兩年的財務表現帶來貢獻。

通過我們與合資伙伴良好的工作關係以及強大的業務網絡，我們贏得了三單綜合用途發展項目的建築工程授權書，包括：價值7,690萬新元在阿爾柏王園建造KAP和KAP Residences綜合用途發展項目；價值9,894萬新元在西海岸通道建造名為NeWest的綜合用途發展項目以及價值約1億5,700萬人民幣在中國北京市的項目。金成興擁有上列合同項目的權益介于12%至45%之间。

以其得獎項目－新加坡國立大學教育資源中心和兩棟住宅院校的教育機構建造專業技術，金成興獲得為國際學生所設的教育機構－國際東南亞聯合世界學院－所頒價值4,250萬新元的建

築合同，將為其在杜佛路現有校舍建造多一座建築和附屬結構工程。

公共行業也繼續認可金成興在建設高質量項目方面的專長，由裕廊集團頒發了一項價值5,990萬新元的合同。金成興將在合同下在亞逸拉惹道建造一棟帶底層的一層樓建築、園景公園、停車場、儲存空間和為區域供冷系統而設的殼體空間。

多元化的房地產項目組合我們也很高興在2014財年與實力互補的合資伙伴們在房地產業空間探討各種具吸引力的房地產開發商機。儘管新加坡住宅物業的價格緩和，房地產業仍有良好的機遇可尋。

金成興在新加坡收購了位於萊佛士坊一帶的甲級辦公樓－保誠保險大樓。此樓盤極為珍貴，能帶來具吸引力的可持續租金收入，並預計能在日後通過分層地契出售帶來收益。這項投資也將進一步強化金成興房地產開發及投資業務的成長。

在馬來西亞，金成興以在雪蘭莪州巴生市收購26塊總約679,460平方英尺的永久業權土地進軍其房地產開發業。該土地的潛在地積比率為1:5，可被發展為包括酒店、服務式公寓、SOHO及大型購物中心的綜合用途項目。此項


目將會形成一個擬議包括住宅和商業空間的獨特商業園的一部分。

在中國，我們的房地產投資業務也繼續受益於我們持有其69.0%權益的36層樓高零售及辦公大樓－天星河畔廣場－所帶來的租金收入。在2014年初，靚景明居第四期－紅杉公館的發售獲得了良好的反應，進一步增強了我們對海外投資的信心。

給予股東們的高額股息為了與各位忠實股東們分享我們回顧年裡取得強勁表現的喜悅，我們欣然擬議派發每股1.75新加坡分的末期股息。連同已派發的每股1.25新加坡分中期股息，我們在2014財年的總股息為每股3.0新加坡分，相等於5.6％1 的股息收益率。

閉幕詞最後，我希望借此對管理層的服務致以由衷感謝。我們的各個執行董事均具備至少30年的建築行業經驗。我也很自豪我們的管理層能得到當中包括服務多年並兼具奉獻精神的工程師、工料測量師和現場協調員等優秀工作團隊的協助。

我們也很榮幸能擁有具備多元化及互補性專業知識的董事，為集團給予了寶貴的指導。同時，我希望借此對賴明成先生在金成興董事會上過去大約七年來作為獨立董事的寶貴服務至上謝意。賴先生為集團薪酬委員會主席、審核委員會和提名委員會成員，並已於2013年7月卸任。與此同時，董事會也借此歡迎高泉安加入集團董事會作為獨立董事。高先生於2013年8月份加入董事會，為審核委員會的一員。

對於我們的股東、客戶、供應商以及伙伴們，你們對集團的忠實支持，我謹代表董事會致上萬分的謝意，您的支持令我們在2014財年保持了增長勢頭並取得了創紀錄的業績表現。

在我們繼續在新加坡追尋新建築商機、建立我們在海內外的房地產開發業務和在東南亞區探尋其它機遇的同時，我本人期待着您一如既往的支持。謝謝。

朱峙安執行主席兼董事經理2014年6月26日

1 按2014年6月26日的閉市價0.535新元

REVIEW OFFINANCIALS AND

OPERATIONS FINANCIALSLifted by higher construction revenue and sales of development properties in Singapore and People’s Republic of China (“PRC”) in FY2014, the Group’s topline jumped 40.1% to S$324.5 million from S$231.6 million in the previous corresponding year (“FY2013”).

Our Construction segment’s revenue contribution grew to S$285.7 million in FY2014, equivalent to 88.0% of Group Revenue in FY2014. Over the same period, our Property development and management segment’s revenue contribution grew to S$38.8 million, contributing 12.0% to Group Revenue in FY2014. The remaining contribution to Group Revenue was derived from Rental income from investment properties.

Apart from topline growth, Share of results of associates also increased to S$27.7 million in FY2014, mainly due to the contribution from our 12 property development projects in Singapore. These projects are expected to be ready for occupancy from December 2014 to June 2019.

Operating expenses increased from S$208.1 million in FY2013 to S$304.9 million in FY2014, due to higher construction costs and finance costs, which were offset by lower personnel expenses.


S$206.1m

S$285.7m

S$20.0m

S$32.5m

S$5.5m

S$6.3m

FY2013

Project Revenue Sales of development property

Rental income from investment properties

S$231.6m

S$324.5m40.1%

FY2014

With the rise in construction activity, costs of construction had increased as well. In consideration of KSH’s diversification, rebalancing and regional expansion strategies for future growth and the anticipated increase in interest rates, KSH established S$300 million multicurrency medium term note programme and successfully issued our inaugural S$75 million 5.25% fixed rate notes due in 2016. The net proceeds from the issue of the Notes under the Programme (after deducting issue expenses) will be used for general corporate purposes including refinancing of borrowings, financing investments and general working capital of the Company or its subsidiaries.

Other income increased by S$0.9 million from S$8.6 million in FY2013 to S$9.5 million in FY2014, mainly due to the increase in foreign exchange gain, increase in management fees from associates and interest income.

Other operating expenses dropped 6.4% from S$6.8 million in FY2013 to S$6.4 million in FY2014 mainly due to decrease in provision for anticipated losses on construction projects; decrease in loss on sale of plant and equipment; decrease in sales tax and decrease in printing expenses.

As a result of the above, the Group achieved a 23.5% increase in net profit attributable to shareholders from S$36.3 million in FY2013 to S$44.8 million in FY2014, marking a record year for the Group.

The Group employs prudent capital management and is proud to have a strong healthy balance sheet that will further buttress the Group for our current and future growth plans.

As at March 31, 2014, we have a healthy working capital, with net current assets of S$77.8 million and high cash and cash equivalents of S$142.4 million. Our Shareholders’ Equity also grew over the years to S$217.3 million as at March 31, 2014.

At the same time, we have a healthy debt coverage and low gearing. Our net borrowing and debt stood at S$2.9 million as at March 31, 2014, with a low net debt-to-equity ratio of 0.01 times.

Cumulatively, the Group’s earnings per share and net asset value stood at 10.81 SGD cents and 52.43 SGD cents respectively.


REVIEW OFFINANCIALS AND OPERATIONS OPERATIONSFor our core construction business, we anticipate that construction costs are likely to continue the uptrend as a result of rising cost pressures due to progressive tightening of manpower policies, more stringent regulatory controls on construction industries and an increase of construction material costs. We also anticipate increases in costs such as rental, utilities, transportation etc.

CONSTRUCTION PROJECTS AWARDED IN FY2014

Project Name Value Project Type

KAP and KAP Residences at King Albert Park S$76.9 million Mixed-use development

United World College of South East Asia at Dover Road

S$42.5 million Construction of an additional school block

NEWest at West Coast Drive S$98.9 million Mixed-use development

JTC Project S$59.9 million Building for a district cooling system plant

Liang Jing Min Ju Phase 4 – Sequoia Mansion

(靚景明居 – 紅杉公館)RMB157 million Mixed-use development

Sing

apor

ePR

C

Separately, we are pleased that our launched property development projects have so far either met or exceeded expectations in both sales volume and prices.

LAUNCHED PROJECTS IN SOUTHEAST ASIA AND PRC

No. Project Name Group’s Stake

Location Type

1 Lincoln Suites 25% Novena Residential

2 The Boutiq 35% 145 Killiney Road Residential

3 Rezi 26 45% Lorong 26, Geylang Residential

4 Cityscape@ Farrer Park 35% Mergui Road Residential

5 The Palacio 32% Lorong M, Telok Kurau Road Residential

6 Rezi 3TWO 45% Lorong 32, Geylang Residential

7 Hexacube 30% 160 Changi Road Commercial

8 Sky Green 25% MacPherson Road Residential

9 NEWest 12.25% West Coast Way Mixed Residential and Commercial

10 KAP and KAP Residences 12.6% King Albert Park Mixed Residential and Commercial

11 FloraVille, Flora Vista & Floraview 12.25% Yio Chu Kang Mixed Residential and Commercial

12 Trio 35% Sam Leong Road Commercial

13 Liang Jing Ming Ju 4th phase

– Sequoia Mansion (靚景明居 – 紅杉公館)

45% Beijing Mixed Residential and Commercial

Sing

apor

ePR

C

Whilst these challenges will exist, KSH has been able to manage these costs through being prudent. To stay cost-competitive, KSH also has continuing relationships with our pool of sub-contractors and suppliers to obtain better credit terms.

KSH has an A1 grading under CW01 category for general building by the Building and Construction Authority to tender for Public Sector construction

projects of unlimited value. Apart from this, KSH has proven our capability in handling projects across various categories such as residential, commercial, industrial, hotel, institution, infrastructure etc, and we are proud to have won new contracts which contributed to our construction order book of S$410.0 million as at March 31, 2014. This provides visibility to the Group’s financial performance over the next two years.


Apart from these projects, KSH and our joint venture partners have completed the acquisition of a property located at No. 160 Changi Road, Singapore 419728 in June 2013 with internal funds and bank borrowings. The Property is an existing 4-storey office building with 2 basements (inclusive of 23 carpark lots) on site area of about 17,974 sq ft. The freehold land is zoned “Commercial” under Master Plan 2008, with a permissible gross plot ratio of 3.0. Its current gross floor area is about 54,208 sq ft.

With our joint venture partners, KSH had entered into a Sales and Purchase agreement in January 2014 to acquire 26 plots of freehold land measuring approximately 679,460 sq ft in Klang, Negeri Selangor, Malaysia for S$36.0 million. KSH’s proportionate share of the purchase consideration was S$14.4 million, which will be funded by proceeds from KSH’s Floating Rate Notes and bank

borrowings. The Acquisition is in line with the Group’s strategy to further expand the Group’s regional presence and our foray in the Malaysian market. It will also provide a good opportunity for the Group to continue building our track record and reputation in Malaysia.

PROPERTY INVESTMENTKSH currently has a 69.0% equity interest in the property developer and manager of Tianxing Riverfront Square, PRC. Approximately 44% of the offices have been sold. The remaining 56% of the offices and the shopping podium have been leased out with an average occupancy of more than 90%. As at 31 March 2014, Tianxing Riverfront Square has a valuation of S$104.1 million1.

Adding to our Property Investment portfolio is Prudential Tower, a 30-storey, Grade A office building located at the Raffles Place precinct, with over 80 years

leasehold remaining. It has 100% committed occupancy and 40 tenants as at March 31, 2014. KSH, through our associate company, had entered into sale and purchase agreements for the proposed acquisition of 92.8% of Prudential Tower’s aggregate strata area of 21,433 sqm, for an aggregate purchase consideration of S$512 million on May 15, 2014.

With our 28% equity interest in the associate company, the aggregate cost to be borne by KSH for the Proposed Acquisition is approximately S$143.36 million. KSH will finance our share of the cost of proposed acquisition by internal funds and/or external borrowings.

The Proposed Acquisition will allow KSH to participate in a strategic investment. KSH will also be able to derive both rental returns and gain from subsequent sale of Prudential Tower on strata lots basis.

1 Based on the valuation performed by DTZ Debenham Tie Leung Property Advisory (Tianjin) Co Ltd



FINANCIAL HIGHLIGHTS

REVENUE (S$’m)

FY2010

290.9

FY2011Restated)

262.8

FY2012

170.6

FY2013

231.6

FY2014

324.5

PROFIT BEFORE TAX (S$’m)

FY2010

23.0

FY2011Restated)

29.3

FY2012

25.6

FY2013

42.0

FY2014

50.3

NET PROFIT (S$’m)

FY2010

18.3

FY2011(Restated)

22.7

FY2012

20.4

FY2013

37.6

FY2014

46.0


Construction 39.94%

Prop

erty

Dev

elopm

ent and Management 60.06%*

Construction 88.04

%Singapore 98.1%

REVENUE BY GEOGRAPHICAL SEGMENTFY2014

REVENUE BY BUSINESS SEGMENTFY2014

PROFIT BEFORE TAXBY BUSINESS SEGMENT

FY2014

PRC 1.9%

Prop

erty

Dev

elopme

nt and Managem

ent 11.96%

S$’m FY2010 FY2011 (Restated)

FY2012 FY2013 FY2014

BALANCE SHEET HIGHLIGHTS

Shareholders’ Equity 108.7 125.0 139.1 180.4 217.3

Net Current Assets 44.4 46.9 35.8 32.7 77.8

Net Tangible Assets 127.9 144.2 160.3 202.3 238.8

EFFICIENCY

Return on Asset (%) 5.1 6.3 6.1 9.6 9.1

Return on Equity (%) 14.3 15.7 12.7 18.6 19.2

HEALTHY DEBT COVERAGE

Net Debt to Equity (x) 0.08 0.02 0.13 0.04 0.01

Interest Cover (x) 11.3 15.4 18.9 28.7 17.1

* Includes share of results of associates amounting to S$27.7 million.


BOARD OF DIRECTORS & MANAGEMENT

MR CHOO CHEE ONN, EXECUTIVE CHAIRMAN AND MANAGING DIRECTOR, is one of the founders of the Group. Mr Choo was appointed to the Board on March 9, 2006 and plays a vital role in charting the corporate direction of the Group. He is responsible for the overall management, strategic planning and business development of the Group, and oversees all key aspects of the Group’s operations, including the tendering process of the Group’s construction projects. He is also responsible for identifying and securing new projects for the Group. In addition, Mr Choo also oversees the Group’s overseas investments and operations, particularly the Group’s property development business in the People’s Republic of China (“PRC”). Mr Choo has over 39 years of experience in construction and property development businesses. As one of the Group’s founders, Mr Choo was instrumental in laying the Group’s early foundations and has been pivotal in the development of the Group and its expansion into the PRC. He is a full member of the Singapore Institute of Directors.

MR LIM KEE SENG, EXECUTIVE DIRECTOR, PROJECT DIRECTOR AND PROCUREMENT DIRECTOR, is one of the founders of the Group. Mr Lim was appointed to the Board on March 22, 2006 and was last re-elected on July 22, 2011. Currently, he oversees the operations of both the Construction and Procurement Departments. Since he founded a construction business in 1974 together with, inter alia, the Group’s Executive Directors, Mr Choo Chee Onn and Mr Tok Cheng Hoe, Mr Lim has accumulated over 39 years of experience in construction and construction-related businesses, including property development, and has been instrumental in the development and growth of the Group. He is a full member of the Singapore Institute of Directors.

MR TOK CHENG HOE, EXECUTIVE DIRECTOR, PROJECT DIRECTOR AND SAFETY DIRECTOR, is one of the founders of the Group. Mr Tok was appointed to the Board on March 22, 2006 and was last re-elected on July 22, 2011. As a Project Director, Mr Tok is responsible for the management of construction projects and oversees the entire execution of the Group’s construction projects. Mr Tok also oversees the functions of QEHS (Quality Environment Health & Safety) of the construction projects carried out by the Group. Since he founded a construction business in 1974 together with, inter alia, the Group’s Executive Directors, Mr Choo Chee Onn and Mr Lim Kee Seng, Mr Tok has accumulated over 39 years of experience in construction and construction-related businesses, including property development, and has been instrumental in the development and growth of the Group. He is a full member of the Singapore Institute of Directors.

MR KWOK NGAT KHOW, EXECUTIVE DIRECTOR AND PROJECT DIRECTOR, was appointed to the Board on March 22, 2006 and was last re-elected on July 27, 2012. As a Project Director, Mr Kwok is responsible for the management of construction projects and oversees the entire execution of the Group’s construction projects. Mr Kwok also oversees the functions of tendering for construction projects and the QAQC (Quality Assurance and Quality Control) of the construction projects carried out by the Group. Mr Kwok has more than 39 years of experience in construction and construction-related businesses, including property development, and has been instrumental in the development and growth of the Group. He is a full member of the Singapore Institute of Directors.


MANAGEMENTMR TANG HAY MING TONY, CHIEF FINANCIAL OFFICER, was promoted to his current post in December 2006. He is responsible for the Group’s finance, accounting and reporting functions as well as the overall financial risk management of the Group. He has several years of experience in auditing, accounting, taxation and financial management before he joined the Group in August 1999. He holds a Bachelor’s degree in Accountancy from the Nanyang Technological University, a Graduate Diploma in Business Administration from the Singapore Institute of Management and a Master’s degree in Business Administration from the University of Adelaide, Australia. He is a fellow member of the Institute of Singapore Chartered Accountants and a full member of the Singapore Institute of Directors.

MR LIM YEOW HUA @ LIM YOU QIN, LEAD INDEPENDENT DIRECTOR, was appointed to the Board on December 18, 2006 and was last re-elected on July 27, 2012. He is currently the Managing Director of Asia Pacific Business Consultants Pte. Ltd., a Singapore company providing tax and business consultancy services. Mr Lim has more than 27 years of experience in the tax, financial services and investment banking industries. Prior to founding Asia Pacific Business Consultants Pte. Ltd., he had held several management positions in various organisations including senior regional tax manager with British Petroleum (“BP”), director (Structured Finance) at UOB Asia Ltd, senior tax manager at KPMG, senior vice president (Structured Finance) at Macquarie Investment Pte Ltd., senior tax manager at Price Waterhouse and deputy director at the Inland Revenue Authority of Singapore. Mr Lim holds a Bachelor’s Degree in Accountancy and a Master’s Degree in Business Administration from the National University of Singapore. He is a fellow member of the Institute of Singapore Chartered Accountants and an Accredited Tax Advisor of the Singapore Institute of Accredited Tax Professionals. He is also a full member of the Singapore Institute of Directors.

MR KO CHUAN AUN, INDEPENDENT DIRECTOR, was appointed to the Board on August 5, 2013. He is currently the Executive Director of KOP Limited, formerly known as Scorpio East Holdings Ltd., a company with businesses that encompass both the property and entertainment industries. Mr Ko also holds chairmanships and directorships in various private and public companies. Mr. Ko was appointed as an Independent Director of Super Group Ltd, San Teh Ltd and Koon Holdings Ltd. Mr Ko has more than 15 years of working experience with the Trade Development Board of Singapore (“TDB”) (now known as the International Enterprise Singapore or IE Singapore). His last appointment with TDB was Head of China Operations. In the past 20 years, Mr Ko has been very actively involved in business investments in the China market. In 2001, he was appointed as the Steering Committee Member of the Network China. Between 2003 to 2005, he served as the Chairman of the Tourism Sub-Committee under the Singapore-Sichuan Trade and Investment Committee. Mr Ko holds a Diploma in Export Marketing, which is equivalent to the Danish Niels Brock International Business Degree Program.

MR KHUA KIAN KHENG IVAN, INDEPENDENT DIRECTOR, was appointed to the Board on December 18, 2006 and was last re-elected on July 26, 2013. He is the Executive Director of Hock Leong Enterprises Pte. Ltd., an oil and gas related servicing company where his responsibilities include overseeing the company’s financial, administrative, human resource and business development aspects. From 2000 to 2001, he was a Research Officer at Rider Hunt Levett & Bailey, where he was involved in the research of various aspects of quantity surveying and the cost management of the company’s quantity surveying services. From 2001 to 2004, he was a Manager with RHLB Terotech Pte. Ltd., where he provided property and infrastructure asset management consultancy services. Mr Khua holds a Diploma in Building (with Merit) from the Singapore Polytechnic and a Bachelor’s degree in Building Construction Management (First Class Honours) from the University of New South Wales, Australia. He is a member of the Singapore Institute of Arbitrators, and an associate of the Singapore Institute of Building. He is a member of the Singapore Polytechnic – School of Architecture and the Built Environment Advisory Committee. He is a full member of the Singapore Institute of Directors.

BOARD OF DIRECTORS

EXECUTIVE DIRECTORS:Choo Chee Onn(Executive Chairman and Managing Director)

Lim Kee SengTok Cheng HoeKwok Ngat Khow

INDEPENDENT DIRECTORS:Lim Yeow Hua @ Lim You Qin(Lead Independent Director)

Khua Kian Kheng IvanKo Chuan Aun

AUDIT COMMITTEELim Yeow Hua @ Lim You Qin (CHAIRMAN)Khua Kian Kheng IvanKo Chuan Aun

NOMINATING COMMITTEEKhua Kian Kheng Ivan (CHAIRMAN)Lim Yeow Hua @ Lim You QinKo Chuan Aun

REMUNERATION COMMITTEEKo Chuan Aun (CHAIRMAN)Lim Yeow Hua @ Lim You QinKhua Kian Kheng Ivan

AUDITORErnst & Young LLPOne Raffles QuayNorth Tower, Level 18Singapore 048583Partner in charge : Tan Swee Ho(since financial year ended 31 March 2010)

JOINT COMPANY SECRETARIESTang Hay Ming Tony (CPA)Ong Beng Hong (LLB (Hons))

SHARE REGISTRARBoardroom Corporate & Advisory Services Pte. Ltd. (a member of Boardroom Limited)50 Raffles Place #32-01 Singapore Land TowerSingapore 048623

PRINCIPAL BANKERSIndustrial and Commercial Bank of China LimitedCitibank, N.A.Development Bank of SingaporeThe Bank of East Asia, LimitedMalayan Banking BerhadOversea-Chinese Banking Corporation LimitedStandard Chartered BankUnited Overseas Bank Limited

REGISTERED OFFICE36 Senoko RoadSingapore 758108

INVESTOR RELATIONSCitigate Dewe Rogerson, i.MAGE Pte Ltd55 Market Street #02-01/02Singapore 048914Email: [email protected] contact: [email protected]

CORPORATEDIRECTORY


FINANCIALCONTENTS022STATEMENT OF CORPORATE GOVERNANCE

039DIRECTORS’ REPORT

042STATEMENT BY DIRECTORS

043INDEPENDENT AUDITOR’S REPORT

045 BALANCE SHEETS

047 INCOME STATEMENTS

048 STATEMENTS OF COMPREHENSIVE INCOME

049 STATEMENTS OF CHANGES IN EQUITY

052 CONSOLIDATED STATEMENT OF CASH FLOWS

054 NOTES TO THE FINANCIAL STATEMENTS

122 STATISTICS OF SHAREHOLDINGS

123 NOTICE OF 8TH ANNUAL GENERAL MEETING

PROXY FORM


FINANCIAL YEAR ENDED 31 MARCH 2014

STATEMENT OF CORPORATE GOVERNANCE

KSH Holdings Limited (the “Company” and together with its subsidiaries, the “Group”) is committed to achieving a high standard of

corporate governance in line with those set out in the Code of Corporate Governance 2012 (“the Code”). Good corporate governance

establishes and maintains a legal and ethical environment, which helps to preserve and enhance the interests of all shareholders.

This report describes the corporate governance framework and practices of the Company with specific reference made to each of the

principles of the Code.

(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.

Role of the Board of Directors (the “Board”)

The primary role of the Board is to protect and enhance long-term shareholders’ value. It sets the corporate strategies of the Group,

sets directions and goals for the Management. It supervises the Management and monitors performance of these goals to enhance

shareholders’ value. The Board is responsible for the overall corporate governance of the Group.

Regular meetings are held to deliberate the strategic policies of the Company, review and approve annual budgets, review the

performance of the business and approve the public release of periodic financial results.

The principal duties of the Board include the following:

(i) protecting and enhancing long-term value and return to the Company’s shareholders (“Shareholders”);

(ii) establishing, reviewing and approving the annual budget, corporate policies, strategies and objectives for the Group;

(iii) ensuring the effectiveness and integrity of management;

(iv) chartering the corporate strategy and direction of the Group and setting goals for the Management;

(v) supervising and monitoring the Management’s achievement of these goals;

(vi) conducting periodic reviews of the Group’s financial performance, internal controls and reporting compliance;

(vii) approving nominations to the Board and appointment of key personnel;

(viii) ensuring the Group’s compliance with all relevant and applicable laws and regulations;

(ix) assuming responsibility for the corporate governance of the Group;

(x) setting the values and standards for the Group, and ensure that obligations to Shareholders and others are understood and met; and

(xi) establishing a framework of prudent and effective controls which enables risks to be assessed and managed.

The Board has formed a number of Board Committees namely the Audit Committee, the Nominating Committee and the Remuneration

Committee to assist in carrying out and discharging its duties and responsibilities efficiently and effectively.




These Committees function within clearly defined terms of references and operating procedures. The Board accepts that while these Board

committees have the authority to examine particular issues and will report back to the Board with their decision and/or recommendations,

the ultimate responsibility on all matters lies with the entire Board.

The Executive Directors also supervise the management of the business and affairs of the Company and reduces the administrative time,

inconvenience and the expenses associated with the convening of meetings of the Board and circulation of resolutions in writing of

the Board, without compromising the Group’s corporate objectives and adversely affecting the day-to-day operations of the Company.

However, meetings of the Board are still held and/or resolutions in writing of the Board are circulated for matters which require the

Board’s approval, including the following, but are not limited to:

(i) review of the annual budget and the performance of the Group;

(ii) review of the key activities and business strategies;

(iii) approval of the corporate strategy and direction of the Group;

(iv) approval of transactions involving a conflict of interest for a substantial shareholder or a Director or interested person transactions;

(v) material acquisitions and disposals;

(vi) corporate or financial restructuring and share issuances;

(vii) declaration of dividends and other returns to shareholders; and

(viii) appointments of new Directors or key personnel.

A formal document setting out the guidelines and matters (including the matters set out above) which are to be reserved for the Board’s

decision has been adopted by the Board.

Board meetings are conducted regularly at least once every quarter and ad-hoc meetings (including but not limited to the meetings of the

Board Committees) are convened whenever a Director deems it necessary to address any issue of significance that may arise. In addition

to holding meetings, important matters concerning the Group are also put to the Board for its decision by way of written resolutions.

The following table discloses the number of meetings held for the Board and Board Committees and the attendance of all Directors for

the financial year ended 31 March 2014:

BOARD MEETING

AUDIT COMMITTEE

REMUNERATION COMMITTEE

NOMINATING COMMITTEE

Number of meetings held 4 4 1 1

Choo Chee Onn 4 – – –

Tok Cheng Hoe 4 – – –

Lim Kee Seng 4 – – –

Kwok Ngat Khow 4 – – –

Lim Yeow Hua @ Lim You Qin 4 4 1 1

Lai Meng Seng(1) 1 1 1 1

Khua Kian Kheng Ivan 4 4 1 1

Ko Chuan Aun(2) 3 3 – –




Notes:

(1) Mr Lai Meng Seng retired as a Director of the Company at the last annual general meeting of the Company held on 26 July 2013 and did not seek re-election. Pursuant to his retirement, Mr Lai Meng Seng also ceased to be the Chairman of the Remuneration Committee, a member of the Audit Committee and a member of the Nominating Committee. The announcements relating to Mr Lai Meng Seng’s cessation as a Director of the Company were released via SGXNET on 26 July 2013.

(2) Mr Ko Chuan Aun was appointed as an Independent Director of the Company on 5 August 2013. Pursuant to his appointment, Mr Ko Chuan Aun was also appointed as the Chairman of the Remuneration Committee, a member of the Audit Committee and a member of the Nominating Committee. The announcements relating to Mr Ko Chuan Aun’s appointment as Independent Director and to the Board Committees were released via SGXNET on 5 August 2013.

While the Board considers Directors’ attendance at Board Meetings to be important, it should not be the only criterion to measure their

contributions. It also takes into account the contributions by Board members in other forms including periodical reviews, provision of

guidance and advice on various matters relating to the Group.

Generally, a newly-appointed Director will be given an orientation to familiarise him/her with the Group’s business and governance

practices and he/she will also be briefed on the duties and obligations of a director of a listed company.

The Directors are updated, from time to time, when new laws or regulations affecting the Group are introduced. The Directors are

encouraged to attend seminars and training courses that will assist them in executing their obligations and responsibilities as directors

to the Company. The Company will bear the costs of such seminars and training courses attended by the Directors.

Board Composition and Guidance

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 and 10% shareholders. No individual or small group of individuals should be allowed to dominate the Board’s decision making.

As at the date of this Annual Report, the Board comprises seven (7) Directors, of whom four (4) are Executive Directors and three (3) are

Independent Directors. The list of Directors is as follows:

Mr Choo Chee Onn (Executive Chairman and Managing Director)

Mr Kwok Ngat Khow (Executive Director)

Mr Tok Cheng Hoe (Executive Director)

Mr Lim Kee Seng (Executive Director)

Mr Lim Yeow Hua @ Lim You Qin (Lead Independent Director)

Mr Khua Kian Kheng Ivan (Independent Director)

Mr Ko Chuan Aun (Independent Director)

During the beginning of the financial year ended 31 March 2014, Mr Lai Meng Seng was an Independent Director of the Company but

retired at the last Annual General Meeting of the Company held on 26 July 2013 and did not seek re-election. Pursuant to Mr Lai Meng

Seng’s retirement, Mr Ko Chuan Aun was appointed with effect from 5 August 2013 as an Independent Director of the Company.

The Board is of the view that the current Board members comprise persons whose diverse skills, experience and attributes provide for

effective direction for the Group. The composition of the Board is reviewed on an annual basis by the Nominating Committee to ensure

that the Board has the appropriate mix of expertise and experience, and collectively possess the necessary core competencies for effective

functioning and informed decision-making.




The criterion for independence is based on the definition given in the Code. The Board considers an “Independent” Director as one who

has no relationship with the Company, its related companies or officers that could interfere, or be reasonably perceived to interfere, with

the exercise of the Director’s independent business judgement of the conduct of the Group’s affairs. The Board has identified each of the

Company’s Independent Directors to be independent, after determining, taking into account the views of the Nominating Committee,

whether the Director is independent in character and judgement and whether there are relationships or circumstances which are likely

to affect, or could appear to affect, the Director’s judgement. Each Director is required to disclose to the Board any such relationships

or circumstances as and when they arise.

The Independent Directors meet at least once annually without the presence of the other Directors and where necessary, the Lead

Independent Director provides feedback to the Executive Chairman after such meetings.

Key information regarding the Directors is given in the “Board of Directors” section of the annual report.

Particulars of interests of Directors who held office at the end of the financial year in shares in the Company and in related corporations

(other than wholly-owned subsidiaries) are set out in the Directors’ Report on pages 39 to 41 of this annual report.

Executive Chairman and Group Managing Director

Principle 3: There should be a clear division of responsibilities between the leadership of the Board and the executives responsible for managing the company’s business. No one individual should represent a considerable concentration of power.

The Executive Chairman and the Managing Director of the Company is Mr Choo Chee Onn (“Mr Choo”). In view of Mr Choo’s concurrent

appointment as the Executive Chairman and Managing Director, the Board has appointed Mr Lim Yeow Hua @ Lim You Qin as the Lead

Independent Director, in accordance with Guideline 3.3 of the Code. In accordance with the recommendations in the said Guideline 3.3,

the Lead Independent Director is available to shareholders where they have concerns for which contact through the normal channels of

the Executive Chairman and Managing Director or Chief Financial Officer has failed to resolve or for which such contact is inappropriate.

As the Executive Chairman, Mr Choo bears responsibility for the workings of the Board and, together with the Audit Committee, ensures

the integrity and effectiveness of the governance processes of the Board.

As the Group Managing Director, Mr Choo bears overall daily operational responsibility for the Group’s business.

All major decisions made by the Executive Chairman and Managing Director are under the purview of review by the Audit Committee.

His performance and appointment to the Board are also reviewed periodically by the Nominating Committee while his remuneration

package is reviewed periodically by the Remuneration Committee. As such, the Board believes that there are adequate safeguards in

place against an uneven concentration of power and authority in a single individual.

The Board is of the view that power is not unduly concentrated in the hands of one individual nor is there any compromised accountability

and independent decision-making as all major decisions and policy changes are conducted through the respective Board Committees,

all of which are chaired by the Independent Directors.




Board Membership

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

As at the date of this Annual Report, the Nominating Committee (“NC”) comprises the following three (3) Independent Non-Executive

Directors:

Mr Khua Kian Kheng Ivan (Chairman)

Mr Lim Yeow Hua @ Lim You Qin (Member)

Mr Ko Chuan Aun (Member)

During the beginning of the financial year ended 31 March 2014, the NC comprised Mr Khua Kian Kheng Ivan as Chairman, Mr Lim Yeow

Hua @ Lim You Qin and Mr Lai Meng Seng as members. However, on 5 August 2013, the Company reconstituted its NC pursuant to Mr Ko

Chuan Aun’s appointment as an Independent Director of the Company on the same date, and the NC now comprises the three existing

Independent Directors, namely Mr Khua Kian Kheng Ivan as Chairman, Mr Lim Yeow Hua @ Lim You Qin and Mr Ko Chuan Aun as members.

Mr Ko Chuan Aun’s appointment was reviewed by the NC and the NC took into account Mr Ko Chuan Aun’s experience as well as his

qualifications before recommending the appointment to the Board for approval.

The NC functions under the terms of reference which sets out its responsibilities:

(a) to recommend to the Board on all Board appointments, re-appointments and re-nominations;

(b) to ensure that Independent Directors meet SGX-ST’s guidelines and criteria; and

(c) to assess the effectiveness of the Board as a whole and the effectiveness and contribution of each Director to the Board.

In the event that there is a need to change the structure of the Board, the chairmanship of the Company or the membership of the Board

Committees, the NC would also review the change to be implemented and make recommendations to the Board accordingly. For the

appointment of new Directors, the NC would, in consultation with the Board, examine the existing Board’s strengths, capabilities and the

existing Directors’ contribution of skills, knowledge and experience to the Group and the Board. Further to the above, the NC will take

into account the future needs of the Group and, together with the Board, it will seek candidates who are able to contribute to the Group.

The NC is also tasked with deciding whether or not a Director is able to and has been adequately carrying out his duties as a Director,

particularly when he has multiple board representations, and to assess the maximum number of listed entity board representations

which any one of the Directors may hold. As a guide, Directors of the Company should not have more than six listed company board

representations and other principal commitments. After conducting reviews, the Nominating Committee is satisfied that sufficient time

and attention are being given by the Directors to the affairs of the Group.

The Articles of Association of the Company require one-third of the Directors to retire from office at each Annual General Meeting

(“AGM”), except that the Managing Director is not subject to retirement by rotation. Accordingly, the Directors submit themselves

for re-nomination and re-election at regular intervals of at least once every three years. The NC has recommended the re-elections of

Mr Lim Kee Seng and Mr Tok Cheng Hoe in accordance with Article 89 of the Company’s Articles of Association at the forthcoming AGM.

In addition, as Mr Ko Chuan Aun was appointed during the financial year ended 31 March 2014, he shall be required pursuant to Article

88 of the Company’s Articles of Association to retire at the forthcoming AGM. The NC has also recommended the re-election of Mr Ko

Chuan Aun at the forthcoming AGM.




The NC examines the Board’s size to ensure that it is appropriate for effective decision making, taking into account the nature and scope

of the Company’s operations.

Details of the appointment of Directors including date of initial appointment and date of last re-election and directorships in other listed

companies, both current and for the preceding three years, are set out below:

Name of Director Age Date of Initial Appointment

Date of Last Re-election

Present and Past Directorship in Listed Companies

Mr Choo Chee Onn 63 9 March 2006 Not Applicable Present Directorships–Past Directorships–

Mr Kwok Ngat Khow 66 22 March 2006 27 July 2012 Present Directorships–Past Directorships–

Mr Tok Cheng Hoe 63 22 March 2006 22 July 2011 Present Directorships–Past Directorships–

Mr Lim Kee Seng 62 22 March 2006 22 July 2011 Present Directorships–Past Directorships–

Mr Lim Yeow Hua @ Lim You Qin 52 18 December 2006 27 July 2012 Present DirectorshipsChina Minzhong Food Corporation LimitedEratat Lifestyle LimitedKTL Holdings LimitedOxley Holdings LimitedAdvanced Integrated Manufacturing Ltd

Past DirectorshipsGreat Group Holdings Ltd

Mr Khua Kian Kheng Ivan 39 18 December 2006 26 July 2013 Present DirectorshipsMoneymax Financial Services Ltd

Past Directorships–

Mr Ko Chuan Aun 56 5 August 2013 – Present DirectorshipsSuper Group LtdKOP Limited (formerly known as Scorpio East Holdings Ltd)San Teh LtdKoon Holdings Limited

Past DirectorshipsBrothers (Holdings) Limited




Board Performance

Principle 5: There should be a formal annual assessment of the effectiveness of the Board as a whole and its board committees and the contribution by each director to the effectiveness of the Board.

The NC has established a process for assessing the effectiveness of the Board as a whole and for assessing the contribution of each

individual Director to the effectiveness of the Board. This assessment is conducted by the NC at least once a year by way of a Board

evaluation where the NC completes a questionnaire seeking their views on various aspects of Board performance, such as Board

composition, information, process and accountability. The Chairman of the NC will act on the results of the performance evaluation, and in

consultation with the NC, propose, where appropriate, that new members be appointed to the Board or seek the resignation of Directors.

To assess the effectiveness of the Board as a whole, the factors evaluated by the NC include but are not limited to:

(i) the size and composition of the Board;

(ii) the individual Directors’ contributions to the Board, including without limitation their participation at Board meetings and ability

to contribute to the discussion conducted by the Board;

(iii) the discussion and decision-making processes of the Board (including the conduct of meetings by the Board);

(iv) the Board’s access to information;

(v) the accountability of the Board to the Shareholders;

(vi) the observation of risk management and internal control policies by the Board; and

(vii) the performance of the Board (including the Board’s performance in relation to the discharge of its principal responsibilities in

terms of the financial indicators set out in the Code).

The Board and the NC have endeavoured to ensure that the Directors possess the experience, knowledge and expertise critical to the

Group’s business.

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 so as to enable them to make informed decisions to discharge their duties and responsibilities.

All Directors are from time to time furnished with information concerning the Company to enable them to be fully cognisant of the

decisions and actions of the Company’s Executive Management. The Board has unrestricted access to the Company’s records and

information.

Senior Management Executives are available to provide explanatory information in the form of briefings to the Directors or formal

presentations in attendance at Board Meetings, or by external consultants engaged on specific projects.

The Board has separate and independent access to the Company Secretary and to other Senior Management Executives of the Company

and of the Group at all times in carrying out their duties. The Company Secretary attends or is represented at all Board Meetings and

meetings of the Board Committees of the Company and ensures that Board procedures are followed and that applicable rules and

regulations are complied with. The minutes of all Board and Board Committees’ meetings are circulated to the Board.




Each Director has the right to seek independent legal and other professional advice, at the Company’s expense, concerning any aspect

of the Group’s operations or undertakings in order to fulfill their duties and responsibilities as Directors.

(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.

As at the date of this Annual Report, the Remuneration Committee (“RC”) comprises the following three (3) Independent Non-Executive

Directors:

Mr Ko Chuan Aun (Chairman)

Mr Khua Kian Kheng Ivan (Member)

Mr Lim Yeow Hua @ Lim You Qin (Member)

During the beginning of the financial year ended 31 March 2014, the RC comprised Mr Lai Meng Seng as Chairman, Mr Lim Yeow Hua @

Lim You Qin and Mr Khua Kian Kheng Ivan as members. However, on 5 August 2013, the Company reconstituted its RC pursuant to Mr Ko

Chuan Aun’s appointment as an Independent Director of the Company on the same date, and the RC now comprises the three existing

Independent Directors, namely Mr Ko Chuan Aun as Chairman, Mr Lim Yeow Hua @ Lim You Qin and Mr Khua Kian Kheng Ivan as members.

The RC recommends to the Board a framework of remuneration for the Directors and Executive Officers, and determines specific

remuneration package for each Executive Director. The recommendations are submitted for endorsement by the Board.

All aspects of remuneration, including but not limited to Directors’ fees, salaries, allowances, bonuses and benefits-in-kind, are covered

by the RC. Each RC member abstains from voting on any resolution in respect of his remuneration package.

The RC functions under the terms of reference which sets out its responsibilities:

(a) to recommend to the Board a framework for remuneration for the Directors and Key Management Personnel of the Company;

(b) to determine specific remuneration packages for each Executive Director;

(c) to review the appropriateness of compensation for Non-Executive Directors; and

(d) to review the remuneration of employees occupying managerial positions who are related to Directors and Substantial

Shareholders.

The RC is provided with access to expert professional advice on remuneration matters as and when necessary. The expense of such

services is borne by the Company. The RC ensures that in the event of such advice being sought, existing relationships, if any, between the

Company and its appointed remuneration consultants will not affect the independence and objectivity of the remuneration consultants.

The Company has not appointed any remuneration consultants for the financial year ended 31 March 2014.




Level and Mix of Remuneration

Principle 8: The level and structure of remuneration should be aligned with the long-term interest and risk policies of the company, and should be appropriate to attract, retain and motivate (a) the directors to provide good stewardship of the company and (b) key management personnel to successfully manage the company. However, companies should avoid paying more than is necessary for this purpose.

In setting remuneration packages, the RC takes into consideration the pay and employment conditions within the industry and in

comparable companies. The remuneration of Non-Executive Directors is also reviewed to ensure that the remuneration is commensurate

with the contribution and responsibilities of the Directors.

The Company submits the quantum of Directors’ fees for the relevant financial year to the Shareholders for approval at each AGM.

The Executive Chairman and Managing Director, Mr Choo and three (3) Executive Directors have service agreements. Such service

agreements cover the terms of employment, salaries and other benefits. The terms of the service agreements are reviewed by the RC

on an annual basis. Non-Executive Directors have no service agreements.

The Independent Directors receive directors’ fees, in accordance with their contributions, taking into account factors such as effort and/

or time spent, the responsibilities of the Independent Directors and the need to pay competitive fees to attract, retain and motivate the

Independent Directors. The Independent Directors are not over-compensated to the extent their independence may be compromised.

Disclosure on Remuneration

Principle 9: Every company should provide clear disclosure of its remuneration policies, 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 management personnel, and performance.

The details of the remuneration of Directors of the Group disclosed in bands for services rendered during the financial year ended 31

March 2014 are as follows:

Number of Directors

$1,000,000 to $1,249,999 1

$750,000 to $999,999 1

$500,000 to $749,999 2

Below $250,000 4

Total 8

As at the date of this Annual Report, the Company has seven Directors. Of the seven Directors, four are Executive Directors who together

with the Company’s Chief Financial Officer comprise the five Key Management Personnel of the Company. There were no other Key

Management Personnel within the Group except for the abovementioned persons for the financial year ended 31 March 2014.




Taking note of the competitive pressures in the labour market, the Board has, on review, decided not to fully disclose the remuneration

of the Company’s Directors and Key Management Personnel. The breakdown of remuneration (in percentage terms) of the remuneration

paid to the Directors and to the Key Management Personnel (who is not also a Director) in bands of S$250,000 for the financial year

ended 31 March 2014 are set out below:

Salary Bonus Directors’ Fees

Allowances and Other Benefits

Total Compensation

% % % % %

Directors

S$1,000,000 to S$1,249,999

Choo Chee Onn 33 62 1 4 100

S$750,000 to S$999,999

Lim Kee Seng 31 62 2 5 100

S$500,000 to S$749,999

Kwok Ngat Khow 30 62 2 6 100

Tok Cheng Hoe 30 62 2 6 100

Below $250,000

Lim Yeow Hua @ Lim You Qin – – 100 – 100

Lai Meng Seng(1) – – 100 – 100

Khua Kian Kheng Ivan – – 100 – 100

Ko Chuan Aun(2) – – 100 – 100

Key Executive of the Group

$250,000 to $499,999

Tang Hay Ming Tony 39 57 – 4 100

Notes:

(1) Mr Lai Meng Seng retired as a Director of the Company with effect from 26 July 2013.

(2) Mr Ko Chuan Aun was appointed as an Independent Director of the Company with effect from 5 August 2013.

There is no termination, retirement and post-employment benefits granted to Directors or the Key Management Personnel.

Immediate Family Member of Directors or Substantial Shareholders

No employee of the Company and its Subsidiaries is an immediate family member of a Director and/or a Substantial Shareholder whose

remuneration exceeded S$150,000 during the financial year ended 31 March 2014.




(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 is accountable to the Shareholders and is mindful of its obligations to furnish timely information and to ensure full disclosure

of material information to Shareholders in compliance with statutory requirements and the Listing Manual of the SGX-ST. The Board is

mindful that one of its principal duties is to protect and enhance the long-term value and returns to the Shareholders. This accountability

to the Shareholders is demonstrated through the presentation of its periodic financial statements as well as the timely announcements

and news releases of significant corporate developments and activities so that the Shareholders can have a detailed explanation and

balanced assessment of the Group’s financial position and prospects.

Price sensitive information is publicly released either before the Company meets with any group of investors or analysts or simultaneously

with such meetings. Financial results and annual reports are announced or issued within legally prescribed periods.

The Management provides the Board with quarterly reports of the Group’s financial performance, as well as progress reports on the

achievements of the Management’s goals and objectives determined by the Board. The Management also maintains close contact and

communication with the Board by various means, including but not limited to holding meetings with the Board or via email in which

documents are circulated to the Board for their review or for their information. The abovementioned arrangement allows the Directors to

monitor the Group’s performance as well as the Management’s achievements of the goals and objectives determined and set by the Board.

Risk Management and Internal Controls

Principle 11: The Board is responsible for the governance of risk. The Board should ensure that Management maintains a sound system of risk management and internal controls to safeguard 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 acknowledges that it is responsible for the overall internal control framework, but recognises that all internal control systems

contain inherent limitations and that no cost effective internal control system will preclude all errors and irregularities, as a 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 Audit Committee (“AC”) conducts regular reviews of the adequacy and

effectiveness of the Group’s system of risk management internal controls, including financial, operational and compliance controls and

internal controls in relation to information technology risks.

The AC ensures that a review of the effectiveness of the Company’s internal controls, including financial, operational, compliance and

information technology controls and risk management, is conducted annually. In this respect, the AC reviews the audit plans, and the

findings of the Auditors and ensures that the Company follows up on the Auditors’ recommendations raised, if any, during the audit

process.

The AC has, on behalf of the Board, reviewed the adequacy and effectiveness of the various systems put in place by the Management and

it is satisfied that there are adequate internal controls and risk management systems in the Company to provide reasonable assurance

as to the integrity and reliability of the financial information and to safeguard and maintain accountability of its assets.




The Group has in place a system of internal control and risk management for ensuring proper accounting records and reliable financial

information as well as management of business risks with a view to safeguarding Shareholders’ investments and the Company’s assets.

The risk management framework implemented provides for systematic and structured review and reporting of the assessment of the

degree of risk, evaluation and effectiveness of controls in place and the requirements for further controls. Management reviews all

significant policies and procedures and highlights all significant matters to the Board and the AC.

The Board has also received assurances from the Managing Director and the Chief Financial Officer on the integrity of the financial

statements of the Group and the effectiveness of the Company’s risk management and internal control systems. In particular, the Board

has been assured that the financial statements give a true and fair view, in all material respects, of the Group’s performance and financial

position as at 31 March 2014.

The Internal Auditors will review policies and procedures as well as key controls and will highlight any issues to the Directors and the

AC. Separately, in performing the audit of the financial statements of the Group, the External Auditors perform tests over operating

effectiveness of certain controls that they intend to rely on that are relevant to the preparation of its financial statements. The External

Auditors also report any significant deficiencies in such internal controls to the Directors and the AC.

Action plans to manage the risks are continuously being monitored and refined by Management and the Board. Any material non-

compliance in internal controls together with corrective measures are reported directly to the Directors and the AC.

Based on the internal controls and risk management systems established and maintained by the Group, reviews conducted by the External

and Internal Auditors and assurance from Management, the Board with the concurrence of the AC, is of the opinion that the Group’s

system of internal controls, addressing financial, operational, compliance and information technology risks, and its risk management

policies and systems (notably those systems that monitor and manage financial, operating, compliance, information technology and

other risks) were adequate and effective as at 31 March 2014 in its current business environment.

The system of internal controls and risk management provides reasonable, but not absolute assurance that the Company will not be

adversely affected by any event that could be reasonably foreseen as it strives to achieve its business objectives. However, the Board also

notes that no system of internal control and/or risk management could provide absolute assurance against the occurrence of material

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

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 the following three (3) Independent Non-Executive Directors:

Mr Lim Yeow Hua @ Lim You Qin (Chairman)

Mr Khua Kian Kheng Ivan (Member)

Mr Ko Chuan Aun (Member)

During the beginning of the financial year ended 31 March 2014, the AC comprised Mr Lim Yeow Hua @ Lim You Qin as Chairman, Mr Lai

Meng Seng and Mr Khua Kian Kheng Ivan as members. However, on 5 August 2013, the Company reconstituted its AC pursuant to Mr Ko

Chuan Aun’s appointment as an Independent Director of the Company on the same date, and the AC now comprises the three existing

Independent Directors, namely Mr Lim Yeow Hua @ Lim You Qin as Chairman, Mr Khua Kian Kheng Ivan and Mr Ko Chuan Aun as members.




The AC meets periodically at least four times a year to review accounting, auditing and financial reporting matters so as to ensure that

an effective system of control is maintained within the Group.

The AC’s main objective is to assist the Board in fulfilling its fiduciary responsibilities relating to internal controls and risk management,

overseeing the external audit process, reviewing the financial information to be disclosed to the public and ensuring that arrangements

are in place for independent investigation and follow up of reports by staff of improprieties in financial reporting and other matters.

To achieve this, the AC ensures that its members have the appropriate qualifications to provide independent, objective and effective

supervision.

Specifically, the AC functions under the terms of reference which set out its responsibilities as follows:

(a) to review the audit plans of both the Internal and External Auditors;

(b) to review the Auditors’ Reports and their evaluation of the Company’s and the Group’s system of internal controls;

(c) to review the effectiveness and adequacy of the internal audit function which is outsourced to a professional firm;

(d) to review the co-operation given by the Company’s Officers to the Internal and External Auditors;

(e) to review the financial statements of the Company and the Group before submission to the Board;

(f) to nominate and review appointment of Internal and External Auditors;

(g) to review with Auditors and Management on the general internal control procedures;

(h) to review the independence of the Internal and External Auditors; and

(i) to review interested person transactions, if any.

The AC has the power to conduct or authorise investigations into any matters within the AC’s scope of responsibility including without

limitation, internal investigations into matters where there is suspected fraud or irregularity, or failure of internal controls or infringement

of any Singapore and other applicable law, rule or regulation which has or is likely to have material impact on the Company’s or Group’s

operating results and/or financial position. The AC is authorised to obtain independent professional advice if it deems necessary in the

discharge of its responsibilities. Such expenses are to be borne by the Company. All of the members of the AC are Independent Directors.

Each member of the AC abstains from voting on any resolutions in respect of matters he is interested in.

The AC meets from time to time with the Group’s External Auditors and the Executive Management to review accounting, auditing

and financial reporting matters so as to provide the necessary checks and balances to ensure that an effective control environment is

maintained in the Group. The AC also studies proposed changes in accounting policies, examines the internal audit functions and discusses

the accounting implications of major transactions. Furthermore, the AC advises the Board regarding the adequacy of the Group’s internal

controls and the contents and presentation of its interim and annual reports. Based on the information provided to the AC, nothing has

come to the AC’s attention to indicate that the system of internal controls and risk management is inadequate.

The AC has full access to and co-operation of the Management and has full discretion to invite any Director or Executive Officer to attend

its meetings, and has been given reasonable resources to enable it to discharge its functions.

The AC meets with both the Internal and External Auditors without the presence of the Management at least once a year, with particular

emphasis on the scope and quality of their audits, and the independence and objectivity of the Internal and External Auditors.




The AC reviews the independence of the External Auditors, Ernst & Young LLP annually. The AC had assessed the External Auditors

based on the factors such as performance, adequacy of resources and experience of their audit engagement partner and auditing team

assigned to the Group’s audit, the size and complexity of the Group.

The AC also conducted a review of non-audit services performed by the External Auditors and is satisfied that the nature and extent of

such services do not prejudice the independence and objectivity of the External Auditors. For the financial year ended 31 March 2014,

the audit and non-audit fees paid to the External Auditors of the Company were S$275,000 and S$62,000 (excluding disbursements and

GST) respectively.

Having regard to the adequacy of the resources and experience of the auditing firm and the audit engagement partner assigned to

the audit, the firm’s other audit engagements, the size and complexity of the Group being audited, and the number and experience of

supervisory and professional staff assigned to the particular audit, the Board and the AC are of the opinion that a suitable auditing firm

has been appointed to meet the Company’s auditing obligations.

The Company engages different audit firms for its subsidiaries or significant associated companies and the names of these audit firms

are disclosed on page 83 of this Annual Report. The Board and AC have reviewed the appointment of these audit firms and are of the

view that the appointment of these other audit firms do not compromise the standard and effectiveness of the audit of the Company.

The AC is satisfied that Rules 712, 715 and 716 of the Listing Manual of the SGX-ST are complied with and has recommended to the

Board that Ernst & Young LLP be nominated for re-appointment as Auditor at the forthcoming AGM.

The Company has in place a whistle-blowing framework to provide a channel where staff of the Company can access to the Human

Resource Manager to raise their concerns about possible improprieties for investigation. The procedures for submission of complaints

have been explained to all employees of the Group. Following investigation and evaluation of a complaint, the AC will then decide on

recommended disciplinary or remedial action, if any. The action so determined by the AC to be appropriate shall then be brought to the

Board or to the appropriate members of senior management for authorisation or implementation respectively.

Internal Audit

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

The Company has engaged KPMG Services Pte. Ltd. as the Internal Auditors of the Group to perform internal audit work under a 3 year

internal audit plan. The Internal Auditors report directly to the Chairman of the AC on all internal audit matters.

The role of the Internal Auditors is to support the AC in ensuring that the Company maintains a sound system of internal controls

by monitoring and assessing the

Documents

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